INDIA Trends and Developments Contributed by: Priyank Ladoia, Raghav Seth, Tanmay Sharma and Arjun Narang, AZB & Partners
JV2 proposes amendments to 355 provisions across 16 statutes, with the dual objective of enhancing both ease of doing business and “ease of living”. For instance, minor procedural violations under the Motor Vehicles Act, 1988, and the Micro, Small and Medium Enterprises Development Act, 2006, would attract monetary penalties rather than imprisonment, ben - efiting businesses of all sizes as well as individuals. JV2 strengthens the trust-based approach: first-time contraventions for 76 offences would result in warn - ings or advisories, while repeat violations would attract graded monetary penalties. Designated officers would adjudicate penalties administratively, reducing court involvement. Periodic upward revisions of fines – 10% every three years – ensure penalties remain propor - tionate without repeated legislative amendments. Extending the benefits of decriminalisation The stated objective of both the JV Act and JV2 is to reduce pendency in criminal courts. The Joint Par - liamentary Committee, in its March 2023 report on the JV Act, had recommended that the government should “endeavour” to bring the amendments pro - posed in the law with “retrospective effect for abat - ing pending legal proceedings in respect of offences being decriminalised”. However, Section 4 of the JV Act and the proposed JV2 expressly prohibit retrospective application. Con - sequently, decriminalised provisions apply only to vio - lations occurring after the amendments’ enactment, leaving ongoing prosecutions unaffected. In other words, the lower punishment pursuant to the amend - ments will apply only to violations which occur after the amendment and the benefit of decriminalisation will not be available in ongoing prosecutions or inves - tigations where the violations were committed before the amendments came into effect. This limits the potential impact on judicial pendency and denies relief to those facing charges for minor offences committed prior to the amendments. Individuals and businesses still have to go through criminal prosecution, even though the law stands beneficially amended and those offences would now lead to only a monetary penalty. This express prohibition on retrospective application neither helps reduce the number of pending cases in
courts, nor does it give relief to people who committed minor offences before the law changed. The Indian Parliament may consider Indian case laws which interpret Article 20 of the Indian Constitution to extend the benefit of lower punishment to pend - ing cases. While laws are generally presumed to apply prospectively, courts have clarified that ben - eficial amendments can be applied retrospectively unless the legislature expressly states otherwise. The Supreme Court has held that while laws increasing punishment cannot apply retrospectively, laws reduc - ing punishment may do so unless expressly prohib - ited. This principle, rooted in beneficial construction and fairness, means that the benefit of reduced pun - ishment introduced through the decriminalisation of an offence should be extended to individuals whose cases are pending investigation or trial, even if the offence occurred before the amendment. The Madras High Court has applied the principle of ex post facto applicability of beneficial legislation to prosecutions under the Companies Act, in the context of various provisions which stood decriminalised by way of the Companies (Amendment) Act, 2020, and subsequent amendments. Courts have extended the benefit of decriminalisation under various laws, where imprisonment for minor contraventions was replaced with monetary penalties, even though the violation occurred prior to the amendment. Legislative reforms and beneficial court rulings have extended the ben - efits of decriminalisation under laws such as the Com - panies Act, 2013, the Limited Liability Partnership Act, 2008, and the Water (Prevention and Control of Pollu - tion) Amendment Act, 2024, even for violations occur - ring prior to the amendments. Courts have been able to extend the benefit of decriminalisation to pending cases because those amendments did not contain an express prohibition to retrospective applicability akin to Section 4 of the JV Act and the proposed JV2. Recently, the Delhi High Court in the case of “CTM India & Anr. v Registrar of Companies” (Crl. M. C. 4535/2022) recognised this trend in the context of violations relating to corporate social responsibility obligations under the Companies Act, 2013, which stood decriminalised by way of the Companies (Amendment) Act, 2020. Criminal sanctions were sub -
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