MCA mulls 'in-house' mechanism to redress grievances

There are plans to put in place an "in-house" mechanism at the ministry of corporate affairs ministry to redress grievances arising out of actions taken against entities under the companies law, union minister P P Chaudhary said today.

The idea, which is at a nascent stage, is being looked at against the backdrop of the MCA striking off the names of around 2.24 lakh companies from the official records for being inactive for long.

Chaudhary, who is minister of state for corporate affairs as well as law and justice, today said that having a redressal mechanism within the department would help in reducing the pressure on courts.
 

"The (departmental) redressal mechanism should be there to minimise pressure on the courts. Otherwise, there is lot of pressure on courts... Once an action is taken, the reaction is in the court of law which is a burden on the court," he said.

Referring to deregistering of around 2.24 lakh companies and disqualification of directors, the minister said there is no provision under the Companies Act to address grievances arising out of such actions within the ministry.

Now, those having grievances have to approach the National Company Law Tribunal (NCLT), he added.

When asked whether such a redressal mechanism is being looked at only at the corporate affairs ministry, Chaudhary said, "we are not talking about only the corporate affairs ministry)".

Amid concerns in certain quarters about government's action to strike off names of around 2.24 lakh companies from the official records, the minister emphasised that it is not the purpose of the government to create any hindrance in the working of the industry.

"You (industry) are much much more experienced than the bureaucrats. We would like to take inputs from the industry and based on them, create a conducive environment on how industry can function freely but certainly within the parameters of law," he said.

Chaudhary said that "no hue and cry" has been raised despite the fact that we have struck of 2.24 lakh companies.

Only few cases have been filed before the NCLT and courts with respect to challenge against striking off of companies' names disqualification of directors, he said on the sidelines of an event organised by industry body CII.