NEW DELHI : The Supreme Court (SC) on Friday will deliver its verdict on a petition challenging the validity of the electoral bond scheme, 2018, which was introduced by the National Democratic Alliance (NDA) government to formalize political funding.

Association of Democratic Reforms (ADR), a non-governmental organization (NGO), had approached the SC in March seeking a stay on the scheme on the grounds that the anonymity of the donor in case of electoral bonds flouts the transparency objectives the scheme promises to achieve.

Attorney general (AG) K.K. Venugopal, appearing on behalf of the government, submitted that the scheme should be accepted as an experimental reform, and argued that anonymity of the donor was a prerequisite. “Funds are received from affluent persons and companies. They all want their political party to win. If their party does not win then they apprehend some repercussions and, hence, secrecy or anonymity is required."

The SC bench headed by Chief Justice Ranjan Gogoi and comprising Justices Deepak Gupta and Sanjiv Khanna heard the argument at length on Thursday.

Arguing that this was a step by the government to combat the role of black money in political funding, the AG said: “We will have to wait and see how far this will work." There is no sinister purpose behind this, he said, adding that after the elections, whichever government comes to power, can prepare a report and file it before the Hon’ble court in order to ascertain its benefits.

The AG also explained that electoral bonds can be bought by any Indian citizen or body incorporated in India. The form carries a unique alphanumerical number and can be purchased from the State Bank of India. The bank follows its know your customer (KYC) policy, involving a detailed verification process, before issuing the election bonds to a person or entity. All the documentation is then put into a sealed envelope. While the bank which issues the bond, knows the donor, but not the political party, the bank which executes the electoral bond would know the identity of the political party, but not that of the donor. So, the details remain anonymous, the AG explained.

Justice Khanna, however, observed that the KYC only verifies the identity of the person and is “not a certification of the genuineness of the transaction".

“Right of the voters to transparency comprises the right to know which party gets funding from whom. Right of the voters to know is the biggest part of the democracy," said the bench.

In his counter argument, the AG said: “Transparency cannot be used as a mantra, for the reality needs to be focused on. If the source is declared, the purpose of the scheme gets vitiated."

Activist lawyer Prashant Bhushan, appearing for the NGO, argued that the scheme does not curb the menace of black money, because donations through cash can still be made. Furthermore, the argument of victimization does not hold good at all, he said.

Bhushan submitted a report by the Election Commission regarding complaints with respect to victimization of donors between 2014 and 2018, and hinged his argument on the fact that the EC had not received any such complaints. “On what basis is the government making the victimization argument," he asked.

The government had launched the electoral bond scheme in January 2018 as a formal alternative to cash donations to political parties.

Gireesh Chandra Prasad contributed to this story.

Get latest election news and live updates on Elections 2019 here