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SC Notice Doesnt Deter Govt, Uses Fin Bill Again To Amend Law To Allow Foreign Funding To Pol Parties

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SC Notice Doesnt Deter Govt, Uses Fin Bill Again To Amend Law To Allow Foreign Funding To Pol Parties

Already facing a Supreme Court notice on petition challenging amendments in law through money bill to legalise foreign funding to political parties, the government has once again sought to amend the repealed Foreign Contribution Regulation Act (FCRA), 1976, retrospectively through Finance Bill 2018.

This is seen as an attempt to wriggle out of legal wrangles that the BJP and Congress have got into over receiving foreign funds

The Delhi High Court had held the two parties guilty of receiving foreign funds from two subsidiaries of Vedanta, a UK-based company and issued contempt notice to the Ministry of Home Affairs (MHA) for not complying with its order.

Political parties are barred from receiving foreign funds under the Representation of the People Act and the FCRA. Facing a court case, in 2016, the government changed the definition of ‘foreign companies’ by amending the FCRA. This was done by moving the amendment as a Finance Bill, which cannot be blocked by the Rajya Sabha.

What is more, the amendment was made effective retrospectively. However, it only made valid the foreign donations received after 2010, the year when the 1976 Act was repealed and replaced with FCRA 2010.

Both BJP and Congress were allegedly receiving foreign funds for political activities from Vedanta from 2004 to 2012.

After a Delhi High Court notice, in an attempt to obtain relief for the two parties, the government has again proposed an amendment through the Finance Bill, 2018. It says, “Clause 217 of the Bill seeks to amend Section 236 of the Finance Act, 2016 which relates to amendment to sub-clause (vi) of clause (j) of sub-section (1) of Section 2 of the Foreign Contribution (Regulation) Act, 2010 …. effect from the 5th August, 1976 the date of commencement of the FCRA, 1976, which was repealed and re-enacted as the FCRA, 2010.”

In Part XIX of the list of amendments in the 2018 Finance Bill, the “Amendment to the Finance Act, 2016”, entry number 217, reads: “In Finance Act, 2016, in section 236, in the opening paragraph, for the words, figures and letter ‘the 26th September, 2010’, the words, figures and letter ‘the 5th August, 1976’ shall be substituted.”

Further, The Indian Express reported quoting an unnamed official, “After Foreign Direct Investment (FDI) norms were relaxed, there were anomalies regarding the definition of foreign companies under the FCRA which were not amended. After seeking legal opinion, it was decided to amend the 1976 Act in the 2018 finance Bill.”

The FCRA of 1976 defined a foreign company as one with over 50 per cent foreign ownership, thereby disallowing the companies owned by foreign nationals or Indian-origin people based abroad and with foreign citizenship to fund and influence political parties in India.

This was inconsistent with the view of the Finance and the Commerce Ministries, which treated companies based in India and having Indian directors and employees as Indian subsidiaries.

Brief background:

The earlier retrospective amendment in 2016 did not apply to donations prior to 2010 while the Delhi High Court had in 2014 held that the donations were illegal. On March 28, 2014, the high court had ordered the Election Commission and the ministry of home affairs (MHA) to look into the accounts of parties and take action within six months.

The matter dragged on. The Association for Democratic Reforms (ADR), the Delhi High Court moved a contempt petition in March 2017 against the Ministry of Home Affairs (MHA) pointing out that the directives of the High Court against the two political parties which received foreign funds were not complied with.

In October, 2017, the Delhi High Court bench of acting Chief Justice Gita Mittal and Justice C Hari Shankar gave further six months to MHA for complying with its 2014 judgment, which had found both parties flouting the FCRA norms by accepting donations from Indian subsidiaries of UK- based Vedanta Resources.

The MHA had sought extension of time till March 31, 2018 to comply with the court’s directions saying that the records were “voluminous in nature and a few decades old” hence it required more time to “collect, collate and then analyse them”.

Contesting the ADR’s contention that even after the lapse of three years the government remained in noncompliance with the judgment of the Delhi HC, the Centre argued that the ministry of corporate affairs was examining the share-holding patterns of the companies which have extended donations to the political parties.

After hearing the arguments the bench said it will give one last opportunity to the government and extended the time period by six months.

By the time six months were to be over, the Centre brought in the latest amendment.

ADR founder Jagdeep S Chhokar told India Legal/APN Live: “The contempt petition is still pending in the HC. Government lawyers have been seeking one adjournment after another, because they were trying to buy time to take care of the problem.”

“They (the government) seem to have come up with the solution: “make the amendment effective since 1976″. But the legal lacuna is that the 1976 Act was specifically repealed in 2010,” said Chhokar.

Calling it “patently illegal”, Chhokar said, “Question is how does one amend an Act that is dead. You can amend a law that is force but you can’t amend a law that does not exist.”

“In fact, if it is taken to its logical end, what they have done in the Finance Bill might land them in further trouble,” he added.

The Supreme Court in October 2017 had issued notice to the Centre on a plea by ADR challenging amendments to various statutes introduced through The Finance Act, 2017, and The Finance Act, 2016, both of which were passed as money bills, allegedly leading to illicit and foreign funding of political parties.

The statutes amended include the Income Tax Act, 1961, Representation of People’s Act, 1951, Reserve Bank of India Act, 1934, Foreign Contribution (Regulation) Act, 2010 (FCRA) and Companies Act, 2013.

The government brought in the latest amendment through the same route of Finance Bill even after receiving the Supreme Court notice on similar moves earlier and the case is still being heard.

There are at least 25 instances of the Congress and the BJP receiving funding from the ‘Indian’ subsidiaries of various foreign companies before 2010.  As the table below, compiled by ADR, shows, the parties have received funding in the range of Rs 5 lakh to Rs 5 crore from the Indian subsidiaries of Vedanta, Dow Chemicals and Switzerland-based Mundipharma over the course of six years from 2004 to 2010.

Company Amount (In Rupees) Year of Donation Political Party Parent Company
Hyatt Regency 5,00,000 FY 04-05 INC American Origin Company
Sterlite Industries Ltd 100,00,000 FY 04-05 INC Vedanta
Sesa Goa Ltd 5,00,000 FY 04-05 INC Vedanta
Sesa Goa Ltd 5,00,000 FY 04-05 INC Vedanta
Sesa Goa Ltd 2,00,000 FY 04-05 INC Vedanta
Adani Wilmer Ltd 2,50,000 FY 05-06 INC Adani Wilmar Limited is a 50:50 joint venture between the Adani Group and Wilmar International Limited
Sesa Goa Ltd 5,00,000 FY 05-06 INC Vedanta
Sesa Goa Ltd 5,00,000 FY 05-06 INC Vedanta
Sesa Goa Ltd 2,00,000 FY 06-07 INC Vedanta
Sesa Goa Ltd 15,00,000 FY 07-08 INC Vedanta
Adani Wilmer Ltd 5,000,000 FY 08-09 INC Adani – Wilmer JV
Solaries Holding Ltd 5,000,000 FY 09-10 INC Vedanta
Solaries Holding Ltd 5,000,000 FY 09-10 INC Vedanta
Sterlite Industries (India) Ltd. 50,000,000 FY 09-10 INC Vedanta
Sesa Goa Ltd 30,00,000 FY 09-10 INC Vedanta
Sesa Goa Ltd Sesa Ghor 5,00,000 FY 05-06 BJP Vedanta
Win Medicare (P) Ltd 25,00,000 FY 05-06 BJP Swiss origin company
Sesa Goa Ltd 2,00,000 FY 06-07 BJP Vedanta
Dow Chemical Int (P) Ltd 1,00,000 FY 06-07 BJP Union Carbide acquirer
Sesa Goa Ltd 15,00,000 FY 07-08 BJP Vedanta
Sesa Goa Ltd 12,50,000 FY 07-08 BJP Vedanta
Adani Wilmar Ltd 50,00,000 FY 08-09 BJP Vedanta
Vedanta The Madras Aluminum Ltd 30,000,000 FY 09-10 BJP Vedanta
Vedanta The Madras Aluminum Ltd 50,00,000 FY 09-10 BJP Vedanta
Sesa Goa Ltd 50,00,000 FY 09-10 BJP Vedanta
Win Medicare (P) Ltd 25,00,000 FY 09-10 BJP Swiss origin company
Sesa Goa Ltd 10,00,000 FY 09-10 BJP Vedanta

India News

Manipur Assembly to meet at 4 pm today, floor test likely under new chief minister

The Manipur Legislative Assembly will convene at 4 pm today, with a floor test likely as the new chief minister seeks to prove his majority in the House.

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Manipur assembly

The Manipur Legislative Assembly will convene at 4 pm on Thursday in Imphal, a day after Yumnam Khemchand Singh was sworn in as the chief minister. A floor test is likely to be held on the first day of the session to establish the majority of the newly formed government.

In the 60-member Assembly, the BJP holds 37 seats, while its ally National People’s Party has six members, giving the ruling combine a clear majority in the House.

Singh chaired the first Cabinet meeting of his government late Wednesday evening, shortly after taking oath as the 13th chief minister of Manipur. The meeting marked the formal start of administrative functioning under the new Council of Ministers.

His appointment came nearly a year after the resignation of former chief minister N Biren Singh, who stepped down following months of ethnic violence between the Meitei and Kuki communities in the state.

After taking oath, Singh thanked Prime Minister Narendra Modi and said he would work with “utmost diligence to advance development and prosperity in Manipur,” aligning the state’s efforts with the vision of Viksit Bharat.

He said the government’s focus would be on inclusive economic growth while preserving Manipur’s cultural heritage, adding that he would discharge his responsibilities with sincerity and dedication, mindful of the trust placed in him.

The summoning of the 12th Manipur Legislative Assembly by Governor Ajay Kumar Bhalla, along with the first Cabinet meeting, signals the resumption of legislative and administrative processes in the state, officially bringing President’s rule to an end.

The sixth session of the 12th Manipur Legislative Assembly was last held from July 31 to August 12, 2024.

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India News

PM Modi skips Lok Sabha reply as protests force repeated adjournments

PM Modi did not deliver his Lok Sabha reply today after sustained Opposition protests led to repeated adjournments over a dispute involving Rahul Gandhi’s proposed speech.

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PM Modi

Prime Minister Narendra Modi did not deliver his scheduled reply to the Motion of Thanks on the President’s address in the Lok Sabha today after sustained Opposition protests led to multiple adjournments of the House.

The disruption followed an escalation of tensions linked to Congress leader Rahul Gandhi’s proposed speech and the suspension of eight Opposition MPs a day earlier. The situation worsened after remarks made by BJP MP Nishikant Dubey during the proceedings.

Dispute over references to books sparks fresh ruckus

The controversy intensified when Nishikant Dubey responded to Rahul Gandhi’s demand to speak on national security and references to the unpublished memoirs of former Army chief General MM Naravane. Dubey said that while Gandhi wanted to quote from an unpublished book, he himself had brought several books that, according to him, made claims about the Gandhi family.

As Dubey began listing these books and their contents, strong protests erupted from Opposition members. Krishna Prasad Tenneti, who was presiding over the House at the time, cited Rule 349, which restricts members from reading out books, newspapers, or letters unless directly related to parliamentary business. Despite repeated warnings, the matter remained unresolved, leading to another adjournment.

Rahul Gandhi accuses government of silencing debate

Earlier in the day, Rahul Gandhi alleged that he was being prevented from speaking on an issue of national importance. He claimed the government was uncomfortable with references to General Naravane’s memoirs, which he said discussed the handling of the 2020 China border crisis.

In a social media post, Gandhi said he intended to present the Prime Minister with a book authored by the former Army chief, adding that some cabinet ministers had even questioned the existence of the book. He also wrote to Lok Sabha Speaker Om Birla after the suspension of eight Opposition MPs, alleging that parliamentary debate was being curtailed.

After it became clear that the Prime Minister would not speak in the House today, Gandhi posted that PM Modi had avoided Parliament because he was “scared” to face the truth. Congress MP Priyanka Gandhi Vadra echoed the allegation, claiming the Prime Minister was unwilling to enter the House.

Proceedings disrupted throughout the day

Lok Sabha proceedings were first adjourned until 2 pm amid loud protests over the issue linked to Naravane’s memoirs. Even after the House reconvened, disruptions continued, preventing normal business from resuming.

Later, Congress MPs staged a demonstration outside the Parliament complex, demanding that Rahul Gandhi be allowed to speak on the President’s address.

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India News

President’s Rule revoked in Manipur as NDA set to form new government

President’s Rule has been withdrawn in Manipur nearly a year after its imposition, paving the way for a new NDA-led government under Yumnam Khemchand Singh.

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President rule invoked in Manipur

President’s Rule has been revoked in Manipur nearly a year after it was imposed, clearing the way for the formation of a new government led by the BJP-led National Democratic Alliance (NDA). The decision came hours before the scheduled oath ceremony of the new council of ministers.

Chief minister-designate Yumnam Khemchand Singh is set to take oath later this evening, along with other NDA legislators who will formally join the new government. The revocation brings an end to central rule that had been in place since February 2025, following the resignation of then chief minister N Biren Singh.

Assembly status during central rule

During the period of President’s Rule, the Manipur Legislative Assembly remained in suspended animation, meaning it was neither functioning nor dissolved. With the restoration of the elected government, legislative activity is expected to resume.

Khemchand Singh, 61, belongs to the Meitei community. Two deputy chief ministers have been named to reflect Manipur’s ethnic diversity. Nemcha Kipgen, from the Kuki community, and Losii Dikho, from the Naga community, are set to take charge as deputy chief ministers.

According to people with direct knowledge of the matter, Nemcha Kipgen is likely to take oath from a Manipur government guesthouse in Delhi.

Key portfolios and leadership choices

Seven-time MLA from Bishnupur district, Govindas Konthoujam, said he has been entrusted with the Home portfolio. Emphasising stability and law and order, he said he remains committed to serving the state with discipline and restraint.

Sources said Khemchand Singh is viewed within the party as a non-polarising leader who is acceptable across internal factions at a time of political transition. While he is yet to be tested in governance, he is seen as a steady administrative choice capable of providing organisational discipline and continuity amid uncertainty.

Uneasy peace continues in Manipur

The formation of the new government comes against the backdrop of continued tension in Manipur, nearly three years after violence erupted between the Meitei community in the valley areas and the Kuki tribes in several hill districts.

A section of Kuki groups has been demanding a separate administrative arrangement, with negotiations involving multiple insurgent groups operating under two umbrella organisations that are signatories to the suspension of operations agreement.

In recent weeks, some Kuki civil society organisations have stated they would not participate in the Manipur government and have distanced themselves from Kuki MLAs expected to join the new administration.

A day before the announcement of the new government, Kuki leader Paolienlal Haokip posted on X that representatives of the Kuki Zo people could not take part in leadership selection without justice and a written commitment for political settlement.

Diverging demands from communities

Meitei civil society groups have maintained that all internally displaced persons should be allowed to return home safely, even as dialogue continues. However, Kuki leaders have insisted that a political solution in the form of a separate administration must come first, before discussions on rehabilitation and return from relief camps.

Meitei leaders have countered this position, arguing that the demand reflects an ethnocentric territorial claim and that humanitarian issues should be addressed alongside negotiations, as no area is exclusively inhabited by a single community.

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