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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 4995
ANSWERED ON MONDAY, 23rd March 2026
ADJUDICATION OF CORPORATE COMPLIANCE VIOLATIONS
4995. Shri Praveen Khandelwal:
Will the minister of Corporate Affairs be pleased to state:
(a) whether average timelines for adjudication of corporate
compliance violations under the Companies Act have been
assessed, if so, the details thereof;
(b) whether compounding and adjudication proceedings are
being digitised end-to-end, if so, the details thereof;
(c) whether risk-based inspection models are being
implemented to reduce unnecessary compliance burden on
smaller companies, if so, the details thereof;
(d) whether data analytics is being used to identify shell
companies and related-party transaction irregularities, if so,
the details thereof; and
(e) the steps taken by the Government to strengthen
transparency and efficiency in corporate regulatory
enforcement?
ANSWER
Minister of State in the Ministry of Corporate Affairs; Minister
of State in the Ministry of Road Transport And Highways:
(SHRI HARSH MALHOTRA)
(a) Yes Sir. The average time taken to issue order from the
date of initiation of adjudication proceedings of the disposed
cases is presently around 43 days.
(b) Under MCA 21 Version 3 (V3), the Ministry has launched the
E-adjudication module in September 2024 to establish a
technology driven adjudication mechanism to digitize end toend adjudication proceedings. Further, appeals against the
order of adjudication are also digitized end to end.
Compounding proceedings under the Companies Act, 2013 are
partially digitised (at the filing stage) through the MCA 21
system.
(c) Whenever any complaint or reference is received from the
Central/Regional Economic Intelligence Committee
(CEIC/REIC), Fraud Monitoring Reports (FMRs) from banks,
reports of the Market Research and Analysis Unit (MRAU) of
the Serious Fraud Investigation Office (SFIO), or references
from the Central Bureau of Investigation (CBI), Securities and
Exchange Board of India (SEBI), Insolvency and Bankruptcy
Board of India (IBBI), through e-Form ADT-4 filed by the auditor
of a company pointing out serious violations or corporate
governance issues and having public interest, the same are
examined. Based on examination and the gravity of the cases
Inspections are ordered against the company under Section
206(5) of the Companies Act, 2013.
(d) The term “shell company” is not defined under the
Companies Act, 2013. As regards irregularities in related party
transactions, filings made by companies in the MCA21 system
that are flagged are examined further and appropriate action
is taken based on such examination.
(e) The Ministry has migrated all filings to MCA21 V3. The
transition aims to enhance compliance efficiency, standardize
data reporting, and promote digitized corporate governance
through features such as web-based filing,
enhanced validations, pre-filled forms, and robust
authentication mechanisms. Further, other functionalities of
the above portal like e-Adjudication, e-Consultation, etc have
been introduced to strengthen transparency and efficiency in
corporate regulatory enforcement.
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