ASSOCIATION FOR DEMOCRATIC REFORMS & ANR. v. UNION OF INDIA & ORS (2)

Citation: Writ Petition (C) No. 880 of 2017

Court: Allahabad High Court (Lucknow Bench)

Bench: Issue for Consideration

Case summary

legislation and executive action which relate to economic policy as compared to laws relating to civil rights contributions made by corporations and companies should not be allowed to conceal the reason for

Judgment text

SUPREME COURT OF INDIA Association for Democratic Reforms & Anr. v. Union of India & Ors. [2024] 2 S. C. R. 420 : 2024 INSC 113 Association for Democratic Reforms & Anr. V. Union of India & Ors. (Writ Petition (C) No. 880 of 2017) 15 February 2024 [Dr Dnhananjaya Y Chandrachud,* CJl, 8 R Gavai, J B Pardiwala, Manoj Misra and Sanjiv Khanna,* JJ. ] Issue for Consideration The matter pertains to the constitutional validity of the Electoral Bond Scheme which introduced anonymous financial contributions to political parties; as also the constitutional validity of the provisions of the Finance Act 2017 which, among other things, amended the provisions of the Reserve Bank of India Act 1934, the Representation of the People Act 1951, the Income Tax Act 1961; as also whether unlimited corporate funding to political parties, as envisaged by the amendment to s. 182(1) of the Companies Act infringes the principle of free and fair elections and violates Art.

14 of the Constitution; and whether the non- disclosure of information on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to 5. 29C of the RPA, s. 182(3) of the CA and 5. 13A(b) of the IT Act are violative of the right to information of citizens u/Art. 19(1)(a) of the Constitution. Headnotes Elections -- Electoral process -- Electoral Bond Scheme, 2018 - Electoral Bond Scheme introduced anonymous financial contribution to political parties -- Constitutional validity of: Held: (per Dr Dhananjaya Chandrachud, Cul. ) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Electoral Bond Scheme is unconstitutional -- Directions to the issuing bank to stop the issuance of Electoral Bonds -- SBI to submit: details of Electoral Bonds purchased since 12 April 2019 till date to the ECI including the date of purchase of each Electoral Bond, the name of the purchaser of the bond and the denomination of the * Authors Ed.

Note : Hon'ble Dr Dhananjaya Y Chandrachud, Cul, pronounced the judgement of the Bench comprising his lordship, Hon'ble Mr. Justice B. R. Gavai, Hon'ble Mr. Justice J. B. Pardiwala, Hon'ble Mr. Justice Manoj Misra, while Hon'ble Mr. Justice Sanjiv Khanna pronounced his separate judgement. [2024] 2 S. C. R. 421 Association for Democratic Reforms & Anr. v. Union of India & Ors. Electoral Bond purchased; details of political parties which have received contributions through Electoral Bonds since 12 April 2019 till date to the ECI, and each Electoral Bond encashed by political parties -- SBI to submit the said information to the ECI within the period stipulated - ECI to publish the information shared by the SBI on its official website -- Electoral Bonds within the validity period of fifteen days but have not been encashed by the political party yet, to be returned by the political party or the purchaser to the issuing bank -- Constitution of India.

[Paras 216, 219] -- Held: (per Sanjiv Khanna, J. ) (Concurring with Dr Dhananjaya Y Chandrachud, Cul. ) (Concurring with conclusions albeit with different reasonings) Electoral Bond Scheme is unconstitutional and is struck down -- Directions to ECI to ascertain the details from the political parties and the State Bank of India, which issued the Bonds, and the bankers of the political parties and thereupon disclose the details and names of the donor/purchaser of the Bonds and the amounts donated to the political party - Henceforth, the issuance of fresh Bonds is prohibited -- Electoral Bonds within the validity period of fifteen days but have not been encashed by the political party yet, to be returned by the political party or the purchaser to the issuing bank. [Para 79] Elections -- Electoral process -- Electoral Bond Scheme Amendmentto s. 182 of the Companies Act, 2013 Act, deleting the first proviso thereunder (as amended by the s.

154 of the Finance Act, 2017) thereby permitting unlimited corporate funding to political parties -- First proviso to s. 182 provided the limit of contribution by the company upto seven and a half per cent of its average net profits during the three immediately preceding financial years -- Validity of: Held: (per Dr Dnananjaya Y Chandrachud, Cul. ) (for himself and for B R Gavai, J 8 Pardiwala and Manoj Misra, JJ): Is arbitrary and violative of Art. 14 -- It infringes the principle of free and fair elections -- Amendment to 5. 182 is manifestly arbitrary for treating political contributions by companies and individuals alike; permitting the unregulated influence of companies in the governance and political process violating the principle of free and fair elections; and treating contributions made by profit-making and loss-making companies to political parties alike [Paras 215, 216] -- Held: (per Sanjiv Khanna, J. ) Amendment to s.

182 of the Companies Act, deleting the first proviso thereunder, is unconstitutional, and is 422 [2024] 2 S. C. R. Digital Supreme Court Reports struck down -- Principle of proportionality applied which would subsume the test of manifest arbitrariness -- Furthermore, the claim of privacy by a corporate or a company, especially a public limited company would be on very limited grounds, restricted possibly to protect the privacy of the individuals and persons responsible for conducting the business and commerce of the company - It would be rather difficult for a public (or even a private) limited company to claim a violation of privacy as its affairs have to be open to the shareholders and the public who are interacting with the body corporate/company -- Constitution of India -- Art. 14 - Companies Act, 2013 - 5. 182.

[Para 73] Elections - Electoral process -- Electoral Bond Scheme - Non-disclosure of information on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to s. 29C of the Representation of the People Act 1951, s. 182(3) of the Companies Act and s. 13A(b) of the IT Act by the Finance Act, 2017 -- If violative of Art. 19(1)(a): Held: (per Dr Dnananjaya Chandrachud, CuJI. ) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner -- Electoral Bond Scheme and the impugned provisions-proviso to s. 29C(1) of the RPA, s. 182(3) of the CA, and s.

13A(b) of the ITA to the extent that they infringe upon the right to information of the voter by anonymizing contributions through electoral bonds are violative of Art 19(1)(a) and unconstitutional -- Union of India was unable to establish that the measure employed in Clause 7(4) of the Electoral Bond Scheme is the least restrictive means to balance the rights of informational privacy to political contributions and the right to information of political contributions -- Deletion of the mandate of disclosing the particulars of contributions in s. 182(3) violates the right to information of the voter since they would not possess information about the political party to which the contribution was made which, is necessary to identify corruption and quid pro quo transactions in governance -- Such information is also necessary for exercising an informed vote - 5. 29C exempts political parties from disclosing information of contributions received through Electoral Bonds whereas s.

182(3) applies to all modes of transfer - Both must be read together -- Only purpose of amending s. 182(3) was to bring the provision in tune with the amendment under the [2024] 2 S. C. R. 423 Association for Democratic Reforms & Anr. v. Union of India & Ors. RPA exempting disclosure requirements for contributions through electoral bonds -- Amendment to s. 182(3) becomes otiose in terms of the holding that the Electoral Bond Scheme and relevant amendments to the RPA and the IT Act mandating non-disclosure of particulars on political contributions through electoral bonds is unconstitutional [Paras 104, 168, 169, 172-174, 216] -- Held: (per Sanjiv Khanna, J. ) On application of the doctrine of proportionality, proviso to s. 29C(1) of the RPA, s. 182(3) of the CA, 2013, and 5. 13A(b) of the ITA, as amended by the Finance Act, 2017, unconstitutional, and are struck down -- Representation of the People Act, 1951 - s. 29C -- Companies Act, 2013 - s. 182(3) -- Income Tax Act, 1961 - 5.

13A(b) -- Constitution of India -- Art. 19(1)(a). [Para 74] Elections -- Electoral process -- Electoral Bond Scheme - s. 31(3) of the RBI Act added by the Finance Act, 2017 to effectuate the issuance of the Bonds which, as envisaged, are not to mention the name of the political party to whom they are payable, and hence are in the nature of bearer demand bill or note -- Challenge to: Held: Per Sanjiv Khanna, J. Sub-section (3) to s. 31 of the RBI Act, 1934 and the Explanation thereto introduced by the Finance Act, 2017 is unconstitutional, and are struck down as it permits issuance of Bonds payable to a bearer on demand by such person -- Finance Act, 2017 -- Reserve Bank of India Act, 1934 - s. 31(3).

[Para 79] Elections -- Electoral process -- Electoral Bonds Scheme, 2018 -- Challenge to the Electoral Bond Scheme and the statutory amendments mandating non-disclosure of information on electoral financing; and provisions permitting unlimited corporate funding to political parties - Parameters to test: Held: (per Dr Dhananjaya Y Chandrachud, Cul, (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ): Courts must adopt a less stringent form of judicial review while adjudicating challenges to legislation and executive action which relate to economic policy as compared to laws relating to civil rights such as the freedom of speech or the freedom of religion -- Amendments relate to the electoral process -- Correspondence between the Ministry of Finance and RBI that the Bonds were introduced only to curb black money in the electoral process, and 424 [2024] 2 S. C. R.

Digital Supreme Court Reports protect informational privacy of financial contributors to political parties -- Union of India itself classified the amendments as an "electoral reform" -- It cannot be said that the amendments deal with economic policy [Paras 40, 42] -- Held: (per Sanjiv Khanna, J. ) Scheme cannot be tested on the parameters applicable to economic policy -- Matters of economic policy normally pertain to trade, business and commerce, whereas contributions to political parties relate to the democratic polity, citizens' right to know and accountability in the democracy -- Primary objective of the Scheme, and relevant amendments, is electoral reform and not economic reform -- To give the legislation the latitude of economic policy, it would be diluting the principle of free and fair elections.

[Para 15] Elections -- Electoral process -- Presumption of constitutionality -- Application, to electoral laws: Held: (per Dr Dnananjaya Chandrachud, Cul, (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ): Presumption of constitutionality is based on democratic accountability, that is, the legislators are elected representatives who are aware of the needs of the citizens and are best placed to frame policies to resolve them; and that they are privy to information necessary for policy making which the Courts as an adjudicating authority are not -- However, the policy underlying the legislation must not violate the freedoms and rights entrenched in Part III of the Constitution and other constitutional provisions -- Presumption of constitutionality is rebutted when a prima facie case of violation of a fundamental right is established - Onus then shifts on the State to prove that the violation of the fundamental right is justified -- It cannot be said that the presumption of constitutionality does not apply to laws which deal with electoral process [Paras 44, 45] -- Held: (per Sanjiv Khanna, J.

): Doctrine of presumption of constitutionality has its limitations when the test of proportionality is applied -- Structured proportionality places an obligation on the State at a higher level, as it is a polycentric examination, both empirical and normative -- While the courts do not pass a value judgment on contested questions of policy, and give weight and deference to the government decision by acknowledging the legislature's expertise to determine complex factual issues, the proportionality test is not based on preconceived notion or presumption -- Standard of proof is a civil standard or a balance of probabilities; where scientific or social science evidence is [2024] 2 S. C. R. 425 Association for Democratic Reforms & Anr. v. Union of India & Ors. available, it is examined; and where evidence is inconclusive or does not exist and cannot be developed, reason and logic may suffice.

[Para 18] Elections -- Electoral process -- Electoral Bond Scheme, 2018 -- Corporate donations to national parties through electoral bonds -- Annual audit reports of political parties from 2017- 18 to 2022-23 as available on website of ECI - Significance -- Doctrine of proportionality, application: Held: (Per Sanjiv Khanna, J. ) Data indicative of the quantum of corporate funding through the anonymous Bonds --- It clarifies that majority of contribution through Bonds has gone to political parties which are ruling parties in the Centre and the States -- More than 50% of the Electoral Bonds in number, and 94% of the Electoral Bonds in value terms were for Rs.

1 crore -- This supports the reasoning and conclusion on the application of the doctrine of proportionality - Based on the analysis of the data available, the Scheme fails to meet the balancing prong of the proportionality test, however, the proportionality stricto sensu not applied due to the limited availability of data and evidence. [Paras 69, 74] Elections -- Electoral Process - Electoral Bond Scheme Infringement of the right to information of the voter, if satisfies the proportionality standard vis-a-vis the purposes of curbing black money; and protecting donor privacy: Held: (per Dr Dhananjaya Y Chandrachud, Cul.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Purpose of curbing black money is not traceable to any of the grounds in Art 19(2) -- Electoral trusts are an effective alternative through which the objective of curbing black money in electoral financing can be achieved -- Electoral Bond Scheme not being the least restrictive means to achieve the purpose of curbing black money in electoral process, there is no necessity of applying the balancing prong of the proportionality standard -- Electoral Bond Scheme is not the only means for curbing black money in Electoral Finance -- There are other alternatives which substantially fulfill the purpose and impact the right to information minimally when compared to the impact of electoral bonds on the right to information -- Constitution of India -- Art. 19(1) (a) and 19(2). [Paras 116, 121, 124, 129, 130] 426 [2024] 2 S. C. R.

Digital Supreme Court Reports Elections -- Electoral process - Right to informational privacy, if extends to financial contributions to a political party: Held : (per Dr Dhananjaya Y Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) If the right to informational privacy extends to financial contributions to a political party, this Court needs to decide if the Electoral Bond Scheme adequately balances the right to information and right to informational privacy of political affiliation -- Informational privacy to political affiliation is necessary to protect the freedom of political affiliation and exercise of electoral franchise -- As regards, right to informational privacy if can be extended to the contributions to political parties, Electoral Bond Scheme has two manifestations of privacy, informational privacy by prescribing confidentiality vis- a-vis the political party; and informational privacy by prescribing non-disclosure of the information of political contributions to the public -- Financial contributions to political parties are usually made because they may constitute an expression of support to the political party and that the contribution may be based on a quid pro quo -- Law permits contributions to political parties by both corporations and individuals -- Huge political contributions made by corporations and companies should not be allowed to conceal the reason for financial contributions made by another section of the population: a student, a daily wage worker, an artist, or a teacher -- When the law permits political contributions and such contributions could be made as an expression of political support which would indicate the political affiliation of a person, it is the duty of the Constitution to protect them -- Contributions made as quid pro quo transactions are not an expression of political support -- However, to not grant the umbrella of informational privacy to political contributions only because a portion of the contributions is made for other reasons would be impermissible -- Constitution does not turn a blind eye merely because of the possibilities of misuse.

[Paras 131, 138, 139, 142] Doctrines/Principles -- Principle of proportionality Proportionality standard test -- Four prongs -- Explanation of: Held: (per Dr Dhananjaya Y Chandrachud, CuI. ) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Proportionality standard is laid down to determine if the violation of the fundamental right is justified -- Proportionality standard is-the [2024] 2 S. C. R. 427 Association for Democratic Reforms & Anr. v. Union of India & Ors.

measure restricting a right must have a legitimate goal (legitimate goal stage); the measure must be a suitable means for furthering the goal (Suitability or rational connection stage); the measure must be least restrictive and equally effective (necessity stage); and the measure must not have a disproportionate impact on the right holder (balancing stage) -- At the legitimate goal stage, the Court is to analyze if the objective of introducing the law is a legitimate purpose for the infringement of rights -- Second prong of the proportionality analysis requires the State to assess whether the means used are rationally connected to the purpose - At this stage, the court is required to assess whether the means, if realised, would increase the likelihood of the purpose - It is not necessary that the means chosen should be the only means capable of realising the purpose -- Next stage is the necessity stage, wherein the Court is to determine if the means adopted is the least restrictive means to give effect to the purpose -- The Court is to see, whether there are other possible means which could have been adopted by the State; whether the alternative means identified realise the objective in a 'real and substantial manner'; whether the alternative identified and the means used by the State impact fundamental rights differently; and whether on an overall comparison (and balancing) of the measure and the alternative, the alternative is better suited considering the degree of realizing the government objective and the impact on fundamental rights -- In the last stage, the Court undertakes a balancing exercise to analyse if the cost of the interference with the right is proportional to the extent of fulfilment of the purpose -- It is in this step that the Court undertakes an analysis of the comparative importance of the considerations involved in the case, the justifications for the infringement of the rights, and if the effect of infringement of one right is proportional to achieve the goal [Paras 105, 106, 117, 119, 156] -- Held: (per Sanjiv Khanna, J.

) Four steps of test of proportionality are: first step is to examine whether the act/measure restricting the fundamental right has a legitimate aim, second step is to examine whether the restriction has rational connection with the aim, third step is to examine whether there should have been a less restrictive alternate measure that is equally effective, and last stage is to strike an appropriate balance between the fundamental right and the pursued public purpose. [Para 25] 428 [2024] 2 S. C. R.

Digital Supreme Court Reports Doctrines/Principles -- Principle of proportionality -- Test of proportionality -- Proportionality standard to balance two conflicting fundamental rights -- Foreign vis-a-vis Indian jurisprudence: Held: (per Dr Dhananjaya Y Chandrachud, Cul, (for himself and for 8 R Gavai, J B Pardiwala and Manoj Misra, JJ): Foreign case *Campbell v MGM Limited judgment adopts a double proportionality standard -- It employed a three step approach to balance fundamental rights, first step to analyse the comparative importance of the actual rights claimed, second step to lay down the justifications for the infringement of the rights, and third to apply the proportionality standard to both the rights -- Said approach must be slightly tempered to suit Indian jurisprudence on proportionality -- Indian Courts adopt a four prong structured proportionality standard to test the infringement of the fundamental rights -- In the last stage, the Court undertakes a balancing exercise, wherein the Court undertakes an analysis of the comparative importance of the considerations involved in the case, the justifications for the infringement of the rights, and if the effect of infringement of one right is proportional to achieve the goal -- Thus, the first two steps laid down in Campbell case are subsumed within the balancing prong of the proportionality analysis.

[Paras 154, 156] -- Held: (per Sanjiv Khanna, J.

) Test of proportionality employed by courts in various jurisdictions like Germany, Canada, South Africa, Australia and the United Kingdom, however, no uniformity on application of test of proportionality or the method of using the last two prongs -- In the third prong, courts examine whether the restriction is necessary to achieve the desired end, wherein they consider whether a less intrusive alternative is available to achieve the same ends, aiming for minimal impairment -- As regards, the fourth prong, the balancing stage, some jurists believe that balancing is ambiguous and value-based, which stems from the premise of rule-based legal adjudication, where courts determine entitlements rather than balancing interests -- However, proportionality is a standard-based review rather than a rule-based one -- Balancing stage enables judges to consider various factors by analysing them against the standards proposed by the four prongs of proportionality -- This ensures that all aspects of a case are carefully weighed in decision-making -- While balancing is integral to the standard of proportionality, such an exercise should be rooted in empirical [2024] 2 S.

C. R. 429 Association for Democratic Reforms & Anr. v. Union of India & Ors. data and evidence as adopted by most of the countries -- In the absence of data and figures, there is a lack of standards by which proportionality stricto sensu can be determined -- However many of the constitutional courts have employed the balancing stage 'normatively' by examining the weight of the seriousness of the right infringement against the urgency of the factors that justify it -- Findings of empirical legal studies provide a more solid foundation for normative reasoning and enhance understanding of the relationship between means and ends -- Proportionality analyses would be more accurate and would lead to better and more democratic governance. [Paras 29, 31-33, 35] Doctrines/Principles -- Doctrine of proportionality Proportionality standard test to balance fundamental rightsright to information and the right to informational privacy: Held: (per Dr Dhananjaya Y Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Proportionality standard is an effective standard to test whether the infringement of the fundamental right is justified -- It would prove to be ineffective when the State's interest in question is also a reflection of a fundamental right -- Proportionality standard is by nature curated to give prominence to the fundamental right and minimize the restriction on it-- If the single proportionality standard were employed to the considerations in the instant case, at the suitability prong, the Court would determine if non-disclosure is a suitable means for furthering the right to privacy -- At the necessity stage, the Court would determine if non-disclosure is the least restrictive means to give effect to the right to privacy -- At the balancing stage, the Court would determine if non-disclosure has a disproportionate effect on the right holder -- In this analysis, the necessity and the suitability prongs would inevitably be satisfied because the purpose is substantial: it is a fundamental right -- Balancing stage will only account for the disproportionate impact of the measure on the right to information (the right) and not the right to privacy (the purpose) since the Court is required to balance the impact on the right with the fulfillment of the purpose through the selected means -- Thus, the Court while applying the proportionality standard to resolve the conflict between two fundamental rights preferentially frames the standard to give prominence to the fundamental right which is alleged to be violated by the petitioners (in this case, the right to information).

[Paras 152-153] 430 [2024] 2 S. C. R. Digital Supreme Court Reports Doctrines/Principles -- Double proportionality standard Application of, to both the rights-right to informational privacy of the contributor and the right to information of the voter: Held: (per Dr Dhananjaya Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Double proportionality standard is the proportionality standard to both the rights (as purpose) to determine if the means used are suitable, necessary and proportionate to the fundamental rights -- First prong of the analysis is whether the means has a rational connection with both the purposes, that is, informational privacy of the political contributions and disclosure of information to the voter -- Further, while applying the suitability prong to the purpose of privacy of political contribution, the court must consider whether the non- disclosure of information to the voter and its disclosure only when demanded by a competent court and upon the registration of criminal case has a rational nexus with the purpose of achieving privacy of political contribution -- Undoubtedly, the measure by prescribing non-disclosure of information about political funding shares a nexus with the purpose -- Non-disclosure of information grants anonymity to the contributor, thereby protecting information privacy -- It is certainly one of the ways capable of realizing the purpose of informational privacy of political affiliation -- Suitability prong must next be applied to the purpose of disclosure of information about political contributions to voters -- There is no nexus between the balancing measure adopted with the purpose of disclosure of information to the voter -- According to Clause 7(4) of the Electoral Bond Scheme and the amendments, the information about contributions made through the Electoral Bond Scheme is exempted from disclosure requirements -- This information is never disclosed to the voter -- Purpose of securing information about political funding can never be fulfilled by absolute non-disclosure -- Measure adopted does not satisfy the suitability prong vis-a-vis the purpose of information of political funding - The next stage is the necessity prong, wherein the Court determines if the measure identified is the least restrictive and equally effective measure -- Court must determine if there are other possible means which could have been adopted to fulfill the purpose, and whether such alternative means realize the purpose in a real and substantial manner; impact fundamental rights differently; and are better suited on an overall comparison of the degree of realizing the purpose [2024] 2 S.

C. R. 431 Association for Democratic Reforms & Anr. v. Union of India & Ors. and the impact on fundamental rights - On an overall comparison of the measure and the alternative, the alternative is better suited because it realizes the purposes to a considerable extent and imposes a lesser restriction on the fundamental rights -- Having concluded that Clause 7(4) of the Scheme is not the least restrictive means to balance the fundamental rights, there is no necessity of applying the balancing prong of the proportionality standard. [Paras 160-164, 168] Doctrine/Principles -- Doctrine of proportionality, when applied: Held: (Per Sanjiv Khanna, J. ) Proportionality principle is applied by courts when they exercise their power of judicial review in cases involving a restriction on fundamental rights -- It is applied to strike an appropriate balance between the fundamental right and the pursued purpose and objective of the restriction.

[Para 24] Doctrine/Principles -- Doctrine of proportionality -- Application of proportionality test to Electoral Bond Scheme, 2018 - Legitimate purpose prong -- Retribution, victimisation or retaliation, if can be treated as a legitimate aim: Held: (Per Sanjiv Khanna, J.

) Retribution, victimisation or retaliation cannot by any stretch be treated as a legitimate aim -- This would not satisfy the legitimate purpose prong of the proportionality test -- Neither the Scheme nor the amendments to the Finance Act, 2017, rationally connected to the fulfilment of the purpose to counter retribution, victimisation or retaliation in political donations -- It will also not satisfy the necessity stage of the proportionality even if the balancing stage is ignored - Retribution, victimisation or retaliation against any donor exercising their choice to donate to a political party is an abuse of law and power - This has to be checked and corrected -- As it is a wrong, the wrong itself cannot be a justification or a purpose -- Cloak of secrecy, leads to severe restriction and curtailment of the collective's right to information and the right to know -- Transparency and not secrecy is the cure and antidote.

[Para 39] Doctrine/Principles -- Doctrine of proportionality -- Application of proportionality test to Electoral Bond Scheme, 2018 - Rational nexus prong: Held: (Per Sanjiv Khanna, J. ) Donor may like to keep his identity anonymous is a mere ipse dixit assumption -- Plea of infringement 432 [2024] 2 S. C. R.

Digital Supreme Court Reports of the right to privacy has no application at all if the donor makes the contribution, that too through a banking channel, to a political party -- Identity of the purchaser of the Bond can always be revealed upon registration of a criminal case or by an order/direction of the court -- Thus, the fear of reprisal and vindictiveness does not end -- So-called protection exists only on paper but in practical terms is not a good safeguard even if it is accepted that the purpose is legitimate -- Under the Scheme, political parties in power may have asymmetric access to information with the authorised bank -- They also retain the ability to use their power and authority of investigation to compel the revelation of Bond related information -- Thus, the entire objective of the Scheme is contradictory and inconsistent -- Rational connection test fails since the purpose of curtailing black or unaccounted-for money in the electoral process has no connection or relationship with the concealment of the identity of the donor - Payment through banking channels is easy and an existing antidote -- On the other hand, obfuscation of the details may lead to unaccounted and laundered money getting legitimised.

[Paras 41, 42, 44] Doctrine/Principles -- Doctrine of proportionality -- Application of proportionality test to Electoral Bond Scheme, 2018 - Necessity prong: Held: (Per Sanjiv Khanna, J. ) As per the Electoral Trust Scheme, contributions could be made by a person or body corporate to the trust which would transfer the amount to the political party -- Trust is thus, treated as the contributor to the political party and guidelines were issued by the ECI to ensure transparency and openness in the electoral process - When the necessity test is applied, the Trust Scheme achieves the objective of the Union of India in a real and substantial manner anc is also a less restrictive alternate measure in view of the disclosure requirements, viz.

the right to know of voters -- Trust Scheme is in force and is a result of the legislative process -- In a comparison of limited alternatives, it is a measure that best realises the objective of the Union of India in a real and substantial manner without significantly impacting the fundamental right of the voter to know. [Paras 50-51] Doctrine/Principles -- Doctrine of proportionality -- Application of proportionality test to Electoral Bond Scheme, 2018 -- Fourth prong-the balancing prong of proportionality: [2024] 2 S. C. R. 433 Association for Democratic Reforms & Anr. v. Union of India & Ors. Held: (Per Sanjiv Khanna, J.

) On application of the balancing prong of proportionality, the Electoral Bond Scheme falls foul and negates and overwhelmingly disavows and annuls the voters right in an electoral process as neither the right of privacy nor the purpose of incentivising donations to political parties through banking channels, justify the infringement of the right to voters -- Voters right to know and access to information is far too important in a democratic set-up so as to curtail and deny 'essential' information on the pretext of privacy and the desire to check the flow of unaccounted money to the political parties -- While secret ballots are integral to fostering free and fair elections, transparency-not secrecy-in funding of political parties is a prerequisite for free and fair elections -- Confidentiality of the voting booth does not extend to the anonymity in contributions to political parties.

[Para 57] Constitution of India -- Balancing of conflicting fundamental rights-right to information and the right to informational privacy -- Standard to be followed: Held: (per Dr Dhananjaya Y Chandrachud, .

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) First exercise that the Court must undertake while balancing two fundamental rights is to determine if the Constitution creates a hierarchy between the two rights in conflict, if yes, then the right which has been granted a higher status would prevail over the other right involved -- And if not, the following standard must be employed from the perspective of both the rights where rights A and B are in conflict, whether the measure is a suitable means for furthering right A and right B, whether the measure is least restrictive and equally effective to realise right A and right B, and whether the measure has a disproportionate impact on right A and right B -- Courts have used the collective interest or the public interest standard, the single proportionality standard, and the double proportionality standard to balance the competing interests of fundamental rights -- There is no constitutional hierarchy between the right to information and the right to informational privacy of political affiliation.

[Paras 145-146, 157, 159] Constitution of India --- Fundamental right --- Breach of -- Burden of proof: Held: (per Dr Dhananjaya Y Chandrachud, Cul, (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ): Courts 434 [2024] 2 S. C. R. cannot carve out an exception to the evidentiary principle which is available to the legislature based on the democratic legitimacy which it enjoys -- In the challenge to electoral law, like all legislation, the petitioners would have to prima facie prove that the law infringes fundamental rights or constitutional provisions, upon which the onus would shift to the State to justify the infringement [Para 45] -- Held: (per Sanjiv Khanna, J.

) Once the petitioners are able to prima facie establish a breach of a fundamental right, then the onus is on the State to show that the right limiting measure pursues a proper purpose, has rational nexus with that purpose, the means adopted were necessary for achieving that purpose, and lasily proper balance has been incorporated. [Para 17] Constitution of India -- Art. 14 -- Doctrine of manifest arbitrariness -- Application of: Held: (per Dr Dnhananjaya Chandrachud, Cul.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Doctrine of manifest arbitrariness can be used to strike down a provision where the legislature fails to make a classification by recognizing the degrees of harm; and the purpose is not in consonance with constitutional values -- Legislative action can also be tested for being manifestly arbitrary -- There is, and ought to be, a distinction between plenary legislation and subordinate legislation when they are challenged for being manifestly arbitrary -- Manifest arbitrariness of a subordinate legislation has to be primarily tested vis-a-vis its conformity with the parent statute -- Doctrines/Principles. [Paras 198, 209] Constitution of India -- Art 19(1)(a) - Right to information, scope of -- Evolution of jurisprudence on right to information: Held: (per Dr Dhananjaya Chandrachud, Cul.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Right to information can be divided into two phases - In the first phase, the right to information is traced to the values of good governance, transparency and accountability -- In the second phase, the importance of information to form views on social, cultural and political issues, and participate in and contribute to discussions is recognised -- Crucial aspect of the expansion of the right to information in the second phase is that right to information is not restricted to information about state affairs, that is, public information -- It includes information which would be necessary to further [2024] 2 S. C. R. 435 Association for Democratic Reforms & Anr. v. Union of India & Ors.

participatory democracy in other forms -- Right to information has an instrumental exegesis, which recognizes the value of the right in facilitating the realization of democratic goals -- Beyond that, it has an intrinsic constitutional value; one that recognizes that it is not just a means to an end but an end in itself. [Paras 60, 64, 65] Constitution of India -- Art. 19(1)(a) - Right to vote - Right to know -- Significance: Held: (Per Sanjiv Khanna, J.

) Right to vote is a constitutional and statutory right, grounded in Art 19(1)(a), as the casting of a vote amounts to expression of an opinion by the voter -- Citizens' right to know stems from this very right, as meaningfully exercising choice by voting requires information -- Representatives elected as a result of the votes cast in their favour, enact new, and amend existing laws, and when in power, take policy decisions -- Access to information which can materially shape the citizens' choice is necessary for them to have a say -- Thus, the right to know is paramount for free and fair elections and democracy -- Denying voters the right to know the details of funding of political parties would lead to a dichotomous situation -- Funding of political parties cannot be treated differently from that of the candidates who contest elections - Democratic legitimacy is drawn not only from representative democracy but also through the maintenance of an efficient participatory democracy -- In the absence of fair and effective participation of all stakeholders, the notion of representation in a democracy would be rendered hollow.

[Paras 19, 21, 22] Constitution of India - Fundamental rights -- Conflict of - Voter's right to know vis-a-vis right to privacy: Held: (Per Sanjiv Khanna, J. ) Fundamental rights are not absolute, legislations/policies restricting the rights may be enacted in accordance with the scheme of the Constitution -- Thread of reasonableness applies to all such restrictions -- Furthermore, Art. 14 includes the facet of formal equality and substantive equality -- Thus, the principle 'equal protection of law' requires the legislature and the executive to achieve factual equality -- This principle can be extended to any restriction on fundamental rights which must be reasonable to the identified degree of harm - If the restriction is unreasonable, unjust or arbitrary, then the law should be struck down - Further, it is for the legislature to identify the degree of 436 [2024] 2 S. C. R.

Digital Supreme Court Reports harm -- Voters right to know and access to information is far too important in a democratic set-up so as to curtail and deny 'essential' information on the pretext of privacy and the desire to check the flow of unaccounted money to the political parties. [Paras 56, 57] Elections -- Electoral Bond Scheme, 2018 -- Clause 7(4), 2(a) -- Features of the Scheme: Held: (per Dr Dhananjaya Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Scheme defines electoral bond "as a bond issued in the nature of promissory note which shall be a bearer banking instrument and shall not carry the name of the buyer or payee" -- The Scheme also stipulates that the information furnished by the buyer shall be treated as confidential which shall not be disclosed by any authority except when demanded by a competent court or by a law enforcement agency upon the registration of criminal case -- While it is true that the law prescribes anonymity as a central characteristic of electoral bonds, the de jure anonymity of the contributors does not translate to de facto anonymity -- The Scheme is not fool-proof -- There are sufficient gaps in the Scheme which enable political parties to know the particulars of the contributions made to them -- Electoral bonds provide economically resourced contributors who already have a seat at the table selective anonymity vis-a-vis the public and not the political party.

[Paras 102, 103] Elections -- Electoral process - Focal point of the electoral process-candidate or political party: Held: (per Dr Dhananjaya Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Statutory provisions relating to elections accord considerable importance to political parties, signifying that political parties have been the focal point of elections -- 'Political party' is a relevant political unit in the democratic electoral process in India -- Voters associate voting with political parties because of the centrality of symbols and its election manifesto in the electoral process -- Form of government where the executive is chosen from the legislature based on the political party or coalition of political parties which has secured the majority -- Prominence accorded to political parties by the Tenth Schedule of the Constitution -- Law recognises the inextricable link between a political party and the candidate though vote is cast for a candidate -- Voters casts their votes based on two considerations: [2024] 2 S. C. R. 437 Association for Democratic Reforms & Anr. v. Union of India & Ors.

the capability of the candidate as a representative and the ideology of the political party. [Paras 80, 86, 89, 94] Elections -- Electoral democracy in India - Basis of: Held: (per Dr Dhananjaya Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Electoral democracy in India is premised on the principle of political equality, guaranteed by the Constitution in two ways - Firstly, by guaranteeing the principle of "one person one vote" which assures equal representation in voting, and secondly, the Constitution ensures that socio-economic inequality does not perpetuate political inequality by mandating reservation of seats for Scheduled Castes and Scheduled Tribes in Parliament and State Assemblies -- Constitution guarantees political equality by focusing on the 'elector' and the 'elected' -- However, political inequality continues to persist in spite of the constitutional guarantees -- Difference in the ability of persons to influence political decisions because of economic inequality is one of the factors -- Economic inequality leads to differing levels of political engagement because of the deep association between money and politics -- It is in light of the nexus between economic inequality and political inequality, and the legal regime in India regulating party financing that the essentiality of the information on political financing for an informed voter must be analyzed.

[Paras 96-100] Elections -- Electoral process in India - Nexus between money and electoral democracy: Held: (per Dr Dhananjaya Chandrachud, CuI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Law does not bar electoral financing by the public -- Both corporates and individuals are permitted to contribute to political parties which is crucial for the sustenance and progression of electoral politics -- Primary way through which money directly influences politics is through its impact on electoral outcomes -- One way in which money influences electoral outcomes is through vote buying -- Another way in which money influences electoral outcomes is through incurring electoral expenditure for political campaigns -- Enhanced campaign expenditure proportionately increases campaign outreach which influences the voting behavior of voters - Money also creates entry-barriers to politics by limiting the kind of candidates and political parties which enter the electoral fray -- Challenge to the 438 [2024] 2 S. C. R.

Digital Supreme Court Reports statutory amendments-provisions dealing with electoral finance and the Electoral Bond Scheme cannot be adjudicated in isolation without a reference to the actual impact of money on electoral politics. [Paras 46-51, 55] Election Symbols (Reservation and Allotment) Order, 1968 - Allotment of symbols to political parties -- Significance: Held: (per Dr Dnananjaya Chandrachud, CUI.

) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) In terms of the provisions of the Symbols Order, the ECI shall allot a symbol to every candidate contesting the election - Symbols Order classifies political parties into recognised political parties and unrecognised political parties -- Difference in the procedure under the Symbols Order for allotting symbols to recognised political parties, registered but unrecognised political parties and independent candidates indicates both the relevance and significance of political parties in elections in India -- Purpose of allotting symbols to political parties is to aid voters in identifying and remembering the political party -- Law recognises the inextricable link between a political party and the candidate though the vote is cast for a candidate -- Most of the voters identified a political party only with its symbol and this still continues to the day -- Symbols also gain significance when the names of political parties sound similar.

[Paras 81, 84, 86, 87] Words and Phrases -- Privacy -- Definition: Held : (per Dr Dhananjaya Y Chandrachud, 3. ) (for himself and for B R Gavai, J B Pardiwala and Manoj Misra, JJ) Privacy is not limited to private actions and decisions -- Privacy is defined as essential protection for the exercise and development of other freedoms protected by the Constitution, and from direct or indirect influence by both State and non-State actors -- Viewed in this manner, privacy takes within its fold, decisions which also have a 'public component'. [Para 133] Case Law Cited In the Judgment of Dr Dhananjaya Chandrachud, Cul Roger Mathew v. South Bank of India, CA No. 8588/2019; PUCL v. Union of India, [2003] 2 SCR 1136 : (2003) 4 SCC 399; ADR v. Union of India, [2002] 3 SCR 696 : (2002) 5 SCC 294; Anjali Bhardwaj v. Union of India, [2024] 2 S. C. R. 439 Association for Democratic Reforms & Anr. v. Union of India & Ors. [2019] 2 SCR 199 : (2019) 18 SCC 246; Kanwar Lal Gupta v.

Amar Nath Chawla, [1975] 2 SCR 259 : 1975 SCC (3) 646; Subash Chandra v. Delhi Subordinate Services Selection Board, [2009] 12 SCR 978 : (2009) 15 SCC 458; Gujarat Mazdoor Sabha State of Gujarat, [2020] 13 SCR 886 : (2020) 10 SCC 459; Ramesh Chandra Sharma State of Uttar Pradesh, [2023] 2 SCR 422 : (2023) SCC OnLine SC 162; Shayara Bano v. Union of India, [2017] 9 SCR 797 : (2017) 9 SCC 1; Rustom Cavasjee Cooper Union of India, [1970] 3 SCR 530 : (1970) 1 SCC 248; A. K Garg v. Union of India, [1982]_ 1 SCR 947 : (1981) 4 SCC 675; Premium Granites v. State of Tamil Nadu, [1994] 1 SCR 579 : (1994) 2 SCC 691; Peerless General Finance and Investment Co v. RBI, [1992] 1 SCR 406 : (1992) 2 SCC 343; BALCO Employees Union v. Union of India, [2001] Suppl. 5 SCR. 511 : (2002) 2 SCC 333; DG of Foreign Trade v. Kanak Exports, [2015] 15 SCR 287 : (2016) 2 SCC 226; Swiss Ribbons v. Union of India, [2019] 3 SCR 535 : (2019) 4 SCC 17; Pioneer Urban Land and Infrastructure Limited v.

Union of India, [2019] 10 SCR 381 : (2019) 8 SCC 416; State of Bombay v. FN Balsara, [1951] 1 SCR 682; Dharam Dutt v. Union of India, [2003] Suppl. 6 SCR_ 151 : AIR 2004 SC 1295; Ramlila Maidan Incident, In re, [2012] 4 SCR 971 : (2012) 5 SCC 1; Ameerunissa Begum v. Mahboob Begum, [1953] 1 SCR 404 : (1952) 2 SCC 697; Vatal Nagaraj v. R Dayanand Sagar, [1975] 2 SCR 384 : (1975) 4 SCC 127; P Nalla Thampy Terah v. Union of India, [1985] Supp. 1 SCR 622 : (1985) Supp SCC 189; Common Cause (A Registered Society) v. Union of India, [1996] 3 SCR 1208 : (1996) 2 SCC 752; State of Punjab v. Sodhi Sukhdev Singh, [1961] 2 SCR_ 371; State of Uttar Pradesh v. Raj Narain, [1975] 3 SCR_ 333 : (1975) 4 SCC 428; SP Gupta v. Union of India, (1981) Supp SCC 87; Dinesh Trivedi v. Union of India, [1997] 3 SCR 93 : (1997) 4 SCC 306; Secy. , Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn.

of Bengal, [1995] 1 SCR 1036 : (1995) 2 SCC 161; Indian Express Newspapers Union of India, [1985] 2 SCR 287 : AIR 1986 SC 515; Romesh Thappar v. State of Madras, [1950] 1 SCR 594 : AIR 1950 SC 124; DC Saxena v. Hon'ble The Chief Justice of India, [1996]_ 440 [2024] 2 S. C. R. Digital Supreme Court Reports Suppl. 3 SCR 677 : (1996) 5 SCC 216; Supriyo v. Union of India, 2023 INSC 920; Union of India v. Association for Democratic Reforms, [2002] 3 SCR 696 : (2002) 5 SCC 294; Rameshwar Prasad v. Union of India, [2006] 1. SCR 562 : (2006) 2 SCC 1; Kihoto Hollohon v. Zachilfhu, [1992] 1 SCR 686 : (1992) Supp (2) SCC 651; Ravi S Naik v. Union of India, [1994] 1 SCR 754 : AIR 1994 SC 1558; Subash Desai v. Principal Secretary, Governor of Maharashtra, WP (C) No. 493 of 2022; Modern Dental College & Research Centre v. State of Madhya Pradesh, [2016] 3 SCR 575 : (2016) 4 SCC 346; Media One Union of India, Civil Appeal No. 8129 of 2022; Sakal Papers v.

The Union of India, [1962] 3 SCR 842 : AIR 1962 SC 305; Express Newspapers v. Union of India, [1959] 1 SCR 12 : AIR 1958 SC 578; Sodhi Shamsher v. State of Pepsu, AIR 1954 SC 276; Kaushal Kishor v. State of Uttar Pradesh, Writ Petition (Criminal) No. 113 of 2016; Superintendent, Central Prison, Fatehgarh v. Dr Ram Manohar Lohia, [1960] 2 SCR 821 : AIR 1960 SC 633; Justice KS Puttaswamy v. Union of India, [2017] 10° SCR 569 : (2017) 10 SCC 1; In Re Noise Pollution, [2005] Suppl. 1 SCR 624 : (2005) 5 SCC 733; Subramanian Swamy v. Union of India, [2016] 3 SCR 865 : (2016) 7 SCC 221; Asha Ranjan v. State of Bihar, [2017] 1 SCR_ 945 : (2017) 4 SCC 397; Mazdoor Kisan Shakti Sangathan v. Union of India, [2018] 11 SCR 586 : (2018) 17 SCC 324; Sahara India Real Estate Corporation Limited v. Securities and Exchange Board of India, [2012] 12 SCR_ 256 : (2012) 10 SCC 603; Justice KS Putiaswamy v.

Union of India, [2018] 8 SCR 1 : (2019) 1 SCC 1; Central Public Information Officer, Supreme Court of India v. Subash Chanara Agarwal, [2010] 13 SCR 1120 : Civil Appeal No. 10044 of 2010; Aishat Shifa v. State of Karnataka, [2022] 5 SCR 426 : (2023) 2 SCC 1; Jayantilal Ranchhoddas Koticha Tata Iron and Steel Co. Ltd. , AIR 1958 Bom 155; Basheshar Nath v. CIT, [1959] Supp 1 SCR 528; State of West Bengal v. Anwar Ali Sarkar, [1952] 1 SCR_ 284 : (1951) 1 SCC 1; Kathi Raning Rawat v. State of Saurashtra, [1952] 1 SCR 435 : (1952) 1 SCC 215; Budhan Chowdhury v. State of Bihar, [1955] 1 SCR 1045; Ram Krishna Dalmia v. S R Tendolkar, [1959] SCR 279; E P Royappa v. State of Tamil Nadu, [1974] 2 SCR 348 : [2024] 2 S. C. R. 441 Association for Democratic Reforms & Anr. . Union of India & Ors. (1974) 4 SCC 3; Ajay Hasia v. Khalid Mujib Seheravardi, [1981] 2 SCR 79 : (1981) 1 SCC 722; Sharma Transport v. Government of Andhra Pradesh, [2001] Suppl.

5 SCR_ 390 : (2002) 2 SCC 188; State of Tamil Nadu v. Ananthi Ammal, Suppl. [1994] 5 SCR 666 : (1995) 1 SCC 519; Dr. K R Lakshmanan v. State of Tamil Nadu, [1996] 1_ SCR 395 : (1996) 2 SCC 226; State of Andhra Pradesh v. McDowell & Co. , [1996] 3 SCR 721 : (1996) 3 SCC 709; Malpe Vishwanath Acharya v. State of Maharashtra, [1997] Suppl. 6 SCR 717 : (1998) 2 SCC 1; Mardia Chemicals Ltd. v. Union of India, [2004] 3 SCR 982 : (2004) 4 SCC 311; Natural Resources Allocation, In Re Special Reference No. 1 of 2012, [2012] 9 SCR 311 : (2012) 10 SCC 1; Maneka Gandhi v. Union of India, [1978] 2 SCR 621 : (1978) 1 SCC 248; Naviej Singh Johar v. Union of India, [2018] 7 SCR 379 : (2018) 10 SCC 1; Joseph Shine v. Union of India, [2018] 11 SCR 765 : (2019) 3 SCC 39; Mohd. Hanif Quareshi v. State of Bihar, [1959] SCR 629 : AIR 1958 SC 731; Binoy Viswam v. Union of India, [2017] 7 SCR 1 : (2017) 7 SCC 59; Charanjit Lal Chowdhuri v.

Union of India, 1950 SCC 833; In Re Dethi Laws Act 1912, 1951 SCC 568; Gwalior Rayon Silk Mfg. (Wvg. ) Co. Lid. v. Assistant Commissioner of Sales Tax and others, [1974] 2 SCR 879 : (1974) 4 SCC 98; Shri Sitaram Sugar Co. Ltd. v. Union of India, [1990] 1 SCR_ 909 : (1990) 3 SCC 223; Khoday Distilleries Ltd. V. State of Karnataka, Suppl. [1995] 6 SCR 759 : (1996) 10 SCC 304; State of Tamil Nadu P Krishnamurthy, [2006] 3_ SCR 396 : (2006) 4 SCC 517; Kesavananda Bharati v. State of Kerala, Suppl. [1973] 1 SCR 1 : (1973) 4 SCC 225; Indira Nehru Gandhi v. Raj Narain, [1978] 2 SCR_ 405 : (1975) Supp SCC 1; Digvijay Mote v. Union of India, [1993] Suppl. 1 SCR 553 : (1993) 4 SCC 175; Kuldip Nayar v. Union of India, [2006] Suppl. 5 SCR 1 : (2006) 7 SCC 1; People's Union for Civil Liberties v. Union of India, [2013] 12 SCR 283 : (2013) 10 SCC 1; Mohinder Singh Gill v. Chief Election Commissioner, [1978] 2 SCR_ 272 : (1978) 1 SCC 405 - referred to. FCC v.

National Citizens Committee for Broadcasting, 436 US 775 (1978); *Campbell v. MGM Limited, [2004] UKHL 22; Citizens United v. Federal Election Commission, 558 U. S 310 - referred to. 442 [2024] 2 S. C. R. Digital Supreme Court Reports In the Judgment of Sanjiv Khanna, J Swiss Ribbons (P. ) Ltd. and Another Union of India and Others, [2019] 3 SCR 535 : (2019) 4 SCC 17; Pioneer Urban Land and Infrastructure and Another v. Union of India and Others, [2019] 10 SCR 381 : (2019) 8 SCC 416 -- held inapplicable. Rojer Matthew v. South Indian Bank Ltd. And Ors. , [2019] 16 SCR 1 : Civil Appeal No. 8588 of 2019; A. K. Garg v. Union of India and Others, [1982] 1 SCR 947 : (1981) 4 SCC 675; Bhavesh D. Parish and Others v. Union of India and Others, Suppl. [2000] 1 SCR 291 : (2000) 5 SCC 471; Directorate General of Foreign Trade and Others v. Kanak Exports and Another, [2015] 15 SCR_ 287 : (2016) 2 SCC 226; Union of India v.

Association for Democratic Reforms and Another, [2002] 3 SCR 696 : (2002) 5 SCC 294; People's Union of Civil Liberties (PUCL) and Another v. Union of India and Another, [2003] 2 SCR 1136 : (2003) 4 SCC 399; Kanwar Lal Gupta v. Amar Nath Chawla & Ors. , [1975] 2 SCR 259 : (1975) 3 SCC 646; K. S. Puttaswamy and Anr. v. Union of India and Ors. [2017] 10 SCR 569 : (2017) 10 SCC 1; Modern Dental College & Research Centre and Others v. State of Madhya Pradesh and Others, [2016] 3 SCR_ 579 : (2016) 7 SCC 353; K. 5. Puttaswamy (Retired) and Anr. v. Union of India and Anr. , [2018] 8 SCR 1: (2019) 1 SCC 1; Gujarat Mazdoor Sabha and Another v. State of Gujarat, [2020] 13 SCR 886 : (2020) 10 SCC 459; Ramesh Chandra Sharma and Others v. State of U. P. and Others, 2023 SCC OnLine SC 162; Anuradha Bhasin v. Union of India and Others, [2020] 1 SCR 812 : (2020) 3 SCC 637; Rustom Cavasjee Cooper v. Union of India, [1970] 3 SCR 530 : (1970) 1 SCC 248; Maneka Gandhi v.

Union of India and Another, [1978] 2 SCR 621 : (1978) 1 SCC 248; Anoop Baranwal v. Union of India, [2023] 9 SCR 1 : (2023) 6 SCC 161; A. C. Poudyal v. Union of India and Others, [1993] 1 SCR 891 : (1994) Supp 1 SCC 324; Shayara Bano v. Union of India, [2017] 9 SCR 797 : (2017) 9 SCC 1 -referred to. Libman v. Quebec (A. G. ), [1997] 3 SCR 569; RJRMacDonald Inc. Canada (Attorney General), [1995] [2024] 2 S. C. R. 443 Association for Democratic Reforms & Anr. v. Union of India & Ors. 3 SCR 199; Thomson Newspapers Co. v. Canada (A. G. ), [1998] 1 SCR 877; R. v. Sharpe, [2001] 1 SCR 45; Harper Canada (A. G. ), [2004] 1 SCR 827; R. v. Bryan, [2007] 1 SCR 527; Mounted Police Association of Ontario v. Canada (Attorney General), [2015] 1 SCR_ 3; Brown v. Socialist Workers Comm. , 459 U. S. 87 (1982); Campbell v. MGM Limited, [2004] 2 AC 457; My Vote Counts NPC v. President of the Republic of South Africa and Ors. , (2017) ZAWCHC 105, para 67; Jeffery Raymond McCloy and Others v.

State of New South Wales and Another, (2015) HCA 34; Bernstein and Ors. v. Bester NO and Others, (1996) _ ZACC 2; Federal Election Commission v. National Right to Work Committee, 459 U. S. 197 (1982); Buckley v. R Valeo, 424 U. S. 1 (1976); Grosjean v. American Press Co. , 297 U. S. 233 (1936); Nixon, Attorney General of Missouri, et al v. Shrink Missouri Government PAC et al, 528 U. S. 377 (2000); In re. S, [2005] 1 AC 593; /n Re. W, [2005] EWHC 1564 (Fam); R. v. Oakes, [1986] 1 SCR 103; Canada (Attorney General) v. JTl-Macdonald Corp. , [2007] 2 S. C. R. _ 610; Alberta v. Hutterian Brethren of Wilson Colony, and [2009] 2 S. C. R. 567; Clubb v. Edwards, (2019) 93 ALJR 448; Associated Provincial Picture Houses Ltd v. Wednesbury Corporation, (1948) 1 KB 223 - referred to. Books and Periodicals Cited In the Judgment of Dr Dhananjaya Chandrachud, Cul Gayatri Devi and Santha Rama Rau, A Princess remembers: The Memoirs of the Maharani of Jaipur, (Rupa Publications 1995) [801]; Michael A.

Collins, Navigating Fiscal Constraints in "Costs of Democracy: Political Finance in India" (edited by Devesh Kapur and Milan Vaishnav) OUP 2018; Neelanjan Sircar, Money in Elections: the Role of Personal Wealth in Election Outcomes in Costs of Democracy: Political Finance in India (ed. By Devesh Kapur and Milan Vaishnav) OUP 2018; Aradhya Sethia, "Where's the party? : towards a constitutional biography of political parties, Indian Law 444 [2024] 2 S. C. R. Digital Supreme Court Reports Review, 3:1, 1-32 (2019); Law Commission of India, 770th Report on the Reform of the Electoral Laws (1999); Lok Sabha Debates, Companies Bill (16 May 1985); Santhanam Committee Report on Prevention of Corruption, 1964 -- referred to. John Hart Ely Democracy and Distrust: A Theory of Judicial Review (Harvard University Press, 2002); Conrad Foreman, Money in Politics: Campaign Finance and its Influence over the Political Process and Public Policy, 52 UIC J. Marshall L. Rev.

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Broockman, "Campaign Contributions Facilitate Access to Congressional Officials: A Randomized Field Experiment" (2016 60(3)) American Journal of Political Science; Philip N Howard and Daniel Kreiss, Political Parties and Voter privacy: Australia, Canada, the United Kingdom, and United States in Comparative Perspective, First Monday 15(12) 2010; Colin Bennet, The politics of privacy and privacy of politics: Parties, elections, and voter surveillance in Western Democracies. First Monday, 18(8) 2013; Hon'ble Mr Justice Andrew Cheung Pu, Conflict of fundamental rights and the double proportionality test, A lecture in the Common Law Lecture Series 2019 delivered at the University of Hong Kong (17 September 2019); Report of the Committee on Prevention of Corruption, 1964 [11. 5] -- referred to. [2024] 2 S. C. R. 445 Association for Democratic Reforms & Anr. v. Union of India & Ors.

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", (Oxford Human Rights Journal 2020); Jochen von Bernstroff, Proportionality Without Balancing: Why Judicial Ad Hoc Balancing is Unnecessary and Potentially Detrimental to Realisation of Collective and Individual Self Determination, Reasoning Rights-Comparative Judicial Engagement, (Ed. Liaora Lazarus); Bernhard Schlink, 'Abwagung im Verfassungsrecht, Duncker & Humblot, 1976, and Francisco J. Urbina, '/s It Really That Easy? A Critique of Proportionality and Balancing as Reasoning' Canadian Journal of Law and Jurisprudence, 2014; Robert Alexy, A Theory of Constitutional Rights (Julian Rivers, trans. Oxford Univ. Press 2002); Cabinet Directive on Law-making in Guide to Making Federal Acts and Regulations (2nd edn, Government of Canada; Niels Petersen, 'Proportionality and judicial Activism: Fundamental Rights Adjudication in Canada, Germany and South Africa, (CUP 2017); Yun-chien Chand & Peng-Hsiang Wang, The Empirical Foundation of Normative Arguments in Legal Reasoning (Univ.

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Press 2002); David Bilchitz, Necessity and Proportionality: Towards a Balance Approach? , (Hart Publishing, Oxford and Portland, Oregon 2016); Adrienne Stone, Proportionality and its Alternatives, Melbourne Legal Studies Research Paper Series No. 848; John Braithwaite, Rules and Principles: a Theory of Legal Certainty, Australian Journal of Legal Philosophy 47 (2002); Harrison Moore, The Constitution of the Commonwealth of Australia; Jennifer L. Greenblatt, Putting the Government to the (Heightened, Intermediate, or Strict) Scrutiny Test: Disparate Application Shows Not All Rights and Powers Are Created Equal, (2009) 10 Fla Coastal L Rev 421 -referred to. Website In the Judgment of Dr Dhananjaya Chandrachud, Cul Election Commission of India, Instructions to political parties on manifestos dated 24. 04. 2015, hitps:// 56/PPEMS/Transparency/2017 -- referred to. In the Judgment of Sanjiv Khanna, J [2024] 2 S. C. R. 447 Association for Democratic Reforms & Anr. . Union of India & Ors. gc.

ca/eng/csj-sjc/rfc-dic/cerf-ccdl/check/art1. htm -- referred to. List of Acts In the Judgment of Dr Dhananjaya Y Chandrachud, Cul Constitution of India; Finance Act, 2017; Companies Act, 1956; Reserve Bank of India Act, 1934; Representation of the People Act, 1951; Income Tax Act, 1961; Companies Act, 2013; Companies (Amendment) Act, 1960; Companies (Amendment) Act, 1969; Companies (Amendment) Act, 1985; Taxation Laws (Amendment) Act, 1978; Evidence Act, 1872; Election and Other Related Laws (Amendment) Act, 2003; Election Symbols (Reservation and Allotment) Order, 1968; Conduct of Election Rules, 1961. In the Judgment of Sanjiv Khanna, J Constitution of India; Companies Act, 1956; Companies Act of 2013; Finance Act, 2017; Income Tax Act, 1961; Reserve Bank of India Act, 1934; Representation of the People Act, 1951; Foreign Contribution Regulation Act, 2010; Prevention of Money Laundering Act, 2002.

List of Keywords In the Judgment of Dr Dhananjaya Y Chandrachud, Cul Electoral bond scheme, 2018; Electoral bond; Corporate contributions; Curbing black money; Transparency; Judicial review; Close association of politics and money; Non- disclosure of information on electoral financing; Right to information; Electoral process; Donor privacy; Informational privacy of financial contributions to political parties; Privacy vis-a-vis political party; Right to informational privacy; Judicial approach; Balancing fundamental rights; Double proportionality standard; Arbitrariness; Manifest arbitrariness; Indian jurisprudence; Anonymous financial contributions to political parties; Financial contributions to political parties; Financial 448 [2024] 2 S. C. R.

Digital Supreme Court Reports contributions; Election Commission of India; Transparency of political finance; Quid pro quo arrangements; Free and fair elections; Presumption of constitutionality; Corporate funding; Electoral campaigns; Excessive delegation; Principle of 'one person-one vote'; Non-disclosure of funding by companies; Public domain; Corporate donations; Anonymity of donations to political parties; Judicial restraint; Symbols Order; Electoral democracy; Proportionality standard; Electoral Trusts; Political contribution; Electronic transfer other than electoral bonds; Right to informational privacy of political affiliation; Privacy; Political beliefs; Political affiliation; Privacy of political affiliation; Electoral franchise; Corrupt practices; Single proportionality standard; Plenary legislation; Subordinate legislation; Removal of contribution restrictions; Loss-making companies; Profitmaking companies.

In the Judgment of Sanjiv Khanna, J Electoral Bonds Scheme, 2018; Electoral bonds; Electoral process; Doctrine of proportionality; Corporate funding; Ban on contributions to political parties; Contributions by companies; Electronic Clearing System; Economic policy; Judicial review; Electoral democracy; Burden of proof; Doctrine of presumption of constitutionality; Test of proportionality; Structured proportionality; Right to vote; Right to know; Symbol allotted to political parties; Funding of political parties; Democratic legitimacy; Substantive balance; Diversity; Conscientiousness; Equal consideration; Donors of a political party; Informational privacy of donors; Black money in electoral finance; Retribution; Victimisation; Retaliation; Quid pro quo; Multiple donors; Double proportionality; Single proportionality standard; Principle of reasonableness; Right of privacy; Balancing prong of proportionality; Principle of /is pendens; Necessity test; Rational connection test; Standard based review; Rule based legal adjudication; Empirical deference; Transparency; Secrecy; Identities of donor; Money laundering; Alternative measures; Electoral Trust [2024] 2 S.

C. R. 449 Association for Democratic Reforms & Anr. v. Union of India & Ors. Scheme; Fundamental rights; Complementary rights; Law Commission of India; Party wise donation; Test of manifest arbitrariness. Case Arising From CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No. 880 of 2017 (Under Article 32 of the Constitution of India) With Writ Petition (Civil) Nos. 59 of 2018, 975 And 1132 of 2022 Appearances for Parties Kapil Sibal, Sr. Adv. , Prashant Bhushan, Ms. Neha Rathi, Pranav Sachdeva, Ms. Alice Raj, Ms. Shivani Kapoor, Kamal Kishore, Ms. Kajal Giri, Varinder Kumar Sharma, Varun Thakur, Gautam Bhatia, Pradanns. S, Ms. Rupali Samuel, Ms. Aprajits Jamuel, Rishabh Parikh, Shsntanu Sharma, Ms. Deeksha Gaur, Y K Prasad, Shadan Farasat, Ms. Hrishika Jain, Aman Naqvi, Ms. Natasha Maheshwari, Rizwan, Ms. Sachi Chopra, Nizam Pasha, Javedur Rahman, Mudassir, Arif Ali, Ms. Aayushi Mishra, Advs. for the Petitioners. Venkataramani, AG, Tushar Mehta, SG, R Balasubramanian, Sr. Adv.

, Raj Bahadur Yadav, Ms. Seema Bengani, Shyam Gopal, Ms. Chinmayee Chandra, Kanu Agrawal, Rajat Nair, Raman Yadav, Chitvan Singhal, Mrs. Shraddha Deshmukh, Ms. Sonali Jain, Abhishek Kumar Pandey, Kartikay Aggarwal, Rajan Kumar Chourasia, Ms. Shraddha Deshmukh, Ankur Talwar, Arvind Kumar Sharma, Amit Sharma, Dipesh Sinha, Ms. Pallavi Barua, Ms. Aparna Singh, Advs. for the Respondents. Vijay Hansaria, Sanjay R Hegde, Sr. Advs. Ms. Sneha Kalita, Ms. Kavya Jhawar, K. S. bhati, Ms. Jessy Kurian, Ms. Sr. Leona, Pawanshree Agarwala, Suren Uppal, Aviral Kashyap, Shahrukh Ali, Sanjeev Menon, Ms. Stuti Srivastava, Ms. Vimal Sinha, Rajesh Kumar, P. B. Suresh, Prasanna S. , Ms. Disha Wadekar, Ms. Deeksha Dwivedi, Ms. Swati Arya, Yuvraj Singh Rathore, Varun K Chopra, Mehul Sharma, Abhishek Kandwal, M/S. Vkc Law Offices, Kaleeswaram Raj, Ms. Thulasi K Raj, Ms. Aparna Menon, Mohammed Sadique T. A. , Advs. for the Intervenors. 450 [2024] 2 S. C. R.

Digital Supreme Court Reports Judgment / Order of the Supreme Court Judgment Dr Dhananjaya Y Chandrachud, CJl* A. Background 4 I. Corporate Contributions ....................... -------------------- 5 li. Curbing black MOMeY .................. -. ---. -------------- 10 . TPAMSPALONCY ........................ ---. ----------********- 11 iv. Objections of RBI and ECI to the Electoral BOnd SCNOME ................... ------- 13 v. Electoral Bond Scheme ............... ------------------- 18 B. ISSUOS ................. -----> 23 ... 579581075 ...................... --------------------- 24 I. Submissions of petitioners ................... ---------------- 24 li. Submissions of Union of India ...................... ----------- 36 D. The Scope of Judicial RCVIOW .......................... --.. ----------- 40 E. The close association of politics and money ............... - 44 F. The challenge to non-disclosure of information ON ClectOral FINANCING ...................... -------- 50 i.

Infringement of the right to information of the voter.. 51 a. The scope of Article 19(1)(a): tracing the right to INFOPIMALION ................... -------------------------------- 51 b. Right to information of a voter: exploring the judgments in ADR and PUCL ............................. - 55 c. The focal point of the electoral process: candidate or political party ................................ ---- 64 [2024] 2 S. C. R. 451 Association for Democratic Reforms & Anr. v. Union of India & Ors. d. The essentiality of information about political funding for the effective exercise of the choice of 11/0) | [0 eee 73 li. Whether the infringement of the right to information of the voter is justified ........................ - 78 a. Curbing Black money ............................... --. ----------- 80 0. 2010 PrivaCy .......................... -------------------- 95 I. Informational privacy of financial contributions to 96 POlitiCAl [21163 ..............................

------------------------- Il. Privacy vis-a-vis political party ........................ ------- 103 Ill. Balancing the right to information and the right to informational PrivACy .......................... --....... ------ 103 a) Judicial Approach towards balancing fundamental rights: establishing the double proportionality standard ................................. - 103 b) Validity of the Electoral Bond Scheme, Section 11 of the Finance Act and Section 137 of the Finance ACt .......................... ---------- 113 c. Validity of Section 154 of the Finance Act amending Section 182(3) to the Companies Acct ................... 120 G. Challenge to unlimited corporate fUNCING .................... - 124 i. The application of the principle of non-arbitrariness 127 a. Arbitrariness as a facet of Article 14 .................... - 127 b. Beyond Shayara Bano: entrenching manifest arbitrariness in Indian jurisprudence .................... - 131 li.

Validity of Section 154 of the Finance Act 2017 omitting the first proviso to Section 182 of the Companies ACt ............... ------------- 140 H. CONCIUSION ANd DITCCTIONS. .......................... -------------------- 149 [2024] 2 S. C. R. 452 Digital Supreme Court Reports The petitioners have instituted proceedings under Article 32 of the Constitution challenging the constitutional validity of the Electoral Bond Scheme' which introduced anonymous financial contributions to political parties. The petitioners have also challenged the provisions of the Finance Act 2017? which, among other things, amended the provisions of the Reserve Bank of India Act 1934°, the Representation of the People Act 19514, the Income Tax Act 1961°, and the Companies Act 20137, A.

Background Section 31 of the RBI Act stipulates that only the RBI or the Central Government authorized by the RBI Act shall draw, accept, make, or issue any bill of exchange or promissory note for payment of money to the bearer of the note or bond. The Finance Act amended the RBI Act by including Section 31 (3) which permits the Central Government to authorize any scheduled bank to issue electoral bonds. To understand the context in which the legislative amendments were introduced, it is necessary to juxtapose the amendments with the regime on financial contributions to political parties. The law relating to financial contributions to political parties focusses on (a) contributions by corporate entities; (0) disclosure of information on contributions; and (c) income tax exemptions for donations. |. Corporate Contributions The Companies Act 1956 and the provisions of the RPA, when they were enacted did not regulate contributions to political parties by companies and individuals.

The Companies (Amendment) Act 1960 included Section 293A' to regulate contributions by companies. = "Electoral Bond Scheme" or "Scheme" WD "Finance Act" Section 135 of the Finance Act 2017; "RBI Act" + Section 137 of the Finance Act 2017;"RPA" oO Section 11 of the Finance Act 2017; "IT Act" NO Section 154 of the Finance Act 2017; "Companies Act" "293A. (1) Notwithstanding anything contained in section 293, neither a company in general meeting nor its Board of directors shall, after the commencement of the Companies (Amendment) Act, 1960, contribute- (a) To any political party, or (b) For any political purpose to any individual or body, any amount or amounts which or the aggregate of which will, in any financial year, exceed twenty-five thousand rupees or five per cent of its average net profits as determined in accordance with the provisions of sections 349 and 350 during [2024] 2 S. C. R. 453 Association for Democratic Reforms & Anr. v. Union of India & Ors.

The provision stipulated that companies cannot contribute to (a) any political party; and (b) to any individual or body for any political purpose, amounts exceeding twenty-five thousand rupees in a financial year or five percent of its average net profits during the three financial years immediately preceding the contribution, whichever is greater. Companies were also required to disclose the amount contributed in a financial year in their profit and loss accounts and furnish particulars of the total amount contributed and the name of the party, individual or entity to which or to whom such amount was contributed. Companies defaulting in complying with the disclosure requirement were punishable with a fine which could extend to rupees five thousand. 5. |The Companies (Amendment) Act 1969 amended Section 293A(R) so as to ban contributions to political parties and for political purposes.

Companies acting in contravention of the prohibition were punishable with a fine which could extend to five thousand rupees, and every officer who defaulted was punishable with imprisonment which could extend to three years, besides being liable to fine. 6. The Companies (Amendment) Act 1985 amended Section 293A% to the three financial years immediately preceding, whichever is greater. Explanation- Where a portion of a financial year of the company falls before the commencement of the Companies (Amendment) Act, 1960, and a portion falls after such commencement, the latter portion shall be deemed to be a financial year within the meaning, and for the purposes, of this sub-section.

(2) Every company shall disclose in its profit and loss account any amount or amounts contributed by it under sub-section (1) to any political party or for any political purpose to any individual or body during the financial year to which the account relates, giving particulars of the total amount contributed and the name of the party, individual or body to which or to whom such amount has been contributed. (3) If a company makes a default in complying with the provisions of sub-section (2), the company, and every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees. " 8 "Section 293A. (1) Notwithstanding anything contained in any other provision of this Act, neither a company in general meeting nor its Board of directors shall, after the commencement of the Companies (Amendment) Act 1960 contribute any amount or amounts- (a) To any political party or (b) For any political purpose to an individual or body.

(2) If a company contravenes the provisions of sub-section (1) then- (i) | the company shall be punishable with fine which may extend to five thousand rupees; and (ii) | every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine" 9 "293A. (1) Notwithstanding anything contained in any other provision of this Act- (a) No Government company; and (6) No other company which has been in existence for less than three financial years, shall contribute any amount or amounts, directly or indirectly, - (i) To any political party; or (ii) | For any political purpose to any person. (2) A company, not being a company referred to in clause (a) or clause (b) of sub-section (1), may 454 [2024] 2 S. C. R. permit contributions to political parties and for political purposes once again.

The explanation of the phrase "political purpose" included donations made to a person who in the knowledge of the donor is carrying out any activity at the time of donation which can be regarded as public support to a political party. Further, the direct or indirect expenditure by companies on advertisements by or on behalf of political parties or publications for the advantage of a political party were also regarded as contributions for political purposes. Three other r