Landmark Verdict: Supreme Court Axes Electoral Bond Scheme! says ‘Unconstitutional’

The Supreme Court gave its verdict on the electoral bond case on Thursday (15 February 2024). The Supreme Court declared the electoral bond scheme unconstitutional and banned it with immediate effect. The court said that this scheme is a violation of RTI. Not only this, the Supreme Court has asked SBI to provide information about electoral bonds by March 6. 

A total of four petitions were filed in the Supreme Court questioning the validity of electoral bonds. The court had heard this in October last year and had reserved the decision in November. While delivering the verdict on the petitions challenging the electoral bond scheme on Thursday, CJI DY Chandrachud said, the decision of the bench is unanimous. Although, there are two decisions in this case, but the conclusion is one. 

We do not agree with the government’s arguments – Supreme Court

The Supreme Court said that the government had argued that this scheme would stop black money. But this argument does not affect people’s right to know. This scheme is a violation of RTI. The court said that the government considered it necessary to maintain the confidentiality of donors. But we do not agree with this. 

The court said, the electoral bond scheme violates the fundamental right to know secured under Article 19 1(a). However, not every donation is meant to influence government policies. People also donate due to political affiliation. It would not be right to make this public. Therefore, it would be wrong to make public the information about small donations. A person’s political leanings come under the right to privacy. 

Important points of the Supreme Court’s decision

– Electoral bond scheme is unconstitutional.
– Electoral bond scheme is a violation of RTI.
– The change made in the Income Tax Act in 2017 (keeping even big donations confidential) is unconstitutional.
The change in the Representation of the People Act in 2017 is also unconstitutional.
The change in the Company Act is also unconstitutional.
– The information about donations given for the purpose of transaction is also hidden due to these amendments.
– SBI should give information about donations received by all parties to the Election Commission by 6 March. 
– The Election Commission should publish this information on its website by 13 March. 
– Political parties should return the bonds which have not yet been encashed to the bank.

What was the electoral bond scheme?

The central government started the electoral bond scheme in 2018. It was introduced as part of efforts to bring transparency in the funding received by political parties. It was seen as an alternative to cash donations given to political parties. Electoral bonds were available in 29 branches of State Bank. Through this, any citizen, company or organization could donate to any party. These bonds could be of Rs 1000, Rs 10 thousand, Rs 1 lakh and Rs 1 crore. The special thing is that the donor does not have to write his name in the bond.

However, these bonds could be obtained only by those political parties which are registered under Section 29A of the Representation of the People Act 1951 and which have got more than one percent votes in the last Lok Sabha or Assembly elections.