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Chandigarh: In a significant development that could reshape the discourse around corporate responsibility during natural disasters, the Punjab and Chandigarh Human Rights Commission has ruled that companies failing to contribute their mandatory Corporate Social Responsibility (CSR) funds towards flood relief amounts to a violation of human rights.

A Bench comprising Chairperson Justice Sant Parkash and Member Justice Gurbir Singh issued this order while hearing a complaint filed by Dr. Punditrao Dharenavar, a Chandigarh resident. The complainant highlighted the devastating impact of Punjab’s recent floods—which destroyed homes, crops, livestock, and infrastructure—yet saw little to no contribution from corporate entities towards relief and rehabilitation.

Complaint and Relief Sought

Dr. Dharenavar argued that, despite the large-scale devastation, no registered company in Punjab had voluntarily come forward to financially assist victims. He urged that corporate houses should be directed to contribute at least 1% of their net income to the Punjab Chief Minister’s Flood Relief Fund, underlining that such aid is not charity but a statutory CSR obligation. To strengthen his case, he annexed photographs of damaged houses, submerged fields, and distressed families.

Commission’s Findings: CSR is a Legal Duty, Not an Option

The Commission pointed out that under Section 135 of the Companies Act, 2013, companies meeting the specified thresholds are mandated to spend a minimum of 2% of their average net profits from the previous three years on CSR activities. Crucially, disaster management, relief, and rehabilitation are explicitly listed as permissible CSR activities under Schedule VII of the Act.

The Bench observed that corporate entities cannot treat CSR as discretionary, especially in times of humanitarian crisis. The Commission went a step further, declaring that failure to contribute CSR funds in such circumstances undermines the human rights of victims—as it deprives them of timely aid and rehabilitation, which they are entitled to under the broader framework of welfare and social justice.

Directions Issued

Directing Punjab’s Chief Secretary to ensure compliance, the Commission instructed the government to engage with competent authorities, including the Registrar of Companies, Chandigarh, to make certain that all eligible companies in Punjab fulfil their CSR obligations without delay. Copies of the order have been sent to relevant authorities, with the matter adjourned to October 1, when the Chief Secretary’s compliance report will be reviewed.

Why This Order Matters

The ruling is a landmark interpretation of CSR not merely as a financial obligation, but as a moral and human rights duty. By linking non-compliance with human rights violations, the Commission has effectively raised the stakes for companies that attempt to evade CSR responsibilities. At a time when 43 lives have been lost, crops on more than 4.3 lakh acres destroyed, and thousands displaced, the order could compel corpo rates to step in as stakeholders in social welfare and disaster management, rather than bystanders.