(A) Constitution of India, Article 14, 19(1)(a) and 32 – Electoral Bond Scheme 2018, Clause 2(a) – Reserve Bank of India Act, 1934, Section 31(3) – Finance Act 2017, Section 11, 135, 137, 154 – Representation of the People Act 1951, Section 29C, 77 – Income Tax Act 1961, Section 13A, 67- Conduct of Election Rules 1961, Rule 90 – Companies Act 2013, Section 182- Electoral Bond Scheme 2018– Challenge to validity – Whether unlimited corporate funding to political parties, as envisaged by the amendment to Section 182(1) of the Companies Act infringes the principle of free and fair elections and violates Article 14 of the Constitution – Held that the Electoral Bond Scheme, the proviso to Section 29C(1) of the Act 1951 (as amended by Section 137 of Finance Act 2017), Section 182(3) of the Companies Act (as amended by Section 154 of the Finance Act 2017), and Section 13A(b) (as amended by Section 11 of Finance Act 2017) are violative of Article 19(1)(a) and unconstitutional; and b. The deletion of the proviso to Section 182(1) of the Companies Act permitting unlimited corporate contributions to political parties is arbitrary and violative of Article 14 – Following directions issued: a. The issuing bank shall herewith stop the issuance of Electoral Bonds; b. SBI shall submit details of the Electoral Bonds purchased since the interim order of this Court dated 12 April 2019 till date to the ECI. The details shall include the date of purchase of each Electoral Bond, the name of the purchaser of the bond and the denomination of the Electoral Bond purchased; c. SBI shall submit the details of political parties which have received contributions through Electoral Bonds since the interim order of this Court dated 12 April 2019 till date to the ECI. SBI must disclose details of each Electoral Bond encashed by political parties which shall include the date of encashment and the denomination of the Electoral Bond; d. SBI shall submit the above information to the ECI within three weeks from the date of this judgment, that is, by 6 March 2024; e. The ECI shall publish the information shared by the SBI on its official website within one week of the receipt of the information, that is, by 13 March 2024; and f. Electoral Bonds which are within the validity period of fifteen days but that which have not been encashed by the political party yet shall be returned by the political party or the purchaser depending on who is in possession of the bond to the issuing bank. The issuing bank, upon the return of the valid bond, shall refund the amount to the purchaser’s account. (Para 216, 219per Dr Dhananjaya Y Chandrachud, CJI for the Bench; Sanjiv Khanna, J concurring)
(B) Constitution of India, Article 19(1)(a) and 32 – Electoral Bond Scheme 2018, Clause 2(a) – Reserve Bank of India Act, 1934, Section 31(3) – Finance Act 2017, Section 11, 135, 137, 154 – Representation of the People Act 1951, Section 29C, 77 – Conduct of Election Rules 1961, Rule 90 – Income Tax Act 1961, Section 13A, 67 – Companies Act 2013, Section 182 – Electoral Bond Scheme 2018– Challenge to validity – Whether the non-disclosure of information on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to Section 29C of the RPA, Section 182(3) of the Companies Act and Section 13A(b) of the IT Act are violative of the right to information of citizens under Article 19(1)(a) of the Constitution–Held 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 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). (Para 104 per Dr Dhananjaya Y Chandrachud, CJI for the Bench; Sanjiv Khanna, J concurring)
(C) Constitution of India, Article 14, 19(1)(a) and 32 – Electoral Bond Scheme 2018, Clause 2(a) – Reserve Bank of India Act, 1934, Section 31(3) – Finance Act 2017, Section 11, 135, 137, 154 – Representation of the People Act 1951, Section 29C, 77 – Conduct of Election Rules 1961, Rule 90 – Income Tax Act 1961, Section 13A, 67 – Companies Act 2013, Section 182 – Electoral Bond Scheme 2018– Challenge to validity – Held as follows:
(i) the Scheme is unconstitutional and is accordingly struck down;
(ii) proviso to Section 29C(1) of the Representation of the People Act, Section 182(3) of the Companies Act, 2013, and Section13A(b) of the Income Tax Act, 1961, as amended by the Finance Act, 2017, are unconstitutional, and are struck down;
(iii) deletion of proviso to Section 182(1) to the Companies Act of2013, thereby permitting unlimited contributions to political parties is unconstitutional, and is struck down;
(iv) sub-section (3) to Section 31 of the RBI Act, 1934 and the Explanation thereto introduced by the Finance Act, 2017 are unconstitutional, and are struck down;
(v) the ECI will ascertain the details from the political parties and the State Bank of India, which has issued the Bonds, and the bankers of the political parties and thereupon disclose the details and names of the donor/purchaser of the Bonds and the amounts donated to the political party. The said exercise would be completed as per the timelines fixed by the Hon’ble the Chief Justice;
(vi) Henceforth, as the Scheme has been declare dun constitutional, the issuance of fresh Bonds is prohibited;
(vii) In case the Bonds issued (within the validity period) are with the donor/purchaser, the donor/purchaser may return them to the authorised bank for refund of the amount. In case the Bonds (within the validity period) are with the donee/political party, the donee/political party will return the Bonds to the issuing bank, which will then refund the amount to the donor/purchaser. On failure, the amount will be credited to the Prime Ministers Relief Fund. (Para 79per Sanjiv Khanna, J concurring Judgment)
SUPREME COURT OF INDIA
2024 STPL(Web) 104 SC
[2024 INSC 113]
Association For Democratic Reforms & Anr. Vs. Union Of India & Ors.
Writ Petition (C) No. 880 of 2017 With Writ Petition (C) No. 59 of 2018 With Writ Petition (C) No. 975 of 2022 And With Writ Petition (C) No. 1132 of 2022-Decided on 15-2-2024
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