LI Network
Published on: February 15, 2024 at 11:20 IST
The Supreme Court has invalidated the Electoral Bonds Scheme, declaring it unconstitutional due to its infringement on the right to information.
The apex court’s constitution bench, comprised of Chief Justice DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, delivered the unanimous verdict.
The case, which saw three days of intense deliberation, involved challenges to the controversial electoral bonds scheme.
The scheme, introduced through amendments in the Finance Act 2017, allowed for anonymous electoral contributions. The Court’s ruling, anchored in Chief Justice Chandrachud’s lead judgment, concluded that such anonymity violated the right to information as guaranteed under Article 19(1)(a) of the Constitution.
The judgment addressed two pivotal questions: the non-disclosure of information on voluntary contributions to political parties, and the unlimited corporate funding allowed by the amendment to Section 182(1) of the Companies Act. Both aspects were deemed incompatible with the principles of free and fair elections.
Chief Justice Chandrachud emphasized that the restrictive means test was not satisfied, and alternative methods, other than electoral bonds, could achieve the objective of curbing black money.
He stressed that the right to informational privacy, extending to financial contributions as a facet of political affiliation, should be upheld. The Court applied a double proportionality standard to balance conflicting rights, ultimately concluding that the government failed to prove that the electoral scheme’s measures were the least restrictive.
Rejecting the government’s argument that Clause 7(4)(c) of the scheme struck a balance between rights, the court found that the provision favored informational privacy and did not meet the proportionality standard.
Consequently, amendments to the Income Tax Act, Representation of Peoples Act, and Companies Act were deemed unconstitutional.
The Court directed the immediate cessation of electoral bond issuance, with the State Bank of India instructed to disclose details of donations and recipient political parties.
The case, brought forth by petitioners including the Association for Democratic Reforms (ADR) and the Communist Party of India (Marxist), underscored concerns about the scheme’s lack of transparency and its potential to enable contributions through shell companies.
The government’s defense centered on promoting legitimate funds in political financing and safeguarding donor anonymity to prevent retaliation.
Throughout the hearings, the bench raised pointed questions about the scheme’s ‘selective anonymity,’ its potential to institutionalize kickbacks, and the removal of the cap on corporate donations.
As a result of the Court’s decision, the Election Commission of India has been directed to provide details of political party contributions via electoral bonds up to September 30.
The landmark case, officially titled Association for Democratic Reforms & Anr. v. Union of India & Ors., marks a significant milestone in the ongoing discourse on electoral transparency and campaign financing.