A bench of justices BR Gavai and BV Nagarathna will hear the batch of five petitions, led by NGO Association for Democratic Reforms (ADR)

The Supreme Court will on Friday take up a clutch of petitions that have challenged the validity of the Centre’s electoral bonds scheme as a source of political funding. 

The case has been listed in the top court after more than 18 months.

A bench of justices BR Gavai and BV Nagarathna will hear the batch of five petitions, led by NGO Association for Democratic Reforms (ADR).

In March 2021, the apex court had dismissed two stay applications moved by ADR to stop the sale of the electoral bonds ahead of elections in West Bengal, Tamil Nadu, Assam, Kerala and Puducherry.

It held that there was no justification to block their sale over concerns of anonymity in political party funding or apprehensions of their misuse and that the sale had continued “without any impediment” in 2018, 2019 and 2020 as well.

Earlier, in April 2019, the top court introduced an interim “safeguard” by directing all political parties to submit details of receipts of the electoral bonds to the Election Commission of India (ECI) in a sealed cover. This was done as an interim measure till the pending petitions challenging the validity of these electoral bonds were decided.

At that time, the ECI had supported the existing system of political party funding through electoral bonds although the constitutional body flagged lack of transparency which it said could be considered at a later stage.

The electoral bonds system was introduced by way of a money bill introducing amendments in the Finance Act and the Representation of Peoples Act.

The ADR claimed that such an anonymous route of funding amounted to legitimising bribery as corporates could fund the party in power in a state or Centre as a matter of quid pro quo. These donations enjoy 100 per cent tax exemption and even foreign companies can donate through Indian subsidiaries, the petitioner added.

“The Electoral Bonds Scheme has opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies which can have serious repercussions on the Indian democracy,” the ADR claimed, adding that the Finance Act of 2017 exempts contributions by way of electoral bonds to be disclosed to the EC under Section 29C of the Representation of Peoples Act.

Petitions by CPI(M) and advocate Ashwini Upadhyay have also raised issues pertaining to electoral bonds and have been tagged with the ADR’s petition.