Electoral Bonds: Supreme Court dismisses petitions seeking to set up a SIT to investigate the alleged instances of quid pro quo arrangements

Today (August 02, 2024), the Supreme Court (SC) bench constituting Chief Justice of India DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra dismissed petitions seeking to set up a SIT (Special Investigation Team) to investigate the alleged instances of quid pro quo arrangements between the political parties and corporate donors via Electoral bonds. The Supreme Court ordered, “The purchase of electoral bonds and the donations made to the political parties were on the basis of a law enacted by the Parliament. The provisions of the statute have since been held to be unconstitutional. The issue to be decided is whether the underlying reasons for the donations to political parties should be subjected to a Court-monitored investigation under an SIT. The petitions are founded on two assumptions: 

(1) There would be prima facie an element of quid pro quo where the date of the purchase of electoral bonds was in proximity to the award of a contract or a change in policy. 

(2) There is an involvement of certain officials of the investigating agencies as a consequence of which an investigation by a normal process of law would not be fair or independent.

We have highlighted the underlying premise of the submission to indicate that these are assumptions at the present stage and require the Court to embark upon a roving enquiry into the purchase of the electoral bonds, the donations which were made to the political parties and the arrangements in the nature of quid pro quo. The submissions which are urged on behalf of the petitioners highlight that even according to them an element of criminality may be involved where there is a proximate relationship between the purchase and contribution of the bond and the award of contract, or commission or omission by the authorities, as the case may be. Individual grievances of this nature with regard to the presence or absence of a 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 the criminal procedure or under Article 226 of the Constitution.

At the present stage, absent a recourse to remedies which are available under the law to pursue such grievances, it would be both premature - because the intervention under Article 32 must be preceded by the invocation of the normal remedies under the law and contingent upon the failure of those remedies - and inappropriate -because the intervention by this Court at the present stage would postulate that the normal remedies which are available under the law are not efficacious- for this Court to issue such directions.The other remedies including the directions sought to make recovery from political parties on the basis they are proceeds of crime or for reopening of income tax assessments hinge upon the statutory functions of authorities constituted under the law. For the above reasons, 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 on the face of remedies which are available under the law governing both criminal procedures.

Likewise, reliefs such as the reopening of assessments pertain to specific statutory jurisdictions conferred upon authorities under the Income Tax Act and other statutory enactments. Issuing a direction of that nature at the present stage would amount to a conclusion on facts which would be inappropriate..” During the proceedings, the Advocate Prashant Bhushan and  Senior Advocate Vijay Hansaria appeared for the Common Cause and CPIL (Centre for Public Interest Litigation), and another petitioner Dr. Khem Singh Bhatti respectively. The major reliefs sought by the petitioners include:

• 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 offences; 
• direction to the authorities to investigate the source of funding of shell companies and loss-making companies to various political parties;
• direction to the authorities to recover the amounts from political parties as donated by companies to these parties as part of quid pro quo arrangements where these are found to be proceeds of crime.