Introduction:

In a historic judgment, the Supreme Court has declared the electoral bonds scheme unconstitutional, emphasizing the violation of the right to information under Article 19(1)(a) of the Constitution. The case, led by the Association for Democratic Reforms (ADR), the Communist Party of India (Marxist), and Congress leader Jaya Thakur, challenged the anonymity associated with electoral bonds, asserting it undermines transparency in political funding and encroaches upon voters’ right to information.

Arguments of Both Sides:

The petitioners, represented by Senior Advocates Kapil Sibal, Prashant Bhushan, and others, contended that the scheme facilitated contributions through shell companies, jeopardizing accountability and integrity in electoral finance. The Union Government, defended by Attorney General Venkataramani and Solicitor General Tushar Mehta, argued that electoral bonds promote the use of legitimate funds in political financing through regulated channels. The government further stressed the need for donor anonymity to protect contributors from potential retribution by political entities.

Court’s Judgment:

Chief Justice DY Chandrachud, delivering the lead judgment, highlighted the importance of open governance and declared the electoral bonds scheme violative of Article 19(1)(a). The court ruled that the non-disclosure of information on contributions to political parties infringes upon the right to information, and the scheme fails the doctrine of proportionality. The amendments to the Income Tax Act, Representation of Peoples Act, and Companies Act were also held unconstitutional. The court directed the State Bank of India to stop issuing electoral bonds and instructed detailed disclosures to the Election Commission of India, to be published on its website.