SC notices to Centre, EC on foreign fund to political parties

The party had challenged Delhi HC order pointing out violations of Foreign Contribution Act by political parties

The Supreme Court on Friday issued notice to the Centre on an appeal by the Congress challenging a Delhi High Court order for taking action after an investigation into funds received from foreign companies for election campaigns.

The Delhi High Court had found prima facie violation of the Foreign Contribution (Regulation) Act as “the donations accepted by the political parties from Sterlite Industries and Sesa Goa accrue from foreign sources within the meaning of law”.

Several other firms, including public-sector company State Trading Corporation of India and MMTC, were also named in the high court judgment, which asked the government to take action within six months. The deadline expires on September 28. The next hearing in the Supreme Court will come up after two months.

Though the high court had named the Bharatiya Janata Party, too, in its judgment, the party has chosen not to appeal to the apex court. The Supreme Court notice will go the Union home ministry and the Election Commission.

Kapil Sibal, senior counsel who represented the Congress, sought a stay of any coercive action against the party till the issues are finally decided by the apex court. The bench headed by Chief Justice R M Lodha allowed the party to approach the court if such action was taken.

The three-judge bench headed by the chief justice observed that the appeal raised important questions of law and required to be settled.

The main question argued was what is a foreign company in the context of poll contributions.

Prashant Bhushan, counsel for the Association for Democratic Rights, which had moved the high court, argued that any company controlled from outside India through shareholding arrangement, should be deemed to be a foreign company. He illustrated the case of Sterlite, which was controlled by Anil Agarwal’s Vedanta Resources from England. Sibal contended that an Indian businessman such as Agarwal, although heading a foreign company, was not barred from making contributions under the law.