The Ministry of Corporate Affairs (MCA) has decided to withdraw 7,338 prosecutions pending before various courts under the Special Arrears Clearance Drive-II. This decision has been taken to promote ease of doing business and decriminalise compoundable offences under the Companies Act, 2013 as envisaged by the 2020 amendment.
Such a withdrawal will reportedly result in a 21.86% reduction in pending prosecutions. It is also in alignment with the principle that the Central Government should not be a “compulsive litigant”.
A committee was constituted by the Ministry to do a review of the pending court cases and the prosecutions which have been pending for a long time have been identified for withdrawal. However, the Press Release dated July 14, 2023, clarifies that prosecutions pertaining to serious and non-compoundable offences including fraud, cheating, etc. were not taken into account for withdrawal.
Earlier, the Government had come up with an action plan to bring down the number of pending court cases and a total of 14,247 prosecutions were withdrawn under Special Drive-1 in 2017.