Electoral bonds invalid: SC

 Ruling mandates disclosure of purchaser, values and recipients.

Stating that the electoral bonds scheme lacked foolproofness, the Supreme Court emphasized on Thursday the necessity for voters to possess information regarding funds received by a political party to effectively exercise their freedom to vote.
A five-judge Constitution bench led by Chief Justice D Y Chandrachud disagreed with the Centre’s argument that political parties, upon receiving contributions, remain unaware of the contributor’s identity due to the absence of names on the bonds and non-disclosure of such details by banks.

In a significant ruling, the apex court declared the 2018 scheme unconstitutional, mandating the disclosure of purchaser names, bond values, and recipients. “The scheme is not foolproof. There are adequate gaps enabling political parties to ascertain particulars of contributions made to them,” Justice Chandrachud, authoring the verdict for himself and Justices B R Gavai, J B Pardiwala, and Manoj Misra, remarked.
Justice Sanjiv Khanna presented a separate judgment, concurring with the CJI’s verdict for different reasons. According to Justice Chandrachud’s ruling, 94 percent of donations through electoral bonds were in Rs 1 crore denominations.

The bench observed that electoral bonds provide economically privileged contributors, who already hold influence, selective anonymity in relation to the public, not the political party.
“In light of the foregoing discussion, we opine that information on funding to a political party is crucial for a voter to exercise their freedom to vote effectively,” the bench stated. “The electoral bond scheme and the impugned provisions, in anonymizing contributions via electoral bonds, infringe upon the voter’s right to information under Article 19(1)(a) of the Constitution,” it added.

The bench underscored that the Constitution ensures political equality by focusing on both the ‘elector’ and the ‘elected’. Nevertheless, political inequality persists despite constitutional guarantees, owing to differing economic abilities to influence political decisions.

The bench pointed out that economic inequality impacts levels of political engagement due to the close association between money and politics. “At its core, political contributions grant a ‘seat at the table’ to the contributor, enhancing access to legislators and influencing policy-making,” it highlighted. The top court cautioned that economically affluent individuals possess greater capability to financially contribute to political parties, potentially leading to quid pro quo arrangements due to the intertwined relationship between money and politics.

Such arrangements could involve policy changes or license grants to contributors. Additionally, the bench emphasized that political parties must be aware of funding particulars to engage in quid pro quo arrangements, underlining the importance of information on political funding for informed voting.