Professor Satya Narayan Misra in Bhubaneswar, July 15, 2023: With Supreme Court |Chief Justice D Y Chandrachud in the saddle, there is a whiff of hope that responsible dissent by civil society organizations like PUCL & ADR would have priority of the court, being the custodian of fundamental rights. One issue that has been hanging fire since 2019 is the challenge to the opaque Electoral Bond Scheme (EBS) which was put as a part of the Finance Bill in a diabolical manner.

ADR has been relentlessly pursuing its writ to scrap the EBS as unconstitutional, given its potential to vitiate free & fair elections, the undue advantage to the ruling BJP at the Centre, and the manifest opacity of the donors. The electoral bond scheme which was introduced as a money bill in budget 2017-18 amended several provisions in the Company Act 2013, RPOP Act 1951, FCRA 2010, and IT Act 1961 must rank as the most flagrant violation in the electoral process by emasculating the role of Election Commission of India to conduct free & fair elections under Article 324 of the Constitution.

With several state elections on the anvil including the general election ten months later, the Supreme Court must decide on the contours, content & constitutional validity of the EBS scheme, by a constitution bench without further loss of time. The scheme as per the government contention was introduced to cleanse the system of political funding. It will be a non-redeemable debt instrument in the manner of a promissory note, an interest-free banking instrument issued in multiple of 10k to 10 million by specified branches of SBI.

They will have a life of 15 days and issued four times a year, January, April, July, and October. Those parties who could muster more than 1% of votes in the last election would be eligible to draw them. Section 29C of the RPOP Act has been amended so that the candidates do not have to render a statement of funds received under EBS to the ECI. Section 13A of the IT Act 1961 was amended exempting candidates from keeping account of money received through EBS. It also removes the cap of 7.5% of net profit during the last three years.

The FCRA (2010) has been amended allowing foreign companies to provide funds even if their share in the Indian company exceeds 50%. In a nutshell, the entire scheme was legally firewalled to be unlimited, unaccounted, and unidentified political funding by the corporates!

Chastened by the draconian change in electoral funding and legitimized opacity that shrouded it, ADR, Common Cause (NGOs), and CPI filed a PIL in the Supreme Court in 2018 to stop the issuance of such bonds. Prashant Bhushan who spearheaded the arguments against the scheme contended that the scheme allows donors of political parties to maintain anonymity which is not healthy for democracy. Besides, the party in power will get more funds as it will be reciprocated with favors.

He also brought to notice the serious reservation that RBI and ECI had about the scheme. Mr. Venugopal, the Attorney General, on the other hand, defended the scheme as it will curb the menace of unaccounted money during the election. The supreme court did not hold up the operation of the scheme but ordered all parties who have received donations through electoral bonds to submit the particulars of the donors to the ECI in sealed covers.

The matter came again came up for hearing after several tranches of ESB have been issued when BJP has been the prime beneficiary. In the 2019 elections, BJP received 76% of total bonds amounting to Rs 3355 cr & 9% went to Congress. Interestingly in 2021-22, while the BJP received Rs 1033 cr, Mamta Banerjee’s TMC received Rs 528 Cr, as against Rs 253 cr by the Congress.

As per the answer to the RTI query, total donations so far (May 2023) are of the order of Rs 12979 Cr, of which the overall share of BJP is 68%. In the recent assembly elections for Karnataka, 1470 electoral bonds worth Rs 970 Cr were sold in April as against Rs 115 cr in the previous election in 2018. EBS clearly shows how this opaque scheme is a money spinner compared the earlier Electoral Trust Scheme introduced by the Congress in 2013. CJI Bobde, Justice Bopanna & Justice Ram Subramaniam found no justification for the stay of the scheme.

They, however, conceded that there are weighty issues that require indepth hearings regarding the sanctity of the electoral process. They did note that ECI & RBI have made some reservations but they have not opposed the scheme itself. This raises the basic issue if the right to information & right to informed voting are part of the right to freedom of speech and expression or not. Several species of rights unenumerated in Article 19(1)(a) have branched off from the genus of the article through the process of interpretation by the Supreme Court.

In SP Gupta vs UOI (1981) Chief Justice Bhagawati wrote: Right to know is implicit in the right of free speech. Disclosure of information in regard to the functioning of the government must be the rule, secrecy the exception. However, the most definitive ruling in the context of the election was given in ADR Vs UOI (2002) when it made it mandatory for candidates to reveal their financial and criminal antecedents.

The present EBS is a retrograde measure that legitimizes crony capitalism, militates against transparency, incentivizes corrupt practices, and bolsters the nexus between politicians and big business. As things stand, the present scheme has not only undermined the authority of the ECI and impaired the ability to ensure free and fair elections on a level playing field, it has also diluted its powers of supervising funds of political parties.

In November 2022 when the government decided to open a fresh window ahead of the Gujrat and Himachal Pradesh elections, no approval of ECI was taken when the model code of conduct had kicked in. The conduct of the Supreme Court in the EBS case has been so far disappointing. The noted jurist Fali Nariman wrote in his autobiography ‘Before Memory Fades’:’ Judiciary is like oxygen in the air. It is not enough for the judges to be independent of the executive. They must be seen to have courage.’

The moment of reckoning has come for CJI DY Chandrachud to constitute a constitution bench to scrap the opaque EBS, provide a level playing field for all parties & facilitate ECI to conduct free & fair elections. Elections in India in recent years have been hugely besmirched by BJP’s overdrive to accentuate the communal divide. The recent endeavour is to resurrect the call for introducing the Uniform Civil Code. Opaque funding by big corporates through EBS to BJP, with an eye on quid pro quo, must not roil the electoral process further.