The Supreme Court on Wednesday said that the electoral bonds scheme only offered a “selective confidentiality”, which does not prevent the ruling party from unearthing the identities of donors to Opposition parties and then hounding them through its investigative agencies.
“There are ways and means for the ruling party to get information about contributions to the Opposition. The Opposition, on the other hand, may not be able to know who your [party in power] donors are, but you will know about their donors. It is easier for the party or person in power to get the information. The Opposition is at a disadvantage to question your donations, but the ruling party is not… That is the grey area here,” Justice Sanjiv Khanna, who is a member of the Constitution Bench headed by Chief Justice of India D.Y. Chandrachud, addressed the Union government, represented by Solicitor-General Tushar Mehta.
Presumption of confidentiality
Chief Justice Chandrachud asked whether the State Bank of India, through which the electoral bonds were purchased, had a statutory obligation to maintain confidentiality.
“You [government] presume that they will keep it confidential because they are bankers?” the Chief Justice asked.
Mr. Mehta said that confidentiality about the identity of the donors and their contributions was key to the electoral bonds scheme. He argued that striking down the scheme would return the country to the earlier regime when black money was cleaned through political donations made in unaccounted cash.
The Solicitor-General said that in the pre-electoral bonds regime, contributors fearing reprisals from rival parties had even gone to the extent of converting clean money to black money to facilitate political donations. “This was disastrous for the economy… The scheme is a conscious and deliberate effort by the government to ensure that clean money goes into banking, the electoral system, and the functioning of political parties,” he submitted.
Suffers from opacity: CJI
Mr. Mehta referred to petitioner Association for Democratic Reforms’ own report of January 2017 that the income of national parties from unknown sources had increased by 313% in just over a decade, from ₹274.13 crore in 2004-2005 to ₹1,130.92 crore in 2014-2015. The donations to regional parties from undisclosed contributors increased by 652%, from ₹37.3 crore to ₹281.01 crore during the same period, he added. He noted that 2.38 lakh shell companies were discovered to be operating during the previous regime of political donations.
“We are not stopping the legislature from coming out with a transparent scheme which relies less on cash and more on accountable channels… This is a work in progress. However, the problem with this scheme is that it does not give a level playing field for parties and suffers from opacity… In the process of bringing white money into the electoral process, we are bringing in an information blackhole. Your motive may be laudable, but the means have to be proportional,” Chief Justice Chandrachud observed.
‘Certain expectations’
Besides, the Chief Justice said, the electoral bonds scheme was not a fail-safe guarantee against retribution coming down on donors to the Opposition. “A party in power will always know how much has come to its coffers and from whom,” the CJI said.
He asked the government how “substantial donations” were always made to the ruling party. “It is with a certain expectation, is it not?” the CJI asked the Union government.
The CJI’s question came even as government records submitted in court by petitioners showed that the BJP has received ₹5271,97,58,000 by way of electoral bonds, while the Indian National Congress got ₹952,29,56,000 between 2017-18 and 2021-22.
The Solicitor-General replied that “more contributions going to the ruling party was the norm. It has always been so from the very beginning”.
‘Donors not doing charity’
Mr. Mehta then offered an explanation, clarifying that he was speaking in his individual capacity and not on behalf of the government. He said that “nobody knows what is in the minds of donors… By and large, it is their own interests. They are not doing charity. The interests are business or market-driven. All big donors, individuals or companies, donate to parties relevant to them”. He said that the mere fact that a party received a larger share of donations did not, by itself, become a ground to challenge the scheme.
The Solicitor-General added that the petitioners’ right to know did not extend to the political affiliations of donors, arguing that such information was part of the donors’ right to privacy.
Justice Khanna asked how confidentiality in the electoral bonds scheme helped in ensuring there was no quid pro quo between the political party and the donor. The judge raised the plausibility of parties circulating unaccounted money lying with them back into the system through proxy political donations.
