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Synopsis

A plea has been filed in the Supreme Court for a probe by a Special Investigation Team into alleged pay offs and quid pro quo arrangements between the corporates and the governments in receiving thousand of crores as donations to political parties through Electoral Bonds Scheme.

The PIL filed jointly by NGOs 'Common Cause' and 'Centre for Public Interest Litigation' contended that the electoral bond data showed that the bulk of the bonds appears to have been given as quid pro quo arrangements by corporates to political parties for getting contracts/licences/leases/clearances/approvals worth thousands and sometimes lakhs of crores and other benefits from the governments or authorities controlled by the governments which were in turn controlled by the political parties that received those bonds.

The plea has been filed by advocate Prashant Bhushan.

On February 14, 2024, the Supreme Court's Constitution bench quashed the Electoral Bonds Scheme as unconstitutional for violating the right to information of the citizens and possible quid pro quo arrangements and directed the SBI to disclose all the data stored with it.

The court's judgment had then come on PILs by NGO Association for Democratic Reforms and others argued by Bhushan and other counsel respectively.

According to the data, a total of electoral bonds worth about Rs 16,518 crore were sold out.

The plea said that this scam needs to be investigated by a Special Investigation Team (SIT) of sitting/retired officers of impeccable integrity chosen by this court and working under the supervision of a retired judge of this court. 

It also stated that electoral bonds were given in close proximity to action by agencies like the ED/IT/CBI raising suspicion of it being “protection” money to avoid or stall action by or in exchange for regulatory inaction by various regulators like the drug controller etc. The plea also aimed that electoral bonds were given as a consideration for favourable policy changes. 

"Though these apparent pay offs amount to several thousand crores, they appear to have influenced contracts worth lakhs of crores and regulatory inaction by agencies worth of thousands of crores and also appear to have allowed substandard or dangerous drugs to be sold in the market, endangering the lives of millions of people in the country," the plea filed by advocate Prashant Bhushan claimed.

"That is why the electoral bonds scam has been called by many astute observers as the largest scam in India so far, and perhaps in the world," it contended.

The plea also stated that in several cases, the donations appear to have been made in blatant violation of the regulatory framework governing contributions by companies to political parties. 

"Section 182(1) of the Companies Act prohibits any government company or any company having been in existence for less than three years from making contributions to political parties. Yet perusal of the data disclosed on electoral bonds, shows that at least 20 companies bought electoral bonds within three years of their incorporation. The donation by such companies total more than Rs 100 crores. In some cases, the companies were just a few months old when they purchased bonds, in flagrant violation of the provisions of the Companies Act," it said.

The plea stated that data further showed that various loss-making companies and shell companies donated huge sums to political parties through electoral bonds.

"Many companies having little or no profits gave large donations to many political parties, especially the ruling party. In this way, laundered money has found its way into the coffers of the political parties," it said.

The plea also said that the electoral bond scam has a money trail unlike the 2G Scam or the Coal Scam, where allocations of spectrum and coal mining leases were arbitrarily made, yet the Supreme Court ordered court-monitored investigations in both those cases, appointed special public prosecutors and formed special courts to deal with those cases.

Stressing on the need for forming SIT, the plea said that in the Electoral Bond scam, some of the country’s main investigative agencies such as the CBI, Enforcement Directorate and the Income Tax Department appeared to have become accessories to corruption. 

"Several firms which were under investigation by these agencies have donated large sums of money to the ruling party, potentially to influence outcomes of probes. Thus, the investigation in this case would not only need to unravel the entire conspiracy in each instance, which would involve officers of the company, officials of the government and functionaries of political parties but also the officers concerned of agencies like the ED/IT and CBI etc who appear to have become part of this conspiracy," it said.

Case Title: Common Cause Vs Union of India