One of the unique features of British colonialism was the establishment of three large Presidencies—Calcutta, Bombay, and Madras—each larger than the average European nation. And each of these presidencies had its own central bank, which operated for more than a century until their amalgamation into the Imperial Bank of India in 1935. It was re-christened as the now ubiquitous State Bank of India in 1955.
The SBI’s recent application before the Supreme Court seeking a nearly four-month extension to disclose electoral bonds data is reminiscent of the functioning of the Imperial Bank of India during the British Raj.
The Association for Democratic Reforms (ADR) has now filed a contempt petition against the SBI for its failure to meet the 6 March deadline prescribed by the Supreme Court, which had struck down the electoral bonds scheme as violative of various extant laws as well as Article 19(1)(a) of the Constitution. The scheme—shorn of unnecessary details—permits anonymous financial contributions to political parties through ‘bonds’, which were in the nature of promissory notes.
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Withholding information?
The SBI’s ostensible reason for seeking this extension of time is that 22,217 electoral bonds were used by various entities to make donations to political parties under the scheme. The details of these bonds are stored separately and hence a period of almost four months is sought to collate the relevant data and submit it.
‘Justice must not only be done but also seen to be done’—is one of the oldest adages in law. The SBI will most likely submit all the details to the Supreme Court and to the general public, either by 30 June or later in due compliance with the court’s directions. But the larger, more pressing issue is this: Isn’t it in the interest of the Indian electorate that this vital information is placed in the public domain before the Lok Sabha election in April-May? (The term of the 17th Lok Sabha is set to expire before the 30 June extended deadline sought by the SBI).
By seeking to withhold this crucial information from the public until after the conclusion of voting for the 18th Lok Sabha, isn’t the State Bank of India depriving the Indian electorate of its sacred right to make an informed decision? Disclosure of the relevant information after voting concludes may at best be considered a compliance that may meet the literal letter of the law but would undoubtedly eviscerate the very spirit of the judgment.
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Political interference and pressure
Pertinently, this litigation before the Supreme Court is of 2019 vintage. It is scarcely believable that the SBI did not conduct the requisite internal due diligence, expected of any reasonable prudent entity and more so from a bank of its size, stature and resource, to collect and collate the relevant data with regard to the electoral bonds.
The five-judge Constitution Bench heard arguments over three days in October and November last year. At this stage too, the SBI ought to have acted prudently and collated the relevant information, which it may have been conceivably asked by the Supreme Court to disclose, in case it found that the bonds scheme violates the law. That, all this while, the SBI chose to do precisely nothing beggars belief and raises justifiable doubts of political interference and pressure as the prime motive for stalling the disclosure until the conclusion of the Lok Sabha election.
After all, if the prevalent perception—that the BJP is the recipient of a lion’s share of donations under the electoral bonds scheme—is found to be correct, and if the shrouds of secrecy are torn asunder and information regarding the donors/purchasers of these electoral bonds are placed in the public domain, then the beneficiaries of such dubious, non-transparent contributions may face a political backlash. It is possibly to avoid such ‘skeletons from tumbling from the closet’ that the SBI seeks to disclose the information after the election.
The nature of the electoral bonds—in varying denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore—is that the purchasers are completely anonymous and confidential. Except for the SBI, no one else has access to the donors’ KYC (Know Your Customer) details.
The bonds of these denominations can be purchased exclusively from the designated SBI branches. Considering the monopolistic and exclusive nature of this crucial, sensitive information, one would have reasonably expected the SBI to act with alacrity and promptitude and disclose the relevant information, rather than submit a time-wasting application.
The EBS is akin to a promissory note in a digitised form. The KYC details too are digitally stored. The litigation over this scheme has been pending for five years. The fact that the hearing concluded and judgment was reserved four months ago and in all this leisurely time, a behemoth of a bank like SBI was unable to keep the relevant details readily available, is extremely disappointing, to say the least, and an abject dereliction of its duty as India’s foremost public sector bank. The hearing of this extension of time application by the SBI will be keenly watched by the nation.
Sunil Fernandes is a Senior Advocate practising in the Supreme Court of India. Views are personal.
(Edited by Theres Sudeep)