[dropcap]A[/dropcap] three-judge bench of the Supreme Court comprising Chief Justice of India (CJI) Ranjan Gogoi, Justices Deepak Gupta and Sanjiv Khanna today refused to stay the operation of the government's controversial Electoral Bonds Scheme on funding for political parties.
The Supreme Court has, however, as an interim measure, directed all political parties to give details of donors who contributed through electoral bonds as well as amount received from them to the Election Commission of India (ECI) in a sealed envelope. This information will have to be furnished to the ECI latest by May 31, 2019.
"This issue of electoral bond is a weighty issue, and thus requires detailed hearing. Court has to ensure that interim relief may not tilt the balance", CJI Gogoi said, while pronouncing the interim order for the bench.
An electoral bond is like a promissory note, similar to a bank note, that 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 Rs 1,000, Rs 10,000, Rs 1 Lakh and Rs 1 Crore and are available at specified branches of the State Bank of India. A donor can purchase an electoral bond with a KYC-compliant account and can donate the bonds to their party of choice, which can then be cashed through the party's verified account within 15 days.
This scheme was introduced through The Finance Act, 2017
Appearing for the NGO, Association for Democratic Reforms (ADR), advocate Prashant Bhushan had submitted that the Electoral Bonds Scheme had "opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies" which could have serious repercussions on India's democratic polity.
The electoral bond scheme, according to the petitioners, poses a "serious danger to the autonomy of the country and are bound to adversely affect electoral transparency and encourage corrupt practices in politics. The scheme, they alleged, had made "the unholy nexus" between politics and corporate houses more opaque and was bound to be misused by special interest groups and corporate lobbyists.
The scheme had made a mockery of transparency in the electoral process, Bhushan said.
Appearing for the Central Government in the Supreme Court, Attorney General for India K K Venugopal vehemently defended the electoral bond scheme. He claimed it limited the use of cash in political funding, and therefore brought about more transparency in the funding for political parties. He said it provided a shield to donors by granting them anonymity.
He also submitted that "all payments made for the issuance of the electoral bonds are accepted only by means of a demand draft, cheque or through the Electronic Clearing System or direct debit to the buyers' account"; "no black money can, therefore, be used for the purchase of these bonds".
The AG claimed, on behalf of the government, that the scheme was a device that had been put in place to curb the role of black money in electoral politics. "Let the system work for some time and after elections, whosoever comes to power can review the scheme and bring in changes," the AG said.
Election Commission, in its affidavit in the Apex 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 has said.
The changes made in the Foreign Regulation Contribution 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 has said.
Appearing for the ECI, senior advocate Rakesh Dwivedi yesterday informed the Supreme Court that the BJP had received Rs 997 crore and Rs 990 crore through donations in 2016-17 and 2017-18 respectively, five times more than what Congress received in the same period.