'Absolutely transparent mode of political funding': Centre to Supreme Court on electoral bond scheme

The Centre told the Supreme Court on Friday that the electoral bonds scheme is an absolutely transparent mode of political funding and it is impossible to get any black or unaccounted money through it. Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding.

"The methodology of receiving money has been so transparent. We will explain step by step. Now it is impossible to get any black or unaccounted money. It is the most transparent system. To say it affects democracy does not hold water," Solicitor General Tushar Mehta, appearing for the Union of India, told a bench of Justices B R Gavai and B V Nagarathna.

The top court was hearing a PILs by NGO, Association for Democratic Reforms, Communist Party of India (Marxist) and other petitioners. Advocate Prashant Bhushan, appearing for the NGO, said this is a very interconnected issue which affects democracy.

He said the matter should be heard urgently as electoral bonds are being issued just before every state election. Advocate Kapil Sibal, appearing for one of the petitioners, said the issue should be heard by a larger bench.

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The top court said it would examine on December 6 whether a batch of pleas challenging laws permitting funding of political parties through the electoral bond scheme should be referred to a larger bench. The apex court said this is an important matter which requires detailed hearing and sought assistance of the Attorney General and Solicitor General in the matter.

Bhushan, appearing for the NGO, on April 5 had mentioned the matter before the then CJI N V Ramana, saying the issue was critical and needed an urgent hearing. The top court had agreed to list the NGO's plea for hearing but it did not come up before any court.

Earlier, Bhushan had sought an urgent listing of the PIL from the apex court on October 4 last year seeking a direction to the Centre not to open any further window for sale of electoral bonds during the pendency of a case pertaining to funding of political parties and alleged lack of transparency in their accounts.

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The NGO, which had filed the PIL in 2017 on the alleged issue of corruption and subversion of democracy through illicit and foreign funding of political parties and lack of transparency in the accounts of all political parties, had filed an interim application in March this year before the assembly polls in West Bengal and Assam seeking that window for sale of electoral bonds be not reopened.

The NGO, in its fresh application filed in the pending petition, had claimed that there is a serious apprehension that any further sale of electoral bonds before the upcoming Assembly elections, including in West Bengal and Assam, would further increase illegal and illicit funding of political parties through shell companies.

On January 20 last year, the apex court had refused to grant interim stay on the 2018 Electoral Bonds Scheme and sought responses of the Centre and the Election Commission on an interim application by the NGO seeking stay on the scheme. The government notified the Electoral Bond Scheme on January 2, 2018.

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According to provisions of the scheme, electoral bonds may be purchased by a person, who is a citizen of India or incorporated or established in India. An individual can buy electoral bonds, either singly or jointly with other individuals.

Only political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than one percent of votes polled in the last general election to the House of the People or the Legislative Assembly of the State, are eligible to receive electoral bonds.

According to the notification, electoral bonds shall be encashed by an eligible political party only through a bank account with an authorised bank. The apex court had in April 2019 declined to stay the Centre's Electoral Bond Scheme 2018 and made it clear that it would accord an in-depth hearing on the pleas as the Centre and the EC have raised "weighty issues" having "tremendous bearing on the sanctity of the electoral process in the country".

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The Centre and the EC had earlier taken contrary stands in the court over political funding, with the government wanting to maintain anonymity of donors of bonds and the poll panel batting for revealing names of donors for transparency.