The Supreme Court has scheduled a hearing on October 31, 2023, to address the petitions challenging the Electoral Bonds scheme. This decision was made by a bench comprising Chief Justice of India (CJI) DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra.
The petitioners have chosen not to argue on the scheme being passed as a money bill for now, as the issue regarding money bills is pending before a seven-judge bench in the Rojer Mathew vs. South Indian Bank Ltd case.
Advocate Prashant Bhushan, representing the petitioners, emphasized the urgency of the matter, stating,
“because of the non-decision in the matter, bonds are being issued before assembly elections.”
He further asserted that anonymous funding of political parties violated citizens’ Right to Information and promoted corruption. Bhushan elaborated,
“A corruption-free society is a facet of the right to life under Article 21.”
Detailing the electoral bonds’ purchase method, Bhushan highlighted that the State Bank of India, despite opposition from the Election Commission of India and the Reserve Bank of India, has been designated to issue electoral bonds ranging from Rs 10,000 to Rs 1 crore. CJI Chandrachud inquired about the purchase mode, asking if it could be done via bank transfer or cash. Advocate Shadan Farasat, also representing the petitioners, clarified,
“The real anonymity is that when you transfer to a political party. Who is donating to which party is anonymous.”
The CJI further sought clarity on whether the bond could be transferred to an individual. Farasat responded that only a political party could encash an electoral bond, emphasizing,
“Earlier there were disclosure requirements for over Rs 20,000. This scheme says that if you pay through electoral bonds, the party doesn’t have to disclose. It only has to disclose the overall amount it received from the electoral bonds.”
The petitions, filed in 2017, challenge the provisions of the Finance Act 2017, which introduced the electoral bonds. These bonds allow donors to buy them at specified banks using electronic payment modes after completing KYC requirements. However, political parties aren’t mandated to disclose the bond source to the Election Commission of India. The bonds, available in denominations from Rs 1,000 to Rs 1 crore, remain valid for 15 days from the issue date.
The petitions, filed by the Communist Party of India (Marxist), NGOs Common Cause, and Association for Democratic Reforms (ADR), describe the scheme as
“an obscure funding system which is unchecked by any authority.”
They express concerns that the amendments to the Companies Act 2013 could result in
“private corporate interests taking precedence over the needs and rights of the people of the State in policy considerations.”
In 2021, the Supreme Court had declined to halt the release of electoral bonds ahead of certain state assembly elections.
Case Title: Association for Democratic Reforms And Anr. v. UoI WP(C) No. 333/2015 & Connected Matters
