CSR News: Rajasthan Govt moves SC Against Circular Excluding CMRF from CSR

The Rajasthan government has approached the Supreme Court, challenging the validity of a circular by the Centre, excluding a special fund, created under the CM Relief Fund from receiving donations as corporate social responsibility, for the purpose of mitigating effects of COVID-19 pandemic.

It has reported that the State claimed the April 10 circular, allowing ‘PM Cares Fund’ and disallowing ‘CM’s Relief Fund’ to receive such contribution, was unconstitutional and went against the principle of cooperative federalism.

A bench of Chief Justice S A Bobde and Justices M R Shah and A S Bopanna issued notice to the Union government, seeking its response on the original suit filed under Article 131 of the Constitution, related to a dispute among the states and between the State and the Centre.

In its plea, the Ashok Gehlot government submitted that it has created a special ‘Rajasthan CMRF COVID-19 Mitigation Fund’ on March 29 for countering the effects of the pandemic. However, on April 10, a circular issued by the Ministry of Corporate Affairs caused an apprehension that the said CMRF won’t qualify as Corporate Social Responsibility (CSR) expenditure.

“In order to allay such apprehension and to declare and hold that CMRF shall fall within the CSR Funds, the present suit under Article 131 of the Constitution, is being preferred,” it said.

The ‘Rajasthan CMRF COVID-19 Mitigation Fund’ was created with the aim and objective to make available funds at grassroots levels for meeting the emergency situation to provide for laboratory testing, ventilators, protective equipment, masks, sanitisers, medical and non-medical essential equipment and medicines. Besides, it was to provide for rations, food packets, transportations, medicines and maintenance of person affected by the pandemic in Rajasthan.

However, the April 10 circular by the Ministry of Corporate Affairs stated that contribution made to ‘PM CARES Fund’ would qualify as the CSR expenditure while the donations received to ‘Chief Minister’s Relief Fund’ or ‘State Relief Fund for COVID-19’ would not qualify as such, it said.

“This is manifestly irrational and frustrates the main objective i.e. alleviation of COVID-19. It would not only be violative of equal protection of laws enshrined under Article 14 of the Constitution but also unjust and palpably arbitrary,” the petition filed by advocate Sandeep Kumar Jha said.

Source: Deccan Herald