Published On: June 07, 2026
Authored By: Anmol G V
Sastra Deemed University
Case Summary and Critical Analysis
Association for Democratic Reforms v. Union of India
2024 INSC 113 | (2024) 5 SCC 1
Supreme Court of India | 15 February 2024
I. Introduction
Association for Democratic Reforms v. Union of India (2024 INSC 113) is a landmark judgment by the Supreme Court of India that struck down the Electoral Bonds Scheme of 2018, finding it unconstitutional and in violation of the voters’ right to information enshrined in Article 19(1)(a) of the Constitution. The ruling represents the most significant judicial intervention in India’s electoral law since the same petitioner organisation secured a judgment in 2002 regarding voters’ rights to know about the criminal, financial, and educational background of electoral candidates.[1] The 2024 judgment picks up that thread and extends it: it is not enough to know a candidate’s criminal record or assets, voters also have a right to know who is bankrolling the parties those candidates represent.
II. Background and Facts
To understand the case, it helps to understand the scope of the Electoral Bonds Scheme.
India’s political funding had a long and messy history. Cash donations, unaccounted contributions, and weak disclosure rules were widespread. Former Finance Minister Arun Jaitley, when presenting the 2017-18 Union Budget, argued that after 70 years of Independence, the country had not been able to evolve a transparent method of funding political parties, and proposed the Electoral Bonds Scheme to cleanse the system. An electoral bond was a bearer instrument payable to the bearer on demand. Unlike a promissory note, it contained no information on the parties to the transaction, providing complete anonymity. Essentially, it worked like a gift voucher, a company or individual could buy one from the State Bank of India and hand it to a political party; the party could then cash it, all without the public ever knowing who gave what to whom.
The scheme came with other significant changes. Section 154 of the Finance Act, 2017 also amended Section 182 of the Companies Act, 2013, removing the upper limit on how much a company could donate to a political party.[2] Previously, companies could donate only up to 7.5 percent of three years of the company’s net profits. In addition, political parties were exempted from declaring these donations in their public contribution reports, and donors received tax exemptions too. Critics argued it was a system designed to hide money, not clean it up.
The petitioners, the Association for Democratic Reforms, Common Cause, and the Communist Party of India (Marxist), challenged the scheme, arguing that it encouraged non-transparency in political funding and contributed to corruption on a large scale. The government pushed back, saying the scheme protected donor privacy and kept black money out of politics by routing donations through the formal banking system. The Supreme Court, after years of delay, finally took up the matter for full hearing in late 2023 and delivered its verdict in February 2024, just months before the General Elections.
III. Issues Before the Court
The five-judge Constitution Bench, led by Chief Justice D.Y. Chandrachud with Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra, framed three core questions:
> Did keeping donor identities secret violate voters’ fundamental right to information under Article 19(1)(a)?
> Was it constitutional to remove the cap on how much corporations could donate to political parties?
> Were the exemptions from disclosure granted under the Income Tax Act and the Representation of the People Act valid?
IV. Judgment and Reasoning
The Court’s answer to all three issues was negative, with the operative directions endorsed unanimously by the bench.[3]
The Court held that the voter’s right to information under Article 19(1)(a) is paramount in a democracy and is not a lesser right than the donor’s right to privacy. The reasoning was clear: a voter cannot make an informed decision without knowing the source of funding of the parties they vote for.
The Court applied the “proportionality test” to evaluate whether the scheme’s restrictions on the right to information were justified. This test was first consolidated into a structured four-pronged framework by a Constitution Bench in Modern Dental College and Research Centre v. State of Madhya Pradesh (2016),[4] drawing on the work of former Chief Justice of the Supreme Court of Israel, Aharon Barak. It was subsequently reinforced and sharpened in K.S. Puttaswamy v. Union of India (2017),[5] the landmark right to privacy judgment. In brief, the test asks four questions: Does the restriction pursue a legitimate goal? Is it a suitable means to achieve that goal? Is it the least restrictive means available? And does the benefit to the public outweigh the harm to the right?
Applying this test to the Electoral Bonds Scheme, the Court held that the scheme failed the necessity and balancing prongs. The government’s stated goal, curbing black money, was accepted as legitimate in principle, but the Court found that less intrusive alternatives existed to achieve it. The total suppression of donor information was not the minimum necessary restriction, and the harm caused to voters’ right to information far outweighed any benefit. The infringement of the right to information was therefore not justified.
On corporate donations, the Court went further still. It found that allowing unlimited corporate donations violated the principle of “one person, one vote” by disproportionately empowering corporations to influence elections. The data bore this out: more than 94 percent of total electoral bonds were purchased in denominations of one crore rupees, indicating that the bonds were purchased by corporates and not individuals.
The Court also ordered the data to come out. The SBI was directed to submit details of electoral bonds purchased from 12 April 2019 to the Election Commission of India, which was ordered to publish this information on its official website.
V. Critical Analysis
What the Court Got Right
The most important thing this judgment does is treat electoral transparency as a constitutional right. By grounding the voter’s right to know in Article 19(1)(a), the Court made it harder for future governments to engineer opacity into political finance through legislative drafting. It firmly establishes that transparency in political funding is non-negotiable and is a core component of free and fair elections.
The Court also deserves credit for rejecting the government’s “black money” justification on its merits rather than dismissing it outright. It acknowledged that curbing black money is a legitimate aim but held that the scheme was a disproportionate and poorly designed way to achieve it. This is nuanced reasoning, not judicial overreach.
Perhaps most importantly, the Court’s concern for the “one person, one vote” principle signals that electoral fairness is about more than just casting ballots. It is about the conditions under which votes are cast, including whether wealthy corporations can shape political agendas in ways that ordinary citizens cannot.
Where the Judgment Falls Short
Despite its strengths, the judgment has real limitations.
First, it is largely a judgment of demolition, not construction. While the Court dismantled a flawed system, it did not offer any replacement or guidelines to streamline political funding. Without a better legal framework in place, political funding could still find its way through hidden or unregulated channels. Striking something down is not the same as fixing the problem that created it. The legislature has shown little urgency in building a fairer alternative, and the Court gave it no deadline or framework to work with.
Second, the government’s privacy argument, though ultimately rejected, was not entirely without merit. In a politically charged environment, a business that donates to an opposition party may genuinely fear retaliation. The Court acknowledged this concern but resolved it quickly in favour of transparency. A more thorough engagement with how other democracies balance donor privacy against public disclosure, through tiered thresholds, redaction mechanisms, or time delays, might have made the judgment more practically useful for lawmakers designing a replacement.
Third, and perhaps most uncomfortable, is the question of timing. Petitions against the scheme were filed as early as 2017. The Court did not hear the matter properly until late 2023. In those six years, thousands of crores flowed through the scheme. The political party at the centre received 57 percent of the total contributions made through electoral bonds. The scheme shaped multiple state elections and the 2019 General Election before the Court stepped in. A faster institutional response could have limited the damage considerably.
Finally, even after the judgment, enforcement proved difficult. The SBI initially sought a months-long extension to disclose the bond data, just days before the deadline, prompting a sharp response from the bench. This highlighted how a strong judgment can be quietly undermined at the stage of compliance.
VI. Conclusion
The Electoral Bonds case is a case about who democracy is for. The Supreme Court’s answer was clear: it is for the voter, not the corporation. By holding that citizens have a constitutional right to know who funds the parties they vote for, the Court drew a firm line between legitimate political finance and the kind of opaque, unlimited corporate funding that corrodes democratic accountability.
But the judgment also reveals the limits of what courts alone can do. Transparency in political funding requires more than a verdict. It requires a legislative framework that is both honest and durable. Until that framework exists, the Electoral Bonds case will stand as an important victory that was won too late and followed up too slowly — even as its core constitutional principles remain indispensable to the health of a thriving democracy.
References
[1] Association for Democratic Reforms v. Union of India, (2002) 5 SCC 294 (India).
[2] Finance Act, 2017, § 154 (amending Companies Act, 2013, § 182), INDIA CODE (2017).
[3] Justice Sanjiv Khanna wrote a separate concurring opinion that agreed on the operative directions but differed from the majority in parts, including on the scope of the SBI disclosure remedy.
[4] Modern Dental College and Research Centre v. State of Madhya Pradesh, (2016) 7 SCC 353 (India).
[5] K.S. Puttaswamy v. Union of India, (2017) 10 SCC 1 (India).
