An Analysis of The Jan Vishwas Act

Context: The controversial Jan Vishwas Act, 2022 which was recently enacted into law by Parliament, has been touted by the government as a landmark piece of legislation aimed at improving “ease of doing business” in India by either decriminalising or making “compoundable” offences across 42 legislations.

In a significant move, the contentious Jan Vishwas Act of 2022, recently ratified by the Indian Parliament, stands as a consequential piece of legislation. Championed by the government, this act aims at revolutionizing the “ease of doing business” in India by either decriminalizing or classifying offences as “compoundable” across an extensive array of 42 legislative provisions.

So in the following article we are going to cover: 

• Need for such a legislation
• Key Features of the legislation 
• Major challenges facing the Act
• Way Forward

Need for such a legislation: 

• The rankings of Ease of Doing Business encompass multiple dimensions of business operations, including aspects like contract enforcement and tax adherence. India’s position in these rankings displayed improvement over time, prompted by advice from various expert committees advocating for reforms aimed at mitigating barriers to business activities. One notable concern highlighted by the Company Law Committee was the imposition of criminal liability for technical or procedural violations, which was perceived as inhibitive.
• Consequently, the Companies Act of 2013 underwent revisions in 2019 and 2020, aimed at reclassifying transgressions as civil violations that could be sanctioned by government officials. The Jan Vishwas (Amendment of Provisions) Bill of 2022 was presented in the Lok Sabha on December 22, 2022, with the goal of declassifying specific offenses, alleviating compliance burdens on individuals and enterprises, and fostering a more conducive business environment. The bill was subjected to scrutiny by a Joint Parliamentary Committee led by Mr. P.P. Chaudhary, whose findings were submitted on March 17, 2023.
• The committee’s recommendations encompassed adjustments to the severity of penalties for certain breaches. For example, under the existing Merchant Shipping Act of 1958, failing to notify a designated authority about a ship’s involvement in an accident carries a potential punishment of imprisonment for up to one year, a fine of up to Rs 10,000, or both. The proposed amendment in the bill suggests revising this penalty to a monetary fine of five lakh rupees. Nevertheless, environmental concerns led the committee to propose omitting this amendment. In cases such as the Boilers Act of 1923, which the bill seeks to decriminalize, the committee also advised introducing amendments to establish Adjudicating Officers and higher-level appellate authorities.

Key Features of the legislation 

• The Act amends 42 Acts which include: the Indian Post Office Act, 1898, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991, and the Information Technology Act, 2000.
• Decriminalising certain offences: Under the Act, several offences with an imprisonment term in certain Acts have been decriminalised by imposing only a monetary penalty.  For example, under the Information Technology Act, 2000, disclosing personal information in breach of a lawful contract is punishable with imprisonment of up to three years, or a fine of up to five lakh rupees, or both.  The Bill replaces this with a penalty of up to Rs 25 lakh.  In certain Acts, offences have been decriminalised by imposing a penalty instead of a fine.  For instance, under the Patents Act, 1970, a person selling a falsely represented article as patented in India is subject to a fine of up to one lakh rupees.  The Bill replaces the fine with a penalty, which may be up to ten lakh rupees.
• Removal of offences: The Bill removes certain offences.  These include all offences under the Indian Post Office Act, 1898.
• Revision of fines and penalties: The Bill increases the fines and penalties for various offences in the specified Acts.  The fines and penalties will be increased by 10% of the minimum amount every three years.
• Adjudicating Officers: The central government may appoint one or more Adjudicating Officers for determining penalties.  These Officers may summon individuals for evidence and conduct inquiries into violations of the respective Acts.  These Acts include the Agricultural Produce (Grading and Marking) Act, 1937 and the Public Liability Insurance Act, 1991.  The Bill also specifies the appellate mechanisms for the orders passed by these Officers.  For instance, in the Environment (Protection) Act, 1986, appeals against the Adjudicating Officer’s orders may be filed with the National Green Tribunal within 60 days.

Major challenges facing the Act

• Omission of offences under the Indian Post Office Act, 1898: The Act removes all offences and penalties under the Indian Post Office Act, 1898.
  • This raises two issues.
    • Omission of offences under the Act may not be relevant to legislative intent
    • Omission of offences under the Act may lead to privacy issues
• Competence of Adjudicating Officers added under environmental laws
  • The Bill amends the adjudication process under the Air (Prevention and Control of Pollution) Act, 1981 (Air Act) and the Environment (Protection) Act, 1986 (EP Act).  Currently, contraventions of both laws are prosecuted in court only upon a complaint by specified authorities, or by any person who has given these authorities. 
  • This new process of adjudication raises a few issues.
    • Independence of Adjudicating Officers
    • Judicial and technical competence of Adjudicating Officers
    • Further, there is significant technical input involved in legal proceedings for offences under the Air Act.  
• Relationship between Adjudicating Officers and the judiciary
  • Under the Bill, the Adjudicating Officer will be responsible for receiving and hearing complaints against contraventions under the EP Act.  Their decisions can be appealed to the National Green Tribunal, whose decisions are appealed to the Supreme Court.  The Bill also empowers the Adjudicating Officer to file complaints in court for offences under the EP Act.  The question is whether there is a need for a parallel process in which the Adjudicating Officer can also file a complaint in court.  This may be conflating the role of an adjudicatory body with that of the prosecution.
• Functional overlap between proposed and existing Funds
  • The Bill adds an Environmental Protection Fund under the EP Act.  The Fund will be used for education, awareness, and research for environmental protection, as well as the expenses of implementing these Acts.  Other funds exist which fulfil a similar purpose, hence the question is whether this new Fund is necessary.

The way forward involves a comprehensive approach to ensure that the Jan Vishwas Act, 2022, effectively achieves its intended goals of promoting ease of doing business while addressing the challenges and concerns that have emerged. Here are some potential strategies:

• Engage with businesses, legal experts, environmentalists, and other relevant stakeholders to gather diverse perspectives on the implementation of the Act. This could help identify potential gaps, refine provisions, and ensure that the legislation strikes a balance between business facilitation and environmental protection.
• Review the omitted offences under the Indian Post Office Act, 1898, and other Acts to ensure that the removal aligns with the legislative intent of promoting ease of doing business. Address concerns regarding the relevance of such omissions and potential privacy implications.
• Develop training programs for Adjudicating Officers to equip them with the necessary judicial, technical, and environmental expertise. This would ensure fair and informed decisions, particularly in complex cases related to environmental violations.
• Establish an independent oversight mechanism to monitor the actions of Adjudicating Officers, ensuring their impartiality and adherence to due process. This can help mitigate concerns about potential conflicts of interest or biased decision-making.

By adopting a holistic and collaborative approach, India can navigate the challenges posed by the Jan Vishwas Act while realizing its potential to foster a conducive business environment and sustainable development.