Confiscate Electoral Bonds Donations Received By Political Parties: Plea In Supreme Court

A petition has been filed in the Supreme Court challenging the legitimacy of funds received by political parties through the Electoral Bond Scheme of 2018 which was recently struck down in ADR v. Union of India. The petition argues that these funds, amounting to a staggering Rs. 16,518 crores, were not mere donations but rather transactions that involved quid pro quo, where benefits were allegedly exchanged between political parties and corporate donors.

In Association for Democratic Reforms (ADR) v. Union of India, famously known as the Electoral Bonds Case, the Supreme Court in a unanimous decision held the Electoral Bonds Scheme to be unconstitutional and violative of Article 19(1)(a) of the Constitution. The court's decision highlighted concerns about transparency and fairness and directed the State Bank of India to cease further issuance of such bonds and make a public disclosure of bond transactions since April 12, 2019. It may be noted that the Election Commission of India uploaded the Electoral Bonds data on its website on March 14 complying with the Apex Court's directions. 

The petition details that a total of 23 political parties received approximately Rs. 12,516 crores through these bonds from over 1210 donors, with 21 donors contributing more than Rs. 100 crores each. The Association for Democratic Reforms has made these details available, raising questions about the potential misuse of the scheme for undue advantages to donors at the expense of the public.

The petitioner has requested the Supreme Court to direct the Union (Respondent no.1), ECI (Respondent no.2)  and Central Vigilance Commission (Respondent no.3) to confiscate the amounts received under the scheme by the involved political parties. Additionally, the plea seeks the formation of a committee led by a former Supreme Court judge to investigate the alleged illegal benefits provided to donors by major political parties (Respondents no.4-25).  Alternatively, it asks for a reassessment of the tax exemptions claimed by these parties and the imposition of taxes, interest, and penalties on the received amounts.

a. Issue appropriate writ, direction or order directing respondents No. 1, 2 and 3 to confiscate amount received by respondent Nos. 4 to 25 under the Electoral Bond Scheme, 2018;

b. Issue appropriate writ, direction or order constituting a Committee headed by a former judge of this Hon'ble Court to investigate illegal benefits conferred on the donors by the public authorities at the instance of political parties on account of payment received by respondent Nos. 4 to 25 through Electoral Bonds by way of quid pro quo;

c. In the alternative and without prejudice to the above, direct the Income Tax Authorities to reopen assessment of respondent Nos. 4 to 25 from the Financial Year 2018 - 2019 to 2023 - 2024 and disallow the exemptions of income tax claimed by them under section 13A of the Income Tax Act, 1961 and levy income tax, interest and penalty on the amount received by way of Electoral Bonds;

d. Pass such order(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice. 

The petition was filed with the assistance of AOR Jayesh K Unnikrishnan and drawn by Sr Advocate Vijay Hansaria along with Advocates Kavya Jhawar and Nandini Raj 

It may be recalled that another petition has already been filed by Common Cause in the Top Court seeking the constitution of a Special Investigation Team to investigate the alleged instances of quid pro quo arrangements between corporations and political parties through Electoral bond donations

Case Details : DR. KHEM SINGH BHATI v. UNION OF INDIA