On 14 May 2016, electoral officials in Tamil Nadu seized around Rs 570 crore in cash in Tirupur district. State Bank of India officials had to come forward with documents to prove that the money was ear-marked for an inter-bank transfer and not for election purposes. But the fact that the Election Commission (EC) made such a gigantic seizure does raise questions whether the EC is in fact conducting arbitrary seizures during election season.
As is the case with most elections in India, the current round of state elections in Assam, West Bengal and Tamil Nadu have generated extraordinary amounts of cash and other goods that are allegedly destined to be used for bribing voters. According to media reports, as of 28 April 2016, the EC had allegedly seized a total of Rs 113 crore in all the poll-bound states, with a majority of it being in Tamil Nadu. As always, traders and businessmen have been complaining that the EC is harassing them and seizing legitimate cash that has no connection with political parties. The EC’s latest Compendium of Instructions on Election Expenditure Monitoring, a document that outlines the scope and aims of EC officials during elections, states that the surveillance teams of the EC can search vehicles belonging to political candidates (as well as their agents and party workers) and seize any amount above Rs 50,000 if they suspect that the money is likely to be used for electoral bribing.
In a country where large cash transactions are routine, such instructions are bound to cause concerns, especially for small traders and businessmen. There is no law preventing large cash transactions in India—it is only illegal to evade taxes on such transactions at the end of the year. For instance, cattle traders in Tamil Nadu have claimed that, because they sell multiple cattle for cash, their trade will be hit by a restriction limiting cash transfers to Rs 50,000. Similarly, on 2 April, a Salem-based merchants’ association filed a PIL before the Madras High Court on the grounds that it is a common practice in business to transfer large amounts of cash for purchase of goods, and that during election season, such cash being transferred was being seized by the EC despite there being no links to political parties. The PIL also alleged that the EC was indiscriminately seizing cash without clearly specifying the documents that would exempt such cash from seizure. On 2 May, a bench headed by the chief justice of the court Sanjay Kishan Kaul declined to admit the PIL and ordered the EC to be more vigorous with its seizures without harassing innocent people.
Notwithstanding the high court’s dismissal of the PIL, there are serious questions about the legality of the EC’s power to conduct such indiscriminate search and seizures. In fact, in 2012, the Gujarat High Court ruled against the EC on this very issue.
In 2012, Bhagyoday Janparishad, a non-governmental organisation in Gujarat challenged the constitutionality of the search and seizure powers of the EC. The NGO stated that the EC was causing havoc by harassing and seizing cash belonging to small businessmen and farmers, who necessarily had to conduct their business with cash. At the time, Section 4.7.1 of Instructions on Election Expenditure Monitoring, issued in July 2012 by the EC for the upcoming Assembly Elections in Gujarat allowed its bureaucrats to seize any “unexplained cash without proper documents” if it was “found in the possession of any person and is suspected to be used for bribing the voters.” The instruction further specified that “if cash found is more than Rs 2.5 Lakh and no criminality is suspected, i.e., without any election campaign material and no party functionary or worker of the contesting candidates/parties are not present in the vehicle, to prove the nexus, then the Assistant Director of Income Tax in charge of the district has to be informed. The Assistant Director will depute the Inspector or himself reach the spot for taking action as per Income Tax Laws.”