SC Declares Electoral Bonds Unconstitutional; Directs SBI to give details

New Delhi, February 15, 2024 – In a landmark ruling, the Supreme Court of India has declared electoral bonds unconstitutional. The court held that the bonds violate the Right To Information and transparency in political funding. The court has directed that the list of bondholders be made public so that voters can know about the funding raised by parties. This will ensure that the information about the funding received by political parties is transparent.

The court struck down the amendments to the Income Tax Act and the Representation of the People Act, which were made to facilitate contributions through electoral bonds. The court held that these amendments were unconstitutional and violated the right to information and Article 19(1)(a) of the Constitution. The CJI said that there are other ways to curb black money besides electoral bonds and that the public should be informed about the funding of political parties.

The court has directed the State Bank of India (SBI) to disclose information about the funding of political parties from April 12, 2019 to the present. SBI will have to provide this information to the Election Commission of India, which will then make it public. The court has given SBI three weeks to provide this information.

The government introduced electoral bonds in 2018 to increase transparency in political funding. Individuals, corporates, and institutions can purchase these bonds and donate them to political parties. The parties can then deposit the bonds in banks to get the money. SBI’s 29 branches are authorized to issue and encash these bonds. If a party fails to deposit the bond in its bank account within 14 days, the bond is canceled.

The case was brought by a group of petitioners who argued that electoral bonds allow for anonymous donations to political parties, which can lead to corruption and undue influence. The court agreed with the petitioners, finding that the bonds “undermine the transparency and accountability of political funding.”

The court also found that the bonds violate the right to equality, as these give an advantage to wealthy individuals and corporations who can afford to purchase the bonds. The court held that “the right to equality requires that all citizens have an equal opportunity to participate in the political process.”

The court’s ruling is a major victory for transparency and accountability in Indian politics. It is likely to have a significant impact on the upcoming Lok Sabha elections, as political parties will now be required to disclose the sources of their funding.