Law Ministry Advised Jaitley Against Bypassing Rajya Sabha On Electoral Bonds, But Made An 'Exception' Anyway: Report

The Law Ministry, in all its senses, knew that electoral bonds were illegal and unconstitutional, yet, it allowed the government a safe passage by introducing it as a money bill and bypassing the Rajya Sabha.

In his latest article on the expose series on the controversial Electoral Bonds, journalist Nitin Sethi in Huffington post reveals that the law ministry in a two-page note had requested the Modi government to "avoid considering this practice as a precedent" and this was one-off exceptions.

According to the report, the documents obtained under the Right to Information Act by activist Saurav Das, reveal that the then Finance Minister, Arun Jaitley, bypassed the Rajya Sabha route to slip the most contentious aspects of the scheme (the scrapping of cap on donations) into a money bill. Saurav Das is a member of the National Campaign for People's Right to Information (NCPRI).

According to Article 110 of the Indian Constitution, a money bill is a bill which deals with receipts, expenditures, taxes or borrowings by the government which stands to impact the Consolidated Fund of India.

Moreover, the officials who had made critical observations on allowing shell companies to donate funds to political parties were sidelined, and their observations were termed as "informal discussions" between unnamed officials.

The Ministry of Personnel, which is under Prime Minister Narendra Modi since 2014 had also warned the PM regarding the officials' observations not being taken on record as it is illegal and violated the October 2013 Supreme Court judgement on how official minutes must be recorded.

This ministry is responsible for enforcing protocols on how government proceedings are transacted and recorded.

To remove the cap on political funding by the corporates, and also maintain the anonymity of the doner, as the electoral bonds promise, the government had to make changes in Companies Act.

Section 182 of the Companies Act allowed only profit-making companies to donate to a political party. It also limited the amount a company can donate not more than 7.5 per cent of its average net profits during the three immediately preceding financial year. The section also made it mandatory for a company to reveal the name of the political party they gave money.

The Huffington Post report says that the government bypassed the Rajya Sabha route to remove these specific provisions of the Companies Act.

The then corporate affairs minister, also Arun Jaitley, sought a legal opinion on bringing the electoral bonds bill as a money bill. The law ministry in response had said that "in a strict sense, it may not be considered as a money bill", but signed it off anyway.

Documents reveal that Jaitley held a meeting with the Corporate Affairs Ministry officials on March 8, 2017. The amendment to section 182 of the Companies Act was not mentioned on the agenda.

"It was, inter alia, decided that section 182 of the Companies Act, 2013 may be amended, keeping in view the various steps being taken by the government to bring transparency in electoral funding," read A file noting post-meeting.

Inter alia means, 'among other things'. However, the name of the person who made the inter alia proposal doesn't find a mention in the file notings. The noting said that 'informal discussions' had taken place between officials of Minister of Corporate Affairs and revenue department of the Ministry of Finance.

Jaitley knew that if the bill went to Rajya Sabha where the Bharatiya Janata Party lacked a majority in 2017, the bill may not see the light of the day. So he slipped the amendments into the Finance Bill which was then brought in as 'Money Bill'.

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