SC agrees to examine plea against electoral bond scheme

The Supreme Court on Tuesday agreed to hear a plea against the scheme of electoral bonds introduced in 2018 allowing political parties to take donations from firms allegedly in an opaque manner.

Advocate Prashant Bhushan, representing the NGO ‘Association for Democratic Reforms’, mentioned the matter before a bench presided over by Chief Justice N V Ramana that it is a critical issue, which requires urgent hearing.

He referred to a news report stating that a Calcutta-based company paid Rs 40 crore through electoral bonds to ensure that no excise raids were conducted on it. The bench said that had it not been for Covid-19, the court would have heard the matter.

The bench, also comprising Justices Krishna Murari and Hima Kohli, assured Bhushan of an early listing of the matter.

The government notified the Electoral Bond Scheme on January 2, 2018, to cleanse the system of political funding in the country.

ADR had filed a plea alleging subversion of democracy through illicit money and lack of transparency in the accounts of all political parties.

On March 27, 2021, the top court had rejected the charge that the scheme was totally opaque. It had said the apprehension that foreign corporate houses may buy the bonds and attempt to influence the electoral process in the country, was misconceived as under Clause 3 of the Scheme, the bonds may be purchased only by a person who is a citizen of India or a company incorporated or established here.

With regard to details of donors in the public domain, the bench had said, "It is not as though the operations under the Scheme are behind iron curtains incapable of being pierced."

The court said since the scheme mandated political parties to file audited statements of accounts and also since the Companies Act requires financial statements of registered companies to be filed with the Registrar of Companies, the purchase as well as encashment of the bonds, happening only through banking channels, is always reflected in documents that eventually come to the public domain.

The court had then dismissed an application filed by Bhushan on behalf of the NGO to stay the sale of fresh electoral bonds from April 1, amid state assembly elections in West Bengal, Tamil Nadu, Kerala, Assam and Puducherry.

It had said despite the fact that the scheme provided anonymity, it was intended to ensure that everything happened only through banking channels.

Bhushan claimed the first purchase may be through banking channels, someone may repurchase the bonds from the first buyer by using black money and hand it over to a political party.

"This contention arises out of ignorance of the scheme. Under Clause 14, the bonds are not tradable. Moreover, the first buyer will not stand to gain anything out of such sale except losing white money for the black," the bench had added.

The court said it found no justification to grant stay as the bonds are released at 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; with certain safeguards, including the filing of details with the Election Commission.

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