Why Supreme Court Struck Down The Electoral Bonds Scheme: 5 Points

New Delhi: The Supreme Court on Thursday struck down the electoral bonds scheme, brought by the central government in 2018 as an alternative to cash donations made to political parties to bring transparency in political funding.

The apex court noted that electoral bonds are violative of the right to information (RTI) and Article 19(1)(a) and held that such a scheme has to be struck down for being ‘unconstitutional.' 

Pronouncing the judgment, the Constitution bench comprising Chief Justice DY Chandrachud, Justices Sanjeev Khanna, BR Gavai, JB Pardiwala, and Manoj Mishra, pronounced that political parties are relevant units in the electoral process and information about the funding of political parties is essential for electoral choices.

“Political parties are relevant units in the electoral process. Information about funding of political parties is essential for electoral choices,” said CJI DY Chandrachud. “Financial support to political parties can lead to quid pro quo arrangements,” he added. 

Mainly, the petitioners argued on two bases- (1) Whether amendments are violative of the right to information under Article 19(1)(a), (2) Whether unlimited corporate funding violates the principles of free and fair elections.

Major Observation by SC on E-Bonds: Top 5 

1. The electoral bonds scheme has to be struck down as unconstitutional. It violates the right to information of citizens, about possible quid pro quo.
2. The issuing bank shall forthwith stop the issue of electoral bonds. The State Bank of India shall furnish the details of donations through electoral bonds and the details of the political parties that received the contributions.
3. CJI DY Chandrachud further noted that the Electoral bonds scheme is not the only scheme to curb black money as there are other alternatives. “Infringement to the right to information is not justified by the purpose of curbing black money.”
4. “Not all political contributions are made with the intent to alter public policy. Students, daily wagers, etc also contribute. To not grant an umbrella of privacy to political contributions only because some contributions are made for other purposes is not impermissible,” the CJi noted. 
5. Amendments to the Companies Act are unconstitutional. “A company has more graver influence on the political process than contributions by individuals. Contributions by companies are purely business transactions. Amendment to Section 182 Companies Act is manifestly arbitrary for treating companies and individuals alike,” said the CJI.