0

Every company shall prepare and keep books of accounts and financial statement for every financial year accounts: Supreme Court of India

Any expenditure incurred by anyone in purchasing the bonds through banking channels will have to be accounted as an expenditure in his books of  If the purchase of the bonds, as well as their encashment, could happen only through banking channels and if the purchase of bonds is allowed only to customers who fulfil KYC norms, the information about the purchaser will certainly be available with the   SBI   which alone is authorised to issue and encash the bonds as per the Scheme. Moreover, any expenditure incurred by anyone in purchasing the bonds through banking channels will have to be accounted as an expenditure in his books of accounts. This auspicious judgment was passed by the Supreme Court of India in the matter of ASSOCIATION FOR DEMOCRATIC REFORMS & ANR. V. UNION OF INDIA & ORS[WRIT PETITION (C) NO.880 OF 2017] by Chief Justice of India S. A. Bobde, Justice A. S. Bopanna, and Justice V. Ramasubramanian.

The petition was for  (i)  a declaration that all national and regional 2political   parties are public authorities under the Right to Information Act, 2005; (ii) a direction to the Election Commission of India to collect all information concerning the finances of political parties; (iii) a direction to all national and regional political parties to mandatorily disclose complete details about their income, expenditure, donations, and funding as well as full details of the donors.

Later, the Association for Democratic Reforms filed the above application I.A. No.183625 of 2019 seeking a stay of the Electoral Bond Scheme, 2018 notified by the Central Government vide notification.

The court stated that “Under Section 129(1), such financial statements should give a true and fair view of the state of affairs of the company and comply with the accounting standards notified under Section 133.  These financial statements are to be placed at every   Annual   General Meeting of the company. Under Section 137, a copy of the financial statement, along with all the documents duly adopted at the Annual General Meeting shall be filed with the Registrar of Companies.”

Also, the court stated that “All that is required is a little more effort to cull out such information from both sides (purchaser of bond and political party) and do some “match the following”. Therefore, it is not as though the operations under   the   Scheme   are   behind   iron   curtains   incapable   of   being pierced.”

The application for stay was dismissed stating that “the   Scheme   was introduced on 2.1.2018; that the bonds are released at periodical intervals in January, April, July, and October of every year; that they   had   been   so   released   in   the   years   2018, 2019, and   2020 without any impediment; and that certain safeguards have already been provided by this Court in its interim order dated 12.4.2019, we do not see any justification for the grant of stay at this stage.”

Click here to read the judgment

Leave a Reply

Your email address will not be published. Required fields are marked *

Open chat