The Supreme Court on Tuesday allowed the Bharatiya Janata Party and the Congress to withdraw their appeals against a Delhi High Court judgment holding them prima facie guilty of violating the Foreign Contribution (Regulation) Act by accepting funds from the London-based multinational Vedanta during 2007 and 2009.
A Bench, led by Justice J.S. Khehar, allowed them to withdraw their appeals after counsel for the parties said the appeals were infructuous following certain amendments to the Act in 2010, easing the norms for receipt of foreign donations. The parties argued that the amendments had a retrospective effect.
The Centre also seconded their stand.
High Court ruling
In 2014, the Delhi High Court concluded that both parties received funds from foreign sources in violation of the Act.
It held that Vedanta was a foreign company as per the Companies Act and therefore, the Anil Aggarwal-owned company and its subsidiaries, Sterlite and Sesa, were “foreign sources” as defined under the FCRA. The court had ordered the government and the Election Commission to take appropriate action against the parties under the Representation of the People Act and the FCRA.
Association for Democratic Rights, an NGO that was the petitioner in the High Court, argued that that the FCRA amendments made in 2010 did not protect donations received in 2007 and 2009, and these transactions were governed by the FCRA of 1976.
Congress stand
The Congress argued that it had never concealed the donations from Sterlite and Sesa, and declared them to the Election Commission as per the Representation of the People Act. Mr. Aggarwal and his family held more than 50 per cent shares in Vedanta, and any of their contributions would not be deemed as from a foreign source under the 2010 amendments, it said.
The BJP acknowledged that it had received donations from Sesa Goa Ltd. and Madras Aluminium Company Ltd. in 2007-08 and 2009-10.
The party argued that the shares of these companies were held by Indian nationals.
Since the majority shares were held by Indians, they did not come under the category of foreign companies.
