SC Tough on SG-Mehta; That's Not SC Duty #lawchakra #supremecourtofindia #analysis

if you don't have a percentage yes why would a company for what conceivable reason would a company donate 100% of its profits because you have to take the extreme case yes yes that's why I give you a one rupee company passes the threshold that I'm a profit-making company I I have two answers I have a one rupee profit but I will donate 100 crores why would a company do that technically I technically I can say Mr bushan has given this example that even ruling party can any party by ruling part any party can Fain ignorance that somebody came and uh in my Dropbox Dropbox not in the digital sense in in the bell in the postal box there was an envelope an envelope contain 100 crores nobody donates like this we donate we give money like this only in pilgrimages we don't people would not donate anonymously in in people would donate 100 crores without any name it would be an anonymous donation because that is yes that's what I'm say but that is again idealistic way practically the part even that is not idealistic because the assumption is that the almighty knows who has put money in the h i bow I bow I bow there is no confidentiality there is no confidence even even the person the person also knows why he is donating that is reflection of the fact that there is a line in Genji for the because they so people also know that but the party who receives knows who has given that you can never come out of there cannot be any system where the donor and Don each other would not know but then tar ma if this is so why not make everything open then the purpose is defeated as I it is as it is everybody knows about or partly knows about it party they know about it only person who is being deprived is the voter your your contention that the voters do not have the right to know after the number of decisions of this court slightly difficult no because they they would know that they should know and I I bow down and we go back to the earlier policy that's the only answer no no it's not like that that's why we said we not we are not for a moment saying that look there are three or four considerations which are very important one the need to reduce the the cash element in the electoral process second the need to encourage the use of authorized banking channels for that purpose which is the only way you can reduce the cash that's a second consideration third there is a counterveiling consideration uh sorry third is incentivizing the use of the banking channels which is confidentiality according to us and therefore according to incentivizing the use of the authorized banking channels should therefore result in greater confiden it but there is a fourth consideration which is a need for transparency and a fifth consideration which is that this should not become a legitimization of Kickbacks and quit proo between the the power centers whether in the states or in the center and people who are really in that sense they are they are benefactors of that power they they are they supplicants they want yes I bow so all these so when when the balance is drawn between these of course the balance has to be drawn by the uh by the legislature and by the executive not by us we are quite conscious of that but it's not therefore that you have an either or either you have this or you go back to an entire Cash System you can design another system which does not have the flaws of this system which really they they put a premium on the they put a premium on opacity you can still devise a system which balances out in a proportional way that's the point I I I'll just how it ised to be done is for you to disc we will not go step into that Arena that's no part of our function I I'll just respond to uh after showing the scheme but let me respond the last Point first which is bothering your LS that this might be used as legitimized Kickback well first of all whenever your Lordships are considering a a piece of subordinate legislature like a scheme because you know in now these five consideration which I have listed out you must must now read in the perspective of how it has been implemented first there was a cap that your donation must be related to a percentage of net profits a percentage of net profits meant that the company must be in a position to have net profits and that you would donate 5% initially then it became 7.5% under the 2013 act now what have we done now we say that well it has nothing to do with whether you have net profits or not in other words the company may have zero profits it may have zero turnover but it gets a donation only for the it gets certain income or Revenue only for the purpose of the donation that that immediately say that passes must I'll immediately say and your lot SMI clarify that if that is the any con it's right concern that so far as the condition with regard to the profit making company that percentage of a net profit a non not not profit making company cannot only but I I understand because then it would be used as a shell company that is one of the objectives we have removed 2 2 lakh 30,000 shell companies from the system so what will you do then you'll bring about an amendment to the companies that government Let Let Me Take A through this so you will move an amendment to amend the companies act to the effect that amending is a legislative function I I cannot make that but you have to move the amendment if you yes all your lot read it accordingly no is a government making a statement that we will amend the company act to bring back the position what it was namely that this will be only a percentage of the net profit no no no I'm not saying percentage I'm saying profit making company can only donate but tell us something assuming that it's a profit making it may have a one rupee profit it may have a 100 rupee profit yes why would a company if you don't have a percentage yes why would a company for what conceivable reason would a company donate 100% of its profit because you have to take the extreme case yes yes that's why I give you a one rupe company passes the threshold that I'm a profit making company I I have two answers I have a one rupee profit but I will donate 100 crores why would a company do that I I therefore when you know it can't be that you know the government says that well it can't be that we lay down under 140 to the principle that so long as you're a profit making company you can donate as much as you want the reason why these caps were introduced that they stood the test of time for a very legitimate reason namely that you're a company your purpose is to carry on business your purpose is not to donate to political parties and if your purpose is not to donate to political parties you must donate only a small portion of your uh assuming that that's an altruistic motive which is of course not so but we will not go into it because challeng 19 1956 act Provisions the 20 3 act provision we are now looking at today's challenge well may may I respond to your L's concern and it's a very valid concern we share the concern I stand corrected we have the data of the political parties we have the data I stand corrected yes Mr yes Mr what do you have to say yes so the first argument of the solicitor was that because of these amendments the volume of cash which is coming to political party which he says are maybe black money or is likely to be black money that has gone down no that's not his argument he doesn't make a quantitative statement his contention is that this was an effort which was made to bring into the accountable channels what was otherwise completely Beyond The Fold of accountability because the earlier schemes had not worked so let me just deal with that firstly M Lord it did not close the cash channel the the amendment has left open the cash channels the only change that has been made is that for getting income tax uh exemption that 20,000 has been brought down to 2,000 that's all otherwise donations up to cash donations up to 20,000 can be given to political parties and they are not required to be reported quite apart from the fact that actually 20,000 or 2,000 does not make any practice iCal difference because all that the political party declares is I have received X crores as cash donations which are below 20,000 they used to say below 20,000 earlier now if they want to Avail of income tax exemption they say it's below 2,000 so they say that we have received whatever 100 crores 500 crores by way of petty cash donation earlier Petty meant below 20,000 now Petty means below 2,000 if you want to income tax exemption practically it makes no difference in my respectful submission to the availability of cash to political parties or the ability of individuals to give cash to political parties practically that 220,000 makes no difference now that will not impinge upon the validity of the scheme yes yes I know but they are saying that this whole exercise was to bring down the element of cash in the economy they say cash is equivalent to Black money the object of the exercise was to uh make political funding of parties to be to come more through banking channels rather than cash this they say was the stated purpose of this whole bringing in electoral Bond one of the stated purpose Mr bushan there will be slight difficulty even if it is not happened probably the data May support you the cash Channel may not have come down no cash did come down I'm not saying cash didn't come down but the reason why it's important to understand why cash the three three four arguments on which we want direct answers one is that the intention was to ensure that the money comes through regular banking Channel yes there's a kyc required yes which is not there as far as payment cash is concerned and also even if it is coming through the bank accounts yes uh the kyc by the second kyc at the time when the bond is purchased is a second added Advantage all right let's assume that that's the number three their contention is that as far as payment is concerned the person who's made the payment is concerned the require the need to know the name of the donor is has been protected the confidentiality of the donor has been protected yes for 1 2 3 4 reasons yes and therefore when you EX ing the reasons you'll have to take into account what was the intent behind the pro behind behind the and not by a counter argument which may be and there's always been a conflict between confidentiality and declaration or so some l in both of them have their pluses and minuses to answer our argument that these changes defeat the citizens right to know about who's funding the political party Cas because they introduce another anonymous source of funding now the the the answer given by the solicitor to that is that well it had an objective now these are two conflicting things uh they say the objective was to limit uh black money or cash money coming to political parties or to reduce that and therefore we introdu these electoral bonds because many individuals or companies do not want to be known that they are the donors to these political parties because they fear victimization so that's the that was what the Finance Minister then stated that's the argument also of the [Music] solicitor

Channel: Law Chakra

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Id: uetqXd1rq_I

Length: 12min 57sec (777 seconds)

Published: Tue Apr 02 2024