EC Opposes Stay on Electoral Bonds as SC Reserves Order on Plea to Restrain Fresh Sales

The Election Commission, while advocating for transparency, said that the stay on bonds would mean going back to the era of unaccounted cash transfers.

New Delhi: The Supreme Court on March 24 reserved order on a fresh petition seeking a stay on the opening of the window for sale of electoral bonds before the elections in West Bengal, Kerala, Assam, Tamil Nadu and Puducherry.

The Association for Democratic Reforms had filed the petition which was being heard by CJI S.A. Bobde and Justices A.S. Bopanna and V. Ramasubramaniam. In the fresh plea, ADR had cited that a Public Interest Litigation (PIL) pertaining to funding of political parties and alleged lack of transparency in their accounts was already pending.

According to a report by LiveLaw, the Election Commission, while advocating for transparency, told the court that it was opposed to the stay on bonds. “The issue of transparency can be considered at the final argument stage, and there should be no interim stay,” ECI counsel and senior lawyers Rakesh Dwivedi told the Supreme Court.

The Election Commission said that the stay on electoral bonds would mean going back to the era of unaccounted cash transfers, which would cause further damage.

On January 20, 2020, the apex court had refused to grant an interim stay on the 2018 electoral bonds scheme and sought responses of the Centre and the Election Commission on an interim application by ADR, seeking a stay on the scheme.

Also read: Transparency Activists Lament SC’s Refusal to Grant Interim Stay on Electoral Bonds

In an expansive report, LiveLaw highlighted portions of the arguments and back and forth between ADR advocate Prashant Bhushan and the bench.

Saying that the anonymous bonds “legalised corruption,” Bhushan primarily raised the objections earlier put forward by the Reserve Bank of India, and the Election Commission to such a scheme.

When the Chief Justice reportedly said that any party and not just the one in government could avail themselves of bonds, Bhushan said, “[R]uling party is in a position to give favours. So, companies will support ruling parties, as they are in a position to give benefits.”

Bhushan further said that the government is uniquely positioned to track donors’ identity but such a person remains anonymous to everyone else. Bhushan, however, stressed that “complete anonymity” is not what he is looking for.

Bhushan also highlighted that the method of bringing the laws was a subversion of process. “These amendments are made through the Finance Bill, in order to avoid going to the Rajya Sabha where the government did not have a majority. This cannot be done through Finance Bill,” he said.

LiveLaw further reported that the CJI said, “If what you are saying is correct, we will have to strike down the law. How can it be done through an interim order?”

To this, Bhushan said that temporarily a stay on the new window is what he seeks.

Also read: Ahead of Polls in 4 States, SC Needs to Prioritise the Challenge to Electoral Bonds

After Bhushan highlighted that the EC too had said that bonds should be reported to them and the RBI had been concerned that bonds could be transferred to facilitate money laundering and kickbacks, the CJI said, “Your arguments at this stage is more on the point of political morality. This question of morality or ethics regarding black money, was it not considered by this court in the RK Garg case…”

Bhushan, however, urged that this was a question not of morality, but democracy.

The Attorney General for India, K.K. Venugopal, who appeared for the Centre said that the Election Commission had allowed for the sale of bonds. He said electoral bonds were a move away from black money as they used banking channels, to which Bhushan said subsequent purchasers of electoral bonds could well use cash.

“That can be said of any transaction, unless you make it non-transferable,” CJI said to Bhushan’s point.

The CJI also reportedly said, “This angle of possibility of funding of terrorism through funding needs to be examined. It is possible that funds through this mechanism are diverted by particular people for other purposes with an agenda…You can start a protest, with this funding. You can start many things.”

He added, “We don’t want to get into political arena and don’t want to comment on any political party. Suppose, there is a party which wants to finance a protest, which has the potential of violence, can’t they use bonds to fund it?”