Breaking: Supreme Court directs all Political Parties to submit details of donations received through Electoral Bonds

Breaking: Supreme Court directs all Political Parties to submit details of donations received through Electoral Bonds

Shruti Mahajan

The Supreme Court has today directed all the political parties to disclose details of the donations received by them through electoral bonds to the Election Commission of India.

The disclosure of these particulars have to be made in sealed covers and the same has to be furnished by May 30. The particulars to be furnished pertain to all the donations received by the parties till date and shall include details of the donors, bank accounts and other relevant particulars.

The Court stated that the petition gives rise to “weighty issues”which need an indepth hearing which cannot be concluded in a limited time that was available before the Court. Thus, the interim order has been passed by the Court keeping in mind that the interim arrangement “does not tilt the balance in favour of either parties.” The Court, observed,

“All that we would like to state for the present is that the rival contentions give rise to weighty issues which have a tremendous bearing on the sanctity of the electoral process in the country. Such weighty issues would require an indepth hearing which cannot be concluded and the issues answered within the limited time that is available before the process of funding through the Electoral Bonds comes to a closure, as per the schedule noted earlier.”

The order was passed by a Bench of Chief Justice of India Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna in a petition filed by Association of Democratic Reforms.

The directions passed, in the interim, by the Court with regard to the scheme, thus, are:

  • All political parties to submit the detailed particulars of donors, amount, date, bank account for each of the electoral bond purchased by a donor to the EC in Sealed cover
  • Parties to submit details of all donations received through electoral bonds received till date forthwith. As regards donations a party might receive till the date of issuance of these bonds, that is May 15, the particulars to be submitted by May 30. The Sealed cover to remain in EC’s custody.
  • As per Clause 8 of the Electoral Bond Scheme, 2018, electoral bonds are to be issued for a period of 10 days in the months of January, April, July and October and additional 30 days is provided during an election year. As per the Note of the Finance Ministry dated 28.2.2019, a total period of 45 days has been fixed for issuing the bonds in the month of March, April, and May. The total period, therefore, allowable for the month of January (10 days), April (10 days) and 30 days for the election year would be 50 whereas the Schedule contemplates the issuance of bonds for a total period of 55 days i.e. 45 days plus 10 days of January. A period of 5 days, therefore, have to be deleted from the Schedule contained in the Note of the Ministry of Finance dated 28.2.2019.

Electoral Bonds was introduced through Finance Act, 2017 by way of amendments to three statutes – Income Tax Act, RBI Act, and Representation of People Act.

The petition has assailed five major amendments which were brought through Finance Act, 2017 and Finance Act, 2016.

  • Section 31, the Reserve Bank of India Act, 1934 through Part  III, Section 135 of the Finance Act, 2017,
  • Section 29C, the Representation of the People Act, 1951 through Part – IV, Section 137 of the Finance Act, 2017
  • Section 13A, the Income Tax Act, 1961 through Chapter III, Section 11 of the Finance Act, 2017 and in
  • Section 182 of the Companies Act, 2013 through Part-XII, Section 154, the Finance Act, 2017.
  • Section 2 of the Foreign Contribution Regulation Act, 2010 (FCRA) through Finance Act, 2016.

The petitioners have also challenged the amendments to Section 182 of the Companies Act which earlier provided for a cap on donations made by companies to political parties.

Appearing for the petitioners, Prashant Bhushan submitted before the Court that an electoral bond is like a promissory note wherein the donor’s name is not on the instrument. The donor, who is the purchaser of the bond, remains anonymous and their details are not obligated to be disclosed to the Election Commission or Income Tax authorities.

“Anonymous funding has opened the flood gates for corruption,” Bhushan had argued.

The petitioners had also asked the Court to grant an interim stay on the sale of the anonymous electoral bonds until such time as the Court decides on the constitutionality of the scheme as a whole.

The Election Commission of India, represented by Senior Counsel Rakesh Dwivedi told the Court that though it was not opposed to the scheme of electoral bonds as such, it was against the anonymity. The EC, in its affidavit before the Court, had stated that it had expressed its concerns over the scheme to the Centre before the passage of the Bill that introduced the scheme. It was also stated by the EC that the body feared that foreign funding coming into Indian political discourse could lead to the influence of foreign companies on Indian policies.

The Centre’s stand, however, was that the scheme was aimed at curtailing inflow of black money into Indian politics. Attorney General for India KK Venugopal stressed that the government had placed checks and balances to ensure that the system also maintained the Right to privacy of the bond purchaser. The non-disclosure of the identity of the bond purchaser was important because if the political party which a person did not provide funds to came to power, the person could be victimised.

Read More: Electoral Bonds: Voters don’t have right to know the source of funding of political parties, AG KK Venugopal

Referring to the contention of the petitioners that voters have a right to know, the AG said,

“Their contention is voters have a right to know. Voters have a right to know what? Voters don’t need to know where the money of political parties comes from. 

Also, there is the Right to Privacy after Puttaswamy judgment”Venugopal had submitted.

Read the Order:

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