The bench – headed by CJI Chandrachud, and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra – is looking at the batch of pleas challenging the validity of the electoral bonds scheme for funding political parties.

Earlier on 2 January 2018, the government notified the scheme – where it was pitched as an alternative to cash donations made to political parties – aiming to bring transparency in political funding.

On the first day of the hearing, as quoted by Bar and Bench, the apex bench remarked that anonymity behind political donations under the Electoral Bonds Scheme may have been aimed at preventing repercussions from parties to which a person or entity has not made donations.

ALSO READ: Electoral bonds generated donations worth over ₹9,188 crore in last 6 years; BJP emerges as biggest beneficiary

Here’s what happened on the second day of hearing:

1) Arguing for the petitioners, senior advocate Vijay Hansaria said, as quoted by the legal website, that the scheme demeans transparency and breathes life into opaqueness.

2) He added that subsection 3A to Section 182 of the Companies Act, 2013 omits the requirement of giving particulars of the amount and the party to which it has been contributed.

3) To which, Justice Khanna said that even if it is deleted, one has to disclose the amount which has to be paid.

4) Arguing on the complete tax exemption under Section 80G (Income Tax Act), Hansaria said a company is only required to disclose in its profit and loss account the total amount contributed by it to a political party, without being required to disclose the name of it. He added that now companies only have to declare that ‘X’ amount has been donated without any details and this makes tracing impossible.

5) Among other things, Hansaria raised concerns as there is no ceiling on the total contribution that can be made.

6) With both Justice Khanna and CJI concerned about the quantum of the donation to be given to a particular political party, SG Mehta said that ‘There are no restrictions’ and added that like-minded persons can come together and create trust and give collectively.

7) Hansaria referred to data compiled by ADR on electoral trust figures, saying “There are 18 electoral trusts who have contributed ₹49 crore”, adding that the information is available with the Election Commission.

ALSO READ: Centre to Supreme Court: Public has no general right to know about Electoral Bond sources

8) When Hansaria noted, as the legal daily quoted, “One of the arguments is that disclosure is required of the ‘candidates’, not of ‘political parties'”, CJI said, “Really, our law did not speak of ‘political party’ at all”.

9) Senior Advocate Sanjay Hegde – appearing for an applicant – said, as quoted by the legal daily, that electoral bonds by a company are election specific and there has to be a resolution of the board of directors, which is not normally open to the public. He added that when the political party uses the money from electoral bonds – ‘cashed’ within 15 days – there is no limit on that.

10) Both the senior advocates Sanjay Hegde and Kapil Sibal proposed the court to impose further directions which would possibly reduce the opacity.

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Updated: 01 Nov 2023, 03:24 PM IST