Supreme Court refuses to stay sale of electoral bonds ahead of Assembly polls

No reason to do so now, says top court.

March 26, 2021 11:53 am | Updated December 04, 2021 10:36 pm IST - NEW DELHI

A view of the Supreme Court of India. File

A view of the Supreme Court of India. File

The Supreme Court on Friday refused to stay the sale of electoral bonds before Assembly elections in crucial States like West Bengal and Tamil Nadu.

The judgment by a Bench led by Chief Justice of India Sharad A. Bobde said the scheme began in 2018 and continued in 2019 and 2020 without any impediments.

Chief Justice Bobde, who read out the judgment, said the court found no reason to stall the sale of electoral bonds now.

The judgment came on an urgent application moved by NGO Association for Democratic Reforms , represented by advocate Prashant Bhushan, to stay the sale scheduled between April 1 and 10.

The NGO, also represented by advocate Neha Rathi, voiced serious apprehensions that sale of electoral bonds before Assembly elections would “further increase illegal and illicit funding of political parties through shell companies”.

Attorney General K.K. Venugopal had said the sale was announced after getting permission from the Election Commission of India (ECI).

Comment | Here is why the electoral bonds scheme must go

The ECI registered its support for the electoral bonds scheme during the last hearing in the case earlier this week.

“The Election Commission is supporting electoral bonds or we will go back to the pre-existing situation of donations coming in by cash,” senior advocate Rakesh Dwivedi, for the poll body, said.

NGO’s arguments

The poll body’s stand was quite surprising as the NGO had consistently maintained that both the Reserve Bank of India and the ECI had objected to the electoral bond scheme.


“Data obtained through RTI has shown that illegal sale windows have been opened in the past to benefit certain political parties... There is a serious apprehension that any further sale of electoral bonds before the upcoming State elections in West Bengal, Tamil Nadu, Kerala and Assam would further increase illegal and illicit funding of political parties through shell companies,” the NGO had submitted.

It said the electoral bonds scheme had “opened doors to unlimited political donations, even from foreign companies and thereby legitimising electoral corruption at a huge scale, while at the same time ensuring complete non-transparency in political funding”.

Govt. view

The government had notified the scheme on January 2, 2018, and defended electoral bonds as an antidote to the influence of black money in politics and anonymous cash donations of huge amounts.


The Ministry of Finance affidavit in the top court had dismissed the ECI’s version that the invisibility afforded to benefactors was a “retrograde step” and would wreck transparency in political funding.

The government affidavit had said the shroud of secrecy was a product of “well thought-out policy considerations”. It said the earlier system of cash donations had raised a “concern among the donors that, with their identity revealed, there would be competitive pressure from different political parties receiving donation”.

The Supreme Court, in the previous hearing on Wednesday, flagged its concern that political parties could misuse crores received as donations through electoral bonds to bankroll violent protests or even terror.

The court had asked how the government intended to flex “control” on how political parties would use the donations. 

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