The Supreme Court on Friday dismissed a clutch of petitions seeking a special investigation team (SIT) probe under judicial supervision into an alleged scam involving political financing through electoral bonds (EBs), noting that the claims were based on assumptions and had not yet undergone the normal legal process.
While the petitioners argued that the scheme, which was struck down by the top court on February 15 for anonymising political donations, facilitated quid pro quo arrangements between donors and political entities, the court held that it cannot order a “roving inquiry” into the accusations when the petitioners had not even invoked the remedies available to them under the law of the land.
“At the present stage, absent any recourse to remedies available under the law for pursuing of grievances, it will be premature and inappropriate for this court to intervene...Intervention of this court under Article 32 must be preceded by invocation of normal remedies under the law. It would be inappropriate because intervention of this court at the present stage will postulate that normal remedies were not efficacious,” stated a bench, led by Chief Justice of India Dhananjaya Y Chandrachud.
In a detailed order dictated by the CJI, the bench, also comprising justices JB Pardiwala and Manoj Misra, stated that the petitions were based on two key assumptions - first, that there was a prima facie element of quid pro quo linked to the timing of EB purchases and the subsequent awarding of contracts; and second, that certain officials within investigative agencies were involved, rendering the normal legal process ineffective.
{{/usCountry}}In a detailed order dictated by the CJI, the bench, also comprising justices JB Pardiwala and Manoj Misra, stated that the petitions were based on two key assumptions - first, that there was a prima facie element of quid pro quo linked to the timing of EB purchases and the subsequent awarding of contracts; and second, that certain officials within investigative agencies were involved, rendering the normal legal process ineffective.
{{/usCountry}}“The petitions are founded on assumptions,” noted the bench, adding that these assumptions were insufficient grounds for the court to intervene at this stage. The court pointed out that the petitioners themselves acknowledged that an element of criminality might be involved only if a direct relationship could be established between the purchase of electoral bonds and the awarding of contracts by authorities.
The bench further underlined that the Supreme Court cannot order a “roving inquiry” based on such speculative assumptions. It pointed out that individual grievances should be pursued through the available legal remedies, such as filing complaints under the applicable criminal procedure laws or seeking redress under Article 226 of the Constitution, which allows individuals to approach high courts for enforcement of fundamental rights.
“Absent a recourse to remedies available in law, it would be premature and inappropriate for this court to intervene. The intervention of this court must be preceded by the exhaustion of legal remedies,” the bench maintained. It further noted that the court could not pre-emptively declare that the normal legal processes would be ineffective without any attempt by the petitioners to utilise them.
The bench also rejected the petitioners’ request to reopen financial assessments related to the EB scheme, stating that such an order would amount to a premature conclusion on the facts of the case.
The court held that ordering an SIT probe or reopening assessments without first exhausting other legal avenues would be “inappropriate” and could lead to generalised and unfounded inquiries.
The court was hearing three petitions, demanding a court-monitored probe into an alleged scam involving EBs apart from other actions against the political parties for receiving donations by way of quid pro quo.
Advocate Prashant Bhushan appeared for the petitioner non-profit organisations, Common Cause and Centre for Public Interest Litigation (CPIL). Senior counsel Vijay Hansaria represented petitioner Khem Singh Bhati while advocate Pranav Sachdeva appeared for RTI activist Sudip Tamankar.
Introduced in 2018, EBs were available for purchase at any SBI branch in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and could be bought through a KYC-compliant account. There was no limit on the number of electoral bonds that a person or company could purchase. Donations made under this scheme by corporate and even foreign entities through Indian subsidiaries enjoyed 100% tax exemption while identities of the donors were kept confidential both by the bank as well as the recipient political parties.
But on February 15, a five-judge Constitution bench struck down the scheme, declaring it to be “unconstitutional” because it completely masked contributions made to political parties, and added that restricting black money or illegal election financing – some of the articulated objectives of the scheme – did not justify violating voters’ right to information in a disproportionate manner.
The bench directed SBI – the only designated EB-issuing bank – to stop the issuance of EBs, adding that the bank should submit details of EBs purchased since April 12, 2019, to the poll watchdog by March 6.
The tranches of data released by the ECI over two weeks in March revealed that Tamil Nadu-based Future Gaming and Hotel Services, the top donor that accounted for ₹1,365 crore worth of bonds, donated across party lines. Out of this, 39.7% ( ₹542 crore) went to the All India Trinamool Congress, 36.8% ( ₹503 crore) to the Dravida Munnetra Kazhagam (DMK), 11.3% ( ₹154 crore) to the YSR Congress, 7.3% ( ₹100 crore) to the Bharatiya Janata Party (BJP), and 3.7% ( ₹50 crore) to the Congress.
The second highest donor -- Hyderabad-based Megha Engineering and Infrastructure Limited (MEIL) -- donated 60.5% of its ₹966 crore to the BJP and 20.2% ( ₹195 crore) to the Telangana-based Bharat Rashtra Samithi.
The third highest donor, Thane-based Qwik Supply Chain, donated 91.5% of its ₹410 crore to the BJP, followed by 6% ( ₹25 crore) to the Shiv Sena. It donated ₹10 crore (2.4%) to the Nationalist Congress Party. According to Zaubacorp, a website that scrapes data from the Ministry of Corporate Affairs and LinkedIn profiles, two of the directors of the firm are employees of the Reliance Group and are directors of multiple Reliance Group companies.
Mining behemoth Vedanta Limited donated ₹230.15 crore, or 57.5% of its total bonds worth ₹400.35 crore, to the BJP, followed by ₹125 crore (31.2%) to the Congress.
The Kolkata-based RP-Sanjiv Goenka Group’s Haldia Energy donated 74.5% of its ₹377 crore to the TMC, followed by ₹81 crore (21.5%) to the BJP.