Parliament and Neta

Is There Life After Electoral Bonds?

A lot of us seem to have forgotten that political parties, elections and democracy existed even before 2017 – and so before the existence of electoral bonds.

Though introduced in 2017, Electoral Bonds (EBs) seem to have become a popular topic in the national discourse ever since the recent three-day hearing in the Supreme Court (SC). There has been fair bit of writing in the print and digital media, and also some discussion on TV. In quite a few of media writings suggestions have been given on how to make EBs less opaque or confidential (as the Solicitor General of India kept insisting during the SC hearings). Quite a few correspondents/reporters have also asked me to specifically comment on how to make EBs “acceptable”. That is what prompts the title of this piece.

A lot of us seem to have forgotten that political parties, elections and democracy existed even before 2017, i.e., before the introduction of EBs. Existence of political parties implies that parties got money to conduct their affairs including contesting elections, and there was no mystery where and how they got the money and from whom. There were several methods of political parties getting money such as (a) by cheque, (b) by bank draft, (c) by digital transfer through banks, (d) digital payment through apps, (e) Electoral Trusts, and (f) cash, with each donation being not more than Rs 2,000. The most popular method, of course, was cash in unlimited amounts.

The only complication was, and still is, that there was no incontrovertible proof of the transactions by the last, and the most common, method and therefore no one except the giver and the receiver knew how much money was given by whom and to whom. Some insiders and snoopers were of course, the expected exceptions. Consequently, it was not possible for people at large to know whether decisions by a particular political party in power, in the Centre of any of the States, were motivated by welfare of the people at large or for the benefit of a donor of a large amount of unaccounted cash. We also need to remember that donations need not be strictly only in cash, they can also be in kind such as making aircraft or helicopters booked in the name of some company or individual, being provided to a political party for its use.

Though the Union of India has claimed during the hearings in the SC that ever since EBs were introduced that transparency of electoral funding has improved, the statement made above – “no one except the giver and the receiver knew how much money was given by whom and to whom” – is still valid with a very interesting change. Going strictly according to the EBs scheme as announced by the government, not even the receiver may know who has given the money! This of course is creative imagination of the highest order as everyone knows that one who gives money always makes sure the receiver knows who is the giver. The pious concept of gupt-daan (anonymous donation) does not apply to political donations.

What can, and should, the Supreme Court do?

I will refrain from suggesting what the SC should do because the judgment is reserved, but being part of one of the petitioner-organisations, what we have requested the SC to do is to declare Sections 135, 137, 11 and 154 of the Finance Act 2017 and consequential amendments in Section 31 of the Reserve Bank of India 1934, Section 29C of the Representation of the People Act 1951, Section 13A of the Income Tax Act 1961, and Section 182 of the Companies Act 2013; and Section 236 of Finance Act 2016 and consequential amendments in Section 2(1)(j)(vi) of the Foreign Contribution (Regulation) Act 2010 “as being unconstitutional, null and void”. What this legal jargon means is that, in effect, we have requested the SC to declare the Electoral Bonds scheme as unconstitutional or illegal, or in even simpler words to strike it down. And of course, this is what we would like the SC to do.

The other issue – “What can the SC do?” – is, I think, more important and needs some comment. A lot of commentary has suggested that the SC should make some modifications in the EBs scheme to remove what has been variously called as “selective disclosure’, “selective or partial transparency” and of course the celebrated “partial confidentiality”.

It is necessary to go to some basics in order to resolve this issue of “What can the SC do?”. Under the principle of separation of powers, the three pillars of the State – the legislature, the executive and the judiciary – have separate and distinct powers. In simple terms, the prime function of the legislature is to make laws, the prime function of the executive is to implement laws, and the prime function of the judiciary is to interpret laws. The power to interpret laws implies and includes the power of judicial review. This power of judicial review implies that the higher judiciary, the Supreme Court and the high courts have the power to review any action of the legislature and the executive and decide whether these actions are in keeping with the Constitution of India or not, and if they find any of the actions not to be in line with the Constitution, the Supreme Court and the high courts have the power to declare any such action as unconstitutional. That is why in our petition we have requested the SC to declare the above-mentioned laws as “unconstitutional, null and void”.

I maintain that all that the SC can do is to declare these laws as unconstitutional and no more. While many of the suggestions that have been, and are still being made, about what the SC should do, are valuable but they are all outside the remit of the SC. What must be remembered is that laws can be made only by the legislature. Yes, the SC can certainly make suggestions, if it wishes to do that, but it cannot, in my view, make modifications to the scheme as enunciated by the government and passed by the Parliament. As an aside, the passing of the EBs scheme by the Parliament is also in doubt because it was included in a Money Bill, thus disabling the Rajya Sabha from making changes to it but that issue is being examined by a separate constitutional bench of seven judges and was therefore not argued before the current bench of five judges.

At the end of the day, we just have to wait and see what the SC does.


This article was originally published in The Wire.