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Wednesday, June 25, 2014
Modi government moves to ease business rules, weed out archaic laws
TNN | Jun 25, 2014: NEW DELHI: With a view to revive investor sentiment, Union law ministry has written to the Law Commission asking it to suggest ways to ensure that business disputes are treated as such and not as criminal ones, as well as to examine whether companies can be given clearances on the basis of "self-certification".
In a letter to the Law Commission a day after Prime Minister Narendra Modi held a review of his ministry, law minister Ravishankar Prasad has highlighted what he termed the trend of commercial disputes being camouflaged as criminal disputes and being taken to magistrates with the risk of penal consequences coming in play. "While crimes ought to be prosecuted, we cannot allow a situation where business rivalries are sought to be settled by passing them off as crimes," said a source in the law ministry to explain the context of Prasad's letter to Justice (retd) A P Shah.
The concern follows the arrest warrant a Ghaziabad court issued against the global chief of Samsung on the basis of a complaint filed by one of the vendors of the Korean giant.
Sources also said that Prasad asked the Law Commission to explore that the desirability of giving companies certain clearances on the basis of "self-certification" is not in the breach of the relevant norms. "This is to smoothen the process as the task of requiring all the relevant clearances can be cumbersome and time-consuming and keep the projects from getting off the ground," said a source, emphasizing that the companies will be liable for punishment if they are found to have misrepresented facts to secure clearances.
Prasad has also asked Shah to prepare a list of archaic laws and suggest ways to weed them out. "As PM has emphasized, we are saddled with laws which we don't need. We have to get rid of them," said an official in the law ministry.
The law minister also asked Justice Shah for a framework to encourage arbitration as dispute-resolution mechanism, and to make suggestions on how India can become an international hub of arbitration.