Electoral bonds: Supreme Court to hear on Monday PIL seeking confiscation of donations received by political parties

Satya Prakash

New Delhi, July 21

The Supreme Court will on Monday hear a PIL seeking directions to confiscate donations received by political parties through the electoral bonds scheme that was declared unconstitutional five months ago.

The petition filed by one Khem Singh Bhati is listed before a Bench of Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra on July 22.

The Bench is also likely to take up another petition filed by Common Cause and the Centre for Public Interest Litigation seeking a court-monitored investigation into the electoral bonds scheme.

Bhati has 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, Bhati 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,” Bhati 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 the electoral bonds scheme unconstitutional 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.