New Delhi, Feb 15.
The Supreme Court on Thursday struck down the controversial electoral bonds scheme which allowed political parties to accept unlimited funds from anonymous sources to finance their campaign and poll expenses.
The scheme, introduced in 2017 through the Finance Act, was challenged in the top court on the ground that it was skewed in favour of the ruling party and tilts the level playing field in its favour to the detriment of other political parties, especially the Opposition.
The 2017 amendments were unconstitutional as they violated the principles of “free and fair elections” and “political equality granted to citizens through one man one vote”, a five-judge bench led by Chief Justice of India D.Y. Chandrachud, said.
The scheme was also violative of the voter’s right to know, it said.
There can be no blanket non-disclosure of campaign finance as it would encourage quid pro quo and influence policy-making and deny voters their right to full disclosure, the court said.
The court said that the central government had failed to show how this was the least restrictive method of cleaning up black money from the electoral process. It also frowned on unlimited political funding as it would encourage corruption.
The court directed that all such bonds which had not been encashed so far must be returned by political parties to the purchasers through banking channels.
It asked the State Bank of India, which issued these bonds to stop issuing them, and also share information on who had bought them and who had received them from April 12, 2019, onwards.
SBI will submit such information to the Election Commission by March 6, 2024. The EC will in turn publish it on its website by March 13, 2024.
Data presented in court during the hearing showed that a substantial 57 per cent of the funds went to the ruling BJP whereas the Opposition Congress got a 10 per cent share.
Critics also alleged that the cloak of anonymity accorded to donors under the scheme is inconsistent with the citizen’s right to know in a democracy. The government on the other hand has defended the scheme as necessary to clean up the political funding process.
It also raised the issue of the right of privacy of donors to urge the court not to interfere with the scheme.
The naysayers alleged that the scheme destroyed the level playing field in elections by permitting unlimited funding to political parties.
They had challenged the Act on multiple counts – the anonymity accorded to donors, unlimited funding to political parties, as also the move to pass the Act as a money bill bypassing scrutiny of the Act by the House of Elders or the Rajya Sabha.
The scheme has several flaws, they said.
The earlier dispensation did not allow any foreign company to donate to any political party. Now they can. Earlier, companies which made such donations had to disclose details of the donations to the shareholders in their annual statement of accounts.
Now they need not. Shell companies can also donate to political parties without anyone getting to know. The scheme also removed the earlier limit up to which companies could donate.
They have sought transparency regarding identity of the donors. Such details must be made known to the public who are crucial stakeholders in a democracy.
Anonymity could lead to money-laundering critics say, a stand backed by the Reserve Bank of India.