Supreme Court Invalidates Electoral Bond Scheme

Supreme Court Declares Electoral Bond Scheme Unconstitutional

On February 15, the Supreme Court delivered its verdict on a series of petitions challenging the validity of the Electoral Bond scheme, which enables anonymous funding to political parties. Chief Justice D Y Chandrachud led a five-judge Constitution bench that had reserved its verdict on November 2 last year.

Key Rulings:

The SC ruled that the Electoral Bond scheme violates the freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution. It directed the issuing bank to cease the issuance of electoral bonds. State Bank of India (SBI) was instructed to furnish details of political parties that received contributions through electoral bonds from April 12, 2019, onwards to the Election Commission (EC).

Emphasis on Rights:

Chief Justice of India DY Chandrachud emphasized the Court’s recognition of the right to information concerning social, cultural, political, and economic issues, promoting participatory democracy. The SC affirmed that the fundamental right to privacy includes citizens’ right to political privacy and affiliation.

Judicial Pronouncement:

The judges, including Chief Justice DY Chandrachud, Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, pronounced the judgment on the validity of the electoral bonds.

Overview of Electoral Bonds:

Electoral Bonds are instruments akin to promissory notes or bearer bonds purchasable by individuals, companies, firms, or associations, provided they are citizens of India or incorporated/established in India. They are specifically intended for contributing funds to political parties. Only political parties registered under Section 29A of the Representation of the People Act, 1951, and securing at least 1% of the votes polled in the last Lok Sabha or state legislative assembly elections are eligible to receive electoral bonds.

Government’s Position and Controversy:

The Centre had stated in an affidavit that the Electoral Bonds scheme’s methodology ensures a “completely transparent” mode of political funding, eliminating the possibility of black money or unaccounted funds. Various petitions are pending before the SC challenging amendments made to different statutes through Finance Act 2017 and Finance Act 2016, arguing that they have enabled unlimited, unchecked funding of political parties. NGOs like the Association of Democratic Reforms and Common Cause contended that the Finance Bill, 2017, facilitating the introduction of the Electoral Bond scheme, was passed as a money bill, although it did not meet the criteria.