As it is well-known, in countries like India where economic integration and social inclusion are imperative forces that drive the masses towards growth and development, Corporate Social Responsibility (“CSR”) has become an integral and impactful part of the corporate landscape.

The legal framework on CSR outside India began to develop during the 1900s. However, India is the first country in the world to impose a statutory obligation of CSR on corporates by way of the introduction of Section 135 of the Companies Act, 2013 (“CA, 2013”).

As per Section 135(1) of CA, 2013 read with the Companies (CSR Policy) Rules, 2014, a company satisfying any of the following criteria during the immediately preceding financial year is required to spend, in every financial year, at least two per cent of the average net profits made during the three immediately preceding financial years:

(i) Net worth of rupees five hundred crores or more, or
(ii) Turnover of rupees one thousand crores or more, or
(iii) Net profit of rupees five crores or more.

Since these criteria are joined by the word ‘or’ instead of the word ‘and’, hence the companies fulfilling any of the above criteria would be required to fulfill the CSR obligations imposed by CA, 2013.

The Government of India (“GOI”) has made it clear that CSR spending is not charity or mere donations without any strategic benefits. In fact, there has been a concerted effort to define broad areas (Schedule VII of CA, 2013) under which the funding can be channelled, thereby visibly and positively impacting the society.

Covid 19 and CSR activities:

With the outbreak of Covid 19 pandemic, GOI declared it as a ‘notified disaster’ on March 14, 2020. Following such notification, the Ministry of Corporate Affairs (“MCA”) on March 23, 2020 through a clarificatory circular, declared that spending of funds for Covid 19 relief would be treated as a permissible activity under CSR. Further, the GOI has also set up the “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund” (“PM CARES”) to respond to the Covid 19 crisis and provide relief to those affected. Upon setting up of the PM CARES, Schedule VII of CA, 2013 was amended to include contributions to PM CARES, as a CSR activity.

Thus, standing today, a company which falls within the ambit of CSR regulations, can contribute to PM CARES and it shall constitute a valid contribution towards CSR activities. Also, Companies’ CSR funds can now be used towards promoting preventive healthcare infrastructure and disaster management.

In light of several circulars issued by MCA, from time to time, since the outbreak of Covid 19 pandemic, the scope of CSR has been widened to encourage companies to contribute towards Covid 19 relief as well as research and development towards generating Covid vaccines.

The table below outlines the kind of expenditure towards Covid 19 related reliefs which would constitute CSR activities and which would not:

Admissible CSR Expenditure

Non-Admissible CSR Expenditure

Contributions made to PM CARES Fund

Contributions made to Chief Minister’s
Relief Fund

Contributions made to State Disaster
Management Authority

Contributions made to State Relief Funds
for Covid-19

Spending of CSR funds for various activities
related to Covid-19 relief under items nos. (i)
and (xii) of the Schedule VII relating to
promotion of health care including preventive
health care and sanitation, and disaster

Payment of salary to employees and
workers, during lockdown period

Ex-gratia payments to temporary/ casual/
daily wage workers for Covid 19 relief, over
and above the disbursement of wages

Payment of wages made to casual/ daily
wage/ contractual labour, during lockdown


Thus, to tackle the need of additional monetary requirement caused by Covid 19 pandemic, the MCA was quick to undertake necessary modifications in the CSR regulations to serve the dual purpose i.e., to generate funds for Covid 19 reliefs as well as ensure that the companies contribute towards Covid 19 reliefs, which is the need of the hour.

However, despite the above measures introduced by MCA, the future of CSR initiative looks a little uncertain in the wake of Covid 19 pandemic. As we are already aware, due to the outbreak of Covid 19 pandemic, many companies (even the large ones) across sectors, have suffered a great loss. This is especially true in case of real estate sector, manufacturing sector, travel and tourism industries, hospitality industry, airline industry, to name of few. Imposition of prolonged lockdown and mass exodus of manual labour, led to the shutdown of many factories and industries across the country.

Therefore, the question remains as to, whether due to the decrease in turnover ratio and profitability of companies during the pandemic, more and more companies would fall below the thresholds prescribed under the CSR regulations.

In such a scenario, may be the need of the hour is for MCA to relook at the threshold limits and undertake necessary modifications therein to lower the limits, accordingly. This may go a long way in ensuring that CSR regulations and corresponding CSR obligations on the companies, even though well intentioned, do not remain a piece of toothless legislation.


1. Limitation under Section 9 of IBC commences only upon the occurrence of default and not when the debt becomes due – observed Supreme Court

The Supreme Court in its order passed on February 04, 2022 in the matter M/s. Consolidated Construction Consortium Limited vs. M/s. Hiltro Energy Solutions Private Limited, relying on the case of B.K. Educational Services (P) Ltd vs. Parag Gupta & Associates, observed that limitation under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC”) (i.e., for filing of application for initiation of corporate insolvency resolution process by operational creditor) does not commence when the debt becomes due but only when a default occurs. The Supreme Court further observed that default is defined under Section 3(12) of the IBC as the non-payment of the debt by the corporate debtor when it has become due.

In the instant case, the appellant – Consolidated Construction Consortium Limited placed orders with the Proprietary Concern (which was later taken over by the respondent M/s. Hiltro Energy Solutions Private Limited). The Proprietary Concern was the supplier of Thorn Lighting India Private Limited. The appellant has placed order through three purchase orders dated June 24, 2013. The contention raised in this case was that the date of default mentioned is November 7, 2013, when the cheque was issued to the Proprietary Concern and therefore the limitation of three years under Article 137 of the Limitation Act would expire on November 7, 2016. However, the application under Section 9 was filed only on November 1, 2017.

The Supreme Court noted that both the parties were in negotiation in relation to the re-payment and the minutes of meeting show that the Proprietary Concern was willing to make the re-payment if the appellant issued a letter stating that it would not pursue a claim in the future or if the applicant provided a bank guarantee for the amount.

The court further observed that a final letter was addressed by the appellant to the Proprietary Concern on February 27, 2017, demanding the payment on or before March 4, 2017. The Proprietary Concern replied to this letter on March 2, 2017, finally refusing to make re-payment to the appellant.

Consequently, the application under Section 9 of IBC which was filed on November 1, 2017, approximately eight months after the default was committed, would not be barred by limitation.

2. Superseded Directors Under RBI Act, not entitled to notice of CoC meetings – NCLAT observed

NCLAT principal bench, New Delhi in its order passed on January 27, 2022 in the matter of Dheeraj Wadhawan vs. The Administrator, Dewan Housing Finance Corporation Limited, observed that there exists a difference between ‘supersession of Directors’ under Section 45-IE of the Reserve Bank of India, Act (“RBI Act”) and the directors of the suspended board of the corporate debtor, as provided under the Insolvency and Bankruptcy Code, 2016 (“IBC”). The NCLAT observed that Section 24(3)(b) of the IBC provides that the Resolution Professional should give notice/ details of the meeting of the CoC to the ‘suspended’ Directors of the Corporate Debtor. This notice is to be given to the ‘suspended’ Board of Directors, and ‘suspended’ under Section 24(3)(b) of IBC has the same meaning as ‘suspended’ under Section 17(1)(b) of IBC. This is very different from ‘supersession of Directors’ under Section 45-IE of RBI Act. The NCLAT observed that upon supersession, the superseded directors ‘vacate’ their office. This action has finality attached to it. Hence, superseded directors are not entitled to the notice of CoC meeting and has no right to participate in the meeting.

The Appellant is a promotor, majority shareholder, erstwhile director and guarantor of DHFL/ Corporate Debtor. In November 2019, the RBI exercised its powers under Section 45-IE of the RBI Act and superseded the Board of Directors because the business of DHFL was being carried out in a manner detrimental to the interests of the creditors and depositors. Thus, the Board of Directors of DHFL vacated their offices and the power stood transferred to the Administrator, who then initiated Corporate Insolvency Resolution Process of the Corporate Debtor. Thereafter, a moratorium was imposed.

This Administrator did not give due notice of the meetings of CoC along with documents and agenda for meetings to the Appellant/ erstwhile Director of DHFL/Corporate Debtor. The Adjudicating Authority refused the request of the Appellant to be allowed to attend meetings of the CoC as member of the erstwhile Board of Directors of the Corporate Debtor since the erstwhile directors were superseded by the Administrator under the RBI Act. Thus they could not be permitted to participate in the CIRP. Against this, the Appellant preferred an appeal in the NCLAT.

The NCLAT did not interfere with the order of NCLT and observed that since the Board of Directors of DHFL had already vacated their offices, the powers of Board of Directors stood vested in the Administrator as per Section 45-IE of the RBI Act,there was no question of ‘suspension’ of the Board of Directors under Section 17(i)(b) of the IBC.

The NCLAT observed that in the present case, the directors have been superseded by the Administrator under the RBI Act and their vacation is final. If they are to be appointed at a later stage, it would be a fresh/ new appointment and not a continuation of the previous appointment, as Directors of the Company.

3. The author of a tender document is the best person to interpret the same – Reiterates Supreme Court

The Hon’ble Supreme Court in its judgment delivered on January 31, 2022 in the matter Agmatel India Pvt. Ltd. Vs Resoursys Telecom, reiterated that the author of the tender document is the best person to interpret its documents and requirements.

Holding the above, the Supreme Court observed as follows:

“The author of the tender document is taken to be the best person to understand and appreciate its requirements; and if its interpretation is manifestly in consonance with the language of the tender document or subserving the purchase of the tender, the Court would prefer to keep restraint. Further to that, the technical evaluation or comparison by the Court is impermissible; and even if the interpretation given to the tender document by the person inviting offers is not as such acceptable to the Constitutional Court, that, by itself, would not be a reason for interfering with the interpretation given.”

4. Fire accident cannot be termed as ‘Act of God’, if it did not happen due to external natural force – Supreme Court observed

The Hon’ble Supreme Court of India in the judgment passed on January 05, 2022 in the matter of State of UP Vs Mcdowell and Company Limited observed that a fire accident cannot be said to an ‘act of God’, if it did not happen due to the operation of any forces of nature.

In the instant case, in 2003, a fire incident took place in a godown of the distillery of the Mcdowell & Co. As many as 35,642 cases of Indian Made Foreign Liquor of different brands got destroyed in this fire. After receiving the initial reports that the fire possibly took place due to short circuit of electricity, the Revenue department proposed to recover the amount of excise duty lost, due to such destruction of liquor, from the company. Allowing the writ petition filed by the company, the Allahabad High Court quashed the demand notice issued by the Department.

The High Court had accepted the contention raised by the company that if the fire had taken place despite the company having taken all care, it was nothing but an act of God of which, no human agency had any control.

In appeal filed by the State before the Supreme Court, the Apex Court disagreed with the observation of the Allahabad High Court and allowed the appeal. The Supreme Court observed that the fire incident in question cannot be said to be that of an event beyond human control and the High Court has been in error in holding that no negligence could be imputed on the respondent company.

The Supreme Court observed as follows:

“When nothing of any external natural force had been in operation in violent or sudden manner, the event of the fire in question could be referable to anything but to an act of God in legal parlance”.


1. MCA relaxes levy of additional fees in filing of e-forms AOC-4, AOC-4(CFS), AOC-4 XBRL, AOC-4 Non-XBRL and MGT-7/ MGT-7A

The Ministry of Corporate Affairs vide General Circular no. 22/ 2021 dated December 29, 2021, has declared that no additional fees shall be levied upto 15.02.2022, for the filing of e-forms AOC-4, AOC-4(CFS), AOC-4 XBRL, AOC-4 Non-XBRL and upto 28.02.2022, for filing of e-forms MGT-7/ MGT-7A, in respect of the financial year ended on 31.03.2021, respectively. During the said period, only normal fees shall be payable for the filing of the above-mentioned e-forms.

2. MCA allows companies to conduct their EGMs through VC or OAVM

The Ministry of Corporate Affairs vide General Circular no. 20/ 2021 dated December 08, 2021, has decided to allow companies to conduct their EGMs through Video Conference (VC) or Other Audio Visual Means (OAVM) or transact items through postal ballot upto June 30, 2022.

3. Introduction of Legal Entity Identifier (LEI) for Cross-border Transactions

The Reserve Bank of India vide Circular A.P.(DIR Series) bearing no: 20 dated December 10, 2021, notified that with effect from October 01, 2022, the AD Category I banks shall obtain the LEI number from the resident entities (non-individuals) undertaking capital or current account transactions of Rs. 50 crore and above (per transaction) under FEMA, 1999. As regards, non-resident counterparts/ overseas entities, in case of non-availability of LEI information, AD Category I banks may process the transactions to avoid disruptions. Further, AD Category I banks may encourage concerned entities to voluntarily furnish LEI while undertaking transactions, even before October 1, 2022. Once an entity has obtained an LEI number, it must be reported in all transactions of that entity, irrespective of transaction size.


K&A Law Offices is an NCR based boutique law firm. Based on the core values of “Accountability & Integrity”, at K&A Law Offices, lawyers are committed to nurturing a high performance culture founded on robust ethical standards, professional integrity and accountability. We pride ourselves on our approachable, collegial, collaborative and team-based way of working.

The areas of practice of the Firm are as follows:

Corporate Law & Foreign Investment

Real Estate Acquisition & Investments

1) General Corporate Advisory (including corporate governance and directors’ responsibilities);

1) Acquisition/ transfer of immovable property;

2) Drafting, Vetting & Negotiation of day-to-day corporate commercial contracts;

2) Drafting, vetting & negotiating of real estate transaction documents;

3) Entry/ Exit Strategy;

3) Due Diligence & Title Investigations;

4) Mergers/Acquisition/Joint Ventures (both in-bound & out-bound);

4) Advising on transactions pertaining to development/ re-development;

5) Due Diligence & Transaction Structuring;

5) Foreign Direct Investment in Real Estate Sector;

6) Drafting, vetting & negotiation of Memorandum of understanding/ Term Sheet;

6) Closing and post-closing assistance;

7) Advising on Shareholders' Rights & drafting, vetting and negotiation of associated transaction documents;

7) Real Estate Regulatory & Compliance advisory.

8) Closing and post-closing assistance;

9) Regulatory & Compliance advisory.

Employment Advisory

Dispute Resolution

1) Drafting, vetting, and finalising employment contracts;

1) IBC Litigation & Advisory;

2) Drafting, vetting, and finalising employee handbook/ company policies;

2) Drafting/ Settling Briefs;

3) Drafting, vetting, and finalising termination related documentation;

3) Shareholders’ Dispute & Investors’ Exit Disputes;

4) Day-to-day advisory on employee welfare legislations;

4) Oppression & Mismanagement Matters;

5) Undertaking human resources due diligence for companies.

5) Appearing before Courts/ Tribunals including Supreme Court, High Courts Across India/ NCLT/ NCLAT (Delhi & Chennai)/ RoC.


Kamalika Bhattacharjee

Corporate Commercial Lawyer

Practice Focus: General Corporate Advisory, Mergers & Acquisitions, Private Equity Transactions, Real Estate Advisory & Transactions, IBC Advisory & Litigation.

Kamalika has close to 14 years of experience in advising Indian and International clients in foreign direct investments (private equity transactions as well as strategic investments), mergers & acquisitions, general corporate and commercial advisory, real estate transactions and IBC matters.

She has advised a wide range of clients across a variety of sectors, including e-commerce, renewable energy, infrastructure, IT/ ITeS, hospitality, manufacturing of food & beverages, education, real estate, to name a few.

Prior to founding K&A Law Offices, Kamalika was working with the Delhi office of Cyril Amarchand Mangaldas, where her areas of practice were general corporate, M&A and IBC.

Disclaimer & Confidentiality

Under the rules of the Bar Council of India, K&A Law Offices (the “Firm”), is prohibited from soliciting work or advertising. By clicking, “I Agree” below, the user acknowledges that:

  • There has been no advertisement, personal communication, solicitation, an invitation, or inducement of any sort whatsoever from the Firm or any of its members to solicit any work or advertise through this website.
  • The purpose of this website is to provide the user with information about the Firm, its practice areas and its advocates.
  • The user wishes to gain more information about the Firm for his/ her own information and personal or professional use.
  • The information about the Firm is provided to the user only on his/ her specific request and information downloaded from this website is completely at the user’s discretion and any transmission, receipt, or use of this website would not create an attorney-client relationship. The creation of the attorney-client relationship would require direct, personal contact between you and our Firm and would also require an explicit agreement in the form of an ‘engagement letter’ by the Firm that confirms that an attorney -client relationship is established and the terms of that relationship.
  • The Firm is not liable for any consequence of any action taken by the user relying on the information provided under this website. In cases where the user requires any assistance, he/ she must seek independent legal advice.
  • If the user wishes to discuss potential legal representation with us, the user can send us an email or drop a message in the inquiry box. Although, we are pleased to communicate with you, you should not rely upon the transmission of an email through this website to create an attorney-client relationship. Without an attorney-client relationship in the particular matter, we cannot assure that your communications via the website will be privileged or that we will treat them as privileged unless we reach an explicit agreement otherwise. Therefore, please do not send confidential or sensitive information to us by email through this website.
  • The content of the website is the intellectual property of the Firm.