The public interest litigation (PIL) claims the two major parties have violated the Foreign Contribution Regulation Act (FCRA) by accepting the donations.
The PIL, filed by NGO Association for Democratic Reforms and E.A.S. Sarma, former secretary of the government of India, through advocate Prashant Bhushan alleged that various Indian laws have been violated by the Congress and the BJP by receiving fundings allegedly from Vedanta Resources.
The Election Commission, the Congress and the BJP are made respondents in the case by the NGO in the PIL.
The PIL sought a direction for "thorough court-monitored investigation by a Special Investigation Team (SIT) or the CBI into the violation of foreign funding and other laws by major political parties, corporate groups and public sector undertakings".
The two political parties have violated the Representation of People Act, 1951, and the Foreign Contribution (Regulation) Act (FCRA), the PIL alleged.
The Representation of the People Act prohibits political parties from taking donations from government companies and from foreign sources. The PIL stated that the FCRA prohibits any financial contribution from any foreign source or company to a political party registered in India.
The PIL said that Britain-based 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 like the Congress and the BJP".
The PIL has asked the central government to "confiscate the illegal donations under the supervision of the high court".
According to Vedanta's annual report of 2012, it made political donations to the tune of $2.01 million ahead of the 2014 general election, the PIL said.
"Sterlite's annual report of 2011-2012 also states that during the year the group made political donations in India of Rs.5 crore either through a trust or directly."
The PIL alleged that since Finance Minister P. Chidambaram was a director in Vedanta till May 2004, the government might not take any action against the group on its own.
"Till recently he (Chidambaram) was the home minister in charge of ensuring the implementation of FCRA. He did not take any action against Vedanta or the Congress with whom he is associated. He is now the finance minister under whose charge income tax exemptions are being given to Vedanta and the Congress for the illegal donations," said the PIL.
"Therefore, a court monitored investigation is required as the Union of India is unlikely to proceed against major political parties or corporate groups like Vedanta on its own," it said.
The PIL asked the central government "cancel the income tax exemption given to political parties and corporate groups for donations made in violation of the law of the land".
The case came up for hearing before the division bench of Chief Justice D. Murugesan and Justice V.K. Jain, but was transferred to another bench after Justice Jain recused himself from the hearing without citing any reason.
A division bench of Justice Sanjay Kishan Kaul and Justice Indermeet Kaur would now hear the PIL Thursday.
