NGOs Urge SC for Court Monitored Probe into Electoral Bond Scheme

Two Non-governmental organizations (NGOs) on Tuesday urged the Supreme Court to consider listing their PIL seeking a court-monitored probe by a special investigation team into alleged instances of “apparent quid pro quo” involving political parties, corporate entities, and officials of investigative agencies in the electoral bonds scheme.

A bench of Justices Sanjiv Khanna and Dipankar Datta took note of the submissions of lawyer Prashant Bhushan, appearing for NGOs ‘Common Cause’ and the Centre for Public Interest Litigation (CPIL), that the plea needed to be listed for hearing at the earliest.

“The CJI’s office is seized of it. It will be listed,” Justice Khanna said.

Landmark Verdict

A five-judge Constitution bench had on February 15 scrapped the electoral bonds scheme of anonymous political funding introduced by the BJP government.

Terming it a “scam,” the plea filed by the NGOs has sought a direction to the authorities to investigate the source of funding of “shell companies and loss-making companies” which made donations to various political parties, as has been disclosed by the data released by the EC.

The petition has also sought a direction to the authorities to recover the money donated by companies as part of “quid pro quo arrangements where these are found to be proceeds of crime”.

Following the top court’s judgement, the State Bank of India, the authorized financial institution under the scheme, had shared the data with the Election Commission (EC), which later made them public.

Electoral Bond Scheme

The electoral bonds scheme, which was notified by the government on January 2, 2018, was pitched as an alternative to cash donations made to political parties as part of its efforts to bring transparency in political funding.

“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, but there was no evidence of a money trail. Yet this court ordered court-monitored investigations in both those cases, appointed special public prosecutors, and formed special courts to deal with those cases,” the plea said.

The plea said in the “electoral bond scam, some of the country’s main investigative agencies such as the CBI, Enforcement Directorate, and the Income Tax department appear to have become accessories to corruption”.

It claimed that several firms which were under investigation by these agencies have donated large sums of money to the ruling party, to potentially influence the outcome 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 alleged.

Court Monitored Investigation

The plea said this “scam” needs to be investigated by an SIT of sitting/retired investigating officers of impeccable integrity chosen by the apex court and working under the supervision of a retired judge of the top court.

It has sought a direction for a “court-monitored investigation by an SIT into the instances of apparent quid pro quo between public servants, political parties, commercial organizations, companies, officials of investigation agencies, and others, and other offenses as highlighted in the present petition, as have been disclosed from the electoral bond data published by the Election Commission of India…”.

The petition has also sought a direction for investigating alleged violation of section 182(1) of the Companies Act, 2013, by companies which donated to political parties through electoral bonds within three years of their incorporation and for the penalty to be imposed on such firms in terms of section 182(4) of the Act.

The plea claimed the electoral bond data showed that the bulk of the bonds purchased by corporate entities appeared to have been donated as quid pro quo arrangements by corporates to political parties for getting contracts, licenses, leases, clearances, and approvals worth crores of rupees and securing other benefits from governments or authorities controlled by governments which were in turn controlled by political parties.

It alleged that electoral bonds were given in close proximity to action by agencies like the ED, IT, or CBI, raising suspicion about the donations being “protection” money to avoid or stall action by or in exchange for regulatory inaction by various regulators like the drug controller etc and as a consideration for favorable 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,” it said.

“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 claimed.

It said data also showed that various loss-making companies and shell companies were donating huge sums to political parties through electoral bonds.

“Data suggests that the introduction of electoral bonds led to the mushrooming of shell companies, which were used by corporate houses as conduits to launder illicit money,” the plea alleged.

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