Lawstreet Journal

Apex Court Issues Notice on plea against the Ministry of Corporate Affairs for Increasing Mandatory Limit for CS Appointment

Lawstreet Journal 11 Aug 2020 1:09am

Image courtesy: Lawstreet Journal Judiciary Apex Court Issues Notice on plea against the Ministry of Corporate Affairs for Increasing Mandatory Limit for CS Appointment

The Supreme Court on August 5, 2020 sought response from the Centre on a plea against a notification which exempts public and private companies, having paid up capital of less than Rs 10 crore, from appointing a full time company secretary. The Apex Court issued a noticein a plea seeking declaration of the notification  as being ultra-vires and repugnant to the article 14, 19(1)(g) of the Constitution of India by the Centre on  January 1st 2020 and its subsequent enforcement w.e.f. 01.04.2020.

The plea was taken by a bench comprising of Chief Justice SA Bobde, Justices AS Bopanna & V. Ramasubramaniun which seek that in order to look into the lapses which led to the closure of more than six lakh companies across the country, formulation of a High Powered Committee has been requested.

It further sought to fix the corporate accountability and responsibility to the perpetrators who were responsible for the formation and operations of the fictitious and shell companies through which thousands of crores were manipulated to the detriment of financial infrastructure of the country.

In the Ministry of Corporate Affairs impugned notification, the mandatory limit for CS appointment was enhanced from 5 Crore to 10 crores.

The plea has sought to declare as ultra-virus of the Constitution a notification issued by the Centre on January 3.It read, “In this respect it is pertinently submitted that the said notification dated 03.01.2020 is constitutionally impermissible in as much as there is no rational basis for the categorization and classification for the purpose of requirement of regulatory professionals i.e. Company Secretaries, as the… Continue Reading...

Tagged: Ministry of Corporate Affairs  
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