Introduction

In the landmark case of Communist Party of India (Marxist) v. Dinesh Kumar Khar (2024 INSC 195), the Supreme Court of India addressed the contentious issue of electoral funding transparency. The case emerged in the backdrop of widespread criticism of the Electoral Bond Scheme, which was perceived to lack adequate disclosure mechanisms, thereby enabling opaque political financing. The primary parties involved were the Communist Party of India (Marxist) and other petitioners challenging the constitutionality of the scheme against respondents including the State Bank of India (SBI) and the Election Commission of India (ECI).

Summary of the Judgment

On February 15, 2024, the Constitution Bench of the Supreme Court declared the Electoral Bond Scheme and certain amendments introduced by the Finance Act 2017 unconstitutional. The court found that the non-disclosure of information related to the funding of political parties infringed upon the citizens' right to information under Article 19(1)(a) of the Constitution. Additionally, the amendments allowing unlimited corporate funding of political parties were deemed arbitrary, violating Article 14 pertaining to equality before the law.

To enforce transparency, the court directed SBI, the authorized bank handling Electoral Bonds, to furnish detailed records of bond purchases and redemptions to the ECI within specified deadlines. The ECI was mandated to publish this information on its official website, thereby enhancing public access to electoral funding data.

SBI sought an extension for compliance, which the court denied, emphasizing the readiness of the bank to disclose the required information within the stipulated timelines.

Analysis

Precedents Cited

The court referenced several key precedents in its deliberations:

• Right to Information (RTI) Act: Emphasized the importance of transparency and citizens' access to information.
• Article 14 of the Constitution: Ensured equality before the law, grounding the decision against arbitrary corporate funding.
• Previous judgments on Electoral Bonds: Cited prior concerns regarding the opacity of political funding mechanisms.

These precedents collectively underscored the judiciary's stance on preserving democratic integrity through transparent electoral financing.

Legal Reasoning

The Supreme Court's legal reasoning hinged on the constitutional principles of transparency and equality. By scrutinizing the Electoral Bond Scheme, the court identified that the non-disclosure provisions undermined citizens' right to information, a cornerstone of a democratic society. Furthermore, allowing unlimited corporate contributions without adequate checks was found to contravene the principle of equality under Article 14, as it disproportionately favored corporations over smaller entities and individuals.

The court also meticulously evaluated SBI's compliance capabilities, determining that the bank possessed the necessary data in accessible formats, thereby negating SBI's claims of logistical challenges in data disclosure.

Impact

This judgment is poised to have significant implications:

• Enhanced Transparency: Mandates detailed disclosure of electoral funding, fostering greater public trust in the electoral process.
• Regulation of Corporate Funding: Introduces checks on corporate contributions, ensuring a level playing field in political financing.
• Precedent for Future Cases: Sets a judicial benchmark for evaluating the constitutionality of policies related to political funding and transparency.

Additionally, political parties and corporate donors will need to adapt to stricter disclosure norms, potentially reshaping the landscape of electoral financing in India.

Complex Concepts Simplified

Electoral Bonds

Electoral Bonds are financial instruments introduced to facilitate anonymous donations to political parties. Critics argue that this anonymity can lead to undisclosed corporate influence in politics.

Article 19(1)(a)

This constitutional provision guarantees the freedom of speech and expression, which includes the right to seek, receive, and impart information.

Article 14

Ensures equality before the law and equal protection of the laws within the territory of India, preventing arbitrary and discriminatory practices.

Constitution Bench

A bench in the Supreme Court comprising the Chief Justice and at least four other judges, convened to deliberate on cases of significant constitutional importance.

Conclusion

The Supreme Court's judgment in Communist Party of India (Marxist) v. Dinesh Kumar Khar marks a pivotal step towards ensuring transparency and accountability in India's electoral processes. By invalidating the Electoral Bond Scheme and enforcing disclosure of political funding, the court reinforced the democratic ethos of openness and equality. This decision not only rectifies constitutional oversteps but also sets a robust framework for future electoral reforms, safeguarding the integrity of India's democratic institutions.