Notice Issue to increase mandatory limit Rs 10 crores paid-up capital for appointment of CS.
On 5th August, the Supreme Court issued notice in the plea matter to notification declaration dated 1st January by the Centre and its subsequent enforcement right [w.e.f.] 1st April 2020 regarded as ultra vires and contrary to the Article 14, 19(1)(g) of the Constitution of India.
The Ministry of Corporate Affairs [MCA] issued the notification which enhanced the mandatory limit to engage Company Secretary from 5 crores to 10 crores. The plea emphasised on the lack of the robust mechanism leading to large number of companies being involved financial shenanigans and misfeasance of the public.
The plea issued that Article 14 is violated as the classification to require the regulatory professionals based on paid-up capital does not account to reasonable classification.
The bench comprising of Chief Justice of India SA Bobde, Justice AS Bopanna and V. Ramasubramaniun looked into the matter which seeks directions to formulate a high-powered committee to look up into the lapses which led to the closure of more than 6 lakh companies across the country. Hence, the Supreme Court sought response from the Centre on plea against the said notification.
