On Indian Supreme Court’s Electoral Bonds
judgement: A Framework for Representative
Democracy
Case Comment
The Supreme Court in Association for Democratic Reforms v Union of India converged
unanimously in ruling the Scheme of Electoral Bonds as unconstitutional due to violation of
the right to information of voters under 19(1)(a) of the Constitution. Central to the court’s
decision was an interpretive exercise that places representative democracy at the core of the
argument. The court also ordered a slew of directions following the overruling of the scheme,
which in effect provide for (I) refund of bonds still not encashed and (II) publishing a list of
electoral bonds received by the parties with the particulars thereof.
Finance Act 2017 introduced the Electoral Bond Scheme, an interest-free banking instrument
(Bearer Bonds) that any company or individual in India can buy. They are issued by any
authorized branch of the State Bank of India and can be used to make donations to Political
parties. Since the Bonds were to be purchased through Regular Banking Channels after
fulfilling all corollary requirements like KYC, the government claimed that such a scheme
reduced the element of Black Money filtering into political funding.
However, as the majority opinion also aptly recognized, the scheme was significant because
it completely anonymized all such donations and removed all caps on corporate funding. The
scheme thus raised twin considerations for the Electoral System of India – (I) Transparency
in Political Funding and (II) Unlimited Corporate Lobbying, which, if left unchecked, could
effectively reduce the electoral power of the ordinary citizen with the political parties being
responsive primarily to corporate interests.
In reaching its conclusion, the majority opinion by the CJI traces the net effect of the scheme
to the violation of two fundamental values essential to a Representative Democracy–
1. The right to form an opinion about the candidate.
2. The right to make an informed choice.
In this post, I argue that the exercise taken by the court in the present case to reach its
conclusion provides us with a framework for Representative Democracy, which, if used
effectively, can lead to a reinvigoration of The Right to Information Act.
Developing the Framework
The majority opinion by the CJI traces the jurisprudence on the Right to Information of the
citizens into two phases –
First Phase – Transparency
In the first phase, this court traced the right to information to the values of good governance,
transparency, and Accountability. These judgments recognize that it is the role of citizens to
hold the State accountable for its actions and inactions, the necessary corollary being that
they must possess information about State action to accomplish this role effectively.
The court traces this to the earlier cases of State of UP v Raj Narain and SP Gupta v Union of
India, which were given in the context of the exercise of executive privilege under Section
123 of the Indian Evidence Act, which provides for a bar on certain disclosures as to affairs
of the State.
The essence of the two decisions was that information is necessary for democratic
governance, which is not just illustrated through voting every five years but rather through
holding the government accountable for its actions.
Second Phase – Effective Participation
In this phase, the right to information was seen as an instrument for Effective Participation in
the public sphere. The court recognized that Effective Participation in democratic governance
is not just a means to an end but is an end in itself.
These two functions of the rights were then concretely applied in the context of furthering a
representative democracy in the earlier decisions of Union of India v Association of
Democratic Reforms (hereinafter referred to as ‘ADR’ Case) and PUCL v Union of India
(hereinafter referred to as ‘PUCL’ case) mandating certain disclosures like cases registered
against the candidates, assets, and liabilities of candidates and their antecedents, etc. The
essence of the earlier decisions was that such disclosures were a facet of the right to
information of the citizens under article 19(1)(a) based on the two functions of the right –
a. Transparency – right to form an opinion about the candidate
b. Effective Participation – right to make an informed choice in the elections.
Justice Shah, in PUCL, summarised the position as –
“30. For survival of true democracy, the voter must be aware of the antecedents of his
candidate. Voter has to caste intelligent and rational vote according to his own criteria. A
well-informed voter is the foundation of democratic structure. That information to a voter,
who is the citizen of this country, is one facet of the fundamental right under Article 19(1)
(a).”
Extending the Framework
While the court has been rightly criticized in recent cases for sidestepping the issues or not
engaging with the petitioner’s arguments, in the present case, the Majority Opinion engages
substantially with the scheme’s implications for representative democracy rather than
sidestepping it through donor privacy alone.
To extend the framework provided by ADR and PUCL, the court had to frame two issues –
1. Transparency Argument –
Whether the right to information about the candidate’s antecedents is akin to being informed
about political funding received by Political Parties, i.e., whether the “political party” is a
relevant ‘political unit’ in the electoral process.
The opinion affirmatively answers this issue through the following three reasons –
a. Voter’s associate voting with political parties because of the centrality of symbols in the
electoral process;
b. The form of government where the executive is chosen from the legislature based on the
political party or coalition of political parties that has secured the majority;
c. The prominence accorded to political parties by the Tenth Schedule of the Constitution
leaves little ground for individual divergence from the party line.
The court herein drew a parallel between the role played by the Candidates themselves and
the Political Parties to which they belong, i.e., the Indian Electoral System, while being a
form of Parliamentary System wherein the people vote for individual representatives
themselves, still contains a central role for Political Parties as a unit in themselves.
As has been previously argued, despite not being explicitly recognized as a relevant unit in
the Indian Constitution, political parties play an essential role in the Indian electoral System.
Voters assess candidates primarily by referencing the political parties they belong to; political
parties play a central role in forming the government and are the relevant unit in determining
disqualification proceedings under anti-defection law.
The decision in Kihoto Hollohan symbolized the primacy of the Political Party as a relevant
unit in itself when it centralized all decision-making power in the hands of party leadership
without any possibility of dissent for individual legislators, lest disqualification proceedings
under the Tenth Schedule. As Bhatia argues, the effect has been to completely efface the
identity of the legislator into the party itself.
The necessary corollary of drawing a parallel between the Candidates themselves and the
Political Parties they belong to is that the observations of this Court in PUCL and ADR on
the right to information about a candidate contesting elections were also considered to apply
to political parties. In effect, the court held that disclosure about political funding
received by political parties was as essential to voters’ right to be informed as that of
individual candidates.
2. Effective Participation –
Whether funding details of political parties are essential information for voters to exercise
their statutory right to vote effectively.
The opinion first establishes an inseparable link between money and electoral politics in India
and government policy. It then goes into the very nature of electoral bonds, which are issued
near the election and are not restricted only to election campaign use but can be used for
other purposes, which opens up the possibility of influencing government policy.
The government contended that this could not be the case, for the bonds are issued
anonymously. However, the court also acknowledges that de jure anonymity claimed by the
scheme is not the same as de facto anonymity.
It recognizes that the contributor could physically hand over the electoral bond to an office
bearer of the political party or the legislator belonging to the political party, or it could have
been sent to the office of the political party with the name of the contributor, or the
contributor could after deposit the electoral bond discloses the particulars of the contribution
to a member of the political party for them to cross-verify.
Thus, the opinion frames political funding as essential information for the voters to know
to effectively exercise their vote for a political party (and, by necessary implication, the
candidate) that is not emboldened or financed by Big Business antithetical to their interests.
Therefore, the disclosure of the particulars of the electoral bond was “essential to the
electoral process,” which was violated by the scheme, making it violative of Article 19(1)(a).
Applying the Framework
The majority opinion effectively frames the issue as balancing the right to information and
the privacy of donors within the broader framework of Representative Democracy. This
starkly contrasts the recent decisions that have hollowed out the Right to Information Act.
Take, for example, The PM-cares Fund, which was established during the pandemic as a
parallel to PMNRF. As the electoral bond scheme, the same shroud of secrecy has also been
provided to the Fund by keeping it out of the purview of audit by CAG and the RTI Act.
Applying the framework to the Fund would provide that –
1. The Fund is set up as a parallel to PMNRF and has received substantial contributions
from citizens; providing tax exemption for companies by designating it as CSR and
allowing even foreign bodies to donate would invariably involve transparency
concerns. Especially when seen in the context of disaster relief, which is the purpose
of the Fund, it becomes imperative for citizens’ right to information to have
transparency in how the govt is receiving and using the funds.
2. A similar logic pervades the second requirement also, i.e., the citizens must know
how their govt is receiving the funds in the context of Disaster Relief so that they can
effectively enjoy their right to vote manifested by rejecting a candidate or party that
foregoes their interests for that of big business or individual donors.
Apart from providing a new frame of analysis for individual cases, the new framework also
contributes effectively to bringing the RTI Act in line with its original intention.
The objects and reasons as outlined by the RTI Act are –
WHEREAS democracy requires an informed citizenly and transparency of information which
are vital to its functioning and also to contain corruption and to hold Governments are their
instrumentalities accountable to the governed.
Thus, the primary objectives align with the framework of analysis given by the judgment.
This provides that the immediate analysis can flow into the jurisprudence of the RTI Act
itself. How it affects the RTI Act’s jurisprudence becomes clear when we analyse the “public
interest exemption” granted from disclosure of the information under the Act.
Section 8 of the RTI Act exempts disclosure of personal information of individuals, however,
such exemption is not absolute and is made subject to three exceptions –
1. When the information cannot be denied to Parliament or State Legislature (Proviso
8(1))
2. When the information is in the larger public interest (Proviso 8(1)(j))
3. When the information is about an event that has occurred more than 20 years back
(Proviso 8(3))
As the NCPRI Report flags, exemption provided for information in Larger Public Interests
has completely been eroded now by the DPDPA, Sec 44(3) of which makes personal
information of any individual totally exempt from disclosure under the RTI Act.
The central government in the electoral Bond case, defended the scheme on similar lines, i.e.,
the Electoral Bond scheme should be upheld as protecting donor privacy, a facet of
informational privacy of the political affiliation of individuals.
The majority argument agreed with the contention, i.e., disclosure about political
contributions made by the parties could very easily be used to coerce them into donating to a
party in power or harass them. The said information could very easily provide grounds for
gerrymandering or stigmatization, and therefore, protecting information about political
affiliation would be included within the party’s informational privacy.
However, what is essential is that the court did not stop at this point itself and instead went
ahead to apply the Double proportionality test, recognizing that informational privacy
cannot be absolute and has to be balanced against the larger public interest in the free
and fair electoral process, thereby reiterating the principle behind such exception in the RTI
Act. As the majority opinion reiterated, the scheme was disproportionate to the right to
information as it rendered absolute zero the prospect of the right to information about
political donations.
The RTI Act, when read with Sec 44(3) of DPDPA, entails a similar scheme wherein the Act
completely extinguishes any possibility of disclosure of personal information even when such
information might be in the larger public interest.
The judgement thus, provides a ground for future constitutional challenge to the broad
exemption granted in the DPDPA Act by stressing the need for balancing individual
informational privacy to larger public interest of transparency and effective electoral
participation and thereby bringing the act in line with its objectives of creating an informed
citizenry.
Conclusion
The Majority Opinion in the electoral bonds case provides an inherent approach to
strengthening democratic Accountability. The democratic framework provided by the
decision provides the opportunity to frame the issue concerning the RTI Act in terms of
transparency and Accountability, which lies at the core of such challenges.
The framework provided by the judgment, if extended provides an ability to rejuvenate the
RTI Act by placing strict limits on what public interest exemptions can be sought for non-
disclosure i.e., any information which is necessary for ensuring transparency in governmental
functions or is necessary for making effective choice about candidates at the pooling booth
cannot be suppressed as not in public interest by the information commissioners.