The Supreme Court said that the scheme is "not the only way" to curb black money.
The Supreme Court, in a historic judgment today, declared the electoral bonds scheme for political funding as unconstitutional. Chief Justice of India DY Chandrachud, while announcing the verdict, said that the scheme was arbitrary and violated the citizens' right to information.
The electoral bonds scheme, introduced by the government on January 2, 2018, was seen as a solution to replace cash donations and enhance transparency in political funding.
Here are the Supreme Court's key conclusions:
1. Violation Of Article 19(1)(a)
The Supreme Court arrived at a unanimous decision, with both Chief Justice Chandrachud and Justice Sanjiv Khanna agreeing on the "unconstitutional" nature of the electoral bonds scheme.
The key issues raised in the petitions focused around the potential violation of the right to information under Article 19(1)(a) of the Constitution and the concern over unlimited corporate funding compromising the principles of free and fair elections.
2. Quid Pro Quo Scenarios
The Supreme Court held that the electoral bonds scheme is "not the only way" to curb black money. The court acknowledged the potential for quid pro quo arrangements arising from financial support to political parties.
The verdict highlighted that the anonymity of electoral bonds directly infringes upon the citizens' right to information.
3. Diverse Purposes
The Supreme Court said that any infringement on the right to information should not be justified solely by the objective of curbing black money.
The Court said that not all contributions are intended to alter public policy, as individuals like students and daily wagers also contribute. The judgment said that denying the umbrella of privacy to political contributions solely due to certain contributions' alternative purposes is impermissible.
4. Corporate Influence
The Supreme Court highlighted the potentially graver influence of companies on the political process compared to individual contributions.
The bench criticised amendments to the Companies Act and implied that corporate donations in political funding as purely business transactions.
5. A Call For Transparency
The Supreme Court issued directives for the immediate end of the issuance of electoral bonds by banks. The State Bank of India, the designated bank for electoral bonds, was mandated to provide details of donations through electoral bonds and disclose the political parties receiving these contributions.
The SBI was also instructed to submit these details to the Election Commission of India (ECI), which is obligated to publish the information on its website by March 13. It also directed that the bonds should be returned and refunded to the purchasers. The bank has to refund the purchasing party after the uncashed bonds are returned.