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Synopsis

A First Information Report (FIR) has been lodged against Union Finance Minister Nirmala Sitharaman, BJP national president JP Nadda, and other prominent figures of the ruling party, accusing them of misusing the Electoral Bond Scheme to extort money from private companies through enforcement agencies. Bengaluru’s Tilak Nagar police registered an FIR on Saturday, September 28, 2024, after a local court directed the city police to investigate the complaint on Friday.

The complaint filed by Adarsh R. Iyer, co-president of Bengaluru-based NGO Janaadhikaara Sangharsha Parishath (JSP), also names BJP Karnataka president BY Vijayendra, senior leader Naleen Kumar Kateel, and officials from the Enforcement Directorate (ED). Despite filing a detailed report at Tilaknagar Police Station on March 30, 2024, no action was taken, including by the DCP of Bengaluru South East. As a result, Iyer approached the court to direct the police to register an FIR under Section 156(3) of the CrPC, investigating the offences alleged.

Following this, the order was issued by the 42nd Additional Chief Metropolitan Magistrate (ACMM) court, which includes charges under Sections 384 (extortion), 34 (common intention), and 120B (criminal conspiracy) of the Indian Penal Code (IPC). The ACMM’s order read, “Office to send the complaint and connected papers to the said police station. Await FIR, Call on 10.10.2024.” The court’s decision was based on two Supreme Court rulings: ‘Association for Democratic Reforms v Union of India’ which declared the Electoral Bonds Scheme "unconstitutional," and another ‘Common Cause v Union of India’, wherein the apex court rejected a plea to form a Special Investigation Team (SIT) to investigate alleged quid pro quo between donors and political parties.

The complainant alleges that Sitharaman, in her capacity as Finance Minister, conspired with the ED to carry out raids on major corporations, including Vedanta, Sterlite, and Aurobindo Pharma. According to Iyer, these raids were used to extort over Rs 8,000 crore from these companies under the guise of the Electoral Bond Scheme. Many companies, fearing further punitive action, were coerced into purchasing electoral bonds, which were subsequently encashed by the accused, including Sitharaman, Nadda, Vijayendra, and others. The complaint suggests that this extortion racket was orchestrated in collaboration with BJP officials at various levels.

The complaint also brings attention to Aurobindo Pharma, which came under scrutiny after its director, P. Sarath Chandra Reddy, was arrested by the ED in connection with the Delhi liquor scam. After his arrest, the company allegedly purchased Rs 5 crore worth of electoral bonds, later contributing an additional Rs 25 crore to the BJP, raising the total contribution via electoral bonds to Rs 52 crore. These funds were allegedly partly received by the BJP, with smaller portions directed to other parties.

Notably, the electoral bonds, introduced in 2017 through the Finance Act, are similar to promissory notes and allow anonymous donations to political parties, with no requirement for donors or parties to disclose the source of the funds. The scheme, which was struck down as unconstitutional by the Supreme Court in February 2024, had been criticised for enabling opaque political funding.

 

Cause Title: Adarsh R Iyer v. Nirmala Sitharaman & Others [P.C.R 4880/2024]