CJI: Would that be valid- if a company was to donate even 100% of its revenue? Is that guided by altruistic motives?
Justice Khanna: There are two conflicting rights- one is confidentiality and the other is kickbacks and quid pro quo.
SG: To start with a presumption that every contribution should necessarily be a part of corruption may be a wrong way to look at it. In some cases it may be quid pro quo. But in most cases whoever donates- they donate for what kind of government they want.
SG: Earlier if a company wanted to donate 10% and the cap was on 7.5% and didn't want to create shell companies - what would they do? They'll pay in cash the rest. Now atleast clean money is coming in system.
CJI: Which is not to say that unclean money isn't coming in system.
CJI: All we are saying is that do it in a proportional, tailor made manner which takes care of the serious deficiencies of this.
CJI: By having narrowly tailored provisions that you must carry on business for certain years, you must have a certain turnover, asset base- these are usually accepted yardsticks to prevent shell companies from carrying out business
CJI: We don't have to go into motives of the government at all. We entirely respect that process. The point is not that. We don't want to go back to a cash only system.
SG: To discourage shell companies we did this. If they want to donate more than 7.5%, let them decide that. The purpose was to disincentivize shell companies.
SG: Experience had shown that in a given sector, some companies wanted to donate 10-15%. There was a cap of 7.5%. So that company would make shell companies so I could from main company donate 7.5% and donate 7.5% from shell companies
CJI: The reason why these caps were introduced and they stood the test of time was for a very legitimate reason- because you're a company- your purpose is to carry business, not to donate to political parties. And if your purpose is not to donate, you must donate small amount.
SG: Amending is a legislative function, that I cannot decide.
CJI: Is the government making a statement that we will amend the Companies Act to bring back the position that donations will be a percentage of profit
SG: No. I'm only saying that a profit making company can donate
SG: So far as the condition with regards to profit - a non profit company cannot donate. Because then a shell company can donate. That defeats the objective.
CJI: So what will you do? You'll bring an amendment in Companies Act?