TEAM CODE 69

CHRIST ACADEMY INSTITUTE OF LAW 14TH INTRA MOOT COURT COMPETITION

CHRIST ACADEMY INSTITUTE OF LAW 14TH INTRA

MOOT COURT COMPETITION
IN THE HON’BLE SUPREME COURT OF
INDUSLAND
WP(C) No. 69/2024

In Matter of

TEAM CODE 69………………………………………PETITIONER

vs.

Union of India
through Ministry of
Finance & Ors………………………………………………RESPONDENT

BEFORE SUMISSION TO HON’BLE CHIEF JUSTICE

AND HIS COMPANION JUSTICES
OF THE HON’BLE SUPREME COURT OF INDUSLAND

MEMORANDUM ON BEHALF OF THE PETITIONERS

TABLE OF CONTENTS

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 TEAM CODE 69
CHRIST ACADEMY INSTITUTE OF LAW 14TH INTRA MOOT COURT COMPETITION

S. No. Particulars Pg. No.

1. Memorial Cover / Title Page 1
2. Table of Contents 2
3. List of Abbreviations 3
4. Index of Authorities 4
5. Statement of Jurisdiction
6. Synopsis
7. Issues Raised
8. Arguments Advanced
8.1 ISSUE 1
Whether the amendment allowing unlimited corporate funding to
political parties violates the principles of free and fair elections and
contravenes Article 14 of the Constitution?
8.2 ISSUE 2
Whether the government's justifications for eliminating black
money and protecting donor privacy fail the test of proportionality?
8.3 ISSUE 3
Whether the lack of disclosure regarding voluntary contributions to
political parties under the Electoral Bond Scheme and amendments to
Sections 29C of the PR Act, 182(3) of the CG Act, and 13A(b) of the RR
Act violates citizens’ right to information under Article 19(1)(a) of the
Constitution?
9. Prayer

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 LIST OF ABBREVIATIONS

LIST OF ABBREVIATIONS

SC Supreme Court

AIR All India Reporter

Ori Orissa

Mad Madras

All Allahabad

Cal Calcutta

IC Indian Cases

Del Delhi

Cr.LJ Criminal Law Journal

SCR Supreme Court Reporter

SCJ Supreme Court Journal

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 INDEX OF AUTHORITIES

INDEX OF AUTHORITIES

A. CASES CITED
1.

B. BOOKS AND TREATISES

1. V.S. Rama Devi and S.K. Mendiratta, How India Votes – Election Laws, Practice
and Procedure (4thed., 2017).
2. Kiran Gupta and P.C. Jain, Chawla’s Elections - Law & Practice (10th ed., 2014)
3.
C. REPORTS
1. Law Commission of India Report No.255 Electoral Reforms March 2015
2.

D. LEGAL DATABASES
1. Manupatra
2. SCC Online
3. Westlaw
4. Lexis Nexis

E. LEGISLATIONS
1. Constitution of India 1950
2. Finance Act 2017
3. Representation of the People Act, 1951
4. Right to Information (RTI) Act 2005
5. Income Tax Act, 1961
6. The Reserve Bank of India Act, 1934
7. The Reserve Bank of India (Amendment) Act, 2018
8. Companies Act, 2013
9. Prevention of Money Laundering Act 2002
10. Prevention of Corruption Act, 1988

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 INDEX OF AUTHORITIES

11. Electoral Bond Scheme, 2018 Ministry of Finance (Department of Economic

Affairs) Notification New Delhi, the 2nd January, 2018 S.O. 29(E)
12. Conduct of Election Rules, 1961
13. United Nations Convention Against Corruption, 2004, Article 7(3)
14. The Foreign Contributions (Regulation) Act, 2010
15. State Bank of India Act, 1955
16. Census Act, 1948

F. MISCELLANEOUS
1. Herkewitz, William. "How a Soviet Social Experiment Became a Game for
Liars." Popular Mechanics, vol. 195, no. 7, Oct. 2019, pp. 30+. Gale Academic
OneFile, link.gale.com/apps/doc/A600917457/AONE?
u=anon~d1c6743&sid=sitemap&xid=5d93534a. Accessed 27 May 2024
2. m

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 STATEMENT OF JURISDICTION

SSTATEMENT
TATEMENT O
OFF JJURISDICTION
URISDICTION

The Hon’ble Court has the jurisdiction to hear the matter under Article 32 of the Constitution
of India

Article 32 of the Constitution of India reads as follows:

“32. Remedies for enforcement of rights conferred by this Part

(1)The right to move the Supreme Court by appropriate proceedings

for the enforcement of the rights conferred by this Part is guaranteed.

(2)The Supreme Court shall have power to issue directions or orders

or writs, including writs in the nature of habeas corpus, mandamus,
prohibition, quo warrant and certiorari, whichever may be
appropriate, for the enforcement of any of the rights conferred by this
Part.

(3)Without prejudice to the powers conferred on the Supreme Court

by clauses (1) and (2), Parliament may by law empower any other
court to exercise within the local limits of its jurisdiction ill or any of
the powers exercisable by the Supreme Court under clause (2).

(4)The right guaranteed by this article shall not be suspended except

as otherwise provided for by this Constitution.”

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 SYNOPSIS

SYNOPSIS

The Electoral Bond Scheme (EBS), introduced through the Fiscal Act of 2017 during the
Union Budget 2017-18 and officially notified by the Department of Economic Affairs on
January 2, 2018, facilitates banks' issuance of electoral bonds for political funding. These
bonds resemble promissory notes and are bearer instruments that do not contain the
purchaser's name, available in denominations ranging from Rs 1,000 to Rs 1,00,00,000, with
payments accepted in Indian rupees through various methods. Legislative amendments to
facilitate the EBS included changes to the National Monetary Authority Act (NMA Act),
Corporate Governance Act (CG Act), Revenue Regulation Act (RR Act), and Peoples’
Participation Act (PP Act). These amendments allowed the Central Government to permit
scheduled banks to issue Electoral Bonds, removed caps on corporate funding, exempted
disclosure of individual party names, and altered transparency requirements, among other
changes. Key features of the EBS include the eligibility of any individual to purchase bonds,
which can only be redeemed by eligible political parties registered under Section 29-A of the
PP Act. The scheme maintains the confidentiality of the buyer's information, only disclosing
it under specific legal circumstances, and treats the value of bonds as tax-exempt income
from voluntary contributions under Section 13-A of the RR Act.

The petitioners contend that the EBS violates the constitutional principles of free and fair
elections and citizens' right to information. Firstly, the amendment allowing unlimited
corporate funding to political parties contravenes Article 14 by undermining the principles of
free and fair elections. The lack of disclosure regarding voluntary contributions to political
parties under the EBS, and the amendments to Sections 29C of the PP Act, 182(3) of the CG
Act, and 13A(b) of the RR Act, violate citizens’ right to information under Article 19(1)(a) of
the Constitution. The petitioners argue that these provisions undermine electoral integrity and
transparency by allowing anonymous political donations, thereby infringing on citizens'
rights to a transparent electoral process and information. The government defends the scheme
by asserting that it combats black money, enhances transparency, mandates KYC norms, and
protects donor privacy.

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 SYNOPSIS

It further argues that the EBS promotes the donation of clean funds to political parties by
safeguarding buyers' privacy and allowing purchases without revealing political affiliations,
which aligns with the state's obligation to protect citizen privacy. The petitioners challenge
this defence, arguing that the scheme's confidentiality provisions and the removal of
disclosure requirements facilitate anonymous contributions, which could potentially lead to
undue influence and corruption, thereby violating democratic principles.

Section 31 of the Reserve Bank of India Act, 1931

Section 31. Issue of demand bills and notes. Section 31. Issue of demand bills and notes.
(1) No person in India other than the Bank
or, as expressly authorized by this Act, the (1) No person in India other than the Bank or,
Central Government shall draw, accept, as expressly authorized by this Act, the
make or issue any bill of exchange, hundi, Central Government shall draw, accept, make
promissory note or engagement for the or issue any bill of exchange, hundi,
payment of money payable to bearer on promissory note or engagement for the
demand, or borrow, owe or take up any sum payment of money payable to bearer on
or sums of money on the bills, hundis or demand, or borrow, owe or take up any sum or
notes payable to bearer on demand of any sums of money on the bills, hundis or notes
such person: Provided that cheques or payable to bearer on demand of any such
drafts, including hundis, payable to bearer person: Provided that cheques or drafts,
on demand or otherwise may be drawn on a including hundis, payable to bearer on demand
person’s account with a banker, shroff or or otherwise may be drawn on a person’s
agent. account with a banker, shroff or agent.

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 SYNOPSIS

(2) Notwithstanding anything contained in (2) Notwithstanding anything contained in the

the Negotiable Instruments Act, 1881, no Negotiable Instruments Act, 1881, no person
person in India other than the Bank or, as in India other than the Bank or, as expressly
expressly authorised by this Act, the Central authorised by this Act, the Central
Government shall make or issue any Government shall make or issue any
promissory note expressed to be payable to promissory note expressed to be payable to the
the bearer of the instrument. bearer of the instrument.
(3) Notwithstanding anything contained in
this section, the Central Government may
authorise any scheduled bank to issue
electoral bond.

Explanation.- For the purposes of this sub-

section, ‘electoral bond’ means a bond
issued by any scheduled bank under the
scheme as may be notified by the Central
Government.

Section 29C of the RPA, 1951

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 SYNOPSIS

Section 29C. Section 29C.

Declaration of donation received by the Declaration of donation received by the
political parties.- political parties.-
(1) The treasurer of a political party or any (1) The treasurer of a political party or any
other person authorized by the political party other person authorized by the political party
in this behalf shall, in each financial year, in this behalf shall, in each financial year,
prepare a report in respect of the following, prepare a report in respect of the following,
namely; namely;
(a) the contribution in excess of twenty (a) the contribution in excess of twenty
thousand rupees received by such political thousand rupees received by such political
party from any person in that financial year; party from any person in that financial year;
(b) the contribution in excess of twenty (b) the contribution in excess of twenty
thousand rupees received by such political thousand rupees received by such political
party from companies other than Government party from companies other than
companies in that financial year. Government companies in that financial
year.
(2) The report under sub-section
(1) shall be in such form as may be prescribed. Provided that nothing contained in this
(3) The report for a financial year under sub- sub-section shall apply to the
section(1) shall be submitted by the treasurer contributions received by way of an
of a political party or any other person electoral bond.
authorized by the political party in this behalf Explanation – For the purposes of this
before the due date for furnishing a return of sub-section, “electoral bond” means a
income of that financial year under section bond referred to in the Explanation to
139 of the Income -tax Act, 1961 (43 of sub-section (3) of section 31 of the
1961), to the Election Commission. Reserve Bank of India Act, 1934.
(4) Where the treasurer of any political party (2) The report under sub-section (1) shall be
or any other person authorized by the political in such form as may be prescribed.
party in this behalf fails to submit a report (3) The report for a financial year under
under sub-section (3) then, notwithstanding sub- section(1) shall be submitted by the
anything contained in the Income-tax Act, treasurer of a political party or any other
1961 (43 of 1961), such political party shall person authorized by the political party in
not be entitled to any tax relief under that Act. this behalf before the due date for furnishing
a return of income of that financial year
under section 139 of the Income-tax Act,
1961 (43 of 1961), to the Election
Commission.

(4) Where the treasurer of any political party

or any other person 10 authorized by the
political party in this behalf fails to submit a
report under sub-section (3) then,
notwithstanding anything contained in the
Income-tax Act, 1961 (43 of 1961), such
political party shall not be entitled to any tax
relief under that Act.

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 SYNOPSIS

Section 182 of the Companies Act, 2013

Section 182. Prohibitions and restrictions Section 182.

regarding political contributions- (1)Prohibitions and restrictions regarding
Notwithstanding anything contained in any political contributions-
other provision of this Act, a company, other (1) Notwithstanding anything contained in
than a Government company and a company any other provision of this Act, a company,
which has been in existence for less than three other than a Government company and a
financial years, may contribute any amount company which has been in existence for
directly or indirectly to any political party less than three financial years, may
contribute any amount directly or indirectly
Provided that the amount referred to in sub- to any political party: [First proviso omitted]
section (1) or, as the case may be, the
aggregate of the amount which may be so Provided further that no such contribution
contributed by the company in any financial shall be made by a company unless a
year shall not exceed seven and a half per cent resolution authorising the making of such
of its average net profits during the three contribution is passed at a meeting of the
immediately preceding financial years: Board of Directors and such resolution shall,
Provided further that no such contribution subject to the other provisions of this
shall be made by a company unless a section, be deemed to be justification in law
resolution authorising the making of such for the making and the acceptance of the
contribution is passed at a meeting of the contribution authorised by it.
Board of Directors and such resolution shall,
subject to the other provisions of this section,
be deemed to be justification in law for the
making and the acceptance of the contribution
authorised by it.

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 SYNOPSIS

Section 182 (3)- Every company shall disclose Section 182 (3)- Every company shall
in its profit and loss account any amount or disclose in its profit and loss account the
amounts contributed by it to any political total amount contributed by it under this
party during the financial year to which that section during the financial year to which
account relates, giving particulars of the total the account relates.
amount contributed and the name of the party
to which such amount has been contributed (3A) Notwithstanding anything contained in
sub-section (1), the contribution under this
section shall not be made except by an
account payee cheque drawn on a bank or an
account payee bank draft or use of electronic
clearing system through a bank account:
Provided that a company may make
contribution through any instrument, issued
pursuant to any scheme notified under any
law for the time being in force, for
contribution to the political parties.

Section 13A Income Tax Act, 1961

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 SYNOPSIS

13A. Special provision relating to incomes of 13A. Special provision relating to incomes
political parties- Any income of a political of political parties- Any income of a
party which is chargeable under the head political party which is chargeable under the
“Income from house property” or “Income head “Income from house property” or
from other sources” or any income by way of “Income from other sources” or any income
voluntary contributions received by a political by way of voluntary contributions received
party from any person shall not be included in by a political party from any person shall not
the total income of the previous year of such be included in the total income of the
political party: Provided that- (a) such political previous year of such political party:
party keeps and maintains such books of Provided that- (a) such political party keeps
account and other documents as would enable and maintains such books of account and
the Assessing Officer to properly deduce its other documents as would enable the
income therefrom; (b) in respect of each such Assessing Officer to properly deduce its
voluntary contribution in excess of ten income therefrom; (b) in respect of each
thousand rupees, such political party keeps such voluntary contribution other than
and maintains a record of such contribution contribution by way of electoral bond in
and the name and address of the person who excess of ten thousand rupees, such political
has made such contribution; and (c) the party keeps and maintains a record of such
accounts of such political party are audited by contribution and the name and address of the
an accountant as defined in the Explanation person who has made such contribution; (c)
below sub- section (2) of section 288. the accounts of such political party are
Explanation.- For the purposes of this section, audited by an accountant as defined in the
“political party” means an association or body Explanation below sub- section (2) of
of individual citizens of India registered with section 288; and (d) no donation exceeding
the Election Commission of India as a two thousand rupees is received by such
political party under paragraph 3 of the political party otherwise than by an account
Election Symbols (Reservation and Allotment) payee cheque drawn on a bank or an account
Order, 1968, and includes a political party payee bank draft or use of electronic
deemed to be registered with that Commission clearing system through a bank account or
under the proviso to sub- paragraph (2) of that through electoral bond. Explanation.- For
paragraph. the purposes of this proviso, “electoral
bond” means a bond referred to in the
Explanation to sub- section (3) of section 31
of the Reserve Bank of India Act, 1934;
Provided also that such political party
furnishes a return of income for the previous
year in accordance with the provisions of
sub section (4B) of section 139 on or before
the due date under that section.

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 SYNOPSIS

In short the EBC has made the following changes to the legal regime to political funding
India:

1. Eliminated the transparency of funding to the political parties making it

impossible for the election commission and the Citizens to know the source of flow of
income to the parties
2. Eliminated caps on corporate donations, thus authorising unlimited corporate
funding of political parties thereby creating a potential quid pro quo system between
the political parties and the Corporate
3. Eliminated internal corporate disclosures requirements for political donations
making shareholder and regulatory oversight impossible.
4. Delinked grant of tax exemptions to political parties and funding disclosure
requirements, removing an important incentive to disclose the receipt and source of
political funds.
5. Set up an asymmetrical information regime, where the only entity (other than the
donor and the party) with knowledge of the funding is the State Bank of India, and -
through the SBI - the central government.

It is respectfully submitted that the EBS is unconstitutional, for the reasons set out below:

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 SUMMARY OF
ARGUMENTS

ISSUES RAISED

ISSUE 1
Whether the amendment allowing unlimited corporate funding to political parties violates
the principles of free and fair elections and contravenes Article 14 of the Constitution?

ISSUE 2
Whether the government's justifications for eliminating black money and protecting donor
privacy fail the test of proportionality?

ISSUE 3
Whether the lack of disclosure regarding voluntary contributions to political parties under
the Electoral Bond Scheme and amendments to Sections 29C of the PR Act, 182(3) of the
CG Act, and 13A(b) of the RR Act violates citizens’ right to information under Article
19(1)(a) of the Constitution?

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 ARGUMENTS
ADVANCED

IN THE SUPREME COURT OF INDUSLAND

ORIGNAL WRIT JURISDICTION

WRIT PETITION (Civil) NO. 69 OF 2024
(Seeking Mandamus to declare specific Sections of Fiscal Act, 2017 as
Unconstitutional)

IN THE MATTER OF:

PARTY POSITION
TEAM CODE 69 Petitioner No 1
VERSUS
UNION OF INDIA Respondent No. 1
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
ROOM NO.137, NORTH BLOCK,
NEW DELHI-110001
UNION OF INDIA Respondent No. 2
MINISTRY OF LAW AND JUSTICE
4TH FLOOR, A WING,
RAJENDRA PRASAD ROAD,
SHASTRI BHAVAN,
NEW DELHI-110001
ELECTION COMMISSION OF INDIA Respondent No. 3
NIRVACHAN SADAN,
ASHOKA ROAD,
NEW DELHI-110001

TO
THE HON'BLE CHIEF JUSTICE OF INDIA
AND HIS OTHER COMPANION JUDGES OF
THIS HON'BLE SUPREME COURT OF INDUSLAND
THE HUMBLE PETITION OF THE
PETITIONERS ABOVE NAMED

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 ARGUMENTS
ADVANCED

MOST RESPECTFULLY SHOWETH :

ISSUE 1
Whether the amendment allowing unlimited corporate funding to political parties violates
the principles of free and fair elections and contravenes Article 14 of the Constitution?

1.1. The Elements Of Free And Fair elections.

1.1.1 It is respectfully submitted before this Honourable court that Free and fair

elections are the bedrock to a Constitutional Democracy and one of the basic

features of the Constitution of India.

In Kihoto Hollohan v. Zachillhu & Ors1. this Hon’ble Court has held,

“179. Democracy is a part of the basic structure of our Constitution; and

rule of law, and free and fair elections are basic features of democracy.
One of the postulates of free and fair elections is provision for resolution
of election disputes as also adjudication of disputes relating to
subsequent disqualifications by an independent authority.”

1.1.2 Sir Winston Churchill described the importance of vote in a democratic election in

the following words:

“At the bottom of all tributes paid to democracy is the little man, walking
into a little booth, with a little pencil, making a little cross on a little bit
of paper – no amount of rhetoric or voluminous discussion can possibly
diminish the overwhelming importance of the point”.
1.1.3 People’s Union For Civil Liberties & Anr. V. Union Of India & Anr [2013]

12 S.C.R. 283

“Democracy is a part of the basic structure of our Constitution and

rule of law and free and fare election are basic features of
democracy. Democracy postulates that there should be periodical
elections so that people may be in a position either to re-elect the
same representatives or choose new representatives. Democracy
also contemplates that elections should be free and fair and the

1
(1992 Supp (2) SCC 651)
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 ARGUMENTS
ADVANCED

voters should be in a position to vote for the candidates of their

choice. The pre-requisite of this is that the elections are not rigged
and manipulated and the candidates or their agents are not able to
resort to unfair means and malpractices.”2

1.1.4 Mohinder Singh Gill v. Chief Election Commissioner (supra), State of U.P. v.

Raj Narain [(1975) 4 SCC 428], Indian Express Newspapers (Bombay) (P)

Ltd. v. Union of India [(1985) 1 SCC 641], Kanhiya Lal Omar v. R.K. Trivedi

[(1985) 4 SCC 628], Common Cause (A Registered Society) v. Union of India

[(1996) 2 SCC 752]

“To maintain the purity of elections and in particular to bring

transparency in the process of election, the Commission can ask the
candidates about the expenditure incurred by the political parties and
this transparency in the process of election would include
transparency of a candidate who seeks election or reelection. In a
democracy, the electoral process has a strategic role. The little man of
this country would have basic elementary right to know full
particulars of a candidate who is to represent him in Parliament
where laws to bind his liberty and property may be enacted.”
1.1.5 Jyoti Basu v. Debi Ghosal [(1982) 1 SCC 691]

“Democracy based on “free and fair elections” is considered as a

basic feature of the Constitution in the case of Kesavananda Bharati.
Lack of adequate legislative will to fill the vacuum in law for
reforming the election process in accordance with the law declared by
this Court in the case of Assn. for Democratic Reforms obligates this
Court as an important organ in constitutional process to intervene.”

2
Smt. Indira Nehru Gandhi v. Shri Raj Narain and another [1975 Supp. SCC 1] ;
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 ARGUMENTS
ADVANCED

1.1.6 Article 324 of the India constitution vests power to Election Commission with

“superintendence, direction and control” to conduct all elections to the Parliament

as well as the state legislature.

“324. Superintendence, direction and control of elections to be vested in

an Election Commission
(1) The superintendence, direction and control of the preparation of the
electoral rolls for, and the conduct of, all elections to Parliament and to
the Legislature of every State and of elections to the offices of President
and Vice-President held under this Constitution shall be vested in a
Commission (referred to in this Constitution as the Election
Commission).
(2) The Election Commission shall consist of the Chief Election
Commissioner and such number of other Election Commissioners, if any,
as the President may from time to time fix and the appointment of the
Chief Election Commissioner and other Election Commissioners shall,
subject to the provisions of any law made in that behalf by Parliament,
be made by the President.
(3) When any other Election Commissioner is so appointed the Chief
Election Commissioner shall act as the Chairman of the Election
Commission.
(4) Before each general election to the House of the People and to the
Legislative Assembly of each State, and before the first general election
and thereafter before each biennial election to the Legislative Council of
each State having such Council, the President may also appoint after
consultation with the Election Commission such Regional Commissioners
as he may consider necessary to assist the Election Commission in the
performance of the functions conferred on the Commission by clause (1).
(5) Subject to the provisions of any law made by Parliament, the
conditions of service and tenure of office of the Election Commissioners
and the Regional Commissioners shall be such as the President may by
rule determine:
Provided that the Chief Election Commissioner shall not be removed
from his office except in like manner and on the like grounds as a Judge
of the Supreme Court and the conditions of service of the Chief Election
Commissioner shall not be varied to his disadvantage after his
appointment:
Provided further that any other Election Commissioner or a Regional
Commissioner shall not be removed from office except on the
recommendation of the Chief Election Commissioner.
(6) The President, or the Governor of a State, shall, when so requested
by the Election Commission, make available to the Election Commission
or to a Regional Commissioner such staff as may be necessary for the
discharge of the functions conferred on the Election Commission by
clause (1).”

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 ARGUMENTS
ADVANCED

1.1.7 Further, Article 327 of the Constitution read with Entry 72 of List 1 of the VII

Schedule The Constitution gives power to the parliament to enact laws with

respect to the elections.

“327. Power of Parliament to make provision with respect to elections to

Legislatures
Subject to the provisions of this Constitution, Parliament may from time
to time by law make provision with respect to all matters relating to, or
in Connection with, elections to either House of Parliament or to the
House or either House of the Legislature of a State including the
preparation of electoral rolls, the delimitation of constituencies and all
other matters necessary for securing the due constitution of such House
or Houses.”

1.1.8 Necessarily, the power exercised by Parliament must be in line with the basic

feature of having free and fair elections.

1.1.9 By exercising powers under Entry 72 of List 1 of the VII th Schedule, Parliament

implemented Peoples’ Participation Act, 1951 (PP Act), which primarily regulates

the conduct and rules to be followed in the electoral process. The Conduct of

Elections Rules, 1961, promulgated under the said Act; these are also geared

towards ensuring a free and fair election.

1.1.10 Section 77 Peoples’ Participation Act, 1951 (PP Act)

“77. Account of election expenses and maximum thereof.—(1) Every

candidate at an election shall, either by himself or by his election agent,
keep a separate and correct account of all expenditure in connection with
the election incurred or authorised by him or by his election agent
between 2 [the date on which he has been nominated] and the date of
declaration of the result thereof, both dates inclusive. 3 [Explanation 1.
—For the removal of doubts, it is hereby declared that— (a) the
expenditure incurred by leaders of a political party on account of travel
by air or by any other means of transport for propagating programme of
the political party shall not be deemed to be the expenditure in
connection with the election incurred or authorised by a candidate of
that political party or his election agent for the purposes of this sub-
section; (b) any expenditure incurred in respect of any arrangements
made, facilities provided or any other act or thing done by any person in
the service of the Government and belonging to any of the classes
mentioned in clause (7) of section 123 in the discharge or purported
20
 ARGUMENTS
ADVANCED

discharge of his official duty as mentioned in the proviso to that clause

shall not be deemed to be expenditure in connection with the election
incurred or authorised by a candidate or by his election agent for the
purposes of this sub-section. Explanation 2.—For the purposes of clause
(a) of Explanation 1, the expression “leaders of a political party”, in
respect of any election, means,— (i) where such political party is a
recognised political party, such persons not exceeding forty in number,
and (ii) where such political party is other than a recognised political
party, such persons not exceeding twenty in number, whose names have
been communicated to the Election Commission and the Chief Electoral
Officers of the States by the political party to be leaders for the purposes
of such election, within a period of seven days from the date of the
notification for such election published in the Gazette of India or Official
Gazette of the State, as the case may be, under this Act: Provided that a
political party may, in the case where any of the persons referred to in
clause (i) or, as the case may be, in clause (ii) dies or ceases to be a
member of such political party, by further communication to the Election
Commission and the Chief Electoral Officers of the States, substitute new
name, during the period ending immediately before forty-eight hours
ending with the hour fixed for the conclusion of the last poll for such
election, for the name of such person died or ceased to be a member, for
the purposes of designating the new leader in his place.] (2) The account
shall contain such particular, as may be prescribed. (3) The total of the
said expenditure shall not exceed such amount as may be prescribed.”

“86. Particulars of account of election expenses.—(1) The account of

election expenses to be kept by a candidate or his election agent under
section 77 shall contain the following particulars in respect of each item
of expenditure from day to day, namely: — (a) the date on which the
expenditure was incurred or authorised;
(b) the nature of the expenditure (as for example, travelling, postage or
printing and the like);
(c) the amount of the expenditure— (i) the amount paid; (ii) the amount
outstanding;
(d) the date of payment;
(e) the name and address of the payee;
(f) the serial number of vouchers, in case of amount paid; (g) the serial
number of bills, if any, in case of amount outstanding;
(h) the name and address of the person to whom the amount outstanding
is payable.
(2) A voucher shall be obtained for every item of expenditure unless from
the nature of the case, such as postage, travel by rail and the like, it is
not practicable to obtain a voucher.
(3) All vouchers shall be lodged along with the account of election
expenses, arranged according to the date of payment and serially
numbered by the candidate or his election agent and such serial numbers
shall be entered in the account under item (f) of sub-rule (1). (4) It shall
not be necessary to give the particulars mentioned in item (e) of sub-rule

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(1) in regard to items of expenditure for which vouchers have not been
obtained under sub-rule (2).

90. Maximum election expenses.—The total of the expenditure of which

account is to be kept under section 77 and which is incurred or
authorized in connection with an election in a State or Union territory
mentioned in column 1 of the Table below shall not exceed— (a) in any
one parliamentary constituency of that State or Union territory, the
amount specified in the corresponding column 2 of the said Table; and
(b) in any one assembly constituency, if any, of the State or Union
territory, the amount specified in the corresponding column 3 of the said
Table—

In this context, the scheme of the Act and the rules themselves suggest that

electoral expenses should be controlled and transparent. The Act and rules impose

a penalty and disqualification. The Act regulates not only candidates but political

parties as well (Section 77 read with Rule 86 and Rule 90). Furthermore, it places

limitations upon electoral expenditures, thus making it clear that its scheme is

designed to cap the amount of money that can flow into the election process.

1.1.11 It is further submitted that it is unanimously adopted by the Inter-Parliamentary

Council at its 154th session (Paris, 26 March 1994)

“(4) In order that elections shall be fair, States should take the
necessary measures to ensure that parties and candidates enjoy
reasonable opportunities to present their electoral platform.
(7) States should take all necessary and appropriate measures to
ensure the transparency of the entire electoral process ”

1.1.12 Declaration adopted without a vote* by the Inter-Parliamentary Council at its

161st session (Cairo, 16 September 1997)

“7. Democracy is founded on the primacy of the law and the exercise
of human rights. In a democratic State, no one is above the law and
all are equal before the law.

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16. Individual participation in democratic processes and public life at

all levels must be regulated fairly and impartially and must avoid any
discrimination, as well as the risk of intimidation by State and non-
State actors.
21. The state of democracy presupposes freedom of opinion and
expression; this right implies freedom to hold opinions without
interference and to seek, receive and impart information and ideas
through any media and regardless of frontiers.
22. The institutions and processes of democracy must accommodate
the participation of all people in homogeneous as well as
heterogeneous societies in order to safeguard diversity, pluralism and
the right to be different in a climate of tolerance.”
1.1.13 As will be elaborated below, any form of funding that lacks transparency and

conceals the source of contributions undermines the essence of free and fair

elections, which is a fundamental aspect of the Basic Structure. Free and fair

elections inherently require transparency and the public’s right to know who is

financing the electoral process and to what extent. This necessitates the disclosure

of all details related to electoral funding, including the entities involved, the

amounts, the timing, and the sources. Such transparency is essential for

maintaining the integrity of free and fair elections. Consequently, the Electoral

Bond Scheme (EBS) is inherently unconstitutional.

1.2 “Freedom” and “Fairness”

1.2.1 The concept of "freedom" under the Indian Constitution encompasses both

negative and positive dimensions. In the context of "free" elections, the negative

dimension of "freedom" pertains to the voter's ability to cast their vote safely,

without interference or intimidation, and without fear of repercussions for their

electoral choice. This is ensured by the use of a secret ballot and the security

infrastructure surrounding elections.

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1.2.2 "Freedom" in its positive dimension means the ability to cast one’s vote based on

complete and relevant information, free from undue influences. In a functional

democracy, elections should be determined by a candidate’s ability to understand

and address the wants, needs, and interests of their constituents through

comprehensive and systematic policies. This process should remain uninfluenced

by monetary power and the ways in which financial resources are utilized in the

context of elections.

Representation of the People Act, 1951 Section 123 as follows

“123. Corrupt practices.—The following shall be deemed to be

corrupt practices for the purposes of this Act:— 3 [(1) “Bribery”
that is to say— (A) any gift, offer or promise by a candidate or his
agent or by any other person with the consent of a candidate or his
election agent of any gratification, to any person whomsoever, with
the object, directly or indirectly of inducing— (a) a person to stand
or not to stand as, or 4 [to withdraw or not to withdraw] from
being a candidate at an election, or (b) an elector to vote or refrain
from voting at an election, or as a reward to— (i) a person for
having so stood or not stood, or for 5 [having withdrawn or not
having withdrawn] his candidature; or (ii) an elector for having
voted or refrained from voting; (B) the receipt of, or agreement to
receive, any gratification, whether as a motive or a reward— (a) by
a person for standing or not standing as, or for 6 [withdrawing or
not withdrawing] from being, a candidate; or (b) by any person
whomsoever for himself or any other person for voting or
refraining from voting, or inducing or attempting to induce any
elector to vote or refrain from voting, or any candidate 3 [to
withdraw or not to withdraw] his candidature. Explanation.—For
the purposes of this clause the term “gratification” is not restricted
to pecuniary gratifications or gratifications estimable in money and
it includes all forms of entertainment and all forms of employment
for reward but it does not include the payment of any expenses
bona fide incurred at, or for the purpose of, any election and duly
entered in the account of election expenses referred to in section
78.] (2) Undue influence, that is to say, any direct or indirect
interference or attempt to interfere on the part of the candidate or
his agent, or of any other person 7 [with the consent of the
candidate or his election agent], with the free exercise of any
electoral right: Provided that— (a) without prejudice to the
generality of the provisions of this clause any such person as is
referred to therein who— (i) threatens any candidate or any
elector, or any person in whom a candidate or an elector is
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interested, with injury of any kind including social ostracism and

ex-communication or expulsion from any caste or community; or
(ii) induces or attempts to induce a candidate or an elector to
believe that he, or any person in whom he is interested, will become
or will be rendered an object of divine displeasure or spiritual
censure, shall be deemed to interfere with the free exercise of the
electoral right of such candidate or elector within the meaning of
this clause; (b) a declaration of public policy, or a promise of
public action, or the mere exercise of a legal right without intent to
interfere with an electoral right, shall not be deemed to be
interference within the meaning of this clause. 1 [(3) The appeal by
a candidate or his agent or by any other person with the consent of
a candidate or his election agent to vote or refrain from voting for
any person on the ground of his religion, race, caste, community or
language or the use of, or appeal to religious symbols or the use of,
or appeal to, national symbols, such as the national flag or the
national emblem, for the furtherance of the prospects of the
election of that candidate or for prejudicially affecting the election
of any candidate: 2 [Provided that no symbol allotted under this
Act to a candidate shall be deemed to be a religious symbol or a
national symbol for the purposes of this clause.] (3A) The
promotion of, or attempt to promote, feelings of enmity or hatred
between different classes of the citizens of India on grounds of
religion, race, caste, community, or language, by a candidate or
his agent or any other person with the consent of a candidate or his
election agent for the furtherance of the prospects of the election of
that candidate or for prejudicially affecting the election of any
candidate.] 3 [(3B) The propagation of the practice or the
commission of sati or its glorification by a candidate or his agent
or any other person with the consent of the candidate or his
election agent for the furtherance of the prospects of the election of
that candidate or for prejudicially affecting the election of any
candidate. Explanation.—For the purposes of this clause, “sati”
and “glorification” in relation to sati shall have the meanings
respectively assigned to them in the Commission of Sati
(Prevention) Act, 1987 (3 of 1988)]. (4) The publication by a
candidate or his agent or by any other person 4 [with the consent
of a candidate or his election agent], of any statement of fact which
is false, and which he either believes to be false or does not believe
to be true, in relation to the personal character or conduct of any
candidate or in relation to the candidature, or withdrawal, 5*** of
any candidate, being a statement reasonably calculated to
prejudice the prospects of that candidate’s election. (5) The hiring
or procuring, whether on payment or otherwise, of any vehicle or
vessle by a candidate or his agent or by any other person 4 [with
the consent of a candidate or his election agent] 6 [or the use of
such vehicle or vessel for the free conveyance] of any elector (other
than the candidate himself the members of his family or his agent)
to or from any polling station provided under section 25 or a place
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fixed under sub-section (1) of section 29 for the poll: Provided that
the hiring of a vehicle or vessel by an elector or by several electors
at their joint costs for the pupose of conveying him or them to and
from any such polling station or place fixed for the poll shall not be
deemed to be a corrupt practice under this clause if the vehicle or
vessel so hired is a vehicle or vessel not propelled by mechanical
power: Provided further that the use of any public transport vehicle
or vessel or any tramcar or railway carriage by any elector at his
own cost for the purpose of going to or coming from any such
polling station or place fixed for the poll shall not be deemed to be
a corrupt practice under this clause.
1.2.3 This is recognized under the Representation of the People Act, 1951. To guarantee

the freedom off

1.2.4 elections, the PP Act enacts a statutory prohibition of “corrupt practices,” defined

under Section 123 of the Act to include “all forms of bribery and undue influence”

upon voters. Additionally, “free” elections are secured by the imposition of model

codes of conduct, which limit what political parties can say or do during an

election campaign, and when they can say or do it.

1.2.5 The concept of “fairness” is closely linked to the concept of “freedom.” In

Raghbir Singh Gill vs Gurcharan Singh Tohra, 1980 SCR (3) 1302, this Hon’ble

Court held that “fairness” implies “fairness to all parties and candidates.” Integral

to the concept of fairness is the idea of a level playing field.

1.2.6 Economic power presents a grave risk to maintaining a level playing field between

individual citizens and groups, as it can give some voices a disproportionate

influence in deciding the agenda of political parties and, consequently, the laws

and policies that govern the entire country. In pluralistic democracies like India, it

is crucial to develop practices that preserve the equal voice of all citizens and

ensure that the special needs of all groups are heard.

1.2.7 To address this concern, various regulatory regimes have been proposed across

countries to equalize the capacity of each candidate to campaign. These include

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caps on electoral funding, uniformly state-sponsored campaign funding, and

televised public debates that allow all contesting candidates to participate. Until

the amendments to the Finance Act and the issuance of the EBS, the Indian

regulatory regime also addressed this concern through funding caps and disclosure

requirements. The Foreign Contributions (Regulation) Act, 2010, also prohibits

the receipt of any funding from foreign sources (whether individuals or

companies) by candidates for elections, political parties, or organizations of a

political nature. This is based on the recognition that money power wields

influence over political parties and is ultimately reflected in governance policies.

1.2.8 This Hon’ble Court has, on multiple occasions, recognized this concern as a

constitutional issue. As observed by Hon’ble Justice P.N. Bhagwati (as he then

was) in Kanwar Lal Gupta v. Amar Nath Chawla, (1975) 3 SCC 646, “the

small man's chance is the essence of Indian democracy, and that would be

stultified if large contributions from rich and affluent individuals or groups are not

divorced from the electoral process.”

1.2.9 It is respectfully submitted that the Electoral Bond Scheme (EBS) is inconsistent

with the elements of a free and fair election. Corporate funding, by its very nature,

conflicts with the Constitution. Corporations are not citizens and therefore are not

entitled to rights under Article 19(1)(a). Their primary purpose is not to intervene

in the political process, and their involvement in corporate funding severely

undermines parity, thus compromising the fairness of elections.

1.3 Violation Of Article 14 of the Indian Constitution

1.3.1 Article 14 of the Indian Constitution

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“14. Equality before law. The State shall not deny to any person
equality before the law or the equal protection of the laws within the
territory of India.”

1.3.2 The Electoral Bond Scheme (EBS) violates Article 14 of the Indian Constitution,

which guarantees equality before the law and equal protection of the laws, by severing

the link between elections and representative democracy through the removal of

funding limits and transparency. The impact of political funding on policy formation,

documented in several ways, highlights this violation:

1.3.2.1 When a political candidate or party takes money from a donor and explicitly

promises to enact policies favoring that donor upon coming to power, it creates a

direct quid pro quo. This practice undermines the principle of equality as it

privileges the interests of wealthy donors over those of ordinary citizens, thereby

skewing the political landscape in favor of the affluent. Such a scenario violates

Article 14 by creating an unequal influence on policy-making, which should

ideally reflect the will of the general electorate rather than a few wealthy

individuals.3

1.3.2.2 The influence of large political donations is often indirect and subtle. Donors

receive heightened access to policy-makers, securing the proverbial “seat at the

table.” This unequal access leads to a disproportionate influence on policy

formation, which is not available to ordinary citizens. This indirect quid pro quo

creates an environment where policy-makers feel compelled to keep their donors

"onside" to continue receiving funding. This dynamic undermines the equality of

political representation and participation, which is fundamental to Article 14.

3
There are three basic stages. In the first stage, politicians accumulate resources while in office. Although the
salaries for MLAs and Members of Parliament (MPs) are modest, studies have shown that the asset holdings of
many elected politicians are often disproportionately large.12 Estimating the financial rewards to office is a
difficult enterprise due to the variety of ways politicians can hide their assets from public scrutiny, but in recent
years there have been numerous allegations of rent-seeking: chief ministers of at least six states have been
investigated for “disproportionate assets”
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1.3.2.3 The EBS facilitates a system where policy-makers may prioritize the interests of

their donors over the general public. This undermines the concept of equal

protection of the laws, as policies are shaped by financial contributions rather than

by equal consideration of all citizens' needs and interests. This bias directly

conflicts with the egalitarian principles enshrined in Article 14.

1.3.2.4 The removal of transparency under the EBS means that the public cannot see who

is funding political parties and candidates. This lack of transparency prevents

voters from making informed choices and undermines the accountability of

political representatives. In the absence of transparency, the political process

becomes opaque, which directly contradicts the equal protection clause of Article

14, as it denies citizens the information necessary to hold their representatives

accountable.

1.3.3 Whether direct or indirect, the impact of large-scale private or corporate political

funding severs the link between the voter and the representative, as the

representative’s actions are substantively oriented towards the will and interests of the

donor rather than those of the voter.

1.3.4 The stylized facts of the Indian system described above point to incentives for private

financing of elections, which in turn, open the door to methods of “off-the-books” or

illicit financing. To quench the thirst for such financing, there are at least five

mechanisms that seem to be growing in intensity.

1.3.4.1 First, parties are actively recruiting candidates involved in serious criminal

activity because they possess both the financial resources and the connections

necessary to contest elections successfully4

4
one of the most important demand-side explanations for the “criminalization” of politics in India is the fact that alleged
criminal candidates have significant financial assets at their disposal that allow them to self-finance.
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1.3.4.2 Second, there is a growing number of businessmen directly contesting national

elections.5

1.3.4.3 Third, wealthy individuals are not only contesting elections directly but they are

also bankrolling entire political movements.6

1.3.4.4 Fourth, many parties are said to readily accept payment in exchange for party

nominations (“tickets,” in the Indian parlance)7

1.3.4.5 Finally, parties and their private sector allies launder funds through domestic and

international markets.8

1.3.5 A regime of transparency enables voters to assess for themselves possible links

between political donations and policy formation and to judge for themselves

whether, and to what extent, there is a quid pro quo between a large donor and a

political party or candidate.

1.3.6 It is for this reason that the United Nations Convention Against Corruption has

strongly advocated in favor of transparency in political funding, a stance supported by

the Law Commission reports of 2015. The Convention, under Article 7(3),

emphasizes the need for transparency in political funding to prevent corruption.

Similarly, the Law Commission reports highlight the importance of transparency in

maintaining the integrity of the electoral process (United Nations Convention Against

5
businessmen constitute 22 percent of the Lok Sabha (lower house of Parliament) and 16 percent of the Rajya Sabha (upper
house of Parliament). These figures represent significant increases over the last decade—and possibly understate the
increase, given the lack of transparency concerning members’ business interests. Businessmen or not, the membership of
elected bodies is increasingly being restricted to a plutocratic minority. More than 50 percent of both chambers of parliament
are crorepatis or the Indian equivalent of millionaires ( one “crore” rupees is equivalent to Rs. 10 million or about $225,000),
while the average wealth of a state-level Member of the Legislative Assembly (MLA) is 1.28 crores
6
For instance, the Reddy bothers (a sibling trio of mining magnates) from Karnataka have used their vast mining wealth to
bankroll the BJP’s rise to power in that state. As a reward, two of the three brothers received cabinet berths while the third
was awarded directorship of a powerful state corporation
7
Uttar Pradesh Chief Minister Mayawati readily admitted that asking candidates to “make a donation to the party” was a key
component of her BSP party’s election strategy, with the proceeds derived from ticket buying used to subsidize less well-off
candidates
8
Since the onset of economic liberalization in 1991 India has become much more integrated with the global economy,
making it easier to move money into and out of the country. As a result, high net-worth individuals and participants in
India’s underground economy have begun stashing their assets abroad to take advantage of generous foreign tax regimes.
Assets sent abroad can also be repatriated for domestic use under the guise of foreign investment and are widely reported to
be a source of election financing
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Corruption, 2004, Article 7(3) and [Para 2.31(b)6], [Para 2.31(b)8] of Law

Commission report).

1.3.7 Removing caps on funding and eliminating transparency drive the relationship

between the donor and the party/candidate underground, obscuring the quid pro quo

between funding and policy from public scrutiny. This lack of transparency and

unchecked funding severely undermines the right to equality and equal protection

before the law by creating an unequal political playing field. It allows wealthy donors

to exert disproportionate influence over political candidates and parties, thereby

eroding the fundamental principles of free and fair elections and compromising the

equal representation of all citizens in the democratic process.

1.3.8 The EBS, thus, has a built-in incumbent bias in its very design. In a fused

parliamentary model, where the executive is drawn from the ruling party, asymmetric

information about political donations ensures that a significantly larger portion of the

donor pie will go to the ruling party, irrespective of which party is in power. This

happens as a function of political risk management. This bias is particularly

pronounced with corporate donations, given the symbiotic relationship between

corporations and the policy-making branch of the state in a modern, privatized

economy.

1.3.9 Finally, it is respectfully submitted that unlimited, anonymous corporate donations to

political parties completely drown out the voice and will of the individual citizen-

voter. While an ordinary individual has a single vote, and every vote is equal ("one

person, one vote"), to paraphrase Dr. B.R. Ambedkar, not every citizen has the same

"value" under the EBS. The EBS accords significantly greater value to corporate

donors by giving them substantially greater opportunities to influence political parties

and electoral outcomes than the ordinary, individual voter.

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1.3.10 This free hand to corporate India is made even more egregious by the fact that funds

contributed through the EBS can be utilized by political parties in whatever manner

they wish, without having any link to electoral campaigns, including periods between

election campaigns. The EBS, thus, is a colorable exercise of power by the executive

branch to enable the untrammeled funneling of money through masked corporate

structures, making any quid pro quo between political parties and the economically

powerful doyens of the corporate sector undetectable under the EBS's veil of secrecy.

1.3.11 In conclusion, the removal of caps on corporate donations under the Electoral Bond

Scheme (EBS) violates Article 14 of the Constitution, which guarantees the right to

equality and equal protection before the law. By allowing unlimited and anonymous

corporate donations, the EBS creates an uneven playing field, giving disproportionate

influence to wealthy donors and corporations while diminishing the voice and impact

of individual voters. This structural inequality undermines the principles of free and

fair elections, as it skews political representation and policy-making in favor of those

with economic power, thereby contravening the fundamental democratic value of

equal participation for all citizen

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ISSUE 2

Whether the government's justifications for eliminating black money and protecting donor
privacy fail the test of proportionality?

2.1 Proportionality
2.1.1 The Respondents have proffered two justifications for the EBS: first, that by
formalizing the process of political donations, black money will be eliminated
from politics; and secondly, that the EBS protects the donor’s right to privacy.
It is respectfully submitted that both justifications fail the test of
proportionality.
2.1.2 It is well-established that State action that infringes Article 19 must— in order
to constitute a "reasonable restriction" upon the right—pass the four-pronged
test of proportionality: a legitimate State aim, a rational nexus with the aim,
the requirement of necessity, and proportionality stricto sensu (i.e., a balance
between the intensity of the goal and the restriction of the right).
2.2 Black money
2.2.1 With respect to black money, it is respectfully submitted that the fact that
under the EBS financial contributions are now routed through the State Bank
of India (SBI), and therefore have to pass a Know-Your-Customer (KYC)
check, is of no assistance. This process cannot address a donor’s ability to
funnel "black" money through a legitimate company or individual, a risk that
is enhanced by the fact that under the EBS, there is no requirement of keeping
a record of large donations or donors. In other words, the EBS does not tackle
the problem of the legitimacy of the origin of political donations, and
arguably, makes scrutiny even more difficult. Even if the State’s goal is taken
at face value, the means to achieve it fail the second prong of the
proportionality test (rational nexus).
2.2.2 However, even if it is held that the second prong has been satisfied, it is
respectfully submitted that the justification cannot pass muster under the
necessity prong, i.e., the requirement of the "least restrictive measure." This is
because it is evident that the rooting out of black money from the electoral
process does not require donor anonymity. In other words, a strong regulatory
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system of campaign financing can co-exist with a regime of transparency,

where voters are provided the relevant information with respect to the funding
of political candidates. Therefore, depriving voters of this information is not
the "least restrictive alternative," insofar as the goal of the EBS is the rooting
out of black money.
2.3 Donor privacy
2.3.1 With respect to donor privacy, it is respectfully submitted that this justification
fails at the first prong itself. Other than the secret ballot, democracy—and the
process of elections—are quintessentially public acts, which take place in the
public sphere. While there is no compulsion upon any citizen—or corporation
—to participate in the political or electoral process (including through the
means of financial donations), should an individual or corporation choose to
do so, they cannot claim that right on conditions of blanket anonymity. The
argument of unregulated donor privacy, thus, has no place in the context of
participation in the political and electoral process, and is not a "legitimate
State aim."
2.3.2 However, even if it is held that in certain cases, donor privacy might be a
legitimate State aim, it is evident that the EBS fails on the second limb of
proportionality. This is because the privacy it purportedly provides is
asymmetric: information about donations is known to the State Bank of India
(SBI), which is owned by the Union Government and is bound by directions
issued by the Union from time to time under section 18 of the SBI Act, 1955.
There is no section or mechanism that restricts sharing of this information with
the government. Unlike the Census Act, 1948, for example, which restricts the
sharing of information for any purpose other than for the census, there is no
imposition of any restriction on the sharing of this data with the government or
on the use of it for any other purpose. That being the case, donor privacy is
always subject to the Central Government’s broad powers to obtain the
identity of the donors. In other words, the “donor privacy” guaranteed by the
EBS is “privacy except from the central government.”
2.3.3 It is respectfully submitted that insofar as the principle underlying donor
privacy in the electoral context is to safeguard donors from political
persecution or reprisals, the availability of such information to the central
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government—which has exclusive control over the instruments of state

coercion—is entirely irrational and defeats the stated purpose entirely. This is
also manifestly unfair and violative of Article 14 of the Constitution inasmuch
as it privileges one party, i.e., the party ruling at the center, with crucial
electoral information that other parties are not privy to, thereby undermining
the level playing field that the electoral process must guarantee.
2.3.4 Finally, even if it is held that, as far as the goal of donor privacy is concerned,
the EBS passes both the legitimate State aim and rational nexus prongs of the
proportionality standard, it fails the necessity test. To the extent that the
concern around reprisals and political persecution is valid, this can be
addressed on a case-by-case basis, and not through an omnibus guarantee of
donor privacy. For example, in Brown vs Socialist Workers Comm., 459
U.S. 87 (1982), the US Supreme Court noted that disclosure requirements
could be waived where there existed “specific evidence of hostility, threats,
harassment and reprisals.” This determination—made on a case-by-case basis
—is a more proportionate way of addressing the concern. In its existing form,
therefore, EBS evidently fails the proportionality test.
2.3.5 Even assuming that donor privacy is a valid justification for the measure, it is
manifestly arbitrary and overbroad inasmuch as it includes corporate entities
within its protective opacity fold. Individuals have privacy rights flowing from
Article 19 read with Article 21. Corporate persons, as non-citizens, do not
have privacy rights.

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ISSUE 3

Whether the lack of disclosure regarding voluntary contributions to political parties under

the Electoral Bond Scheme and amendments to Sections 29C of the PR Act, 182(3) of the

CG Act, and 13A(b) of the RR Act violates citizens’ right to information under Article

19(1)(a) of the Constitution?

3.1.1 It is respectfully submitted that the voter’s right to relevant information about

the political process, which enables her to cast an informed vote, is guaranteed

by Article 19(1)(a) of the Constitution. Article 19(1)(a) guarantees the

freedom of speech and expression.

3.1.2 Article 19(1)(a):

“19(1)(a): All citizens shall have the right- to freedom of

speech and expression;”

3.1.3 The act of casting a vote which is a central element of the democratic process

has been held to be an expressive act protected under Article 19(1)(a) People’s

Union for Civil Liberties vs Union of India, (2003) 4 SCC 399.

“Communication of emotion and display of talent through

music, painting etc., is also a sort of expression. Having regard
to the comprehensive meaning of phrase 'expression', voting can
be legitimately regarded as a form of expression. Ballot is the
instrument by which the voter expresses his choice between
candidates or in respect to propositions; and his 'vote' is his
choice or election, as expressed by his ballot”

3.1.4 This Hon’ble Court held in the case of Lily Thomas (Ms), Advocate vs

Speaker, Lok Sabha and Ors. (1993) 4 SCC 234

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“Voting is formal expression of will or opinion by the

person entitled to exercise the right on the subject or issue
in question. In Black's Law Dictionary it is explained as, the
expression of one's will, preference, or choice, formally
manifested by a member of a legislative or deliberative
body, or of a constituency or a body of qualified
electors, in regard to the decision to be made by the body as
a whole upon any proposed measure or proceeding or in
passing laws, rules or regulations, or the selection of an
officer or representative'. Right to vote means right to
exercise the right in favour of or against the motion or
resolution. Such a right implies right to remain neutral as
well. 'Neutral' means, 'indifferent', unbiased, impartial, not
engaged on either side'."
3.1.5 S. 29C of People’s Participation Act 1951: Declaration of donation received

by the political parties.

“(1) The treasurer of a political party or any other person

authorised by the political party in this behalf shall, in each
financial year, prepare a report in respect of the following
namely:—
(a) the contribution in excess of twenty thousand rupees received
by such political party from any person in that financial year;
(b) the contribution in excess of twenty thousand rupees received
by such political party from companies other than Government
companies in that financial year.
[Provided that nothing contained in this sub-section shall apply to
the contributions received by way of an electoral bond.
Explanation.––For the purposes of this sub-section, “electoral
bond” means a bond referred to in the Explanation to sub-section
(3) of section 31 of the Reserve Bank of India Act, 1934 (2 of
1934).]

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(2) The report under sub-section (1) shall be in such form as may
be prescribed.
(3) The report for a financial year under sub-section (1) shall be
submitted by the treasurer of a political party or any other person
authorised by the political party in this behalf before the due date
for furnishing a return of its income of that financial year under
section 139 of the Income-tax Act, 1961 (43 of 1961) to the
Election Commission.
(4) Where the treasurer of any political party or any other person
authorised by the political party in this behalf fails to submit a
report under sub-section (3) then, notwithstanding anything
contained in the Income-tax Act, 1961 (43 of 1961), such political
party shall not be entitled to any tax relief under that Act.]”
Section 13A(b): Special provision relating to incomes of political
parties
“In respect of each such voluntary contribution 2 [other than
contribution by way of electoral bond] in excess of 3 [twenty
thousand rupees], such political party keeps and maintains a
record of such contribution and the name and address of the
person who has made such contribution;”

3.1.6 It is humbly submitted that the abovementioned amendment is against the

interest of the voters as specifically exempting the electoral bonds in

Explanation to section 29C(1) of People’s Participation Act 1951 and

amended provisions of Section 13-A(a) of the Revenue

3.1.7 Regulation Act, 1961 (RR Act).defeats the very possibility of having a free

and fair by infusing transparency within the election process and assuring that

the little man is on the same pedestal as his wealthier compatriot.

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3.1.8 Counsels for petitioners bring to Hon’ble Court’s notice the audit report of the

Association for Democratic Rights 2022-23 as per the figure provided below 9

Electoral Bonds have become the most favoured mode of income for political

parties as its shrouded secrecy and anonymity has made it a better prospect

than traditional methods of contribution. More than 62% of the total income of

seven National Parties came from Donations through Electoral Bonds (Rs

2993.826 cr), wherein identity of the donor is not disclosed to the public. Of

the Regional parties that have submitted their audit reports, 14 Regional

Parties (TRS, TDP, YSRC, BJD, DMK, SHS, AAP, JDU, SP, JDS, SAD,

AIADMK, RJD & JMM) have declared receiving donations through Electoral

Bonds worth Rs 447.498 cr.

3.1.9 The Petitioner respectfully submits that the disproportionate influence of

corporate donations on national political parties necessitates the

9
Association for Democratic Reforms, Updated Analysis of Income and Expenditure of National Political
Parties for FY 2020-21 (2021),
https://adrindia.org/sites/default/files/Updated_Analysis_Of_Income_And_Expenditure_Of_National_Political_
Parties_For_Fy_2020-21_English.pdf.
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implementation of stringent transparency measures to preserve the democratic

integrity of the electoral process and the impugned Electoral Bonds Scheme

only contributes to the degradation of this imperative transparency.

3.1.10 According to the Association for Democratic Reforms' Analysis of Donations

Received by National Political Parties – FY 2022-23, national political parties

received 3318 donations from corporate/business sectors totalling Rs 680.495

crores, constituting 80.017% of total donations. Conversely, 8567 individual

donors contributed only Rs 166.621 crores, accounting for 19.592% of total

donations. The below mentioned figure shows the breakup of sources of

donations available in the public domain.10

10
Association for Democratic Reforms, *Analysis of Donations Above Rs 20,000 Received by National Political
Parties – FY 2022-23* (2023), https://adrindia.org/content/analysis-donations-above-rs-20000-received-
national-political-parties-fy-2022-23-0.
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3.1.11 The Petitioners humbly submit data reveals an overwhelming dominance of

corporate donations, which can lead to undue influence on political decision-

making and policies, potentially skewing them in favour of corporate interests

over public welfare. This data is incomplete without the data kept hidden from

the public of the sources of electoral bonds painting a more transparent picture

for the benefit of the voters. Transparency in political donations is essential for

maintaining public trust in the democratic process. Voters must have clear

visibility into the sources of party funding to make informed electoral choices.

For the aforementioned reasons, the Petitioner respectfully submits that

increased transparency in political donations is imperative to safeguard the

democratic framework of our nation.

3.1.12 As this Hon’ble Court has held on multiple occasions, the protection of a

specific, enumerated fundamental right under the Constitution entails the

protection of ancillary rights, without which the original right would be

meaningless, or redundant.

3.1.13 Following this logic, in Union of India vs Association for Democratic

Reforms, (2002) 5 SCC 294, this Hon’ble Court held that

“There is no reason to hold that freedom of speech and

expression would not cover a right to get material information
with regard to a candidate who is contesting elections for a
post which is of utmost importance in the country.”

3.1.14 Specifically, this Hon’ble Court went on to hold that

“Casting of a vote by a misinformed and non-informed voter

or a voter having one-sided information only is bound to affect
democracy seriously.”

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3.1.15 On this basis, in Association for Democratic Reforms, supra, this Hon’ble

Court held that in order for voters to exercise an informed decision, electoral

candidates must disclose their assets, educational qualifications, and

involvement in criminal cases.

3.1.16 It is respectfully submitted that this proposition has been an established part of

Indian constitutional jurisprudence right from the origins of the Constitution.

In Romesh Thapar vs State of Madras, 1950 SCR 594, the first Article

19(1)(a) case to be decided by this Hon’ble Court, it was clearly articulated

that

“The public interest in freedom of discussion stems from the

requirement that members of democratic society should be
sufficiently informed that they may influence intelligently the
decisions which may affect themselves.”

3.1.17 Likewise, in PUCL vs Union of India, supra, this Hon’ble Court held that

“there can be little doubt that exposure to the public gaze and

scrutiny is one of the surest means to cleanse our democratic

governing system and to have competent legislatures.”

3.1.18 As held by Shah, J. People’s Union of Civil Liberties (PUCL) v. Union of

India (2003) 2 S.C.R. 1136

“(D) The contention that as there is no specific fundamental right

conferred on a voter by any statutory provision to know the
antecedents of a candidate, the directions given by this Court are
against the statutory provisions is, on the face of it, without any
substance. In an election petition challenging the validity of an
election of a particular candidate, the statutory provisions would
govern respective rights of the parties. However, voters’
fundamental right to know the antecedents of a candidate is
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independent of statutory rights under the election law. A voter is

first citizen of this country and apart from statutory rights, he is
having fundamental rights conferred by the Constitution.
Members of a democratic society should be sufficiently informed
so that they may cast their votes intelligently in favour of persons
who are to govern them. Right to vote would be meaningless
unless the citizens are well informed about the antecedents of a
candidate. There can be little doubt that exposure to public gaze
and scrutiny is one of the surest means to cleanse our democratic
governing system and to have competent legislatures.
(E) It is established that fundamental rights themselves have no
fixed content, most of them are empty vessels into which each
generation must pour its content in the light of its experience. The
attempt of the Court should be to expand the reach and ambit of
the fundamental rights by process of judicial interpretation.
During the last more than half a decade, it has been so done by
this Court consistently. There cannot be any distinction between
the fundamental rights mentioned in Chapter III of the
Constitution and the declaration of such rights on the basis of the
judgments rendered by this Court.”
3.1.19 Another decision of the hon’ble court that has a bearing on the matter at hand

is the decision in the case of Jyoti Basu v. Debi Ghosal [(1982) 1 SCC 691]

“(1) Securing information on the basic details concerning

the candidates contesting for elections to Parliament or the
State Legislature promotes freedom of expression and
therefore the right to information forms an integral part of
Article 19(1)(a). This right to information is, however,
qualitatively different from the right to get information
about public affairs or the right to receive information
through the press and electronic media, though, to a certain
extent, there may be overlapping.

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(2) The right to vote at the elections to the House of the

People or Legislative Assembly is a constitutional right but
not merely a statutory right; freedom of voting as distinct
from right to vote is a facet of the fundamental right
enshrined in Article 19(1)(a). The casting of vote in favour
of one or the other candidate marks the accomplishment of
freedom of expression of the voter.”
3.1.20 It is respectfully submitted that the legal proposition (i.e., that voters have a

fundamental right to receive relevant information about electoral candidates),

along with the principle that underlies it (that an informed vote is essential to

the functioning of democracy), establishes beyond cavil that information

pertaining to the source of political party and candidate funding falls squarely

within the ambit of Article 19(1)(a), as interpreted by this Hon’ble Court.

3.1.21 The rationale for this was articulated by the Supreme Court of the United

States in the landmark campaign funding case of Buckley vs Valeo, 424 U.S.

1 (1976), in terms that are squarely applicable to the present situation:

disclosure requirements

“provide the electorate with information as to where political

campaign money comes from and how it is spent by the
candidate in order to aid the voters in evaluating those who
seek federal office.”
3.1.22 The link between political funding and necessary information required to

evaluate electoral candidates, thus, is clearly established. In plain language,

the knowledge that a candidate for elected office might be likely to represent,

or predominantly represent, the interests of his or her donors is relevant and

necessary information for voters to decide whether, and to what extent, the

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said candidate might represent their interests especially when such interests

are in conflict

3.1.23 In the US case of Nixon vs Shrink Missouri Government PAC, 528 U.S.

377 (2000) the court held the following

“It could not have, given the reality that donations “make a
significant contribution to freedom of expression by enhancing
the ability of candidates to present, and the public to receive,
information necessary for the effective operation of the
democratic process.”

3.1.24 It is respectfully submitted that empirical research bears this out. It has been

seen that voters who are informed about a candidate’s source of political

funding are able to exercise their vote on par with voters who have actively

researched the policy positions of a particular candidate. 11 Put simply,

information about a candidate’s source of political funding is an invaluable aid

for a voter to discern their likely stance on issues of policy (especially if the

voter lacks the time - or the resources - to engage in a detailed study of the

said candidate). On the flip side, denying this information to voters makes it

impossible for the latter to understand when their elected representatives might

be acting in favour of large campaign donors.

3.1.25 It is therefore submitted that the EBS, in its shielding of the source of political

funding from the voter, violates Article 19(1)(a) of the Constitution.

11
Elizabeth Garrett, “The Future of Campaign Finance Reform Laws in the Courts and in Congress,” University
of Chicago Public Law & Legal Theory Working Paper No. 19 (2001).
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 PRAYER

PRAYER

Wherefore, in the light of the facts of the case, issues raised, arguments advanced and
authorities cited, this Hon’ble court may be pleased to:
1. Issue a writ of Mandamus or any other appropriate writ declaring:

a. Section 135 of the Finance Act 2017 and the corresponding amendment carried
out in Section 31 of the Reserve Bank of India Act, 1934,
b. Section 137 of the Finance Act, 2017, and the corresponding amendment carried
out in Section 29C of the Representation of the People Act, 1951
c. Section 11 of the Finance Act, 2017 and the corresponding amendment carried
out in Section 13A, the Income Tax Act, 1961
d. Section 154 of the Finance Act, 2017 and the corresponding amendment carried
out in Section 182 of the Companies Act, 2013 and,
e. Section 236 of Finance Act, 2016 and the corresponding amendment carriedout in
Section 2(1)(j) of the Foreign Regulations Contribution Act, 2010

as being unconstitutional, illegal and void.

2. Issue a writ of mandamus or any other appropriate writ directing that no political parties
would accept any donation in cash

AND/OR

Pass any other order that it deems fit in the interest of Justice, Equity and Good Conscience.

And for this, the Petitioners shall as in duty bound, forever humbly pray.
Counsels for the Petitioners

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