Published On: 7th October 2026
Authored By: Ola Abdelwahab
Ain Shams University
CASE DETAILS
- Case Name: Association for Democratic Reforms & Anr v Union of India & Ors
- Citation: 2024 INSC 113; (2024) 5 SCC 1; Writ Petition (Civil) No. 880 of 2017.
- Court: Supreme Court of India, Constitution Bench
- Bench: D Y Chandrachud CJI, Sanjiv Khanna, B R Gavai, J B Pardiwala, Manoj Misra, JJ (five judge bench)
- Date of Judgment: 15 February 2024
FACTS & ISSUES
Between 2016-2018 several amendments were made to the laws relating to political funding by various “Finance Acts” along with amendments to the Companies Act 2013, Income-tax Act 1961, Foreign Contribution (Regulation) Act 2010 and the Representation of the People Act 1951, which together constituted the electoral bonds scheme. The Electoral Bonds Scheme allowed any citizen or domestic company to purchase interest-free bearer bonds from any branch of the State Bank of India and the same was to be donated to a registered political party, which would be able to redeem the bonds at a designated bank account, in a disclosed manner. The buyer would have the option of disclosing the identity of the purchasing citizen or company.
However, the recipient political party would not be disclosed the identity of the donor nor would it be informed of the source of its contributions. Political parties were not under any legal obligation to reveal to the citizens how they received donations under the electoral bonds scheme. Simultaneously, political parties were also statutorily exempted from disclosing the source of contributions to their party through electoral bonds. 5% of a company’s average net profits in the preceding three financial years.
Furthermore, the requirement for disclosing these donations in the company’s profit-and-loss account was deleted, enabling even loss-making and shell companies to contribute to political parties without limit and without having to disclose this in their financial statements. The Association for Democratic Reforms (ADR), Common Cause and the Communist Party of India (Marxist) filed a writ petition in 2017 challenging the constitutional validity of the scheme. For some time, the matter remained largely unattended until a five-judge Constitution Bench was constituted a year before a general election. In October and November 2023, the Court heard arguments on the matter for several days before reserving its judgment in November 2023.
The Court framed two central questions:
(1) Whether the Scheme’s ban on disclosures regarding the identity of donors to political parties violated the citizen-voter’s right to information guaranteed under Article 19(1)(a) of the Constitution of India; and
(2) Whether such violations, if any, could be justified as proportional measures to protect the donor’s informational privacy under Article 21 or for preventing the misuse of unaccounted “black money” in elections. III.
ARGUMENTS ADVANCED
By Petitioners:
The petitioners argued that, much like the right to information about candidates as acknowledged by this Court in Union of India v Association for Democratic Reforms, voters also had the right to know who the donors were of political parties because knowledge of political finance is imperative to forming a clear opinion about the policies and decisions of a government. Failure to disclose political donations facilitates quid pro quo arrangements between donors and those in power, thereby undermining policy-making and electoral integrity. The petitioners further contended that the confidentiality of the electoral bonds scheme was fictitious as the government, by virtue of its control over the SBI, could identify the purchasers of the bonds through access to customer data. This asymmetry of information gave the ruling party an unfair advantage over other parties and the electorate.
5% ceiling on corporate donations and the elimination of the requirement to disclose donations in P&L statements diluted the guarantee of free and fair elections and undermined Article 14 of the Constitution because it granted the corporate sector undue influence over elections, particularly benefiting companies with no economic rationale for their contributions.
By Respondents:
The Union of India defended the Scheme by arguing that it was a legitimate socio-economic and political policy choice subject to legislative and executive discretion. The government maintained that the Scheme provided a practical and effective solution to curb the use of unaccounted money in elections by ensuring that donations were channelled through the official banking system. It argued that donor anonymity served the purpose of protecting the informational privacy of contributors under Article 21 of the Constitution, shielding them from potential political reprisal or victimisation by parties to which they may not have supported. The Union asserted that there was no inherent right to information about the source of political funding and that the Court should defer to Parliament’s judgment on matters of election policy.
JUDGMENT & RATIO DECIDENDI
The Constitution Bench, in a unanimous decision, struck down the Electoral Bond Scheme along with its enabling amendments as unconstitutional. A majority opinion, delivered by CJI Chandrachud for himself and Justices Gavai, Pardiwala, and Misra, laid out the reasons. A concurring opinion by Justice Sanjiv Khanna independently arrived at the same conclusion.
The majority ruled that the right to information under Article 19(1)(a) encompasses not only the personal backgrounds of political candidates but also information about funding sources for political parties. This knowledge, it was emphasized, is essential for voters to cast informed ballots and hold elected officials accountable. To address the conflict between the right to information of the voter and the right to informational privacy of the donor, the Court introduced a ‘double proportionality’ standard. Under this test, when a State action restricts one fundamental right to serve another, both rights must independently satisfy the proportionality test.
The Court acknowledged that curbing the use of black money in elections was a legitimate state interest, but concluded that the blanket non-disclosure under the Scheme was not the least intrusive means to achieve this objective. Less restrictive alternatives, such as channelling contributions through the banking system and electoral trusts while providing necessary disclosures to the Election Commission, were available. Furthermore, the Court noted that the Scheme was not genuinely confidential as the government could trace the purchase of bonds through the SBI, creating an informational imbalance that favoured the party in power. Since the Scheme failed to meet the proportionality test on several fronts, the Court did not delve into the ultimate balancing phase.
In regard to the second question, the Court found the deletion of the corporate donation cap and the exemption from disclosure to shareholders in the P&L account of the Companies Act, 2013, to be manifestly arbitrary and violative of Article 14. This, the Court explained, treated companies as equal to individuals despite their significant power to influence political and policy outcomes through their financial capacity. It also allowed even loss-making or shell companies to contribute to political parties without restriction. The Court ordered the SBI to immediately cease issuing electoral bonds and to provide the Election Commission with complete details of all bonds purchased and redeemed from April 12, 2019 onwards, which were to be subsequently published by the EC on its website.
The ratio decidendi of the case is that a scheme for anonymous and unlimited donations to political parties, that withholds this information from the electorate, fundamentally infringes upon the voter’s right to information under Article 19(1)(a) of the Constitution. Such infringement is impermissible, as it cannot be justified by either a claim to donor informational privacy or through unsubstantiated claims of preventing the use of black money, when less intrusive means to achieve a legitimate state objective are available and furthermore each competing right must be independently and individually subjected to the rigorous test of proportionality.
CRITICAL ANALYSIS
The judgment is a landmark addition to the body of Indian right to information law as it meaningfully extends the logic of the earlier decision of the Supreme Court in Union of India v Association for Democratic Reforms to systemic political financing.
This is a doctrinally consistent and coherent development, particularly in view of the Court’s increased focus on proportionality analysis as the key standard for balancing competing rights. However, the Court’s invocation of a “double proportionality” standard is not without its detractors. Some commentators have argued that this framework might still fall short of truly symmetrical balancing between the competing interests of the voter and the donor, suggesting that the sequential application of the proportionality test effectively tilted the balance in favor of the right invoked by the petitioners and that a more comprehensive analysis would have necessitated the inclusion of the donor’s interests at an earlier stage of the balancing process, prior to concluding the necessity to bypass the balancing phase altogether. From a pragmatic standpoint, the impact of the judgment has been significant; it led to the immediate disclosure of data for the 2024 general election, and the transparency thereby achieved facilitated a deeper public debate on the correlation between corporate donations and government decisions, shedding light on the potential for quid pro quo practices in Indian political finance.
The limitation of the judgment is inherent; it was able to dismantle an opaque political financing mechanism but could not prescribe a transparent alternative for future political funding, a task that remains the purview of Parliament and that has not yet been seriously undertaken. The judgment also leaves unanswered questions regarding the legal implications and retrospective accountability for donations already made under the now-invalidated Scheme. Comparatively, the ruling aligns India with a global trend towards increased transparency in campaign financing. Several countries with dedicated electoral finance regulators have introduced legislation to enhance transparency in election funding, even though India continues to rely on the Election Commission and ad-hoc judicial interventions.
On balance, however, the judgment is a decisive vindication of the principle of participatory democracy and electoral accountability over what the Court viewed as the executive’s unfettered prerogative to shape the political financing system according to its own preferences, although its proportionality approach may warrant refinement in future cases.
REFERENCES
- Constitution of India 1950, art 19(1)(a)
- Companies Act 2013 (India), s 182
- Finance Act 2017 (India)
- Representation of the People Act 1951 (India), s 29C
- Association for Democratic Reforms v Union of India, 2024 INSC 113; (2024) 5 SCC 1
- Union of India v Association for Democratic Reforms (2002) 5 SCC 294
- People’s Union for Civil Liberties v Union of India (2003) 4 SCC 399
- Justice K S Puttaswamy v Union of India (2017) 10 SCC 1
- Gautam Bhatia, ‘The Supreme Court’s Electoral Bonds Judgment – I: Political Equality and Electoral Transparency’ (Indian Constitutional Law and Philosophy Blog, 23 February 2024).
- Chiranth Mukunda, ‘The Supreme Court’s Electoral Bonds Judgment – III: A Critique of Double Proportionality’ (Indian Constitutional Law and Philosophy Blog, 25 March 2024).
- Supreme Court Observer, ‘Constitutionality of the Electoral Bond Scheme’ (scobserver. In).
