Supreme Court Agrees To Hear Plea To Stay Electoral Bonds On March 24

The Supreme Court on Thursday agreed to hear on March 24 an application seeking stay of the release of new set of electoral bonds, ahead of assembly polls in Kerala, West Bengal, Pudhucherry and Assam.Advocate Prashant Bhushan, appearing for Association for Democratic Reforms, mentioned the application before the Chief Justice of India today for urgent listing."I wanted to mention Electoral Bonds matter. which has been pending here since 2017. The last hearing took place two years ago. Whenever electoral bonds are released, we file application to stay. Now new set of bonds are to be released in April. We want the application to be heard very urgently. ECI, RBI have all stated that these bonds allow transfer of illicit black money from shell companies", Bhushan told the CJI.The CJI asked if the plea for stay was refused earlier.Bhushan informed that in April 2019, the Supreme Court had sought for information from political parties regarding the donations received through electoral bonds in a sealed cover."Stay was not rejected. The Court said it was not the stage to consider stay. They said at they will ask parties to furnish the details to court in sealed cover. That was two years ago...after that two documents have emerged - one from the RBI, another from the ECI, both of which say these bonds are very detrimental to democracy", Bhushan informed the bench.The CJI then said that the matter can be listed on next Friday, March 26. However, Bhushan sought for an earlier date, saying that the Centre will delay the matter by seeking time to reply. He pointed out that the new bonds are slated for release on April 1.At this juncture, CJI called Solicitor General of India, Tushar Mehta, and told him about the mentioning being made."Any request for time to reply is not delaying the matter", the SG replied. The CJI suggested that the matter can be posted on next Wednesday.The SG indicated that the Attorney General of India might be appearing in the matter. 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...

Supreme Court Agrees To Hear Plea To Stay Electoral Bonds On March 24

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