Association for Democratic Reforms vs. Union of India

Background

The case of Association for Democratic Reforms (ADR) vs. Union of India (2024) centered on the constitutional validity of the Electoral Bond Scheme (EBS), introduced by the Indian government in 2018 to reform political funding. Electoral bonds were bearer instruments allowing individuals and corporations to anonymously donate to political parties. The scheme aimed to curb black money in elections, but its anonymity provisions raised concerns about transparency, accountability, and the potential for unchecked corporate influence in politics.

Key Issues

Whether the Electoral Bond Scheme violated the right to information of voters under Article 19(1)(a) of the Indian Constitution.

Whether the scheme’s anonymity provisions undermined transparency and the democratic process.

Whether unlimited and undisclosed corporate donations threatened the principle of free and fair elections.

Arguments

Petitioners (ADR and others):

Argued that the scheme’s anonymity allowed for unlimited, undisclosed corporate funding, increasing the risk of quid pro quo arrangements and undermining political equality.

Claimed that the removal of the 7.5% cap on corporate donations and non-disclosure of donor identities violated voters’ right to information and the basic structure of free and fair elections.

Asserted that the scheme did not effectively curb black money and instead fostered opacity in political funding.

Respondent (Union of India):

Defended the scheme as a measure to channel political donations through banking channels, thus promoting transparency and curbing black money.

Justified donor anonymity as necessary to protect donors from victimization and retaliation.

Judgment

On February 15, 2024, a five-judge Constitution Bench of the Supreme Court, led by Chief Justice D.Y. Chandrachud, unanimously struck down the Electoral Bond Scheme as unconstitutional. The Court held:

The right to information of voters regarding political funding is part of the fundamental right to freedom of speech and expression under Article 19(1)(a).

Anonymity in political donations undermines transparency, accountability, and the integrity of the electoral process.

The scheme’s provisions, including the removal of the cap on corporate donations and non-disclosure of donor identities, violated the principles of free and fair elections and the basic structure of the Constitution.

The Court emphasized that democracy thrives on informed choices, and transparency in political funding is essential for maintaining public trust and preventing undue influence in governance.

Impact and Significance

This landmark judgment reaffirmed the judiciary’s role in upholding constitutional rights and the basic structure doctrine. It set a precedent for transparency in political funding and reinforced the right of voters to make informed choices, shaping future electoral reforms and practices in India.

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