In a significant order, a Bombay High Court bench of Justices Sunil Shukre and Avinash Gharote at the Nagpur seat ordered the divisional commissioners of Nagpur and Amravati and also the collectors of all districts in Vidarbha region to initiate action against private companies that have made zero contribution towards Corporate Social Responsibility (CSR) funds. The HC has said the commissioner could initiate action under the Companies Act.
The bench was seized with a clutch of petitions along with a suo motu petition over the Covid crisis in Nagpur and the Vidarbha region.
During the hearing, the divisional commissioner of Nagpur region submitted an affidavit listing the names of private companies in Vidarbha that had not spent any amounts from their CSR funds or hadn’t contributed at all.
“The affidavit also gives list of companies which had shown their willingness to make their contributions and the companies which are unwilling,” the bench noted.
The bench further noted that the affidavit was about two weeks old and the present situation wasn’t clear. “It is not known how many of the willing companies have actually sent their contributions,” Justice Shukre said.
The judges further referred to the laws that enable the authorities to act against companies that aren’t coming forward to contribute. “We must point out here that there are specific provisions made in the Companies Act, 2013, for dealing with such unwilling, defaulting and non-responsive companies. The relevant provisions are contained in section 136 of the Companies Act and also in some other provisions,” the bench said.
“The Divisional Commissioner of Nagpur and Amravati and also Collectors of all the districts in Vidarbha region shall do well to make a thorough study of these provisions of law and invoke them against the erring companies by resorting to the procedure prescribed in the Companies Act, 2013,” the judges ordered.
The bench further said that if any directions in this regard were required then “detailed factual position be placed before this court so that appropriate decision can be taken by this court in this regard. It shall be done on or before the next date, if required,” the judges’ order stated.
