The Court ruled that the anonymous nature of the electoral bonds scheme violated the right to information and impinged upon free speech and expression under Article 19(1)(a) of the Constitution.
New Delhi, April 4: The Supreme Court of India has rejected a petition that sought a review of its earlier decision, which had dismissed the request for confiscating Rs 16,518 crore received by political parties through the 2018 electoral bond scheme.
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A three-judge bench, comprising Chief Justice Sanjiv Khanna and Justices J B Pardiwala and Manoj Misra, dismissed the review petition filed by Khem Singh Bhati. Bhati had sought reconsideration of the court’s ruling from August 2, 2024, which had refused to confiscate the funds collected under the scheme.
The court, in its order dated March 26, stated: “The review petition is dismissed in terms of the signed order. Pending application(s), if any, shall stand disposed of.”
Additionally, the Supreme Court also declined Bhati’s request for an open-court hearing on the matter.
A five-judge Constitution bench, led by former Chief Justice of India D Y Chandrachud, had earlier struck down the electoral bonds scheme on February 15, 2024.
The Court ruled that the anonymous nature of the electoral bonds scheme violated the right to information and impinged upon free speech and expression under Article 19(1)(a) of the Constitution.
“The Electoral Bonds Scheme, as well as the proviso to Section 29(1)(c) as amended by Section 139 of the Income Tax Act and Section 13(b) as amended by the Finance Act 2017, violates Article 19(1)(a),”
-the judgment stated.
The Court mandated that the State Bank of India, as the issuer of electoral bonds, must disclose details of political parties that received electoral bonds and provide all relevant information to the Election Commission of India (ECI) by March 6.
By March 13, the ECI must publish this information on its official website, and political parties must subsequently reimburse the amount of electoral bonds to the purchasers’ accounts.
Two judgments were rendered, one by CJI DY Chandrachud and the other by Justice Sanjiv Khanna, both concurring.
The Court asserted that the scheme could advantage the party in power.
“Economic inequality results in varying levels of political engagement. Access to information influences policy-making and may also lead to quid pro quo arrangements, which may benefit the party in power,”
-the judgment stated.
Furthermore, the Court concluded that the electoral bonds scheme could not be justified by claiming that it would combat black money in politics.
Lastly, while acknowledging the importance of donor privacy, the Court emphasized that transparency in political funding cannot be achieved by granting absolute exemptions.
The bench had on November 2, 2023 reserved its judgment on the case concerning the legal validity of the scheme, after a three-day hearing.
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The Supreme Court while reserving its verdict had asked the Election Commission of India (ECI) to submit data up till September 30, 2023 regarding electoral bonds sold under the scheme.
CJI Issues Directions
- Electoral Bonds Scheme, proviso to Section 29(1)(c) as amended by Section 139 of Income Tax Act and Section 13(b) as amended by Finance Act 2015 is violative of Article 19(1)(a).
- The issuing bank shall herewith stop issuing electoral bonds.
- SBI shall issue details of the political parties which received electoral bonds and all the particulars received and submit them to ECI by March 6. SBI shall furnish bonds’ purchase details with date of purchase, name of purchaser, denomination. SBI shall also submit details of parties who received contributions through Electoral Bonds. SBI should disclose details of each bond encashed.
- By March 13, ECI shall publish this information on official website.
- Electoral Bonds which are not encashed by political parties shall be returned and refunded to purchasers.
What Was the Electoral Bonds Scheme?
The electoral bonds scheme was introduced by the central government through a notification on January 2, 2018. It allowed individuals and companies to donate money to political parties without revealing their identities. The government had argued that this initiative would reduce the role of black money in elections and encourage clean funding practices.
However, the Supreme Court ruled that the scheme violated the principles of transparency and accountability in political funding. The decision led to the disclosure of information about the donors and recipients of electoral bonds.
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