Electoral bonds case: LIVE UPDATES from Supreme Court [Day 3]

A five-judge Constitution Bench of the Supreme Court of India is hearing a batch of petitions challenging the legal validity of the electoral bonds scheme which facilitates anonymous donations to political parties.

The matter is being heard by Chief Justice of India (CJI) DY Chandrachud along with Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra.

An electoral bond is an instrument in the nature of a promissory note or bearer bond which can be purchased by any individual, company, firm or association of persons provided the person or body is a citizen of India or incorporated or established in India.

The bonds, which are in multiple denominations, are issued specifically for the purpose of contributing funds to political parties in its existing scheme.

Electoral bonds were introduced through the Finance Act, 2017, which in turn amended three other statutes - the RBI Act, the Income Tax Act and the Representation of People Act - to enable the introduction of such bonds.

The 2017 Finance Act introduced a system by which electoral bonds could be issued by any scheduled bank for the purpose of electoral funding.

The Finance Act was passed as a money bill, which meant that it did not require the assent of the Rajya Sabha.

Various petitions were filed before the top court challenging at least five amendments made to different statutes through the Finance Act, 2017 on the ground that they have opened doors to unlimited, unchecked funding of political parties.

The petitions have also raised the ground that the Finance Act could not have been passed as a money bill.

The Central government in its counter-affidavit has maintained that the electoral bonds scheme is transparent.

In March 2021, the Court dismissed an application seeking a stay on the scheme.

On October 16, the Supreme Court had decided to refer the matter to a Constitution Bench, in view of a legal issue involved relating to the passage of laws as money bills.

During the first day of the hearing on Tuesday, the top court remarked that anonymity behind political donations under the Electoral Bonds Scheme could perhaps be aimed at preventing repercussions from parties to which a person or entity has not made donations.

The top court yesterday questioned whether the electoral bonds scheme presents a disadvantage for opposition parties since ruling political parties may have ways to unearth confidential information about donors who contribute funds to opposition parties.

Live updates from the hearing today feature here.

[Watch the hearing LIVE:]