[BREAKING] Supreme Court to hear plea challenging Electoral Bonds scheme on October 14

The Supreme Court will hear on October 14, Friday a batch of petitions challenging the laws enabling the issuance of electoral bonds that allows for anonymous funding of political parties.

The petitions will be heard by a bench of Justices BR Gavai and BV Nagarathna.

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 contribution of funds to political parties in its existing scheme in the country.

The pleas challenging the scheme were last in legal news when it was mentioned in April this year by advocate Prashant Bhushan before then Chief Justice of India (CJI) NV Ramana.

" ... we will hear it," the CJI had assured after remarking that the top court would have heard it if not for the pandemic.

The matter was, however, never listed during his tenure.

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

The Finance Act, 2017 introduced a system of electoral bonds to 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 Rajya Sabha.

Various petitions are pending before the top court challenging at least five amendments made to different statutes through Finance Act 2017 and Finance Act 2016 on the ground that they have opened doors to unlimited, unchecked funding of political parties.

The petition by two NGOs – Association for Democratic Reforms and Common Cause said that the money bill route was adopted in order to bypass the Rajya Sabha, where the ruling BJP government does not have a majority.

The petition has assailed five major amendments which have been brought about through Finance Act, 2017 and Finance Act, 2016.

• Section 31, the Reserve Bank of India Act, 1934 through Part III, Section 135 of the Finance Act, 2017,

• Section 29C, the Representation of the People Act, 1951 through Part – IV, Section 137 of the Finance Act, 2017

• Section 13A, the Income Tax Act, 1961 through Chapter III, Section 11 of the Finance Act, 2017 and in

• Section 182 of the Companies Act, 2013 through Part-XII, Section 154, the Finance Act, 2017.

• Section 2 of the Foreign Contribution Regulation Act, 2010 (FCRA) through Finance Act, 2016.

The petitioners have also submitted that the consequence of the amendments was that annual contribution reports of political parties to be furnished to the Election Commission of India need not mention names and addresses of those contributing by way of electoral bonds, thereby killing transparency in political funding.

The removal of the cap on donations by the amendment to the Companies Act, 2013 and the amendments made to Section 236 of the Foreign Contribution (Regulation) Act, 2010 have also been challenged as opening the avenues of foreign contribution to Indian political parties.

The top court had in March 2021 dismissed an application seeking a stay on the sale of Electoral Bonds.