Electoral bond scheme: Supreme Court to deliver key verdict on validity today
The bench had on November 2 reserved its judgment in the matter even as it observed on the day that the EB scheme suffers from “serious deficiencies”
The Supreme Court will on Thursday morning deliver its verdict on a clutch of petitions that have contested the validity of the electoral bond (EB) scheme of political funding.
A five-judge Constitution bench, headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud, and comprising justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra, will rule on the legal sanctity of the EB scheme ahead of the general elections, which is expected to take place in the coming months of April and May.
The bench had on November 2 reserved its judgment in the matter even as it observed on the day that the EB scheme suffers from “serious deficiencies” and added that the Union government ought to consider designing a new tailor-made system which balances proportionality and paves the way for a level playing field instead of “putting a premium on opacity”.
However, in response to a question from the bench, the government refrained from making a statement that it was prepared to make suitable amendments in the Companies Act to ensure that profit-making companies could make political donations, which will be capped at a fixed percentage of their profits.
Representing the Centre, Solicitor general (SG) Tushar Mehta said during the November 2 hearing that making laws was a legislative function and that he could not commit nor was he of the view that donations had to be a percentage of profit of a company. Mehta also produced a letter signed by the chairman of SBI to support his claim that not even the Union government has access to information about EBs and that, should the court decide that more safeguards needed to be included in the scheme, RBI could be the only designated bank to issue EBs.
On November 2, the bench also directed the Election Commission of India (ECI) to submit within two weeks complete information on each and every donor and contributions received by political parties through EBs till September 30.
Under the 2018 EB scheme, bonds are available for purchase at any SBI branch in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and can be bought through a KYC-compliant account. There is no limit on the number of electoral bonds that a person or company can purchase. Every party registered under section 29A of the Representation of the People Act and having secured at least 1% of the votes polled in the most recent Lok Sabha or state election has been allotted a verified account by ECI.
On October 16, the court referred the clutch of petitions against the EB scheme to a Constitution bench of five judges. It started hearing the petitions, filed by Association for Democratic Reforms (ADR), non-profit Common Cause, Congress leader Jaya Thakur, and the CPI (M), among others, on October 31.
The bench heard the matter on three consecutive days when it picked holes in the 2018 EB scheme flagging a spate of “flaws” while the Centre mooted two suggestions in its endeavour to defend it. First, the Centre said the court could consider substituting SBI with RBI as the statutory bank for issuing EBs and keeping accounts; and second, the court could criminalise any instance of breach of confidentiality regarding donors.
While the court remained of the tentative view that the EB scheme did not appear to augur well with the need for transparency when such donations could very well be kickbacks, the Centre maintained that confidentiality is necessary so that no political party gets to know as to which entities have not donated to it but have given funds to some other party.
Attorney general (AG) R Venkataramani also argued on behalf of the Centre, saying there cannot be a general right to know everything under the sun and that the petitioners had failed in showing what larger public purpose would be served by disclosing the identity of the donors whereas there were enough for the government to corroborate how the EB scheme was helping weeding out black money.
For the petitioners, senior counsel Kapil Sibal and Vijay Hansaria, along with advocates Prashant Bhushan, Shadan Farasat and Nizam Pasha, attacked the scheme, arguing that either the scheme must go on account of violating people’s right to know and affecting free and fair election, or the court ought to direct for full disclosure of the purchasers and donors of EBs.
