Supreme Court flags concerns over electoral bonds

The Supreme Court on Wednesday flagged its concern that political events might misuse crores of rupees acquired as donations by electoral bonds to bankroll violent protests and even terror.

The court docket requested the federal government whether or not there’s any “control” over how these donations have been utilized by political events.

“Suppose there is a political party which wants to buy electoral bonds and finance a protest. What is the control of the government on how the money is put to use? A party receives electoral bonds worth ₹100 crore — what is the guarantee that they will use the entire funds for political purpose alone and not for terrorism or other activities? Funds can be misused… We would like you, as the government, to look into that aspect. They [political parties] can use the funds for activities outside their political agenda… along with election expenditure, you [a political party] can also start a violent protest,” Chief Justice of India Sharad A. Bobde, heading a three-judge Bench, addressed Attorney General K.K. Venugopal.

Mr. Venugopal, showing for the federal government, mentioned solely events registered underneath the Representation of the People Act might obtain donations by electoral bonds, and that they need to not have secured lower than 1% of the votes polled within the earlier elections.

The court docket mentioned it didn’t need to “get into politics” nor have been its feedback geared toward any specific occasion.

The trade got here throughout a digital court docket listening to of an utility filed by the Association for Democratic Reforms, represented by advocate Prashant Bhushan, to remain the sale of electoral bonds scheduled between April 1 and April 10, previous to the essential Assembly elections in 5 States, together with West Bengal and Tamil Nadu.

“Electoral bonds scheme introduces anonymity in political donations at many levels. The sale of bonds in April should be stopped,” Mr. Bhushan urged.

Mr. Venugopal mentioned the sale was introduced after getting permission from the Election Commission of India.

The Election Commission intervened so as to add that it supported the electoral bonds scheme. “The Election Commission is supporting electoral bonds or we will go back to the pre-existing situation of donations coming in by cash,” senior advocate Rakesh Dwivedi, for the ballot physique, mentioned.

Chief Justice Bobde then requested whether or not the purchasers of electoral bonds disclosed whether or not the cash paid was black or white.

“When a businessman goes and buys bonds, does he have to disclose whether he purchases them with white or black money? Does he have to pay tax?” the Chief Justice requested Mr. Venugopal.

“Buyers have to use white money. The purchase is through bank drafts, cheques or electronic transfer,” Mr. Venugopal replied.

But Mr. Bhushan intervened to submit that although the unique buy of bonds could possibly be performed utilizing white cash, anyone might anonymously re-purchase the bonds from the unique purchaser and drop it at a political occasion workplace with anybody none the wiser.

“Nobody will know who purchased the bonds from the original buyer. The scheme facilitates kickbacks,” Mr. Bhushan argued.

At this level, the CJI questioned whether or not Mr. Bhushan’s arguments have been based mostly on “political morality”.

“It is not just a question of political morality, but a question of democracy. The electorate needs to know the source of funds and antecedents of candidates. Transparency goes to the very heart of democracy,” Mr. Bhushan replied.

“Most people are conscious of the role of money in elections,” the CJI acknowledged.

Initially, throughout the listening to, the CJI mentioned the electoral bonds scheme was not restricted to the ruling occasion, others might additionally obtain donations.

“It is bribe for a favour, the ruling party runs the government,” Mr. Bhushan defined.

“We understand, but bonds can be given to other parties, like a party who may come to power or States where there are other parties in power,” Chief Justice Bobde endured.

“But the government would know if money is given to other parties,” Mr. Bhushan mentioned.

The CJI requested whether or not Mr. Bhushan was arguing for “complete anonymity”.

“No, no, I want complete transparency, which is absolutely necessary in a democracy. The electoral bonds scheme opens the way for direct bribery and anonymous donations. It is quid pro quo for favours done or to be done. Amendments were made through the Finance Bill because the government did not have the majority in the Rajya Sabha,” Mr. Bhushan responded.

The CJI turned to Mr. Venugopal and requested him about this “selective anonymity”.

“We do not have the names of the donors on its face. The then Finance Minister Arun Jaitley introduced the scheme to rid politics and elections of the influence of black money. There was huge expenditure for elections,” Mr. Venugopal mentioned.

The Attorney General mentioned political events weren’t submitting revenue tax returns on time. He mentioned it was solely after the Supreme Court’s intervention that political events began submitting returns.

He mentioned now “every penny is accounted for”.

The court docket reserved the plea for orders.