Supreme Court's Landmark Decision: Electoral Bonds Scheme Struck Down

In a watershed moment, the Supreme Court of India has delivered a resounding blow to the controversial Electoral Bonds Scheme, declaring it unconstitutional. The five-judge Constitution bench, headed by Chief Justice of India (CJI) DY Chandrachud, unanimously quashed the scheme, asserting that its anonymous nature violated the right to information and, consequently, impinged on free speech and expression as outlined in Article 19(1)(a) of the Constitution.

At the heart of the matter was the clash between donor privacy and the imperative of transparent political funding. The Electoral Bonds Scheme, introduced through the Finance Act, of 2017, allowed individuals, corporations, and entities to make undisclosed contributions to political parties by purchasing bearer bonds from the State Bank of India (SBI). The bench, comprising Justices Sanjiv Khanna, BR Gavai, JB Pardiwala, and Manoj Misra, sided with CJI Chandrachud's perspective, emphasizing the pivotal role of transparent political funding in preserving the democratic fabric of the nation.

The court's ruling raises concerns about potential power imbalances and unequal playing fields arising from the secretive nature of the Electoral Bonds Scheme. The bench directed the State Bank of India (SBI) to disclose details of political parties that received electoral bonds. This move, aimed at dismantling the veil of secrecy surrounding political donations, promotes accountability and transparency.

Furthermore, political parties are now required to return uncashed electoral bonds, with the issuing bank mandated to refund the donated amount to the respective donors' accounts. This comprehensive approach ensures the eradication of anonymity provisions, fostering transparency and integrity in the political funding landscape.

CJI Chandrachud's opinion delved into the potential dangers of the Electoral Bonds Scheme, expressing concerns about the undue advantage it could provide to the ruling party, resulting in economic inequality. The ruling not only strikes down the scheme but also reinstates the earlier law restricting corporate donations to political parties to a maximum of 10% of the average profits of the last three financial years.

Senior Advocate Kapil Sibal, representing the petitioners, lauded the verdict, emphasizing its significance in restoring equilibrium to the electoral process. Dismissing speculations about legislative nullification, Sibal highlighted the illegality of the Electoral Bonds Scheme. He underscored the positive impact of the judgment on ensuring fair elections and enabling voters to make informed decisions.

As the verdict reverberates through the political and legal spheres, it initiates a critical reevaluation of political funding practices in India. The Court's emphasis on transparency, fairness, and the prevention of undue influence represents a paradigm shift in the approach towards financing political activities.

However, challenges and debates are likely to ensue in the aftermath of this decision. The disclosure of political donations, while promoting transparency, may raise concerns about the potential misuse of such information. Striking a delicate balance between transparency and individual privacy will be crucial in navigating the evolving landscape of political funding regulations.

The Supreme Court's intervention marks a decisive step towards reshaping the contours of political funding, reinforcing the principles of transparency, accountability, and fairness in the Indian democratic framework. While the full ramifications of this judgment are yet to unfold, it undoubtedly sets the stage for a more transparent and equitable electoral landscape.

Author: Anushka Taraniya

News Writer, MIT ADT University