Professor Satya Narayan Misra in Bhubaneswar, February 19, 2024: There was a growing perception that the Supreme Court has become an extended arm of the central government; the way it has decided in several cases in favor of the government; like the Rafale aircraft acquisition, Ram Janmabhoomi site settlement, and abrogation of Article 370.

However, the electoral bond scheme which was introduced in 2018 by amending several provisions in the Company Act 2013, The Representation of the People Act, 1951 (RPA) 1951, the Foreign Contribution (Regulation) Act, 2010 (FCRA), and Income Tax (IT) Act 1961, allowed the corporates to remain anonymous while making an unlimited donation to their preferred parties This was considered as the most toxic affront to the principle of a free and fair election. Belated though, the Supreme Court by unanimously striking down as ultra vires the Electoral Bond Scheme (EBS), has somewhat vindicated the faith of vox populi about the impartiality of the highest court of justice as the defender of fundamental rights.

The scheme as per the government contention was introduced to cleanse the system of political funding. It will be a non-redeemable debt instrument in the manner of a promissory note, an interest-free banking instrument issued in multiple of 10k to 10 million by specified branches of SBI. They will have a life of 15 days and issued four times a year, January, April, July, and October.

Those parties who could muster more than 1% of votes in the last election would be eligible to draw them. Section 29C of the RPOP Act has been amended so that the candidates do not have to render a statement of funds received under EBS to the ECI. Section 13A of IT Act 1961 was amended exempting candidates from keeping account of money received through EBS. It also removes the cap of 7.5% of net profit during the last three years.

The FCRA (2010) has been amended allowing foreign companies to provide funds even if their share in the Indian company exceeds 50%. In a nutshell, the entire scheme was legally firewalled to be unlimited, unaccounted, and unidentified political funding by the corporations!

The Supreme Court has long held that the right to know, specifically in the context of elections (PUCL Vs UOI: 2003), is an integral part of the right to freedom of speech and expression under Article 19(1)(a). Chastened by the draconian change in electoral funding and legitimized opacity that shrouded it, ADR, Common Cause (NGOs), and CPI filed a PIL in the Supreme Court to stop the issuance of such bonds.

Prashant Bhusan who spearheaded the arguments against the scheme contended that the scheme allows donors of political parties to maintain anonymity which is not healthy for democracy. Besides, the party in power will get more funds as it will be reciprocated with favors. He also brought to notice the serious reservations that RBI and ECI had about the scheme.

The AG, on the other hand, defended the scheme as it will curb the menace of unaccounted money during the election. He also mentioned that if it is known that a corporation has given 50/100 cr to one party, they would be targeted by rival parties. This raises the basic issue if the right to information is part of the right to freedom of speech and expression or not. Several species of rights unenumerated in Article 19(1) (a) have branched off from the genus of the article through the process of interpretation by the Supreme Court.

In State of UP vs Raj Narain (1975), Justice Mathew wrote: The people of this country have a right to know every public Act, everything that is done in a public way, by their public functionaries. In SP Gupta vs UOI (1981) Chief Justice Bhagawati wrote the right to know is implicit in the right to free speech. Disclosure of information regarding the functioning of the government must be the rule, secrecy the exception.

However, the most definitive ruling in the context of the election was given in ADR Vs UOI (2002) when it made it mandatory for candidates to reveal their financial and criminal antecedents. The court also struck down S33A & 33B of the RPOP Act which tried to ban providing information. In PUCL vs UOI (2003) the court decreed that the State is under obligation to create conditions so that rights under Art 19(1) (a), like the right to receive information, can be effectively enjoyed by the citizens.

The present judgment is a reiteration of its earlier judgments that the right to informed voting of citizens cannot be trumped by the right to informational secrecy by corporations. CJI Chandrachud rejected the argument of the UOI that clause 7(4©) of the EBS balances two rights viz right to information and informational privacy. To him, the provision tilts the balance in favor of informational privacy because ‘the suitability prong of the proportionality standard is only partly fulfilled.’. The judges rightly reasoned that financial contributions to political parties are made either to support or in fulfillment of a quid pro quo arrangement.

Further right to privacy of political affiliation does not extend to contributions made to influence public policy. Justice Misra also calls permitting unlimited corporate funding arbitrary and violative of Article 14. To him, the harm of contribution by loss-making companies in the form of quid pro quo is much higher. The amendment to the Company Act is manifestly arbitrary as it does not make a distinction between profit-making and loss-making companies for political contribution. The scheme also fails to fulfill the proportionality test as the government has not been able to show how the object sought to be achieved, viz curb corruption will be achieved by the opacity of the scheme.

The government informed the parliament that bonds worth Rs 16518 cr were sold from 2018-2024. As per information provided by the ADR nearly 57% of the donation went to the BJP as against 10% to the INC. The court has directed SBI to provide ECI with a detailed record of all electoral bond contributions received from 2018 in about three weeks. The free and fair election was considered a basic structure by the iconic Keshavanand Bharti Case in 1973.

The latest decision on EBS has proved that the Court is not indefinitely indifferent to the growing nexus between a few unscrupulous corporations and venal political parties. Company Raj will hopefully be supplanted by popular will.