Notice issued to Kesri for receiving foreign funds, illegally

The Delhi high court on Friday has issued notice to Sitaram Kesri and the central government on a public interest petition seeking the Congress president's prosecution for allegedly receiving Rs 30 million in US dollars on his party's behalf in contravention of the Foreign Contribution Regulation Act. The notice is answerable before May 20.

Counsel Prashant Bhushan, appearing for petitioner Madhuresh, contended before a division bench consisting of Acting Chief Justice Mahinder Narain and Justice S K Mahajan that the money was received by Kesri, then the Congress treasurer, in contravention of the FCRA, which bars political parties from receiving money from foreign sources.

Bhushan said the income tax department had detected the foreign contribution when perusing the Congress accounts for the years 1993-95 and sent a detailed report to the under secretary, FCRA wing, home affairs ministry.

But while the income tax department was quick in imposing a penalty of Rs 240 million on the Congress for violations of the Income Tax Act, the FCRA cell sat on the department's recommendation in deference to the ''political negotiations'' between the Congress chief and the prime minister.

R D Jolly, appearing on behalf of the income tax department, said the department had taken the Rs 30 million into account when imposing the Rs 240 million penalty on March 31. The petitioner contended that a deputy director of the department had interrogated Kesri and several other functionaries in February 1997 before concluding that this was a case of FCRA violation and sending a report to the home ministry stating that three foreign cheques worth Rs 30 million were received and encashed by Kesri.

Bhushan said Kesri also met then prime minister H D Deve Gowda on March 13 and requested him to drop the case under FCRA and other income tax proceedings against him. The petitioner said this was being used as a ''bargaining ploy'' between the government and the Congress, and sought that the court should direct the Union home ministry and the CBDT should prosecute Kesri and other concerned Congress officials. Violation of the FCRA, 1976, provides for a maximum imprisonment of up to five years.

Section four of the FCRA prohibits political parties from receiving foreign contributions while section five says organisations of a political nature, not being political parties, can accept such funds only with prior permission from the central government. In this case, the Congress had not received any sanction to receive foreign funds from the government, he added.

Summarising the income tax department's proceedings against the Congress, Madhuresh -- who has also filed a case against Kesri for alleged possession of assets in excess of known sources of income -- submitted that a notice was served on the party to file its accounts for the years 1993-94 and 1994-95 on November 30 1994. Thereafter, repeated reminders were sent to it and finally the party submitted its books of account on February 14, 1996 without giving any reasons for the delay.

On February 23, the deputy director, investigations, asked the party to furnish details of donors who contributed more than Rs 10,000 to the party and also whether it had taken prior permission before encashing the three cheques of foreign currency amounting to Rs 30 million received from a non-resident Indian.

Following this four reminders were sent to the Congress between September 1996 and January 30 1997, and this was followed up by the income tax deputy director interrogating Kesri and other party officials in February.

Despite several opportunities, the party did not provide proper accounts of income and expenditure and considering the time bar limit, the income tax department imposed a fine of Rs 240 million on the party.

The petitioner submitted that investigations had revealed that the foreign donation of Rs 30 million came from Germany.

Madhuresh, a freelance journalist, said he was moving the petition in the public interest as not even a show cause notice had been sent to Kesri despite the income tax department's investigations proving his ''direct involvement'' in receiving the foreign currency cheque, encashing it and declaring it in the party's account books, without taking prior sanction from the central government.

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