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Authored by: Madhumita Barik (Intern at Legal Soch Foundation)
META DESCRIPTION : The Supreme Court of India has heard a slew of petitions challenging the national government's Election Bond Scheme, which funds political parties. The arguments will be heard on October 31 and are going to continue on the first of November if the session does not conclude. The Electoral Bond Scheme is a funding device for political groups, and the private nature of the funding encourages corruption. NGOs claim that modifications made by the Finance Acts of 2016 and 2017, both of which were enacted as Money Bills, have opened the door to unlimited political donations. According to the Centre, the programme is a "completely open" method of political finance that makes it impossible to acquire black money or undocumented money.
KEYWORDS : SUPREME COURT, DY CHANDRACHUD, FINANCE BILL, NGO, POLITICAL, MONEY .
The Supreme Court ruled on Tuesday that the batch of petitions challenging the disputed Electoral Bonds scheme be scheduled for a final hearing on October 31 of this year [Association for democratic reform and anr vs Union India's Cabinet Secretary and ors].
At the outset, Advocate Bhushan emphasised the need for the petition to be heard immediately, stating that "bonds are given out before assembly elections due to the non-decision in the matter." The Chief Justice told Bhushan whether the court was prepared to hear the case. However, R Venkatramani, the Attorney General of India, intervened and claimed that one of the reasons highlighted in the challenge to the Electoral Bonds was that it was approved as a money measure.
In this regard, he announced that the question of money bills would be heard by a seven-judge panel in the Rojer Mathews case. Bhushan got involved, stating that while the financial bill was one of the issues mentioned in the petition, there were additionally other issues that needed to be addressed apart from the money bill. He said that anonymous backing of political organisations violated citizens' Right to Information. He went on to say that the anonymity of the funding encouraged corruption by allowing firms that had obtained specific advantages from the federal government of certain political parties to secretly donate to those parties. He stated- "A corruption free society is a facet of right to life under Article 21."
Bhushan elaborated on the method for purchasing electoral bonds, saying that, despite contrast from both the Election Commission of India as well as the Reserve Bank of India, the State Bank of India has been chosen as the bank in which anyone may visit and purchase electoral bonds in denominations ranging from Rs 10,000 to Rs 1 crore.
At this point, the CJI inquired whether the ties could be purchased via bank transfer or cash. He goes on to explain that this was crucial because if an obligation was bought through a transfer from a bank, the source of the transaction would come out as a banking channel, whereas if it were to be purchased in cash, the procedure would be absolutely anonymous. Advocate Shadan Farasat, who was also representing the group of the petitioners, came in and clarified the issue of electoral bond anonymity. He stated, “The true anonymity comes when you join a political party."
It is unknown who provides to which party." In seeking clarity, the CJI inquired whether a person could also transfer money to another individual. According to Farasat, just a political party may redeem an electoral bond. In that sense, the money weren't able to be transferred to an individual. He went on to say-"Previously, there were the requirements for disclosure for transactions exceeding Rs 20,000 Rs." According to this plan, if you pay with election bonds, the party is not required to reveal. It simply needs to publish the entire sum obtained by means of electoral bonds..." He also mentioned a concurrent revision to the Companies Act that would prevent shareholders from learning what party in politics their corporation contributed money to.
As a result, the transaction remained anonymous on both ends: the stockholders would not know who their firm donated to, and the parties weren't obligated to report who made the donation. He stated in this context- “The information of donation is sanitised from the public domain." The CJI clarified that the money bill issue will not be argued upon, as it is listed before a seven-judge bench. Bhushan, on behalf of the petitioners, stated that they would argue the matter along with the money bill issue if the Rojer Mathews case was settled by December 2023.
The CJI stated that it may be difficult to predict and listed all for a pre-hearing on October 12. If settled, the petitioners would argue the matter without the matter. The 2017 amendment to Section 29C of the Representation of Peoples Act 1951 allows donors to buy electoral bonds at banks and branches using electronic payment methods and KYC requirements. Political parties are not required to disclose the source of these bonds to the Election Commission of India. Bonds can be bought in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, or Rs 1 crore, and the donor's name is not included in the bond. The bonds are valid for 15 days from issue and the face value is counted as income for exemption from income tax under Section 13A of the Income Tax Act, 1961.
In 2017, petitions were filed by the Communist Party of India (Marxist) and NGOS Common Cause and Association for Democratic Reforms (ADR) challenging the Finance Act 2017 that allowed anonymous electoral bonds. The Act introduced amendments to various Indian laws, including the Reserve Bank of India Act, Companies Act, Income Tax Act, Representation of Peoples Act, and Foreign Contributions Regulations Act. The petitioners feared that the amendments to the Companies Act 2013 would lead to private corporate interests prioritizing state citizens' needs and rights. In 2021, the Supreme Court refused to delay the release of electoral bonds.
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