Why PM Cares Fund and not CM's Covid Fund entitled to CSR donation: Rajasthan

5 months ago 25
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NEW DELHI: The Supreme Court on Tuesday sought Union government's response to a suit filed by Rajasthan government questioning the Centre's decision to include corporate contributions to the PM Cares Fund under CSR activity but denying extension of same route donations to chief ministers' funds (CMRF) created specifically to fight Covid-19 pandemic.
Reluctance of a bench of Chief Justice S A Bobde and Justices M R Shah and A S Bopanna to entertain the subject matter of the petition was writ large when Rajasthan's additional advocate general Manish Singhvi pressed the discrimination argument. What saved the petition from the guillotine was its character as a Centre-state dispute, it being a suit filed under Article 131 by a state government airing its grievance against the Union government. "There is nothing in the petition. Just because it is a Article 131 suit, we are issuing notice," the bench said.
In the suit escalating the grievance of exclusion of CM's Covid funds from receiving CSR contributions to Centre-State dispute, Rajasthan government said it had formed a separate 'Rajasthan Covid-19 Mitigation Fund', which is a dedicated account under CMRF, for countering adverse impact of the pandemic.
"The objective and scope of the March 29 state government circular is to channelize and utilize the funds for countering and mitigating the effects of the pandemic caused by COVID-19. The object of this dedicated account (CMRF) squarely falls within purview of enumerated clauses of the Schedule VII of Companies Act, 2013, to qualify as CSR Expenditure," it said,
However, the Union ministry of corporate affairs by a circular dated April 10 clarified that corporate contributions to the PM Cares Fund alone would qualify to be bracketed under CSR expenditure and specifically barred the CMRF from receiving same route donations. The Rajasthan suit sought a declaration that CMRF should also be entitled to receive corporate contributions through the CSR expenditure route.
It termed the Union government's decision to bar CM's relief fund from the purview of donations under CSR expenditure as a blatant violation of right to equality guaranteed under Article 14 of the Constitution and an attempt to destabilize the democratic governance founded on the constitutional principle of cooperative federalism. However, the April 10 circular of the Union government had clarified that corporate contributions to the State Disaster Management Authority to combat Covid-19 shall qualify as CSR expenditure.
"The Plaintiff also seeks a direction praying that the contributions made to the CMRF shall be included as eligible activities enumerated under Schedule VII of Companies Act which qualify as Corporate Social Responsibility. It is pertinent to mention that COVID-19 is also notified under the National Disaster Management Act, 2005. Item (i) of Schedule VII of Companies Act pertains to public and preventive healthcare. Item No. (xii) of the aforesaid Schedule VII, pertains to disaster management and relief and thus would include CMRF," Rajasthan said.

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