HP High Court Pulls Up Centre, State Over CSR Failure After 2025 Rain Disaster
Shimla:
In a landmark suo motu PIL, the Himachal Pradesh High Court has pulled up both the Union government and the State government for failing to effectively use Corporate Social Responsibility funds after the unprecedented rainfall and large-scale destruction witnessed in the State in 2025.
A Division Bench of Chief Justice G.S. Sandhawalia and Justice Jiya Lal Bhardwaj here made the observations while hearing CWPIL No. 90 of 2025, a suo motu public interest litigation initiated by the Court to examine the utilisation of CSR funds for disaster relief and rehabilitation.
The Court noted that despite massive damage to roads, bridges and public infrastructure, the State government did not issue any directions to companies under Section 135 of the Companies Act, 2013.
An affidavit filed by the Director of Health Safety and Regulation admitted that although 65 companies were covered under the CSR framework, no effort was made to channel CSR resources towards disaster response.
Another affidavit by the Special Secretary to the State government revealed that 80 companies operating in Himachal Pradesh met the CSR eligibility criteria, but only ₹4,752.39 lakh was spent on all CSR activities during 2025–26, including disaster-related works.
The State attempted to defend its inaction by citing advisories issued by the Ministry of Corporate Affairs in 2016 and 2020, which caution against interference in CSR decisions taken by company boards.
The High Court rejected this argument and held that the State had misunderstood the law and wrongly treated the advisories as a bar on facilitation and coordination.
The Union government informed the Court that CSR obligations can be discharged either through direct implementation of projects or by contributing to notified Central funds such as the Prime Minister’s National Relief Fund and PM CARES.
The Centre also pointed out that disaster management and rehabilitation are specifically included as permissible CSR activities under Schedule VII of the Companies Act.
However, the Court noted contradictions in the Union’s stand after the Ministry of Power stated that no CSR funding request was received from the Himachal Pradesh government, even as NTPC, NHPC and SJVN voluntarily spent CSR funds for post-disaster works.
The Bench observed that this exposed a serious lack of coordination and initiative.
In strong remarks, the Court said both the Centre and the State had been remiss in their duties and had failed to appreciate the true scope of Section 135 of the Companies Act and the benefits meant for the general public.
The Court underlined that CSR is a statutory obligation and not charity, particularly in disaster-prone States like Himachal Pradesh.
The Bench also examined a list of 80 CSR-eligible companies and found that several had not even disclosed their CSR spending to the State government.
Industries located in Baddi, Nalagarh, Paonta Sahib, Kala Amb, Una and Bilaspur came under the Court’s scanner for non-disclosure or minimal CSR contribution.
The Court flagged token spending by some large companies, including one that spent only ₹0.86 lakh and another that spent ₹6.34 lakh during 2025–26 despite the scale of destruction.
The High Court has now directed the State government to file a fresh affidavit detailing concrete steps against defaulting and ineffective companies and to identify all CSR-eligible industries operating in Himachal Pradesh.
Meanwhile, it is noteworthy is the ministers, politicians regardless of political parties keep on visiting the BBN industrial corridors for raiding funds more often than not. It is surprising, they let go companies not fulfilling their CSR funds obligations made under law.
The matter has been listed for further hearing on March 5, 2026.
Advocate Deven Khanna has been formally shown as amicus curiae in the case.
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