The Supreme Court Friday issued notice to the central government and the Election Commission on a petition challenging a Delhi High Court direction to investigate the Congress party's foreign funding.
A bench of Chief Justice R.M. Lodha, Justice Kurian Joseph and Justice Rohinton Fali Nariman, while issuing notice returnable in eight weeks, said that the provision on foreign funding requires an interpretation and the court will examine the status of subsidiaries of foreign-based companies within the meaning of the Companies Act
Appearing for the Congress, senior counsel Kapil Sibal urged the court to restrain the central government and the poll panel from taking any coercive steps but the court said that as and when any coercive step is taken, the party can approach the court for intervention.
The probe into the foreign funding of the Congress was over an allegation that it has received funds from a foreign-based company with operations in India.
The Congress had July 23 moved the apex court challenging the Delhi High Court verdict that held it and the Bharatiya Janata Party (BJP) guilty of receiving funds from the subsidiaries of Britain-based Vedanta by flouting the norms of the Foreign Contribution (Regulation) Act.
The Congress has sought the stay of the March 28 high court order which had prima facie found both Congress and BJP guilty of violating the foreign contribution statute and had asked the central government and the Election Commission to initiate appropriate action against them within six months.
The high court had directed the home ministry and the poll panel to "relook and reappraise the receipts of the political parties" to identify foreign donations and take action within six months.
The court order had come in response to a PIL filed by the Association for Democratic Reforms contending that the Vedanta Resources and its subsidiary companies in India - including Sterlite Industries, Sesa Goa and Malco - of allegedly donating several crores of rupees to major political parties like the Congress and the BJP.
The high court came to the conclusion that "Vedanta is a 'foreign company' within the meaning of the Companies Act, 1956 and therefore, Vedanta and its subsidiaries - Sterlite and Sesa - are a 'foreign source' as contemplated under the Foreign Contribution (Regulation) Act, 1976".
"Prima facie the acts of the respondents (Congress and BJP) inter se, clearly fall foul of the ban imposed under the Foreign Contribution (Regulation) Act as the donations accepted by the political parties from Sterlite and Sesa accrue from 'foreign sources' within the meaning of law."
The FCRA prohibits any financial contribution from any foreign source or company to a political party registered in India.
