Published on: 26th August 2026
Authored by: Prajna Sarkar
Kirit P. Mehta School of Law (NMIMS)
Case Details
Full Case Name: Association for Democratic Reforms & Anr. v. Union of India & Ors.[1]
Citation: 2024 INSC 113
Court: Supreme Court of India (Constitution Bench)
Bench: Dr. Dhananjaya Y. Chandrachud CJI, Justice Sanjiv Khanna, Justice B.R. Gavai, Justice J.B. Pardiwala, Justice Manoj Misra
Date of Judgment: 15th February, 2024
Case Number: Writ Petition (Civil) No. 880 of 2017
Introduction
Association for Democratic Reforms & Anr. v. Union of India & Ors. is one of the most significant constitutional judgments delivered by the Supreme Court in recent years. The case challenged the validity of the Electoral Bonds Scheme, which had allowed individuals and companies to make anonymous donations to political parties. Although the first petition was filed in 2017, the matter remained pending for several years before being heard by the five-judge Constitution Bench. In a unanimous judgment, the Supreme Court struck down the scheme and the related amendments to various laws. The Court held that transparency in political funding is essential to a healthy democracy and that voters have a fundamental right to know where political parties receive their financial support. Rather than focusing only on the rights of donors or political parties, the judgment placed the voters at the center of the democratic process and reinforced the constitutional values of transparency, accountability, and informed electoral choice.
Facts and Background
In 2017, the Union Government introduced the Electoral Bond Scheme through the Finance Act,[2] which amended four different statutes in one stroke: the Reserve Bank of India Act 1934, the Representation of the People Act 1951,[3] the Income Tax Act 1961,[4] and the Companies Act 2013.[5]
Under the scheme, individuals and companies could purchase electoral bonds from authorized branches of the State Bank of India (SBI) and donate them to eligible political parties. While SBI maintained records of the purchasers, the identities of donors were not disclosed to the public or the Election Commission, making political donations effectively anonymous.
The amendments also removed the earlier 7.5% cap on corporate political donations and abolished the requirement for companies to disclose the specific political parties to which they had contributed. This allowed even newly incorporated or loss-making companies to make unlimited political donations without public scrutiny.
The Association for Democratic Reforms, an NGO working on electoral transparency, along with Common Cause and the Communist Party of India (Marxist), challenged these amendments as unconstitutional under Article 32. They argued that the scheme violated the constitutional principles of transparency, free and fair elections, and the citizens’ right to information. The matter dragged through the Court for years while the bonds continued to be sold. Ultimately, the case was heard by a five-judge Constitution Bench in October 2023, which delivered its unanimous judgment on 15 February 2024, declaring the Electoral Bond Scheme unconstitutional.
Issues Before the Court
1. Whether the Electoral Bond Scheme violated the voters’ fundamental right to information under Article 19(1)(a) by keeping the identities of political donors anonymous.[6]
2. Whether the removal of limits and disclosure requirements on corporate political donations violated Article 14 and undermined the principle of free and fair elections.[7]
3. Whether the Government’s objective of preventing black money in political funding justified the restrictions imposed on the public’s right to know about political donations.
Arguments of the Parties
Petitioners’ Arguments:
The petitioners, led by senior advocates Prashant Bhushan and Kapil Sibal, argued that the Electoral Bond Scheme violated the voters’ right to information under Article 19(1)(a). They relied on earlier Supreme Court decisions such as Union of India v. Association for Democratic Reforms[8] and People’s Union for Civil Liberties v. Union of India,[9] which recognized that voters have a right to make informed electoral choices. According to the petitioners, this right includes knowing who funds political parties, as financial contributions can influence public policy and government decisions. They further argued that removing the limit on corporate donations and disclosure requirements encouraged opaque funding and increased the risk of quid pro quo arrangements between corporations and political parties.
Respondent’s Arguments (Union of India):
The Union of India, represented by Solicitor General Tushar Mehta, defended the scheme by arguing that it promoted clean political funding. Since electoral bonds could only be purchased through authorized banking channels, the scheme reduced the use of unaccounted cash in elections. The Government also contended that donor anonymity protected individuals and companies from political retaliation by rival parties, forming part of the right to privacy recognized in Justice K.S. Puttaswamy (Retd.) v. Union of India.[10] It argued that the scheme struck a reasonable balance between the voters’ right to information and the donors’ right to privacy, and that such policy choices should be left to the legislature.
Judgment and Ratio Decidendi
The five-judge Constitution Bench unanimously struck down the Electoral Bond Scheme and the related amendments made through the Finance Act, 2017. The Court held that the voters’ right to information under Article 19(1)(a) includes the right to know who funds political parties, as such information enables citizens to make informed electoral choices. It observed that transparency in political funding is essential for a healthy democracy.
The Court rejected the Government’s argument that donor anonymity was necessary to curb black money. Applying the principle of proportionality, it held that although preventing black money was a legitimate objective, complete anonymity was not the least restrictive way of achieving it. Less restrictive alternatives that balanced transparency and accountability were available.
The Bench also rejected the privacy argument, holding that political donations are made with the intention of influencing the democratic process and therefore involve a strong public interest. It further held that removing the cap on corporate political donations was manifestly arbitrary, as it allowed even loss-making or shell companies to make unlimited contributions without public disclosure.
As a result, the Court directed the State Bank of India to stop issuing electoral bonds and ordered it to disclose details of all electoral bonds issued since April 2019 to the Election Commission of India, which was directed to publish the information on its official website.
Ratio Decidendi:
A system of political funding that prevents voters from knowing the source of financial contributions to political parties violates the fundamental right to information under Article 19(1)(a). Such restrictions can only be justified if the State proves that no less restrictive alternative is available to achieve its objective.
Critical Analysis
The judgment builds on earlier Supreme Court decisions such as State of Uttar Pradesh v. Raj Narain,[11] Union of India v. Association for Democratic Reforms, and People’s Union for Civil Liberties v. Union of India, which recognized the right to information as part of the freedom of speech under Article 19(1)(a). By extending this principle to political funding, the Court strengthened transparency in the electoral process.
A major strength of the decision is that it promotes accountability in political finance. Anonymous and unlimited corporate donations had the potential to influence public policy without public scrutiny. By striking down the Electoral Bond Scheme, the Court reinforced the importance of informed voting and democratic transparency. However, the judgment does not provide an alternative framework for political funding, leaving it to Parliament to create a system that balances transparency with genuine concerns about donor privacy and safety.
Overall, the ruling is a significant step towards ensuring free and fair elections. It upholds constitutional values while making it clear that transparency in political funding is essential to a healthy democracy.
References
[1] Association for Democratic Reforms & Anr. v. Union of India & Ors., (2024) 2024 INSC 113.
[2] Finance Act, 2017 (India).
[3] Representation of the People Act, 1951, § 29C (India).
[4] Income Tax Act, 1961, § 13A(b) (India).
[5] Companies Act, 2013, § 182(3) (India).
[6] INDIA CONST. art. 19, cl. 1(a).
[7] INDIA CONST. art. 14.
[8] Union of India v. Association for Democratic Reforms, (2002) 5 SCC 294.
[9] People’s Union for Civil Liberties v. Union of India, (2003) 4 SCC 399.
[10] Justice K.S. Puttaswamy (Retd.) v. Union of India, (2017) 10 SCC 1.
[11] State of Uttar Pradesh v. Raj Narain, (1975) 4 SCC 428.
