The SBI said in its application that stringent measures undertaken to ensure that the identity of the donors was kept anonymous makes “decoding” the electoral bonds and matching the donors to the donations a complex process.

In a setback to the State Bank of India, a Constitution bench of the Supreme Court on Monday dismissed its miscellaneous application seeking an extension of the March 6 deadline set by the top court through its order on February 15. A five-judge Constitution bench led by Chief Justice of India DY Chandrachud said that the provisions of the electoral bonds scheme itself mandate disclosure when sought by the court making the SBI’s appeal for time “unwarranted”.

The top court directed the SBI to comply with the court’s orders by the end of business hours on Tuesday, March 12. The Election Commission of India, on the other hand, has been directed to furnish the details on its website by 5 PM on March 15.

SC : The submissions of the SBI sufficiently indicate that the information is readily available. The Application filed by the SBI seeking extension of time until 30 June, 2024 is dismissed.#SupremeCourtofIndia #ElectoralBonds

— Live Law (@LiveLawIndia) March 11, 2024

“It would be pertinent to refer to the FAQs on electoral bonds published by the SBI that state that the KYC documents shall be furnished by the purchaser each time regardless of whether the purchaser has a KYC verified SBI account. The electoral bond form, KYC and pay-in slip can only be used to purchase one electoral bond. That is one set of documents (electoral bond application form, KYC documents and pay in slip) can be only be used to purchase one electoral bond. Contributors who have an SBI account as well as those who don’t have to submit the EB application, KYC docs and proof of payment through NEFT/Cheque/DD. Thus, the details of the bonds which have been purchased are readily available,” CJI Chandrachud noted while dictating the order in court.

“Similarly, the FAQs with respect to redemption of bonds states that each political party can only open one current account for EB redemption. The current account would be opened by the political party only in 39 authorised branches. The information about poltical parties information will be stored in these branches which would be clearly accessible. There is no dispute about the fact that this process was duly followed,” the order noted while dismissing the SBI’s application.

Appearing for the state-run lender, senior advocate Harish Salve argued before the top court bench that the information which was received by the SBI was maintained in two separate silos with utmost secrecy so as to fulfiull the core purpose of the electoral bonds scheme. Salve said that if the disclosure is to be made of the information required to be submitted by the SBI to the ECI in the separate silos, as referred to in the operative directions of the SC, would take three weeks.

However, difficulties arose in matching the donor and bond details with the corresponding details of encashment by political parties, which would require three months.

“The SBI has full details of who purchased the bond. That is in one silo. I have another set of information of which political party encashed, that is not a problem… When the purchases were happening, we had divided the information… We knew that it was sensitive information. A physical procedure was devised. Only the bond number was cleared and the bond number was used for further purchases. And it was done to prevent the gossip that so and so have purchased,” he said.

The top court, however, countered Salve’s argument and said that for SBI to seek time for a matching exercise was unwarranted. ” if you see the direction we have issued, we have not you to told you to do the matching exercise. We have directed a plain disclosure,” CJI Chandrachud said.

“The provisions of the electoral bonds itself mandate the SBI to disclose information when sought by court,” CJI Chandrachud observed.

The SC also pulled up SBI for dragging its feet on the court’s directives to disclose information related to electoral bonds. “Our judgment is dated 15 Feb. We are on 11 March. In past 26 days, what steps you have taken? Nothing is stated. It should have been disclosed. That this is the work which we have done, we need time to more.. We expect some candour from the State Bank of India,” the court observed.

The hearing came on the State Bank of India’s application in the Supreme Court seeking an extension of the March 6 deadline to furnish several details pertaining to electoral bonds till June 30, 2024. In its order dated February 15, the Supreme Court had directed the state-run lender to submit the details to the Election Commission of India by March 6.

On March 7, the top court clubbed a contempt petition filed by the Association for Democratic Reforms (ADR), the petitioner in the plea challenging the validity of electoral reforms, along with the SBI’s plea for hearing on Monday. The ADR has filed a contempt petition against the State Bank of India for “disobeying” the orders of the Constitution bench of the top court in the matter.

“SBI has wilfully and deliberately disobeyed the judgment passed by the Constitution Bench of this Hon’ble Court, and the same not only negates the right to information of the citizens, but also wilfully undermines the authority of this Hon’ble Court,” the petition read.

Directing the SBI to comply with its directions, the court issued a notice to the state-run lender, asking its top officials to place on affidavit the steps taken to comply with its directions. “While we are not inclined to exercise the contempt jurisdiction at this time, we place SBI on notice that this Court may be inclined to proceed against it for wilful disobedience if SBI does not comply with the directions by the timelines indicated in this order,” the court’s order stated.

What did SBI state in its application?

The SBI’s plea in the Supreme Court seeks an over three-month extension of the March 6 deadline set by the court to submit details of electoral bonds to the Election Commission of India. In its verdict dated February 15, the Constitution bench of the top court had directed the SBI to disclose details of donors, the amount donated by them as well as its recipients by the set date. The Election Commission, in turn, was directed to make all such data public latest by March 13.

On March 4, the SBI moved the apex court seeking extension till June 30 to disclose the details of the electoral bonds encashed by political parties.

In its application before the top court, the SBI contended that retrieval of information from “each silo” and the procedure of matching the information of one silo to that of the other would be a time-consuming exercise.

The application said due to stringent measures undertaken to ensure that the identity of the donors was kept anonymous, “decoding” the electoral bonds and matching the donors to the donations would be a complex process.

“It submitted that the data related to the issuance of the bond and the data related to the redemption of the bond was kept recorded in two different silos. No central database was maintained. This was done to ensure that donors’ anonymity would be protected,” it said.

“It is submitted that donor details were kept in a sealed cover at the designated branches and all such sealed covers were deposited in the main branch of the applicant bank, which is located in Mumbai,” it added.

What did ADR’s application state?

In its order dated February 15, the Supreme Court directed the State Bank of India to submit to the Election Commission details of electoral bonds purchased since April 12, 2019 by March 6. However, on March 4, the SBI filed an application before the Supreme Court seeking an extension of the deadline from March 6 to June 30, 2024, to furnish the information citing practical difficulties and the complexity of decoding and compiling data from the sale of these bonds.

As per the ADR’s application, the SBI’s request is “mala fide” and an attempt to thwart efforts to bring transparency ahead of the Lok Sabha elections, scheduled to be held in April-May. The ADR argues that the SBI’s IT system designed for managing electoral bonds is already in place and can easily generate reports based on unique numbers assigned to each bond.

The petition further contends that voters have a fundamental right to know bout the substantial sums of money contributed to political parties through electoral bonds. The petition argues that the lack of transparency goes against the essence of participatory democracy enshrined in Article 19(1)(a) of the Constitution.