Supreme Court Unanimously Strikes Down India’s Electoral Bonds Scheme as Unconstitutional

A five-judge bench of the Supreme Court in India delivered a unanimous verdict on the electoral bonds scheme, declaring it “unconstitutional.” The bench, led by Chief Justice DY Chandrachud and comprising Justices Sanjiv Khanna, B R Gavai, J B Pardiwala, and Manoj Misra, concluded that the scheme violated the right to information and Article 19(1)(a) of the Indian Constitution. The court stated that information about political party funding is essential for electoral choices and that the scheme’s privacy provisions are impermissible.

Chief Justice Chandrachud emphasized that financial support to political parties could lead to quid pro quo arrangements and suggested that there are alternative schemes to curb black money. The court declared amendments to the Income Tax Act provision and Section 29C of the Representation of Peoples Act as ultra vires, and the amendment to the Companies Act as unconstitutional.

Justice Sanjiv Khanna agreed with the Chief Justice’s judgment, applying the principles of proportionality with slight variation. The Supreme Court issued three directions, including the return of all electoral bonds within the 15-day validity period by political parties to purchasers, the Election Commission of India making all donations public within one week, and the State Bank of India stopping the issuance of electoral bonds immediately and submitting all details to the ECI by March 6.

The electoral bonds scheme, introduced in 2018, aimed to provide an alternative to cash donations, with only eligible political parties able to receive such bonds. The court’s decision underscores concerns about transparency and the influence of money in Indian politics.