Nagaland Post
Yaqoob Alam

In a landmark verdict, the Supreme Court ruled on the key questions related to transparency in financial contribution to political parties. Central to this verdict is not only an affirmation of the principle of free and fair elections, but also the influence of money on the sanctity of electoral process and the role of the Right to Information in fostering participatory democracy.

The Supreme Court deliberated on the challenge to a set of parliamentary laws which introduced Electoral Bond Scheme (“scheme”) in January 2018 and provided for the confidentiality of information pertaining to the financial contributions made to political parties and enabled unlimited corporate funding to political parties by removing cap on the funding by the company.

Two primary issues were deliberated. First, whether the non-disclosure of information regarding contributions to political parties violated the Right to Information of citizen as enshrined in Article 19(1)(a) of the Constitution. Second, whether unlimited corporate funding to political parties infringed upon the principle of free and fair elections, thereby violating Article 14 of the Constitution.

Right to information of voter and participatory democracy

On the first issue, the court examined the scope of the Right to Information under Article 19(1)(a) to decide whether the right to information extends to financial contribution made to political parties. While doing so, the court analysed the evolution of the scope of Right to Information in two distinct phases.

In the first phase, the scope was limited to open government and transparency. In the second phase, the court progressively expanded the scope of the right to information and recognised the role of information in debate, discussion, and fostering democratic participation.

Notably, the first and second phase of the right to information laid the foundational framework for the court to guarantee right to information of voter about the contesting candidates background including their criminal past in Union of India v Association for Democratic Reforms 2002 and PUCL v. Union of India 2003.

Addressing the first issue, the court acknowledged that the political parties are relevant political units and are central to the democratic electoral process. Consequently, it affirmed that the right to information of voters extends to political parties given their significance in shaping the electoral outcomes.

The opinion of the court was based on the assessment of the prominence accorded to the political parties in the constitutional framework, particularly under the tenth schedule, and their position within the legal framework related to the election laws.

Next, the court ruled that the right to information of voters includes information about financial contribution to a political party. The court made a comprehensive analysis of the relationship between political inequality and economic inequality.

While the constitution mandates political equality by ensuring equal value and voice of each vote to influence government decisions and policy, economic inequality can still perpetuate political inequality. The court noted that the economic inequality allows the wealthy individuals and corporate to ‘get seat at the table’ and influence not only the policy decisions but also the electoral outcome by virtue of their financial contributions to the political parties.

The progressive reading of the right to information by the court to include financial contribution to political parties resulted from the recognition that such transparency enables voters to evaluate any potential quid pro quo between contributors and political parties. Moreover, it facilitates an assessment of the influence of money on policy decisions and electoral processes.

Unlimited funding and electoral corruption

The court addressed a crucial issue regarding the constitutional validity of unlimited corporate funding to political parties, which was made possible by amending Section 182 of the Companies Act 2013, that removed the cap on corporate donations to political entities.

At the core of the debate on the Electoral Bond Scheme lies the significant role of money in electoral politics as emphasised by the court throughout its judgment. Recognising the nexus between money, power and politics, the court highlighted its influence on electoral democracy.

Justice Sanjiv Khanna, in his concurring opinion, noted that the influence of money itself poses a threat to the electoral process, and undermines the quality and integrity of governmental decision-making processes

In response to the question of unlimited funding, the court asserted the principle of free and fair elections within an electoral democracy, emphasising the sanctity and integrity of the electoral process, as previously established in cases such as Indira Gandhi v. Raj Narain 1975 and PUCL v. Union of India 2013.

The court observed that unlimited corporate funding authorises companies to exert unrestrained influence over the electoral process, fostering corruption in electoral financing. Thus, the court ruled that such practice violates the fundamental principle of free and fair elections and is inherently arbitrary and violates Article 14 of the Constitution.

Right to informational privacy of donors vs Right to information of voters

On the Union government’s argument on informational privacy for donors, the court relied on the K.S. Puttaswamy v. Union of India 2017 and held that the Constitution recognises the right to informational privacy of political affiliation, which also extends to the financial contributions made to political parties.

The court noted that privacy regarding political affiliation is a prerequisite to exercising the freedom of political expression. The lack of privacy in political affiliation and the disclosure of information about a person’s political beliefs could lead to disproportionate effects, such as voter surveillance and the suppression of dissenting opinions.

Given the competing interests of right to information of voter and the informational privacy of donor, the court applied double proportionality standards (test applied by court to balance two conflicting fundamental right) to balance both the rights.

The court observed that blanket non-disclosure of information as envisaged under the scheme heavily favoured informational privacy and did not adequately balance the competing interests. Therefore, the court held that the right to information of voters cannot be restricted based on the informational privacy of donors.

Regarding the Union government’s defense that the scheme curbs the circulation of black money in electoral funding by incentivising donations through the banking channel, the court affirmed that the right to information of voters under Article 19(1)(a) can be curtailed only on the limited grounds of restriction provided under Article 19(2). The purpose of curbing black money cannot be traced to any of the grounds, and hence the court rejected the Union’s argument.

No violation of privacy

In addition to the court’s strong assertion of the principle of free and fair election, and the role of right to information in nurturing participatory democracy, this verdict highlights two distinctive features. Firstly, it extends the right to information to political parties. This ruling would impact the issue originating from political parties’ outright refusal to be subject to the Right to Information Act 2005. Secondly, it acknowledges the informational privacy of donors, including companies.

It, however, opens the door for divergence in the scope of interpreting informational privacy to donors in view of the concurring opinion of Justice Khanna who slightly differed and pointed out that the affairs of public company (or even a private company) are open to the shareholders and public, thus claim of the violation of privacy lacks substantial strength.

The verdict reinstates faith in constitutional principles of free and fair elections through its interpretative exercise and provides clearer standards for the legislature’s adherence. It also reinforces the importance of the RTI as an important instrument for upholding our democratic values and expands on the understanding of the scope of informational privacy.

© Association for Democratic Reforms
Privacy And Terms Of Use
Donation Payment Method