The central issue before the five-judge Constitution Bench in Association for Democratic Reforms vs Union of India, was plain and simple: Does the Electoral Bond Scheme (EBS), 2018, guaranteeing anonymity to the corporate donors to political parties, go against the spirit of free and fair elections, considered a basic feature of the Constitution?
The bench comprising the Chief Justice of India, D.Y. Chandrachud, and Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra, while declaring the EBS unconstitutional, broke down the issue before it in terms of the rich jurisprudence that the Court had laid down in its previous cases.
The first question that the bench considered was whether the non-disclosure of the identity of the contributors to the political parties violates the right to information of the voters.
Having held in previous cases that the right to information about the candidates contesting an election is part of the right to freedom of expression under Article 19(1)(a), the bench found it easier to extend the logic to include the right to information about the political parties under the same Constitutional provision.
This has interesting implications as political parties, in the past, resisted civil society’s attempts to bring them under the Right to Information Act. The February 15 judgment makes it clear that political parties cannot claim any exemption from being accountable to the electorate.
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This clarity led the bench to examine the related issue of whether guaranteeing the anonymity of corporate donors to political parties could be construed as a reasonable restriction on the freedom of expression, under Article 19(2) of the Constitution, which lists certain specified grounds, such as sovereignty and integrity of India, the security of the State, friendly relations with foreign states, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence.
The Union of India (UoI), defended the guarantee of anonymity to corporate donors, on the ground that it sought to minimise the influence of black money in the electoral process, even though “public interest”, which could have justified the ostensible fight against black money, is not among the listed grounds under Article 19(2).
The Constitution Bench unanimously called the UoI’s bluff, by holding that of the rights recognised under Article 19, only Article 19(1)(g) which guarantees the freedom to practise any profession or to carry on any occupation, trade or business can be restricted on the ground of public interest.
The UoI submitted that providing anonymity to the contributors incentivises them to contribute through the banking channel. Assuming for the purpose of hypothesis that the UoI is right on this prong, what it urges is that nondisclosure of information about political expenditure has a rational nexus with the goal, that is, curbing black money or unregulated money, the bench pointed out.
The bench, however, concluded that EBS is not the least restrictive means to achieve the purpose of curbing black money in the electoral process. For contributions below Rs.20,000, contributions through other means of electronic transfer are the least restrictive. For contributions above Rs. 20,000, contributions through the Electoral Trust are the least restrictive means. There are better alternatives to EBS that impact the right to information minimally, the bench ruled. The doctrine of proportionality, which the Court has been using in similar cases impinging on fundamental rights, made the bench’s task easier.
The UoI has been unable to establish that the measure employed in Clause 7(4) of the EBS is the least restrictive means to balance the rights of informational privacy to political contributions and the right to information about political contributions.
This clause stipulates that the information furnished by the buyer shall be treated as confidential by the authorised bank. The bank has to disclose the information when it is demanded by a competent court or upon the registration of a criminal case by a law enforcement agency. The purpose of securing information about political funding can never be fulfilled by absolute non-disclosure; the measure adopted does not satisfy the suitability prong vis-a-vis the purpose of information on political funding, the bench found.
Section 29C of the Representation of the People Act, 1951, as amended by the Finance Act 2017 stipulated that the political party need not disclose financial contributions received through electoral bonds. Section 13A of the Income Tax Act, 1961, as amended did not require the political party to maintain a record of contributions…
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