Monday 25 March 2024

Short notes on Supreme Court judgment on Electoral Bonds


Supreme Court Strikes Down Electoral Bonds Scheme As Unconstitutional, Asks SBI To Stop Issuing EBs.

1) The Supreme Court on Thursday (15February 2024) delivered its highly-anticipated judgment in the electoral bonds case, holding that anonymous electoral bonds are violative of the right to information under Article 19(1)(a) of the Constitution. Accordingly, the scheme has been struck down as unconstitutional.

2) Judgment has answered two key questions, namely, first, whether the non-disclosure of information on voluntary contributions to political parties according to the electoral bond scheme and the amendments to Section 29C of Representation of the People Act, Section 183(3) of the Companies Act, Section 13A(b) of the Income Tax Act are violative of the right to information under Article 19(1)(a) of the Constitution, and second, whether unlimited corporate funding to political parties as envisaged by the amendment to Section 182(1) of the Companies Act violates the principles of free and fair elections.

3) "Information about funding of political parties is essential for the effective exercise of the choice of voting," Chief Justice Chandrachud stressed right at the outset, emphasising the importance of open governance.

4) Authoring an opinion on behalf of himself and Justices Gavai, Pardiwala, and Misra, the chief justice crucially held that the electoral bonds scheme violated Article 19(1)(a) of the Constitution -
"At a primary level, political contributions give a seat at the table to contributors, i.e., it enhances access to legislators. This access also translates to influence over policymaking. There is also a legitimate possibility that financial contributions to a political party would lead to quid pro quo arrangement because of the close nexus between money and politics. The electoral bond scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymising contributions through electoral bonds are violative of Article 19(1)(a)."

4) Accordingly, the amendments to the Income Tax Act, the Representation of Peoples Act, the Companies Act have been held to be unconstitutional.

Association for Democratic Reforms & Anr. v. Union of India & Ors. | Writ Petition (Civil) No. 880 of 2017

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