SC refers to Constitution bench pleas against Electoral Bond scheme

New Delhi [India]: The Supreme Court on Monday referred to a five-judge Constitution bench a batch of pleas challenging the government's Electoral Bond scheme which allows for anonymous funding to political parties.

A bench of Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra sent the matter for adjudication to the Constitution bench in view of the importance of the issue.
"In view of the importance of the issue raised, and with regard to Article 145(4) of the Constitution of India, the matter be placed before a bench of at least five judges. The matter will be retained on October 30, 2023," said the CJI on Monday.

Earlier, the bench had said that it would consider if the Electoral Bonds case should be referred to a five-judge Constitution bench.

The petitioners' counsel had said the matter was of Constitutional importance and could impact democratic polity in the country and funding of political parties and demanded that it should be sent to a five-judge Constitution bench.

On October 10, the bench had posted for hearing the arguments in the case on October 31.

An Electoral Bond is an instrument in the nature of a promissory note or bearer bond which can be purchased by any individual, company, firm or association of persons provided the person or body is a citizen of India or incorporated or established in India. The bonds are issued specifically for the purpose of contributing funds to political parties.

Advocate Prashant Bhushan, appearing for petitioner NGO Association for Democratic Reforms, has told the bench that the anonymous nature of the funding also promoted corruption as it allowed companies, who had received certain benefits from the government of certain parties, to anonymously donate to those political parties.

He has argued that amendments made via Finance Acts of 2016 and 2017, both passed as Money Bills, have through the electoral bonds scheme, "opened the floodgates to unlimited political donations".

In October last year, the Centre in an affidavit had said that the methodology of the Electoral Bonds scheme are "completely transparent" mode of political funding and it is impossible to get black money or unaccounted money.

Various petitions are pending before the top court challenging amendments made to different statutes through Finance Act 2017 and Finance Act 2016 on the ground that they have opened doors to unlimited, unchecked funding of political parties.

NGOs Association of Democratic Reforms and Common Cause have said that the Finance Bill, 2017, which paved the way for the introduction of the Electoral Bond scheme, was passed as a money bill even though it wasn't.