Petition over electoral bonds in Supreme Court on January 20
The Finance Act, 2017 introduced a system of electoral bonds to be issued by any scheduled bank for the purpose of electoral funding.Updated: Jan 18, 2020 23:44 IST
The Supreme Court will hear on Monday the plea by Communist Party of India (Marxist) and NGO Association for Democratic Reforms and seeking a stay on the electoral bonds scheme of 2018.
The case will be heard by a bench of Chief Justice of India, SA Bobde and justices BR Gavai and Surya Kant.
The Finance Act, 2017 introduced a system of electoral bonds to be issued by any scheduled bank for the purpose of electoral funding.
An electoral bond is an instrument in the nature of a promissory note or bearer bond which can be purchased by any individual, company, firm or association of persons provided the person or body is a citizen of India or incorporated or established in India.
The bonds which are in multiple denominations are issued specifically for the purpose of contribution of funds to political parties.
The first step towards introduction of electoral bonds was the enactment of the Finance Act, 2017 which amended various provisions of the Reserve Bank of India Act, Representation of People Act, Income Tax Act, Companies Act and Foreign Contribution Regulation Act.
The Finance Act was passed as a money bill which meant that it did not require the assent of Rajya Sabha. This, the petitioner submitted, was done in order to bypass the Rajya Sabha where the ruling BJP government does not have majority.
The petitioners also submitted that the consequence of the amendments was that annual contribution reports of political parties to be furnished to the Election Commission of India need not mention names and addresses of those contributing by way of electoral bonds thereby killing transparency in political funding.
The removal of cap on donations by the amendment of the Companies Act, 2013 and the amendments made in Section 236 of the Foreign Contribution (Regulation) Act, 2010 were also challenged as opening avenues for foreign contribution to Indian political parties.
Subsequently, in January 2018, the central government promulgated the electoral bond scheme thereby giving effect to the electoral bond system contemplated by the finance act and other consequential amendments.
The petitioners had then approached the apex court seeking stay on the scheme.
Central government’s top law officer, attorney general KK Venugopal had told the court that the scheme is within the realm of policy of the government and court should not interfere in policy matters. He also said that the scheme protects the privacy of donors which should outweigh the right of voters to know about the source of funding of political parties.
The top court then passed an order on April 12, 2019 stating that the case involves “weighty issues” which could have a great bearing on the sanctity of the electoral process in the country. Therefore, it had held that the matter requires an in-depth hearing. As an interim arrangement, the court had asked all political parties to submit in a sealed cover to the Election Commission of India details of funding received through electoral bonds.