A Bench comprises Chief Justice of India (CJI) D.Y. Chandrachud and Justices Sanjiv Khanna, B.R.Gavai, J.B. Pardiwala and Manoj Misra will hear the matter from October 31.
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A Constitution Bench of the Supreme Court is slated to begin hearing on a batch of petitions mounting a challenge against the Union government's 2018 scheme of introducing electoral bonds.
As per the cause list published on the Supreme Court website, a Bench comprises Chief Justice of India (CJI) D.Y. Chandrachud and Justices Sanjiv Khanna, B.R.Gavai, J.B. Pardiwala and Manoj Misra will hear the matter from October 31.
An electoral bond is like a promissory note, similar to a banknote, which is payable to the bearer on demand and free of interest. It can be purchased by any Indian citizen or a body corporate in India.
An electoral bond may be issued in multiples of ₹1,000; ₹10,000; ₹1 lakh and ₹1 crore, available at specified branches of the State Bank of India. A donor can purchase an electoral bond with a 'know your customer (KYC)'-compliant account and can donate the bonds anonymously to a political party of their choice, and the bond can be cashed within 15 days through the party's verified account.
This scheme was introduced through the Finance Act, 2016 and the Finance Act, 2017.
On March 26, 2021, a Supreme Court Bench, headed by the then CJI S.A. Bobde refused to grant a stay on the electoral bond scheme.
The Bench observed: "[T]he Scheme was introduced on January 2, 2018; that the bonds are released at periodical intervals in January, April, July and October of every year; that they had been so released in the years 2018, 2019 and 2020 without any impediment; and that certain safeguards have already been provided by this Court in its interim Order dated April 12, 2019, we do not see any justification for the grant of stay at this stage. Hence, both the applications for stay are dismissed."
In 2019, the Election Commission of India (ECI), in its affidavit in the Supreme Court, said that electoral bonds and the removal of a cap on corporate funding would have a serious impact on transparency in the funding of political parties.
"Any donation received by a political party through an electoral bond has been taken out of the ambit of reporting under the contribution report as prescribed under Section 29C of the Representation of the People Act, 1951," the ECI had clarified.
The changes made in the Foreign Contribution (Regulation) Act, 2010 through the Finance Act, 2016 would allow unchecked foreign contribution/funding of political parties in India, which could lead to Indian policies being influenced by foreign companies, the ECI had added.
Appearing for the ECI, senior advocate Rakesh Dwivedi had in 2019 informed the Supreme Court that the Bharatiya Janata Party received ₹997 crore and ₹990 crore through donations via electoral bonds in 2016–17 and 2017–18 respectively, five times more than what the Indian National Congress received in the same period.
In April 2019, the Supreme Court passed an interim Order directing that all political parties give details of donors who contributed through electoral bonds as well as the amount received from them to the ECI in a sealed envelope.
Referring to the argument of the petitioner that foreign corporate houses may buy the bonds and attempt to influence the electoral process, the court said this argument was misconceived. It cited Clause 3 of the scheme which provided that a bond may be purchased only by a person who is a citizen of India or a body incorporated or established in India.
Appearing for the non-governmental organisation (NGO) 'Association For Democratic Reforms (ADR), advocate Prashant Bhushan submitted that the sale of an electoral bond would further increase the illegal and illicit funding of political parties through shell companies.
Bhushan added that the Election Commission, on May 25, 2018 and the Reserve Bank of India (RBI) vide letters on January 31, 2017, and September 14 and 27, 2017 had objected to electoral bonds and had advised against issuing them as a mode for donation to political parties.
An electoral bond, Bhushan argued, is like cash to a political party for a quid pro quo. Bhushan had contended that electoral bonds were anonymous to others but not to the government which would know who the donor was as the State Bank of India (SBI) came under the purview of the Union government.
Therefore, he argued that if the government wished to victimise a donor for donating to opponent parties, it could do so as it would know the identity of the donor.