Source: 
Outlook.com
http://news.outlookindia.com/items.aspx?artid=830807
Date: 
28.02.2014
City: 
New Delhi

The Delhi High Court today reserved its order on a PIL seeking a court-monitored probe against Congress and BJP for allegedly receiving fundings from Indian subsidiaries of UK-based Vedanta Resources in violation of various laws.

"We reserve the order," the bench comprising justices Pradeep Nandrajog and Jayant Nath said after hearing arguments on behalf an NGO, which had filed the PIL, the Centre and both the political parties.

Prashant Bhushan, appearing for NGO Association for Democratic Reforms, referred to the provisions of the Foreign Contribution (Regulation) Act (FCRA) and the Companies Act and said, "It is an open and shut case, wherein the facts are admitted that both the parties have accepted donations from Indian subsidiaries of the United Kingdom-based Vedanta Resources PLC."

The provisions of the FCRA are "very clear" on this aspect that no Indian firm, whose holding company is incorporated in a foreign country, can donate to a political party here, he said.

He alleged Sterlite, Sesa Goa and Madras Aluminum, all Indian subsidiaries of Vedanta, gave donations to Congress and BJP in violation of the FCRA Act and the Companies Act.

He opposed the plea of both the political parties that Anil Agarwal, an Indian, holds more than 50 per cent stakes in the parent UK-based Vedanta Resources and hence, no Indian laws were violated.

Additional Solicitor General L Nageswara Rao, appearing for the Centre, opposed Bhushan's plea saying the donations came from companies listed in India and moreover, the firms have operations here.

Referring to the legal provisions, the ASG said if a firm has a business here then it would be "construed as an Indian" firm for all the legal purposes relating to the Companies Act.

Congress and BJP had taken a similar stand that no laws have been violated by them as an Indian held majority stakes in a foreign company, whose Indian subsidiaries gave donations to them.

Reserving the verdict today, the bench asked the Centre and both the political parties to file written submissions within a week.

The PIL, which was transferred to this bench from another, also sought confiscation of funds allegedly received from abroad by the two parties in violation of Indian laws.

Earlier, the court had issued notices to the political parties, Ministry of Home Affairs and the Election Commission on the PIL filed by the NGO and E A S Sarma, a former Secretary of the government of India.

The PIL sought a direction for a "court-monitored investigation by SIT or CBI into the violation of foreign funding and other laws by major political parties, corporate groups and PSUs".

It alleged that the two political parties have violated the Representation of People's Act and the Foreign Contribution (Regulation) Act (FCRA) by taking donations from government companies and foreign sources, which is prohibited under both the legislations.

The petition alleged that UK-based Vedanta Resources and its subsidiary companies in India, including Sterlite Industries, Sesa Goa and Malco "have donated several crores of rupees to major political parties like the INC and the BJP".

The PIL has also alleged that according to Vedanta's annual report of 2012, it had made political donations to the tune of USD 2.01 million either through a trust or directly in respect of the Indian general elections.

"Sterlite's annual report (of 2011-2012) also states that during the year the Group made political donations in India, of Rs 5 crore either through trust or directly," it claimed.

The PIL sought directions to the Centre to "initiate action against the major political parties and corporate groups under FCRA and to confiscate the illegal donations under the supervision of the high court".

It also sought an order directing the Centre to "cancel the income tax exemption given to political parties and corporate groups for donations made in violation of the law of the land".

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