The Hon’ble Supreme Court in case of Association for Democratic Reforms & Another v. Union of India and Others, Writ Petition (Civil) No. 880 of 2017 has struck down the scheme of Electoral Bond.
The Five Judge Bench comprising Chief Justice DY Chandrachud, and Justice Sanjiv Khanna, Justice BR Gavai, Justice JB Pardiwala, and Justice Manoj Misra, has held that electoral bonds are violative of the right to information under Article 19(1)(a) of the Constitution.
The constitutional validity of the Electoral Bond Scheme was challenged by filling a petition under Article 32 of the Constitution. The main issues before the court as stated below:-
I. Whether unlimited corporate funding to political parties, as envisaged by the amendment to Section 182(1) of the Companies Act infringes the principle of free and fair elections and violates Article 14 of the Constitution; and
II. Whether the non-disclosure of information on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to Section 29C of the RPA, Section 182(3) of the Companies Act and Section 13A(b) of the IT Act are violative of the right to information of citizens under Article 19(1)(a) of the Constitution.
Electoral Bond Scheme: The Ministry of Finance in the Department of Economic Affairs notified the Electoral Bond Scheme 2018 on January 02, 2018. The Electoral Bond is a bond issued in the nature of a promissory note which is a bearer banking instrument and does not carry the name of the buyer.
The above stated issues were concluded: Following provisions and schemes were held to be unconstitutional and accordingly struck down.
– Scheme of Electoral Bond;
– Section 29C(1)(proviso) of the Representation of the People Act, Section 182(3) of the Companies Act, 2013, and Section 13A(b) of the Income Tax Act, 1961, as amended by the Finance Act, 2017;
– Section 182(1)(proviso) of the Companies Act of 2013;
– Section 31(3) of the RBI Act, 1934 and the Explanation thereto introduced by the Finance Act, 2017;
Election Commission of India (ECI) was directed to disclose the full details of the donor and the amount donated to the particular political party through Bonds.
Directions issued as follows……
– Issuance of fresh Bonds was also prohibited as unconstitutional.
– The State Bank of India was directed to submit details of the Electoral Bonds purchased since the interim order of this Court dated 12 April 2019 till date to the ECI. The details shall include the date of purchase of each Electoral Bond, the name of the purchaser of the bond and the denomination of the Electoral Bond purchased;
– The State Bank of India was directed to submit the details of political parties which have received contributions through Electoral Bonds since the interim order of this Court dated 12 April 2019 till date to the ECI. SBI must disclose details of each Electoral Bond en-cashed by political parties which shall include the date of encashment and the denomination of the Electoral Bond;
– The State Bank of India was directed to submit the above information to the ECI within three weeks from the date of this judgment, that is, by 6 March 2024;
– The Election Commission of India was directed to publish the information shared by the SBI on its official website within one week of the receipt of the information, that is, by 13 March 2024; and Electoral Bonds which are within the validity period of fifteen days but that which have not been en cashed by the political party yet shall be returned by the political party or the purchaser depending on who is in possession of the bond to the issuing bank. The issuing bank, upon the return of the valid bond, shall refund the amount to the purchaser’s account.
