SC dismisses petition seeking review of its verdict declaring electoral bond scheme unconstitutional

The Supreme Court has dismissed a petition seeking review of its verdict declaring unconstitutional the electoral bonds scheme that allowed individuals and companies to make unlimited anonymous donations to political parties.

“Having perused the review petitions, there is no error apparent on the face of the record. No case for review under Order XLVII Rule 1 of the Supreme Court Rules 2013. The review petitions are, therefore, dismissed,” a five-judge Bench led by CJI DY Chandrachud said in its September 25 order made public on Saturday.

Advocate Mathews Nedumpara and another had sought review of the February 15 verdict delivered in the run up to the 2024 Lok Sabha election that had also directed the SBI to furnish details of electoral bonds to the Election Commission for making the same public.

Noting that voters have right to know, a five-judge Constitution Bench led by CJI DY Chandrachud had said the Electoral Bonds Scheme violated Article 19(1)(a) of the Constitution which guaranteed right to freedom of speech and expression and included right to information within its ambit.

“We are of the opinion that the information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner. The Electoral Bond Scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymizing contributions through electoral bonds are violative of Article 19(1)(a) (right to freedom of speech and expression,” the Bench said.

The Beach—which also included Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra – had said the disclosure of information regarding electoral bonds was necessary to identify corruption and quid pro quo transactions in governance. “Such information is also necessary for exercising an informed vote,” it added.

Maintaining that “the integrity of the electoral process is a necessary concomitant to the maintenance of the democratic form of government,” the Bench said, “While quid pro quo and clientelistic corruption erodes quality and integrity of government decision making, the power of money may also pose threat to the electoral process itself.”

The Constitution Bench also declared unconstitutional amendments made to the Representation of the People Act, 1951, the Income-tax Act, 1961, and the Companies Act, 2013 through the Finance Act, 2017 to facilitate introduction of the Electoral Bonds Scheme.

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 could 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 had also challenged the electoral bonds scheme.