New Delhi: The Supreme Court on Tuesday said that it will begin the final hearing on October 31 and November 1, on a clutch of petitions challenging the validity of the Centre's electoral bonds scheme as a source of political funding.
A bench led by Chief Justice of India D Y Chandrachud and comprising justices J B Pardiwala and Manoj Misra said it will begin the final hearing on the matter on October 31, and if there is a spillover, the hearing will continue on November 1.
During the hearing on Tuesday, advocate Prashant Bhushan, representing a petitioner, submitted that there three are grounds on which electoral bonds scheme has been challenged – one, the fact that it was passed a money bill; electoral bonds is anonymous source which has been legalised for funding political parties, and anonymous funding violates right to information of citizens; and, it also promotes corruption, as large amount of funding coming to political parties from companies which have received some benefits from them. Bhushan stressed, “it is a device which promotes corruption in the country….”.
The Chief Justice queried: "Does the source of funding take place through banking channels? How does the scheme work? Purchase of an electoral bond happens through a bank transfer or cash?" Bhushan said both are allowed. “That is critical, because if it is through bank transfer…..purchaser is treated as anonymous”, said Chief Justice. Bhushan said the source is known to the State Bank of India (SBI) and they will not disclose, and the total amount can be from Rs 10,000 to Rs 1 crore.
Advocate Shadan Farasat, representing another petitioner, said the purchase usually does not take place through cash and “you will have to have an account in a certain designated bank account and only from bank transfer it can be done”. Farasat said the identity of the purchaser of the electoral bonds is kept anonymous and the real anonymity is “when you transfer to a political party, who has transferred to which political party is anonymized from the public domain, and that is the real challenge from our side”.
The Chief Justice said the electoral bond is like a bearer bond, and is the bond in person’s name or it is just like a bearer bond? That person can transfer to anybody? Bhushan said it is transferred to political parties. Farasat said the party which is entitled to encash electoral bonds has to be a recognized political party.
The Chief Justice queried Farasat, the donor’s name is kept anonymous, and the quantum of amount is not anonymous. Farasat agreed. “When political party encashes, the bond does not have to disclose the name of the donor; merely say this is the quantum received”, said the Chief Justice. Farasat said the information of donation from the public domain is sanitized.
Senior advocate Sanjay Hedge, representing a petitioner, gave an example saying that Tiger Investments may have several companies upstream and downstream and one may not who is controlling that, and they get money from abroad through various round-tripping routes. Hedge argued that Tiger Investment is an Indian company, it buys electoral bonds and donates, source of donation is not known and “whichever political party gets it, says thank you very much”.
The Chief Justice replied, “in your example, Tiger Investments buys the electoral bonds. There is anonymity but regarding the source of funding, it has to explain in its tax”. The Chief Justice said, “suppose, it is contributing Rs 1 crore. First, it transfers a crore through normal banking channels to SBI, and now Tiger in its assessment has to disclose to its ITO, where did that Rs 1 crore come from?” Hedge insisted on round-tripping.
The Chief Justice asked Bhushan, “what about the money bill issue, are you pressing it here and we do not want to compel you to give it up because that is pending before 7-judges…all seven-judge and nine-judge matters are listed for directions on October 12. Would you like us to hear this, minus the money bill?”
Farasat said “your lordships may consider hearing it de hors money bill issue….”. Bhushan insisted that the challenge to the electoral bonds scheme should be decided before the general election scheduled next year and urged the court to allow petitioners to argue on issues other than money bill.
After hearing initial submissions, the apex court scheduled the matter for hearing on October 31. Petitions have been filed against the scheme by the Association for Democratic Reforms, Communist Party of India (Marxist), Dr Jaya Thakur (Congress leader), Spandan Biswal, and others.
Also read: Electoral bonds are 'legalised bribery', says Chidambaram
