The Supreme Court on Friday admitted a petition filed by the CPI(M) and party general secretary Sitaram Yechury to strike down the government’s Electoral Bond Scheme 2018 and amendments in the Finance Act, 2017, which allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.
A three-judge Bench led by Chief Justice of India Dipak Misra asked the Centre, the Ministry of Law and Justice and the Election Commission of India to respond to the writ petition filed under Article 32 of the Constitution by lawyers Raju Ramachandran and Shadaan Farasat. The admission of the case is an extraordinary relief for the party as Article 32 petitions are confined to private individuals.
The petition submits that the amendments made in the Finance Act “jeopardises the very foundation of Indian democracy.”
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“The introduction of electoral bonds by the Finance Act by which details of donations made to political parties are not reported or recorded by the parties and whose purchasers identity remain hidden from the public realm is the creation of an obscure funding system which is unchecked by any authority,” the petition contended.
The petition said that the requirement of disclosure of electoral bonds, the names and addresses of their contributors in the account statement of political parties is omitted by the amendment to the Representation of the People Act of 1951.
Further, the petition said the system of corporate donations has been made correspondingly “secretive by removing the requirement of disclosure of the names of political parties to whom contributions have been made by amendment to the Companies Act, 2003.”
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“In effect, at both ends of the transaction, neither the contributor nor the recipient of the fund is required to disclose the identity of the other... Quid pro quo arrangements, not unknown to Indian polity, will only be strengthened,” the petition said.
The amendment to the Companies Act results in the removal of any ceiling on the amount for donation by a company to a political party. It allows a company to be eligible as a political contributor regardless of whether the company is making profits or losses.
Challenging the passage of the amendments as a Money Bill, the petition recalls the words of the Finance Minister that the changes in laws were meant to introduce transparency and reduce the usage of black money in financing political parties. But the electoral bond scheme is “vague, arbitrary and a violation of the fundamental right to information.”
Instead of incentivising political party contributors to forego black money, the scheme actually allows them to continue to bury their unaccounted wealth with political parties, the petition said.