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Fund stain on Big Two stays

New Delhi, Aug. 22: The Supreme Court today refused to stay a five-month-old Delhi High Court verdict that held the Congress and the BJP prima facie guilty of accepting donations from foreign sources, which is illegal.

Responding to Congress fears about possible coercive steps by government agencies — for instance, raids on its premises or questioning of its leaders — the apex court said the party could in such circumstances apply to it for relief.

The apex court, which was hearing a Congress petition challenging the high court order, issued notices to the Centre and the Election Commission seeking their responses in six seeks.

According to the court, an interpretation of the Foreign Contribution (Regulation) Act of 1976 is necessary to determine whether the donations received by the two parties were illegal. The 1976 act bars Indian political parties from receiving donations from foreign sources.

In its appeal, the Congress has argued that the majority shareholders of the donor companies Sterlite Industries and Sesa Goa — Indian subsidiaries of the UK-based Vedanta Group — were Indians. It has claimed that what the law prohibits is contributions by citizens of foreign countries.

The BJP, which has come to power since the high court passed its verdict, is yet to file its appeal.

An NGO, the Association for Protection of Democratic Rights, had petitioned the high court alleging the two parties had received donations running into crores from Sterlite and Sesa Goa till 2009.

It argued through counsel Prashant Bhushan and Pranava Sachdeva that although the donor companies had been registered in India, more than half their share capital was held by Vedanta, a company incorporated in Britain.

On March 29, the high court bench of Justices Pradeep Nandrajog and Jayant Nath found the two parties prima facie guilty. It directed the Centre to act against the two parties and find out within six months if other parties had received any donations from foreign sources.

The high court ruled that Anil Agarwal, a non-resident Indian citizen, and his family held more than 50 per cent shares in Vedanta and any contributions by them violated the 1976 act, meant to protect the country from subversive activities.

Senior counsel and former Union law minister Kapil Sibal today appeared for the Congress before the apex court bench of Chief Justice R.M. Lodha and Justices Kurien Joseph and R.F. Nariman.