Lok Sabha Question No. 4995 (UNSTARRED), answered on 2026-03-23
Subject: Adjudication of Corporate Compliance Violations
Ministry: CORPORATE AFFAIRS
Asked by: Shri Praveen Khandelwal

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS LOK SABHA

## UNSTARRED QUESTION NO. 4995 ANSWERED ON MONDAY, 23 rd  March 2026

## ADJUDICATION OF CORPORATE COMPLIANCE VIOLATIONS

4995. Shri Praveen Khandelwal:

Will the minister of Corporate Affairs be pleased to state:

- (a)  whether  average  timelines  for  adjudication  of  corporate compliance  violations  under  the  Companies  Act  have  been assessed, if so, the details thereof;
- (b)  whether  compounding  and  adjudication  proceedings  are being digitised end-to-end, if so, the details thereof;
- (c) whether risk-based inspection models are being implemented  to  reduce  unnecessary  compliance  burden  on smaller companies, if so, the details thereof;
- (d)  whether  data  analytics  is  being  used  to  identify  shell companies and related-party transaction irregularities, if so, the details thereof; and
- (e) the steps taken by the Government to strengthen transparency and efficiency in corporate regulatory enforcement?

## ANSWER

Minister of State in the Ministry of Corporate Affairs; Minister of State in the Ministry of Road Transport And Highways:

(SHRI HARSH MALHOTRA)

- (a) Yes Sir. The average time taken to issue order from the date of initiation of adjudication proceedings of the disposed cases is presently around 43 days.
- (b)  Under MCA 21 Version 3 (V3), the Ministry has launched the E-adjudication  module  in  September  2024  to  establish  a technology driven adjudication mechanism to digitize end to
- end  adjudication  proceedings.  Further,  appeals  against  the order of adjudication are also digitized end to end. Compounding proceedings under the Companies Act, 2013 are partially  digitised  (at  the  filing  stage)  through  the  MCA  21 system.
- (c)  Whenever any complaint or reference is received from the Central/Regional Economic Intelligence Committee (CEIC/REIC),  Fraud  Monitoring  Reports  (FMRs)  from  banks, reports of the Market Research and Analysis Unit (MRAU) of the  Serious  Fraud  Investigation  Office  (SFIO),  or  references from the Central Bureau of Investigation (CBI), Securities and Exchange  Board  of  India  (SEBI),  Insolvency  and  Bankruptcy Board of India (IBBI), through e-Form ADT-4 filed by the auditor of  a  company  pointing  out  serious  violations  or  corporate governance issues and having public interest,  the  same are examined. Based on examination and the gravity of the cases Inspections are ordered against the company under  Section 206(5) of the Companies Act, 2013.
- (d)  The  term  'shell  company'  is  not  defined  under  the Companies Act, 2013. As regards  irregularities in related party transactions, filings made by companies in the MCA21 system that are flagged are examined further and appropriate action is taken based on such examination.
- (e)    The  Ministry  has  migrated  all  filings  to  MCA21  V3.  The transition aims to enhance compliance efficiency, standardize data  reporting,  and  promote  digitized  corporate  governance through features such as web-based filing, enhanced validations, pre-filled forms, and robust authentication  mechanisms.  Further,  other  functionalities  of the above portal like  e-Adjudication, e-Consultation,  etc have been introduced to strengthen transparency and efficiency in corporate regulatory enforcement.

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