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Electoral Bonds: Application to stay Electoral Bonds Scheme of 2018 to be heard by SC in January 2020

Electoral Bonds: Application to stay Electoral Bonds Scheme of 2018 to be heard by SC in January 2020

Shruti Mahajan

The Supreme Court today agreed to hear an application to stay the implementation of the Electoral Bonds Scheme of 2018 in January 2020.

The matter was mentioned today by Advocate Prashant Bhushan before a Bench of Chief Justice SA Bobde and Justices BR Gavai and Surya Kant. Bhushan told the Bench that the stay was sought on account of certain facts coming to light. In particular, he informed the Court that the RBI had flagged concerns with the scheme saying that the scheme could lead to funneling of black money and lead to money laundering.

The Court  proceeded to ask why a stay was sought one year after the scheme was brought in. In response, Bhushan apprised the Court that a PIL had been filed in the matter last year by the Association of Democratic Reforms (ADR), and an interim order was passed in the matter in April this year. 

The Court has now agreed to take up the matter next month.

The main petition filed in 2017 challenges as many as five amendments brought to various legislations in order to facilitate the implementation of the scheme for electoral bonds.

Given that the main questions in the petition are yet to be answered by the Supreme Court, ADR had filed the application seeking a stay on the scheme notified in 2018 in light of the recent documents that have surfaced under RTI and the investigative reports published in the media.

The application refers to these investigative reports, which suggest that the Reserve Bank of India (RBI) had repeatedly opposed amendments to the RBI Act and the Finance Bill, 2017 as well as the Electoral Bonds scheme. Placing reliance on RTI replies received by activists Commodore Lokesh Batra and Anjali Bhardwaj, the application states that the RBI had warned the government that “it has the potential to increase black money circulation, money laundering, cross-border counterfeiting, and forgery.”

The RBI had expressed its reservations on the scheme and the same were “summarily dismissed” by the Union Finance Ministry. Former Governor of the RBI Urjit Patel had reportedly written to then Finance Minister Arun Jaitley conveying the reservations the Committee of the Central Board of the  RBI had.

Further, the application also sheds light on the Election Commission’s reservation as regards the scheme and the adverse impact it would have on the transparency of political financing. Earlier this year, the Election Commission had placed these concerns on the record before the Supreme Court.

The NGO also levels allegations against the Prime Minister’s Office (PMO) for allegedly selling illegal bonds just ahead of Assembly polls in May, in violation of the scheme. Basing the allegations on the RTI replies accessed by Batra and Bhardwaj and reports published in HuffPost, it is stated in the application,

“…just prior to the notification of the Electoral Bond Scheme by the Central Government, PMO directed that these rules be broken on two separate occasions. This came to light when an officer in the Finance Ministry noted that an extra window period was being asked by the PMO in the run-up assembly elections held in May.”

Further, it is also alleged that while the government has access to the source of the donations, the public and the opposition parties do not. The anonymity which is aimed to be protected is only from the public and the opposition but not from the government of the day, the application states.

The application further states that the government’s claims that the donors sought secrecy as regards their identity fearing political retribution is shown to be a “lie”. It adds that no representation was received from donors making a request for anonymity.

Interestingly, the RTI replies also show that the Finance Ministry chose to ignore the recommendation of the Law Ministry on the scheme. The latter Ministry had said that the scheme should be framed in a way so that it aligns with the Representation of People Act.

In the wake of these recent revelations through RTI and investigative news reports, the petitioner NGO has sought a stay on the implementation of the scheme.

[Read Order]