New Delhi: The Supreme Court will decide on April 11 whether to refer petitions challenging the validity of the contentious electoral bond scheme to a Constitution bench after the petitioners said the matter regarding funding of political parties strikes at the root of democratic functioning in the country.
On Tuesday, a bench of Chief Justice of India (CJI) Dhananjaya Y Chandrachud and justice PS Narasimha heard the petitions but did not proceed with the hearing after the Union government requested time to file a response to the various petitions challenging the scheme.
The lead petition in the case was filed in 2017 by Association for Democratic Reforms (ADR), a non-profit, followed by a spate of petitions by Communist Party of India (Marxist), Congress leader Jaya Thakur and other individuals.
Advocate Shadan Farasat, appearing for CPI(M), urged the court to consider referring the matter to a Constitution bench of a minimum of five judges. He framed seven questions of seminal constitutional importance arising in thee matter and said: “This issue impacts the democratic polity and funding of political parties that requires an authoritative pronouncement by a Constitution bench.”
Farasat was supported by senior advocate Dushyant Dave appearing for ADR. “The issue raised by us goes to the core of how a democracy functions as majority of funds are going to only one political party,” Dave said.
The note submitted by Farasat raised two basic issues for the court’s consideration – whether a citizen has a right to know about funding of political parties under Article 19(1)(a) . If so, whether the electoral bonds scheme is justified in restricting this right as the government can restrain the right under Article 19(1)(a) only on the grounds permitted by the Constitution. These include sovereignty and integrity of India, security of the state, friendly relations with foreign states, public order, decency, morality, contempt, defamation or incitement to an offence.
Since funding of political parties is crucial to the functioning of a democracy, the note argued the matter raised questions of constitutional significance as “democracy” and “free and fair elections” form part of the basic structure of the Constitution.
“We will post it on April 11,” the bench said. “On that day, we can decide whether to refer the matter to a constitution bench.” The court allowed the government to file its response before the next date of hearing.
The electoral bond scheme was implemented in 2018 as a source of political funding. Under the scheme, the identity of the donors is kept anonymous. The bonds were issued by the State Bank of India and donations made under this scheme by corporate and even foreign entities enjoy 100% tax exemption.
Although the Centre has already filed its response to the ADR petition, it sought time to consider the prayers in the accompanying petitions as well.
ADR has opposed the scheme since its inception, claiming that anonymous route of funding amounted to “legitimising bribery” as corporates could fund the party in power in a state or Centre as a matter of quid pro quo.
As the matter remained pending without any stay operating on the sale of electoral bonds, ADR moved applications to oppose any fresh opening of window for sale of these bonds ahead of assembly elections.
In April 2019, the top court directed all political parties to submit details of receipts of the electoral bonds to the Election Commission in a sealed cover. This was done as an interim measure till the petitions on the validity of the bonds were finally decided.
The Election Commission supported the scheme and has been filing reports in sealed covers to the court in the past indicating the receipt of funds by various political parties.
According to ADR, political parties received ₹6,500 crore through the scheme between 2017-18 and 2020-21, with around ₹4,238 crore of this going to the Bharatiya Janata Party. Around ₹2,700 crore of donations using electoral bonds were made in 2021-22 of which the BJP received ₹1,033 crore.