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Supreme Court Declaring Electoral Bonds Unconstitutional

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Courtesy/By: PARAM SAKET SARANG | 2024-02-17 00:34 Views : 170

Supreme Court Declaring Electoral Bonds Unconstitutional

Introduction

On February 15, a Constitutional Bench comprising the Chief Justice of India, D.Y. Chandrachud, and Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra deemed the electoral bonds programme unlawful.

The Supreme Court's decision in the electoral bonds case is an excellent example of the "sentinel on the Qui Vive" performing its duties to perfection. The statement, immortalised by Justice Patanjali Sastry in his 1952 decision in State of Madras vs V G Row, can be rendered as "sentry on watch". Justice Sastry used it to suggest that the Supreme Court of India (SCI) of India serves as a "sentry on watch" to protect citizens' fundamental rights. The SCI, in declaring the Electoral Bonds Scheme proposed by the government in 2017 as unconstitutional, did exactly that.

In a landmark decision on February 15, the Indian Supreme Court declared the 2017 Electoral Bonds Scheme to be illegal, leading to its repeal. Chief Justice of India DY Chandrachud stated that anonymous electoral bonds violate the right to knowledge under Article 19(1)(a) of the Constitution when announcing the unanimous decision of the five-member constitutional bench.

Key Observations and Directions from the Bench:-

The Supreme Court ruled that the Electoral Bonds Scheme, coupled with certain provisions of the Income Tax Act and Finance Act 2015, violated Article 19(1)(a) of the Constitution.
The State Bank of India (SBI), which issues electoral bonds, has been told to stop issuing them immediately.
SBI is required to give the Election Commission (EC) information about political parties that have received electoral bonds, including purchase dates, purchaser names, and bond denominations, by March 6. Additionally, SBI must give information about each encashed bond.
By March 13, the EC is expected to post the data it obtained from SBI on its official website.
Political parties are required to return and reimburse the buyers of any remaining electoral bonds that they have cashed.

What are Electoral Bonds?

A Finance bill from 2017 created the electoral bonds system, which went into effect in 2018.

They provide a way for people and organizations to donate to officially recognized political parties while keeping donor anonymity. Electoral bonds' ability to enable anonymous contributions to political parties is one of its main advantages. Neither the public nor the political party that receives the donation is informed of the donor's identity.

The bonds are available for purchase in January, April, July and October. With the latest tranche last month. Bonds in the denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore are issued by the State Bank of India (SBI). Interest-free and payable on demand to the bearer. Acquired by individuals or companies based in India.

maybe purchased separately or in combination with other people. Redeemable within 15 calendar days of the date of issuance. The approved issuer is SBI.

Bonds for elections are issued by specific SBI branches.

Electoral bonds can only be obtained by political parties that are registered under Section 29A of the Representation of the People Act, 1951, and that have received at least 1% of the total votes cast in the most recent general election for the Legislative Assembly or the House of the People. You can buy Electoral Bonds using checks or digitally. Encashment only via a political party-approved bank account.

Benefits

Transparency: By replacing cash donations with digital transactions, electoral bonds seek to increase the openness of political financing. To ensure a verifiable trail of contributions, donors buy these bonds from licensed institutions and then give them to the political party of their choice.
Accountability: Electoral bonds can improve accountability in political fundraising by providing a recorded trail of donations. Election-related disclosures must be made by political parties and contributors, enhancing accountability and openness in the political system.
Prevention of Black Money: By demanding digital transactions and donor information disclosure, electoral bonds seek to stop the flow of black money into political fundraising. This lessens the chance that money laundering will affect the election process.
Promoting Corporate Involvement: Electoral bonds give individuals and corporations a formal way to donate to political parties. Electoral bonds may persuade more business companies to engage in politics without fear of scrutiny by providing a clear and lawful means for donations.
Reducing Dependency on Cash: Election bonds lessen the need for cash contributions to political campaigns, which are sometimes opaque and vulnerable to abuse. Electoral bonds aid in the fight against corruption and formalize the economy by encouraging digital transactions.

Data on electoral bond sales obtained in May 2023 through India's Right to Information Act revealed that just five cities accounted for 90% of the bonds sold thus far.

Nearly 90% of all electoral bonds sold to date have come from five cities: Mumbai, Kolkata, Hyderabad, New Delhi, and Chennai. Mumbai has contributed the most, with 26.16% of all bonds sold.

Though dubbed the tech centre of India, Bengaluru, the capital of Karnataka, which is headed for elections, accounted for little over 2 per cent of total sales.

With 64.55% of all electoral bonds redeemed to date being encashed in the nation's capital, the State Bank of India (SBI) branch in New Delhi is the most popular option when it comes to bond redemption.

Mumbai only accounted for 1.51% of all electoral bonds redeemed, although accounting for over 26% of all sales. Hyderabad and Kolkata were in a distant second and third place, respectively, for redemption.

References

Courtesy/By: PARAM SAKET SARANG | 2024-02-17 00:34

News

Latest Article

Supreme Court Declaring Electoral Bonds Unconstitutional

Back

Supreme Court Declaring Electoral Bonds Unconstitutional

Introduction

On February 15, a Constitutional Bench comprising the Chief Justice of India, D.Y. Chandrachud, and Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra deemed the electoral bonds programme unlawful.

Key Observations and Directions from the Bench:-

The Supreme Court ruled that the Electoral Bonds Scheme, coupled with certain provisions of the Income Tax Act and Finance Act 2015, violated Article 19(1)(a) of the Constitution.

The State Bank of India (SBI), which issues electoral bonds, has been told to stop issuing them immediately.

SBI is required to give the Election Commission (EC) information about political parties that have received electoral bonds, including purchase dates, purchaser names, and bond denominations, by March 6. Additionally, SBI must give information about each encashed bond.

By March 13, the EC is expected to post the data it obtained from SBI on its official website.

Political parties are required to return and reimburse the buyers of any remaining electoral bonds that they have cashed.

What are Electoral Bonds?

A Finance bill from 2017 created the electoral bonds system, which went into effect in 2018.

maybe purchased separately or in combination with other people. Redeemable within 15 calendar days of the date of issuance. The approved issuer is SBI.

Bonds for elections are issued by specific SBI branches.

Benefits

Transparency: By replacing cash donations with digital transactions, electoral bonds seek to increase the openness of political financing. To ensure a verifiable trail of contributions, donors buy these bonds from licensed institutions and then give them to the political party of their choice.

Accountability: Electoral bonds can improve accountability in political fundraising by providing a recorded trail of donations. Election-related disclosures must be made by political parties and contributors, enhancing accountability and openness in the political system.

Prevention of Black Money: By demanding digital transactions and donor information disclosure, electoral bonds seek to stop the flow of black money into political fundraising. This lessens the chance that money laundering will affect the election process.

Promoting Corporate Involvement: Electoral bonds give individuals and corporations a formal way to donate to political parties. Electoral bonds may persuade more business companies to engage in politics without fear of scrutiny by providing a clear and lawful means for donations.

Reducing Dependency on Cash: Election bonds lessen the need for cash contributions to political campaigns, which are sometimes opaque and vulnerable to abuse. Electoral bonds aid in the fight against corruption and formalize the economy by encouraging digital transactions.

Data on electoral bond sales obtained in May 2023 through India's Right to Information Act revealed that just five cities accounted for 90% of the bonds sold thus far.

Nearly 90% of all electoral bonds sold to date have come from five cities: Mumbai, Kolkata, Hyderabad, New Delhi, and Chennai. Mumbai has contributed the most, with 26.16% of all bonds sold.

Though dubbed the tech centre of India, Bengaluru, the capital of Karnataka, which is headed for elections, accounted for little over 2 per cent of total sales.

With 64.55% of all electoral bonds redeemed to date being encashed in the nation's capital, the State Bank of India (SBI) branch in New Delhi is the most popular option when it comes to bond redemption.

Mumbai only accounted for 1.51% of all electoral bonds redeemed, although accounting for over 26% of all sales. Hyderabad and Kolkata were in a distant second and third place, respectively, for redemption.

References