The Corporate Affairs Ministry (MCA) has taken a big leap towards end-to-end digitalisation of adjudication processes related to penalties.
From September 16, all activities around adjudication of penalties would have to take place in electronic mode only and that too only through the e-adjudication platform developed by the Central Government for this purpose, MCA has ruled.
This end-to-end digitalisation of adjudication proceedings is expected to reduce the burden of Registrar of Companies (ROCs) and enable quick resolution of adjudication proceedings, say company law experts.
MCA on Monday notified the Companies (Adjudication of Penalties) Amendment Rules, 2024, mandating that all adjudication proceedings, including notices, filings, hearings, and penalty payments, occur electronically via the Central Government’s e-adjudication platform.
‘Forward-thinking approach’
Sindhuja Kashyap, Partner, King Stubb & Kasiva, Advocates and Attorneys, said this forward-thinking approach to mandating electronic mode for all adjudication activities enhances efficiency, transparency, and accessibility for stakeholders.
It not only minimises procedural delays and the risk of lost documents but also ensures a streamlined and effective adjudication process, she added.
Embracing digitisation in legal proceedings marks a significant advancement in corporate governance and compliance, reinforcing accountability and fostering a more robust legal framework, Kashyap added.
Shiju PV, Senior Partner, IndiaLaw LLP, said that E-Adjudication platform envisages an end-to-end digitalisation of adjudication proceeding. It can really reduce the burden of ROCs and will enable quick resolution adjudication proceedings, Shiju added.
‘Single e-platform’
Suhana Islam Murshedd, Partner, AQUILAW said this is a welcome move since it streamlines the entire adjudication process through a single e-platform which is currently the MCA V3.
By virtue of this amendment, all the steps including but not limited to issuance of notices, filing of replies, attendance of witnesses, payment of penalties and the passing of orders must neccessarily be conducted through the e-platform, she noted.
Additionally, the government has provided guidance on handling cases where an email address is incorrect or unavailable. This initiative underscores the government’s commitment to centralising and streamlining the adjudication process through technological integration with the existing system, she said.
‘Greater transparency’
Aakash Dasgupta, Partner, IndusLaw, said that introduction of the electronic adjudication platform is a welcome move towards ensuring greater transparency and in line with the Digital India initiatives designed to ensure the availability of digital infrastructure to citizens.
While Rule 3 of the Adjudication of Penalties Rules empowers the adjudicating officer to require physical attendance of a person, the new Rule 3A clarifies that the holding of hearing and attendance of witnesses needs to be in electronic mode only through the e-adjudication platform. This is also expected to expedite the conclusion of adjudication proceedings, given that physical attendance is no longer required, he added.