Electoral Bonds: You have all details, cough them up by 12 March, Supreme Court tells SBI

The Supreme Court said the SBI need not match the two “silos” of information it has and should provide the following details: The names of the purchasers of electoral bonds and their denomination and the bonds redeemed by the respective political parties. Politically, this is a relief to the BJP with the Lok Sabha elections around the corner.

“The SBI shall file an affidavit of its Chairman and Managing Director on compliance with the above directions. While we are not inclined to exercise the contempt jurisdiction at this time, we place SBI on notice that this Court may be inclined to proceed against it for wilful disobedience if SBI does not comply with the directions by the timelines indicated in this order.”

The court said: “The operative directions of this Court directed the SBI to disclose the transactions as set out in direction B and direction C. SBI submits in its application itself that the donor details and redemption details are available albeit in separate silos. In other words, the direction issued by this court requires SBI to disclose information which is already available to it. Thus, the details of the bonds which have been purchased are readily available.

“Together with the SBI’s application for extension of time, ADR has filed a contempt petition in which it submits that the information can be easily disclosed by the SBI because of the unique number printed on the electoral bonds.”

Here are more details from the Supreme Court order:

“It is submitted that the difficulty of SBI arose since it construed the direction of this Court as to do a matching exercise of the donor details and the details of the bonds encashed by the political parties.

“While evaluating the submissions made by the SC, a reference to some of the key aspects of the scheme would be in order. Clause 7 of the EB scheme stipulates that the information furnished by a buyer of the EB shall be treated as confidential and shall be disclosed only when called upon to do so by a competent court or by a registration of offence by a law enforcement agency.

“Thus, in terms of the provisions of the electoral bonds scheme itself, SBI is mandated to disclose information when mandated by a Court.

“What has to be analysed is whether SBI is justified in seeking an extension of time. SBI seeks an extension of time on the ground that the process of “decoding the electoral bonds and matching the donors to donations” is a complex and time-consuming exercise.

“To substantiate, SBI has averred that (a) information is not available in a digital format; (b) Clause 7.1.2 of SOP stipulates that “no details of bond purchaser including KYC and other details will be entered in the core banking system”.

What transpired in Court

A five-judge Constitution bench of the Supreme Court on Monday, 11 March asked the State Bank of India to apprise it about the steps taken so far to ensure disclosure of details of electoral bonds encashed by political parties before the scheme was scrapped last month.

Commencing the crucial hearing, the bench headed by Chief Justice DY Chandrachud said it had asked the SBI to do a “plain disclosure” as per the court’s judgment.

In a landmark verdict delivered on 15 February, a five-judge Constitution bench scrapped the Centre’s electoral bonds scheme that allowed anonymous political funding, calling it “unconstitutional” and ordered disclosure by the Election Commission of donors, the amount donated by them and the recipients by 13 March.

The matters were heard by a five-judge bench comprising Chief Justice of India DY Chandrachud, Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra.

SBI seeking extension

The first matter was related to the SBI plea for an extension of the deadline of 6 March, to submit electoral bond details to the Election Commission of India.

The Bench told SBI’s counsel, Harish Salve, as per LiveLaw: “Now if you see the direction we have issued, we have not told you to do the matching exercise. We have directed a plain disclosure. So, seeking time to say that a matching exercise is to be done is not warranted. We have not directed you to do that.”

The Chief Justice said, “Even your FAQs indicated that for every purchase, you had to have a separate KYC. So every time a purchase was made, KYC was mandated.”

Salve replied: “I have full details of who purchased the bond. That is in one silo. I have another set of information about which political party encashed, and that is not a problem.”

Justice Gavai told the counsel: “We have not asked to correlate it with the purchaser and the political party.”
When Salve answered “In that paragraph, it is suggested”, the justice told him: “Don’t go by what is suggested, go by what is stated.”

Chief Justice Chandrachud said: “Our judgment is dated 15 February. We are on 11 March. In the past 26 days, what steps have you taken? Nothing is stated. It should have been disclosed. This is the work that we have done; we need time to do more. We expect some candour from the State Bank of India.”

Salve said he could file an affidavit about that because “The problem is that I can’t make a mistake, in a hurry to give numbers”.

Justice Khanna pointed out: “We are taking that you have no difficulty in giving the names of purchasers and political parties, and the only difficulty is in matching. For what 26 days, something must have happened.” He added that it was pointed out that the bonds have some numbers.

Salve said: “That number is kept secret, putting them requires tracing of each transaction.”

The Chief Justice made a strong observation: “An assistant general manager of the Bank files an affidavit seeking modification of the judgment of a Constitution Bench of this Court.”

The background

In its 15 February judgment quashing the electoral bonds scheme, the Supreme Court had said: “The State Bank of India shall submit the details of the political parties which have received contributions through electoral bonds since the interim order dated 12 April 2019, till date to the ECI. SBI must disclose details of each electoral bond encashed by the political parties, including the date of encashment and the denomination of the electoral bond. The SBI shall submit the above information to the ECI within three weeks, i.e., by 6 March.”

However, on 4 March, SBI approached the Supreme Court. It said it needed additional time till 30 June as has to compile and decode information relating to the sale of twenty-two thousand two hundred and seventeen (22,217) electoral bonds.
Its application said: “The SBI stated that between 12 April 2019, and 15 February 2024, twenty-two thousand two hundred and seventeen (22,217) electoral bonds were issued for making donations to various parties.

“The redeemed bonds were deposited to the Mumbai Main Branch by the Authorised Branches at the end of each phase in sealed envelopes. The SBI stated that since two different information silos existed, it has to decode, compile and compare forty-four thousand four hundred thirty-four (44,434) information sets.”

The second matter before the court is the challenge to the SBI petition by the Association of Democratic Rights, Common Cause and the political party Communist Party of India (Marxist).

On behalf of ARD, advocate Prashant Bhushan told the court on 7 March that ADR has sought initiation of contempt proceedings against SBI for not abiding by the court-mandated deadline of 6 March to submit to ECI full details of EBs purchased. ADR argued that voters have a fundamental right to know about the substantial sums of money contributed to political parties through EBs and that the lack of transparency goes against the essence of participatory democracy enshrined in Article 19(1)(a) of the Constitution.

He requested that this matter be heard on March 11, the same day the court heard the SBI plea.

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