Supreme Court agrees to examine plea against electoral bond scheme soon

New Delhi: The Supreme Court on Tuesday agreed to hear a plea against the laws allowing political parties' funding through the electoral bond scheme.

Advocate Prashant Bhushan, representing the NGO Association for Democratic Reforms, submitted before a bench headed by Chief Justice N.V. Ramana that it is a critical issue, which requires urgent hearing. He cited a news report where a Calcutta-based company paid Rs 40 crore through electoral bonds to ensure that no excise raids are conducted on it.

The Chief Justice replied that if it was not for Covid, then the court would have heard the matter.

The bench, also comprising Justices Krishna Murari and Hima Kohli, assured Bhushan an early listing of the matter.

In 2017, the NGO had filed a plea alleging subversion of democracy through illicit and lack of transparency in the accounts of all political parties. The government notified the Electoral Bond Scheme on January 2, 2018.

In March, last year, the NGO filed an interim application, in its pending petition, claiming there was a serious apprehension that any further sale of electoral bonds before the upcoming state elections in West Bengal, Tamil Nadu, Kerala and Assam, would further increase illegal and illicit funding of political parties through shell companies.

"The Electoral Bonds Scheme has opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies which can have serious repercussions on the Indian democracy", the plea had argued.

The top court, in January last year, had declined to grant an interim stay on the 2018 Electoral Bonds Scheme. It had also sought replies from the Central government and the Election Commission on the NGO's plea.

The plea said the Finance Act of 2017 had introduced the use of electoral bonds which is exempt from disclosure under the Representation of Peoples Act, 1951, opening doors to unchecked, unknown funding to political parties. It argued that these amendments have removed the existing cap of 7.5 percent of net profit in the last 3 years on campaign donations by companies and have legalised anonymous donations.

"Even loss-making companies now qualify to make donations of any amount to political parties out of their capital or reserves. Further, it opens up the possibility of companies being brought into existence by unscrupulous elements primarily for routing funds to political parties through anonymous and opaque instruments like electoral bonds," argued the plea.