Himachal High Court raps Centre and State for failing to tap CSR funds for disaster-hit public
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Shimla, Dec 27,
Calling it a failure that has deepened the suffering of people still rebuilding their lives after the unprecedented 2025 rains, the Himachal Pradesh High Court has sharply criticised both the Union Government and the State Government for not invoking mandatory Corporate Social Responsibility (CSR) provisions to support post-disaster rehabilitation. The Division Bench led by Chief Justice G.S. Sandhawalia noted that despite 65 to 80 companies qualifying under Section 135 of the Companies Act and operating in major industrial belts of Himachal Pradesh, the authorities took no proactive steps to direct CSR funds towards repairing collapsed infrastructure and restoring essential public services.
The court said the contradiction in the affidavits filed by different departments only reveals State inaction. While the State cited Central instructions as a reason for not issuing directions to companies, the Union’s own affidavit recorded that disaster-management-related CSR is part of the statutory framework, and that companies are bound to spend at least 2% of average profits on CSR with preference to local areas impacted by their operations. The Bench found this justification unacceptable and held that both governments had failed to understand the ambit and purpose of CSR, especially when thousands of residents still suffer due to damaged roads, broken utilities and delayed rebuilding after the calamity.
The court expressed concern that only Rs 47.52 crore has been spent under CSR in the financial year 2025–26 on all activities combined, while many companies have either disclosed negligible spending or no information at all. It pointed to major firms that have made meagre contributions in Himachal, including large multinational corporations, and highlighted the list of companies that have not even provided details to the State despite falling squarely within the CSR mandate. This, the court remarked, shows a lack of monitoring and enforcement by authorities at a time when public rehabilitation urgently needs corporate participation.
The Bench underscored that CSR is not charity but a statutory obligation and reminded that Schedule VII of the Act explicitly includes disaster relief, rehabilitation and reconstruction. It stressed that failure to spend must invite penalties, and that the Central Government may also issue directions where needed. The Bench further highlighted that CSR must prioritise local areas surrounding company operations, yet the State had not even sought funds from the Ministry of Power, which contradicted the Union’s affidavit stating that no such request was ever made.
Directing the government to take corrective action, the High Court has ordered a fresh affidavit detailing concrete steps proposed against ineffective contributors and demanded a full identification of all industries in the State that fall under Section 135.
The matter has now been listed for compliance on 5 March 2026, signalling that the Court intends to hold the administration accountable in ensuring statutory CSR funds actually reach Himachal’s disaster-hit communities.
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