On Tuesday, the Supreme Court announced that it will consider whether the petitions that challenge the validity of the electoral bond scheme for political funding of parties can be referred to a constitutional bench for a “authoritative pronouncement.” The scheme is being challenged because the court believes it violates the First Amendment.
In light of the claim made by an NGO that so far Rs 12,000 crore has been paid to political parties through electoral bond and that two-thirds of the amount has gone to one major political party, the observations of the apex court to decide whether the pleas can be referred to a constitution bench assume significance in light of the fact that the matter needed to be decided expeditiously prior to the upcoming elections for the Karnataka assembly.
“We will see whether the petitions can be referred to a constitution bench on April 11,” said the bench comprising Chief Justice D Y Chandrachud and Justice P S Narasimha.
One of the PIL petitioners’ lawyer, Shadan Farasat, requested that the petitions be referred to a constitution bench due to the impact of the electoral bond scheme on the democratic polity and political party funding. Farasat stated that the issue required “authoritative pronouncement” from a larger bench.
Senior advocate Dushyant Dave, appearing on behalf of the NGO Association for Democratic Reforms (ADR), also supported the request to refer the batch of PILs to a constitution bench. Dave suggested that the issue be addressed in April, ahead of the upcoming Karnataka assembly elections.
Meanwhile, the bench appointed two lawyers, including Neha Rathi, as nodal counsel to ensure a smooth hearing of the PILs, stating that they would coordinate to ensure that a common compilation of judgements and other records is filed. The hearing on four PILs, including one challenging the electoral bond scheme, was postponed to April 11 due to a prior letter circulated by the Centre seeking adjournment on the grounds that Solicitor General Tushar Mehta was unavailable.
Previously, on January 31, the Supreme Court stated that the three sets of petitions on the electoral bonds scheme, bringing political parties under the purview of the Right to Information Act, and those challenging amendments to the Foreign Contribution Regulation Act would be heard separately. The court has stated that it will hear the petitions challenging the laws allowing political parties to be funded through the electoral bond scheme in the third week of March. Prior to this, the Supreme Court stated that it would hear a batch of PILs challenging laws allowing political parties to be funded through the electoral bond scheme in the last week of January.
As part of efforts to increase transparency in political funding, electoral bonds have been promoted as an alternative to cash donations to political parties. Lawyer Bhushan had sought an urgent listing of the PIL by the Supreme Court, as well as a directive to the Centre not to open any further window for the sale of electoral bonds while a case involving political party funding and alleged lack of transparency in their bank accounts was pending.
The NGO, which had filed the PIL on the issue of alleged corruption and subversion of democracy through illicit and foreign funding of political parties, as well as a lack of transparency in all political parties’ bank accounts, had moved an interim application in March 2021 before the assembly elections in West Bengal and Assam, requesting that the sale of electoral bonds not be reopened.
On January 20, 2020, the Supreme Court denied an interim stay on the 2018 Electoral Bonds Scheme and asked the Centre and the Election Commission to respond to an interim application by an NGO seeking a stay on the scheme. On January 2, 2018, the government announced the Electoral Bond Scheme.
Electoral bonds may be purchased by a person who is a citizen of India or is incorporated or established in India, according to the scheme’s provisions. Individuals can purchase electoral bonds either individually or in groups.
Only political parties registered under Section 29A of the Representation of the People Act, 1951, and which received at least 1% of the votes cast in the state’s last general election to the Lok Sabha or Legislative Assembly are eligible to receive electoral bonds. According to the notification, an eligible political party may only cash electoral bonds through an account with an authorised bank.
The apex court had in April 2019 also declined to stay the Electoral Bond Scheme and made it clear that it will accord an in-depth hearing on the pleas as the Centre and the EC have raised “weighty issues” having “tremendous bearing on the sanctity of the electoral process in the country”. The Centre and the EC had previously taken opposing positions in court on political funding, with the government wanting to keep donors anonymous and the poll panel arguing for revealing their names for the sake of transparency.
