Electoral Bonds Verdict | 'Contributions Give Seat at Table to Contributor': Excerpts from Landmark SC Judgment

The Supreme Court highlighted the close nexus between money and politics as it delivered a crucial judgment annulling the electoral bond scheme on Thursday. The apex court said there was a possibility that "financial contribution to a political party would lead to quid pro quo arrangements". Reports ETV Bharat's Sumit Saxena

New Delhi:The Supreme Court on Thursday, while striking down the electoral bond scheme introduced on January 2, 2018, as an anonymous mode to contribute to political parties, said the influence of money over electoral politics is not limited to its impact on the electoral outcomes but also spills over to governmental decisions.

The apex court stressed that there is a legitimate possibility that financial contribution to a political party would lead to quid pro quo arrangements because of the close nexus between money and politics.

The Chief Justice of India D Y Chandrachud authored the lead judgment on behalf of himself and Justices B R Gavai, J B Pardiwala and Manoj Misra on a batch of petitions filed by NGO Association for Democratic Reforms, CPI (M), Congress leader Jaya Thakur and others.

The CJI, in the 232-page judgment, noted that maintaining the anonymity of the contributor is a crucial and primary characteristic of the electoral bond scheme. He said the influence of money over electoral politics is not limited to its impact over electoral outcomes.

“It also spills over to governmental decisions. It must be recalled here that the legal regime in India does not distinguish between campaign funding and electoral funding. The money which is donated to political parties is not used by the political party only for the purposes of electoral campaigns. Party donations are also used, for instance, to build offices for the political party and pay party workers," said the CJI.

The bench said money can be contributed to political parties throughout the year and the contributed money can be spent by the political party for reasons other than just election campaigning. “It is in light of the nexus between economic inequality and political inequality, and the legal regime in India regulating party financing that the essentiality of the information on political financing for an informed voter must be analyzed”, said the CJI.

The bench said economic inequality leads to differing levels of political engagement because of the deep association between money and politics. “At a primary level, political contributions give a ‘seat at the table’ to the contributor. That is, it enhances access to legislators. This access also translates into influence over policy-making”, said the bench.

It added: “An economically affluent person has a higher ability to make financial contributions to political parties, and there is a legitimate possibility that financial contribution to a political party would lead to quid pro quo arrangements because of the close nexus between money and politics. Quid pro quo arrangements could be in the form of introducing a policy change, or granting a license to the contributor”.

The apex court said the money that is contributed could not only influence electoral outcomes but also policies particularly because contributions are not merely limited to the campaign or pre-campaign period. “Financial contributions could be made even after a political party or coalition of parties form Government. The possibility of a quid pro quo arrangement in such situations is even higher. Information about political funding would enable a voter to assess if there is a correlation between policy-making and financial contributions”, said the bench.

The bench noted that electronic and print media would present the information on contributions received by political parties, and the probable link between the contribution and the licenses which were given to the company in an accessible format. “The responses to such information by the Government and political parties would go a long way in informing the voter”, it said.

Electoral bond scheme not fool-proof on anonymity of contributor

The Union of India submitted that the political party which receives the contribution does not know of the identity of the contributor because neither the bond would have their name nor could the bank disclose such details to the political party.

“We do not agree with this submission. While it is true that the law prescribes anonymity as a central characteristic of electoral bonds, the de jure anonymity of the contributors does not translate to de facto anonymity. The scheme is not foolproof. There are sufficient gaps in the scheme which enable political parties to know the particulars of the contributions made to them," said the bench.

The apex court said Clause 12 of the scheme states that the bond can be encashed only by the political party by depositing it in the designated bank account. “The contributor could physically hand over the electoral bond to an office bearer of the political party or the legislator belonging to the political party, or it could have been sent to the office of the political party with the name of the contributor, or the contributor could after depositing the electoral bond disclose the particulars of the contribution to a member of the political party for them to cross-verify”, said the bench.

Electoral bond scheme infringes upon the right to information of voter

The apex court said that according to the data on contributions made through electoral bonds, ninety-four percent of the contributions through electoral bonds have been made in the denomination of one crore. “Electoral bonds provide economically resourced contributors who already have a seat at the table selective anonymity vis-à-vis the public and not the political party”, said the bench.

The CJI said, "Under the current Scheme, it is still open to the political party to coerce persons to contribute. Thus, the argument of the Union of India that the Electoral Bond Scheme protects the confidentiality of the contributor akin to the system of secret ballot is erroneous". “We are of the opinion that the information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner," the bench said.

The electoral bond scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymizing contributions through electoral bonds are violative of Article 19(1)(a), which has been held to guarantee the right to information to citizens, it added.

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