Launched in 2018 to boost transparency in political funding, the scheme drew criticism for favouring ruling parties while compromising transparency
The five-judge bench, led by Chief Justice D Y Chandrachud, delivered a major blow to the central government, stating the scheme undermines freedom of speech under Article 19(1)(a) and citizens’ right to political privacy | Photo Credit: SUSHIL KUMAR VERMA
In a landmark judgement that delivered a big blow to the government, the Supreme Court annulled the electoral bonds scheme on Thursday, saying it violates the Constitutional right to freedom of speech and expression as well as the right to information.
The apex court ordered the State Bank of India (SBI) to disclose to the Election Commission the names of the contributors to the six-year-old scheme.
A five-judge Constitution bench headed by Chief Justice D Y Chandrachud directed that the SBI disclose details of each electoral bond encashed by political parties. The information should include the date of encashment and the denomination of the bonds and be submitted to the poll panel by March 6.
The bench said the Election Commission should publish the information shared by SBI on its official website by March 13.
The bench, comprising Justices Sanjiv Khanna, B R Gavai, J B Pardiwala and Manoj Misra, delivered two separate and unanimous verdicts on the pleas challenging the scheme.
Pronouncing the verdict, the CJI said the scheme violates the right to freedom of speech and expression under Article 19(1)(a) of the Constitution.
“The electoral bonds scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymising contribution through electoral bonds are violative of Article 19 (1)(a),” the CJI said while pronouncing the verdict.
The bench said the fundamental right to privacy also includes the citizens’ right to political privacy and affiliation.
It also considered the amendments made in various laws, including the Representation of Peoples Act and Income Tax laws, invalid.
The apex court directed that the SBI shall stop issuing electoral bonds and submit details of bonds purchased since April 12, 2019, to date to the Election Commission. It should also submit details of political parties that have received contributions through electoral bonds since April 12, 2019, to the poll panel.
In October last year, the bench began hearing arguments on the four petitions, including those filed by Congress leader Jaya Thakur, the Communist Party of India (Marxist) and the NGO Association for Democratic Reforms (ADR).
Advocate Varun Thakur, who represented Thakur in the case, described the verdict as a setback for the government “because from 2018 to 2024 whatever transactions which have taken place have to be made public”.
“It is a setback because of the way anonymous contributions were received through the scheme. Now accountability will be fixed. It is a historical step for democracy and today, we can say democracy has won,” Thakur added.
“The Supreme Court has directed the SBI to furnish complete information about who purchased the bonds, who encashed the bonds… All this information will have to be submitted to the Election Commission, which will have to display it on its website so that the people come to know who purchased the bonds,” advocate Prashant Bhushan, who represented ADR, said.
The scheme, which the government notified on January 2, 2018, was pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency to political funding.
According to the scheme’s provisions, 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, without disclosing their identity.
Critics have said this eliminates electoral funding transparency and gives ruling parties an edge.
On November 2 last year, the top court reserved its verdict.
In April 2019, the apex court declined to stay the 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.”
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