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TMI Blog2021 (3) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that everything happens only through banking channels. While the identity of the purchaser of the bond is withheld, it is ensured that unidentified/ unidentifiable persons cannot purchase the bonds and give it to the political parties. Under clause 7 of the Scheme, buyers have to apply in the prescribed form, either physically or online disclosing the particulars specified therein. Though the information furnished by the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, it is subject to one exception namely when demanded by a competent court or upon registration of criminal case by any law enforcement agency. A nonKYC compliant application or an application not meeting the requirements of the scheme shall be rejected. Under Section 129(1), such financial statements should give a true and fair view of the state of affairs of the company and comply with the accounting standards notified under Section 133. These financial statements are to be placed at every Annual General Meeting of the company. Under Section 137, a copy of the financial statement, along with all the documents duly adopted at the Annual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, AOR ORDER 1. The Association for Democratic Reforms and Common Cause have joined together and come up with the above Public Interest Litigation praying for the: (a) Issue a writ of declaration or any other appropriate writ declaring (i) Section 135 of the Finance Act 2017 and the corresponding amendment carried out in Section 31 of the Reserve Bank of India Act, 1934, (ii) Section 137 of the Finance Act, 2017, and the corresponding amendment carried out in Section 29C of the Representation of the People Act, 1951 (iii) Section 11 of the Finance Act, 2017 and the corresponding amendment carried out in Section 13A, the Income Tax Act, 1961 (iv) Section 154 of the Finance Act, 2017 and the corresponding amendment carried out in Section 182 of the Companies Act, 2013 and (v) Section 236 of Finance Act, 2016 and the corresponding amendment carried out in Section 2(1)(j)(vi) of the Foreign Regulations Contribution Act, 2010 as being unconstitutional, illegal and void. (b ) Issue a writ of mandamus or any other appropriate writ directing that no political parties would accept any donation in cash. 2. On 3.10.2017, notice was order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the donors as against the each Bond; the amount of each such bond and the full particulars of the credit received against each bond, namely, the particulars of the bank account to which the amount has been credited and the date of each such credit. 14. The above details will be furnished forthwith in respect of Electoral Bonds received by a political party till date. The details of such other bonds that may be received by such a political party upto the date fixed for issuing such bonds as per the Note of the Ministry of finance dated 28.2.2019, i.e. 15.5.2019 will be submitted on or before 30th May, 2019. The sealed covers will remain in the custody of the Election Commission of India and will abide by such orders as may be passed by the Court. 15. As per Clause 8 of the Electoral Bond Scheme, 2018, electoral bonds are to be issued for a period of 10 days in the months of January, April, July and October and additional 30 days is provided during an election year. As per the Schedule contained in the Note of the finance Ministry dated 28.2.2019, extracted above, a total period of 45 days has been fixed for issuing the bonds in the month of March, April and May. This, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, though filed in a gap of two years, are one and the same, they were taken up together. 8. At the outset, learned Attorney General submitted that the copy of the latest application was received only three days ago and that however he will advance arguments without seeking time for counter if no fresh material other than those found in I.A. No.183625 of 2019 is relied upon. This was agreed to. 9. We have heard Shri Prashant Bhushan, learned counsel for the applicants/writ petitioners, Shri K.K. Venugopal, learned Attorney General for the Union of India and Shri Rakesh Dwivedi, learned Senior Counsel appearing for the Election Commission of India. 10. We should point out at the threshold that there cannot be repeated applications seeking the same relief, merely because the interim reliefs sought, relates to something that is to happen at periodical intervals of time. Under Clause 8(1) of the Electoral Bonds Scheme, 2018 the bonds under the Scheme are made available for purchase, for a period of 10 days each in the months of January, April, July and October. Therefore, once this Court has passed an Order on 12.4.2019 directing some interim arrangement, thereafter applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e EBBs may have a tenor of maximum 15 days. (b) The EBBs can be purchased for any value in multiples of ₹ 1,000, ₹ 10,000 or ₹ 100,000. (c) The purchase of EBBs would be allowed from a fully KYC compliant bank account of the purchaser. (d) The EBBs can be redeemed only by way of deposit into the designated bank account of an eligible political party. (e) The sale of EBBs will be open for a limited period, may be twice in a year, for 7 days each. (f) The EBBs will be issued at RBI, Mumbai only 14. Even in his letter dated 14.9.2017 the then Governor of RBI stated that the major objective of the Scheme is to provide anonymity and that the same can be achieved if the bonds are issued in electronic form with RBI as the depository rather than as a physical scrip. On 27.9.2017 the matter was placed before the Committee of the Central Board of RBI and the Committee flagged serious reservations. These reservations, incorporated in the next letter of the RBI dated 27.9.2017 were read out to us by Shri Prashant Bhushan, in support of his contention that the Scheme, as proposed by the Government will not only be seen as facilitating money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions issued by RBI regarding KYC norms and the bank s customer shall apply for the buyers of the bond and the authorized bank may also call for any additional KYC document; (iv) the bond shall be valid for 15 days from the date of issue and no payment will be made to any payee political party if the bond is deposited after the expiry of the validity period; (v) all payments for the issue of the bonds shall be accepted in Indian rupees, through demand draft or cheque or through electronic clearance system or direct debit of the buyers account; (vi) the bond can be encashed only by depositing the same in the designated bank account of the eligible political party; (vii) the face value of the bonds shall be counted as income by way of voluntary contribution received by an eligible political party for the purpose of exemption from income tax under Section 13A of the Income Tax Act, 1961. 18. Despite the fact that the Scheme provides anonymity, the Scheme is intended to ensure that everything happens only through banking channels. While the identity of the purchaser of the bond is withheld, it is ensured that unidentified/ unidentifiable persons cannot purchase the bonds and give it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his books of accounts. The trial balance, cash flow statement, profit and loss account and balance sheet of companies which purchase Electoral Bonds will have to necessarily reflect the amount spent by way of expenditure in the purchase of Electoral Bonds. 23. Under Section 128 (1) of the Companies Act, 2013 every company shall prepare and keep books of accounts and financial statement for every financial year. Financial statement is defined under Section 2(40) as follows: 2. ( 40) financial statement in relation to a company, includes- (i) a balance sheet as at the end of the financial year; (ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year; (iii) cash flow statement for the financial year; (iv) a statement of changes in equity, if applicable; and (v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv): Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement; 24. Under S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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