The Supreme Court (SC) verdict on the Electoral Bonds Scheme (EBS) is one of the most political judgments in recent times. While technically shattering the legal foundation of the scheme, it has also exposed the scale of big money in elections in the country. The SC has rightly emphasised the voter’s right to know by placing it over the Centre’s concern over the “donor’s confidentiality”.
Amendments made to a few central enactments like the Representation of the People Act, the Companies Act, the Income Tax Act and the Reserve Bank of India Act permitted non-disclosure of voluntary contributions to political parties. It was Parliament that decided to place the donor’s interests over the people’s interests. According to a study by the Association for Democratic Reforms (ADR), between March 2018 and July 2023, 24,012 electoral bonds valued at over ₹13,791 crore were sold in the country.
The bare fact that an astounding amount of close to ₹60,000 crore, according to a Centre for Media Studies report, was spent during the Lok Sabha election in 2019 says it all. Elections in India have become a big industry where the voter is often reduced to a statistic. This practically negates the idea of one person one vote, which Babasaheb Ambedkar highlighted as the essence of representative democracy. EBS negated the notion of political equality. It ensured that there was no level-playing field between a candidate of a wealthy political party on the one hand and one fielded by an impoverished party on the other.
In State of Uttar Pradesh v. Raj Narain (1975), the SC held that “in a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets”. In the same judgment, the Court added that “the people of this country have a right to know every public act, everything that is done in a public way, by their public functionaries”. The present ADR judgment has applied the principle in a concrete political situation, directly confronting the stronger limbs of the State, namely the executive and legislature.
In the first-past-the-post system in India, political parties, not individual candidates, run the show. The SC, in Union of India v. Association for Democratic Reforms (2002) held that disclosure of the personal details of the candidates such as assets, educational qualifications and criminal antecedents should be disclosed while contesting elections. Despite such judicial urge for transparency, secrecy has been the hallmark of corporate funding of political parties.
The Centre’s defence that EBS would curb black money, which is why there were restrictions on voters’ right to know, was rejected by the SC by applying the test of proportionality. It held that unlimited corporate donation through electoral bonds sabotages free and fair elections. The SC has now directed the authorities to stop the issuance of electoral bonds.
The Court began hearing the case on November 2. Just as it reserved judgment, a massive sale of bonds was announced. It is a relief that the repetition of such a process has now been curtailed. While reserving the case for judgment, the Court directed the Election Commission of India (ECI) to collect data on electoral bonds issued till September 30, 2023. Now, the ECI has been directed to publish the details of the bonds sold so far.
The Centre’s plea for judicial restraint as EBS relates to economic policy was not accepted by the Court. While dealing with the amendments made to the statutes, no presumption of constitutionality was drawn by the court since the very process of elections was at stake. The Court found that the notion of presumption cannot be delinked from democratic accountability and constitutionally-guaranteed rights and freedoms of the citizens. The Court drew on Dharam Dutt v. Union of India (2003) to state that no presumption of constitutionality can be attached to legislation when it infringes on an individual’s fundamental right under Article 19(1). It is now settled that the freedom of expression takes in the right to information. It is equally settled that a vote is an expression. Therefore, it follows that any legislation that curtails a citizen’s right to get full knowledge of corporate funding is vitiated.
The linkage between political parties and the government formed by them is too obvious to be explained. In SR Bommai v. Union of India (1994), where the SC held that secularism and federalism are basic features of the country’s Constitution, the Court also explored this fundamental connection. It said that a political party has a duty to behave with a sense of constitutional responsibility. This principle should be all the more applicable in the context of electoral bonds.
To ensure that the electoral process is not monopolised by corporate entities, advanced democracies are moving towards public funding of elections. A survey of 175 countries by International IDEA, an organisation that promotes democracy, revealed that public funding for political parties or campaigns is absent only in 47 of them, including India. This discrepancy needs to be corrected for the spirit of the SC verdict to prevail. Public funding of elections and political parties, however, is a matter of legislative policy, not of constitutional adjudication. Almost all legal issues are essentially political and corporate funding of polls is no exception.
Kaleeswaram Raj is a lawyer at the Supreme Court of India. Raj was the one of the lawyers who appeared in the case. The views expressed are personal
