New Delhi: A five-judge Supreme Court bench Monday dismissed the State Bank of India’s (SBI’s) plea seeking more time to disclose details of those who bought its controversial electoral bonds to fund political parties.
The top court, which also sought information on redemption of these bonds, told the bank to furnish the details to the Election Commission of India (ECI) by Tuesday. The bench led by Chief Justice D.Y. Chandrachud directed the poll body to upload these details on its website by 15 March.
The bench, which included justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala and Manoj Mishra, said the bank had requisite information sought in terms of its 15 February direction that had asked the SBI to submit details of electoral bonds purchased between 12 April 2019 and 15 February this year.
“Submissions of SBI in application indicates that information sought is readily available. Thus, the application by SBI seeking extension of time until 30 June is dismissed. SBI is directed to disclose the details by the close of business hours of 12 March,” the court said.
According to the constitution bench’s direction, this was to be done by 6 March and the SBI was to give this information to the ECI. It was part of the court’s unanimous verdict striking down the anonymous Electoral Bond Scheme scheme, holding it unconstitutional.
Two days before the deadline was to end, the bank moved an application asking for more time to comply with the court’s direction on information related to election bond purchasers and redemption details.
It wanted till end-June to do the needful, saying it would have to undertake a physical exercise to correlate the information stored in two different silos — one that pertains to purchasers and the other related to redemption by political parties.
During the hearing Monday, senior advocate Harish Salve, who was arguing for SBI, accepted that the bank had the information as sought in the order but in two different sets. He also said that if correlation was not needed, then the SBI would be able to follow the 15 February order in the next three weeks.
Rejecting this proposition, the bench observed, “There is no scope for confusion,” before directing SBI to furnish details within a day.
Salve said that SBI did not want to create havoc by committing a mistake.
However, Justice Khanna interjected, saying, “There is no question of any mistake. You have the KYC. This is the number 1 bank in the country. We expect them to be able to handle this.”
The court also ordered the ECI to immediately upload information provided by it to the court in April 2019. This was done five years ago following a direction to the poll panel to disclose details of electoral bonds purchased and redeemed by political parties.
The information was given to the ECI by various political parties. The court had not made this report public and kept it in a sealed cover.
The court also frowned upon SBI for not disclosing the steps it has initiated so far to comply with its 15 February direction and felt the bank should have at least given a status report of what it has done in the last 26 days since the order was declared.
The bench, therefore, put the SBI chairman on notice and warned of contempt in case there was non-compliance of its direction. It also asked the chairman and the managing director of the bank to file separate affidavits affirming compliance of the court’s directions.
“Though we are not exercising the contempt jurisdiction, but we put SBI on notice that this court will proceed against it for wilful disobedience of court if it does not adhere to the directions issued by the court,” the court said, declining to hear contempt petitions filed by the Association of Democratic Reforms (ADR) and Common Cause — two non-profit organisations on whose petitions the court gave its 15 February judgment.
The court highlighted provisions of the bond scheme to point out that the SBI was mandated to reveal details of bonds purchased and encashed in case there were judicial orders asking it to do so.
It then recounted that as per the Frequently Asked Questions (FAQ) published by SBI with respect to purchase of electoral bonds, each purchaser would have to submit Know Your Customer (KYC) documents. Therefore, the court concluded that details of bonds purchased and directed by the court to be disclosed are readily available.
Similarly, FAQ linked to redemption of electoral bonds states that each political party can only open one current account to encash them. These current accounts can only be in four authorised branches, meaning redemption details would be available there, the court observed in its order.
‘We have asked you for a plain disclosure’
During the arguments, Salve took the court through the standard operating procedures (SOP) in support of SBI’s contention on correlation of data stored in two separate sets.
The senior counsel said that to maintain confidentiality of the purchase, the bank made sure there is no connection between the name of the purchaser, the bank’s core banking system and the bond number.
In response, the bench read out its 15 February directions and observed verbally: “….we have not told you to do the matching exercise. We have asked you for a plain disclosure. Therefore, the grounds on which you seek an extension does not accord with the directions of the judgment at all. The judgment does not tell you to do that exercise.”
“If that’s not so, then there is no problem,” Salve added. When he said the order seemed to suggest what the bank apprehended, Justice Gavai told him not “to go by what’s suggested”.
“Whatever we wanted to speak, we have spoken in black and white,” the bench said.
Salve explained the procedure which SBI followed to ensure the purchaser’s identity is kept secret. “When the purchases were made, we divided the information. The names were kept at one place and purchases recorded at another place. We knew this was sensitive information. So, a physical process was devised. So, we did KYC. It was done to prevent the gossip over who purchased which bond.”
He further said: “We were told to ensure this information does not leak. So, the bond’s information did not go into the core banking system.”
The court noted the SBI’s submission that an SOP clause regarding sale and redemption of electoral bonds stipulates that no details of bond purchasers including KYC and other details will be entered into the core banking system and thus the details of purchasers of bonds were not available centrally and donor and recipient details are in two different silos.
“There is a large number of data sets to decipher and a total of 22,217 bonds were purchased between April 2019 to February 2024 and this will lead to 44,000 plus data sets since there are two silos of info and thus compilation will be time-consuming process,” the SBI had submitted, the court recorded in its order.
This is an updated version of the report.
(Edited Tikli Basu)
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