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SC rejects plea seeking stay on issuance of electoral bonds; says enough safeguards in place

BusinessToday.In     March 26, 2021

The Supreme Court for Friday rejected a plea by an NGO that sought a stay on the issuance of electoral bonds amid the assembly elections in five states. The plea was heard by a three-judge bench led by chief justice of India (CJI) SA Bobde, who ruled that there are enough "safeguards" in place.

The SC bench comprising CJI Bobde, justices AS Bopanna and V Ramasubramaniam said the electoral bonds have been issued periodically since 2018. "Bonds are released on periodical intervals. Have been released in 2018, 2019 and 2020. We do not see any justification for grant of stay on issuance of EBs," the SC bench ruled.

On Wednesday this week, the Supreme Court had highlighted the money received via electoral bonds was being used to fund terror activities and asked the Centre to reveal its strategy to curb the misuse and whether there was any "control" over how these funds could be put to use.

"What is the control of the government on how the money is put to use," the bench asked attorney general KK Venugopal.

During the hearing, the top court said suppose a political party wants to encash electoral bonds and finance a protest, what is the government's control on how this fund is put to use. "The funds can be misused for illegal purposes like terrorism. We would like you, as the government, to look into this aspect," the bench said, adding that political parties may use these funds for activities beyond their political agenda.

"If a political party receives electoral bonds worth Rs 100 crore, what is the assurance that it won't be used for an illegal purpose or fund violence," the bench observed. The bench, however, made it clear that it did not want to get into politics and its comments were not aimed at any particular political party.

Venugopal told the bench that electoral bonds have a validity of 15 days and political parties have to file their income tax return also. The bench also asked, "Suppose, a businessman or anybody goes to buy the electoral bond, do they have to disclose it is white money and do they have to pay tax?".

The top law officer said that buyers have to use white money and the purchase of the electoral bond is through banking channel. "Terrorism is not funded by white money. It is funded by black money," Venugopal said.

Today's ruling comes after reserving the order by the Supreme Court on Wednesday. The plea had sought to ban the issuance of electoral bonds amid assembly polls and on the grounds of pendency of pending PILs against such bonds in the apex court.

Advocate Prashant Bhushan, who was appearing for petitioner NGO Association for Democratic Reforms, said that any further sale of electoral bonds should not be permitted. When Bhushan said that today elections are largely influenced by money, the bench observed, "most people are conscious of the role of money in elections".

On January 20, 2020, the apex court had refused to grant an interim stay on the 2018 Electoral Bonds Scheme and sought responses of the Centre and the Election Commission on an interim application by the NGO seeking stay on the scheme.

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