The Supreme Court has directed the Election Commision of India to submit data regarding money collected by political parties through electoral bonds before the court in a sealed cover within two weeks. After a three-day hearing of a batch of pleas challenging the electoral bonds scheme, the Supreme Court, on Thursday, November 2, reserved its judgement in the case. The five-judge Constitution bench hearing the case also pulled up the Election Commission of India (ECI) for not maintaining an up-to-date data log of electoral bonds received by various political parties. The Constitution bench headed by Chief Justice of India DY Chandrachud also comprises Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra.
Electoral bonds are anonymous interest-free bearer bonds like promissory notes. Individuals or companies can purchase these bonds from authorised branches of the State Bank of India (SBI) to make donations to political parties. The bonds start at Rs 1,000 and go up to Rs 1 crore. Due to their anonymous nature, electoral bonds have been opposed by civic activists and even the Opposition, as it has been alleged that these bonds encourage quid pro quo and are also used to create ‘white channels’ for black money.
Continuing his submissions on day three of the hearing, Solicitor General (SG) Tushar Mehta argued that the citizens’ right to know was not more important than the right to privacy of information. Referring to the Justice KS Puttaswamy vs Union of India case, he argued, “Informational privacy was held to be a fundamental right. Right of the buyer to purchase bonds without having to disclose his preference of political party is in furtherance of his right to privacy, which has been recognized as a fundamental right.”
The SG also argued that secrecy per se is not antithetical to free and fair elections and that the electoral bonds scheme enhances free and fair elections. Stating that the voters’ have a right to know what information of theirs was obtained by which party, he argued that votes are cast not based on the funding of parties but on its ideology, principle, leadership, and efficiency. He also contended that business houses cast their votes based on which party provides an environment conducive for business and that it is not always quid pro quo.
Read: Citizens don’t have right to know funding of political parties: Union govt on electoral bonds
SG Mehta also argued that donations through electoral bonds are not only utilised for elections but also for running the party. “When we think of elections, we think of general parliamentary elections. Political parties contest parliamentary, assembly, and local authority elections. They have campaigns, rallies, think tanks, salaries, and offices,” he said. He refuted the petitioners’ argument that there has to be a level playing field as all parties don’t get equal contribution. “Every party will have to rise and get more contributions,” he said, adding that how secrecy is maintained cannot be a public debate.
The CJI pointed out that there are five important considerations in the case — reduce the cash element in the electoral process; encourage use of authorised banking channels; incentivise use of banking channels by maintaining confidentiality; ensure transparency; and prevent scheme from becoming a legitimate means of quid pro quo between the power centres and benefactors of that power. He also observed that a new system can be designed without the “flaws of this system”.
Attorney General (AG) R Venkatramani submitted before the court that the electoral bonds scheme treats all contributors equally. "The one common thread in all is confidentiality. The scheme doesn't violate any existing right of any person", the AG said while responding to the statutory challenges made to the Reserve Bank of India Act, Income Tax Act, Representation of People Act, and the Companies Act.
The AG argued that while voters should know the criminal antecedents of candidates as that will help them choose a candidate, knowing the details of electoral bond purchases do not serve them any purpose. “What is the end that I would put to use by way of accessing this information? General political debate or determining which party would do better? What concrete purpose would this information be relevant for?” he asked.
Read: Electoral bonds: SC says scheme puts Opposition parties at a disadvantage
ECI to submit details of funds received through electoral bonds
The court directed the ECI to submit details of the funds received by all political parties through electoral bonds till September 30 this year to the court registry in a sealed cover within two weeks. When asked by Justice Khanna if the ECI possessed data at least till March 2023, advocate Amit Sharma, appearing for the ECI, told the Bench that he did not have the required data.
The advocate explained that the ECI was under the impression that the SC order of 2019 pertains only to the 2019 Lok Sabha elections. In April 2019, the court had directed all political parties that received donations through electoral bonds to submit the particulars of the bonds and its donors to the ECI. Refusing to accept this reasoning, the CJI said, "We didn't freeze the data that was to be maintained. You were to continue collecting the data." Justice Khanna added that the ECI should have clarified this with the court.
The batch of Public Interest Litigations challenging the electoral bonds scheme contend that the scheme violates the citizen's fundamental right to information and enables backdoor lobbying and quid pro quo. The petitioners also argue that it is an opaque instrument that is not entirely anonymous and one which promotes corruption and eliminates level playing field for political parties in the Opposition. They also demand that the finances of political parties be made public in the same way that criminal antecedents of candidates are. A three-judge bench of the SC referred the pleas to a five-judge Constitution Bench on October 16.
Read: Petitioners to SC: 'Electoral bonds are anonymous white channels of black money'
Also Read: SBI’s Hyderabad branch sees highest sale of electoral bonds at Rs 377 crores