New Delhi, April 5: In a significant development which could impact elections and funding of political parties across the country, the Supreme Court of India on Tuesday said that it will hear the case challenging the laws enabling the issuance of electoral bonds, reports Bar and Bench.
The matter was mentioned by advocate Prashant Bhushan before Chief Justice of India (CJI) NV Ramana.
“It has been reported today morning that Calcutta based company has paid ?40 crores through electoral bonds to stop excise rate. It is distorting democracy,” Bhushan said.
“If it was not for COVID etc then I would have heard all of this,” CJI Ramana said.
“It is critical,” said Bhushan
“Yes, we will hear it,” the CJI assured.
If it was not for COVID etc then I would have heard all of this.
CJI NV Ramana
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 such 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.
Various petitions are pending before the top court challenging at least five amendments made to different statutes through Finance Act 2017 and Finance Act 2016 on the ground that they have opened doors to unlimited, unchecked funding of political parties.
The Finance Act was passed as a money bill, which meant that it did not require the assent of Rajya Sabha.
The petition by two NGOs – Association for Democratic Reforms and Common Cause said that the money bill route was adopted in order 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 the cap on donations by the amendment to the Companies Act, 2013 and the amendments made to Section 236 of the Foreign Contribution (Regulation) Act, 2010 were also challenged as opening the avenues of foreign contribution to Indian political parties.
The top court had in March 2021 dismissed an application seeking a stay on the sale of Electoral Bonds.
