The ministry of corporate affairs (MCA) has decided to withdraw litigation against companies in 27,000 cases pending in various courts, in a move that would give relief to thousands of companies and reduce the workload of its administrative arms.
These cases, filed over several decades, were being dragged along even after the companies caught for violation of the Companies Act 1956, rectified their mistakes. The ministry took the decision after a reality check on the status of all litigation fought against registered firms.
Corporate Affairs Secretary D K Mittal said the ministry was in the process of scrutinising another 35,000 cases for similar action. “Wherever offences are compoundable, we would like to settle the matter,” Mittal said.
Mittal believes of the pending 75,000 cases, only 8,000 to 10,000 cases related to serious offences would stay.