CPI(M) Moves Supreme Court For Early Hearing Of Electoral Bonds Case

The Communist Party of India (Marxist) has filed an application seeking early hearing of the writ petition filed by it in 2018 challenging the legality and constitutionality of the anonymous Electoral Bonds Scheme.The application filed through Advocate Shadan Farasat states that the case deals with the "very essence of a fundamental democracy" and impacts voters' right to know the source of political funding.Pointing out that the Supreme Court has large number of working days from July 2021 onwards, the applicant seeks final hearing of the case in July or August 2021, especially so when there are no elections imminent soon.The NGO 'Association for Democratic Reforms' is the other petitioner which has challenged the Electoral Bonds Scheme.In March this year, the Supreme Court had refused to stay the sale of Electoral Bonds ahead of the assembly polls in Kerala, West Bengal, Assam, Tamil Nadu and Puducherry. A bench led by the then Chief Justice of India observed that since the bonds were released without any impediment in the earlier cycles of elections and certain safeguards are introduced by the Court in its order passed in April 2019, there was no need to stay the scheme."...in the light of the fact that the Scheme was introduced on 2.1.2018; that the bonds are released at periodical intervals in January, April, July and October of every year; that they had been so released in the years 2018, 2019 and 2020 without any impediment; and that certain safeguards have already been provided by this Court in its interim order dated 12.4.2019,we do not see any justification for the grant of stay at this stage.Hence both the applications for stay are dismissed", the Court said in the order.Supreme Court's Refusal To Stay Electoral Bonds Undermines Transparency In Electoral Process BackgroundThe petitions were filed in 2017 challenging the provisions of Finance Act 2017 which paved the way for anonymous electoral bonds. The Finance Act 2017 introduced amendments in Reserve Bank of India Act, Companies Act, Income Tax Act, Representation of Peoples Act and Foreign Contributions Regulations Act to make way for electoral bonds.The petitions have been filed by political party Communist Party of India(Marxist), and NGOs Common Cause and Association for Democratic Reforms(ADR),which challenge the scheme as "an obscure funding system which is unchecked by any authority". The petitioners voiced the apprehension that the amendments to Companies Act 2013 will lead to "private corporate interests taking precedence over the needs and rights of the people of the State in policy considerations".However, the case became alive only by March 2019, by which time most of the electoral bonds have been purchased. On April 12, 2019, after several sessions of hearing held during the run up to the 2019 Lok Sabha polls, a three judges bench of the SC comprising the then CJI Ranjan Gogoi, Justice Deepak Gupta and Sanjiv Khanna had directed the political parties to submit the details of donations received to the ECI in sealed cover by May 30. The Election Commission of India has already filed a counter-affidavit in the case expressing its concerns about the anonymous nature of bonds. The ECI has described this a "retrograde step as far as transparency of donations is concerned" and called for its withdrawal.By virtue of the 2017 amendment made to Section 29C of the Representation of Peoples Act 1951(RPA), political parties need not report to ECI the donations received through electoral bonds. The ECI has described this a "retrograde step as far as transparency of donations is concerned" and called for withdrawal of the amendment.The ECI said that if contributions are not reported, it will not be possible to ascertain if political parties have taken donations from government companies and foreign sources, which is prohibited under Section 29B of RPA.The amendments made to Companies Act 2013 were also flagged by the ECI. The amendment to Section 182 of the Act took away the restriction that contribution can be made only to the extent of 7.5% of net average profit of three preceding financial years, enabling even newly incorporated companies to donate via electoral bonds. "This opens up the possibility of shell companies being set up for the sole purpose of making donations to political parties, with no other business consequence of having disbursable profits", said the ECI. Also, the amendment to Section 182(3) abolished the provision that companies should declare their political contributions in their profit and loss accounts. Now, this requirement is diluted to only showing the total expenditure under the head. This would "compromise transparency" and could lead to the "increased use of black money for political funding through shell companies" expressed the ECI. ECI had urged the Ministry to ensure that only profitable companies with proven...

CPI(M) Moves Supreme Court For Early Hearing Of Electoral Bonds Case

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