Vedanta Donation to Congress, BJP Violated FCRA: Delhi HC

The ruling Congress and the Opposition BJP, country’s two main political parties, violated Foreign Contribution (Regulation).

Published: 29th March 2014 08:09 AM  |   Last Updated: 29th March 2014 08:09 AM   |  A+A-

The ruling Congress and the Opposition BJP, country’s two main political parties, violated Foreign Contribution (Regulation) Act (FCRA) by accepting funds from companies controlled by UK-based mining group Vedanta Resources Plc,  the Delhi High Court ruled on Friday, directing the Union Home Ministry to take appropriate action as the law.

Section 3 of the FCRA imposes prohibition on political party or office-bearer and member of any Legislature from accepting contributions from foreign companies or companies in India controlled by foreign firms. The court directed the Centre to relook and re-appraise the receipts and take appropriate action against the parties within six months.

The PIL filed by the Association for Democratic Reforms (ADR) through Prashant Bhushan had alleged that the Congress and the BJP received donations from UK-based Vedanta group firms -Sterlite Industries and Sesa Goa in violation of the Representation of Peoples Act and FCRA. According to ADR, Sterlite Industries and Sesa Goa donated Rs 8.79 crore to the Congress between 2004 and 2012. During the same period, Sesa Goa donated Rs 1.42 crore to the BJP, while Sterlite Industries added another Rs 7 crore .

A Division Bench of Justice Pradeep Nandrajog and Justice Jayant Nath ruled that Vedanta is a “Foreign Company” within the meaning of Section 591 of the Companies Act, 1956, and therefore, Vedanta and its subsidiaries Sterlite and Sesa are a “Foreign Source” as contemplated under Section 2(e)(iii) of the Foreign Contribution (Regulation) Act, 1976.

The Bench directed the Home Ministry and the Election Commission of India (ECI) to probe all contributions to the political parties by the two companies, as well as all other donations received from the companies which would be deemed ‘foreign sources’, and act within six months.Additional Solicitor General L Nageswara Rao, appearing for the Centre, had opposed the PIL arguing that Indian citizen Anil Agarwal holds more than one half of share capital of Vedanta and it is not a ‘Foreign Company’ within the meaning of Section 591 of the Companies Act, 1956, and neither Vedanta nor its subsidiaries Sterlite and Sesa can be treated as a Foreign Source.

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