Case Title: Association for Democratic Reforms v. Union of India and others
The Supreme Court remarked that the operations under the Electoral Bond Scheme are not hidden behind iron curtains that cannot be pierced while refusing to stay the release of a new set of electoral bonds for the assembly elections in West Bengal, Kerala, Tamil Nadu, Assam, and Puducherry.
The CJI-led bench noted that, because the Scheme requires political parties to file audited statements of accounts, and the Companies Act requires financial statements of registered companies to be filed with the Registrar of Companies, the purchase and encashment of bonds, which occurs only through banking channels, is always reflected in documents that eventually become public domain.
"They can also be obtained in physical form from the Registrar of Companies upon payment of prescribed fee. Since the Scheme mandates political parties to file audited statement of accounts and also since the Companies Act requires financial statements of registered companies to be filed with the Registrar of Companies, the purchase as well as encashment of the bonds, happening only through banking channels, is always reflected in documents that eventually come to the public domain. All that is required is a little more effort to cull out such information from both sides (purchaser of bond and political party) and do some "match the following". Therefore, it is not as though the operations under the Scheme are behind iron curtains incapable of being pierced"
The bench, which also included Justices AS Bopanna and V. Ramasubramanian, noted that the financial statements of firms registered under the Companies Act, 2013 and filed with the Registrar of Companies are publicly available on the Ministry of Corporate Affairs website.
The court also rejected the argument that, even if the bonds were purchased through banking channels for a consideration paid in white money, someone may repurchase them from the first bidder using black money and transfer them over to a political party.
The fear that foreign business entities may buy the bonds and attempt to influence the country's electoral process is unfounded.
The worry that foreign corporate houses may buy the bonds and attempt to influence the country's election process is also misplaced, as the Bonds may only be purchased by a person who is a citizen of India or corporate houses incorporated or established in India, according to Clause 3 of the Scheme.