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Law

Citizens Have No Fundamental Right to Know of Source of Political Funding: AG to SC

R. Venkataramani also said that the Supreme Court would be entering the domain of policy if it tried to regulate electoral bonds. 

New Delhi: Attorney General of India R. Venkataramani on Sunday (October 29) submitted before the Supreme Court that citizens have no fundamental right to know the sources of electoral bonds funds.

The AG was posting his views on petitions challenging the opaque nature of electoral bonds. The matter is posted for hearing in front of a Chief Justice D.Y. Chandrachud-led bench on October 31. The bench also comprises Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala and Manoj Misra.

Venkataramani also said that the Supreme Court would be entering the domain of policy if it tried to regulate electoral bonds.

“Firstly, there can be no general right to know anything and everything without being subjected to reasonable restrictions. Secondly, the right to know as necessary for expression can be for specific ends or purposes and not otherwise,” AG said, according to LiveLaw.

He added that just because courts have ruled that citizens have the right to know a candidate’s criminal antecedents, that cannot be extended to knowledge about funding through electoral bonds.

The electoral bonds scheme does not infringe upon any individual’s rights, the AG continued, and cannot be said to be repugnant to any right under Part III of the Constitution.

“The scheme in question extends the benefit of confidentiality to the contributor. It ensures and promotes clean money being contributed. It ensures abiding by tax obligations. Thus, it does not fall foul of any existing right. A constitutional Court reviews State action only if it impinges upon existing rights and not because State action has not provided for a possible right or an expectation howsoever desirable,” he said.

Background

The lead petition, filed by the Association of Democratic Reforms (ADR), challenges the Finance Act, 2017 which was enacted as a money bill and introduced the electoral bond scheme for the purpose of electoral funding. The Act also removed the previous limit of 7.5% of the company’s average three-year net profit for political donations.

As per the scheme, a company is not required to name the political parties to which such contributions are made. The donors’ names are also not revealed to the public.

The petitioners argue that these amendments will result in opaqueness, heighten the odds of conflict of interest and also drastically increase black money and corruption. The petitioners also claim that this will lead to the creation of shell companies and rise of benami transactions to channelise undocumented money into the political and electoral process in India.

On October 10 during the preliminary hearing, counsel Prashant Bhushan for the petitioners alleged that due to non-decision on the matter by the court continuously since 2017, the ruling party has been enjoying the fruits of the scheme in every general election to the Lok Sabha as well as the assembly elections, thus upsetting the level playing field.

Bhushan submitted that the scheme, apart from having been fraudulently introduced through a money bill, also seeks to legalise anonymous sources of political funding. He alleged that the scheme violates the right to information about funding of political parties, and promotes corruption. When a legislative measure is introduced by the government as a money bill, it does not require approval from the Rajya Sabha.

Bhushan explained that political parties received funds most likely from companies which received some benefit or the other from them. He told the bench that as corruption-free society is a facet of Article 21 of the Constitution, as held by the court, source of funding cannot be anonymous.

The State Bank of India (SBI), as the designated bank, sells these bonds in the denominations from Rs 10,000 to Rs 1 crore to anybody, either in cash or through bank transfers (bank account to be opened if there is a cash deposit), with the source of purchase kept in wraps. While the source is known to SBI, it is obliged not to disclose it.

Details regarding who donates to which political party and what amount are not in the public domain.