AdvocateKhoj
Login : Advocate | Client
Home Post Your Case My Account Law College Law Library
    

Report No. 255

(iii) Laws regulating disclosure of election expenditure for candidates and parties

2.21.1. Pursuant to Sections 77(1) and 78 of the RPA read with Rule 86 of the Rules, all contesting candidates are also required to maintain a correct account of their election expenses and lodge a true copy of the same with the district election officer within thirty days from the date of election of the returning candidate. Contravention of the above provisions can be the basis for disqualification up to a period of three years under Section 10A of the RPA.

It is important to note, as several Supreme Court decisions have done, Dalchand Jain v. Narayan Shankar Trivedi, (1969) 3 SCC 685; L.R. Shivaramagowda v. T.M. Chandrashekar (1999) 1 SCC 666 that a mere failure to maintain correct accounts is not in and of itself a corrupt practice under Section 123(6), provided the prescribed limit of expenditure is not exceeded. While discussing the relevance of these provisions in maintaining "absolute purity in elections", the Supreme Court in Ashok Shankarrao Chavan noted as follows:

"Even the explanation to Sub-section (1) to Section 123 makes it clear that incurring of election expenses and the maintenance of account of those expenses are not an empty formality but the very purpose of stipulating such restrictions and directions under Section 77(1) and (3) read along with Section 78 explains the mandate to maintain absolute purity in elections by the contesting candidates. This is required in order to ensure that the process of the election is not sullied by resorting to unethical means while incurring election expenses."36

36. (2014) 7 SCC 99

2.21.2. Further, the Supreme Court in PUCL v. Union of India, (2003) 4 SCC 399 endorsed the recommendations of the NCRWC's Report,38 which had highlighted the need for stronger disclosure and auditing norms observing:

38. NCRWC Report, supra note 13, at para 4.14.3.

"4.14.3. The Commission recommends that the political parties as well as individual candidates be made subject to a proper statutory audit of the amounts they spend.... At the end of the election each candidate should submit an audited statement of expenses under specific heads. EC should devise specific formats for filing such statements so that fudging of accounts becomes difficult. Also, the audit should not only be mandatory but it should be enforced by the Election Commission."

2.21.3. The ECI issued transparency guidelines under Article 324 of the Constitution bearing No. 76/PPEMS/Transparency/2013 dated 29th August, 2014 w.e.f. 1st October 2014 after consultation with all the recognised political parties, and including the following:

  • On election expenses by parties: the payment of any election expenditure over Rs. 20,000 should be made by the political parties via cheque or draft, and not by cash, unless there are no banking facilities or the payment is made to a party functionary in lieu of salary or reimbursement.
  • On election expenses by unrecognised parties: although not required by law to submit their election expenditures to the ECI, unrecognised parties are required under these guideless to file their expenditure statements with the Chief Electoral Officer of the State in which the party headquarters are located.
  • On giving money to candidates: although there is no cap on expenditure by political parties for propagating their program, parties are required to adhere to the cap prescribed in section 77(3), RPA and Rule 90, Election Rules while providing "financial assistance" to candidates in their election campaigns. These amounts should be paid only by a crossed account payee cheque or draft or bank transfer, and not by cash.
  • On accounts and audit: all parties are required to maintain books of accounts (under section13A, IT Act) based on the guidance note issued by the Institute of Chartered Accountants of India to enable the calculation of their party income. These books need to be audited and certified by qualified, practicing Chartered Accountants, and are to be submitted annually (as audited annual accounts) to the ECI by 31st October, with a copy of the Auditor's Report.

2.21.4. The ECI in a clarification bearing No. 76/PPEMS/Transparency/2013 dated 19th November, 2014 stated that its "lawful instructions" were issued to fill the legal vacuum in the area, pursuant to the Supreme Court's order in Mohinder Singh Gill v. CEC, AIR 1978 SC 851 and Article 324; and are binding on all parties.40

40. ECI, Clarification of Transparency Guidelines for the Political Parties issued by the ECI, No. 76/contribution/Transparency/2013, 19th November 2014
<http://eci.nic.in/eci_main1/PolPar/Transparency/Clarification%20of%20Transparency%20guideline%20for%20political%20parties.pdf>



Electoral Reforms Back




Client Area | Advocate Area | Blogs | About Us | User Agreement | Privacy Policy | Advertise | Media Coverage | Contact Us | Site Map
powered and driven by neosys