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Updated: Feb 9

by Nishka Kapoor *

Recently, the Union Minister of Commerce and Industry, Piyush Goyal, tabled the Jan Vishwas (Amendment of Provisions) Bill, 2022 (“the bill”), in Lok Sabha. The bill comes in the aftermath of the Vivad se Vishwas Bill tabled in 2020, which aimed to establish a secure and dynamic business environment in the country. The Jan Vishwas Bill was introduced with the objective of decriminalising minor offences in order to promote a favourable business environment within the country. To facilitate the ease of doing business, the bill seeks to decriminalise or replace 183 offences across 42 central legislations with monetary penalties. The bill encompasses a wide range of offences that will be decriminalised, including but not limited to trespassing, failure to maintain a register of workers, failure to provide adequate safety equipment to workers, and non-compliance with environmental regulations etc.

The primary reason for introducing the bill is to foster a sense of trust and confidence among the citizens, encouraging them to invest in businesses and promoting the establishment of ethical and upright business practices. Presently, there exist numerous laws and regulations in the country that can subject individuals to several legal consequences in the event of an inadvertent mishap. In the realm of business, the reputation and trustworthiness of entrepreneurs and businesspersons play a pivotal role in determining their success and growth. By decriminalizing specific offences, the bill aims to replace stringent legal actions with penalties. This approach seeks to ensure that individuals who have committed minor infractions while conducting their business operations do not face excessive legal repercussions. Consequently, this measure serves to safeguard both the trust of the people and the reputation of the business in question.

Further, the substitution of criminal legal actions with civil penalties would yield substantial benefits for the judicial system. It would alleviate the burden on courts by mitigating the number of cases that would otherwise require prolonged legal proceedings, enabling the judiciary to allocate its resources more efficiently, focusing on cases that involve more significant violations and offences.

Boosting Businesses: Bill’s Positive Impact

The bill is welcomed by retailers because of the positive impacts it will have on them. The bill will help in the growth of businesses and decrease the burden on them because it seeks to remove harsh punishments such as serving a jail term for trivial mistakes committed in the course of doing business. The step to either decriminalise criminal action or replace several sections from across different acts with civil penalties will also prevent the misuse of those sections. Further, in case of monetary penalty, the bill seeks to penalise proportionate to the magnitude of the offence committed. In addition to this, the bill also seeks to revise and increase the fine by 10% after every three years. This step will effectively work as a deterrent to stop people from committing crimes repeatedly.

The bill will also help prevent the misuse of sections against various individuals doing business. For instance, the bill, along with several sections of different acts, aims to decriminalize Section 59 of the Food Safety and Standards Act, 2006. This section states that if a vendor, manufactures, sells, or, for that matter, even stores food that is not safe and can result in injury, they may be imprisoned for six months. While the provision may seem fair on the face of it, the implication might be a bit regressive because the provision states that the vendor might be imprisoned even if no injury is caused. Hence, decriminalizing such malicious sections will not be used to target any business, reduce the burden on the business and save the high enforcement cost for the government.

The Bill will advantage not only the existing businesses but the emerging start-ups as well. According to the, ‘The State of India Startup Ecosystem Report, 2022’, the startup ecosystem has grown 8.4 times in India. Since 2014, the annual funding for startups in India has grown eightfold, from $5 billion in 2014 to $ 42 in 2021. India is ranked 3rd globally, with over 4,200 startups, creating 80,000 employment opportunities. The bill, such as, after starting the business, it will be easy for the businesses to get construction permits, electricity, property registration, enforce contracts and resolve insolvency, etc. These parameters have been created for the ease of doing business in the future and to avoid any external hindrance that might adversely affect the course of business.

Privacy Protection and Deterrence: Rethinking Penalties for IT Act Offences

The bill aims to push for monetary penalty instead of imprisonment for sections pertaining to the Information Technology Act, 2000. The major provisions the bill seeks to amend from the Information Technology Act, 2000 are Section 33, Section 67 C, Section 72, and Section 66 A. Section 33 is related to the failure to surrender the license. The bill aims to reduce the punishment from a jail term to a monetary penalty. While this step might seem reasonable, it has chances of getting misused because, firstly, having a license ensures that the business is legal and is conducted in a way that won’t cause any harm to the people. So, instead of removing the jail term altogether, the authorities could amend it in a manner that, if the businesses failed to produce the license for the first time, they would be fined. If they fail to produce it subsequently, they will be awarded a jail term.

Similarly, for Section 67C and Section 72 of the Information Technology Act, 2000, the bill aims to amend the provisions and reduce the punishment to a monetary penalty for these sections as well. However, these Sections are related to the privacy of the user. Section 67 C mentions the preservation and retention of the information by intermediaries, and Section 72 states provisions pertaining to the breach of confidentiality and privacy of the users. For these sections, the punishment shouldn’t be reduced to a monetary penalty because it won’t be as effective for large corporations. Even the Supreme Court emphasized the privacy rights of individuals in the Puttaswamy judgement and held that informational privacy is a vital aspect of privacy. Therefore, the government should establish an appropriate check mechanism, transparency, and accountability system that might be built, instead of amending the punishment specified under this section. This will keep the company's database safely and protect individual privacy.

Lastly, with respect to the Information Technology Act, the bill aims to decriminalize Section 66A of the Information Technology Act, 2000. This section makes it a punishable offence to send fake and offensive messages using a computer or any other device. This is one of the most controversial sections of the Information Technology Act, 2000. In Shreya Singhal vs UOI, 2015, SC held this section to be unconstitutional on the grounds that it is open-ended, vague, and arbitrary in practice and violated Article 19 of the constitution, which enshrines within it the Right to Freedom of Speech and Expression. Though, according to the SC order, it is valid to decriminalize this provision, it wouldn’t be rational to do so because decriminalizing this section will lead to misuse of the provision and adversely affect society. There have been various instances where fake and offensive messages targeting some sections of society surfaced on the internet, and not having any concrete law in this area would affect societal peace and harmony

A way forward

Overall, the Jan Vishwas is a step in the right direction, but it does not go far enough. For instance, the bill does make some reasonable amendments and aims to promote the ease of doing business, it doesn’t clearly define what constitutes a minor offence. Further, the bill does not provide for any appeal process. This means that it is up to the discretion of the Jan Vishwas Authority to decide which offences are minor and which are not. Furthermore, if a business is fined, there is no way to challenge that. Thus, the bill needs to be more specific about what constitutes a minor offence, and it needs to provide for an appeal process

The bill does not address the problem of corruption. This increases the risk of officials using their discretion in targeting businesses for fines. This could create a climate of fear and uncertainty for businesses and could discourage investment in India. Hence, if this issue is not addressed, the decriminalisation of minor offences will not be effective in promoting the ease of doing business in India.

India’s government could enact legislation along the same lines as Singapore. For instance, rules in Singapore place a strong emphasis on accountability and transparency, requiring enterprises to register with the government and, in some situations, make their financial information available to the public to safeguard the public interest. Similar to that, it also has strict licensing and consumer protection laws. Singapore has also implemented precautions to curb corruption and the impunity of money taken in the form of fines. Similar reforms could be tailored to India’s socioeconomic conditions and implemented here as well.

*Nishka Kapoor is a third year student at NALSAR University of Law, Hyderabad at the time of publication of this blog.

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