The Centre has stood up for the Bharatiya Janata Party and the Opposition Congress in the Supreme Court by clearing them of any violations under the Foreign Contribution (Regulation) Act, 2010 for accepting funds from the London-based multinational Vedanta.
Both parties have appealed in the Supreme Court against a Delhi High Court decision of 2014, holding 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’ under the FCRA.
In a hearing on Tuesday, a Bench led by Justice J.S. Khehar scheduled the case for final hearing on September 14 and 15, and asked the two parties to not take any adjournments.
In its affidavit, the government said that since the majority shares of these companies were held by Indians, they did not come under the category of foreign companies. The Congress argued that it never concealed the receipt of donations from Sterlite and Sesa. It had also declared the contributions to the Election Commission as per the Representation of the People Act.
It had argued that Mr. Aggarwal and his family held more than 50 per cent shares in Vedanta, and any contributions made by them would not be deemed as from a foreign source.
The BJP acknowledged that it had received donations from Sesa Goa Ltd and the Madras Aluminium Company Ltd in 2007-08 and 2009-10. It too contended that the shares of these companies were held by Indian nationals.
The FCRA, 2010 provides that a company “shall not be deemed a foreign source” if the nominal value of share capital is within the limits specified for foreign investments under the Foreign Exchange Management Act, 1999, or associated rules and regulations.
The definition of what comprises a ‘foreign source’ under the FCRA, 2010 includes companies in which more than one half of the nominal value of its share capital is held by the following entities: a government of a foreign country or territory; foreign citizens, corporations incorporated abroad; trusts, societies or associations set up abroad; or a foreign company.
The High Court judgment was based on a PIL petition by the NGO, Association for Democratic Reforms, and E.A.S. Sarma, a former government secretary, who had alleged that the two parties had violated the Representation of the People Act and the FCRA.
