Electoral Bonds: Supreme Court reserves verdict, asks ECI for latest data on donations to political parties

The Supreme Court on Thursday reserved its verdict in the batch of pleas challenging the legal validity of the electoral bonds scheme that allows anonymous donations to political parties. [Association for Democratic Reforms and Anr vs Union of India Cabinet Secretary and ors].A bench of Chief Justice of India (CJI) DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra reserved its judgment after a three-day hearing that started on October 31..Pertinently, the bench before reserving its verdict also asked the Election Commission of India (ECI) to submit data up till September 30 this year regarding electoral bonds sold under the scheme.."We would like the Election Commission of India (ECI) to get the data upto September 30, 2023. We have heard arguments. Judgment reserved. On April 2019, there was an interim direction to the ECI, and as per that a sealed cover document was produced and the order of court was not restricted to that date and a clarification could have been sought. Now, the ECI is to submit updated data till September 30, 2023 in a sealed cover to the registrar judicial of this court within 2 weeks," the order stated. .On April 2019, the Supreme Court had directed all the political parties to disclose details of the donations received by them through electoral bonds to the ECI. The Court has now directed the ECI to collate such data for a further period until September 30, 2023. .Background.The electoral bonds scheme allows donors to anonymously send funds to a political party after buying bearer bonds from the State Bank of India (SBI). 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..Hearing today.Attorney General for India R Venkataramani and Solicitor General Tushar Mehta wrapped up their submissions on behalf of the Central government today. Addressing concerns raised by the Court yesterday, the law officers asserted that nobody, including the Central government, would have access to confidential information about donors.They underscored that keeping the donations anonymous was at the heart of the scheme. Such confidentiality was intended to encourage donors of political funds to put their money into authorised banking channels, instead of making political donations through cash or black money channels, the Court was told..Donations via Electoral Bonds anonymous to protect privacy, political affiliation of donors: SG Tushar Mehta to Supreme Court.CJI Chandrachud, in turn, said that the Court is not suggesting that the country should go back to a cash-only system, even if the scheme were to be struck down.Rather, the bench said that it suggesting an alternative system for political donations which will address the "flaws" that plague the present electoral bonds system."You can design another system which does not have the flaws of this system, which really puts a premium on opacity ... How it is to be done is for you (government) to decide. We (Court) will not step into this arena," CJI remarked. .The Court also questioned whether it was the right move to remove the earlier cap on political donations by companies. Without such limits under the electoral bonds scheme, even a company with mere ₹1 profit could make political donations, the CJI pointed out. .Solicitor General Mehta asserted that no system was foolproof and that the scheme should not be struck down just because a few persons may misuse the system. He also defended the move to keep donor data anonymous. "If there is genuine public interest in disclosure, you go to court, but merely for your curiosity, you cannot invade someone's privacy if that privacy serves larger public interest," he added. Attorney General Venkataramani contended that the electoral bonds system should be viewed as a step towards ensuring a greater credibility in the electoral funding process..The Court also heard brief rejoinder submissions by the petitioners in the matter. Advocate Prashant Bhushan contended that the right to privacy does not extend to corporations, while Senior Advocate Kapil Sibal contended that the scheme cloaks corrupt practices. Advocate Shadan Farasat argued that any right to confidentiality of donors cannot take precedence over public interest. "Right to privacy of individuals cannot extend to shadow the entire political system and affect the public interest," he said..Devise a system for political donations which addresses flaws of electoral bonds system: Supreme Court .[Follow our live-coverage of today's hearing]