Facts
An application seeking stay on the sale of electoral bond under the Electoral Bond Scheme 2018. Another application seeking an interim direction to the Union of India not to open any further window for sale of electoral bonds.
The specific disclosures demanded as the scheme allowed the leaders of political parties to maintain anonymity. Although it was also stated that though the scheme provides the factor of anonymity but the scheme is also intended to ensure that everything happens through banking channels – while the identity of the of the purchaser of the bond is withheld, it is often stated that unidentified/unidentifiable person
The Association for Democratic Reforms and Common Cause joined together and came up with the Public Interest Litigation to issue a writ of declaration or any other appropriate writ declaring Section 135 of the Finance Act 2017, and the corresponding amendment carried out in Section 31 of the Reserve Bank of India Act, 1934,
Section 137 of the Finance Act 2017, and the corresponding amendment carried out in Section 29C of the Representation of people Act ,1951,
Section 11 of the finance Act 2017 and the corresponding amendment carried out in Section 13A, the income tax Act, 1961.
Section 154 of the Finance Act, 2017 and the corresponding amendment carried out in Section 182 of the Companies Act 2013 and Section 236 of Finance Act 2016 and the corresponding amendments carried out in section 2(1)(j)(vi) of the foreign regulation Contribution Act, 2010.
The demand was to struck down these on the ground that these being unconstitutional and illegal are violative of the various provisions of constitution.
The case established a milestone in the conduct of election process in India providing the voters with the empowerment to know the background of whom they are about to choose as their representatives establishing transparency and accountability in the process of election.
Moreover, this case also laid the stepping stone for further legal advancements on electoral integrity.
These schemes were actually made to facilitate the flow of elections in the country but then turned out that these are actually being misused to gain an undue advantage in the election process.
The appropriate use of electoral aid was in question in the present case, the claims raising concern that the use of electoral bond scheme was actually not transparent and had numerous loopholes. The major aim was to increase the political investment in country but it turned out that the misutilization of this scheme was happening giving rise to filling of this particular case.
Issues Raised
The two major issues raised in case for consideration by the Hon’ble Supreme Court were as follows:
- The electoral bond scheme 2018 allowed individuals and various corporations to donate to political parties under the cover of anonymity were the identity of the person donating to a particular party was kept undisclosed.
- The various organizations raised question regarding the fact that this was violative of right to information provided by the right to information under article 19(1)(a) of the Constitution, as the political funding remain a grey area since the source of such funds is unclear.
- The parliamentary scrutinization was missing as the scheme was passed through a finance bill and not any oversight was provided over the same.
Contentions
The requirement was that the State Bank of India should furnish to the Election Commission of India all details of the Electoral Bonds purchased, and, as the case may redeemed by political parties, including the date of purchase/redemption, name of the purchaser and denomination of the Electoral Bond purchased. It has been submitted that SBI has not disclosed the alpha-numeric numbers of the Electoral Bonds.
The violation of Right to Information it was argued that the Electoral Bond Scheme was curtailing down the right of the citizens to have reliable information regarding source of political funds.
The Scheme was also creating a hinderance in the process of free and fair elections as the major element concerning elections in democracy i.e. transparency and accountability was being compromised due the Electoral Bond Scheme 2018.
The fact that transparency in political funding is essential as many times these funds can be raised through the money pooled through money laundering, benami transactions or hawala transactions.
Rationale
The rationale behind the judgement given by the Hon’ble Supreme Court laid down that in a democracy the importance of transparency being adhered to is of pivotal importance. It also held that the non-identification of doners giving funding to political parties is curtailing down citizens right to information conferred to them under article 19(1)(a) of the Indian Constitution.
The Court contended that the spirit of democracy can only be maintained when the fundamentals of transparency and accountability are maintained in conducting election in the country.
The Hon’ble Court also noted that the scheme can also lead to influential corporations have a control over the election process in the country, hampering the democratic set up of the country
The judgement also highlighted the importance of parliamentary scrutinization over bills that are passed as the scheme of Electoral Bonds 2018 was passed through a finance bill which lacks the essential characteristic of scrutinization by parliament.
The verdict given by the Hon’ble Supreme Court called out for legislative bodies to adhere to proper procedures, ensuring that significant electoral reforms undergo comprehensive debates and scrutiny.
Defects of law
The process of law is most essentially required to be followed when there is something so imperative that it can actually violate the fundamental rights guaranteed to the citizens under the relevant articles of the Indian Constitution. In the present Case of Electoral Bonds Scheme 2018 a major drawback that was recognized was the absence of scrutinization of the bill passed in the parliament which ultimately led to passing of a bill that was violative of the fundamental Rights enshrined in the relevant articles of the constitution. The neglect of such important factors if not halted would ultimately cause the structural basis of the democracy to be shaken leading to a situation of chaos and instability.
This was not the only problem highlighted another major issue was the problem of influence on the free and fair process of elections. The Electoral bond Scheme removed cap on the political funding of various parties that came in or were pooled through corporate donation that were anonymous and lacked the factor of transparency and accountability moreover, not only this but it also lacked the disclosure of such funding if in any case required creating further problems concerning the reliability and credibility of the same.
This was brought into attention by filing of applications first and then writ petitions to which the Hon’ble Court responded positively and took immediate actions. The Hon’ble Supreme Court in the year 2024 realized the flaws and loopholes associated with this Scheme (Electoral Bond Scheme 2018). The Hon’ble Apex Court held the scheme to be violation of Article 19 as it violated the Right to Information provided to the citizens under the Article so mentioned.
The Scheme and even the procedural flaw in the passing of the scheme i.e. the absence of proper overview and parliamentary debate regarding the advantages and the disadvantages associated with the Electoral Bond Scheme 2018 was also a major matter that was criticized heavily.
The fact that State Bank of India was instructed to disclose all the details of sale and purchase of Electoral Bonds and redemption of the same creating an authorization which was missing and was being neglected since a prolonged period of time.
The information was not available in the public domain creating a suspicion in the mind of the public regarding the source of funding that the various political parties were raising. Accountability on part of the political parties was not being maintained on part of the parties raising funds through any kind of unlawful or illegal sources.
The Hon’ble Court keeping the same contentions in consideration mandated the political parties to reveal funding sources the Court stated that received funds through electoral bonds were ordered to disclose donor details and the amount that they received through the means of Electoral Bonds.
Ensuring a level playing field as the ruling given by the Hon’ble Court prevented the ruling party from having exclusive access to donor information through the State Bank of India, addressing concerns of an uneven electoral playing field.
Inference
The inference drs that from the present case is that even though the passing of a scheme that is affecting the fundamental rights of the citizens can be challenged in the Court of Law. The Court will scrutinize the constitutional validity of the scheme and would ultimately pass a just and equitable order which may deem best fit in the interest of justice, equity and fairness creating a check and balance ultimately upholding the spirit of the Indian Democratic system.