Srinagar: A local court here has restrained defendants from causing any sort of interference into the smooth running and functioning of Public Welfare Trust Khonmoh.
After hearing plaintiff and defendants through their respective counsels, the Court of Second Additional Munsiff presided over by Shabir Ahmad Malik observed that powers for allocation or regulation of Corporate Social Responsibility (CSR) is to be exercised by proper authority under the provisions of the Companies Act.
The court said that while addressing any issue that pertains to the companies including the allocation or regulation of CSR, the same was to be done by the proper authority vested with the powers in terms of the provisions of this act.
The court was hearing an application moved by the trust, seeking the declaration of order issued by the authorities as “null and void”.
The plaintiff sought directions against the defendants to not interfere in the functioning and management of the trust.
“The impugned order issued by authorities has serious repercussions not only on the industrial units and companies but also on the plaintiff,” the court observed.
“The amount under CSR is allocated and utilised by the companies in accordance with the framework provided under Section 135 of the Companies Act, 2013 and Companies (CSR Policy) Rules, 2014, as amended from time to time,” the court said.
It said that the board of a company was empowered to plan, decide, execute and monitor CSR activities of the company.
“As such the defendants cannot assume the power of the Board of Company and change the framework provided under Section 135 of the Companies Act, 2013 and Companies (CSR Policy) Rules, 2014,” the court said.
It said that prima facie the impugned order was not in consonance with the law as envisaged under the act.
“The impugned order prima facie appears to have been passed without any inquiry into serious allegations leveled against the plaintiff and without giving plaintiff any opportunity of being heard,” the court said.
“Keeping in view what has been discussed and the facts and circumstances of this case, the impugned Order No Div Com/PS/ Misc/2021/805-07 dated 23 June 2021 is kept in abeyance till further orders. Further the defendants are restrained from causing any sort of interference into the smooth running and functioning of plaintiff trust except in due course of law,” the court said.
However, the court said that any observation made in this interim order should have no bearing on the final outcome of the suit.