The Supreme Court Wednesday said the problem with electoral bonds scheme is that it provides for “selective anonymity” and “selective confidentiality” as the details are available with the State Bank of India (SBI) and can also be accessed by the law enforcement agencies.
A five-judge constitution bench headed by Chief Justice D Y Chandrachud observed the problem with the scheme would lie if it does not provide a level playing field to political parties and if it suffers from opacity.
While hearing arguments on a batch of pleas challenging the validity of electoral bonds scheme for funding political parties, the apex court said the motive behind the scheme may be perfectly laudable but in an effort to bring in white money into the electoral process, it essentially provides for a “complete information hole”.
“The problem with the scheme is it provides for selective anonymity. It is not completely anonymous. It provides for selective anonymity, selective confidentiality . it is not confidential qua the State Bank of India. It is not confidential qua the law enforcement agencies,” the bench, also comprising Justices Sanjiv Khanna, B R Gavai, J B Pardiwala and Manoj Misra, told Solicitor General Tushar Mehta who was arguing the case for the Centre.
Under the scheme, electoral bonds can be issued or purchased from some authorised branches of the SBI.
“Your argument that look if you were to strike down the scheme, you will go to a situation which existed prior that may not be valid for the reason that we are not precluding the government from coming out with a transparent scheme or a scheme which has a level playing field,” the CJI observed.
During the day-long hearing, he said a big donor would never take the risk of buying electoral bonds for the purpose of tendering it to political parties and never put his or her head on the line by being in the books of account of the SBI.
The CJI said a big donor may disaggregate the donation to people who will purchase electoral bonds with small amounts through the official banking channel and not through cash.
Mehta, who told the bench he would explain the entire scheme, said each and every word in it was very consciously used and what the petitioners have called “anonymity or opaqueness” was neither anonymous nor opaque but was “confidentiality by design”.
“The purpose of ensuring that electoral funding relies less and less on cash component and more and more on accountable component is, of course, a work in progress and we are completely with you. There is no difficulty,” the bench said.
Making it clear that the apex court was not saying what the scheme should be, the bench said maybe the earlier scheme had failed and did not get as much white money into the electoral funding as desired.
Justice Khanna said one of the issues was selective confidentiality and it may be easier for the party in power to get the information about the electoral bonds.
He said because of selective confidentiality, the opposition parties may not know who the donors are but the donors of the opposition parties may be identified at least by the probe agencies.
“We will have to trust at some stage someone as the final fiduciary authority,” Mehta said, adding, “Nobody has taken your lordships through the scheme Nobody can come to know, including the Central government”.
During the arguments, the CJI observed that the scheme did not obviate the possibility of retribution.
The bench said it was not on the issue of whether a particular political party was holier than the other and that it was only testing a question of constitutionality.
Mehta told the bench that every country was grappling with the problem of use of black money in election and politics.
He said country-specific issues were being dealt with by every nation depending upon the circumstances existing there.
The solicitor general said every government did its bit to ensure that some methodology was adopted to eradicate the power of black money or unclean money in the electoral process.
“Having tried several attempts, several mechanism and modes, the menace of black money was not being dealt with as effectively because of the systemic failures and therefore, the present scheme is a conscious and deliberate attempt to ensure clean money coming into the banking system and election ,” he said.
During the hearing, Justice Khanna referred to the submissions advanced by the petitioners’ side about electoral bonds being given by way of kickbacks, bribes or quid pro quo.
The bench asked the Election Commission about the total financing which was required for each general election or for the state elections on an average, and amount which was collected through these bonds and used.
“The issue which may come up is, because we have this opacity with regard to who is funding etc, then if there is any quid pro quo, how do anybody establish it?” it asked.
Responding to the question, Mehta said, “Please, for the time being, for appreciating my arguments, remove the two expressions repeatedly used, ‘anonymity and opacity’. It is a restricted, limited confidentiality which can be opened and the veil can be lifted by judicial direction.”
The hearing remained inconclusive and will continue on Thursday.
During the arguments on Tuesday, the petitioners had told the apex court that the “opaque” electoral bonds scheme for funding political parties will “destroy democracy” as it promotes corruption and does not allow a level playing field between the ruling and opposition parties.
The scheme, which was notified by the government on January 2, 2018, was pitched as an alternative to cash donations made to political parties as part of efforts to bring in transparency in political funding.
According to the provisions of the scheme, electoral bonds may be purchased by any citizen of India or entity incorporated or established in India. An individual can buy electoral bonds, either singly or jointly with other individuals.
Only the political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than one per cent of the votes polled in the last election to the Lok Sabha or a state legislative assembly are eligible to receive electoral bonds.
According to the notification, electoral bonds shall be encashed by an eligible political party only through an account with an authorised bank.
The apex court had, in April 2019, declined to stay the electoral bonds scheme and said it will accord an in-depth hearing on the pleas as the Centre and the EC had raised “weighty issues” that had “tremendous bearing on the sanctity of the electoral process in the country”.