Congress, BJP withdraw plea against HC order on foreign donations

New Delhi: The Congress and the BJP on Tuesday withdrew their pleas challenging a Delhi High Court order holding both guilty of taking donations from subsidiaries of Britain-based Vedanta Resources in violation of the Foreign Contribution (Regulation) Act (FCRA).

Justice Jagdish Singh Khehar, Justice Arun Mishra and Justice A.M. Khanwilkar dismissed the petitions after the Congress and the Bharatiya Janata Party told the bench about their decision to take back the plea.

Holding both the parties guilty of accepting donations from foreign companies in violation of the act, the Delhi High Court on March 28, 2014, asked the central government and the Election Commission to take action against them.

"Prima facie the acts of the respondents (Congress and BJP) inter se, clearly fall foul of the ban imposed under the FCRA as the donations accepted by the political parties from Sterlite and Sesa accrue from 'foreign sources' within the meaning of law," the High Court had said.

The FCRA, prohibits any financial contribution from any foreign source or company to a political party registered in India. However, this position underwent change following the repeal of 1976 law by 2010 law and the amendment of the 2010 Act by the Finance Act 2016.

Appearing for BJP, senior counsel Shyam Divan assailed the High court judgment saying that the judgment that was pronounced in March 2014 on a PIL that was filed in January 2013, the court had relied on 1976 law which was "expressly repealed" by the 2010 statute.

The court was told that under the amended provision, the donations to a political party by the subsidiary of a foreign company incorporated in India and owned by an India citizen would not attract the prohibition under the FCRA, 2010.

As Divan relied on the 2010 law and the amendment introduced by the Finance Act, 2016, the bench observed: "We will allow you one option, if you think that 2010 law serves you better we will allow you to raise that."

As Divan sought the setting aside of the March 2014 judgment and the curtains on the direction to the Union government and the Election Commission to investigate the matter and take action, the court said that under the FCRA, the "prohibition is on you (BJP) not to accept the foreign contribution. The onus was on you (to ascertain) whether what (money) was coming to you was permitted or not". 

Not agreeing with Divan to overrule the March 28, 2014, High Court judgment, the bench said: "We will make a declaration of law, for the rest on facts, go before the Election Commission and argue. We will hear you, declare a law and then let the investigation go on."

It was after more than two hours of the hearing, senior counsel Kapil Sibal appearing for the Congress told the bench that they would withdrew the petition and contest the High Court verdict in the light of new law when the cause of action arises.