The Supreme Court on Friday said that fresh electoral bonds can be issued from April 1, reported NDTV.
The decision was based on the Election Commission’s argument that it approved the use of the bonds since, without it, political parties would deal in hard cash. The poll panel, however, also said it was keen on bringing in more transparency into the transactions involving the bonds.
The court also dismissed the application seeking a ban on the sale of electoral bonds ahead of the upcoming State Assembly elections in West Bengal, Assam, Kerala, Tamil Nadu and the Union Territory of Puducherry, reported Bar and Bench.
“In light of the scheme introduced in 2018 and the fact they have been released in 2018, 2019, and 2020 without impediment, we do not see any reason to stay the issuance at this stage,” the court said.
The Supreme Court had reserved its order on Wednesday on the plea filed by non-governmental organisation Association for Democratic Reforms. The NGO had expressed “serious apprehension” that the sale of electoral bonds ahead of the Assembly polls would lead to an increase in illegal funding of political parties through shell companies.
Electoral bonds are monetary instruments that citizens or corporate groups can buy from a bank and give to a political party, which is then free to redeem them for money. The Centre had first introduced electoral bonds in January 2018.
However, before reserving the order on Wednesday, the court had expressed apprehension that the money might be misused. “There are political parties who do terrorism,” CJI Bobde said. “We are not sure of what we are saying but this angle of possibility of funding of terrorism through funding needs to be examined.”
Attorney General KK Venugopal, representing the Centre, claimed that since the electoral bonds scheme was launched in 2018, black money has been kept under check as all political funding is made through banking channels and not in cash. Bonds can be purchased only through cheque or a Demand Draft, so there is no black money, he argued.
Senior advocate Rakesh Dwivedi, who represented the Election Commission, said that the poll panel was not opposed to these bonds as such, but raised concerns over the anonymity.
Advocate Prashant Bhushan, appearing for the petitioner, emphasised that the sale of electoral bonds was a form of “legalised corruption” that will pave way for shell companies to essentially offer bribes. He had also highlighted the objections raised by the Reserve Bank of India. “The RBI has said that this system of bonds is a type of weapon or medium for financial scams,” Bhushan argued.
The case so far
The Association for Democratic Reforms had filed a writ petition in 2017, challenging the provisions of the Finance Act that cleared the way for anonymous electoral bonds.
In November, the ADR had filed a plea to expedite the hearing on the matter in light of the Bihar Assembly elections. It had then pointed out that a notification of January 2, 2018, stipulated the sale of electoral bonds in the months of January, April, July and October months of each year. But, the sale window was not opened in April and July in 2020. However, it was opened in October, just ahead of the Bihar elections.