Debate Centre’s decision on CSR funds in Parliament, SC tells Mahua Moitra

Moitra claimed the MCA circular is not only in violation of Article 14 of the Constitution, but is also ultra vires the provisions of the Companies Act of 2013.
TMC MP Mahua Moitra

New Delhi, May 5 : The Supreme Court on Tuesday declined to entertain Trinamool Congress MP Mahua Moitra’s plea challenging the validity of the Ministry of Corporate Affairs’ circular, which excluded Chief Minister relief funds from receiving contributions under Corporate Social Responsibility (CSR) to deal with the outbreak of coronavirus.

A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and B.R. Gavai, hearing the plea through video conferencing, noted that the petition is devoid of any merit and allowed Moitra’s counsel to withdraw the petition. The court observed Moitra, who is a Member of Parliament, can debate on the issue, whether the state should get CSR benefit or not, in the House, as she has not challenged the law in her plea.

Moitra’s counsel, senior advocate C.A. Sundaram insisted that his client has no problem with respect to deposits, but why are state governments kept out of it.

Justice Kaul said there is no aggrieved entity before the court. “The petitioner before the court is an MP,” said the bench.

To this, Sundaram said that Moitra was an MP from West Bengal “but the state government cannot accept this fund”. Justice Bhushan replied it is a legislative scheme and the petitioner has not challenged the act.

The bench observed unless covered under schedule VII of the Companies Act of 2013, the state government cannot claim such funds. Moitra’s counsel insisted that it is covered under schedule VII as the coronavirus outbreak has been notified as a disaster.

Justice Kaul said: “Whether state should get the benefit out of it or not the petitioner can debate it in the parliament.”

Moitra challenged the validity of the circular issued by the Ministry of Corporate Affairs (MCA) on April 10, under which contributions to Chief Minister’s Relief Fund and State Relief Fund for COVID-19 cannot be claimed as CSR spending.

Justice Kaul reiterated that there is no corporate entity before the court and these issues can be raised before the parliament. Moitra claimed the MCA circular is not only in violation of Article 14 of the Constitution, but is also ultra vires the provisions of the Companies Act of 2013.

The bench noted that it did not see any merit in the petition and asked the counsel to withdraw it or the court would have to dismiss it. The plea was then withdrawn.

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