The Election Commission of India (ECI) is obligated to keep full and up-to-date information on each and every political donor and contributions through electoral bonds (EBs), the Supreme Court said on Tuesday, brushing aside the election watchdog’s submission that it was supposed to maintain such data only till 2019.

Referring to an order passed by it on April 12, 2019, in a batch of cases challenging the validity of EBs as a source of political funding, a Constitution bench of the top court remained emphatic that its direction to the political parties for submitting full information with ECI regarding the receipt of EBs was a “continuing order”, and that it could not be restricted to the deadline of May 30, 2019, which was mentioned only for the submission of the details for that particular year (2019).

The five-judge bench, headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud, was prompted to remind ECI of its obligation after it told the polling body to keep the updated data on political funding through EBs ready for a perusal of the court during the hearing, but ECI’s counsel replied that he had information on EBs only till 2019.

“Why only till 2019? This was a continuing mandamus. It was an interim order and it had to continue till the final order. You were supposed to keep such data till date,” the bench, also comprising justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra, told advocate Amit Sharma, ECI’s counsel.

It asked Sharma if ECI’s understanding was that the court’s April 12, 2019, order mentioned May 30, 2019, to restrict the furnishing of the information to the latter date.

By its order on April 12, 2019, the top court introduced an interim “safeguard” by directing all political parties to submit details of receipts of EBs, including the particulars of the donors, to 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. “The above details will be furnished forthwith in respect of Electoral Bonds received by a political party till date,” the order had added while fixing May 30, 2019, as the deadline for the submission of such details.

“Have you (ECI) not kept the data post 2019? Have you been reading para 13 of the order (on the necessity to furnish full information of EBs) to be restricted by para 14 (where the date of May 30, 2019, is mentioned)? Para 14 does not restrict para 13. While para 14 is for the past transactions, para 13 is for the period onward. Para 13 is a continuing direction. It was not confined to the 2019 elections,” the bench told Sharma.

At this, Sharma said that he would consult ECI on the availability of data and revert. “I will take instructions and come back,” the counsel told the bench.

The Constitution bench on Tuesday commenced its scrutiny of a bundle of petitions that have pressed for a right to have access to the details of contribution to political parties calling the EB scheme as an opaque system that promotes corruption in elections that go to the root of democratic functioning in the country.

During the hearing, senior counsel Kapil Sibal and advocates Prashant Bhushan, Shadan Farasat and Nizam Pasha attacked the scheme, arguing it has opened floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies. While Bhushan began the submissions on behalf of the group of petitioners by stressing on people’s right to know the source of political funding, Sibal argued that since there is no mandate to use the money received through EBs only for electoral processes, the instrument is used to enrich the ruling political parties and disrupt the level playing field.

Bhushan, appearing for a petition filed jointly by the Association for Democratic Reforms (ADR) and non-profit Common Cause in 2017. Bhushan claimed that the confidentiality clause in the EB scheme defeats people’s right to be informed about the source of funding which is a fundamental right of citizens under Article 19(1) (a).

“This opaque instrument promotes corruption as these bonds are given as kickbacks to the ruling parties, either at the Centre or in states. The scheme has virtually legalised kickbacks. It also destroys the level playing field in an electoral democracy by facilitating the lion’s share of EBs in favour of the ruling parties,” argued Bhushan, adding even a shell company through a subsidiary can donate through EBs and there are no ways to check such sham transactions.

Farasat, who appeared for the CPI (M), complained that the architecture and effect of the EB scheme is not to weed out black money but to re-route otherwise non-anonymous banking channel funding to anonymous EBs. The arguments in the case will continue on Wednesday as well.

During the hearing, the bench clarified that it will not go into the concept of corporates making political donations since the Companies Act permits it. “The moment we accepted Section 293A (in the Companies Act), our society legitimised corporate quit pro quo. There is an element of quid pro quo the moment you have a corporation. The large public limited company that makes a donation doesn’t give it in charity,” remarked the bench.

At the same time, the bench said that the arguments of the petitioners regarding anonymity of such funding for the shareholders of a company making such donations and to the public at large are debatable.

On October 16, the court referred the matter to a Constitution bench of five judges, underscoring that the importance of the matter calls for setting up a larger bench to deliver an authoritative verdict.

Introduced in 2018, EBs are issued by the State Bank of India and donations made under this scheme by corporate and even foreign entities enjoyed 100% tax exemption while identities of the donors are kept confidential both by the bank as well as the recipient political parties. Under the scheme, bonds are available for purchase at any SBI branch in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and can be bought through a KYC-compliant account. There is no limit on the number of electoral bonds that a person or company can purchase.

Every party registered under section 29A of the Representation of the People Act and having secured at least 1% of the votes polled in the most recent Lok Sabha or state election has been allotted a verified account by ECI. The donor can donate the bond to a party of their choice, which can cash it within 15 days, only through the allotted account. The bonds go for sale in 10-day windows in the beginning of every quarter — in January, April, July and October, besides an additional 30-day period specified by the central government during the Lok Sabha election years.

Submitting his written submissions on behalf of the Union government on October 27, attorney general R Venkataramani opposed the petitions, arguing that judicial review is not about scanning State policies for the purposes of suggesting better or different prescriptions, and maintained that citizens do not have a fundamental right to be informed about the sources of political funding. Venkataramani emphasised that the EB scheme extends the benefit of confidentiality to the contributor while ensuring and promoting clean money being contributed.

In order to bring in the EB scheme, the Centre had made multiple amendments by way of two Finance Acts— Finance Act, 2017 and Finance Act, 2016, both passed as money bills (not necessitating the oversight of the Rajya Sabha). The passage of the amendments as money bills has also challenged but is not being dealt with in the present batch of petitions since that issue is pending before a seven-judge bench.