The Supreme Court on Monday refused to grant an immediate stay on the electoral bonds scheme ahead of the Delhi Assembly elections, reported Bar and Bench. The bench of Chief Justice of India SA Bobde and Justices BR Gavai and Surya Kant said the matter will be heard again in two weeks.

The top court was hearing a clutch of pleas on the matter, filed by the Communist Party of India (Marxist) and non-government organisation Association for Democratic Reforms. The ADR had earlier challenged the electoral bond scheme, but had now sought an immediate stay on its implementation ahead of the Delhi polls, in light of more revelations by recent media reports.

The top court sought a response from the Centre and the Election Commission on the pleas.

Electoral bonds are monetary instruments that citizens or corporate groups can buy from the State Bank of India and give to a political party, which is then free to redeem them for money. These bonds are anonymous. The scheme was notified in January 2018.

To bring in the scheme, the Centre had amended various provisions of the Reserve Bank of India Act, Representation of People Act, Income Tax Act, Companies Act and Foreign Contribution Regulation Act. These amendments were passed as a money bill and hence the assent of Rajya Sabha, where the Bharatiya Janata Party does not have a majority, was not required.

ADR filed a writ petition in 2017 challenging these five amendments. The news stories that the NGO cited to seek an immediate stay included a five-part series in the Huffington Post based on documents received by Right to Information activist Commodore Lokesh Batra, which exposed claims regarding the bonds anonymity and revealed the Reserve Bank of India’s and Election Commission’s reservations about them.

In its stay application, ADR said the central bank had given repeated warnings to the government against the electoral bond scheme, stating that it has “the potential to increase black money circulation, money laundering, cross-border counterfeiting and forgery”.

The application also referred to letters written by former Reserve Bank Governor Urjit Patel to then Finance Minister Arun Jaitley, stating that the “issue of EBs as bearer instruments in the manner currently contemplated has the possibility of misuse more particularly through use of shell companies”. The objections raised by the poll body were also highlighted in the application. The commission had described this a “retrograde step as far as transparency of donations is concerned” and called for withdrawal of the amendment.

The CPI(M)’s petition contended that the amendments “jeopardise the very foundation of Indian democracy”, reported The Print. It said: “[The] confluence of uncapped corporate resources funding political parties can only lead to private corporate interests taking precedence over the needs and rights of the people of the state in policy considerations.” The petitions also questioned the passing of the Finance Act as a money bill, bypassing the Rajya Sabha.

The Election Commission had told the top court that it is not opposed to electoral bonds, but to the anonymity of donations. “We are not opposed to the electoral bonds but we are opposed to anonymity, we want full disclosure and transparency,” advocate Rakesh Dwivedi had said.

On April 12, the Supreme Court had directed all political parties to submit details of political donations received through the electoral bonds scheme to the Election Commission by May 30. The top court asked the parties to submit details of donors, donations received from each donor, and payments received on each bond in a sealed cover to the poll body.

During the hearing in April, Attorney General KK Venugopal, on behalf of the Centre, told the Supreme Court that voters do not need to know where the money for political parties comes from. The Centre argued that the electoral bonds scheme was introduced to eliminate the use of black money in elections. Venugopal said the government has ensured that identity of those donating funds through electoral bonds is not disclosed.

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