Electoral bonds “provide (only) selective anonymity… confidentiality” since purchase records are available with the State Bank of India and can be accessed by investigative agencies, the Supreme Court noted Wednesday, as it responded to the government’s argument that absent provision for anonymous donations, a large volume of political funding could revert to black money. The court was conducting a second day of hearing of challenges to the legal validity of the electoral bonds scheme.
“If I gave to Party ‘A’ and Party ‘B’ formed the government, I’d (fear) victimisation… so safest course was pay cash. Practicality requires… so I’m not victimised. So, my clean money, is converted to black money… and that is disastrous for the economy,” Solicitor General Tushar Mehta argued.
The provision for anonymous donation, therefore, is needed to protect donors from “victimisation and retribution”, if the party they did not donate to won the election, the government argued.
To this, Chief Justice DY Chandrachud pointed out, “The problem with the scheme is that it provides (only) selective anonymity. It is not confidential qua SBI… not confidential qua law enforcement…”
The court pointed out that under existing laws, a company had “to show how much it has contributed” overall, if not to any particular party. But, since that amount would reflect in the company’s balance sheet, in a macro sense, any party therefore “knows how much has come (from the company)”.
The Chief Justice also expressed doubt over the government’s argument that declaring the scheme void would revert to the situation described above – where “the safest course (is) to pay by cash”.
Overall, though, the court said it agreed that “the purpose of (the bonds) is to ensure electoral funding relies less and less on cash component and more on accountable component”.
“(This) is a work in progress. We are with you on that,” the Chief Justice said.
However, the court underlined its belief that in the process of bringing more white money into the political funding space, the electoral bonds scheme seems to be “a complete information hole”.
“The motive may be laudable. But have you (the government) adopted proportional means?”
“The questions is if we accept this submission – that if we require disclosure of identity, whether we like it or not, our political system is such that there will be victimisation,” the court said, highlighting two points. “One, whether by giving confidentiality you ensure greater public interest is served. Second, what happens to selective confidentiality when person in power can access (donor data).”
The government’s counter-argument, though, was, “Anything else other than keeping it confidential will not be able to address problem of victimisation. And victimisation incentivises payment in cash.”
The court was also told, firmly, “There is complete confidentiality.”
Earlier today, petitioners challenging the scheme argued it creates an “artificial distinction between bank transfer by honest (individual)… and another who wants anonymity”. This can’t be, they said, since there is, otherwise, no “intelligible differentia” between the forms of each donation.
Petitioners picked up from where they stopped Tuesday, when advocate Prashant Bhushan argued the scheme defeats citizens’ fundamental right to know about political parties’ sources of funding, and Advocate Shadan Farasat, appearing for the Communist Party of India Marxist, said the scheme was designed to “re-route” black money funding to run via anonymous electoral bonds.
On Monday, the government said citizens do not have such a right to information regarding source of funds. Attorney General R Venkataramani told the court there can be no general right to know “anything and everything”, without being subjected to reasonable restrictions.
Notified by the government in 2018, the scheme was seen as an alternative to cash donations made to political parties as part of efforts to bring in transparency in political funding. The bonds can be purchased by any Indian citizen or domestically-incorporated entity. And only political parties with more than one per cent of votes polled in the last Lok Sabha or state election can receive them.
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