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TMI Blog2020 (1) TMI 1583X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and learned counsel for respondent No.2 and also learned ASG for respondent No.1. 3. Though this case is listed for admission, with the consent of learned counsel appearing for the parties, the same is taken up for final disposal. 4. The brief facts of the case are that IBC Knowledge Park Private Limited is a company incorporated under the Companies Act, 2013, which is carrying the business of Engineering Developers. It is alleged in the complaint that in the declaration given by the company, it has not disclosed the contribution made to the political parties during the year 2016-2017. On the basis of the complaint, a case has been registered under Section 182(1) of the Act. 5. It is the submission of the learned senior counsel that the proceedings initiated against the petitioner-company and its directors is without application of mind. Neither the company nor the directors have committed any offence much less the one under Section 182(3) of the Act. It is his further submission that when a declaration has been made for the year 2016-2017, there is a specific mention about the declaration of CSR expenses and donations to the extent of Rs.1,51,39,924/-. It is his further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake. On these grounds, he prayed to allow the petition and to quash the proceedings. 6. Per contra, learned counsel for the respondents vehemently argued and submitted that by combined reading of Section 182 of the Act, earlier to 01.04.2017 and subsequently, they go to show that the disclosure of the donation is mandatory and even after the amendment, if the declaration does not disclose separately, it is not considered to be a legal declaration as contemplated under Section 182 of the Act. It is his further submission that the balance sheet filed is composite declaration under Section 135 of the Act as well as the donation under Section 182 of the Act, under such circumstances, it is not going to fulfill the mandate of provisions of Section 182 of the Act. It is further submitted that the word used in Section 182 of the Act is "shall". In that light, the mandate prescribes the petitioners/accused to separately declare whatever the donations which have been contributed to the political party. It is his further submission that to the show cause notice dated 27.02.2019, a reply has been given dated 06.03.2019 and the petitioners/accused in their reply, have clearly admitted the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by it. (2) Without prejudice to the generality of the provisions of sub-section (1),-- (a) a donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscription or payment was given or made, can reasonably be regarded as likely to affect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose; (b) the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall also be deemed,-- (i) where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and (ii) where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose. (3) Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be a contribution of such amount to such political party, and (ii) where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose. (3) Every company shall disclose in its profit and loss account the total amount contributed by it under this section during the financial year to which the account relates. (3A) Notwithstanding anything contained in sub-section (1), the contribution under this section shall not be made except by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account: Provided that a company may make contribution through any instrument, issued pursuant to any scheme notified under any law for the time being in force, for contribution to the political parties. (4) If a company makes any contribution in contravention of the provisions of this section, the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard of every company referred to in sub-section (1) shall,- a. after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company's website, if any, in such manner as may be prescribed; and b. ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company. (5). The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy: Provided further that if the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities: Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub- section (3) of Section 134, specif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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