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New Delhi

New Delhi – After hearing the arguments of a Public Interest Litigation (PIL) which seeks CBI or SIT probe into the funding of India’s two leading political parties – Indian National Congress (INC) and Bhartiya Janata Party (BJP), by alleging that they have breached constitutional barriers in the process of collecting funds, a bench of Delhi High Court on Thursday asked the Central Government (Home Ministry) and Election Commission of India (ECI) to respond within 2 weeks.

The PIL, filed by the election watchdog Association for Democratic Reforms (ADR) along with E.A.S. Sarma, former secretary to the government of India, through advocate Prashant Bhushan alleged that various Indian laws were violated by the Congress and the BJP by receiving funds from the Vedanta Group, which is a foreign company listed on the London Stock Exchange under the name “Vedanta Resources PLC”.

“The two political parties namely Indian National Congress (INC) and Bhartiya Janata Party (BJP) have violated the Representation of People’s Act (RPA) 1951 and Foreign Contribution (Regulation) Act (FCRA) by taking donations from government companies and foreign sources, which is prohibited under both the legislations”, ADR said in a statement.

Both, section 29B of RPA and section 3(1)(e) of FCRA, 2010 [section 4(1)(e) of FCRA, 1976] prohibit contributions received by political parties from foreign companies.

“The donation of huge sums of money made by the Vedanta Group (being a foreign company) to major political parties like INC and BJP is in clear violation of the FCR Act of 1976 and the FCR Act of 2010,” they added.

“The donation of huge sums of money by the public sector undertakings (who are also State within Article 12 of the Constitution) to the political parties is in violation of Section 293A of the Companies Act,” ADR’s statement read.

The PIL said that Britain-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 Congress and the BJP".

The PIL also asked the central government to "confiscate the illegal donations under the supervision of the high court". 

According to Vedanta's annual report of 2012, it made political donations to the tune of $2.01 million ahead of the 2014 general election, the PIL said.

"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 a trust or directly."

The PIL alleged that since Finance Minister P. Chidambaram was the Director of Vedanta till May 2004, the government might not take any action against the group on its own.

"Till recently he (Chidambaram) was the home minister in charge of ensuring the implementation of FCRA. He did not take any action against Vedanta or the Congress with whom he is associated. He is now the finance minister under whose charge income tax exemptions are being given to Vedanta and the Congress for the illegal donations," said the PIL.

"Therefore, a court monitored investigation is required as the Union of India is unlikely to proceed against major political parties or corporate groups like Vedanta on its own," it said.

The PIL then asked the central government to "cancel the income tax exemption given to political parties and corporate groups for donations made in violation of the law of the land".

BJP and INC confess to foreign funding

Both BJP and INC have themselves declared, in their annual contribution reports submitted to the Election Commission of India (ECI), that they have received funding from the Vedanta Group.

Court asks Centre to respond before calling on the parties

After hearing the petitioners, Delhi High Court has asked the Home Ministry and Election Commission of India (ECI) to file their responses within 2 weeks.

Court has also said that the two political parties - INC and BJP - will be called upon to respond only after going through the responses of the Home Ministry and ECI. The next date of hearing in the matter has been set to 4th February 2013.

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