While the BJP-led government and the opposition parties led by the Congress are having a war of words over the anonymity aspect of electoral bonds, with the latter critiquing what it calls the lack of transparency in the scheme, petitions filed by the NGOs Association for Democratic Reforms and Common Cause, and subsequently by the CPI(M), are currently pending before the Supreme Court.
The petitions were filed before the Supreme Court in September 2017.
On the contentious clause that allows anonymity of the donor, the Centre said this was to protect them from victimisation at the hands of other parties to whom they may not have contributed.
The EC took the stand that it was “not opposed” to the Scheme, but was only concerned about the anonymity brought by it. The poll panel backed the petitioners’ demand that the State Bank of India, the only bank authorised to issue the bonds, should publish details of those who brought the bonds, and who they were given to.
How Centre defends transparency issue
The Centre calls introduction of electoral bonds “a big step towards electoral reform” and that acquiring and encashing them “will ensure transparency” and “accountability”. The government called the move a “conscious legislative policy” to further electoral reforms “to defeat the growing menace of black money, especially when the country is moving towards a cashless-digital economy...”
In an affidavit filed in court, the EC stated that that it had conveyed to the government in 2017 that changes in the law enabling Scheme “will have repercussions/impact on the transparency aspect of political finance/funding of political parties”.
In an interim order on April 12 this year, a three-judge bench headed by then CJI Ranjan Gogoi directed political parties that received donations through electoral bonds to “forthwith” submit the details to the Election Commission of India (EC).
The court ordered that the parties should give the EC “detailed particulars of donors as against each Bond; the amount of each such bond and the full particulars of the credit received against each bond, namely, particulars of the bank account to which the amount has been credited and the date of each such credit”.
The court, which went into the submissions of the petitioners, the EC, and the government, stated, “All that we would like to state for the present is that the rival contentions give rise to weighty issues which have a tremendous bearing on the sanctity of the electoral process in the country. Such weighty issues would require an in-depth hearing which cannot be concluded and the issues answered within the limited time that is available before the process of funding through the Electoral Bonds comes to a closure, as per the schedule (set out in the Electoral Bonds Scheme).”
The petitions challenged The Electoral Bond Scheme, 2018, notified by the Centre on January 2, 2018, and amendments made through Finance Act, 2016 and 2017; Reserve Bank of India Act, 1934; Representation of the People Act, 1951; Income Tax Act, 1961; Companies Act, 2013; and the Foreign Contribution (Regulation) Act, 2010.
The court said that it 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 competing claims of the parties, which are yet to be adjudicated”.
Details on the bonds received until May 15 “will be submitted on or before 30th May, 2019”, the bench ordered. It said that the “sealed covers will remain in the custody of the Election Commission of India”, which will “abide by such orders as may be passed by the Court”, which will hear the matter on an “appropriate” day.
The top court also noted that the schedule of availability of the bonds as per a Finance Ministry note of February 28 was 55 days — five days more than what could be allowed — and ordered the deletion of these five days.
The petitioners contended that the amendments affect transparency in political funding, as it allows political parties not to disclose in their annual contribution reports to the EC, details of the identity of those who have donated through the Electoral Bonds. This, in turn, they claimed, affect the citizens’ right to know about the contributions made to various political parties and the source of such contribution.