Review Sought Of Supreme Court Order Rejecting Plea To Confiscate Electoral Bond Donations

Today, a review petition has been filed by Advocate Dr. Khem Singh Bhati seeking a review of the Supreme Court's order dated August 2, 2024, whereby the plea to confiscate Rs.16,518 crores received by the political parties under the 2018 Electoral Bonds Scheme, which was held unconstitutional, was dismissed.

The Supreme Court bench headed by former Chief Justice of India D.Y. Chandrachud, J.B. Pardiwala and Manoj Misra while dismissing the petition had stated that the petitioner had an alternative remedy to approach the appropriate forum governing criminal procedure or under Article 226 of the Constitution.

On February 15, last year, in Association for Democratic Reforms v. UOI, the Supreme Court held the 2018 electoral bonds scheme and the provisions in cognate legislations including those in Representation of the People Act, 1951, Companies Act, 2017 and the Income Tax Act, 1961 as ultra vires and violative of Article 19(1)(a) of the Indian Constitution.

Subsequently, in Common Cause v. Anr v. UOI, four petitions were filed including by Dr. Bhati under Article 32. Through the said petition, a court-monitored investigation by the Special Investigating Team was sought into the "quid pro quo" arrangements between public servants political parties, company officers and others which was revealed on the disclosure of the data. 

In the writ petition, the petitioner had argued 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.

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.

However, the petition was dismissed by the Supreme Court on grounds that an assumption was made as to the quid pro quo arrangements and the Court cannot be asked to "embark upon a roving inquiry into the purchase of the electoral bonds".

It had held: "This Court entertained a batch of petitions challenging the constitutional validity of statutory provisions embodying the Electoral Bond Scheme and the consequential amendments which were made to diverse statutes. The only remedy for challenging such legislative changes lies in the invocation of the power of judicial review. Allegations involving criminal wrong doing, on the other hand, are of a distinct nature where recourse to the jurisdiction of this Court under Article 32 of the Constitution should not be taken as a matter of course particularly, in view of the remedies available in law."

Grounds for review:

It has been argued that the August 2 order suffers from apparent errors on the face of record because:

1. The judgment in the ADR case has the effect of wiping out the statutory provisions regarding electoral bond from the inception as the judgment was not declared to operate prospectively; hence, reliance upon the parliamentary legislation in para 10 of the impugned order as one the grounds for dismissal of the writ petition suffers from apparent error on the face of the record.

2. The impugned order by bench of three Judges has the effect of modifying the judgement of this Court in the ADR case passed by a Bench of five Hon'ble judges, inasmuch as this Hon'ble Court by the impugned order has treated the Constitution Bench judgment to operate prospectively.

3. Finding recorded in para 15 and 16 of the impugned order that the petitioner has alternative remedy to approach appropriate forum governing criminal procedure or under Article 226 of the Constitution is an apparent error on the face of the record since there is no other efficacious remedy available to the petitioner to seek confiscation of the proceeds of Electoral Bond received by political parties.

4. Disclosure of information regarding electoral bonds in terms of the direction of this  Court clearly establish that there is was quid pro quo between the donations made to the political parties and benefits received by the corporate houses and the observation in paragraph 12 and 13 that the Writ Petition is based on assumption about quid pro quo between the donor and donee and the petitioner is seeking a roving inquiry, suffers from apparent error on the face of the record.