New Delhi, Feb 15: The Supreme Court on Thursday declared the electoral bonds scheme unconstitutional and ordered the banks to stop issuing electoral bonds forthwith.
A five-judge Constitution Bench led by CJI DY Chandrachud said the scheme violated the right to information.
The State Bank of India would furnish the details of donations through electoral bonds and the details of the political parties which received the contributions, ordered the top court.
Electoral bonds scheme is violative of Article 19(1)(a) and is unconstitutional…amendment to companies Act in this regard is unconstitutional, declared the CJI, while delivering the verdict.
The Bench directed the SBI to stop issuing electoral bonds immediately and submit all details to the Election Commission by March 6.
The Election Commission has been ordered to make all donations public within one week of the receipt of the information.
All electoral bonds within the 15-day validity period would be returned by the political parties to the purchasers, the top court said.
Welcoming the verdict, petitioner Association for Democratic Reforms counsel Prashant Bhushan said, “This is a salutary judgment which will enhance our democratic process.”
Justice Sanjiv Khanna delivered a separate but concurring judgment.
The CJI said, “The Union of India has been unable to establish that the measure adopted in Clause 7(4)(1) of the electoral scheme is the least restrictive measure.”
The top court also declared amendments to the Income Tax Act provisions and Section 29C of the Representation of Peoples Act unconstitutional.
Introduced through the Finance Act, 2017, an Electoral Bond is a bearer instrument like a Promissory Note which can be purchased by an Indian citizen or an Indian company whose identity would remain secret from everybody except the SBI from whom it has to be purchased. Once purchased, the buyer can give it to a political party, which can encash it using its bank account.
It was introduced through the Finance Act, 2017, which made amendments to several statutes, including the RBI Act, Representation of People Act, Income Tax Act and Companies Act, to facilitate the scheme which was notified on January 2, 2018.
In its PIL filed in 2017, ‘Association for Democratic Reforms’ (ADR) alleged corruption and subversion of democracy through illicit and foreign funding of political parties and lack of transparency in their accounts. Besides ADR, CPI(M) and Common Cause have also challenged electoral bonds scheme.
Maintaining that several constitutional issues having a tremendous bearing on the sanctity of electoral process were involved in the petitions challenging the validity of Electoral Bonds Scheme, the petitioners had earlier urged the Supreme Court to refer the matter to a Constitution Bench.
The Centre maintained that the electoral bonds scheme was an “absolutely transparent” mode of political funding and it was impossible to get any black or unaccounted money through it.
