ASSOCIATION FOR DEMOCRATIC REFORMS Vs. UNION OF INDIA

JUDGEMENT

(1.) Filed in public interest, the petitioner asserts 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. The petitioner asserts that FCRA prohibits acceptance of foreign contributions by political parties as per the mandate of Section 4(1)(e) thereof.

(2.) Since the writ petition drew attention to donations made to political parties for the period up to the year 2009, we record at the outset that our concern is not with the Foreign Contribution (Regulation) Act, 2010 which has come into force on September 26, 2010. Our discussion of the legal position would be with respect to the Foreign Contribution (Regulation) Act, 1976.

(3.) By way of illustration, the petitioner relies upon the annual report of Vedanta Resources plc, a company incorporated under the Companies Act, 1985 and registered in England and Wales with registration No.04740415 as also the annual report of M/s Sterlite Industries India Ltd. (hereinafter referred to as Sterlite), a company registered in India under the Companies Act, 1956 evidencing donation made by Sterlite to political parties in India. The petitioner also refers to a company by the name of M/s Sesa Goa Ltd. (hereinafter referred to as Sesa), which is incorporation in India under the Companies Act, 1956 but controlling shareholding whereof is owned by Vedanta Resources plc. The said company has also made donations to political parties. The petitioner brings home with reference to the annual report of Vedanta Resources plc that it owns 55.1% of the issued share capital of Sterlite. The petitioner would concede that Sh.Anil Aggarwal, an Indian National and a citizen of India holds more than 50% issued share capital of Vedanta Resources plc. As regards the Respondent No.3 the petitioner brings out that two Government Companies: State Trading Corporation and Metals & Minerals Trading Corporation of India have donated money to the Respondent No.3, a fact admitted to by Sh.Motilal Mehra, the Treasurer of the party in his communication dated September 29, 2008 to the Election Commission of India. Section 293(a) of the Companies Act, 1956 is alleged to have been violated by the Respondent No.3 when it accepted donations from the State Trading Corporation and Metals & Minerals Trading Corporation of India.