Electoral Bonds: No Public Interest In Disclosing Identities Of Donors & Donees, Says CIC Rejecting RTI Application

Information Commissioner Suresh Chandra also said that there does not appear to be any public interest of such importance that requires superseding of "right to privacy" of donors and donees.

The remarks were made while dismissing an appeal filed by activist Vihar Durve, inter alia seeking information from CPIO, SBI, about scheme donors and donees.

"There appears to be no larger public interest overriding the right to privacy of the donors and donees concerned," the Commission held.

It further concurred with the Respondent-CPIO that the disclosure of the names of the donors and donees of electoral bonds from books of accounts may be in contravention of the provisions contained under section 8 (1) (e) and (j) of RTI Act.

State Bank of India (SBI) was authorized to issue and encash Electoral Bonds during the XIII Phase of sale in January 2020. Durve had asked the Bank to disclose the details  of Donor and Donee of Electoral Bonds from its books.

The concerned CPIO however declined the request, stating that the names of donors being third party information and relating to their customers were held by the bank in fiduciary capacity. Therefore, the information was exempted under provisions of section 8 (1) (e) and (j) of RTI Act.

The CPIO further referred to the Electoral Bond Scheme 2018 and as per the clause 7 (4) of the said scheme, the information furnished by the buyer shall be treated as confidential by the authorized bank (SBI) and shall not be disclosed to any authority for any purpose.

The First Appellate Authority had also held that the information relating to electoral bonds issued to various political parties was held by the bank in fiduciary capacity and hence was denied to the appellant.

Electoral bonds were introduced by amendments made through the Finance Act 2017 to the Reserve Bank of India Act 1934, Representation of Peoples Act 1951, Income Tax Act 1961 and Companies Act. On January 2, 2018, the Centre notified the scheme for electoral bonds, which are in the nature of bearer instruments like a Promissory Note capable of being purchased by an Indian citizen or a body incorporated in India. The bonds can be purchased from an authorized bank, and can be issued to a political party. The party can encash the bond within 15 days. The identity of the donor will be known only to the bank, which will be kept anonymous.

The scheme has been challenged before the Supreme Court as an obscure funding system which is unchecked by any authority.

The Central Government however defended the scheme and submitted that it will promote transparency in funding and donation received by political parties. Following this, the Top Court declined to stay the EB Scheme ahead of the 2019 General Elections.

Durve had contended that SBI was supposed to uphold public interest and not the interest of political parties. He submitted that SBI was not in fiduciary capacity with any political party and hence had no legal duty to maximize the benefit of any public sector or private sector bank; as there was no relationship of "trust" between them.

He submitted that denial of this information would affect transparency, accountability and efficient functioning of Enforcement Directorate.

Notably, the Election Commission of India has already filed a counter-affidavit in the Supreme Court expressing its concerns about the anonymous nature of bonds. The ECI has described this a "retrograde step as far as transparency of donations is concerned" and called for its withdrawal.

The Centre claims that the schemes will bring in more transparency in political funding. The anonymity of the scheme was intended to protect the privacy of the donor, stated the centre.

After CJI Bobde assumed charge, the petitioners challenging the electoral bonds scheme filed an application for early hearing of the case, in the light of certain media reports that the electoral bonds were hurried by the government ignoring grave concerns raised by the Reserve Bank of India and the ECI.

On January 2020, when the cases were finally listed(after April 2019), a bench headed by CJI Bobde adjourned them for two weeks.

The cases have not been posted since then. Though the petitioners recently filed a fresh application for urgent posting in the wake of notification of the electoral bonds for the Bihar elections, the cases await listing.

Click Here To Download Order

Read Order