Plea in Kerala HC against foreign funding for political parties

A petition was today filed in the Kerala High Court challenging the constitutionality of amendments to a few legislations made by Parliament enabling companies and foreign institutions to fund political parties and candidates in elections in the country.

When the petition came up for hearing, a division bench of Chief Justice Antony Dominic and Justice Dama Seshadri Naidu adjourned it for detailed hearing after summer vacation.

The petition contended that the amendments to the Companies Act, the Representation of People's Act and Foreign Contribution (Regulation) Act, enabling companies and foreign institutions to fund political parties was against the basic structure and violative of the fundamental rights guaranteed under the Constitution.

The petitioner, social activist Victor T Thomas contended that the amended acts would enable Indian corporates and foreign institutions to have direct or indirect control over the elected government and the elected representatives.

He said the Companies (Amendment) Act of 1985, Section 293-A was re-enacted and the absolute ban on political contribution by companies was lifted permitting companies to contribute five per cent of their annual net profit to political parties.

Later, by virtue of Section 182 of the Companies Act of 2013, a company was permitted to contribute up to 7.5 per cent of the average annual net profit of the company, it said.

Now by the Finance Act of 2017, Section 182 had been further amended and the limit on contribution has been lifted thereby enabling companies to make unlimited contributions to political parties, the petitioner submitted.

The Foreign Contribution (Regulation) Act 2010, which was passed in suppression of the Foreign Contribution (Regulation) Act of 1976 was enacted for the purpose of restraining political parties from receiving foreign contributions.

Thereafter, by the Finance Act of 2016, a new proviso was introduced to Section 2(1)(j)(vi) of the Foreign Contribution (Regulation) Act 2010 which has in effect lifted the restrictions and regulations imposed by the said Act on receiving contribution from foreign companies.

Also by the Act 46 of 2003 and amendment had been carried out in the Representation of the People's Act, 1951 by inserting Section 29B whereby political parties are made entitled to accept contribution from companies, the petitioner pointed out.

As a result of these legislations, the right of citizens to conduct free and fair election is being corrupted, the petitioner contended.

"The aftermath of the election would be that Indian corporates and foreign institutions would have a direct or indirect control over the elected government and elected representatives, thereby influencing the policies and regulations in their favour and that would be detriment to the welfare of the citizens," it said.

The petitioner submitted that the sections enabling enabling the companies and foreign institutions to fund the political parties be declared unconstitutional.