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“Unveiling Electoral Bonds”: Supreme Court Mandates Transparency Over Secrecy

Case Title – State Bank of India vs. Association for Democratic Reforms and Ors.

Case No. – Miscellaneous Application No. 486 of 2024 in Writ Petition (Civil) No. 880 of 2017

Dated on – 11th March, 2024

Quorum – Hon’ble CJI D.Y. Chandrachud, Hon’ble Justice Sanjiv Khanna, Hon’ble Justice B.R. Gavai, Hon’ble Justice J.B. Pardiwala and Hon’ble Justice Manoj Misra.

Facts of the Case –

The case revolves around the Electoral Bond Scheme and amendments introduced by the Finance Act, 2017 to the Representation of People Act, 1951 and the Income Tax Act, 1961, which allowed for non-disclosure of political funding information and unlimited corporate donations to political parties. The Supreme Court, in its judgment dated 15 February 2024, declared these provisions unconstitutional, citing violations of the right to information under Article 19(1)(a) and arbitrariness under Article 14 of the Indian Constitution. The Court directed the State Bank of India (SBI) to submit details of all Electoral Bonds purchased and redeemed between 12 April 2019 and 15 February 2024 to the Election Commission of India (ECI) by 6 March 2024. The ECI was instructed to publish this information by 13 March 2024. SBI requested an extension until 30 June 2024, citing complexities in matching donor and redemption data stored in separate silos.

 

Legal Provisions –

No statutory legal provisions were referred in the instant case

 

Contentions of the Appellant –

The appellant, State Bank of India (SBI), contended that the compliance with the Supreme Court’s directive to submit detailed information on Electoral Bonds was complex and time-consuming. SBI argued that the data on bond purchases and redemptions were stored in separate silos, maintained with utmost confidentiality as per the core principles of the Electoral Bond Scheme. The bank asserted that matching the donor details with the corresponding political party encashments required a significant amount of time, particularly given that the information was not digitally centralized but stored in physical sealed covers at various branches. SBI highlighted the extensive volume of transactions, noting that 22,217 bonds had been purchased, necessitating the processing of 44,434 data sets. The bank maintained that these logistical challenges justified an extension until 30 June 2024 to ensure accurate compliance with the Court’s directive.

 

Contentions of the Respondent –

The respondents, Association for Democratic Reforms (ADR) and the Communist Party of India (Marxist), contended that the State Bank of India (SBI) had the capacity to comply with the Supreme Court’s directive within the stipulated timeframe. They argued that the information required by the Court was readily available since SBI had a systematic process for handling Electoral Bonds, including unique identification numbers and mandatory Know Your Customer (KYC) documentation for each transaction. The respondents asserted that the segregation of donor and redemption details into separate silos should not impede the compilation process, as the bank already had procedures in place for tracking and maintaining these records. They emphasized that the delay was unjustified and indicative of willful disobedience of the Court’s order, urging strict adherence to the original deadlines to uphold transparency and accountability in political funding.

 

Court Analysis and Judgement –

The Hon’ble Supreme Court evaluated the SBI’s request for an extension of time to disclose details of the purchase and redemption of Electoral Bonds. The Court noted that the information required was already available with the SBI, albeit maintained in two separate silos. The Court found that the SBI’s process of maintaining donor and redemption details separately should not significantly hinder the disclosure, as the bank’s own FAQs indicated the mandatory submission of detailed KYC documentation for each transaction. Additionally, the Court observed that the SBI was obligated under the Electoral Bond Scheme to disclose information when ordered by a competent court. Given the SBI’s acknowledgment that the information existed, the Court dismissed the extension request, emphasizing that compliance with the original deadline was feasible. The Court ordered the SBI to disclose the details by 12 March 2024 and directed the Election Commission of India (ECI) to publish the information on its website by 15 March 2024. The Court warned SBI of potential contempt proceedings for non-compliance but chose not to invoke contempt jurisdiction immediately, considering the bank’s application for an extension. The Miscellaneous Application for extension was dismissed, and the Contempt Petitions were disposed of accordingly.

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Judgement Reviewed By- Anurag Das

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