Hyderabad, Feb.9 (Maxim News): Confederation of Indian Industry (CII) urged govt to take urgent steps to decriminalize provisions in several business laws and Acts to help improve investor confidence and ensure ease of doing business in true spirit.
The CII has come out with 12 alternative ways that can help achieve this goal in its compilation – Decriminalization of Business and Economic Legislation – that has been shared with Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman as part of its consultative deliberations on the subject. “A change in the nature of penalty provisions in business and economic laws represents the next stage of reforms in ease of doing business. Divesting criminal penalties from business laws – unless well-defined criminal actions are found – will strengthen confidence among young entrepreneurs and investors in doing business,” CII president Vikram Kirloskar said.
Echoing the principle of establishing trust, which has been a pillar of the recent government policy announcements, CII has sought intervention from different arms of the government to examine how the current criminal provisions in the laws can be treated as civil offenses with penalties. CII’s recommendations in this regard which cover 37 laws and Acts ranging from the partnership Act of 1932 to the Insolvency and Bankruptcy Code of 2016 has said that offences which are of a technical nature or those that do not affect public interest prejudicially should be considered to be decriminalized.
Lately, there have been increasing incidents where commercial and civil disputes are being treated as criminal complaints, thereby creating a fear factor among Directors, young entrepreneurs and foreign investors. “For such business and economic legislations which fall within the domain of arbitration or civil courts, the Government should consider decriminalising the laws, unless there is an intent of fraud or misdoings,” the CII chief said.
“Directors today are fearful, and this impacts corporates negatively since they are resigning due to the fear of criminal implications of the laws. Changing the nature of the punishments to make them more rationale will also help reduce litigation and de-clog the judiciary. The proposed changes in the Companies Act where offences like not meeting obligations under CSR is now being decriminalized is a step in this direction. CII has recommended 12 alternative ways to work towards decriminalization of laws and amend legislations to change criminal penalties to civil penalties.
“Periodic or habitual offenders should be treated differently and punished with higher penalties as may be decided by the adjudicating authority. This will not only increase confidence of both domestic and global players, but also provide boost to ease of doing business in India,” Kirloskar said, adding that it was important to prescribe a time frame or filing a complaint for economic related offences and for completion of investigation and adjudication with a few agreed exceptions. This will also ensure that investigation into economic related offences is concluded by the investigating agency in timely manner.
Appreciating the Government’s intent to improve the investment climate pertaining to legislation, CII noted that companies focused on compliance and ethical behaviour comprise the largest part of the corporate universe and all enterprises need not be subjected to tough regulation due to a few errant firms. Malafide actions, frauds and criminal activities by businesses deserve strong punitive measures. However, for technical or procedural lapses of non-serious nature, civil liability would be adequate as a deterrent, he said. The CII list of statutes proposed for consideration of amendments includes 37 legislations related to the Companies Act, Insolvency and Bankruptcy Code, environmental protection, consumer protection and labour interests. (Maxim News)
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