Electoral bonds: PIL in Supreme Court demands confiscation of donations received by political parties

Satya Prakash

New Delhi, July 6

Almost five months after the Supreme Court struck down the Electoral Bonds Scheme launched in 2018, a PIL has urged it to issue directions to confiscate donations received by political parties through electoral bonds.

Petitioner Khem Singh Bhati demanded that a committee headed by a former Supreme Court judge should be constituted to investigate alleged quid pro quo between donors and the public authorities at the instance of political parties.

Alternatively, Singh wanted the top court to direct the Income Tax Department to reopen assessment of all the beneficiary political parties from the financial year 2018-2019 to 2023-2024 and disallow the exemptions of income tax claimed by them under Section 13A of the Income Tax Act. He demanded that income tax should be levied on the amounts received by them through electoral bonds along with interest and penalty.

“The political parties used electoral bonds as a tool and method to extract money, by conferring undue advantage to corporate houses by way of compromising their criminal prosecution or granting State largesse, at the cost of public exchequer and against public interest,” Singh submitted in his petition settled by senior advocate Vijay Hansaria.

Introduced through the Finance Act, 2017, an electoral bond is a bearer instrument like a Promissory Note which can be purchased by an Indian citizen or an Indian company whose identity would remain secret from everybody except the SBI from whom it has to be purchased. Once purchased, the buyer can give it to a political party, which could encash it using its bank account. The scheme was notified on January 2, 2018.

However, ahead of the 2024 Lok Sabha election, a five-judge Constitution Bench led by CJI DY Chandrachud had on February 15 declared unconstitutional the electoral bonds scheme that allowed individuals and companies to make unlimited anonymous donations to political parties, saying it infringed upon the right to information of the voter by anonymizing contributions through electoral bonds are violative of Article 19(1)(a) (right to freedom of speech and expression.

Maintaining that “the integrity of the electoral process is a necessary concomitant to the maintenance of the democratic form of government,” the Bench had said, “While quid pro quo and clientelistic corruption erodes quality and integrity of government decision making, the power of money may also pose threat to the electoral process itself.”

The top court had also ordered the State Bank of India to stop issuing electoral bonds immediately and submit all details to the Election Commission which shall make all donations public.