Thread by @barandbench

CJI SA Bobde led bench to shortly hear NGO Association for Democratic Reforms (ADR's) application seeking an interim direction to bar the sale of Electoral Bonds.
#SupremeCourt
#ElectoralBonds

@pbhushan1 had stated it was important that the application is heard in light of the upcoming Assembly Elections to West Bengal, Kerala, Tamil Nadu, Assam and Puducherry.
#WestBengalElections2021
#Assamelections
#KeralaAssemblyElections2021
#TamilNaduElections2021

Plea states #ElecroralBonds led to annual contribution reports of political parties to be furnished to ECI which need not mention names and addresses of those contributing by way of electoral bonds, thereby killing transparency in political funding

Advocate Prashant Bhushan: This matter pertains to electoral bonds which was introduced by Finance Act 2017.

Attorney General KK Venugopal: I want to say something..

Bhushan continues his submissions..

CJI: Mr Bhushan can you hear us..

AG: If no new facts have been stated then we can argue today. But if counter affidavit has to be filed we can hear this in April. Copy of application was served on Sunday

Bhushan: Please hear the interim application since new EBs will be opened for sale. I will argue 2019 plea

@pbhushan1 : Please see the letter written by RBI Governor where it was stated its discomfiture to issue Electoral Bonds and states that it is fraught with risk and will impact India's financial system. It stated they are concerned about use of it as bearer bonds

Bhushan: RBI said there may be use of this electoral bonds to fund shell companies etc. RBI said this will put them at reputation reputational risk. Here bribing has been made through government channels. Apart from bank no one will know who is the Donor not even ECI

Bhushan: RBI and ECI had both raised strong reservations. This is unprecedented and has not happened anywhere in the world.

@pbhushan1 : What they have done is open the way of large corporations through shell companies like bribes

CJI: bribes to political parties?

Bhushan: essentially bribes paid to ruling parties

CJI: Why it's a ruling party? It can be any party

Bhushan: The ruling party is the one which can fulfill the needs

CJI: It can also be given to a party which may come to power in the upcoming election.

@pbhushan1 : absolutely it can happen so.

Bhushan cites how #ElectoralBonds can be used for cross border counterfeiting.

CJI: who is an aggregator?

Bhushan: someone who buys the bonds in bulk and then gives it to the political parties.

CJI: RBI said they are willing to do it in certain way. They say it's okay to do it in a demat form.

Bhushan: but they say there is a serious risk of money Laundering

CJI: What is the difference in issuing it in demat form and one in script form?

Bhushan: Demat may help in tracking

CJI: Demat they say it will be anonymous still

@RBI
#SupremeCourt

Bhushan: If it's anonymous then it will be direct bribery. This can be given to political parties as quid pro quo

CJI: if you are not familiar with it we will ask someone else. You are not answering us. They say same money will be issued in demat form. We will ask AG

Bhushan: Nobody can come to know who is the last transferee and who are the initial subscribers of these electoral bonds. That's why @RBI raised issue of money Laundering through shell companies

Bhushan: It is not anonymous to Government but its anonymous to everyone else.

#SupremeCourt

Bhushan: The only person who will want this anonymity are the people who pay bribes.

CJI:So your point is that government can know who is the Donor? So you will like complete anonymity

Bhushan:No we want complete transparency. The govt can know the details from @TheOfficialSBI

Bhushan: this was not a finance bill and was still brought in as finance bill. They also allowed foreign companies to donate companies to political parties and this amendment was made. ECI had stated that it was a complete retrograde amendment.

CJI: if your argument is correct we have to strike down the law in full. How do we decide this in an interim application?

Bhushan: But they are opening sale of #ElectoralBonds soon in April

CJI: we had issued directions for the sale of these later on. Like keeping it in sealed cover with the Election Commission of India.

Bhushan: these directions have also not been followed

Bhushan: That order will not suffice because of the nature of bonds. Purchaser can sell it in cash to someone else and then give political parties. Political parties can always say that these bonds were just dropped. #ElectoralBonds only lead to money laundering

CJI: your present argument is on political morality and ethics. Wasn't this considered in the RK Garg case ?

Bhushan: ADR judgment dealt with morality and it was equated with a question of democracy. If you remove transparency from political funding then it impacts democracy

CJI: Most people are conscious of the role of money in elections

Bhushan: Electoral Bonds has only facilitated this further. Please stay the issuance of Electoral Bonds.

CJI: Mr AG are you going to issue the #ElectoralBonds

AG: ECI permission has been taken and Electoral Bonds will be open from April 1 to April 10

CJI: tell us why is there selective anonymity?

CJI: suppose one buys electoral bonds one had to pay tax on it?

AG: Yes they have to

CJI: are these amounts brought to tax or undisclosed money?

AG: this is only white money which goes through banks and paid through cheque or demand draft

Bhushan: subsequent purchasers can be bought by cash

CJI: you are not telling us about the anonymity

AG: Bond on its face does not have name of the Donor or beneficiary. This is only a document and does not disclose who recieved it or purchased it. Mr Arun Jaitely decided that black money is a tremendous menace

AG: Mr Jaitely devised this

CJI: Can some one buy bonds in these 10 days and fund terrorist operation

SG Mehta: Only political parties can encash

CJI: we are sure there are political parties who have violence on their agenda. Can not a political party fund terrorist operations?
#SupremeCourt

AG: only political parties registered under Representation of Peoples Act and secured not less than one percent vote cannot encase

CJI: we don't want to get into politics
And not comment on any party, but can't a party recieve bonds and then fund a protest which turns violent

CJI: what is the control of the government on what use the money is put to

AG: after 15 days these bonds become paper. They can encash it from SBI and once they have it they can use it

CJI: if a party buys #ElectoralBonds worth ₹100 crores what is the assurance that it won't be used for illegal purposes or fund violence.

AG: every party has to file their income tax returns. Apart from Communist party and one national party no one had declared this.

AG: Even @INCIndia did not file. It was after your judgment that all started filing. So now question of such misuse cannot arise

AG: terrorism is not funded by white money. It is only funded by black money

CJI: You are saying it's not black money at all

AG: only cheque and demand draft can be used

SG: KYC norms also has to be followed

CJI: No trading allowed?

AG: No

CJI: then we will close for orders

CJI: Mr Bhushan has said political parties had not followed our orders. Ofcoursr everything is verbal not on record

Counsel for Election Commission appears: we have placed in sealed cover. Major political parties has submitted I am informed.

Advocate Bhushan submits points in rejoinder: Original purchaser cannot purchase in cash but thereafter there is nothing to prevent them to selling them to others in cash. There is anonymity at so many levels

CJI: isn't it that happens with currency note also

CJI: when currency notes are in circulation and printed firstly its white and then its becomes black by misuse?

Bhushan: Electoral Bonds strikes a coach through transparency in Electoral fundings. Earlier donations upto 25 lakh could be anonymous bit now upto cores of money can de donated anonymously.

CJI: We will pass orders. Mr Attorney, we are not sure of what we are saying. But this angle of misuse of funds for illegal purposes for purposes of terrorism we would like you as a government to look into. It is not to suggest that political parties have violence on their agenda

AG: then there is de registration

CJI: No there cannot be. With those funds one can start a protest and start many things.

AG: we will look into it. But with black money it will be worse

Bhushan: No black money is being stopped

CJI: I don't know when will black money stop. That is for a larger dicussion

Counsel for Election Commission: We are supporting Electoral Bonds and not opposing it. If it's disallowed then we go back to the period when there was unaccounted deposits. At least now there is accountability. We are asking for second step so that people know Please do not stay

CJI SA Bobde led bench reserves the interim application for orders
#SupremeCourt
#ElectoralBonds