CHAPTER 7 – CORPORATE SOCIAL RESPONSIBILITY
Apurva Natvar & Company India Private Limited vs. Registrar of Companies, Mumbai
NCLT, Mumbai bench
Section 135 r/w 134(3)(o) of the Companies Act, 2013.
Facts of the case
The Company has violated the provision of Section 135 r/w Section 134 (3) (o) of the Com-
panies Act, 2013 (hereinafter as Act) r/w. Rule 8 of Companies (Corporate Social Responsi-
bility Policy) Rules, 2014 wherein the Company has not made CSR Expenditure and has not
explained the reasons in Board’s Report of F. Y. 2014-15 for non-spending of the CSR
amount along with other disclosure as required under Section 135 (2) of the Act.
Provisions of Companies Act, 2013
According to the provision of Section. 135 (5) of the Act, the Board of the Company was
required to spend, in every financial year, at least 2% of the average net profit of the Com-
pany during the three immediately preceding financial years, in pursuance of its Corporate
Social Responsibility (CSR) policy, applicable to every company having net worth of Rupees
Five Hundred Crore or more, or turnover of Rupees One thousand crore or more, or having net
profit of Rupees Five Crore or more, during Financial Year. Further the provision of S. 134 (3)
(o) provides that, if company fails to comply with the provision of S. 135 (5), then the
Board in its report shall specify the reasons for not spending the amount.
But the Applicants / Defaulters herein, have not complied with the provision of S. 134 (3)
(o) of the Act. But the Company had made the default good by constituting the CSR com-
mittee and by furnishing declaration in the Board of Directors Report from the F. Y. 2015-16.
NCLT, Mumbai bench observed that Application made by the Applicants/Defaulters herein for
compounding of offence committed under S. 134 (3) (o) of the Companies Act, 2013, merits
consideration, though belatedly the default has been made good.
The NCLT on 21/08/2019 imposed a Compounding Fee of Rs 1,00,000/- on the Company and
Rs. 1,00,000/- each on the Directors of the Company that the Compounding fee should be
paid within a period of three weeks from the date of order in the account of “Prime Minis-
ter’s National Relief Fund.”