Transparency vital for free, fair polls: Justice Khanna on electoral bonds

Justice Sanjiv Khanna of the SC has declared that the electoral bond scheme must be reviewed in order to ensure transparency and fairness in elections

The Supreme Court cannot adopt a hands-off approach by testing the electoral bond (EB) scheme on the restrictive parameters applicable to economic policy, justice Sanjiv Khanna said in his separate judgment that quashed the EB scheme on Thursday, adding that contributions to political parties quintessentially relate to the democratic polity, citizens’ right to know ,and accountability in the democracy.

In his 74-page judgment, justice Sanjiv Khanna underlined that the right to know is paramount for free and fair elections

“To give the legislation the latitude of economic policy, we will be diluting the principle of free and fair elections. Clearly, the importance of the issue and the nexus between money and electoral democracy requires us to undertake an in-depth review...voters’ right to know supersedes anonymity in political party funding,” held the judge.

In his 74-page judgment, justice Khanna underlined that the right to know is paramount for free and fair elections and democracy because it is access to information that can materially shape the citizens’ choice necessary for them to have a say in how their lives are affected.

As political parties are at the helm of the electoral process, including its finances, the judge said that the funding of political parties cannot be treated differently from that of the candidates who contest elections, and therefore, denying voters the right to know the details of funding of political parties would lead to a dichotomous situation.

“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. The confidentiality of the voting booth does not extend to anonymity in contributions to political parties,” noted the judge.

Justice Khanna discussed the test of proportionality to scrutinise whether the scheme strikes an appropriate balance between the fundamental right and the pursued purpose and objective of the restriction. He noted that the scheme failed on the very first parameter of satisfying a legitimate aim as the Centre claimed the confidentiality clause is meant to protect donors from retribution and victimisation.

“I am of the opinion that retribution, victimisation or retaliation cannot by any stretch be treated as a legitimate aim...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,” said justice Khanna.

The judge held that the Centre’s argument suffers from inconsistency and coherence since it seeks to perpetuate and accept the wrong rather than deal with the malady and correct it.

“The inconsistency is also apparent as the change in law, by giving a cloak of secrecy, leads to severe restriction and curtailment of the collective’s right to information and the right to know, which is a check and counters cases of retribution, victimisation and retaliation. Transparency and not secrecy is the cure and antidote,” underlined justice Khanna.

The judge also dismissed the Centre’s argument about protecting the donors’ identity, saying the plea of infringement of the right to privacy has no application at all if the donor makes the contribution through a banking channel.

“It is the transaction between the donor and the third person. The fact that a donation has been made to a political party has to be specified and is not left hidden and concealed,” said justice Khanna, pointing out that protection against disclosure “exists only on paper” because law enforcement agencies can access such information under the scheme.

“The fear of the identities of donors being revealed exists in another manner. 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,” declared the judge.

He further noted that curtailing black money in the electoral process has no connection or relationship with the concealment of the donor’s identity. “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,” said the judgment.

According to justice Khanna, political contributions for a quid pro quo may amount to money laundering, as defined under the Prevention of Money Laundering Act, 2002. “By ensuring anonymity, the policy ensures that the money laundered on account of quid pro quo or illegal connection escapes eyeballs of the public,” he added.

If monetary contributions to political parties are made as a quid pro quo to secure a favourable economic policy, justice Khanna pointed out, it would be an offence under the Prevention of Corruption Act, and also under the PMLA. “Such offences when committed by political parties in power can never see the light of the day if secrecy and anonymity of the donor is maintained,” he rued.

Justice Khanna finally ruled that the 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.