Electoral bonds: SC junks petition seeking review of its order against confiscation of donations received by political parties

The Supreme Court has dismissed a petition seeking review of its decision rejecting petitions demanding confiscation of Rs 16,518 crore received by political parties under the 2018 Electoral Bond Scheme that was declared unconstitutional last year.

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"Having gone through the review petition and also the documents enclosed, we do not find any good ground and reason to review the order dated August 2, 2024. Accordingly, the review petition is dismissed,” a Bench of Chief Justice Sanjiv Khanna, Justice JB Pardiwala and Justice Manoj Misra said in its March 26 order, dismissing the review plea filed by Khem Singh Bhati.

Contending that the top court’s decision did not properly account for the retrospective nullification of the electoral bonds scheme, Bhati had submitted that its existence should not have been a ground for the dismissal of the petition seeking confiscation as it was considered non-existent from the start according to the top court’s ruling in the ADR case.

Highlighting discrepancies in the judicial reasoning of the August 2 order, the review petition said it indirectly modified the Constitutional Bench judgment by dismissing petitions based on the assumption of quid pro quo between donors and political parties as speculative.

Evidence disclosed under court direction clearly established such reciprocal arrangements, contradicting the court’s earlier conclusions, contended the petitioner.

Introduced through the Finance Act, 2017, an electoral bond is a bearer instrument like a Promissory Note, which can be purchased by an Indian citizen or an Indian company whose identity would remain secret from everybody except the SBI from whom it has to be purchased. Once purchased, the buyer can give it to a political party, which could encash it using its bank account. The scheme was notified on January 2, 2018.

However, ahead of the 2024 Lok Sabha election, a five-judge Constitution Bench led by CJI DY Chandrachud had declared the scheme unconstitutional on February 15, 2024. The Bench said it infringed upon the right to information of the voter by anonymising contributions through electoral bonds and is violative of Article 19(1)(a) (right to freedom of speech and expression).

Maintaining that “the integrity of the electoral process is a necessary concomitant to the maintenance of the democratic form of government,” the Bench had said, “While quid pro quo and clientelistic corruption erodes quality and integrity of government decision making, the power of money may also pose a threat to the electoral process itself.”

Bhati had originally demanded that a committee headed by a former Supreme Court judge should be constituted to investigate alleged quid pro quo between donors and the public authorities at the instance of political parties.

Alternatively, Singh had wanted the top court to direct the Income Tax Department to reopen assessment of all the beneficiary political parties from the financial year 2018-2019 to 2023-2024 and disallow the exemptions of income tax claimed by them under Section 13A of the Income Tax Act. He had demanded that income tax should be levied on the amounts received by them through electoral bonds, along with interest and penalty.