How Congress And BJP Annulled High Court Judgment That Aimed To Wipe Their Existence — The Story They Want To Bury
Let me tell you an important story which for all reasons will be retold for years to come as our democracy transforms in coming decades.
Way back in March 2014, 10 days before the general elections, the Delhi High Court found both BJP and Indian National Congress guilty of accepting foreign funds. The court ruled that these parties were violating the FCRA and were slated to be disqualified because both of them had taken donations from Vedanta and its subsidiaries — which are foreign entities — between 2004 and 2012.
— via Newslaundry.com
I know how you are feeling. This was just before the biggest elections that voted in Narendra Modi as Prime Minister of the Republic of India. Imagine those elections without BJP and Congress; just imagine.
If this is indeed true (which it is), how come both parties fought the elections? That’s the interesting bit to know how political parties fight their battles and unite with ‘rivals’ when need be but we will come to that little later. Here is little back story:
The whole story begins with Association for Democratic Reforms (ADR) represented by lawyer Prashant Bhushan filing PIL in Delhi High Court alleging political parties including the BJP and the Congress of violation of the Foreign Contribution (Regulation) Act of 1976 (FCRA). This act forbids election candidates, as well as journalists, judges, members of any Legislature, and political parties or its office-bearers from accepting a “foreign contribution”. It is fairly clear how if not to this act then the functioning of parliament, media and rest can be influenced by foreign forces to their advantage. This act is the barrier between free and fair functioning of our republic against outside influence and intentions.
Sterlite Industries India Ltd and Sesa Goa Ltd, companies registered in India under the Companies Act but whose more than 50 percent of issued share capital is held by Vedanta resources, a company which is registered in England and Wales, had made donations to political parties during the period upto 2009 and this were illegal, ADR alleged. What is so special about ‘upto 2009’? Well, on September 26, 2010 new law was enacted as Foreign Contribution Regulation Act (FCRA), 2010 which repealed the old 1976 act. That’s why ADR stood with balance sheets upto 2009. What did the Delhi HC said?
The High Court concluded that Vedanta is unquestionably a foreign company by virtue of the fact that it is incorporated outside India, that is, in the U.K., and has established its place of business in India and operates through its subsidiary companies like Sterlite and Sesa.
Therefore, it held that prima-facie, the acts of the BJP and the Congress, clearly fell foul of the ban imposed under the 1976 Act, as the donations accepted by them from Sterlite and Sesa were from “foreign sources”.
— via adrindia.org.
This was a landmark judgement which had far-fetching effects as it would directly affect the two most powerful and prominent political parties of India. In essence the whole political scene in India was about to change. But it did not as we can see how both parties are still functioning as of now. But how? What happened in between?
Time. They bought time. Well, you guessed it right. How anyone buys time in India when a court rules against himself/herself. They approach the higher court. In this case, the Supreme Court. Supreme Court obviously did not rule anything before the general elections and the two parties merrily fought the battle, rest you know how it all ended up and who won it triumphantly at last. Many things changed with that win. Oh yeah, also Rajdeep came with his book, people came to know about JNU, we got Aadhaar, cows got Aadhaar… And we got many memes to laugh about.
Alright. Elections took place and Modi won but is the case still running and will the two parties stop existing when the verdict comes out? If that’s what you are thinking, you my friend just underestimated the capabilities and lengths our political leaders can go to save their asses.
In a surprising move, stranded on a loose legal wicket, both senior advocates Kapil Sibal (representing Congress) and Shyam Divan (representing BJP) withdrew their appeals in Supreme Court on November 29, 2016 months after elections were over and government had formed. With this move, the case was dismissed by SC bench headed by justices J. S. Khehar.
Okay. That meant the Delhi HC verdict was valid and now both parties were up for action. Isn’t it? Well, not really. Before they hugged each others in Supreme Court and bailed one another, they also joined hands in Parliament for something more sinister. In April that year, The Wire broke out the story of how Arun Jaitley Redefined ‘Foreign’ as ‘Indian’ to Get BJP, Congress Off the Hook for FCRA Violation.
Under the new definition, so long as the foreign company’s ownership of an Indian entity is within the foreign investment limits prescribed by the government for that sector, the company will be treated as “Indian” for the purposes of the FCRA.
The new provision is retrospective, and is with effect from 2010, when the FCRA was introduced.
— via TheWire
You might be asking, how case which ADR filed was concerning about the duration upto 2009, so why did they not make this change effective from the date of old act i.e. 1976? Well, in 2010 under FCRA act of 2010 they repealed the 1976 act; it no more exists to tweak it any further. We will come back to this in a while. Let us first see why definition of ‘foreign sources’ was changed and how.
It was argued that, FCRA was tweaked to boost CSR spending. In fact, there was an interesting piece in The Hindu with similar heading which said, the amendment would unlock an estimated Rs. 10,000 crore that corporates want to spend on corporate social responsibility (CSR) activities in India. Sounds legit and wow right? Well, the report further says,
A senior government official said the amendment, which alters the definition of what is a “foreign source” when it comes to making contributions, would benefit parties such as the BJP and the Congress. Both have been charged with illegally receiving foreign funds for political activities from U.K.-based Vedanta Group from 2004 to 2012.
— via The Hindu
2004 to 2012 — you read it right. What political parties have done is they’ve shielded themselves from 2010 because they can. before 2010, they couldn’t so they didn’t. The argument put forward by government in support of this amendment was all about how industry asked for it. Read this from The Hindu report.
The process of amending the FCRA was initiated in September 2015 when Union Finance Minister Arun Jaitley wrote a letter to the Home Ministry seeking its reply to a petition submitted by at least 22 companies — a list that included Infosys and Axis Bank among others.
The companies argued that while government policy mandated them to spend two per cent of the company’s profit on Corporate Social Responsibility (CSR) projects, the FCRA’s provisions which classified such funds as coming from a “foreign source” came in the way of this. They contended that the rules, which required the MHA’s clearance each time money was to be disbursed, were cumbersome.
— via The Hindu
But was it really? Let’s for a moment agree that the amendment was brought with good intention so as to allow corporations to spend easily for India’s good towards their CSR. Applause. But why was the law implemented retrospectively? Do our government has some time-travel plan to make the corporations go back in past and make them spend their bucks with effect from 2010?
Obviously not. One need not tell you who benefits from this retrospective amendment. But did no member of parliament stood up and against this fowl plan which aims not just to save BJP and Congress but also opens floodgates for giant foreign corporations to influence our own policy-making? Well, someone did and you will be surprised to know who — it was Hyderabad MP Asaduddin Owaisi. He said in house,
I want to know why amendment to FCRA is being brought. This is a very clever device of this Government to overcome the Delhi High Court judgement… The Delhi High Court has asked the Home Ministry and the Election Commission to enquire into it and take action. Sir, this is nothing but a case of backdoor legislation… classic case of preempting the judiciary to a retrospective change in law… conflict of interests and natural justice. You being in power are bringing in a legislation which will have retrospective effect from 26th September, 2010. You are legitimizing the violation of FCRA, which is against the natural justice. How will the Ruling Party take action against the BJP? Sir, I also want to know the stand of Congress Party on it because when it suits to both the parties, it is a matter of convenience and when it does not suit, it become Augusta.
Sir, this is very wrong. Retrospective legislation is completely wrong. You are against NGOs, but you are for corporates and political parties. You are legalising an illegal act of your party and Congress party. I want to know the jugalbandi between you and the Congress party.
— via Parliament Debates
That’s not all. The said Finance Bill was being passed as a Money Bill. What’s the difference? The ruling party, BJP has all the numbers it needs to pass any legislation from Loksabha but it doesn’t have numbers in Rajyasabha. Now for any law to be passed, it is required to be discussed, debated and agreed upon in both the houses. Certainly, there were chances for this bill to fail in Rajyasabha and that’s where this ‘Money Bill’ cover came to their rescue. The good (or bad) part about Money Bill is, it doesn’t require Rajyasabha’s approval. Money Bill is used for certain urgent taxation measures, this was no such. Owaisi raised this in the house,
Sir, it is a violation of Article 110 (1). How can you bring an amendment to RBI or FCRA in a Finance Bill? The FCRA is with the Home Minister. How can it be in the Finance Bill? The Home Minister has to bring a Bill to amend the FCRA. An ordinary Bill has to be brought for it.
— Owaisi in Parliament
The next day when house started its functioning, Owaisi again raised the issue and Speaker responded,
I agree that as per Rule 219, the primary object of a Finance Bill is to give effect to the financial proposals of the Government. At the same time, this Rule does not rule out the possibility of inclusion of non-taxation proposals. Therefore, a Finance Bill may contain non-taxation proposals also. In the past also, though rare, the Finance Bills have had non-taxation proposals. Nevertheless, the fact is that a well established practice of this House has been not to include non-taxation proposals in not only a Finance Bill but also other Bills containing taxation proposals unless it is imperative to include such proposals on constitutional or legal ground. Therefore, every effort should be made to separate taxation measures from other matters unless it is on some such unavoidable reasons to do so in a particular case. Therefore, keeping in view the fact that Rule 219 does not specifically bar inclusion of non-taxation proposals in a Finance Bill, I rule out the point of order.
— Hon. Speaker, Parliament
And so the objection raised by Owaisi was struck down. Finance Minister has introduced sum total of 49 amendments to the Finance Bill and all were passed with three chants of ‘the ayes had it’. Rajyasabha couldn’t debate or decide its fate for it was passed as Money Bill, just like that.
Uff. Spare little more of your time. We are almost done.
Coming back to ADR’s case and Delhi HC verdict — Yes, they have shielded themselves through amending laws retrospectively but again, they could go only as far back as 2010. “The retrospective amendment applies to the FCRA (2010). The donations for which the high court had held them guilty were made before 2010. The judgment specifically mentions that it is concerned with the FCRA (1976),” said Jagdeep S. Chhokar of ADR. Will there be any action against them? “The Delhi high court order in 2014 clearly stated that the home ministry should take action against the parties in six months. By not taking any action on the matter, the ministry can be charged with contempt of court,” says E.A.S. Sarma, former secretary to the government of India and one of the advocates for government accountability in the case.
The lingering worry still is to see if government will again bring any new amendment so as to shield themselves from this case specifically.
The larger worry in all these cases is of our media’s conspicuous silence. This was a larger matter than all the things they covered in this period. Here were our MPs framing and tinkering laws to specifically protect themselves from the court judgement over their crimes. And in saving themselves, they have opened doors for big corporate houses to come and take hold of our policies. This makes them easier to influence our legislators in drafting and implementing laws favorable to their business interests. And all this was and is possible because our media, you and I are not outraging enough.
Thanks for reading so far. Do comment your feedback below. Also do share if you liked what you just read. It means a lot to me and helps other people to discover it :)