Abstract

The Companies (Amendment) Act 2019 and 2020 have decriminalised numbers of provisions which were hitherto panel provisions under the Companies Act 2013. Under these amendments, provisions were made tortious liability by the sanction of compensation. The Company Act 2013 was enacted on the background of the recommendation of the working committee to rewrite the Companies Act on the aftermath of the new economic policy incorporated in 1991 which brought globalisation and liberalisation authority economy. The Company Act 2013 also provide a reinforcement to the deteriorating situation of corporate governance in India by the menace of corporate fraud and corporate malpractices in the nineties, which was reflected in the collapse of Satyam Online, UTI and many other stock exchange fraud. The western common law countries have dealt with such situation very sensitively by enacting stringent panel legislation. In USA, they brought Sarbanes Oxley Act of 2002 and in Australia, the Australian Criminal Code Act 1995. These laws have adopted very sophisticated mechanism by evolving new principles of criminal liability of corporation to curb effectively the menace of corporate crime. Even after enacting the companies Act 2013 in India, there was frequent incident of corporate fraud which caused serious harm to the economy of the country. In such a situation decriminalising number of provisions in the Companies Act 2013 in a hasty way shall not be considered as a measured action by any knowledge of legisprudence. This article through lights on the socio-legal background of the Companies (amendment) Act 2019 and 2020 and its probable socio-economic impacts.

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