Electoral bonds: SC asks parties for funding details

Lifting the veil of anonymity from the government's political funding scheme, the Supreme Court on Friday directed parties to furnish by May 30 all the details of funds received through electoral bonds to the Election Commission in a sealed cover.

The top court, which did not stay the Centre's Electoral Bond Scheme, 2018, made clear it would accord in-depth hearing on April 15 the pleas of an NGO and Communist Party of India-Marxist as they as also the Centre and the EC have raised 'weighty issues' having 'tremendous bearing on the sanctity of the electoral process in the country'.

"According to us, the just and proper interim direction would be to require all the political parties who have received donations through Electoral Bonds to submit to the Election Commission of India in sealed cover, detailed particulars of the donors as against each bond; the amount of each such bond and the full particulars of the credit received against each bond, namely, the particulars of the bank account to which the amount has been credited and the date of each such credit," it said.

A bench headed by Chief Justice Ranjan Gogoi asked the parties to furnish 'forthwith' the details of electoral bonds received by a political party till date.

"The details of such other bonds that may be received by such a political party up to the date fixed for issuing such bonds as per the Note of the Ministry of Finance dated February 28, that is May 15, will be submitted on or before May, 30.

"The sealed covers will remain in the custody of the ECI and will abide by such orders as may be passed by the court," it noted in the 19-page interim order.

The bench, also comprising Justices Deepak Gupta and Sanjiv Khanna, directed the Finance Ministry to tweak the window period for purchasing the electoral bonds and reduce it from present 55 days to 50 days in 2019.

"The total period...allowable for the month of January (10 days), April (10 days) and 30 days for the election year would be 50 (for purchasing the bonds) whereas the schedule contemplates issuance of bonds for a total period of 55 days that it 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 of February 28," it said.

The court, which was to decide the plea of NGO 'Association of Democratic Reforms' seeking that the issuance of electoral bonds be stayed or the names of donors be made public, opined that the plea required detailed hearing in view of weighty arguments and the counter.

It also did not consider the plea of the Centre that the purpose behind the scheme was to eliminate the use of black money in elections and the court should not interfere with the policy decision before the elections.

Attorney General K K Venugopal had pleaded that anonymity of donors of electoral bonds is to be maintained for various reasons such as fear of repercussions on a firm or an individual if the other political party or group wins.

The EC, on the other hand, explained its stand and said that it was 'exclusively confined to one of transparency in political funding and not on the merits of the scheme'.

The court said the scheme has been brought after amending various laws like the Finance Act, the Reserve Bank Of India Act, the Representation of the People Act, the Income Tax Act and the Foreign Contribution (Regulation) Act and it needed detailed examination.

"The court, therefore, has to ensure that any interim arrangement that may be made would not tilt the balance in favour of either of the parties but that the same ensures adequate safeguards against the competing claims of the parties which are yet to be adjudicated," it said.

The court extensively referred to the objections of EC to the scheme and the changes made in laws.

"In para...of the said affidavit the ECI has stated that the..., had informed the Ministry of Law and Justice that certain provisions of the Finance Act, 2017 and the corresponding amendments carried out in the Income Tax Act, the Representation of the People Act and the Companies Act, will have serious repercussions/impact on the transparency aspect of political finance/funding of political parties," it said.

The NGO has challenged the validity of the scheme and sought that either the issuance of electoral bonds be stayed or names of donors be made public.

As per scheme, electoral bonds may be purchased by a person, who is a citizen of India or an entity incorporated or established in India.

A person being an individual can buy electoral bonds, either singly or jointly with other individuals.

Only parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than 1 per cent of votes polled in the last general election to the House of the People or the Legislative Assembly of the State, will be eligible to receive electoral bonds.

As per the notification, electoral bonds will be encashed by an eligible political party only through a bank account with an authorised bank.

State Bank of India (SBI) in the 6th phase of sale, had been authorised to issue and encash Electoral Bonds through its 29 Authorised Branches from November 1-10, 2018.

The Centre and the EC had taken contrary stands in the court over political funding with the government wanting to maintain anonymity of donors of bonds and the poll panel batting for revealing names of donors for transparency.