The Ministry of Corporate Affairs (MCA) issued a notification on August 5, 2024, introducing the Companies (Adjudication of Penalties) Amendment Rules, 2024. These rules, which will come into effect on September 16, 2024, significantly update the process for adjudicating penalties under the Companies Act, 2013. The key change is the introduction of a new Rule 3A, which mandates that all proceedings related to the adjudication of penalties, including the issuance of notices, submission of replies, filing of documents, presentation of evidence, hearings, attendance of witnesses, passing of orders, and payment of penalties, must be conducted entirely through an electronic platform. This e-adjudication platform has been developed by the Central Government to streamline and modernize the penalty adjudication process.
The new rules ensure that all interactions between the adjudicating officer, the Regional Director, and the concerned parties will be managed electronically. If an email address for the individual or entity involved is unavailable, the adjudicating officer is required to send the notice via postal mail to the last known address. A copy of this notice must be preserved in the electronic record system. Additionally, if no address is available, the notice will be posted directly on the e-adjudication platform.
This move to an electronic adjudication process is part of the government’s broader efforts to digitize regulatory processes, enhancing transparency, efficiency, and accessibility. By shifting to an e-platform, the MCA aims to reduce delays, improve the tracking of penalty cases, and ensure that the adjudication process is more streamlined and accessible to all parties involved.
