The Supreme Court refused to order an interim stay on the electoral bond scheme but decided to hear the matter after two weeks. A bench of Chief Justice S A Bobde and Justices B R Gavai and Surya Kant gave the Centre and the Election Commission two weeks to reply to an application by NGO Association for Democratic Reforms (ADR), which had sought the stay. Turning down the request, the CJI observed that if a similar plea for stay had been argued earlier and rejected, there was no question of ordering the stay now.

What

  1. Appearing for ADR, Advocate Prashant Bhushan contended that with the Delhi elections scheduled on February 8, the scheme will be opened again to enable political parties to receive funds. Bhushan alleged that unaccounted money was being channelled under the scheme and that it had become a source for corruption.
  2. Appearing for the Election Commission, Senior advocate Rakesh Dwivedi said the arguments were being repeated. He requested the court to grant four weeks to file its reply.
  3. ADR and NGO Common Cause had moved the Supreme Court in September 2017 against the scheme
  4. Acting on these petitions, a three-judge bench headed by the then CJI Ranjan Gogoi in an interim order on April 12, 2019 directed political parties which have received donations through electoral bonds to “forthwith” submit the details of these bonds to the Election Commission.
  5. The Supreme Court ordered that the parties should furnish to the commission “detailed particulars of the donors as against each Bond; the amount of each such bond and the full particulars of the credit received against each bond, namely, the particulars of the bank account to which the amount has been credited and the date of each such credit”.
  6. Subsequently, ADR filed the plea for interim stay and referred to alleged objections raised by the RBI to the scheme. It said documents obtained under RTI Act showed that RBI “gave repeated warnings to the government: against the scheme, “stating that it has the potential to increase black money circulation, money laundering, cross-border counterfeiting and forgery”.

Flashback

  1. The Finance Bill, 2017 introduced “electoral bonds” — interest-free bearer bonds (like Promissory Notes) that can be purchased from specified branches of the State Bank of India in a designated 10-day window in every quarter of the financial year. 
  2. The scheme, which was notified on January 2, 2018, allows individuals and domestic companies to present these bonds — issued in multiples of Rs 1,000, 10,000, 1 lakh, 10 lakh, and 1 crore — to political parties of their choice, which have to redeem them within 15 days. 
  3. Buyers of the bonds have to submit full KYC details at the time of buying. But the beneficiary political party is not required to reveal the identity of the entity that has given it the bond(s).