In an unanimous verdict, the Constitutional Bench of Supreme Court headed by Chief Justice of India D.Y. Chandrachud , has held the electoral bonds scheme is unconstitutional and is violative of Article 19(1)(a). It also held that the amendment to Section 182 Companies Act, which allowed corporate political funding, as unconstitutional.
The Bench directed the State Bank of India, the sole issuer of electoral bonds, to immediately stop its issuance and furnish the details of donations through electoral bonds and the details of the political parties which received the contributions by March 6, 2024.
It also directed the Election Commission to the details on electoral bonds on the website by March 31, 2024.
Electoral bonds still not encashed by political parties should be returned to the bank, which will refund the purchaser.
The Constitution Bench also comprising Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra had on November 2 last year reserved its verdict after hearing extensive arguments over a span of three days.
The electoral bond scheme, which was notified by the government on January 2, 2018, introduced money instruments through which companies and individuals in India can donate to political parties anonymously. Consequently, Congress leader Dr. Jaya Thakur, the Communist Party of India (Marxist), and the NGO Association for Democratic Reforms (ADR) challenged the scheme by contending that it opens the “floodgates” to anonymous political donations thereby infringing upon the voters’ right to information.
The Union government on the other hand defended the scheme by pointing out that anonymity in political donations is required to ensure that there is no apprehension of retribution from other political parties. It was also argued that the scheme ensures that ‘white’ money is used for political funding through proper banking channels.