The apex court’s verdict on the Electoral Bonds Scheme signals the coming of age of a strong citizen rights jurisprudence in the country. Another laxman rekha has been breached, and for good, but is there an alternative?
By Sanjay Raman Sinha
As the Supreme Court struck down the Electoral Bonds Scheme (EBS), it also demolished a major bulwark of the government. The five-judge bench of Chief Justice of India (CJI) DY Chandrachud, and Justices Sanjeev Khanna, BR Gavai, JB Pardiwala and Manoj Misra gave a unanimous historic verdict which has the potential to not only cleanse the funding process, but also protect voter rights.
During the argument stage of the case, the Attorney General R Venkataramani had made a case for total information blackout of EBS donors and beneficiaries, asserting that right to know stops at the threshold of the EBS. Right to know is not a general right available to citizens, he said. By doing so, the government sought not only to infringe on the right to information of citizens, it also drew a laxman rekha which the citizens were told not to cross, and for no good reason. The CJI had taken to task the senior most law officer of the government. But that’s another story.
The point is that the government’s effort to stonewall the funding information was effectively decimated. The EBS verdict is an exoneration of the judiciary’s stand on a range of issues pertaining to voters’ rights and individual freedom. Electoral funding is not going to be the same ever again.
Vijay Hansaria, senior advocate in the Supreme Court, had argued for the petitioners in the EBS case. Speaking to India Legal, he said: “The verdict is very important for our electoral reforms. I believe positive changes will come. Over a crore of funds are transferred in one go by big donors. In cash, this can be voluminous. I had argued in the Court that cash donations should be stopped and digital transactions and bank transfers should be promoted. This will promote transparency.”
The right of voters to know about the criminal antecedent of the candidate is also part of the fundamental rights. This was brought out in the Lok Prahari vs Union of India case wherein the bench stated: “…voter speaks out or expresses by casting vote and such a speech is part of the fundamental right under Article 19(1)(a). This Court after taking into consideration various aspects of the matter… held that for the effective exercise of his fundamental right, the voter is entitled to have all relevant information about the candidates at an election…”
In the State of Uttar Pradesh vs Raj Narain and Others (1975), the Constitution bench of the Supreme Court held: “The people of this country have a right to know every public act, everything that is done in a public way by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing.”
The legal antecedents clearly support the verdict of the five-judge bench hearing the electoral bonds matter wherein it has struck down the restrictions on the right to information of voters.
Shailesh Gandhi, former Central Information Commissioner and noted RTI activist, spoke to India Legal on the RTI aspect of the verdict: “As a transparency advocate, I am very happy at this judgment saying that things should be transparent, and there is no doubt about this. However, there are some things that we need to understand before rejoicing on this judgment. It has taken seven years for the Supreme Court to come up with this decision. In the meantime, there have been various instances where the Supreme Court’s decisions have not been implemented by the government. One such case I am aware of personally is in 2011 when I was the Information Commissioner. I had ordered RBI to reveal various information to be disclosed to citizens like loan defaulters’ lists, audit reports of banks, inspection reports and more in a RTI appeal. The RBI obtained stay orders on these. The Supreme Court in 2015 upheld all my decisions and said there was no need to change anything and unless our courts give decisions in a time-bound manner, these methods will continue frustrating the rule of law.”
Despite the verdict, funding of elections is going to be a thorny matter for some time to come. An alternative arrangement has to be devised.
A look at the funding models of other countries can help. In countries like the United States, the United Kingdom, Switzerland and Singapore, the focus is on transparency, disclosure and proper reporting on political contributions. These examples highlight the global consensus on transparency in the political funding process.
In the present dispensation, there seems a one-to-one relationship between big ticket donors and the receivers, especially political parties in power. No wonder then, quid pro quo arrangements formed the crux of some of the major arguments during the hearing stage.
The Law Commission of India in its 255th Report had noted the concern of financial superiority translating into electoral advantage. It was observed that lobbying gives undue importance to big donors and certain interest groups at the expense of the ordinary citizens, violating “the right of equal participation of each citizen in the electoral process”.
In the United States, amidst public concern over the influence of large donors in political campaigns, an opinion poll was conducted in 2018 which found that 74% of Americans surveyed felt it was “very” important that “people who give a lot of money to elected officials not have more political influence than other people”.
The people giving a lot of money are obviously the corporate entities as the value of donations above Rs one crore is in large numbers. Ninety four percent of the contributions through electoral bonds have been made in the denomination of Rs one crore. Such contributions can only come from the corporate world and may provide more political influence than other people.
Thus, EBS not only provides an unequal playing ground for political parties, it also infringes upon the right to information of the voter by anonymising contributions through bonds which is violative of Article 19(1)(a) of the Constitution.
In the EBS case, the petitioners had argued that Section 154 of the Finance Act, 2017 violates Article 14 of the Constitution. The primary ground of challenge was that the amendment to Section 182 of the 2013 Act is manifestly arbitrary as it allows companies, including loss-making companies, to contribute unlimited amounts to political parties.
After referring to Article 14 and also to a series of court verdicts, the apex court bench came to the conclusion that “it is now a settled position of law that a statute can be challenged on the ground it is manifestly arbitrary.” Thereafter, the bench held that: “Unlimited contribution by companies to political parties is antithetical to free and fair elections because it allows certain persons/companies to wield their clout and resources to influence policymaking.”
Sometime back, the former RBI Governor Raghuram Rajan had critiqued the EBS. He had asserted that it favours the ruling party in political funding, thus creating an unbalanced playing field.
The irony is that the Finance Act, 2017 was passed as a Money Bill with the primary aim to curb black money within the electoral system. However, the amendments legitimised electoral corruption at a large scale. The passage of EBS as a Money Bill is under examination by a larger bench.
The fact of the matter is that the political class works in a concerted way to achieve its narrow ends, ideological differences notwithstanding. Two examples underline the fact. In 2013, Rahul Gandhi had publicly torn the ordinance brought by the Congress to save convicted legislators from disqualification.
In 2003, the Vajpayee government had prevented the criminal antecedents of candidates to be revealed. The Vajpayee government had tried to bypass the verdicts of the High Court and the Supreme Court and amended the Representation of People Act and added Section 33A and 33B to it. When read together, these Sections held that candidates will not be liable to disclose any information regarding their criminal antecedents.
The amendment was challenged in the apex court and in People’s Union for Civil Liberties vs Union of India (2003), the amendment was struck down as being ultra vires the Constitution as it aimed to impose a blanket ban on the dissemination of information by candidates. The Court held it void as it infringed upon the right of voters to know. Thereafter, the Supreme Court made it mandatory for candidates with criminal antecedents to publish information about the criminal charges filed against them. This is history, but it directly relates to machinations of political dispensation to curtail the right to know of the candidates, which had been effectively achieved under the EBS regime.
The election funding policy was tweaked during the Vajpayee rule. The Income Tax Act was amended to make donations made to parties to be treated as expenditure and this gave tax advantage to the donors. A political party was expected to file its returns. Cheque donations, instead of cash, was expected. However, most of the donors were reluctant to disclose the donation details. Secrecy was thought to be a shield for potential political reprisal. The law was further amended by the UPA government facilitating the formation of an electoral trust which was supposed to distribute pooled donations to various political parties. Then as the Modi government’s new amendments were eased in, the EBS regime came into vogue.
Reviewing the EBS, the bench held: “Electoral Bond Scheme does not fulfil the least restrictive means test. The Electoral Bond Scheme is not the only means for curbing black money in Electoral Finance. There are other alternatives 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 EBS verdict takes into its gamut not only electoral funding, but also voters’ right to know, donor privacy and political contributions by companies. Like a deft surgeon, the Supreme Court has removed the diseased portions, but an alternative system needs to be devised and put in place to regenerate the electoral funding process.