CII flags rising incidents of commercial disputes being treated as criminal complaints

NEW DELHI: Industry body CII on Tuesday said that of late, there are increasing incidents where commercial and civil disputes are being treated as criminal complaints, thereby creating a "fear factor" among entrepreneurs and foreign investors. To address the issue, CII Start-up Council Chairman Kris Gopalakrishnan called for decriminalising business and economic cases that fall within the domain of arbitration or civil courts, unless there is an intent of fraud.

Gopalakrishnan said that "lately, there have been increasing incidents where commercial and civil disputes are being treated as criminal complaints, thereby creating a fear factor among directors, young entrepreneurs and foreign investors".

Prime Minister Narendra Modi last week said the government is working to decriminalise some provisions of the Companies Act to make it easier to do business in the country.


"For such business and economic legislations which fall within the domain of arbitration or civil courts, the government needs to consider decriminalising the laws, unless there is an intent of fraud or misdoings," said Gopalakrishnan. This will not only increase confidence of both domestic and global players but also boost ease of doing business in India, he added.

India has emerged as the third-largest start-up ecosystem behind the US and China with 21 unicorns, according to the inaugural Hurun Global Unicorn List 2019. While this is encouraging, the specific aspects of the regulatory framework relating to criminal complaints need to be reviewed for the ease of doing business in India, the Confederation of Indian Industry (CII) state.