The Supreme Court took steps towards transparency in Political Funding Today (15 Feb 2024), and mentioned factors such as the serious repercussions of unregulated corporate contributions, as well as the voters entitlement to information regarding their electoral candidates.
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NEW DELHI: The Supreme Court has struck down the electoral bonds scheme, highlighting its disproportionate impact and failure to be the least restrictive measure in curbing black money in electoral financing. A five-judge Constitution bench consisting of Chief Justice of India (CJI) DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra unanimously quashed the scheme along with amendments made to the Income Tax Act and the Representation of People Act, which had facilitated anonymous donations.
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This decision marks a pivotal moment in the ongoing debate over transparency and privacy in political contributions, underscoring the Court’s commitment to upholding the democratic principle of voters’ right to information.
The Disproportionate Impact of Electoral Bonds
The Court’s analysis revealed that the electoral bonds scheme was not the sole or most effective method to combat black money within political financing frameworks. It emphasized that there exist alternative measures that could achieve the same objective while imposing a lesser impact on the voters’ right to information. The judgment explicitly stated that the scheme
“does not fulfill the least restrictive means test”
signifying its disproportional influence on the electoral process.
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Justice Sanjiv Khanna, in his concurring opinion, delved into the scheme’s proportionality, ultimately concluding that the imperative for voters’ information access and transparency in political party funding far outweighs the need for donor anonymity. He remarked,
“The voters’ right to know and access to information is far too important in a democratic set-up… While secret ballots are integral to fostering free and fair elections, transparency-not secrecy-in funding of political parties is a prerequisite for free and fair elections. The confidentiality of the voting booth does not extend to the anonymity in contributions to political parties.”
The Right to Privacy vs. the Right to Know
The Court acknowledged that a citizen’s political beliefs and affiliations, including political contributions, are part of their right to privacy. However, it also clarified that this right does not extend to contributions that could influence policies. A balance must be struck between keeping political affiliations private and the voter’s right to know about political funding. The electoral bonds scheme, however, was found to heavily favor informational privacy over informational interests, disrupting this balance.
“The Union of India has been unable to establish that the measure employed in clause 7 (4) of the Electoral Bonds Scheme is the least restrictive means to balance the rights to informational privacy to political contributions and the right to information about political contributions,”
-the Court observed.
Corporate Donations Under Scrutiny
The judgment also addressed the issue of corporate donations, noting the inherent difference between individual and corporate donors. The Court criticized the scheme for allowing even loss-making companies to make anonymous political donations, highlighting the potential for quid pro quo contributions. It labeled the decision to permit unlimited, anonymous corporate donations as “manifestly arbitrary” and a violation of the principle of equality enshrined in the Constitution.
“The amendment to Section 182 (of Companies Act) by permitting unlimited corporate contributions authorizes unrestrained influence of companies on the electoral process. This is violative of the principle of free and fair elections and political equality captured in the value of ‘one person one vote,’”
-the Court added.
Transparency as the Antidote
Justice Khanna also countered the government’s argument that the electoral bonds scheme protected donors from potential retaliation, stating that transparency, rather than secrecy, is the solution to such concerns. He highlighted that secrecy in donations severely restricts the collective right to information, which serves as a check against retribution and victimization.
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In conclusion, the Supreme Court’s judgment against the electoral bonds scheme represents a significant move towards enhancing transparency in political funding. By prioritizing the voters’ right to know over the anonymity of political contributions, the Court has reaffirmed the foundational principles of democracy and fair play in the electoral process.
This decision is a call to action for implementing more transparent and equitable methods of political financing, ensuring that the electoral system remains a true reflection of the people’s will.
CASE TITLE:
[Association for Democratic Reforms and Anr vs Union of India Cabinet Secretary and ors].
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