Donors Have Right To Secrecy, Voters Have No Right To Know About It: AG Submits, SC To Pronounce Order Tomorrow On Electoral Bonds

The Centre on Thursday faced some tough queries from the Supreme Court over its Electoral Bonds Scheme. Attorney General K. K. Venugopal had yesterday sought to defend the Electoral Bonds as a means of donations to political parties, advancing that they serve in eradicating black money from political funding, and to prevent the donors from being victimized. "Why do you want to keep the identity (of the purchaser of the bonds) a secret?", asked Chief Justice Ranjan Gogoi. "All industrialists have to knock on the doors of the government from time to time for licenses, exemptions etc. If it is known that they gave 50 crores or 100 crores to one party, they would be targeted by the rival parties", replied the AG. Addressing Senior Advocate Rakesh Dwivedi who was representing the Election Commission, the Chief Justice asked if the Commission could produce the figures in the light of the AG's contention that affluent donors have so far been compelled to make contributions in cash because of which a large amount of unaccounted money is introduced in the economy. "They distribute bottles of liquor, biryani etc at rallies. Every single method of wooing the voters is employed, mostly legal means but some even illegal...that is the way of life...The biggest fraud is perpetrated in the returns filed for election expenses! What is 20-30 crores for each constituency as is revealed to the ECI under 77 (section 77 of the RPA, 1951)?", submitted the AG. "In 1971, there was Purushothama Reddiar's case where the Supreme Court found that a lot of money (much over the prescribed limit of Rs. 2,000) had been incurred over the shamiyana, speakers, etc and the Pondicherry Assembly election was set aside. This is a reality! Black money is being generated deliberately as kickbacks. We have seen investigations going on- as to whom I have given a contract for a building or a bridge, I could say increase the price by 10% and give me the 10% as funding!" "If the government seeks to stem the flow of black money, are they justified? Will the court sit (to review) it? At the end of the elections, Your Lordships will know if black money has gone down and has the payment to political parties by cheque or EBs increased? If previously only 50 crores were disclosed by a national party as election expenditure, now upto 500 crores are being shown. We were at 94 in Transparency International's corruption list and have now come to 78! The experiment needs the support of the court! My friend (Advocate Prashant Bhushan for the petitioner) has very cleverly said that the court may direct disclosure if not stay the EB, which is as good as stopping the scheme! This is a matter where Your Lordships may not interfere and let it play out till the elections and then the new government and the economists will review and Your Lordships will get the report...", urged the AG. "Nobody knows that 95% of the EBs are going to the ruling party (as alleged by Mr. Bhushan)! Is he saying that other parties are receiving and spending only cash? For campaigning, rallies, road shows etc, others are also spending the same money. They are also using helicopters and wooing crowds! Where is this money coming from? From rightful sources or black money? Historically, it has only been black money!" "Your Lordships have seen how elections are fought. Whatever one party says or does, the other says no! There is no question of the minds of political parties coming together to say this is in the interest of the country. This is a matter for Your Lordships to wait and see what happens...", he pleaded. "When the bank is issuing the EB, there is a format for application. Once it is issued, it has a (serial) number. Is the identity of the purchaser available to the bank?", inquired Chief Justice Gogoi. "Yes, as all purchasers fill up the KYC. And then a random ten-digit number is allotted and all the documentation as to each purchaser is placed in in the vault in a sealed cover at the end of the day. At the end of the month, it is sent to a central repository in Bombay. When the political parties receive the bonds, they can see the number in UV light", replied the AG. "When the bank issues an EB on the application of 'X', 'Y' or 'Z', does the bank know which bond is issued to 'X' and which to 'Y'? Kindly sit down and reflect. It has wider ramifications on Income Tax law if the identity of the purchaser of the bond, who has donated 100s of crores of rupees, is not known. Then your entire exercise against black money is useless", observed the Chief Justice. The AG asserted that it a bank-to-bank transaction and white money alone that can be transferred. The CJ pressed about contributions by shell companies, in view of the amendment to Section 182 of the Companies Act taking away the restriction that donations can be made only to the extent of 7.5% of net average profit of three preceding financial years. The ECI had warned that this would...

Donors Have Right To Secrecy, Voters Have No Right To Know About It: AG Submits, SC To Pronounce Order Tomorrow On Electoral Bonds

MEHAL JAIN

"This is a matter where Your Lordships may not interfere and let it play out till the elections and then the new government and the economists will review and Your Lordships will get the report..."AG requested.

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