The Supreme Court on Thursday after striking down the Electoral Bonds Scheme which allowed for anonymous funding to political parties, ordered the State Bank of India (SBI) to stop issuing Electoral Bonds immediately.
It further ordered that Electoral Bonds which are within the validity period of 15 days but which have not been encashed by the political parties yet shall be returned by the political party to the purchaser. The issuing bank shall then refund the amount to the purchaser’s account, it ordered.
“There is also a legitimate possibility that financial contributions to a political party would lead to a quid pro quo arrangement because of the close nexus between money and politics. The Electoral Bond scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymous contributions through Electoral Bonds are violative of Article 19(1)(a),” the verdict stated.
The apex court further said that while the privacy of donors is important, transparency in political funding cannot be achieved by granting absolute exemptions.
Hence, it struck down the Electoral Bonds Scheme saying its anonymous nature is violative of Right to Information under Article 19(1)(a) of the Constitution.
The infringement of the right to information is not justified, it said.
The Constitution bench held that the Electoral Bonds scheme will help the party in power to gain an advantage.
An Electoral Bond is an instrument in the nature of a promissory note or bearer bond which can be purchased by any individual, company, firm or association of persons provided the person or body is a citizen of India or incorporated or established in India. The bonds are issued specifically for the purpose of contributing funds to political parties.
The Centre in an affidavit had said that the methodology of the Electoral Bonds scheme are “completely transparent” mode of political funding and it is impossible to get black money or unaccounted money.
According to the Electoral Bond Scheme, 2018, an electoral bond is issued in the nature of a promissory note, which shall be bearer in character. A bearer instrument is one which does not carry the name of the buyer or payee, no ownership information is recorded and the holder of the instrument (i.e. political party) is presumed to be its owner, explains Association for Democratic Reforms.
The scheme allows individuals — who are citizens of India — and domestic companies to donate these bonds — issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore — to political parties of their choice.
These bonds have to be redeemed by the political parties within 15 days. A person being an individual can buy bonds, either singly or jointly with other individuals.
*With Agency Inputs
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Published: 15 Feb 2024, 03:06 PM IST