Electoral Bonds: SC Judgment Landed Like a Clap of Thunder From a Clear Blue Sky

Just as remarkable as the court’s reasoning is also the actions it took to enforce its judgment.

For a court that sat on the issue for five years, and has almost always upheld the union government’s actions with respect to other issues, the striking down of the entire electoral bonds scheme in Association for Democratic Reforms v Union of India was entirely unexpected of the Supreme Court (SC).

Observers of the court, like yours truly, were expecting a rerun of the court’s judgment in the Bearer Bonds case in the 1980s where a Constitution Bench had given a free pass to the government’s scheme of legitimising black money.

Instead, what we got was a repeat of the Supreme Court’s judgment in an earlier case concerning the ADR, i.e., the disclosure of criminal cases and assets of politicians. Using the well-established principles around the voter’s right to know (drawn from Article 19(1)(a)) and the recently evolved doctrine of manifest arbitrariness (built around Article 14), the court concluded that the entire electoral bonds scheme was unconstitutional.

Most Importantly, SC Asked SBI to Submit ALL the Details

Just as remarkable as the court’s reasoning and its judgment in the case, is what the court did in not just the judgment itself but also the actions it took to enforce its judgment. This is a distinction that I make repeatedly and one that must inform the way we assess the Supreme Court and the judiciary at large.

What the court did in a case is just as important as what the court chose not to do as a consequence of its judgment. This becomes all the more important in the context of the ADR case as I will discuss, and one which does not get enough credit I think, given the options that the court had before it.

When it held the entire electoral bonds scheme unconstitutional, the court struck down the provisions of the Representation of the Peoples Act, 1951, the Finance Act, 2014 and the Companies Act, 2013 which had been amended to accommodate the electoral bonds scheme. Had it done just this much, while it would have been welcome and still quite unexpected, it would have meant that the court had all but condoned everything that took place on its watch as it kept the electoral bonds case pending.

It would have effectively said, “What’s done is done, but don’t do this in the future” — a message that would have been perfectly acceptable to the union government and the political parties that had benefited from electoral bonds.

The most important part of the ADR case, I think, are the directions which are found in paragraph 219 and are a follow-on from the striking down of the scheme. The court directed the State Bank of India (the sole agency to issue electoral bonds) to submit all the details of purchasers of electoral bonds and all parties who have received electoral bonds to the Election Commission of India. It also directed the ECI to make this information publicly available within four weeks of the judgment.

The Court Had None of the Deliberate Misleading by the SBI

These directions are important because the court is asserting that it is dead serious about the importance of transparency in electoral funding. When the court says, “the information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner”, the directions to disclose the electoral bond data suggest that it means what it says. 

The extent of the unexpectedness of these directions can be gauged by the SBI’s attempts to push back the deadline given to it to share the information so that nothing is made public before the elections. It is hard to believe that SBI, one of the largest government-owned banks in the country, needed three weeks to figure out what it was supposed to do in a one-line direction given to it by the Supreme Court.

The court had none of the deliberate misleading, and a prompt order and short deadline were given. Even then, the SBI chose not to indicate the unique alphanumeric codes of each electoral bond in the data it shared with the ECI — a fact that did not escape the court’s notice.

There have been other attempts at trying to get the court to rethink its directions made by industry bodies and plain busybodies but none have even been remotely entertained. 

The importance of the court’s directions has been validated as even without the unique alphanumeric codes, people have been able to draw fairly clear correlations between the purchase of electoral bonds by companies and their investigation by the Enforcement Directorate, the Competition Commission or the Central Bureau of Investigation.

Keen-eyed reporters have been able to track down the shell companies that have been used to channel hundreds of crores of money through electoral bonds. They have drawn the links between policy approvals for large infrastructure companies that have donated electoral bonds to ruling parties. 

What electoral consequences follow from this cannot be easily deciphered. What no one can say is that when they vote sometime in the next three months, the Indian voters are ill-informed.

(Alok Prasanna Kumar is a Senior Resident Fellow at the Vidhi Centre for Legal Policy in Bengaluru. He is also a member of the Executive Committee of the Campaign for Judicial Accountability and Reforms. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)