The Supreme Court on Friday dismissed the plea of a non-governmental organisation seeking a stay on the sale of fresh electoral bonds ahead of state assembly elections in West Bengal, Tamil Nadu, Kerala, Assam and the union territory of Puducherry.
The court observed that there is no justification to stay the electoral bonds since the bonds were allowed to be released in 2018 and 2019 without interruption, and also there are sufficient safeguards at present.
The bench of Chief Justice S.A. Bobde, Justices A.S. Bopanna and V. Ramasubramanium had reserved the order on the application filed by Association for Democratic Reforms (ADR) on Wednesday.
The NGO, in its Public Interest Litigation, had sought that the amendments carried out to the Finance Act be struck down. The ground cited in the petition is that the scheme lacks transparency and the donations made by the way of electoral bonds enjoy 100% tax exemption as they need not be reported to the Income Tax department either.
Advocate Prasant Bhushan, representing ADR, had pointed out that the Reserve Bank of India as well as the Election Commission of India had raised objections over the current Electoral Bond Scheme and written to the government expressing their concern.
Bhushan had submitted that the electoral bonds are like currency notes which dilutes the monopoly of the Reserve Bank of India.It has opened the way for large corporations where they can give bribes to the ruling party anonymously because in return, they get favours from the government. It promotes forgery, cross-border smuggling of counterfeited currency, money laundering through shell companies and, moreover, it promotes bribery and terrorism.
Further he had submitted that since neither the purchaser of the bond nor the political party receiving the donation is required to disclose the donor’s identity, voters will have no idea of how, and through whom, a political party has been funded. This will lead to victimisation of donors who have donated to the other parties other than the ruling party.
Attorney General K.K. Venugopal had submitted that this present Law of Electoral Bonds has been carefully devised by the earlier finance minister Arun Jaitley to eradicate the evil of Black money. In the absence of electoral bonds, donors would have no option but to donate by cash after siphoning off money from their businesses.
Advocate Rakesh Dwivedi, representing the Election Commission had submitted that without electoral bonds, we will go back to the earlier cash system, which was unaccounted. The Electoral Bond system is one step forward, as all transactions are through banking channels.
The electoral bond scheme was notified by the Central Government on January 2, 2018.