Congress, BJP took illegal foreign donations, 1967 elections foreign funded: Delhi High Court

On March 28, 2014, Delhi High Court delivered a judgement exposing the corrupt practices of both the ruling Congress party and the opposition Bharatiya Janata Party (BJP). 

 The London-listed mining group Vedanta Resources Plc gave foreign donations in cash between 2004 and 2012. This judgment 10 days before the voting for the 16th Lok Sabha election commences has revealed their true colours. Vedanta Resources plc is a company incorporated under the Companies Act, 1985 and registered in England and Wale.

Sterlite Industries India and Sesa Goa, two companies then registered in India but whose controlling shareholder was Vedanta, donated 87.9 million rupees in total to Congress between 2004 and 2012.

Sesa Goa donated 14.2 million rupees to the BJP over the same period. This data was presented by the Association for Democratic Reforms (ADR) in the court through Prashant Bhushan, a noted public interest lawyer and a prominent leader of Aam Aadmi Party. The judgement was announced on a petition filed in public interest by E A S Sarma, Former Secy, Govt of India, and ADR in Delhi High Court in January 2013.

Sterlite Industries India also donated 70 million rupees to the BJP, according to the company's annual 2009-10 report. Vedanta, which is the controlling shareholder, merged the two companies in 2013.

"The acts of the respondents ... clearly fall foul of the ban imposed under the Foreign Contribution (Regulation) Act, 1976 as the donations accepted by the political parties from Sterlite and Sesa accrue from "Foreign Sources"," Judge Pradeep Nandrajog and Judge Jayant Nath wrote in their 33 page long judgment.

In para 73 of the judgement “…We have no hesitation in arriving at the view that prima-facie the acts of the respondents inter-se, as highlighted in the present petition, clearly fall foul of the ban imposed under the Foreign Contribution (Regulation) Act, 1976 as the donations accepted by the political parties from Sterlite and Sesa accrue from Foreign Sources within the meaning of law.”

The court has issued two directions in para 74 of the judgement:

·         The first direction would concern the donations made by State Trading Corporation of India and Metals and Minerals Corporation of India to INC in respect of the donations made to National Students Union of India (NSUI). Both MHA and ECI have been directed to investigate the matter to find out whether the same is a “stray incident and possibly a mistake or otherwise.”

·         The second direction would concern the donations made to political parties by not only Sterlite and Sesa but other similarly situated companies/corporations. Both MHA and ECI have been asked to “relook and reappraise” the receipts of the political parties and identify foreign contributions received by foreign sources.

 ADR had submitted that there is a blatant violation of the Foreign Contribution (Regulation) Act, 1976 (hereinafter referred to as "FCRA") by political parties which include the Respondent
No.3 and the Respondent No.4. It is asserted that Section 29(b) of the Representation of People Act, 1951 prohibits political parties from taking donations from Government Companies as also from a foreign source. It asserted that FCRA prohibits acceptance of foreign contributions by political parties as per the mandate of Section 4(1) (e) thereof. [Union of India (Respondent 1) and Election Commission of India (Respondent 2), Indian National Congress (Respondent 3) and BJP (Respondent 4)]

The Court recalled its decision in the matter of P.V Narsimha Rao v. Central Bureau of Investigation wherein it observed, "“What is the best way to win political foes? Persuasion? Understanding? Love? Compassion? Dale Carnegie's sermons? ...secret of success lies, at least with regard to some, in mastering the art of transferring one's own bulging wallets into the eager pockets of others.” 

The March 28, 2014 judgment refers to V.K.R.V.Rao and Dharm Narain's book Foreign Aid and India‟s Economic Development, wherein it has been pertinently observed on page 72: “India’s policy of non alignment with power blocs enabled it to receive foreign contributions from both the blocs. Eventually, with too much money coming in, with no self discipline, regulation, transparency or public accountability, and with some groups building empires in the name of contribution.”

It also refers to debates on the floor of the two Houses of Parliament where is reference to an enquiry conducted by the Intelligence Bureau, "it was revealed that the Political Parties in India were funded by Foreign Powers for the elections held in the year 1967." 

The judgement observes, "Deep concern was unanimously expressed by all Members cutting across party lines that in the recent past the Foreign Powers were alarmingly successful in wielding their satanic influence to corrupt public life and create a class of citizens having "extra -territorial loyalty". It was gathered from experience, domestic as well as international, that such covert operations were executed through the aid of seemingly innocuous organisations like Research Foundations, Religious and Cultural Societies, Voluntary Associations and Multi-National Corporations. It had dawned that India had denigrated into a playground for the world powers; who were coining ingenious means to latently push across huge sums of money through puppet organisations and destabilize the country. The Members of the House unanimously supported the Aim and Object(s) of the legislation and the mischief of pervasive foreign influence on our polity that it sought to suppress."