Supreme Court Refuses to Stay Fresh Sale of Electoral Bonds

A bench headed by Chief Justice S.A. Bobde noted that bonds were allowed to be released in 2018 and 2019 without interruption, adding, 'Sufficient safeguards are there.'

New Delhi: The Supreme Court on Friday said it did not find any justification to stay fresh sales of electoral bonds ahead of assembly elections in four states and one Union Territory, dismissing the application filed by the NGO Association for Democratic Reforms (ADR).

A bench headed by Chief Justice S.A. Bobde declined to stay the sale of the electoral bonds, noting that bonds were allowed to be released in 2018 and 2019 without interruption and that ‘sufficient safeguards are there’.

The Centre had earlier told the bench, also comprising Justices A.S. Bopanna and V. Ramasubramanian, that the bonds would be issued from April 1 to April 10. Elections in West Bengal, Kerala, Assam, Tamil Nadu and Puducherry are set to be held between March 27 and April 28.

The NGO had claimed that there is a serious apprehension that any further sale of electoral bonds before the upcoming assembly elections, including in West Bengal and Assam, would increase “illegal and illicit funding of political parties through shell companies”.

The court had reserved its order on March 24.

During the hearing, the Election Commission of India told the court that it was opposed to a stay on the sale of 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.

Senior advocate Prashant Bhushan, appearing for ADR, said that the anonymous bonds “legalised corruption,” raising the objections that the Reserve Bank of India and the Election Commission put forward when the Centre was mulling their implementation.

According to LiveLaw, the petitions challenging provisions of the Finance Act, 2017 – which paved the way for anonymous electoral bonds – were filed in 2017. The Act introduced amendments to the Reserve Bank of India Act, Companies Act, Income Tax Act, Representation of Peoples Act and Foreign Contributions Regulations Act to make way for electoral bonds.

Petitions were filed by the Communist Party of India (Marxist), and NGOs Common Cause and ADR, which challenged the scheme as “an obscure funding system which is unchecked by any authority”.

The petitioners felt that the amendments to the Companies Act, 2013 will lead to “private corporate interests taking precedence over the needs and rights of the people of the State in policy considerations”.

However, the case became alive only by March 2019, by which time the sale of electoral bonds had already occurred.