Supreme Court puts ‘voters’ right to know’ on hold, allows Electoral Bonds

The Supreme Court on Friday allowed the Government’s plea for allowing the scheme of Electoral Bonds to continue, without giving a judgment on the Attorney General’s argument that ‘Donors to political parties have a right to secrecy but voters do not have the right to know’.

The court, however, directed all political parties to forthwith give details of donors who contributed through electoral bonds, amounts received from them, details of payment received on each bond to the Election Commission of India by May 30, a week after the Lok Sabha election results are out.

Electoral Bonds, the court held, is a weighty issue and required in-depth hearing. ‘Court had to ensure that the interim measures do not tilt the balance,’ it said. The court said that it had taken into consideration the Election Commission’s submissions passing interim directions

The court, however, disallowed the finance ministry schedule which showed five days in excess for purchasing electoral bonds this election year. The five days, it directed, be deleted from the schedule.

The order disappointed not just activists opposed to the opaque bonds but also a section of the jurists. Constitutional lawyer Apar Gupta tweeted, “ The principal stakeholder who require protection, whose interest is to be served during elections is not the political party or it’s funders, it is the voter. Details of funding by electoral bonds disclosed in a sealed cover, is no disclosure at all. Curious to learn how privacy is being cited as a reason for non-disclosure given governments across party lines have at every step forced personal data expropriation from individuals on the basis of checking corruption, leakages, crime, national security, tax evasion...”

The petitioner, Association for Democratic Reforms (ADR), had sought either a stay on the issuance of the bonds or that the identities of the donors be made public.

Last week, in a Facebook post, Finance Minister Arun Jaitley called the scheme a legitimate and transparent mode of political funding. He dismissed the criticism against the bonds as a result of the tendency among NGOs to exaggerate and misrepresent, and spread misinformation about electoral bonds.

“The donors have the right to secrecy but voters have no right to know,” is what the Government had conveyed to the Supreme Court on Thursday.

Attorney General K.K. Venugopal was quoted as saying, “ 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..."
In a fascinating exchange in the Supreme Court on Thursday, the Attorney General had confirmed that political parties are not obliged to disclose details of the payments received through the bonds even to the Election Commission. The counsel for the Election Commission told the court that it would have information disclosed by political parties but conceded that the amendments made the disclosure discretionary on the part of the parties.

"Why do you want to keep the identity (of the purchaser of the bonds) a secret?", had 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.

“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.

Explaining how black money works, Justice Sanjiv Khanna had observed, “This is not how black money works. There are a series of companies through which the money passes- it is deposited under some and passes through a chain of transactions and then is finally transferred. And the argument taken is that you can't go to the source. KYC is not a certification as to the genuineness of the transaction,"

The issue is now likely to come up for hearing later this year, in June or July or after the summer recess.