Is Electoral Bonds Scheme Legalising Kickbacks? Are Means Proportional? Supreme Court Asks Union Govt [Day 2]

On the second day of the hearing in the Electoral Bonds case, the Supreme Court questioned if the scheme was legalising 'kickbacks' made to political parties. The Constitution Bench comprising Chief Justice of India DY Chandrachud, Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra also discussed if the bonds were actually confidential or merely "selectively anonymous". During the proceedings, the CJI also remarked– "What we are now doing is that in the effort of bringing white money in the process, essentially, we're providing for a complete information hole! That is the problem. The motive may be laudable. But the question is have you adopted proportional means?". At this point, Solicitor General of Tushar Mehta said, "I take it that your lordships are just putting to me what is their contention." "Obviously!...Our word is the last word only when the judgement is delivered," CJI clarified.The Solicitor General commenced the arguments for Union today, requesting the bench to refrain from using the terms "anonymity" and "opacity" to describe the Electoral Bonds Scheme, as he stated the scheme only ensured "confidentiality" which could be opened by judicial direction. The SG submitted today that the donations made through bonds had to be confidential so as to protect the donor from victimisation and retribution they may face from a political party if the affiliation with another opposing party was made public. He added that the fear of this retribution may also push donors to donate through cash, converting white money into black money, if the donations made through electoral bonds were not kept confidential.As the proceedings came to an end for the day, the bench asked the Union if this scheme was legalising illegal payments intended as compensation for favorable treatment from political parties. The CJI asked–"Is it not liable to give rise to kickbacks or legalising kickbacks? It's a question. Not a hypothesis."Elaborating further, the CJI orally remarked–"In the earlier scheme, a candidate from the party collects 50 crores. He's not gonna deposit 50 crore in the coffers of the party. He has his share in that. Now it goes to the party, doesn't go to the individual. That's the benefit. The party gets it as opposed to the individual. We have no way of knowing whether this is legalising the motive for the in- flow of the fund." To this, the SG responded–"If this scheme didn't come, if I had to pay kickback. I will pay kickback by way of cash. Even considering the case to be a worst case, the amount will now come in white money in channels."The CJI retorted–"You can maintain confidentiality. We take your point that it's designed to ensure that people aren't victimised. We're not saying that that would be a better scheme or the government should adopt the scheme. But if you really wanted to have that scheme and have a level playing field, then all these donations should be given to the Election Commission of India which would then be distributed on an equitable basis!"The SG responded to the same that in such a scenario, "nothing will come and everything will be by cash".As the bench rose after the day long proceeding, the CJI amusedly said–"You're absolutely right! That shows us the motivation for these donations."Element Of 'Confidentiality' Necessary In Donations: SG MehtaAiming to explain the necessity of "confidentiality" under the Electoral Bonds scheme, the Solicitor argued that while previous government initiatives had tried addressing the use of black or unclean cash for political donations, such as tax exemptions and electoral trusts, the same had proven unsuccessful as the donors were insistent on maintaining their confidentiality. He stated that if the element of confidentiality was removed from the scheme, the country would go back to the 2018 regime. To underline the issues with the 2018 regime, the SG took the bench through a report by the ADR on sources of donations to political parties in 2018. He said–"The income of national parties from unknown sources increased by 313% from Rs 274.13 crore during FY 2004-2005 to Rs 1130 crore during FY 2014-15."The CJI said–"The purpose of ensuring that electoral funding relies less and less on cash component and more and more on accountable component is work in progress. We're with you on that. The problem of the scheme is if it doesn't provide a level playing field to political parties and if it suffers from opacity, as the argument for the other side is. This is not to prevent the legislature from coming out with a scheme which deals with these deficiencies. We are not saying what the scheme should be. Maybe the earlier scheme failed. Maybe it didn't get you as much white money into the electoral funding as you otherwise would have liked but look at the safeguards in earlier provisions. What we are now doing is that in the effort of bringing white money in the process, essentially, we're providing for a complete information hole! That is the ...

Is Electoral Bonds Scheme Legalising Kickbacks? Are Means Proportional? Supreme Court Asks Union Govt [Day 2]

Padmakshi Sharma

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