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Cull Out Information From Bond Purchaser & Political Party; Do 'Match The Following' :SC Says Electoral Bond Anonymity Can Be Pierced

LIVELAW NEWS NETWORK
26 March 2021 4:08 PM GMT
Cull Out Information From Bond Purchaser & Political Party; Do Match The Following :SC Says Electoral Bond Anonymity Can Be Pierced
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"All that is required is a little more effort to cull out such information from both sides (purchaser of bond and political party) and do some "match the following". Therefore, it is not as though the operations under the Scheme are behind iron curtains incapable of being pierced"

It is not as though the operations under the Electoral Bond Scheme are behind iron curtains incapable of being pierced, the Supreme Court remarked while it refused to stay the release of the fresh set of electoral bonds from April 1 for the assembly polls in West Bengal, Kerala, Tamil Nadu, Assam and Puducherry.The CJI led bench observed that, as the Scheme mandates...

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It is not as though the operations under the Electoral Bond Scheme are behind iron curtains incapable of being pierced, the Supreme Court remarked while it refused to stay the release of the fresh set of electoral bonds from April 1 for the assembly polls in West Bengal, Kerala, Tamil Nadu, Assam and Puducherry.

The CJI led bench observed that, as the Scheme mandates political parties to file audited statement of accounts and also since the Companies Act requires financial statements of registered companies to be filed with the Registrar of Companies, the purchase as well as encashment of the bonds, happening only through banking channels, is always reflected in documents that eventually come to the public domain.

The bench also comprising Justices AS Bopanna and V. Ramasubramanian observed that the financial statements of companies registered under the Companies Act, 2013 which are filed with the Registrar of Companies, are accessible online on the website of the Ministry of Corporate Affairs for anyone.

"They can also be obtained in physical form from the Registrar of Companies upon payment of prescribed fee. Since the Scheme mandates political parties to file audited statement of accounts and also since the Companies Act requires financial statements of registered companies to be filed with the Registrar of Companies, the purchase as well as encashment of the bonds, happening only through banking channels, is always reflected in documents that eventually come to the public domain. All that is required is a little more effort to cull out such information from both sides (purchaser of bond and political party) and do some "match the following". Therefore, it is not as though the operations under the Scheme are behind iron curtains incapable of being pierced", it said.

Scheme is intended to ensure that everything happens only through banking channels.

"Despite the fact that the Scheme provides anonymity, the Scheme is intended to ensure that everything happens only through banking channels. While the identity of the purchaser of the bond is withheld, it is ensured that unidentified/ unidentifiable persons cannot purchase the bonds and give it to the political parties. Under clause 7 of the Scheme, buyers have to apply in the prescribed form, either physically or online disclosing the particulars specified therein. Though the information furnished by the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, it is subject to one exception namely when demanded by a competent court or upon registration of criminal case by any law enforcement agency. A non-­KYC compliant application or an application not meeting the requirements of the scheme shall be rejected", the bench added.


Bonds are not tradable

The court also rejected the contention that that though the first purchase may be through banking channels for a consideration paid in white money, someone may repurchase the bonds from the first buyer by using black money and hand it over to a political party.

"But this contention arises out of ignorance of the Scheme. Under Clause 14 of the Scheme, the bonds are not tradable. Moreover, the first buyer will not stand to gain anything out of such sale except losing white money for the black.", the court said.

Apprehension that foreign corporate houses may buy the bonds and attempt to influence the electoral process in the country, is misconceived 

The also observed that the apprehension that foreign corporate houses may buy the bonds and attempt to influence the electoral process in the country, is also misconceived as under Clause 3 of the Scheme, the Bonds may be purchased only by a person, who is a citizen of India or incorporated or established in India. 

Background

The application seeking stay was filed by NGO 'Association for Democratic Reforms'. The petitions were filed in 2017 challenging the provisions of Finance Act 2017 which paved the way for anonymous electoral bonds.  On April 12, 2019, a three judges bench comprising the then CJI Ranjan Gogoi, Justices 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. 


 

 Case Title : Association for Democratic Reforms vs Union of India and others

Coram : Chief Justice of India SA Bobde, Justices AS Bopanna and V Ramasubramaniam
Citation : LL 2021 SC 183







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