The petitioners argued that the anonymity in the electoral bonds affects the transparency of political funding and infringes on the voters’ right to information, which is sacrosanct in a democracy
The Supreme Court on Thursday struck down the electoral bonds scheme that allows anonymous donations to political parties by purchasing electoral bonds from the State Bank of India (SBI), saying anonymous electoral bonds violated citizens’ right to information.
Calling the electoral bonds unconstitutional, the top court said, “The electoral bonds violate the right to information of citizens right to freedom of speech and expression as guaranteed by the of the Constitution of India.”
Chief Justice of India (CJI) DY Chandrachud said, “The right to information of the voter isn’t justified to curb black money.”
He explained, “Fundamental right to privacy includes citizen’s right to political privacy. Information about a citizen’s political affiliation can lead to subjecting a citizen to curbs or subjecting them to trolls. It can be used to disenfranchise voters through voter surveillance.” The other judges, including Justice Sanjiv Khanna, seconded the CJI’s remarks.
A five-judge Constitution bench headed by Chief Justice DY Chandrachud, had, on November 2 last year reserved its verdict in the matter.
The scheme, which was notified by the government on January 2, 2018, was pitched as an alternative to cash donations made to political parties as part of efforts to bring in transparency in political funding.
According to the provisions of the scheme, electoral bonds may be purchased by any citizen of India or entity incorporated or established in the country. An individual can buy electoral bonds, either singly or jointly with other individuals.
Only the political parties registered under Section 29A of the Representation of the People Act, 1951, and which secured not less than 1 per cent of the votes polled in the last elections to the Lok Sabha or a state legislative assembly are eligible to receive electoral bonds. According to the notification, electoral bonds shall be encashed by an eligible political party only through an account with an authorised bank.
In April 2019, the apex court had declined to stay the electoral bonds scheme and made it clear that it would accord an in-depth hearing on the pleas as the Centre and the Election Commission had raised “weighty issues” that had “tremendous bearing on the sanctity of the electoral process in the country”.
The Constitution bench, also comprising Justices Sanjiv Khanna, B R Gavai, J B Pardiwala and Manoj Misra, had on October 31 last year commenced hearing arguments on the four petitions, including those filed by Congress leader Jaya Thakur, the Communist Party of India (Marxist) and NGO Association for Democratic Reforms (ADR).
During the hearing in the matter, the apex court had underscored the need for reducing the cash component in the electoral process.
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WHAT PETITIONERS SAY
The petitioners in the case are the Association for Democratic Reforms (ADR), the Communist Party of India (Marxist), and Dr Jaya Thakur, who challenged the amendments introduced by the Finance Act 2017 which paved the way for the electoral bonds scheme.
The petitioners argued that the anonymity in the electoral bonds affects the transparency of political funding and infringes on the voters’ right to information, which is sacrosanct in a democracy.
The Modi government, on the other hand, is defending the scheme calling it a method to ensure that ‘white’ money is used for political funding through proper banking channels.
The Government further argued that anonymity in these bonds was necessary to keep the identity of donors confidential so that they would not face any retribution from political parties.
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BJP GOT NEARLY RS 1,300 CRORE THROUGH ELECTORAL BONDS IN 2022-23
The ruling BJP received nearly Rs 1,300 crore through electoral bonds in 2022-23, which was seven times more than what the Congress got in the same period through the same route. The BJP’s total contributions stood at Rs 2,120 crore in the 2022-23 fiscal, of which 61% came from electoral bonds, according to the party’s annual audited report submitted to the Election Commission.
In FY 2021-22, the party’s total contributions were to the tune of Rs 1,775 crore. The party’s total income in 2022-23 stood at Rs 2360.8 crore, up from Rs 1917 crore in FY 2021-22.
The Congress, on the other hand, earned Rs 171 crore from electoral bonds which was down from Rs 236 crore in FY 2021-22. The BJP and the Congress are recognised national parties. The Samajwadi Party, a recognised state party, had earned Rs 3.2 crore through electoral bonds in 2021-22. In 2022-23, it received no contributions from these bonds.
HOW CAN ELECTORAL BONDS BE PURCHASED
It can be purchased by any Indian citizen or a company registered in India. Electoral bonds can be purchased at any State Bank of India branch in one of the cities listed by the government.
The bonds are interest-free and people and corporations interested in purchasing them must first complete prerequisites such as KYC (Know Your Customer) with the bank for authentication. It can be purchased in multiple denominations ranging from Rs 1,000 to Rs 1 crore.
The bond would not carry the name of the payee and have a life of only 15 days, during which it can be used for making donations to political parties meeting certain criteria. The electoral bonds can be encashed only through designated bank accounts by the parties.
Political parties registered under Section 29A of the Representation of the People Act, 1951 which secured not less than 1% of the votes polled in the last election to the Lok Sabha or a state legislative Assembly are only eligible to receive electoral bonds.
