SC dismisses plea against sale of electoral bonds

NEW DELHI: The Supreme Court on Friday cleared the sale of electoral bonds ahead of elections in West Bengal, Tamil Nadu, Assam, Kerala and Puducherry, finding no justification to block their sale over concerns of anonymity in political funding or apprehensions of their misuse. The 10-day sale window will open, as scheduled, on April 1.

Dismissing two stay applications moved by NGO Association for Democratic Reforms, filed in 2019 and earlier this month, a three-judge bench of the apex court headed by Chief Justice of India (CJI) SA Bobde noted that the sale of these bonds, which began in January 2018, have continued “without any impediment” in 2018, 2019 and 2020. In April 2019, the Court introduced an interim “safeguard” by directing all political parties to submit details of receipts of the bonds to the Election Commission in a sealed cover. With this order still in vogue, the bench, also comprising Justices AS Bopanna and V Ramasubramanian, said, “certain safeguards have already been provided by this Court in its interim order of April 12, 2019, (and) we do not see any justification for grant of stay at this stage.”

The EC, which supported the policy in the top court, said it has received sealed covers from various parties. The court held this interim arrangement will now remain and no applications for stay will be entertained every time bonds sales are opened.

ADR in its application claimed electoral bonds could be a channel for corporate bribes to political parties as a quid pro quo since the scheme envisaged anonymity for donors. Centre, represented by Attorney General KK Venugopal, said the bonds were meant to stop black money influence on polls.

In support of his concerns, ADR’s counsel Prashant Bhushan relied on a letter written by Reserve Bank of India (RBI) in September 2017 (before the scheme) expressing reservations. The bench, after examining a series of letters by RBI, concluded that much of the regulator’s concerns were addressed later.

The judges noted that in one letter, RBI called electoral bonds “an enduring reform consistent with the Centre’s digitisation push.” RBI’s only objection was to the issue of bonds in scrip form rather than in dematerialised (electronic) form. The bench held, “It is not correct to say RBI and EC opposed the electoral bond scheme… The concerns by RBI to the form and not to the substance, cannot really advance the case of the petitioners.”

Bhushan further alleged the bond could be purchased by a person using white money and transferred to somebody in black. The Court ruled out the scope of such transaction as purchasers will have to comply with KYC norms and their identities are known to the State Bank of India, which issues the bonds.

Welcoming the order, BJP spokesperson Nalin Kohli said: “Now that the honourable SC has decided in favour of the electoral bonds one hopes there will be closure to what was unnecessary controversy.”

Congress spokesperson Randeep Surjewala, however, termed the bonds a “dubious money laundering operation”. “SC must expose #ElectoralBonds for what they have become: 1. A dubious money laundering operation to help one party. 2. A veiled mechanism to legitimize quid-pro-quo deals. 3. An untraceable funnel for black money payments. If not now, then when?,” he tweeted.

ADR founder Jagdeep Chhokar said: “The judgment is disappointing. Interim arrangement on which the Court relied is unworkable. The EC cannot know the donors of these bonds received by political parties. The Court has said that information about the donors can be known by making a little effort... why can’t it be in public domain?...”