Challenge to electoral bond scheme goes to five-judge bench

However, if the hearing remains inconclusive on October 31, it will continue on November 1 as well.

Challenge to electoral bond scheme goes to five-judge bench

Supreme Court of India [Representational Photo : iStock]

The Supreme Court on Monday referred to a five-judge constitution bench, a batch of petitions

including one by NGO Association for Democratic Reforms (ADR) challenging the electoral bond scheme which allows anonymous funding to political parties, which was brought as a money bill – part of the Finance Acts of 2016 and 2017.

Referring the challenge to the election bond scheme to a five-judge constitution bench, Chief Justice DY Chandrachud heading a bench also comprising Justice JB Pardiwala and Justice Manoj Mishra said: “In view of the importance of the issue raised, and with regard to Article 145(4) of the constitution of India, the matter be placed before a bench of at least five judges.”


Having referred the matter to a five-judge constitution bench, the Chief Justice Chandrachud said that “the matter will be retained for hearing on October 31, 2023.”

However, if the hearing remains inconclusive on October 31, it will continue on November 1as well.

In the last hearing of the matter on October 10, the bench had asked nodal counsel – one each from both the sides – to prepare a common compilation of the submissions, pleadings, documents and precedents to be used by all in the course of the hearing.

However, noting that the issue regarding the certain laws that were brought as money bill is yet to be adjudicated by the seven-judge bench, the petitioners told the bench that, for now, they would not argue on their challenge to the introduction and passage of the electoral bond scheme as a money bill.

Advocate Prashant Bhushan, appearing for NGO ADR had told the bench that the anonymous nature of the funding also promoted corruption as it allowed companies, who had received certain benefits from the government of certain parties, to anonymously donate to those political parties.

He had stated that the electoral bond scheme that was brought as a part of the Finance Acts of 2016 and 2017, have “opened the floodgates to unlimited political donations.”

Electoral bond is an instrument in the nature of a promissory note or bearer bond which can be purchased by any individual, company, firm or association of persons provided the person is a citizen of India or body is incorporated or established in India. The bonds are issued specifically for the purpose of funding political parties.

The government has all through defended the electoral bond scheme, describing it as completely transparent, that takes care of unaccounted funding of the political parties. The Centre has urged the top court to hear it before deciding whether the matter needs to be referred to the constitution bench.

The Association for Democratic Reforms, which monitors the criminal antecedents of the candidates of various parties, has alleged that the ruling party had received more than 60 per cent of total electoral bonds in the audit of the parties in two years of 2017-18 and 2018-19.

The NGO has noted that even the Election Commission and the Reserve Bank of India had in 2017 objected to the electoral bonds, advising against their issuance as a mode of donation to the political parties.

Various petitions are pending before the top court challenging amendments made to different statutes through Finance Act 2017 and Finance Act 2016 on the ground that they have opened doors to unlimited, unchecked funding of political parties.