NEW DELHI: In a landmark verdict on the eve of national elections, the Delhi high court Friday indicted the Bhartiya Janata Party and Congress Party of receiving foreign funds in violation of provisions of Foreign Contribution (Regulation) Act (FCRA).
A division bench comprising Justice Pradeep Nandrajog and Justice Jayant Nath asked the government and the Election Commission (EC) to act against the two political parties for accepting foreign funds from Vedanta subsidiaries. It asked MHA and EC to "relook and reappraise the receipts of the political parties and identify foreign contributions received by foreign sources" and take action within six months.
In addition, the bench also faulted the Congress for taking donations from public sector undertakings State Trading Corporation of India and Metals and Minerals Corporation of India. HC asked the authorities to investigate Congress' defence that the money was donated to NSUI and accidentally reflected in Congress accounts.
"Prima facie the acts of the respondents (Congress and BJP) inter se, clearly fall foul of the ban imposed under the Foreign Contribution (Regulation) Act as the donations accepted by the political parties from Sterlite and Sesa accrue from "foreign sources" within the meaning of law," the bench ruled.
Interpreting the FCRA 1976 and the Companies Act, HC held that "Vedanta is a "foreign company" within the meaning of the Companies Act, 1956 and therefore, the Anil Aggarwal-owned company and its subsidiaries, Sterlite and Sesa, are foreign sources as per Foreign Contribution (Regulation) Act (FCRA).
Drawing extensively on Parliamentary debates, Justice Nandrajog, who authored the 33 page verdict, pointed out FCRA was enacted to ward off threat of foreign money influencing politics in India. "Political Parties and pliant public functionaries were influenced by foreign powers to toe their lines and in return were handsomely rewarded in myriad forms, which included bribes, extending lavish hospitality, sponsorship of education of their relatives in reputed Universities abroad and even securing attractive career opportunities in Multi-National Corporations," the judge observed, stressing the need to check such violations.
The court also referred to an IB report that revealed "that the Political Parties in India were funded by Foreign Powers for the elections held in the year 1967," and touched upon the subversive activities of CIA in third world countries. "It was gathered from experience, domestic as well as international, that such covert operations were executed through the aid of seemingly innocuous organizations like - Research Foundations, Religious and Cultural Societies, Voluntary Associations and Multi-National Corporations," HC highlighted.
The verdict came on a PIL by Association for Democratic Reforms. Demanding a court monitored investigation by an SIT or CBI the ADR cited the MHA reply admitting the position that funding came to these parties from foreign sources. Filed by E A S Sarma, a former Secretary to the Government of India and argued by AAP member Prashant Bhushan, the PIL alleged that the two political parties violated the Representation of the People Act apart from FCRA by taking these donations. It asked the central government to "confiscate the illegal donations under the supervision of the high court".
Citing Vedanta's 2012 annual report, the PIL alleged it made political donations to the tune of $2.01 million. "Sterlite's annual report of 2011-12 also states that during the year the group made political donations in India of Rs.5 crore either through a trust or directly." It further raised apprehensions that since Finance Minister P. Chidambaram was a director in Vedanta till May 2004, the government might not take any action against the group on its own.
BJP and Congress in their defence had argued that Vedanta is owned by an Indian citizen, Aggarwal, and its subsidiaries are incorporated here, therefore they are not foreign sources.
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