Electoral Bonds: No Stay by SC, Parties to Reveal Donations to EC

The decision by the SC bench will be an interim order, and not a final decision on the scheme’s constitutionality.

The Supreme Court heard arguments about the constitutionality of the electoral bonds scheme.

(Photo: Kamran Akhter/The Quint)

In an interim order on Friday, 12 April, the Supreme Court refused to grant a stay on the electoral bonds scheme, although it directed all political parties to disclose the details of donations received through electoral bonds to the Election Commission by 30 May 2019, in sealed envelopes.

In its interim order, the apex court asked political parties to give details of identity of donors who donated through electoral bonds, receipts of electoral bonds, details of the amount as well as bank account of donors to the poll body.

The order was pronounced by a bench comprising Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna. They considered the Election Commission’s submissions to the court on the impact of these bonds, and said that needed to ensure that the interim arrangements don’t tilt the balance in favour of either party to the case. as a result, they wrote that,

“the just and proper interim direction would be to require all the political parties who have received donations through Electoral Bonds to submit to the Election Commission of India in sealed cover, detailed particulars of the donors as against the each Bond;  the amount of each such bond and the full particulars of the credit received against each bond, namely, the particulars of the bank account to which the amount has been credited and the date of each such credit. “ 

The judges made it clear that this information has to be provided not just for electoral bonds received by political parties after the date of the order, but all electoral bonds received by a party till date.

One point to note about this order is that while it does require disclosure, the information is to be provided in a sealed cover, and therefore won’t be made public. the order specifies that the “sealed covers will remain in the custody of the Election Commission of India and will abide by such orders as may be passed by the Court.” Therefore, they will only be disclosed if the Supreme Court orders this.

The court also directed the government to reduce the notified time allowed for sale of bonds from now till the end of May by five days. The court noted that the Finance Ministry has notified that the bonds will be available for purchase for 45 days for the months of March, April and May. As they had previously notified their sale for 10 days in January, this brought the total number of days the bonds were on sale till the end of the election season to 55.

However, under the legal provisions of the scheme, the bonds could be sold for 10 days each in January and April, and for another 30 days in light of the elections, a total of 50 days. The order therefore says that

“A period of 5 days, therefore, have to be deleted from the Schedule contained in the Note of the Ministry of Finance dated 28.2.2019. Such deletion will be made by the Ministry of Finance who will be free to decide the days of deletion/exclusion.” 

Arguments During the Hearings

During the the hearings on Wednesday and Thursday, the petitioners – NGOs Common Cause, Association for Democratic Reforms and CPI (Marxist) – had argued how the scheme was a blow to transparency and disproportionately benefitted the ruling party.

The petitioners who had filed the PILs challenging the electoral bond scheme had also asked the apex court to grant an interim stay on the sale of the anonymous bonds during the phases currently announced by the RBI (April and May) and till such time as the court decides on the constitutionality of the scheme as a whole.

The petitioners had alternatively asked for full disclosure on any electoral bond sales, even for the bonds sold in the past.

Meanwhile, Attorney General KK Venugopal, representing the government, had defended the scheme as part of the government’s policy to curb black money, and argued that the court should not interfere in this policy “experiment”. He also made a number of extremely controversial statements in court, including that voters didn’t need to know the source of funding of political candidates.

What is the Electoral Bond Scheme?

The government had notified the Electoral Bond Scheme 2018 on 2 January 2018.

As per provisions of the scheme, electoral bonds may be purchased by a person, who is a citizen of India or incorporated or established in India.

A person being an individual can buy electoral bonds, either singly or jointly with other individuals.

Electoral bonds shall be encashed by an eligible political party only through a bank account with authorised bank.

To read about all that happened during the proceedings in the court on Wednesday and Thursday, along with a background on the electoral bonds scheme, click here.

You can read the whole order of the Supreme Court below.