The Supreme Court of India refuses 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).
Electoral bond is an interest-free bearer instruments used to donate money anonymously to political parties. A bearer instrument does not carry any information about the buyer or payee and the holder of the instrument (which is the political party) is presumed to be its owner.
The bonds are available for purchase by any person (who is a citizen of India or incorporated or established in India) for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government.
Since these Electoral bonds were released in 2018 and 2019 without interruption, and sufficient safeguards are there, there is no justification to stay the electoral bonds at present.
The Electoral Bond Scheme acts as a check against traditional under-the-table donations as it insists on cheque and digital paper trails of transactions, however, several key provisions of the scheme make it highly controversial.
Several petitions challenging the legality of the issue of bonds have been pending in the court for years now but are yet to be heard due to the huge waiting list of cases.
The Supreme Court expressed concern over the possible misuse of money generated by political parties through electoral bonds to spread violence and anarchy in the country.
Using electoral bonds is quite simple. The bonds will be issued in multiples of Rs 1,000, Rs 10,000, Rs 100,000 and Rs 1 crore (the range of a bond is between Rs 1,000 to Rs 1 crore).
These will be available at some branches of SBI. A donor with a KYC-compliant account can purchase the bonds and can then donate them to the party or individual of their choice.
Now, the receiver can encash the bonds through the party's verified account. The electoral bond will be valid only for fifteen days.
Election Commission’s stand on electoral bonds
The Election Commission, in its submission to the Standing Committee on Personnel, Public Grievances, Law and Justice in May 2017, had objected to the amendments in the Representation of the People (RP) Act, which exempt political parties from disclosing donations received through electoral bonds.
It described the move as a “retrograde step”. In a letter written to the Law Ministry the same month, the Commission had even asked the government to “reconsider” and “modify” the above amendment.
Asking the government to withdraw the new proviso, the EC had written, “In a situation where the contribution received through electoral bonds are not reported, on perusal of the contribution report of political parties, it cannot be ascertained whether the political party has taken any donation in violation of provision under Section 29(b) of the RP Act which prohibits the political parties from taking donations from government companies and foreign sources.”
