January 2023

Corporate Law Corner Part A : Company Law

Pramod Prabhudesai | Vinod Agrawal, Chartered Accountants
Kaushik M. Jhaveri, Company Secretary

13 Comviva Technologies Ltd.
ROC/D/ADJ Order/Section 135/COMVIVA/5472-5480
Office of the Registrar of Companies, NCT of Delhi & Haryana
Adjudication order
Date of order: 27th September, 2022

Penalty on Company for failure to spend minimum CSR obligation u/s 135(5) of the Companies Act, 2013.


As per the MCA website, Comviva Technologies Ltd. (CTL) has its registered office in Gurgaon.

CTL made an application dated 26th July, 2022 informing ROC that it was required to spend Rs. 2,88,65,811 as CSR obligation during F.Y. 2020-21. However, it spent only Rs. 2,83,15,689 during that financial year, leaving an unspent CSR balance of Rs. 5,50,122. This unspent amount was required to be transferred within six months of the end of the financial year to a fund specified in Schedule VII of the Act (Section 135(5) read with Rule 10 of the Companies (Corporate Social Responsibility Policy) Rules, 2014).

CTL transferred the unspent CSR amount to the PMs Relief Fund on 22nd April, 2021. However, due to some technical error, the amount bounced back to CTLs bank account on the same day and remained unnoticed by its officers.

However, CTL made the default good by depositing the said amount to the PMs Relief Fund on 30th March, 2022.

Thereafter, the Adjudication Officer (AO) issued CTL and its officers in default a show cause notice dated 7th September, 2022 for violation of Section 135 (5) r.w.s. 454 of the Companies Act, 2013. A reply was submitted via email dated 16th September, 2022 to the AOs office.

Relevant provisions
Section 135(5)

The Board of every company, referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least 2 per cent of the average net profits of the company made during the three immediately preceding financial years [or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years], in pursuance of its Corporate Social Responsibility Policy.Provided that 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, specify the reasons for not spending the amount [and, unless the unspent amount relates to any ongoing project referred to in sub-section (6), transfer such unspent amount to a fund specified in Schedule VII, within a period of six months of the expiry of the financial year].

Section 135 (7)

If a company is in default in complying with the provisions of sub-section (5) or sub-section (6),


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