New Delhi: The Supreme Court Wednesday said it would consider according hearing in January a plea of an NGO seeking a stay on the electoral bond scheme meant for collection of funds by political parties to contest polls.
A bench, comprising Chief Justice S A Bobde and Justices B R Gavai and Surya Kant, was told by lawyer Prashant Bhushan that around Rs 6,000 crore had been collected under the scheme, which have been red-flagged by institutions like the Reserve Bank of India and the Election Commission.
Bhushan, appearing for the Association for Democratic Reforms, said the scheme needed to be stayed as it had become akin for accepting bribe, money laundering and channelisation of black money.
“We have filed an application for stay of this scheme which is being misused by the party in power,” he said, adding that the RBI and EC had already expressed their views on it.
“We will see this in January,” the bench said.
The government had notified the Electoral Bond Scheme January 2, 2018. As per its provisions, electoral bonds may be purchased by a person, who is a citizen of India or incorporated or established in India.
The ADR has said in its plea that certain amendments made in the Finance Act, 2017, and the earlier Finance Act, 2016, both passed as money bills, have opened doors to unlimited political donations even from foreign companies.
It said such amendments legitimised electoral corruption at a huge scale, while time ensuring complete non-transparency in political funding.
“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 three years on campaign donations by companies and have legalised anonymous donations,” said the plea.
It said the use of electoral bonds for political donations was a cause for concern because these bonds were in the nature of bearer bonds and the identity of the donor was 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,” according to the plea.
The ADR said it had already filed a PIL on the 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.
It said that through the amendments, the requirement of the donor companies to disclose details in their profit and loss account about the name of the political party to which a donation had been made was also removed.
“Only the total amount of donations to political parties has to be disclosed without naming the political party,” it said.
The plea said with the removal of the 7.5 per cent cap on the net profits of the last three years of a company, now corporate funding had increased manifold as there is no limit on the amount a company can donate.
It said that even loss-making companies now qualify to make donations of any amount to political parties out of their capital or reserves.
“Further, it opens up the possibility of companies being brought into existence by unscrupulous elements primarily for routing funds to political parties through anonymous and opaque instruments like electoral bonds.
“This has increased the opacity of funding of political parties, and the danger of quid pro quo and if any benefits are passed on to such companies or their group companies by the elected government,” it said.
This has a major negative implication on transparency in political funding and are in violation of citizens’ right to information, a fundamental right, it added.
PTI