Electoral bonds ruling: How SC balanced right to know with right to privacy
By Arvind Narrain
This article was originally published on The Federal and can be accessed here.
The unanimous constitutional bench decision holding the scheme which allows for the purchase of electoral bonds without disclosing who the purchaser is has been struck down the Supreme Court in Association of Democratic Reforms v. Union of India. Under the scheme, political parties need not disclose the contributions received through electoral bonds; Companies are not required to disclose the details of contributions made in any form; and Unlimited corporate funding was permissible.
To facilitate this scheme the Representation of Peoples Act, Income Tax Act, Companies Act and Finance Act were amended. In a remarkable decision authored by Chief Justice Chandrachud for the plurality consisting of Justices, Gavai, Pardiwala and Misra and Justice Khanna speaking for himself, both the scheme as well as these facilitating provisions were struck down leaving no scope for ambiguity. What flowed from this finding was that the issue of Electoral Bonds was stopped and the SBI was required to ‘submit details of the Electoral Bonds purchased since the interim order of this Court dated 12 April 2019 till date to the ECI.’ The SBI was also required to ‘submit the details of political parties which have received contributions through Electoral Bonds’.
In an indication that this was not merely a declarative judgment and that there were consequences to follow, the Court prescribed 6th March, 2024 as the deadline for SBI to submit the above information to the Election Commission. The Election Commission in turn was ordered to ‘publish the information shared by the SBI on its official website by 13 March 2024.
The Court for its reasoning drew upon its previous precedents with respect to proportionality analysis as well as the doctrine of arbitrariness to arrive at this result. The base of the judgment was the seminal importance of Article 19(1)(a) as including the right to know of citizens. The integrity of the electoral process was based on the citizen’s right to know and this right to know, the Court derived from the previous judgments of the Supreme Court where the Court had held that transparency with respect to criminal records / assets of a candidate were essential to a democracy.
However the Union of India contended that this right to know must be balanced against the right of a person to ‘maintain privacy of their political affiliations’ and that ‘donating money to one’s preferred party is a form political self-expression, which lies at the heart of privacy’.
To understand if these rights could be restricted, Justice Chandrachud employed what he called a ‘double proportionality analysis’, under which the two so called competing rights, namely the right to donate anonymously and the right to know were analysed within the proportionality framework.
The proportionality framework examines whether the measure restricting a right has a legitimate goal (legitimate goal stage);The measure was a suitable means for furthering the goal (suitability or rational connection stage); The measure was the least restrictive and equally effective (necessity stage); and the measure did not have a disproportionate impact on the right holder (balancing stage).
With respect to the right of the donor to be anonymous, the Court reiterates that the right to not let your political affiliation be disclosed is a legitimate dimension of one’s privacy. However if that is the concern of the Union of India the measure adopted is not ‘suitable’. In the Court’s understanding, ‘the right to privacy of political affiliations does not extend to contributions which may be made to influence policies. It only extends to contributions made as a genuine form of political support that the disclosure of such information would indicate their political affiliation and curb various forms of political expression and association.’ Justice Khanna’s concurring opinion which lists the party wise donation through bonds as being in the thousands of crores, ( mainly flowing to the BJP) adds further weight to this conclusion and gives the lie to the Union of India’s argument.
The Court then applies the proportionality analysis to the restrictions on the citizen’s right to know. It took seriously the Union’s argument that this scheme is required to deal with the problem of black money and then asks the question as to whether this is the ‘least restrictive’ means to achieve that objective? It held that, the ‘Electoral Bond Scheme is not the only means for curbing black money in Electoral Finance’. In its reasoning it holds that ‘there are other alternatives [ such as the extant Electoral Trust Scheme] which substantially fulfil the purpose and impact the right to information minimally when compared to the impact of electoral bonds on the right to information.’
The other legal test which the Court applies is the doctrine of ‘manifest arbitrariness’, under which a legislation can be struck down if ‘the determining principle of it is not in consonance with constitutional values.’ In this case the amendment to Section 182 of the Companys Act which does away with the distinction between contributions by companies and individuals is found to be ‘manifestly arbitrary’.
In the Court’s reasoning, this is because ‘the ability of a company to influence the electoral process through political contributions is much higher when compared to that of an individual’ and hence a ‘company has a much graver influence on the political process’ and the two cannot be equated for the purposes of political contributions.
The future Chief Justice of India, Sanjiv Khanna, in his concurring opinion, while agreeing on the conclusion of the plurality, does not agree with the conclusion that to eliminate the distinction between individuals and corporations when it comes to political contributions is manifestly arbitrary!
While the judgment is soundly grounded in law, it remains alive to the political context. The citing by Justice Khanna of the thousands of crores received by political parties and disproportionately cornered by the BJP is one example. Justice Chandrachud is also alive to the context as he observes that, ‘the challenge to the statutory amendments and the Electoral Bond Scheme cannot be adjudicated in isolation without a reference to the actual impact of money on electoral politics’ and concludes that ‘the nexus between money and electoral democracy’ should be borne in mind, while deciding these petitions.’
While this judgment is to be welcomed, it has been seven long years since the case was first filed allowing for what the Chief Justice has appositely called the ‘murder of democracy’. One cannot but note that the aliveness to the political context which the Court exhibits in this judgment was sadly absent in the other major constitutional bench decision on the constitutionality of the abrogation of Article 370.
Still, this is a step in the right direction and hopefully the Court will begin the process of restoring the tattered faith of the common man that the Court will vigorously defend the values of the Constitution against an overweening executive.
Arvind Narrain is the President of the PUCL-Karnataka.