AUTHOR -KAJAL PRAJAPATI
UNIVERSITY- SHRI RAMSWAROOP MEMORIAL UNIVERSITY
Headline
Electoral Bonds and Democratic Integrity: A Legal Reassessment
Abstract
The Supreme Court’s verdict on 15 February 2024 invalidated India’s Electoral Bond Scheme, citing its violation of citizens’ right to information under Article 19(1)(a) and breaching Article 14 through arbitrary removal of donation limits. Employing the basic structure doctrine and proportionality test from Puttaswamy, the Court emphasized transparency and equality. The decision mandates full disclosure of bond transactions by SBI and proposes legislative reform toward equitable political financing.
To the Point
The Electoral Bonds Scheme (2018–2024) allowed for anonymous, unlimited donations by individuals and corporations via SBI. Critics alleged it undermined democratic transparency and enabled quid pro quo arrangements. On 15 February 2024, the Supreme Court struck it down as ultra vires, directing SBI to disclose bond transactions and refund unencashed bonds. The verdict marks a landmark corrective step against opaque political funding.
Legal Jargon
Ultra vires – beyond legal authority
Quid pro quo – reciprocal exchange of favors
Manifest arbitrariness – irrational or unjustified government action
Proportionality – judicial balancing of rights, from Puttaswamy
Basic structure doctrine – constitutional core beyond amendment
Judicial review – High Court oversight of legislative acts
Selective anonymity – confidentiality limited to voters, not state.
The Proof
1 Violations of Fundamental Rights
Supreme Court held the scheme breached the right to access information under Article 19(1)(a), vital for informed voting
It also violated Article 14, as the removal of donation caps (including for shell or loss-making firms) was declared manifestly arbitrary
2 Selective Anonymity and Corporate Bias
Anonymity applied to public, but SBI retained donor information, potentially enabling government favoritism .
Data revealed approximately ₹1,300 crore from the “Lottery King” and ₹60 bn to BJP, indicating disproportionate advantages
3 Judicial Instructions
Direction to SBI: cease bond issuance; submit all records from April 2019 by 6 March 2024
Unencashed bonds must be returned/refunded
Case Laws
1 Association for Democratic Reforms v Union of India (Electoral Bonds), 15 Feb 2024
Unanimous five-judge bench (CJI Chandrachud, Justices Khanna, Gavai, Pardiwala, Misra) declared the scheme unconstitutional under Articles 14 & 19(1)(a), critiquing selective anonymity and corporate favoritism. SBI was ordered to disclose records and refund unencashed bonds
2.KS Puttaswamy v Union of India (2017)
Established the informational privacy doctrine and developed a robust four-part proportionality test—central to striking down the Scheme’s unjustified secrecy.
3.Kesavananda Bharati v State of Kerala (1973)
Introduced the basic structure doctrine, restricting Parliament’s ability to amend fundamental constitutional principles. The Electoral Bonds Act’s violation of transparency and equality triggered this doctrine.
Conclusion
The Supreme Court’s annulment of the Electoral Bond Scheme reaffirms constitutionally mandated transparency and democratic integrity. By invalidating opaque financial practices and reinstating the right to information, the Court upheld electoral equality. Moving forward, reforms should focus on mandatory disclosure of political donations, reasonable caps, direct state funding, and strengthened judicial oversight—ensuring elections serve the electorate, not narrow corporate interests.
What were Electoral Bonds?
A1: Interest-free, KYC-verified financial instruments sold via SBI for anonymous donations to eligible political parties within 15 days of purchase.
Q2: Why were they declared unconstitutional?
A2: For violating Article 19(1)(a) (right to information) and Article 14 (equality), via selective anonymity and arbitrary removal of donation limits .
Q3: How did Puttaswamy influence the verdict?
A3: The proportionality test from Puttaswamy showed the scheme wasn’t the least restrictive means to curb black money and disproportionately harmed public transparency
Q4: What remedies did the Court direct?
A4: SBI to stop bond issuance, provide full records to ECI, publish the data publicly by 13 March 2024, and refund unencashed bonds.
Q5: What reforms can prevent such opacity in future?
A5: Enforce donor‑party disclosure; impose donation limits; consider state‑funded campaigns; enhance independent monitoring—including RTI applicability.
