Supreme Court Asks Parties To Submit Details Of Donations Through Electoral Bonds In Sealed Covers By May 30

The Congress welcomed the Supreme Court judgement on electoral bonds, saying the party has always maintained that transparency in political funding and governance must be adhered to.

Congress spokesperson Priyanka Chaturvedi took a swipe at the Bharatiya Janata Party and said the judgement would bring out the "nexus" between the saffron party and its "suited-booted friends".

Chaturvedi alleged that the BJP, which came to power on the back of promises like bringing in transparency in the system, has done nothing towards it.

She also alleged that the BJP has undermined the Right to Information and the Central Vigilance Commission and the party is doing everything to suppress transparency in governance.

"We hope that the BJP would explain how they got such kind of political funding. We also hope this would expose the nexus between their suited-booted friends and the political party, which has within its five years not given development to this country, but developed a five-star headquarter for itself in Delhi," she said.

The Supreme Court has directed all political parties receiving funding through electoral bonds to submit detailed particulars of donors of each bond to the Election Commission.

The details of bonds received up till May 15, 2019 will have to be submitted before May 30, in sealed covers, CJI Gogoi said. The court also directed the finance ministry to remove five extra days in April and May for purchasing electoral bonds, Bloomberg reported.

This means the apex court has refused to put an interim stay on the usage of electoral bonds - the key ask made by the plea being heard today. The date for the final hearing on the funding instrument will be announced later.

The Supreme Court bench - consisting of CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjeev Khanna - has assembled.

The Chief Justice said that the apex court will announce the operative part in today’s hearing, after having closely examined the stand taken by all including election commission.

"Such issues will require an in-depth hearing,” Gogoi said. “The court has to ensure that any interim arrangement made will not tilt the balance in favour of either parties.”

The Election Commission said the scheme ran counter to the idea of transparency in political funding. Opposing electoral bonds in the Supreme Court, the commission in its affidavit informed the court about the letters it had written about the amendments in May 2017.

The Election Commission also opposed other amendments to the FCRA in Finance Bill, 2017, which allowed foreign companies with majority stake in Indian entities to donate to political parties.

Advocate Prashant Bhushan, who was arguing for the petitioners, asked the court to either halt the scheme or disclose the identity of the donors. Opaqueness of the scheme has opened the floodgates for corruption, he said.

The petition questioned the introduction of electoral bonds through a money bill, arguing that it was done to bypass the Rajya Sabha. “The new amendments are a mala fide attempt to bypass the approval of the Rajya Sabha, which holds an important place in the Constitutional and democratic framework of law-making.”

The act also removed the previous limit of 7.5 percent of the company’s average three-year net profit for political donations as donor is no longer required to name the parties to which contributions are made, the petition pointed out.

The government said the Election Commission’s concern was without merit. Citing the Right to Privacy judgment, Attorney General KK Venugopal, arguing on behalf of the government, said voters do not have the right to know the source of funding of political parties.

The government, in its affidavit, said while political parties do not get to know the details of the donors and thus do not have to disclose the identity of the donors, the banks issuing the bonds do have to ensure KYC compliance of the donors.

The main ground of the challenge is the anonymity factor which the petitioners argue affected the transparency in electoral funding as it takes away the requirement of declaring the identity of donors.

Click here for details on what the debate is about.

An electoral bond is an interest-free instrument, like a promissory note, which is used to make political donations in a more organised fashion.

Any interested donor can buy these bonds of any value from specified State Bank of India branches and issue them to any political party. Once the bond is issued, the party has 15 days to encash it. While the party doesn’t get to know the identity of the donor, the bank knows but is expected to keep it confidential. Political parties that secured more than 1 percent votes in the last general election are eligible for such funding.

The Supreme Court today is set to give its interim verdict on a plea seeking a stay on the use of electoral bonds for political funding.

A bench headed by Chief Justice of India, which heard arguments from both sides, had reserved its judgement yesterday.

At the same time, the bonds have triggered a debate regarding the transparency of the political funding.