Why did the top Court reject SBI’s plea?
What were the reasons given by the State Bank of India to the Supreme Court on why it could not furnish the relevant details pertaining to electoral bonds to the Election Commission of India? What was the contempt plea filed against the public sector bank
OThe story so far: n March 11, the Supreme Court dismissed a plea by the State Bank of India (SBI) to extend the deadline for providing details of electoral bonds purchased anonymously and their encashment by political parties to June 30, 2024. A fivejudge Bench headed by the Chief Justice of India D.Y. Chandrachud gave the bank 24 hours, that is, by the close of business hours on March 12, to provide the details to the Election Commission of India (ECI). It was also hearing a contempt plea filed by NGOs — Association for Democratic Reforms
(ADR) and Common Cause — against the SBI Chairman Dinesh Kumar Khera that contended that the bank was deliberately trying to ensure that details of donors and the amounts contributed to political parties anonymously were not disclosed to the public before the Lok Sabha elections due in AprilMay. Analysis reveals that the BJP was the scheme’s greatest beneficiary.
Why was the contempt petition filed?
The petition was filed in the aftermath of the Supreme Court’s verdict on February 15 striking down the electoral bonds scheme, where the Court had directed the SBI to furnish details of the bonds to the ECI by March 6, 2024. These details were to include the date of purchase of each bond, the name of the purchaser of the bond and the denomination of the bond purchased. The ECI was subsequently ordered to publish all such information shared by the SBI on its official website by March 13, 2024.
Why did the SBI seek more time to comply?
On March 4, the SBI filed a ninepage application before the Court seeking time till June 30 to provide the ECI with the required details regarding the purchased electoral bonds. The bank said that the information and documents were scattered across its various branches and decoding them was a “timeconsuming exercise.”
According to the public sector bank, not only were the details not maintained centrally at one place, but the data related to the issuance of the bond and data related to the redemption of the bond were recorded “in two different silos.” This was done to ensure that donors’ anonymity was protected, it said. The Court was also apprised that donor details were kept in a sealed cover at the designated branches and all such sealed covers were then deposited in its main branch located in Mumbai. “It can thus be noted that both sets of information were being stored independently of each other. Thus, to rematch them would be a task requiring a significant amount of effort... the retrieval of information from each silo and the procedure of matching the information of one silo to that of the other would be a timeconsuming exercise,” its plea said.
The SBI added that while some details such as the number of bonds issued are stored digitally, others such as the names of the purchasers and Know Your Customer documentation are stored physically in its various branches to “achieve the object of the scheme.”
The bank further submitted that it needs to decode 22,217 electoral bonds issued between April 12, 2019, to
February 15, 2024. This would involve compiling and comparing 44,434 information sets (equal to twice the number of bonds issued) as the details relating to buyers and recipients of bonds were kept in two different information silos, the bank said.
Why was the extension plea challenged?
The contempt plea alleged that the bank was deliberately trying to ensure that the amounts contributed anonymously to political parties were not disclosed to the public before the Lok Sabha elections.
It was also pointed out that the bank’s stand was directly contradictory to an affidavit filed by the Union government on March 15, 2019, which said that information about the bonds was completely traceable and quickly available.
The petitioners further claimed that the SBI maintains a secret numberbased record of donors who buy bonds and the political parties to which they donate. Additionally, each electoral bond also possessed a unique number making it easier to trace it, they contended. “A simple query on the database can generate a report in a particular format which does not require any manual verification,” the plea said.
Highlighting that the SBI had enough manpower to retrieve the information within the stipulated deadline, the petitioners pointed out, “The SBI has 2,60,000 employees, 22,500 worldwide branches administered by a headquarters, 17 local head offices, 101 zonal offices and 208 foreign offices in 36 countries. It is hard to believe that the SBI is not able to gather information which the SBI has itself recorded.” Referring to Section (4) of Clause 7 of the scheme that makes it mandatory to disclose information furnished by a buyer when demanded by a competent court, the petitioners claimed that “it is inconceivable that the SBI does not have the recorded information readily available within its database.”
The petitioners also relied on a Right to Information response given by the bank to retired Commodore Lokesh Batra in 2018, saying that it had spent ₹60.43 lakh on IT system development, ₹89.72 lakh on operational costs and that the net cost for floating of electoral bonds was ₹1.5 crore. “This implies that a wellfunctioning IT system is already in place with respect to management of sale and redemption of electoral bonds,” the plea asserted. Pointing out that only 19 out of the 29 the SBI authorised branches sold electoral bonds and only 14 branches encashed them, the plea said that “data available as of January 2024 further shows that only 25 political parties had opened their account and are eligible for encashing electoral bonds” and “therefore, compiling of this information should not be difficult as the system is already in place.”
Such a “defiant approach” of the SBI attempts to stifle a citizen’s right to audit actions of the political class and is therefore contemptous, the petitioners concluded.
What did the top court say?
At the outset of the proceedings, senior advocate Harish Salve appearing for the bank submitted that matching the bonds purchased and names of donors with the parties which redeemed the bonds was a “timeconsuming and complex” exercise. He explained that the details were kept in two separate silos and not stored in a digital format.
But the CJI pointed out that the judgment had not asked the bank to “match” information to ascertain who contributed to which parties and only wanted a “plain disclosure”. He asserted that the SBI in its own application said that such information was “readily available”.
Pointing out how the bank had not even bothered to mention what it had been doing for the past 26 days since the February 15 judgment, the Chief Justice remarked, “You are the SBI… There should be some candour from your part. What have you been doing for the past 26 days? There is not a word about that in your application”. Indicating the seriousness of the directives, Justice Sanjiv Khanna asked whether the bank wanted a specific judicial order to open the sealed covers containing the bonds’ details right there in the courtroom.
Although the Bench said that it did not want to initiate contempt proceedings against the SBI, it underscored that it was putting the bank on notice and that it would take action if the SBI failed to ensure compliance.
Why are the SBI’s claims contested by experts?
Professor Jagdeep Chhokar, foundermember and trustee of the ADR, termed the SBI move “not surprising but unfortunate.” He earlier told The Hindu that the “data is obviously in digital format and collecting data from different States and locations and taking four months for that is impossible in this day and age.”
Concurring with this, former Finance Secretary Subhash Chandra Garg told The Wire that such information was “available at the click of a button” and that the bank had either deliberately misconstrued or failed to understand the “simple nature of the six bits of information” that they are required to give to the ECI.
According to a report published in The Reporter’s Collective, the SBI has previously provided similar data to the Union government as well as the Finance Ministry within 48 hours. It pointed out that all electoral bondrelated work was overseen by a specific team of the SBI called the Transaction Banking Unit (TBU) to ensure that the government can access crucial information on a short notice.
In 2019, a Huffington Post investigation divulged that in a January 2018 meeting, the SBI had asked the Union Ministry of Finance to include a serial number on the bonds to have an audit trail. The bank believed that without such a number, it would fail to submit information on donors and redeemers of bonds if a competent court or law enforcement agency asked for it.