The Supreme Court of India has declared the electoral bonds scheme unconstitutional, asserting that it infringes upon citizens’ right to information. Chief Justice of India DY Chandrachud deemed the scheme arbitrary and unconstitutional, expressing concerns about potential quid pro quo arrangements between political parties and donors. The court emphasized that the scheme’s objectives of combating black money and safeguarding donor confidentiality do not justify its existence.
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The electoral bonds scheme, introduced in 2018 with the goal of preventing black money from entering the political system, has faced persistent legal challenges since its inception. Finance Minister Arun Jaitley, at the time of its introduction, highlighted the need to address the prevailing issues of anonymous and undisclosed cash donations in political funding. However, multiple parties, including the CPM, Congress leader Jaya Thakur, and the non-profit Association for Democratic Reforms, raised concerns about the confidentiality clause hindering citizens’ right to information.
Source: Verdictum
The unanimous decision by the five-judge bench, including Justice Sanjiv Khanna, Justice BR Gavai, Justice JB Pardiwala, and Justice Manoj Misra, declared the electoral bonds scheme as unconstitutional. Chief Justice Chandrachud clarified that although there were two distinct opinions, both led to the same conclusion, with a minor variance in reasoning.
A critical aspect of the ruling involves the Supreme Court’s rejection of amendments to company and tax laws aimed at facilitating the electoral bonds scheme. The court highlighted the removal of transparency measures in corporate donations, as the new law eliminated the requirement for companies to be at least three years old before donating and to disclose the amount and recipient party.
Source: The Hindu
The court argued that companies wield significant influence in the political process, and the amendments treating companies and individuals alike were deemed arbitrary. Before the changes, loss-making companies were barred from contributing, acknowledging the potential harm of allowing such entities to participate in political funding due to quid pro quo arrangements.
The controversy surrounding the electoral bonds scheme escalated as various parties contested its legitimacy in court, including the Election Commission expressing reservations about its impact on transparency in political funding. Solicitor General of India Tushar Mehta defended the scheme, asserting that it aimed to ensure clean funding for political parties. He argued that revealing donors’ identities could disincentivize contributions, with the example of contractors not wanting their political affiliations disclosed.
Source: India Today
Advocate Prashant Bhushan, representing the Association for Democratic Reforms, countered by claiming that the opaque and anonymous nature of electoral bonds promoted corruption. He highlighted the imbalance created between ruling and opposition parties, as well as between political parties and independent candidates, since the introduction of the scheme. Bhushan also pointed out the surge in contributions through this method compared to other modes.
Responding to the right to information argument, Attorney General of India R Ventakaramani contended that there should be reasonable restrictions on the general right to know everything.
