(1.) The petitioners have instituted proceedings under Article 32 of the Constitution challenging the constitutional validity of the Electoral Bond Scheme ("Electoral Bond Scheme" or "Scheme") which introduced anonymous financial contributions to political parties. The petitioners have also challenged the provisions of the Finance Act 2017 ("Finance Act") which, among other things, amended the provisions of the Reserve Bank of India Act 1934 (Sec. 135 of the Finance Act 2017; "RBI Act"), the Representation of the People Act 1951 (Sec. 137 of the Finance Act 2017; "RPA"), the Income Tax Act 1961 (Sec. 11 of the Finance Act 2017; "IT Act"), and the Companies Act 2013 (Sec. 154 of the Finance Act 2017; "Companies Act").
(2.) Sec. 31 of the RBI Act stipulates that only the RBI or the Central Government authorized by the RBI Act shall draw, accept, make, or issue any bill of exchange or promissory note for payment of money to the bearer of the note or bond. The Finance Act amended the RBI Act by including Sec. 31(3) which permits the Central Government to authorize any scheduled bank to issue electoral bonds.
(3.) To understand the context in which the legislative amendments were introduced, it is necessary to juxtapose the amendments with the regime on financial contributions to political parties. The law relating to financial contributions to political parties focusses on (a) contributions by corporate entities; (b) disclosure of information on contributions; and (c) income tax exemptions for donations.
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