SC Strikes Down Electoral Bonds Scheme, Terms It 'Unconstitutional' | Details

A five-judge Constitution bench headed by Chief Justice D Y Chandrachud delivered two separate but unanimous verdicts on pleas challenging the scheme.

Pronouncing the verdict, the CJI said the scheme is violative of freedom of speech and expression under Article 19(1)(a) of Constitution.

About the SC verdict

In a unanimous verdict, the Constitution bench headed by CJI Chandrachud said political parties are relevant units in the electoral process and information about funding of political parties is essential to make informed electoral choices.

The apex court on Thursday directed that the issuing bank shall stop issuance of electoral bonds and the State Bank of India shall submit details of electoral bonds purchased since April 12, 2019 till date to the Election Commission.

SC also held that anonymous electoral bonds are violative of right to information, and freedom of speech under Article 19(1)(a) of the Constitution. The bench further added fundamental right to privacy also includes citizens’ right to political privacy and affiliation.

About the electoral bond

The provisions of the scheme allow any citizen of India or entity incorporated or established in the country to purchase electoral bonds either singly or jointly with other individuals.

Only the political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than 1 per cent of the votes polled in the last elections to the Lok Sabha or a state legislative assembly are eligible to receive electoral bonds.

The scheme, which was notified by the government on January 2, 2018, was pitched as an alternative to cash donations made to political parties as part of efforts to bring in transparency in political funding. According to the notification, electoral bonds shall be encashed by an eligible political party only through an account with an authorised bank.

The legal issue

In April 2019, the apex court had declined to stay the electoral bonds scheme and made it clear that it would accord an in-depth hearing on the pleas as the Centre and the Election Commission had raised "weighty issues" that had "tremendous bearing on the sanctity of the electoral process in the country".

The Constitution bench, also comprising Justices Sanjiv Khanna, B R Gavai, J B Pardiwala and Manoj Misra, had on October 31 last year commenced hearing arguments on the four petitions, including those filed by Congress leader Jaya Thakur, the Communist Party of India (Marxist) and NGO Association for Democratic Reforms (ADR).

During the hearing in the matter, the apex court had underscored the need for reducing the cash component in the electoral process.