In a significant legal pronouncement, the Supreme Court rendered a pivotal decision today by declaring the electoral bonds scheme of 2018 as unconstitutional. This scheme, introduced as an alternative to cash donations for political parties with the aim of fostering transparency in political funding, faced scrutiny before a five-judge Constitution bench led by Chief Justice DY Chandrachud.
"Electoral bonds scheme has to be struck down as unconstitutional. It violates the right to information of citizens, about possible quid pro quo."
The court delivered two separate but unanimous verdicts addressing pleas challenging the electoral bonds.
The court's ruling emphasized the violation of citizens' right to information, deeming the electoral bonds unconstitutional. To enforce this decision, the court directed the immediate cessation of the issuance of electoral bonds. Furthermore, the State Bank of India was instructed to provide detailed information regarding donations through electoral bonds, including specifics about the political parties that received these contributions.
In elucidating its stance, the Supreme Court recognized the multifaceted nature of financial contributions to political parties. It distinguished between contributions made in support of a political party and those potentially linked to quid pro quo arrangements.
"The issuing bank shall forthwith stop the issue of electoral bonds. The State Bank of India shall furnish the details of donations through electoral bonds and the details of the political parties which received the contributions."
The court acknowledged that not all political contributions are driven by a desire to influence public policy, highlighting the diverse motivations such as contributions from students and daily wage earners. The court contended that denying the privacy umbrella to political contributions solely based on some being made for other purposes is impermissible.
A notable aspect of the court's pronouncement was its critique of the equal treatment of companies and individuals under the amended Section 182 of the Companies Act. The court argued that companies wield a more profound influence on the political process than individual contributions, categorizing corporate contributions as purely business transactions. It deemed the amendment manifestly arbitrary for treating companies and individuals alike in this context.
What is EB?
Electoral Bonds are financial instruments introduced in India in 2018 as a means of making donations to political parties. These bonds are essentially promissory notes that can be purchased by individuals and entities from authorized banks in fixed denominations. The buyer can then donate these bonds to the political party of their choice.
One of the intended purposes of electoral bonds was to bring transparency to political funding by reducing the use of cash and promoting digital transactions. However, concerns have been raised about the anonymity of donors, as the identity of the bond purchaser is not disclosed to the public or even to the recipient political party.
In recent times, there has been debate and legal scrutiny surrounding the electoral bonds, with arguments both for and against their continued use. Some argue that they enhance transparency, while others express concerns about potential misuse and the lack of disclosure regarding the identity of donors.
The Supreme Court's decision to strike down the electoral bonds scheme, as mentioned in the previous conversation, adds a new dimension to the ongoing discussions about political funding in India.
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