In a significant judgment which would have political ramification, the Delhi High Court on Friday found two leading political parties-Congress and BJP guilty of accepting foreign funds from subsidiaries of Vedanta in violation of the existing law.
Fixing a time frame of six months, the court asked the central government and the Election Commission to take appropriate actions against the for flouting the norms laid down under the Foreign Contribution (Regulation) Act. "Prima-facie the acts of the respondents (Congress and BJP) inter-se, clearly fall foul of the ban imposed under the FCR Act as the donations accepted by the political parties from Sterlite and Sesa accrue from "foreign sources" within the meaning of law," a bench of justices Pradeep Nandrajog and Jayant Nath said.
It came to the conclusion that "Vedanta is a "foreign company" within the meaning of the Companies Act and therefore, Vedanta and its subsidiaries - Sterlite and Sesa are a "foreign source" as contemplated under the FCRA. The bench directed the home ministry and election commission to "relook and reappraise the receipts of the political parties" to identify foreign donations and take action.
The court order followed to a PIL filed by the Association for Democratic Reforms through advocate Prashant Bhushan claiming the Britain-based Vedanta Resources and its subsidiary companies in India – including Sterlite Industries, Sesa Goa and Malco of donating several crores of rupees to major political parties like the Congress and the BJP.
According to the PIL, Indian laws had been violated by the Congress and BJP by allegedly receiving funding from Vedanta Resources.
Further , it alleged that the two parties breached the Representation of the People Act, (RPA) and the FCRA. "Both the acts prohibit political parties from taking donations from government companies and from foreign sources, the plea said.
According to Vedanta's 2012 annual report, it made political donations to the tune of $2.01 million in 2011-12, the PIL said. "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."