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SC Dismisses Mahua Moitra's Plea Challenging Exclusion Of Donations To CM's Relief Fund From CSR

Radhika Roy
10 Aug 2020 2:08 PM GMT
SC Dismisses Mahua Moitras Plea Challenging Exclusion Of Donations To CMs Relief Fund From CSR
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The Supreme Court on Monday dismissed plea filed by TMC MP Mahua Moitra which challenged the Centre's circular which states that Chief Minister's Funds or State Relief Funds will not come within the purview of Corporate Social Responsibility (CSR) activities under Section 135 of the Companies Act. 

A Bench comprising of Justices Ashok Bhushan, R. Subhash Reddy ad BR Gavai heard the matter and noted that Moitra had filed a similar plea which had been dismissed on May 5, 2020. Accordingly, he dismissed the instant plea as well.

Today, Advocate-on-Record Rohit Anil Rathi, appearing on behalf of the MP from Krishnanagar (West Bengal), submitted that the previous plea had been withdrawn on May 5th.

"I withdrew the petition on May 5; the notification which has been challenged herein came subsequently on May 27. I urge my Lords to only consider the matter in respect of this subsequent development."

However, the Bench was not inclined to entertain the matter and noted, "How can the same Petitioner file another petition on the same issue? This won't set a right precedent. You shouldn't have filed it again after you withdrew a similar petition in May."

Accordingly, the bench observed that as the Petitioner had filed a plea for similar relief, which had been dismissed as withdrawn on 5th May, 2020, the Court was not inclined to entertain the instant petition.

Corporate Contributions Towards CM Relief Funds/ State Relief Funds For COVID-19 Do Not Qualify As CSR Expenditure, Clarifies MCA

In the previous plea, while holding that there was no representation by an aggrieved party before the Supreme Court, a Bench headed by Justice Ashok Bhushan refused to entertain Moitra's plea which challenged the Circular issued by Ministry of Corporate Affairs (MCA) in so far as it excluded CM's Relief Funds from the ambit of CSR. 

It had been highlighted that to exclude the fund(s) from purview of CSR was in direct contravention of Constitutional tenets of federalism and Article 14 as well as being ultra vires of the Companies Act.

Further, the MP had contended that the MCA notification made distinctions on the basis of contributions made to PM CARES Fund and CM Relief Funds as only the former would attract CSR, thereby disincentivizing corporate contributions which the State Governments would have otherwise received.

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