Supreme Court has agreed to hear in January 2020 an application filed by the Association of Democratic Reforms (ADR) seeking a stay on the implementation of the Electoral Bond Scheme notified by the Central government on January 2, 2018.
A Bench of Chief Justice SA Bobde, Justice BR Gavai and Justice Surya Kant posted the plea for hearing next month after advocate Prashant Bhushan sought an immediate stay in implementation of Electoral Bonds.
Bhushan told the court that a stay was sought on account of certain facts coming to light and the RBI had flagged concerns with the scheme. He contended that the scheme could lead to funneling of black money and lead to money laundering.
The Bench asked why a stay was sought one year after the scheme was brought in, to which, Bhushan replied that a PIL was filed in the matter last year, and an interim order was passed in the matter in April this year.
The application has sought direction to strike down certain amendments made through Finance Act, 2017, and earlier Finance Act, 2016, both passed as money bills, and which have "opened doors to unlimited political donations, even from foreign companies and thereby legitimising electoral corruption at a huge scale, while at the same time ensuring complete non-transparency in political funding".
"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 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. The said amendments have also removed the existing cap of 7.5 per cent of net profit in the last 3 years on campaign donations by companies and have legalised anonymous donations," application stated.
The application further contended that these bonds are in the nature of bearer bonds and the identity of the donor is kept anonymous.
"Political parties are not required to disclose the name of the person/entity donating to a party through electoral bonds. Since the bonds are bearer instruments and have to be physically given to the political parties for them to encash, parties will know who is donating to them. It is only the general citizens who will not know who is donating to which party. Thus, electoral bonds increase the anonymity of political donations," the plea added.
"The requirement of the donor companies to disclose details in their Profit & Loss account about the name of the political party to which a donation has been made is also removed. Only the total amount of donations to political parties has to be disclosed without naming the political party," it said.
The petition was filed in an already pending case to bring on record that 'certain vital documents that have surfaced recently and have a strong bearing on the case'.
The said documents have been disclosed under the Right to Information Act and have also been reported in the media. According to the ADR website, over 12,000 electoral bonds worth Rs 6,128 crore were sold between March 2018 and October 2019.
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