Electoral Bonds Judgment: Why Supreme Court said no to anonymous political donations

The Supreme Court on Thursday struck down the electoral bonds scheme introduced by the Indian government in 2018 to permit anonymous donations to political parties..A five-judge bench opined that black money in politics can be tackled through less drastic measures.Two concurring opinions were pronounced, one by Chief Justice of India DY Chandrachud on behalf of himself and Justices BR Gavai, JB Pardiwala and Manoj Misra; and another by by Justice Sanjiv Khanna.The highlights of these opinions include the following. .Money, politics and the right to voteIn CJI Chandrachud’s opinion, it was noted that there was a “close association” between money and politics, and that information about the funding of political parties was essential for voters to effectively exercise their choice to vote.There is a possibility that financial contributions to a political party would lead to quid pro quo arrangements because of the close nexus between money and politics, the Court explained..Electoral bonds not least restrictive measure to curb black moneyThe disproportional impact of the electoral bonds scheme was a major factor which led the Court to strike down the scheme.The Court noted that the electoral bonds scheme was not the only means for curbing black money in electoral financing. There are other alternatives that have a lesser impact on the right to information of voters, the Court said.In other words, the Court held that the electoral bonds scheme was not proportional in its impact, since it “does not fulfill the least restrictive means test.”In his concurring opinion, Justice Sanjiv Khanna also dealt extensively with the proportionality of the electoral bonds scheme. He concluded that the voters' right to know supersedes the need for anonymity in political party funding.“The voters right to know and access to information is far too important in a democratic set-up ... While secret ballots are integral to fostering free and fair elections, transparency—not secrecy—in funding of political parties is a prerequisite for free and fair elections. The confidentiality of the voting booth does not extend to the anonymity in contributions to political parties,” Justice Khanna held..Right to keep political affiliations private has its limitsThe Court held that the citizen’s political beliefs or political affiliations are a part of their right to privacy. Political contributions are also a part of one’s political affiliations, the Court ruled.However, the bench proceeded to opine that “the right to privacy of political affiliations does not extend to contributions which may be made to influence policies.”The Court explained that a balance should be struck between a voter’s right to keep their political affiliations private and the right of a voter to know about the funding of political candidates.While so, the Court concluded that the electoral bonds scheme “completely tilts the balance” in favour of the right to keep political affiliations private (“informational privacy”) while discarding the voters’ right to know (“informational interests”). “The Union of India has been unable to establish that the measure employed in clause 7 (4) of the Electoral Bonds Scheme is the least restrictive means to balance the rights to informational privacy to political contributions and the right to information about political contributions,” the Court said..Why was electoral bonds scheme struck down wholly?The Court noted that the “anonymity of the contributor” is the only feature that set apart the electoral bonds scheme from other modes of contributions (cheques, debit, etc.). If the anonymity component of the scheme is struck down, “the Electoral Bond Scheme 2018 will also consequentially have to be struck down as unconstitutional”, the Court explained..Manifestly arbitrary to allow corporate donations uncheckedThe Court pointed out corporate donors are not like individuals. Donations by companies to political parties are “purely business transactions, made with the intent of securing benefits in return.”The Court also took critical note that the electoral bonds allowed even loss-making companies to make anonymous political donations. This ignored the fact that loss-making companies are more likely to make quid pro quo contributions, the Court said.Thus, the Court concluded that the decision to allow corporate donors to make unlimited, anonymous political donations was manifestly arbitrary and violative of Article 14 (right to equality) of the Constitution.“The amendment to Section 182 (of Companies Act) by permitting unlimited corporate contributions authorizes unrestrained influence of companies on the electoral process. This is violative of the principle of free and fair elections and political equality captured in the value of ‘one person one vote,’” the Court added..Possible victimisation of donors not justification for electoral bonds schemeIn his opinion, Justice Sanjiv Khanna was not persuaded by the Central government’s contention that the electoral bonds scheme was also meant to protect political donors from retaliation from political parties in power due to the donors’ political affiliation to a rival party.Transparency and not secrecy is the cure and antidote, Justice Khanna said.“Giving a cloak of secrecy leads to severe restriction and curtailment of the collective’s right to information and the right to know, which is a check and counters cases of retribution, victimisation and retaliation,” the judge explained.The judge added that political parties in power may still have asymmetric access to information about donors maintained in banks. Thus, the judge opined that the scheme was contradictory.Concerns were also briefly raised on the possibilities of enabling money laundering.“By ensuring anonymity, the policy ensures that the money laundered on account of quid pro quo or illegal connection escapes eyeballs of the public,” the judge said..[Watch pronouncement of judgment].[Read Judgment]