Supreme Court reserves judgment on electoral bonds challenge

Supreme Court of India reserves judgment in electoral bonds case

The Supreme Court on November 2 reserved a bunch of pleas challenging the validity of the electoral bonds scheme for judgment after hearing the case for three days.

The Supreme Court has further directed the Election Commission to furnish all data on donations that political parties received through the scheme until September 30, 2023, within two weeks.

The scheme was challenged by the Association for Democratic Reforms, the Communist Party of India (Marxist), Congress leader Jaya Thakur, and Spandan Biswal. They were represented by senior advocates Kapil Sibal, Vijay Hansaria, and lawyer Prashant Bhushan. The government was represented by Attorney General (AG) Venkatramani and Solicitor General (SG) Tushar Mehta.

The petitioners mounted their challenge on the first day of the hearing, with Prashant Bhushan arguing that electoral bonds are eroding the institution of democracy since they lack transparency. He argued that the scheme itself ensures that there is no level playing field between the ruling party and the opposition party.

Senior advocate Kapil Sibal argued that any corporation that makes a substantial donation will disclose information to the political party they donated to, in return for some leverage.

Sibal argued that no legitimate state aim was fulfilled because of the scheme of electoral bonds, and the scheme itself is rigged to favour the ruling party. He further noted that there are no specific guidelines as to how such funds from electoral bonds must be utilized.

SG Tushar Mehta argued that before the introduction of electoral bonds, political parties did not disclose the source of their donations as they were not permitted to accept donations over Rs. 20,000. He argued that, according to ADR's own report, 69% of political donations were from 'unknown sources.' The SG further argued that anonymity in electoral bonds was introduced to ensure that a person's political alignment is protected.

Attorney General Venkatramani in his written arguments had contended that the citizens do not have the right to information under Article 19(1)(a) of the Constitution regarding the funding of a political party. He further said that the right to know the criminal antecedents of a candidate is neither comparable to this case nor can there be a general right to know anything and everything for undefined ends.

Casefile:

Electoral bonds are financial instruments through which anyone can donate money to political parties. Such bonds are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore and can be bought from authorised branches of the State Bank of India. The bond provides anonymity to the donors.  These bonds were introduced in 2017 to bring transparency in electoral funding, and formally launched in 2018.

Political parties can encash these bonds within 15 days of receipt to fund their electoral expenses. One can buy these electoral bonds during the first 10 days of January, April, July and October, as specified by the government. An additional 30-day period shall be set by the Centre in a general election year.

Non-governmental organisations (NGOs) such as ADR challenged the constitutional validity of the bill in 2018.

The cases were referred to the bench on October 17 considering the importance of the issues raised in the pleas. Earlier on October 10, it was adjourned to October 31, without being referred to a five-judge bench.