The Supreme Court Tuesday sought a response of the Centre on a lawsuit filed by the Congress-led Rajasthan government seeking a direction that on the lines of the PM CARES Fund, the contributions made to the Chief Minister’s Relief Fund (CMRF) be also included as the Corporate Social Responsibility (CSR) expenditure under the Companies Act.
A bench of Chief Justice S A Bobde and Justices M R Shah and A S Bopanna issued the notice to the Ministry of Corporate Affairs on the plea which challenged a part of the April 10 circular of the ministry which said, Chief Minister’s Relief Fund or State Relief Fund for Covid-19 is not included in Schedule VII of the Companies Act, 2013 and therefore any contribution to such funds shall not qualify as admissible CSR expenditures.
Usually, CSR is defined as a Company’s sense of responsibility towards the community and environment, both ecological and social, and it is a way of conducting business, by which corporate entities visibly contribute to the social good.
The state government said that the Centre’s circular has excluded CMRF from the purview and ambit of Corporate Social Responsibility (CSR) activities, prescribed by the Act.
Rajasthan, in its plea filed through senior advocate Manish Singhvi, said it has formed a separate Rajasthan CMRF Covid-19 Mitigation Fund, which is a dedicated account under Chief Minister Relief Fund for countering adverse impact of Covid-19.
In the lawsuit, filed under Article 131 of the Constitution, by advocate Sandeep Kumar Jha, the state government has sought a direction that the Centre’s circular be not made applicable to its CMRF and be held as discriminatory and void.
Pass a decree declaring the contributions made to the Chief Minister’s Relief Fund or State Relief Funds (CMRF) to be included as CSR Expenditure under Schedule VII of the Companies Act, 2013, the plea said.
Rajasthan said its CMRF Fund’ was aimed to make available funds at grass root levels for meeting the emergency situation inter alia to provide for laboratory testing, ventilators, protective equipment, masks, sanitizers, medical and non-medical essential equipment and medicines.
It was meant to provide rations, food packets, transportations, medicines and maintenance of person affected by the pandemic in the state, the plea said.
It said the though the circular provided that the contribution made to the PM CARES Fund shall qualify as CSR expenditure, but the same benefit was not given to the special CMRF fund.