On 22nd December 2022, the Hon’ble Minister for Industry and Commerce introduced the Jan Vishwas (Amendment of Provisions) Bill, 2022 (“Bill”) which seeks to decriminalise minor offences and rationalise monetary penalties by amending 183 provisions across 42 acts. The Bill has been referred to a Joint Parliamentary Committee which is expected to submit its report in the upcoming budget session of the Parliament.

Salient Features

• Decriminalisation of minor offences: The Bill proposes to decriminalise procedural lapses and minor non-compliances which do not have large negative externalities and instead seeks to impose monetary penalties for penalising each such contravention or non-compliance.
• Appointment of Adjudicating Officers: The Bill proposes empowering the Central Government to appoint adjudicating officers for determining the amount of penalty payable under the acts as amended under the Bill including the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, etc.
• Automatic increase in fines and penalties: The Bill seeks to increase the minimum amount of fine and penalty levied by ten per cent after the expiry of every three years once the Bill is enacted into a law.

From a broad business compliance perspective, the following key legislations have been proposed to be amended under the Bill:

The Information Technology Act, 2000 (“IT Act”)

• Increased monetary penalty under Section 70 (7) – The Bill seeks to increase the penalty imposed under Section 70B (7) from Rs 1 lakh to Rs 1 crore. Section 70B (7) penalises non-compliance with the directions issued under Section 70B(6) of the IT Act. It is worth noting that if the Bill is implemented in its current form then such a penalty would be imposed in case of any violation of the Indian Computer Emergency Response Team’s (CERT-In) Directions issued on 28th April, 2022 since the said Directions were issued under Section 70B (6) of the IT Act. The term of imprisonment of 1 year under Section 70B (7) remains unchanged.
• Decriminalisation for disclosure of information in breach of lawful contract under Section 72A – The Bill seeks to decriminalise disclosure of information in breach of a lawful contract by any person (including an intermediary) by decriminalising the extant provision, which currently prescribes imprisonment for a term of up to 3 years or fine extending up to Rs 5 lakhs or both, by instead proposing a provision imposing a fine extending up to Rs 25 lakhs.
• Decreased term relating to monitoring and collecting traffic data or information for cyber security under Section 69B – The Bill seeks to decrease the term of imprisonment for failure to provide technical assistance and facilities to authorised Government agency for accessing traffic data from 3 years to 1 year. Furthermore, the fine liable to be paid may extend to Rs 1 crore.
• Extending the powers of the adjudicating officer under Section 46 – The Bill seeks to increase the powers of the adjudicating officer appointed by the Central/State Government (for adjudging contravention of provisions of the IT Act or any rule, regulation, direction or order made thereunder, and determining corresponding penalties) to the entire Act, and not just to limited provisions (i.e. Sections 43 to 47, IT Act) as is the case presently.

The Environment (Protection) Act, 1986 (“EPA”)

• Decriminalisation of any non-compliance/contravention of the EPA – The EPA currently criminalises any non-compliance/contravention with its provisions, or the rules/orders/directions issued thereunder with imprisonment for a term extending up to 5 years or a fine extending up to Rs 1 lakh or both. In cases, where the contravention continues beyond a period of 1 year after the date of conviction, the offender can be imprisoned for a term up to 7 years.
• The Bill proposes to decriminalise non-compliance/contravention of the EPA, rules, orders and directions issued thereunder by relying on monetary penalties, and not imprisonment, for each such contravention or non-compliance. Such penalties which shall range between Rs 5,000 to Rs. 15 lakhs.
• Similarly, in case of contravention of any of the provisions of the EPA by a company, then such company shall be liable to pay the penalty for “each such contravention” of minimum Rs 1 lakh extending up to Rs 15 lakhs. In case the errant company continues contravention of the EPA, then it shall be liable to pay an additional penalty of Rs 1 lakh for every day during which such contravention continues.
• Additionally, the Bill proposes to decriminalise various other provisions (pertaining to contravention of standards, handling hazardous wastes, failure to render assistance to authorities, etc.) by seeking to impose monetary penalties only.
• Appointment of an Adjudicating Officer – The Bill proposes appointing an Adjudicating Officer (“AO”) who will be empowered to impose the penalties prescribed under the EPA based on various factors as identified in the Bill. The penalties imposed by the AO will be deposited into an ‘Environmental Protection Fund’ proposed to be setup under the EPA. Appeals against the order of the AO will lie before the National Green Tribunal.

Legal Metrology Act, 2009 (“LM Act”)

• Decriminalisation relating to Quoting/publishing a non-standard unit – The penalty under Section 29 of the LM Act for quoting a non-standard unit is currently imprisonment up to one year/fine or both, on the second or subsequent offence. The Bill proposes to replace the imprisonment clause with a fine of Rs 50,000 for the second offence extending up to Rs 1 lakh and for the third and subsequent offence with a fine extending up to Rs 2 lakhs.
• Decriminalisation relating to sale of commodities, etc. by non-standard weight or measure – Section 34, LM Act penalises sale of any commodity by any means other than the standard weight or measure or number, with a fine ranging from Rs 2,000 extending up to Rs,5000 and mandates a term of imprisonment of up to 1 year or fine or both for the second or subsequent offence. The Bill seeks to decriminalise any violation of Section 34 by mandating a fine extending up to Rs 25,000 and for the second offence with fine which may extend up to Rs 50,000 and for the third and subsequent offence, with fine extending up to Rs 1 lakh.

Our Take

The introduction of the Bill is laudatory measure adopted by the Government of India to reduce compliance costs for business enterprises and enhance ease of doing business in India. The process of decriminalisation of minor offences will also have a salutary effect on reduction of cases in our judicial system by establishing an alternative mechanism for expeditious enforcement of various acts by prescribing monetary penalties for such minor offences. The Bill is a recognition by the Government of India of the inherent need to reduce the regulatory and compliance burden on business enterprises by imposing criminal liability only for serious offences and decriminalising procedural lapses which otherwise would have attracted criminal liabilities under the extant law.

This article was first published on Saikrishna&Associates