1.

Whether the finance Acts of 2016 and 2017 incorporating the provisions
regarding electoral bonds scheme are illegally passed as money bill bypassing the
adequate representation and scrutiny by Rajya Sabha?

Before this esteemed court, it is respectfully submitted that the categorization of the Finance
Acts of 2016 and 2017 as money bills is both incorrect and unconstitutional. Such
classification falls outside the scope delineated in Articles 109 and 110 of the Constitution. As
elucidated in the case of Mr. Jairam Ramesh vs. Union of India and Ors, a money bill is
defined as one containing provision solely addressing matters enumerated under Article
110(1) (a) to (g). Thus, the essence of a money bill is confined to these specified areas and
cannot encompass additional subjects within its purview.

(A). The introduction of the amendment in Finance act 2017 unconstitutional and
subject to judicial review.

I). It is most humbly submitted before this hon'ble court that the introduction of the Finance
Act 2017 as a money bill under article 110(1) of the Constitution of Aryavrata is
unconstitutional as under article 110(1) only those bills can be introduced as money bill
which deal with

● taxation,

● financial obligations of the government,

● custody and

● appropriation of money from the Consolidated Fund of India,

● declaration of an expenditure to be charged under the Consolidated Fund of India,

● receipt of money on account of Consolidated Fund of India or the public account of

India

● such matters which are incidental, but in an instance case the presentation of Finance
act as a money bill does not cover any such provision which is mentioned under
Article 109 and 110 of the Aryavrata Constitution. It is merely a colourable exercise
of powers to bypass the Upper House, which is impressible and constitutes fraud on
the Constitution.
ii
The current scenario bears semblance to the abuse of ordinance-making authority, an act
previously censured by this Hon’ble Court in the case of Krishna Kumar Singh v. State of
Bihar, deeming it a violation of constitutional integrity. Similarly, the deliberate invocation
of the special procedures outlined in Articles 109 and 110, whether to bypass Upper House
approval or otherwise, constitutes an affront to constitutional supremacy. As per Article
117(1), a Bill addressing the aforementioned matters, along with any extraneous issue,
qualifies as a Financial Bill. Hence, the Finance Bill of 2017 may be designated a Money Bill
if it exclusively pertains to the specified subjects, failing which it would rightly be classified
as a Financial Bill.

(B).The introduction of amendment bill in Finance act 2017 money bill is "Irregularity
of Procedure" and "Substantive illegality" and Subject to judicial review.

i. "Irregularity of Procedure" and "Substantive illegality".

It is most humbly submitted before this hon'ble court that the introduction of the Finance Act
as a money bill is irregularity of procedure and substantive illegality. In matter of S.R
Bomaniand Raja Ramapal, the Hon'ble Justice Chandrachud and Justice Bhushan remarked
that there is a clear difference between the “Irregularity of Procedure" and "Substantive
illegality".When a bill does not fulfil the essential Constitutional conditions under Art.110(1),
the said requirement cannot evaporate on certification by speaker. Thus, the decision of
speaker certifying the bill as money bill is not only a matter of procedure and if any illegality
has occurred in the decision and the decision is clearly in the breach of the constitutional
provisions, the decision is subject to judicial review. In the present case the passing of finance
act 2017 as a money bill is irregularity of procedure and substantive illegality. The sole
purpose of this was to bypass the upper house of the parliament and the certification by
speaker of the house of people as a money bill is breach of constitution.According to the
constitution of Aryavrata, all the bills are required to be passed by both the houses of
parliament. The exception for the same is given in case of money bills and in the case of joint
sitting of both houses.

Thus, the decision of the speaker certifying the bill as money bill is not only a matter of
procedure and in the event, any illegality has occurred in the decision and the decision is
clearly in breach of constitutional provision, the decision is subject to judicial review.
ii. Threat to Bicameralism Structure of the government.

Bearing Judicial review of the Lok Sabha speakers condition would render a certification
of a bill as a money bill immune from scrutiny, even where the bill does not deal only
with the provisions set out in the Art. 110 (1) but the decision of the speaker of Lok
Sabha as to whether a bill is a money bill or not directly impacts on the constitutional
role discharged by the Rajya Sabha. The Lok Sabha alone does not represent Parliament.
The Aryavrata Parliament is Bicameral. The Constitution gives a special role for the
Rajya Sabha when there is no single party rule in Parliament, government that lack upper
house majority support find it difficult to pass the bills the institution of a second
chamber generates legislative advantage only “if the chambers differ significantly from
one another.” In the case in hand the Respondent presented the Finance Act as a money
bill with the intention to bypass the upper house of the parliament which is equal to fraud
to the constitution. So it is a threat to Bicameral structure of the Government.

Bicameralism, when entrenched as a principle in a constitutional democracy, acts as a

check against abuse of power by Constitutional Means or its use in an oppressive
manner. As a part of constitutional principle of division of power, Bicameralism is
mainly a safeguard against the abuse of the constitutional process. Bicameral national
Parliament can hold the government accountable and can check or restrain the misuse of
government power.

As per the study by IndiaSpend, Money bill has been Lok Sabha’s most favoured mode
of transacting legislative business in the preceding three tenures of the house. As
compared to Ordinary bills, Money bills were 21% more in number between 2004 and
2018.

iii. The Introduction of Amendment bill in Finance act 2017 as a money bill violates the
Basic Structure of the Constitution.

Under Art 110 of the constitution, the provisions are clear and in its normal form, vests
no uncontrolled discretion in the Speaker.The provision requires that a bill confirms to
the criteria prescribed in it for it to be classified as a money bill.Where a bill intends to
legislate on matters beyond the features delineated in Art 110, it must be treated as an
ordinary bill.Any violation of this mandate needs to be checkedas a substantive
constitutional error. Where a speaker’s choice is grossly illegal, or disregards basic
constitutional mandates, this hon’ble court has the power to review such parliamentary
pronouncements.Where a speaker's choice is grossly illegal, or disregards basic
Constitutional mandates, or worse still, where the Speaker's decision is riddled with
perversities, this Hon'ble Court has the power to review such parliamentary
pronouncements.

a). It defeats the supremacy of the Constitution.

In the landmark case of I. R. Coelho vs. State of Tamil Nadu, a Nine-Judge bench
under the leadership of Y.K. Sabharwal, C.J.I., emphasized that the authority to enact
laws and adjudicate the legality of their limitations should not be concentrated within a
single organ. The supremacy of the Constitution necessitates adherence to its provisions
by all Constitutional bodies. Furthermore, it calls for a mechanism to scrutinize the
validity of legislative acts, which is entrusted to an independent organ—the judiciary.
The judiciary bears the responsibility of assessing the constitutionality of all laws. The
absence of clear guidelines for exercising such power undermines constitutional control,
leading to the erosion of constitutional supremacy and the establishment of parliamentary
dominance. It also diminishes the efficacy of judicial review in determining the
constitutional validity of such exercises of power.

ii). It violates the doctrine of federalism and separation of power.

The subject amendments by way of Money Bills exclude Rajya Sabha - the Upper
House- from the legislative process and this causes a serious dearth into the concept of
Federalism which again is a basic feature of our Constitution.

In Adhaar judgement- K.S Puttaswamy v Union of India

 ,what’s whether the Aadhaar (Targeted Delivery of Financial and other subsidies Benefits
and Services)Act, 2016 was rightly passed as a “money bill”.By a majority, it was held
that it was indeed a money bill while the dissenting judgement of Chandrachud J. held to
be contrary. Justice Chandrachud observed that introducing the Aadhaar act as a money
bill bypass the Constitutional authority of Rajya Sabha. The passage of the Aadhaar act
as a money bill is an abuse of Constitutional process. It deprived the Rajya Sabha from
altering the provisions of the bill by carrying out amendments. On the touchstone of the
provision of Article 110, the bill could not have been certified as a money bill.

The Act thus fails to qualify as a money bill under article 110 of the Constitution. Since
the act was passed as a money bill, even though it does not qualify to be so, the passage
of the act is an illegality. The Aadhaar act is in violation of Article 110 and therefore is
liable to be declared unconstitutional.

iv. The amendments made in Representation of People’s Act, 1951, Foreign

Contribution Regulation Act, 2010. Income Tax Act, 1961, and The Companies Act,
2013 was unconstitutional.

In the finance act 2016, the definition of ‘foreign source’ , provided in Foreign Contribution
Regulation Act, 2010 was amended. This amendment allowed a company, having a nominal
value of share capital within the limits specified for foreign investment under the Foreign
Exchange Management Act 1999, not to be considered as a foreign source. One of the major
implications of this modification is that the change in the definition allows foreign
corporations to donate not only uncapped but also anonymous donations to political parties in
Aryavrat. The finance act 2016 has amended the FCRA Act 2010 to allow foreign companies
with subsidies in India to fund political parties in India, effectively, exposing the Indian
politics and democracy to international lobbyists who may want to further their agenda.
These amendments pose a serious danger to the autonomy of the country and are bound to
adversely affect electoral transparency, encourage corrupt practices in politics and have made
the unholy nexus between politics and corporate houses more opaque and deemed to be
misused by the special interest groups and corporate lobbyists.

Prior to the Finance Act of 2017, section 239-A of Companies Act 1956 provided several
checks upon corporate donations to political parties. Firstly, there was a cap on the
contributions of 7.5% of the net annual profits in the last preceding three years cap limit. Also
the donor company should have been in existence for more than three years and contributions
should only be made through a resolution passed by the board of directors authorising the
contribution for the particular purpose. And the company was also required to disclose in its
profit and loss account any amount contributed by it to any political party during the financial
year. Post the amendment of the 2017 the upper cap limit on corporate funding was removed.
Names of political parties to which donations are made were all exempted from disclosure.

Before the 2017 amendment, specific conditions existed for political parties to claim income
exemption from financial contributions. They were obligated to maintain comprehensive
records, including books and accounts detailing donations and contributions exceeding Rs.
20,000. These records had to undergo auditing by an authorized accountant and be submitted
annually to the Election Commission of India.However, the 2017 amendment eliminated the
requirement to maintain records of contributions with detailed donor information such as
name, address, and other particulars, especially if the donation was received through electoral
bonds. Additionally, donations exceeding Rs. 2,000 could only be accepted via cheque, bank
draft, ECS, or electoral bonds.

Prior to the amendment, political parties were obliged to declare all the specifics of the
contributions received, including individualized donor/contributor information, and submit
this report to the Election Commission of India (ECI). Non-compliance with this requirement
rendered the claim for exemption under the Income Tax Act invalid.

Conversely, the 2017 amendment relieved political parties of the duty to disclose details of
contributions received via electoral bonds to the Election Commission of India, thereby
exempting them from this obligation.

Aspect Before 2017 Amendment Current Situation

 Required for donations exceeding Rs.
20,000 to the Election Commissioner Exempted for donations made through electoral
Disclosure of under Section 29C of the bonds under the amended Section 29C of the
donor's name Representation of the People Act, 1951. Representation of the People Act, 1951.
Donations made through electoral bonds
Donations exceeding Rs. 20,000 exempted from disclosure and any cap on the
required disclosure of donor's name and amount, as well as exempted from requiring
Tax-deductible address under Section 13A of the donor details under the amended Section 13A of
donations Income Tax Act, 1961. the Income Tax Act, 1961.
Cash donation Limited to Rs. 2,000 under Section 13A Cash donations remain limited to Rs. 2,000
limit of the Income Tax Act, 1961. under the same section.
Contributions from foreign companies
owning a majority stake in an Indian
Foreign company allowed under Section 2(j)(vi)
company of the Foreign Contribution Continues to allow contributions from foreign
contributions (Regulation) Act, 2010. companies under the same section.

Removed the clause imposing a cap on the

Cap on Limited to 7.5% of average net profit amount that can be donated by companies under
donations from for the last 3 years under Section 182(1) the amended Section 182(1) of the Companies
companies of the Companies Act, 2013. Act, 2013.

Loss-making companies now allowed to donate

Donation by Not specifically addressed; implied that bonds without any cap on the amount under the
loss-making loss-making companies would still be amended Section 182(1) of the Companies Act,
companies subject to the cap on donations. 2013.
Before 2017, there was more The current situation allows for greater
transparency and accountability with anonymity in political donations, as electoral
regards to political donations, as bonds enable undisclosed donations without any
disclosure of donor details and caps on cap, while removing caps on corporate
donations ensured some level of donations further complicates transparency and
Overall Impact oversight. accountability.
2. Whether it is a fundamental right of every citizen to know the sources of funding
to the political parties, if yes, does the electoral bonds scheme violates the same?

It is most respectfully submitted before the Hon’ble Supreme Court of Aryavrata that
the Electoral Bond Scheme is ultra vires of the Constitution of Aryavrata. According
to the facts and circumstance of the case the fundamental right of citizens to know the
sources of funding of political parties is being violated. Thus, the electoral bond
scheme violates Article 19(1)(a).

i. The electoral bond scheme is violative of Art. 19(1)(a)

Freedom of speech and expression conferred by Art.19(1)(a) is known to be the

cornerstone of a democratic Government. “Then right to knowledge and
information is a universally conceded natural right stemming from the conception
of democracy” and has emanated from the fundamental right of speech and
expression ingrained within Art.19(1)(a).

Even before the coming into existence of a legislation to ensure the Right to
Information, this court has been instrumental in providing the same to the public.
The constitutional guarantee of the Freedom of Speech was always more inclined
towards the benefit of the people in contrast to that of the press and the right of all
citizens to read and be informed within its purview.

In the instant case, the scheme along with the impugned amendments have a
delirious impact on the citizens Right to know.

a. There lies a violation of the right to informed voting

“Fundamental Rights do not have fixed contents but are made vibrant by
interpretation to create a truly Republic Democratic Society.”The Doctrine of
the Informed Vote find its antecedents in other Penumbral Rights mentioned
under Art.19(1)(a), primarily the Right to Know and the Freedom to Vote.

In State of Uttar Pradesh v. Raj Narain

 , the court reaffirmed that the people of this country have a Right to Know
every Public Act, everything that is done in a public way by their public
functionaries. They are entitled to know the particulars of every public
transaction in all its bearing. This principle was further elucidated in SP
Gupta v. Union of India, where justice PN Bhagwati observed that the
constitution guarantees the “Right to Know” which is necessary to secure
“true facts” about the administration of the country. The court recognised that
effective participation in democratic governance is not just a means to an end
but is an end in itself. A crucial aspect of the expansion of the right to
information is that right to information is not restricted to information about
state affairs. It includes information which would be necessary to further
participatory democracy in other forms and is not restricted to information
about the functioning of public officials.

In Union of India v. Association for Democratic reforms, the court traced

the right of voters to have information about the antecedents including the
criminal past, of candidates contesting elections, to Art.19(1)(a) of the
constitution. The court held that voters have a right to be sufficiently
informed about candidates so as to enable them to exercise their democratic
will through elections in an intelligent manner.

b. The Essentiality of Information about Political Funding for the effective

exercise of the choice of voting

In the case of PUCL v. Union of India, the court held that the right to
privacy would not be infringed because information about whether a
candidate is involved in a criminal case is a matter of public record. The
voters have a right to the disclosure of information which is “Essential” for
choosing the candidate for whom a vote should be cast.

In the present case the source of funding of political parties will be covered
under “Essential” information to cast their votes because the Candidates
elected to the government represent the ideology of the respective political
 party, thus influencing the public interest.

The constitution guarantees political equality by focusing on the ‘Elector’ and

the ‘Elected’. The constitution mandates that the value of each vote is equal.
This guarantee ensures formal political equality where every person’s vote is
accorded equal weightage. The constitution ensures that members of socially
marginalised groups are not excluded from the political process. This
guarantee ensures (a) Equality in representation and (b) Equality in influence
over Political decisions.

In a politically equal society, the citizens must have an equal voice to

influence the political process. There is a close association of money and
politics. The influence of money over electoral politics is not limited to its
impact over electoral outcomes it can also spill over to governmental
decisions. The money which is donated to political parties is not used by the
political parties only for the purposes of electoral campaigns even the money
contributed to political parties throughout the year can be spent for reasons
other than just election campaigning. So the information on political funding
is an essential part of the Right to Know under Art. 19(1)(a).

c. Whether the infringement of the Right to Information of the voter is justified?

In the case of Modern dental college & Research centre v. State of

Madhya Pradesh, the apex court has laid down the proportionality standard
to determine if the violation of the fundamental right is justified. The
proportionality standard is as follows-

➢ The measure restricting the right must have a legitimate goal.

➢ The measure must be a suitable means for furthering the goal.

➢ The measure must be least restrictive and equally effective.

➢ The measure must not have a disproportionate impact on the right

holder.
The then finance minister, Mr. Ram Jetli defended the electoral bond scheme by
stating the objective of the scheme as:

● An attempt was made in the past to incentivize the donations to political

parties through banking channels. Both the donor and the done were
granted exemption from payment of tax if accounts of contributions were
maintained and returns were filed. However, this situation had only
marginally improved the parties continued to receive funds through
anonymous sources.

● Donors have been reluctant in donating through the banking channel

because the disclosure of the donor identity would entail adverse
consequences.

Thus the main purpose of the scheme was to curb black money in
electoral funding and protecting donor privacy.

In the present case the amendments were made in Foreign Contribution

Regulation Act, 2010 and Companies Act, 2013. By way of these
amendments, foreign corporations could donate uncapped but also
anonymous donations to political parties in Aryavrata. Post the
amendments the upper cap limit on political funding was removed and
names of political parties to which donations are made were all exempted
from disclosure.

The changes brought to Income Tax Act eliminated the requirement to

maintain records of contributions with detailed donor information such as
name, address and other particulars, especially if the donation was
received through electoral bonds. Thus, the goal of curbing black money
is not getting fulfilled.

In Asha Ranjan v. State of Bihar

 the court held that when there is a conflict between two individuals with
respect to their right, the facts and circumstances must be weighed “on
the scale of constitutional norms and sensibility and larger public
interest”. Thus the present scheme in the name of protecting privacy of
citizens is violating the fundamental right of citizens under Art.19 of the
constitution. The Right to Know about the political funding will have an
edge over the Right to Privacy because it is in the larger public interest.

Thus, the present scheme is not a suitable means to achieve the legitimate
goal.

Electoral Bond scheme does not the fulfil the least restrictive means test
the scheme is not the only means for curbing black money in Electoral
finance there are other alternatives which substantially fulfil the purpose.

An Electoral Trust is formed only for collecting political contributions

from donors. An Electoral trust can contribute to more than one party. In
this manner the purpose of curbing black money in electoral financing
will be met. At the same time there would be no fear of consequences
from political opponents because the information as to which political
parties were made is not disclosed.

So, for contributions below twenty thousand rupees, contributions

through other means of electronic, is the least restrictive means. For
contributions above twenty thousand rupees, contributions through
electoral trust is the least restrictive means. Thus, Electoral Bond scheme
is not the least restrictive means to achieve the purpose of curbing black
money in electoral process and there are other alternatives which impact
the right to information minimally when compared to the impact of
Electoral Bonds on the right to information.

Thus the test of proportionality given by the apex court is not met so
there is no reason to restrict the fundamental right of citizens to know the
sources of political funding.

ii. TRAnsparency in the electoral Process has been compromised.

 The transparency during every stage of election is a significant requisite to aid
democracy this would also include the funds received as political donations along
with the details of the donor. The principals of accountability and democracy
must be extended to political parties by introducing practices of internal
democracy and financial transparency. The formulation of the scheme has made
the system more impervious by eliminating any disclosure requirements either on
the part of the individual donors or the companies in so far as the books of
accounts and yearly reports of the contribution of the political parties do not have
to reveal the identities of the contributors donating through electoral bonds to the
income tax department and the Election Commission so now it is impossible for
election commission to verify whether a party has received a donation either from
a government company or from a foreign source.

The scheme also seeks to promulgate the unholy quid-pro-quo nexus between
donors and political parties. There is a practice prevalent among the political
fraternity, in exchange for the money contributed by the contributors, the political
party or their candidate, once elected votes for laws favourable to those who
make major contributions. The problems with political funding are noit limited to
bribery but have far reaching consequences like politicians being too compliant
with the wishes of large contributors.

iii. There lies a violation of the larger public interest involved.

The right to information can be traced not only to the RTI Act, but also to Art.
19(1)(a). The RTI Act neither defines the expression ‘Larger Public Interest’ nor
lays down any parameters to be followed by the deciding authority in interpreting
it. “A larger Public Interest would be satisfied if the disclosure relates to a matter
of public concern. A matter of Public Concern includes matters which are
integral to free speech and expression and entitle everyone to seek the truth and
comment fairly about.”

In a multi Party democracy like that of Aryavrata, political parties perform

significant public functions. As non state actors, they act as pressure groups
influencing governmental policies, which directly affect the lives of billions,
thereby implying that public interest operates against political parties too and
 citizens have a right to know about their activities, including the sources of their
funding.

iv. Beyond the ambit of reasonable restrictions enunciated by Art.19(2)

According to the Art.19(2) of the constitution, the Fundamental right of freedom

of speech and expression can only be curtailed on the ground of (a) Interest of
Sovereignty and integrity of India or, (b) The security of the state or (c) Friendly
Relations with Foreign states, or (d) Public Order or (e) decency or Morality or
(e) contempt of court or (f) Defamation or incitement to an offence.

The scheme along with the impugned amendments cannot be protected under the
veil of reasonable restrictions given u/a 19(2) because the confidentiality claimed
through various amendments has no repercussions on the grounds mentioned
above. Making the political cclass more unanswerable, unaccountable and
causing of annoyance, inconvenience, obstruction to the citizens at large by
withholding crucial public information regarding electoral funding are outside the
purview of Art. 19(2).

Thus, the scheme is not protected u/a 19(2).

3. Whether matters concerning the modus operandi of political funding amount to

policy decisions within the domain of government and free from judicial scrutiny?

The counsel humbly submits that the modus operandi of political parties do not come under
policy decisions of government. Even when the vice versa of the same is assumed even then
the policy decision should be in harmony with the constitution. In the present case it is
evident that the scheme is in conflict with the provisions of the constitution.

i. Does modus operandi of political parties comes under policy decision of

government?

The contention of the government that the court should refrain from interfering in
the policy of the government because it is an economic legislation. The courts
before classifying the policy underlying a legislation as economic policy must
undertake an analysis of the true nature of the law. The amendments in question
 can be clubbed into two heads:

● Mandating non-disclosure of information on electoral financing.

● Provisions permitting unlimited corporate funding to political parties.

Both these amendments relate to the electoral process.

From the correspondence between the ministry of finance and RBI on the apprehensions of
the bonds which can be used as an alternative currency that the bonds were introduced only to
curb black money in the Electoral process and protect informational privacy of financial
contributors to political parties. The union of Aryavrata has itself classified the amendments
as an “Electoral Reform”. Thus, the amendments do not deal with economic policy and are
within the ambit of judicial review.

ii. Violation of Art.14

Art.14 entitles every individual “Equality before Law and Equal Protection of
Laws”. “Equality is a dynamic concept with many aspects and dimensions and it
cannot be “cribbed, cabined and confined” within traditional and doctrinaire
limits. From a positivist point of view, equality is the opposite of
arbitrariness”.An action would be manifestly arbitrary if it is excessive and
disproportionate.The scheme along with the impugned amendments are violative
of Art.14 under the doctrine of manifest arbitrariness, which shall be proved in a
twofold manner: [a]. they fail to satisfy the two fold test of reasonable
classification; and [b]. they are arbitrary and fail the test of proportionality.

a. They fail to satisfy the twofold test of reasonable classification

Art.14 of the constitution prohibits class legislation but not classification of

persons, objects and transactions by the legislature for achieving specific ends
a classification to be reasonable must pass the twin test which includes:

First, the classification must have an intelligible differentia upon which the
things or persons are grouped together and others are left out of the group and
Second, the differentia must Have a rational relation with the object sort to be
achieved. The term “Intelligible differentia” is construed as a difference that
has the capability of being understood. It contains all the reasons or factors
due to which the classification is made.

While making any classification u/a 14, “Equals should not be treated as un-
equals and un-Equals should not be treated as Equals. Equals should be
treated as Equals”.

In the instant case, only those political parties which are registered under
section 29A of Representation of Peoples Act and have secured minimum 1%
votes of total votes polled in the last general elections to the Lok sabha or the
Legislative assembly are entitled to secure donations through Electoral Bonds.
The nature of the provision was also highlighted by the election commission
as being discriminatory. This provision without any reasonable differentia
side-lines the parties with less than 1% votes and neglects independent
candidates and the parties that have been newly formed and have never
contested the elections before. This disparity is violative of Art.14 as it renders
them in eligible to gain any donations via the electoral bonds, thus severely
disadvantaging them when it comes to funding an electoral campaign.
Therefore, the classification created by the scheme is arbitrary and
unreasonable.

The differentia which serves as the basis of the classification and the object of
the act are two different things. It is necessary that there must be some nexus
between them.

The classification created by the scheme has no rational nexus with the object
of the scheme and the impugned amendments, which is to curb black money
and corruption from the Electoral Funding process and to make it transparent
because in that scenario the political parties and independent candidates may
receive unaccounted money through cash donations which further kills the
intention with which the scheme was initiated.

Also, since Electoral Bonds can be issued in small denominations, which can
be purchased by not so effluent persons to donate to newly formed or small
political parties or independent candidates, there doesn’t seem to lie any
concrete reasoning for creating the classification, especially when in a
 populated country Aryavrata where even 1% of votes is a significant number
and the expenditure for getting a bond issued is borne by the donor himself.

iii. Role of Judiciary in Reviewing Policy Decisions

Faith reposed on the judiciary by the people of Aryavarta, stands on a much higher
pedestial then on any other organ of the state as the ultimate guardian of the rights
of the people of this populous land, the courts have found themselves at the helm
of affairs, in dealing with the state machinery judicial review brings realisation to
the hopes and aspirations of millions. As proved above that the electoral bond
scheme is not a policy decision but even if for once we consider this matter to be a
policy decision the power to review the same isn’t outside the purview of the
hon’ble court. In State of M.P. v. Nandlal Jaiswal the court in considering the
validity of policy decision relating to economic matters observed that “But, while
considering the applicability of Art.14 in such a case, we must bear in mind that,
having regard to the nature of the trade or business, the court would be slow to
interfere with the policy laid down by the state government for grant of licenses
for manufacture and sale of liquor. Moreover, the grant of licenses for
manufacture and sale of liquor would essentially be a matter of economic policy
where the court would hesitate to intervene and strike down what the state
government has done, unless it appears to be plainly arbitrary, irrational or mala
fide.”

In the case of DDA v. Joint Action Committee, Allottee of SFS Flats, the Supreme
court held as following “an Executive order termed as a policy decision is not
beyond the pale of Judicial review. Whereas the superior courts may not interfere
with the nitty-gritty of the policy, or substitute one by the other but it will not be
correct to contend that the court shall lay its judicial hands off, when a plea is
raised that the impugned decision is a policy decision. Interference therewith on
the part of the superior court would not be without jurisdiction as it is subject to
judicial review”.

The best example for positive judicial review in 2021 is the central government
 deciding to change its Covid vaccination policy after the supreme court
highlighted several flaws in it. A bench comprising Justice D.Y. Chandrachud,
Justice L. Nageswara Rao and Justice S. RavindraBhat made Prima Facie
observations to the fact that the dual pricing policy for centre and states and the
exclusion of the age group 18-44 years from free vaccines were arbitrary and
discriminatory. The supreme court said that the vaccine policy was “detrimental to
the right to life and health” and that it needs a rethink to “make it conform to the
mandate of Art.14 and 21 of the constitution of India.

In the case of K.Narayanan v. State of Karnataka the court held that a policy
decision taken by the government is not liable to interference unless the court is
satisfied that the rule making authority has acted arbitrarily or in violation of the
fundamental right guaranteed under Art.14 and 16.

In the case of Narmada BachaoAndolan v. Union of India it was held that it is now
well settled that the courts, in the exercise of their jurisdiction, will not transgress
into the field of policy decision. The court, no doubt, has a duty to see that in the
undertaking of a decision, no law is violated and people’s fundamental rights are
not transgressed upon except to the extent permissible under the constitution.

4. Whether the electoral bonds scheme tampers with and distorts the principles of fair
elections in the democratic setup which is also the basic structure of the constitution?

i. Threat to democracy of Nation.

Transparency and equality are pillars of a true democracy for which accountability of
political parties and transparency in their functioning is inevitable. Citizens should be
confident of the actions of the government and in order to earn such trust the
government should be transparent to its citizens. The scheme along with the
impugned amendments has adverse impact on the principle of transparent political
funding which is a bedrock of a responsible democracy.

“Democracy expects openness and openness is concomitant of a free society and the
sunlight is a best disinfectant”.
 Since there is no upper limit on the amount of contribution to be made via electoral
bonds, the corporate houses and extremely wealthy lobby groups can have a control
on the electoral process and governance. Such activities, if allowed, can result in a
situation that legislation, regulations, etc. will be ultimately passed to favour these
corporates and lobby groups at the expense of the common citizens of the country.

Confluence of uncapped corporate resources funding political parties can only read to
private corporate results taking precedence over the needs and rights of the people of
the state and in policy considerations, which implies the translation of economic
inequality to political inequality, therefore contravening the principle of ‘welfare
state’ enshrined in the constitution.

ii. Contravention to “free and fair elections” as a basic feature of democracy.

The amendments and the electoral bond scheme skew free and fair elections by
permitting unlimited contributions to political parties by corporate entities and
removing the requirement of disclosure of information about political funding.

Freedom of a voter in the narrative connotation refers to the freedom to cast their vote
without interference and intimidation. Freedom in the positive connotation includes
the freedom to vote on the basis of complete and relevant information. This includes
information about financial contribution to political parties. Corporate funding per se
is violative of the constitution because corporate entities are not citizens and thus, are
not entitled to rights under Art.19(1)(a).

The electoral bond scheme severs the link between elections and representative
democracy because those elected are inclined to fulfil the wishes of the contributors
and not the voters. This could be through direct quid pro quowhere an express
promise is made to enact a policy in favour of the donor and indirect quid pro quo
where there is an influence through access to policy makers.

Section 77 of the Representation of peoples act read with rule 90 of the conduct of
election rules 1961 prescribes a cap on the total expenditure which can be incurred by
a candidate or their agent in connection with parliamentary and assembly elections
between the date on which they are nominated and the date of the declaration of the
result. The legal regime has not prescribed a cap on the financial contributions which
can be received by a political party or a candidate contesting elections.The maximum
limit for the expenditure in a parliamentary constituency is between rupees seventy-
five lakhs to ninety-five lakhs depending on the size of the state and union territory.
The maximum limit of election expenses in an assembly constituency varies between
rupees twenty-eight lakhs and forty lakhs depending on the size of the state.

One way in which money influences electoral outcomes is through vote buying.
Another way in which money influences electoral outcomes is through incurring
electoral expenditure for political campaigns. Have a measurable influence on voting
behaviour because of the impact of television advertisements campaign events and
personal canvassing. In the case of Kanwar Lal Gupta v. Amar Nath Chawla the court
observed that the availability of large funds allows a candidate or political party
“significantly greater opportunity for the propagation of its programme” in
comparison to their political rivals. Such political disparity, it was observed, results in
“serious discrimination between one political party or individual and another on the
basis of money power and that in turn would mean that some voters are denied ‘equal’
voice and some candidates are denied an ‘equal chance’”. In the case of Vatal v. R
Dayanad Sagar, Justice V.R Krishna Iyer acknowledged that large monetary inputs are
“necessary evils of modern elections”.

Electoral democracy in Aryavrata is premised on the principle of political equality

which the Constitution guarantees in two ways. First, by guaranteeing the principle of
“one person one vote” which ensures equal representation in voting. Second, the
Constitution ensures that socio-economic inequality does not perpetuate political
inequality by mandating reservation of seats for Scheduled Castes and Scheduled
Tribes in Parliament and State Assemblies.

The electoral bonds scheme, by providing anonymity to donors and facilitating large,
undisclosed donations to political parties, creates an uneven playing field. Incumbent
parties or those with access to wealthy donors may gain an unfair advantage over
smaller or less-funded parties, distorting the democratic process. Established parties
with access to resources and influence are better positioned to attract large donations
through electoral bonds, creating an uneven playing field and stifling competition
from smaller or emerging political entities. This concentration of financial support
reinforces the dominance of entrenched political elites and diminishes the diversity of
voices in the democratic process, eroding the principle of fair and equal
representation.

In Lily Thomas v. Union of India, the Supreme Court of India emphasized the
importance of a level playing field in elections to ensure fairness and equal
opportunity for all candidates.