Electoral bonds are
violative of the Right to Information and Right to Freedom of Speech and
Expression and need to be struck down as unconstitutional, the Supreme Court
said on Thursday while delivering its judgement on several pleas challenging
the validity of these instruments.
While delivering
the judgement, Chief Justice of India DY Chandrachud said that the decision was
unanimous. A five-judge Constitution bench headed by Chandrachud had on
November 2 last year reserved its verdict in the matter.
The SC also asked
the banks to stop issuing electoral bonds. It also ordered the State Bank of
India to furnish all details of donations received by the political parties to
the Election Commission of India (ECI).
The ECI has been
asked to publish all details on their website by March 31.
While delivering
the judgement, CJI Chandrachud said that the citizens have a right to know
about the funding of political parties and it is essential for the electoral
process.
He added that
financial support to a political party can lead to quid pro quo
arrangement.
Chandrachud said
that a company has a "more graver" influence on the political process
than individuals adding that These transactions may only be for business
purposes. He said the amendment to Section 182 of the Companies Act is also
unconstitutional.
Under the
amendment, the Centre removed the limit on the maximum amount a company can
contribute to a political party.
"Before the
amendment, loss-making companies were not able to contribute. The amendment
does not recognise the harm of allowing loss-making companies to contribute due
to quid pro quo," CJI said, according to Live Law.
"The
amendments to Section 182 of the Companies Act are manifestly arbitrary for not
making a distinction between loss-making and profit-making companies."
The scheme, which
was notified by the government on January 2, 2018, was pitched as an
alternative to cash donations made to political parties as part of efforts to
bring transparency to political funding.
According to the
provisions of the scheme, only the political parties registered under Section
29A of the Representation of the People Act, 1951 and which secured not less
than 1 per cent of the votes polled in the last elections to the Lok Sabha or a
state legislative assembly are eligible to receive electoral bonds.
An Electoral Bond
is an instrument like a promissory note or bearer bond which can be purchased
by any individual, company, firm or association of persons provided the person
or body is a citizen of India or incorporated or established in India.
The bonds are
issued specifically for the contribution of funds to political parties.