Comprehension
The philosophy of Corporate Social Responsibility (“CSR”) has had a long-standing history in India. India is one of the first countries in the world to create a legal framework on CSR and statutorily mandate companies to report on the same. It emanates from the Gandhian principles of trusteeship and giving back to the society. The intent of the law is to mainstream the practice of business involvement in CSR and make it socially, economically and environmentally responsible.
The Companies Act, 2013 (the ‘Act’) mandates companies meeting a certain minimum threshold in terms of turnover/net worth/net profit to undertake CSR activities as per Schedule VII of the Act. Schedule VII specifies the areas or subjects to be undertaken by the company as CSR activities. These areas broadly align with national priorities and relate to sustainable and inclusive development. The Act does not recognise any expenditure on areas/activities outside of Schedule VII as CSR expenditure. Companies (CSR Policy) Rules, 2014 prescribes the operational framework and manner in which companies should comply with CSR provisions under the Act. The mode of implementation of CSR activities, content of CSR policy, impact assessment, reporting requirements and disclosure for CSR are covered under these Rules. The CSR architecture is disclosure-based and CSR-mandated companies are required to file details of CSR activities annually in the MCA-21 registry in e-form AOC-4.
A High-Level Committee set up in 2018 to review the CSR framework recommended that Schedule VII of the Act be mapped with Sustainable Development Goals (‘SDGs’). The Committee noted that companies need to balance CSR spending between local area/areas around where it operates, and less developed regions such as aspirational districts.
The Government of India launched the ‘Transformation of Aspirational Districts’ programme (‘ADP’) in January 2018 with the aim to improve [the] socio-economic status of the least developed regions across India. The programme is based on five socio-economic themes such as – Health & Nutrition, Education, Agriculture and Water Resources, Financial Inclusion and Skill Development and improvement of basic infrastructure… As on date, 112 aspirational districts are recognised by the Government wherein Jharkhand has the highest number of aspirational districts i.e., 19 followed by Bihar (13), Odisha and Chhattisgarh (10 each). The Government has been taking various initiatives to encourage CSR in aspirational districts and to remove regional disparities.
[Source: Ministry of Corporate Affairs, Government of India “Compendium on Corporate Social Responsibility in India” (2021)]
The Companies Act, 2013 (the ‘Act’) mandates companies meeting a certain minimum threshold in terms of turnover/net worth/net profit to undertake CSR activities as per Schedule VII of the Act. Schedule VII specifies the areas or subjects to be undertaken by the company as CSR activities. These areas broadly align with national priorities and relate to sustainable and inclusive development. The Act does not recognise any expenditure on areas/activities outside of Schedule VII as CSR expenditure. Companies (CSR Policy) Rules, 2014 prescribes the operational framework and manner in which companies should comply with CSR provisions under the Act. The mode of implementation of CSR activities, content of CSR policy, impact assessment, reporting requirements and disclosure for CSR are covered under these Rules. The CSR architecture is disclosure-based and CSR-mandated companies are required to file details of CSR activities annually in the MCA-21 registry in e-form AOC-4.
A High-Level Committee set up in 2018 to review the CSR framework recommended that Schedule VII of the Act be mapped with Sustainable Development Goals (‘SDGs’). The Committee noted that companies need to balance CSR spending between local area/areas around where it operates, and less developed regions such as aspirational districts.
The Government of India launched the ‘Transformation of Aspirational Districts’ programme (‘ADP’) in January 2018 with the aim to improve [the] socio-economic status of the least developed regions across India. The programme is based on five socio-economic themes such as – Health & Nutrition, Education, Agriculture and Water Resources, Financial Inclusion and Skill Development and improvement of basic infrastructure… As on date, 112 aspirational districts are recognised by the Government wherein Jharkhand has the highest number of aspirational districts i.e., 19 followed by Bihar (13), Odisha and Chhattisgarh (10 each). The Government has been taking various initiatives to encourage CSR in aspirational districts and to remove regional disparities.
[Source: Ministry of Corporate Affairs, Government of India “Compendium on Corporate Social Responsibility in India” (2021)]
Question: 1
Which of the following criteria should a company satisfy during the immediately preceding financial year to qualify for CSR under the Companies Act, 2013?
Which of the following criteria should a company satisfy during the immediately preceding financial year to qualify for CSR under the Companies Act, 2013?
Updated On: Jul 19, 2024
- Net profit of ` 5 crores or more
- Net profit of ` 1,000 crores or more
- Turnover of ` 5,000 crores or more
- Net worth of ` 5,000 crores or more
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The correct option is (A): Net profit of ` 5 crores or more.
Was this answer helpful?
0
0
Question: 2
What is the minimum spending obligation on CSR activities for a company under Section 135 of the Companies Act, 2013?
What is the minimum spending obligation on CSR activities for a company under Section 135 of the Companies Act, 2013?
Updated On: Jul 17, 2024
- 5% of the average net worth of the company of the preceding three financial years
- 2% of average net profits of the company made during the three immediately preceding financial years
- 7% of the average turnover of the company of the previous financial year
- 5% of the average net profits of the company made during the preceding financial year
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
The correct option is (B): 2% of average net profits of the company made during the three immediately preceding financial years.
Was this answer helpful?
0
0
Question: 3
Company A is incorporated in FY 2020-21, Company B is incorporated in FY 2019-20, and Company C is incorporated in FY 2018-19. Which company is covered under Section 135(1) of the Companies Act, 2013 for CSR in FY 2020-21?
Company A is incorporated in FY 2020-21, Company B is incorporated in FY 2019-20, and Company C is incorporated in FY 2018-19. Which company is covered under Section 135(1) of the Companies Act, 2013 for CSR in FY 2020-21?
Updated On: Jul 17, 2024
- Company A
- Company B
- Company C
- All the above
Hide Solution
Verified By Collegedunia
The Correct Option is B, C
Solution and Explanation
The correct options are (B) and (C): Company B and C .
Was this answer helpful?
0
0
Question: 4
Which of these activities is not specified in Schedule VII of the Companies Act, 2013?
Which of these activities is not specified in Schedule VII of the Companies Act, 2013?
Updated On: Jul 19, 2024
- promoting education and employment enhancing vocation skills
- eradicating hunger, poverty and malnutrition
- rural development projects
- maintenance of law and order
Hide Solution
Verified By Collegedunia
The Correct Option is D
Solution and Explanation
The correct option is (D): maintenance of law and order.
Was this answer helpful?
0
0
Question: 5
CSR policy is based on which of the following principles?
CSR policy is based on which of the following principles?
Updated On: Jul 17, 2024
- trusteeship and giving back to society
- utmost good faith
- leveraging India’s managerial, technological and innovative skills
- promoting greater protection for the environment
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The correct option is (A): trusteeship and giving back to society.
Was this answer helpful?
0
0
Question: 6
Which of the following falls within the scope of the Companies (CSR Policy) Rules, 2014?
Which of the following falls within the scope of the Companies (CSR Policy) Rules, 2014?
Updated On: Jul 11, 2024
- determination of the amount of expenditure to be incurred by companies on CSR activities
- reporting on the amount remaining unspent by the Company for CSR activities with detailed reasons for failing to spend the amount
- impact assessment and disclosure requirements for CSR
- detailing the company’s sponsorship activities for deriving marketing benefits for its products or services
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
The correct option is (C): impact assessment and disclosure requirements for CSR.
Was this answer helpful?
0
0
Question: 7
The chief objective of the Government’s aspirational district programme is to:
The chief objective of the Government’s aspirational district programme is to:
Updated On: Jul 17, 2024
- ensure access to financial services like banking, remittance, credit, insurance, pension in an affordable manner
- promote entrepreneurship in India in manufacturing and other sectors
- improve India’s ranking in the Human Development Index
- facilitate easy access to credit facilities for people belonging to vulnerable populations
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
The correct option is (C): improve India’s ranking in the Human Development Index.
Was this answer helpful?
0
0
Question: 8
Which one of the following comes within the scope of the ADP?
Which one of the following comes within the scope of the ADP?
Updated On: Jul 19, 2024
- Labour Welfare
- Skill Development
- Maternity Benefits
- Urban Employment
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
The correct option is (B): Skill Development.
Was this answer helpful?
0
0
Question: 9
Which Indian State has the highest number of ‘aspirational districts’?
Which Indian State has the highest number of ‘aspirational districts’?
Updated On: Jul 19, 2024
- Jharkhand
- West Bengal
- Karnataka
- Bihar
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The correct option is (A): Jharkhand.
Was this answer helpful?
0
0
Question: 10
The High-Level Committee reviewing the CSR framework in 2018 recommended that:
The High-Level Committee reviewing the CSR framework in 2018 recommended that:
Updated On: Jul 17, 2024
- a national CSR data portal be set up to monitor the progress of implementation of CSR policies by companies
- spending of CSR funds on Covid-19 related activities be considered as an eligible CSR activity
- CSR implementing agencies should mandatorily register with the central government
- companies should balance CSR spending between local areas and the less developed regions of the country
Hide Solution
Verified By Collegedunia
The Correct Option is D
Solution and Explanation
The correct option is (D): companies should balance CSR spending between local areas and the less developed regions of the country.
Was this answer helpful?
0
0
Top Questions on Company Law
- Pick the correct statement:
- AILET LLM - 2025
- Legal Studies
- Company Law
- “Associate company” in relation to another company means a company:
- AILET LLM - 2025
- Legal Studies
- Company Law
- Pick the incorrect option under the Companies Act, 2013:
- AILET LLM - 2025
- Legal Studies
- Company Law
- A company may issue fully paid bonus shares to its shareholders and use the following funds:
- AILET LLM - 2025
- Legal Studies
- Company Law
- A class action suit may be filed by prescribed number of members of a company before the Tribunal on behalf of the members or depositors for seeking any of the following orders except:
- AILET LLM - 2025
- Legal Studies
- Company Law
View More Questions
Questions Asked in CLAT PG exam
- The Hon’ble Supreme Court in the case of ‘Nil Ratan Kundu and another v. Abhijit Kundu’ 2008(3) Apex Court Judgements 232 (SC), while granting the custody to the maternal grandparents observed: In our judgement, the law relating to custody of a child is fairly well settled and it is this. In deciding a difficult and complex question as to custody of minor, a Court of law should keep in mind relevant statutes and the rights flowing therefrom. But such cases cannot be decided solely by interpreting legal provisions. It is a humane problem in live in relationship and is required to be solved with human touch. A Court while dealing with custody cases, is neither bound by statutes nor by strict rules of evidence or procedure nor by precedents. In selecting proper guardian of a minor, the paramount consideration should be the welfare and well-being of the child. In selecting a guardian, the Court is exercising parens patriae jurisdiction and is expected, may bound, to give due weight to a child’s ordinary comfort, contentment, health, education, intellectual development and favorable surroundings. But over and above physical comforts, moral and ethical values cannot be ignored. They are equally, or we may say, even more important, essential and indispensable consideration. If the minor is old enough to form an intelligent preference or judgement, the Court must consider such preference as well, though the final decision should rest with the Court as to what is conducive to the welfare of the minor.
The Hon’ble Supreme Court in the case of ‘Gaurav Nagpal v. Semedha Nagpal’-(2009)1 SCC 42, while giving paramount importance to the welfare of the child, which should include moral and ethical values, besides ethical well-being, observed as under:
When the court is confronted with conflicting demands made by the parents, each time it has to justify the demands. The Court has not only to look at the issue on legalistic basis, in such matters human angles are relevant for deciding those issues. The Court then does not give emphasis on what the parties say, it has to exercise a jurisdiction which is aimed at the welfare of the minor. As observed recently in Mausami Moitra Ganguli case, the Court has to give due weightage to the child’s ordinary contentment, health, education, intellectual development and favorable surroundings, but over and above physical comforts, the moral and ethical values have also to be noted. They are equal if not more important than the others.
(Extracts from Jaswinder Singh and Another vs Surjit Singh, AIR 2010 (NOC) 425 (P. & H.))- CLAT PG - 2025
- Family Laws
- Ahmadi, J. (as he then was) speaking for himself and Punchhi, J., endorsed the recommendations in the following words-The time is ripe for taking stock of the working of the various Tribunals set up in the country after the insertion of Articles 323-A and 323-B in the Constitution. After the incorporation of these two articles, Acts have been enacted where-under tribunals have been constituted for dispensation of justice. Sufficient time has passed, and experience gained in these last few years for taking stock of the situation with a view to finding out if they have served the purpose and objectives for which they were constituted. Complaints have been heard in regard to the functioning of other tribunals as well and it is time that a body like the Law Commission of India has a comprehensive look-in with a view to suggesting measures for their improved functioning. That body can also suggest changes in the different statutes and evolve a model on the basis whereof tribunals may be constituted or reconstituted with a view to ensuring greater independence. An intensive and extensive study needs to be undertaken by the Law Commission in regard to the Constitution of tribunals under various statutes with a view to ensuring their independence so that the public confidence in such tribunals may increase and the quality of their performance may improve.
Before parting with the case, it is necessary to express our anguish over the ineffectiveness of the alternative mechanism devised for judicial review. The judicial review and remedy are the fundamental rights of the citizens. The dispensation of justice by the tribunal is much to be desired.
(Extracted with Edits from R.K. Jain v. Union of India, 1993 (4) SCC 119)- CLAT PG - 2025
- Constitutional Laws
- The elements of tort of negligence consist in – (a) duty of care; (b) duty is owed to the plaintiff; (c) the duty has been carelessly breached. Negligence does not entail liability unless the exacts a duty in the given circumstances to observe care. Duty is an obligation recognised by law to avoid conduct fraught with unreasonable risk of damage to others. The question whether duty exists in a particular situation involves determination of law. Hence, three ingredients are necessary for the existence of a duty of care: (i) foreseeability of the damage, (ii) proximity of relationship between the parties; and (iii) whether it is “just, fair and reasonable” that the law should impose a duty of care. In Caparo Industries Plc. v. Dickman, 1990 2AC 605, the court held that breach of duty is concerned with the standard of care that ought to have been adopted in the circumstances and whether the defendant’s conduct fell below that standard i.e., whether he was careless.
The court while quoting Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, 1997 stated that as a tort, negligence consists of legal duty to take care and breach of that duty. Duty determines whether the type of loss suffered by the plaintiff in the particular way in which to occurred can ever be actionable. The division of negligence into duty, breach and consequent damage is convenient for the purpose of exposition but it can be confusing because the issues will often overlap. The process of determining a breach of duty involves three steps: First, it is necessary to ascertain the qualities of the reasonable person, given the qualities attributed to him, would have taken in the circumstances. The factors that are permissible to take into account in this regard are prescribed by law, but the amount of care that the reasonable person would have taken is a question of fact. Thirdly, it must be determined whether the defendant took less care than the reasonable person would have taken.
(Extracts from Managing Director, Kerala Tourism Development Corporation Limited v. Deepti Singh and Ors., 2019 SC)- CLAT PG - 2025
- Law of Torts
- Article 14 of the Constitution stipulates that the State shall not deny to any person equality before the law or the equal protection of laws within the territory of India. Article 15(1) states that the State should not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. Article 15(4) stipulates that nothing in Article 15 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes. Article 16 deals with equality of opportunity in matters of public employment. Clause (1) of Article 16 guarantees equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. Clause (2) stipulates that no citizen shall be discriminated in or be ineligible for any employment or office under the State on the grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them. Clause (4) of the provision states that nothing in Article 16 shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens, which in the opinion of the State, is not adequately represented in the services under the State. The purpose of the equal opportunity principle in Article 16(1) and the reservation provision in Article 16(4) has emerged as a focal point of the jurisprudence on reservations in this Court. A discussion of the journey of the competing models of equality that the Court has espoused and their evolution over the course of the years is necessary to understand the constitutional vision on equality.
The impugned constitutional amendments by which Article 16 (4-A) and 16 (4-B) have been inserted, flow from Article 16 (4). They do not alter the structure of Article 16 (4). They retain the controlling factors or the compelling reasons which enables the State to provide for reservation keeping in mind the overall efficiency of the state administration under article 335. Sub-categorization within a class is a constitutional requirement to secure substantive equality in the event that there is a distinction between two sections of a class; Sub-classification must not lead to the exclusion of one of the categories in the class. A model that provides sufficient opportunities to all categories of the class must be adopted; and Sub-classification among a class must be on a reasonable basis.
Justice Bela Trivedi opined, in dissent, that presidential list of scheduled castes notified under Article 341 cannot be altered by the States. Any change to this list can only be made by a law enacted by Parliament. Sub-classification, according to her would amount to tampering with the Presidential List and undermine the object Article 341, which aims to eliminate political influence in the SC-ST List. Further, she emphasised the importance of adhering to the rule of plain and literal interpretation. She mentions that any preferential treatment for a sub-class within the presidential list would deprive other classes within the same category of their benefits. In the absence of executive or legislative power, state lack the competence to sub-classify castes and the benefit reserved for all SCs. Allowing states to do so would constitute a colourable exercise of power, which is impermissible under law. Justice Trivedi concluded by affirming that affirmative action by States must remain within constitutional boundaries and held that the law laid down in E.V. Chinnaiah case was correct and should be upheld.
(Extract from The State of Punjab & Ors. v. Davinder Singh & Ors. 2024 SC)- CLAT PG - 2025
- Constitutional Laws
- Live-in relationship, as such, as already indicated, is a relationship which has not been socially accepted in India, unlike many other countries. In Lata Singh v. State of U.P. [(2006) 5 SCC 475: (2006) 2 SCC (Cri) 478] it was observed that a live-in relationship between two consenting adults of heterosexual sex does not amount to any offence even though it may be perceived as immoral. However, in order to provide a remedy in civil law for protection of women, from being victims of such relationship, and to prevent the occurrence of domestic violence in the society, first time in India, the DV Act has been enacted to cover the couple having relationship in the nature of marriage, persons related by consanguinity, marriages, etc. We have few other legislations also where reliefs have been provided to woman placed in certain vulnerable situations. Section 125 Cr.P.C. of course, provides for maintenance of a destitute wife and Section 498-A IPC is related to mental cruelty inflicted on women by her husband and in-laws. Section 304-B IPC deals with the cases relating to dowry death. The Dowry Prohibition Act, 1961 was enacted to deal with the cases of dowry demands by the husband and family members. The Hindu Adoptions and Maintenance Act, 1956 provides for grant of maintenance to a legally wedded Hindu wife, and also deals with rules for adoption. The Hindu Marriage Act, 1955 refers to the provisions dealing with solemnisation of marriage also deals with the provisions for divorce. For the first time, though, the DV Act, Parliament has recognised a “relationship in the nature of marriage” and not a live-in relationship simpliciter. We have already stated, when we examine whether a relationship will fall within the expression “relationship in the nature of marriage” within the meaning of Section 2(f ) of the DV Act, we should have a close analysis of the entire relationship invariably, it may be a question of fact and degree, whether a relationship between two unrelated persons of the opposite sex meets the tests judicially evolved.
(This extract is taken from Indra Sarma v. V.K.V. Sarma, (2013) 15 SCC 755)- CLAT PG - 2025
- Family Laws
View More Questions