The Supreme Court in the case observed that the purpose of curbing black money is not a sufficient justification to anonymise the identities of donors and the details of the contributions in the electoral bonds scheme.
The Constitution bench comprising of the Supreme Court in the case observed and has held that the anonymous electoral bonds scheme violated the right to information of a voter guaranteed under Article 19(1)(a) of the Constitution of India and struck down the same as unconstitutional.
Therefore, the Union Government defended the scheme which being on the grounds that it curbed black money as it ensured that the contributions were coming through banking channels.
The bench headed by CJI DY Chandrachud in the case observed and has noted that the purpose of curbing black money is not traceable to any of the grounds under Article 19(2) of the Constitution of India.
The court stated that the fundamental rights guaranteed under Article 19(1)(a) of the Constitution of India can be restricted only on the grounds specified under Article 19(2) of the Constitution.
It has also been stated by the court that such restrictions must fulfil the judicially evolved test of proportionality.
The Electoral Bonds scheme does not satisfy the test
The court in the case noted that in the financial year which immediately preceded 2016-17, in which the Electoral Bonds was introduced, 81% of the contributions, an amount of Rs 580.52 crores were received by political parties through voluntary contributions and since the amount of voluntary contributions is not regulated, it allowed the circulation of black money.
The court stated that after the introduction of the electoral bonds scheme, 47% of the contributions were received through EBs, which is regulated money.
It has also been submitted by the Union Government that anonymity incentivises contributors to contribute through banking channels. Thus, the non-disclosure has a rational nexus with the purpose of curbing black money.
The court in the case opined that the third prong of the proportionality standard, which mandates that the restriction must be the least restrictive option, was not satisfied in the case of Electoral Bonds.
The bench headed by CJI stated that the Electoral Bonds scheme is not the only means for curbing black money in electoral financing. There are other alternatives which substantially fulfil the purpose and impact the right to information minimally when compared to the impact of electoral bonds on the right to information. The court in the case observed that for contributions below Rs 20,000, contributions through other electronic means are the least restrictive means and for the contributions above Rs 20,000, contributions through electoral trust are the least restrictive means.
The court observed and has held that these alternative means have a less restrictive impact on the right to information while having the same ability to fulfil the purpose. Further, the court held that the infringement on the right to information is not proportionately justified for the purpose of curbing black money in electoral financing. Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra were the other members of the bench.