A Bench headed by Chief Justice of India SA Bobde agreed to list the matter for early hearing after it was mentioned by Advocate Prashant Bhushan in light of the upcoming Assembly Elections to West Bengal, Kerala, Tamil Nadu, Assam and Puducherry.
“New set bonds to be issued from April 1 for coming elections. We need our case to be heard urgently. Election Commission has said these bonds allow illegal funds to be diverted to shell companies,” Bhushan said.
“Wasn’t the stay request rejected (earlier)?” asked CJI Bobde.
“Not per se. Election Commission says bonds are detrimental to our democracy,” replied Bhushan.
“We will list this next Friday,” CJI said.
Bhushan pointed out that bonds are set to be released on April 1.
“It won’t be April 1 by Friday. Mr Tushar Mehta, we are going to grant circulation,” the CJI told Solicitor General.
SG Mehta, however, told the Court that it may list the matter on Wednesday next week while also informing the Bench that Attorney General KK Venugopal will defend the Central government.
“You can list on Wednesday. AG will appear,” Mehta said.
The NGO through its application filed on March 9, 2021 sought urgent listing of its 2017 writ petition challenging the Electoral Bonds scheme.
The application by the NGO stated that there is 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 petitioner seeks that no further opening of window for the sale of EBs be allowed during the pendency of the instant writ petition,” reads the urgency application.
ADR has informed the top court that the case was last heard in January 2020 and even after a similar application was filed on December 27, 2020, seeking urgent hearing of the case, the matter was not listed.
An electoral bond is an instrument in the nature of a promissory note or bearer bond which can be purchased by any individual, company, firm or association of persons provided the person or body is a citizen of India or incorporated or established in India.
The bonds which are in multiple denominations are issued specifically for the purpose of contribution of funds to political parties.
Electoral bonds were introduced through Finance Act 2017, which in turn amended three other statutes – the RBI Act, the Income Tax Act and the Representation of People Act – for enabling introduction of electoral bonds.
The Finance Act, 2017 introduced a system of electoral bonds to be issued by any scheduled bank for the purpose of electoral funding.
The Finance Act was passed as a money bill, which meant that it did not require the assent of Rajya Sabha. This, the petitioner submitted in the 2017 petition, was done to bypass the Rajya Sabha, where the ruling BJP government does not have a majority.
The petitioners also submitted that the consequence of the amendments was that annual contribution reports of political parties to be furnished to the Election Commission of India need not mention names and addresses of those contributing by way of electoral bonds, thereby killing transparency in political funding.
The removal of cap on donations by the amendment to the Companies Act, 2013 and the amendments made in Section 236 of the Foreign Contribution (Regulation) Act, 2010 were also challenged as opening the avenues of foreign contribution to Indian political parties.