From the information made available to the Department by the Registrars of Companies it is found that 5,16,100 companies were in existence and 2,60,530 Annual Returns and 2,70,961 Balance Sheets were filed in the year 1999 alone. The compliance level for these two documents is around 50 per cent. More than 5 lakh prosecutions will have to be launched by the Govt. Already 38,603 cases are pending in various courts as on 31.03.1999. Experience has shown that disposal of prosecution cases takes considerable time.
Courts generally levy a nominal penalty while disposing off cases.
The results are not commensurate with the time and effort that go into obtaining orders of the Hon ble Court. Experience shows that prosecutions do not really solve the problem of widespread non-compliance. The Scheme would involve the applicant Company or the officers to make a declaration to the relevant Registrars of Companies that within the stipulated time the Company will apply with necessary fees seeking immunity from prosecution and compounding of the period of delay involved in filling. The quantum of fees which will have to be paid by the Company will depend upon the number of documents in respect of which the default has taken place and the period of delay involved in filing them. Fees will be directly proportional to the extent of immunity sought.