SC Bench of Justices BR Gavai & BV Nagarathna Posts Electoral Bonds Case to December 6

Electoral Poll Bench Law Insider

Khushi Bajpai

Published on: October 14, 2022 at 20:43 IST

A number of petitions contesting the anonymous electoral bonds scheme were referred to December 6 by the Supreme Court on Friday.

A group of petitions contesting the electoral bonds programme was being reviewed by a bench made up of Justices BR Gavai and BV Nagarathna. The petitions were brought by the Association for Democratic Reforms, the Communist Party of India (Marxist), and others.

An electoral bond is a bearer bond or promissory note that can be purchased by any individual, business, or group of people as long as they are Indian citizens or have their corporate or legal headquarters there.

The multiple-denomination bonds were created with the express intent of funding the nation’s political parties under the framework that is now in place.

After being last posted on March 26, 2021, the case was finally listed today.

The last time the scheme’s legal challenges made headlines was when counsel Prashant Bhushan brought them up in front of then-Chairman of the Supreme Court of India (CJI) NV Ramana in April of this year.

The Chief Justice of India stated that if it weren’t for the pandemic, the top court would have heard the case and added, “… we would hear it.”

But during his time there, the topic was never listed.

Senior Advocates Kapil Sibal, Gopal Sankaranarayanan, and Advocate Prashant Bhushan, who were representing the petitioners in the brief hearing on Friday, pushed for an early hearing of the case, either the following week or in November, ahead of the December assembly elections in Gujarat and Himachal Pradesh.

Due to many Constitution Bench hearings slated for November, India’s Attorney General R Venkataramani and Solicitor General Tushar Mehta sought that the current case be continued until January 2023.

This request was rebuffed by the petitioners, who also pushed for a quick listing.

The bench ultimately decided to list the case on December 6, 2022.

Background

The introduction of electoral bonds was made possible by the Finance Act of 2017, which also altered the Representation of the People Act, the Income Tax Act, and the RBI Act.

A system of electoral bonds that can be issued by any scheduled bank to fund elections was established under the Finance Act of 2017.

  • The Finance Act was approved as a money measure, hence Rajya Sabha’s approval was not necessary.
  • At least five changes to various legislation introduced by the Finance Acts of 2017 and 2016 are being contested in a number of petitions before the Supreme Court on the grounds that they have made political party funding unrestricted and unlimited.
  • The Association for Democratic Reforms and Common Cause, two NGOs, claimed in a petition that the money bill method was used to avoid the Rajya Sabha, where the governing BJP government lacks a majority.
  • Five significant adjustments that were implemented as a result of the Finance Acts of 2017 and 2016 have been challenged in the petition.

Amendments

  • Sections 31 through Part III of the Reserve Bank of India Act of 1934 and Section 135 of the Finance Act of 2017;
  • Part IV, Section 137 of the Finance Act of 2017 through Section 29C of the Representation of the People Act, 1951;
  • Chapter III, Section 11 of the Finance Act of 2017 and Section 13A of the Income Tax Act of 1961;
  • Part-XII, Section 154 of the Finance Act of 2017 to Section 182 of the Companies Act of 2013;
  • The Foreign Contribution Regulation Act of 2010 (FCRA), Section 2, as amended by the Finance Act of 2016.

Additionally, the petitioners claim that the revisions killed political finance transparency by removing the requirement for names and addresses to be included in yearly contribution reports of political parties filed to the Indian Election Commission.

The abolition of the donation cap by the Companies Act, 2013 change and the Foreign Contribution (Regulation) Act, 2010 amendments to Section 236 have both been contested as opening up the possibility of foreign funding for Indian political parties.

The top court had in March 2021 dismissed an application seeking a stay on the sale of Electoral Bonds.

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