Apex Court Refuses To Direct SIT Probe Into Alleged 'Quid-Pro-Quo' Arrangements By Political Parties Under Electoral Bonds Scheme

The Supreme Court, today, refused to set up a Special Investigation Team ('SIT') into the alleged 'quid-pro-quo' arrangements under the Electoral Bonds Scheme and to direct reassessment of the income of the Political Parties.

The Bench of Chief Justice DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra said in the order, "At the present stage, recourse to the remedies which are available under the law to pursue such grievances, it would be both premature and inappropriate for this Court: because the intervention of this Court 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...Moreover, the other reliefs which are sought in the batch of petitions including the directions to the authorities to make recovery from political parties on the basis they are proceeds of crime or for that matter for the 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, 1961 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 to make...For all these reasons we are declining to exercise jurisdiction under Article 32 of the Constitution."

The reliefs which have been sought in these petitions were: a) A court-monitored investigation by SIT b)quid pro quo arrangements by the public servants, political parties, companies etc. d) direction to authorities to investigate the source of funding, e) direction to the authorities to recover amounts from political parties, f) direction for an investigation into the violation of section 182(1) of the Companies Act, 2013 by companies which donated through electoral bonds, g)Constitution of a committee headed by a Former Judge of this Court to investigate into the illegal benefits from donors by public authorities by way of quid pro quo and h) Direction to IT Authorities to reopen assessment of political parties.

Advocate Prashant Bhushan, appearing for the Petitioner, submitted that no investigation within the purview of a normal legal process will reach any conclusion or carry any credibility and there is a likelihood that some officers in the investigative agencies are likely to be involved hence, an independent investigation outside the purview of the normal process of law should be ordered by this Court. He also submitted that an element of criminality may be involved where there is a proximate relationship between the purchase and the contribution of the bond and the contract given to such purchasers. 

The Petitions were founded on two assumptions: 1) the prima facie existence of quid pro quo and  2) the involvement of some officials of the investigative agencies.

The Petition, jointly filed by Common Cause and the Centre for Public Interest Litigation, both registered societies, highlighted the necessity of an SIT inquiry to uncover alleged conspiracies and malpractices associated with the electoral bonds scheme, which facilitated anonymous donations to political parties. 

Bhushan submitted, "There is a money trail of 8,000 crores of electoral bonds given by way of quid pro quo...This is not limited to one political party. This has happened across the board."

Justice Pardiwala asked, "What do you expect us to do on the basis of quid pro quo? Start inquiring about it?"

Bhushan replied, "For example in Mega Engineering, an Electoral Bond of 140 crores was paid within one month thereafter a contract of 14,000 crores of infrastructure contract was given by the Government headed by the Political Party."

Justice Pardiwala to this said, "You are assuming."

Adv Bhushan replied, "I am not assuming, I am saying that just see the sequence of events and see facts. The Companies themselves have disclosed in one case, they said they had to give electoral bonds because we were facing excise issues and the Government advised us to give this bond...Who will investigate this? How will this be investigated? Because the Government appears to be involved. The Political party appears to be involved...The company appears to be involved. Now, if I go and launch an FIR in a normal police station or CBI, what will happen?"

Adv Bhushan also submitted, "One more thing which I forgot to tell you is that some of the donations have been made by Pharmaceutical companies who are now facing inquiries and action for substandard drugs or even life-threatening drugs. After receipt of those electoral bonds etc., all those inquiries by the drug controller appear to have gone silent."

Senior Advocate Vijay Hansaria, appearing for another petitioner i.e. Dr.Khem Singh Bhatti sought a direction to confiscate the amounts received by the political parties through electoral bonds and reassessment of income of the political parties. 

The plea stated that the Constitutional Bench had also directed the State Bank of India (SBI) to release all the data about the purchase of bonds and encashment of bonds by political parties, and after some foot-dragging by the SBI, the data was finally released, and within minutes of the release of the data, the donors of bonds were matched with the political party encashing the bonds.

The NGOs, in their plea, stated that the electoral bond data that has been revealed 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. (c) electoral bonds given as a consideration for favourable policy changes.

Cause Title: Common Cause and Anr. v. Union of India (W.P.(C) No. 266/2024) and other matters.