W.P.(C) No. 266/2024
Petition for SIT investigation in Electoral Bonds Scam

Summary :

Common Cause along with Centre for Public Interest Litigation (CPIL) filed a Writ Petition under Article 32 of the Constitution of India for enforcement of the right of the people under Article 14, 19 and 21 seeking direction for a court-monitored investigation by an SIT into the overwhelming instances of apparent quid pro quo between political parties, corporates and officials of investigation agencies, and other offences and as have been disclosed from the electoral bond data published by the Election Commission of India pursuant to judgment dated February 15, 2024 in W.P.C. No. 880 of 2017 titled Association for Democratic Reforms & Common Cause v Union of India & Ors reported as (2024) SCC Online SC 150.

The Hon’ble Supreme Court vide said judgment struck down the Electoral Bond Scheme, 2018, which allowed anonymous donation to political parties on the grounds that it violated the right of the people to be informed about who is donating how much to political parties; and that it could lead to quid pro quo arrangements between corporates and governments headed by these political parties; and that it distorts the level playing field by giving a massive advantage to parties in power.

The electoral bond data released by SBI shows that the bulk of the bonds appear to have been given as quid pro quo arrangements by corporates to political parties for:

(a) 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,

(b) electoral bonds given in close proximity to action by agencies like the ED/IT/CBI raising suspicion of it being “protection” money to avoid/ stall action by or in exchange for regulatory inaction by various regulators like the drug controller etc. and

(c) electoral bonds given as a consideration for favourable policy changes.

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 3 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.

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 Hon’ble Court ordered court-monitored investigations in both those cases, appointed special public prosecutors and formed special courts to deal with those cases.

Thus, the investigation in this case would not only need to unravel the entire conspiracy in each instance, which would involve officers of the D 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.

Hence, this scam needs to be investigated by a Special Investigative Team (SIT) of sitting/retired investigating officers of impeccable integrity chosen by this Court and working under the supervision of a retired judge of this Hon’ble Court. It is with this prayer that the petitioners have approached the Apex Court.

The Supreme Court on April 23 2024 registered the writ petition. 

On August 02, 2024, the Supreme Court bench comprising the Chief Justice Dr D. Y. Chandrachud, Justice J. B. Pardiwala and Justice Manoj Misra dismissed the writ petition by observing that recourse to the jurisdiction of the Apex Court under Article 32 of the Constitution should not be taken as a matter of course particularly, in view of the remedies available in law.

The court noted that the petition is founded on two assumptions:

1. An assumption that there would prima facie be an element of quid pro quo where the date of the purchase of the electoral bonds and the donation to a political party is in proximity to the award of a contract or a change in policy; and
2. An assumption that there is an involvement of certain officials of the investigative agencies, as a consequence of which, an investigation under the normal processes of the law would not be fair or independent.

“Individual grievances of this nature in regard to the presence or absence of quid pro quo would have to be pursued on the basis of the remedies available under the law. Likewise, where there is a refusal to investigate or a closure report has been filed, recourse can be taken to appropriate remedies under the law governing criminal procedure or, as the case may be, Article 226 of the Constitution,” the court observed.

It was opined by the court that at the present stage, absent a recourse to the remedies which are available under the law to pursue such grievances, it would both be premature and inappropriate for this Court; premature because the intervention of this Court under Article 32 of the Constitution must be preceded by the invocation of normal remedies under the law and contingent upon the failure of those remedies; and inappropriate because the intervention of this Court, at the present stage, would postulate that the normal remedies which are available under the law would not be efficacious.

“…….we are of the considered view that the constitution of an SIT headed by a former Judge of this Court or otherwise should not be ordered in the face of remedies which are available under the law governing the criminal procedure. Likewise, matters, such as the reopening of assessments pertain to the specific statutory jurisdiction conferred upon assessing authorities under the Income Tax Act 1961 and other statutes,” the court held.

Thus, the court dismissed the Writ Petition in the above terms. 

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Order_02-Aug-2024
WP (C) 266 of 2024 Petition