Lok Sabha Question No. 98 (UNSTARRED), answered on 2025-02-03
Subject: Steps to Reduce Litigation under Company Law
Ministry: CORPORATE AFFAIRS
Asked by: Shri Harish Chandra Meena, Shri Jugal Kishore, Shri Ramvir Singh Bidhuri

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS LOK SABHA UNSTARRED QUESTION NO- 98

## ANSWERED ON MONDAY THE 03 RD  FEBRUARY, 2025 MAGHA 14 1946 (SAKA)

## STEPS TO REDUCE LITIGATION UNDER COMPANY LAW

## 98. SHRI RAMVIR SINGH BIDHURI SHRI JUGAL KISHORE SHRI HARISH CHANDRA MEENA

Will the Minister of Corporate Affairs be pleased to state:-

- a) The steps taken or proposed to be taken by the Government to reduce the number of cases pending in the courts of Rajasthan and other parts of the country under the company law;
- b) The number and details of the cases withdrawn and reduce the Government as a result of the set taken to reduce the burden of litigation and the number of such cases related to Delhi;
- c) Whether the Government is taking any additional step to improve the ease of doing business and to enhance corporate Governance structure in Rajasthan in other parts of the country;
- d) If so, the details thereof ?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## [SHRI HARSH MALHOTRA]

(a) & (b) : The Ministry of Corporate Affairs (MCA) has taken several steps to review pending prosecutions in various courts. In 2017 and later in 2022, a committee of senior officers of MCA  was  set  up  to  give  recommendations  regarding  withdrawal  of  prosecutions.  The objective  was  to  free  Judicial  Courts  from  dealing  with  offences  that  are  procedural  and technical in nature to ensure that such courts are able to focus on serious offences. It was envisaged  that  cases  of  procedural  and  technical  nature  may  be  handled  through  an adjudication process.

Accordingly,  14,247  prosecutions  were  withdrawn  in  Special  Drive-I  conducted  in  2017. Further, 6266 prosecution were withdrawn in Special Drive-II in 2023-24 in various part of the country.

The cases identified & withdrawn in the state of Rajasthan (ROC Jaipur) and Delhi (ROC Delhi & Haryana) were 10 & 18 respectively. Further, as on 30.11.2024, the number of prosecutions pending with ROC Jaipur and ROC Delhi & Haryana are 258 & 938 respectively.

(c) & (d) : The Government has been taking various steps to  improve ease of doing business and  enhance  corporate governance  from  time to  time  which  are  applicable  to  the  entire country including Rajasthan. Some of the important steps are as under.:(i) Decriminalization of 63 offences under the Companies and LLP Acts. One of the objectives of decriminalization has also been reduction of litigation burden in judicial courts and shifting the prosecution cases towards adjudication; (ii) Setting up of a Centralized Registrar of Companies (CRC) for incorporation; (iii) Setting up of a Centre for Processing Accelerated Corporate Exit (C-PACE) for voluntary exit of companies and LLPs ; (iv)  Setting up of a Central Scrutiny Centre (CSC) for centralised scrutiny of e-Forms filed under Straight Through Process (STP); (v) Conversion of more than 50 forms to STP (Straight Through Process) which earlier required approval of field offices; (vi) Setting up of a Central Processing Centre (CPC) for centralised processing of specified non-STP e-forms; (vii)  Introducing  a  new  e-Form  SPICe+  along  with  a  linked  form  called  AGILE  PRO-S  for providing different services at one place such as Name Reservation, Incorporation, allotment of PAN, TAN, DIN, EPFO Registration, ESIC Registration, Professional Tax Registration , Shops and Establishment Registration, GST number, opening of Bank Account etc. at the time of incorporation of  company  to  start  the  business  immediately.  Similarly,  new  eForm  FiLLiP (Form  for  incorporation  of  Limited  Liability  Partnership)  was  introduced  for  providing  the same services in a single application; (viii) Definition of small companies has been amended by increasing the threshold limit of a small  company,  having  a  paid-up  capital  not  exceeding  Rs.  4.00  Crore  and  turnover  not exceeding  Rs  40.00  Crore.  Similarly,  concept  of  small  LLP  has  been  introduced  which  is subject to lesser compliances, lesser fee to reduce the cost of compliances; (ix) Zero fee for incorporation of company with authorized capital up to Rs.15.00 Lakh; (x) Extended fast track process for mergers under section 233 of the Companies Act, 2013 to include  mergers  of  Startups  with  other  Startups  and  with  small  companies,  so  that  the process of mergers & amalgamations is expedited. (xi)  The  scope  of  section  233  of  CA-2013(Fast  Track  Mergers  &  Amalgamation  through approval of Regional Directors) enhanced. This now also covers merger of a transferor foreign company  incorporated  outside  India  (being  a  holding  company)  with  its  wholly  owned subsidiary incorporated in India.

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