A division bench of justices Pradeep Nandrajog and Jayant Nath delivered its verdict on a PIL by a NGO, Association for Democratic Reforms, which had claimed that the Union home ministry, in its reply, has factually admitted the position that fundings came to these parties from Vedanta.
The court had reserved its verdict on February 28 after hearing arguments on behalf an NGO, which had filed the PIL, the Centre and both the political parties.
The PIL, in which E A S Sarma, a former secretary of the Government of India, was one of the petitioners, had sought a direction for a court-monitored investigation by the Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI) into the violation of foreign funding and other laws by major political parties, corporate groups and PSUs.
It had alleged that the two political parties have violated the Representation of the People Act and the Foreign Contribution (Regulation) Act (FCRA) by taking donations from government companies and foreign sources, which is prohibited under both the legislations.
The petition alleged that Vedanta Resources and its subsidiary companies in India, including Sterlite Industries, Sesa Goa and Malco, have donated several crores of rupees to major political parties such as the Indian National Congress and the BJP.
The PIL has also alleged that according to Vedantas annual report of 2012, it had made political donations to the tune of $2.01 million either through a trust or directly in respect of the Indian general elections.
Additional Solicitor General L Nageswara Rao, appearing for the Centre, had opposed the NGOs plea saying donations came from companies listed in India and moreover, the firms have operations here.
Congress and BJP had taken a similar stand that no laws have been violated by them as an Indian held majority stakes in a foreign company, whose Indian subsidiaries gave donations to them.
NGOs counsel Prashant Bhushan had opposed the plea of both the political parties that Anil Agarwal, an Indian, holds more than 50% stakes in the parent UK-based Vedanta Resources and hence, no Indian laws were violated.