File photo: The Supreme Court of India. Photograph:( Reuters )
The Attorney General said the law was passed to eliminate black money and that the "secrecy of funding is necessary to ensure that those who fund the political parties are not victimised.
The Supreme Court of India on Thursday reserved its verdict on petitions challenging the legality of electoral bonds. The bench, headed by Chief Justice of India Ranjan Gogoi, will pronounce its judgment on Friday.
Tomorrow's order, however, will be interim and not the final one on the constitutionality of electoral bonds.
The Centre and the Election Commission have taken contrary stands in the court over political funding with the government wanting to maintain anonymity of the donors of electoral bonds and poll panel batting for revealing the names of donors for transparency.
The court is hearing the plea of NGO Association of Democratic Reforms opposing the use of electoral bonds for political funding. The petitioner has sought interim reliefs that either the issuance of electoral bonds be stayed or the names of the donors be made public to ensure transparency in the poll process.
Appearing for the NGO, Advocate Prashant Bhushan told the top court that electoral bonds were promoting undisclosed (anonymous) source of funds to political parties, thereby destroying the fabric of free and fair elections in India.
Attorney General KK Venugopal, appearing for the Centre, countered by saying, "This is the best scheme possible to combat the vice of black money in elections. I hope the court upholds it."
Meanwhile, the Election Commission told the top court that it was not against electoral bonds but the anonymity factor. "We are opposed to anonymity and we want transparency with full disclosure. We are concerned with the amendments brought to the Representation of the Peoples Act. Political parties should put it (info on donations) on their websites so people get to know," the commission said.
However, the Attorney General defended the government's stand by saying that the law was passed to eliminate black money and that the "secrecy of funding is necessary to ensure that those who fund the political parties are not victimised if the party which they did not fund comes to power".
Electoral bonds were introduced by amendments made through the Finance Act 2017 to the Reserve Bank of India Act 1934, Representation of Peoples Act 1951, Income Tax Act 1962 and Companies Act. In January last year, Modi government notified the scheme for electoral bonds, which are in nature of bearer instruments like a promissory note capable of being purchased by an Indian citizen or a body based in India. These electoral bonds can be purchased from an authorised bank and can be issued to a political party. The political party can encash the bond within 15 days.
The most important issue regarding the electoral bonds is that the identity of the donor is known only to the bank, which is any case is kept anonymous.