Summary
The Court held that voters have a right to information about political funding and that the Electoral Bond Scheme’s anonymity and related disclosure exemptions unjustifiably impaired that right. It also held that removing the cap on corporate political contributions was arbitrary and unconstitutional.
Issues
- Whether the Electoral Bond Scheme and associated statutory amendments impermissibly withhold information about political contributions from voters.
- Whether permitting unlimited corporate contributions to political parties is constitutionally arbitrary.
Provisions considered
- Article 19(1)(a), Constitution of IndiaThe voter’s right to information about political funding forms part of freedom of speech and expression; the scheme and disclosure exemptions fail to protect that right. (¶¶ 158-169, 216)
- Section 29C(1), proviso, Representation of the People Act, 1951The exemption from reporting contributions received through electoral bonds is unconstitutional; the existing disclosure framework is a less restrictive means of balancing voter information and donor privacy. (¶¶ 165-169, 216)
- Section 13A(b), Income-tax Act, 1961The exemption from maintaining records of political contributions made through electoral bonds is unconstitutional because it supports the scheme’s complete non-disclosure. (¶¶ 158-169, 216)
- Section 182(3), Companies Act, 2013Disclosure only of the total corporate contribution, without identifying recipient parties, is unconstitutional. (¶¶ 170-177, 216)
- Section 182(1), first proviso (deleted), Companies Act, 2013Removing the ceiling on corporate contributions, including for loss-making companies, is arbitrary and violates Article 14. (¶ 200-216)
- Article 14, Constitution of IndiaThe deletion of the statutory cap on corporate political contributions is arbitrary and unconstitutional. (¶ 200-216)
Held
- Voters have a right to information about political funding. The scheme’s anonymity and the amendments that exempted bond contributions from disclosure did not provide an adequate balance with donor informational privacy. (¶ 158-169)
- The Electoral Bond Scheme and the proviso to Section 29C(1) of the Representation of the People Act, Section 182(3) of the Companies Act, and Section 13A(b) of the Income-tax Act, as amended in 2017, are unconstitutional. (¶ 216)
- Deleting the cap on corporate political contributions is arbitrary and violates Article 14. (¶ 208-216)
- The issuing bank must stop issuing electoral bonds. SBI must provide the Election Commission of India with bond purchaser and encashment details from 12 April 2019 onward; the ECI must publish the information on its website. Unencashed bonds still within their validity period must be returned for refund. (¶ 217-220)
Result
The writ petitions were disposed of in those terms; electoral-bond issuance was stopped and disclosure and refund directions were issued.