TMI Blog2024 (2) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... al parties, as envisaged by the amendment to Section 182(1) of the Companies Act infringes the principle of free and fair elections and violates Article 14 of the Constitution? Whether the non-disclosure of information on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to Section 29C of the RPA, Section 182(3) of the Companies Act and Section 13A(b) of the IT Act are violative of the right to information of citizens under Article 19(1)(a) of the Constitution? HELD THAT:- It is held in the present case as follows:- a. The Electoral Bond Scheme, the proviso to Section 29C(1) of the Representation of the People Act 1951 (as amended by Section 137 of Finance Act 2017), Section 182(3) of the Companies Act (as amended by Section 154 of the Finance Act 2017), and Section 13A(b) (as amended by Section 11 of Finance Act 2017) are violative of Article 19(1)(a) and unconstitutional; and b. The deletion of the proviso to Section 182(1) of the Companies Act permitting unlimited corporate contributions to political parties is arbitrary and violative of Article 14. The following directions are issued: a. The issuing bank shall h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwal, Adv. Mr. Rajat Nair, Adv. Mr. Raman Yadav, Adv. Mr. Chitvan Singhal, Adv. Mrs. Shraddha Deshmukh, Adv. Mr. Abhishek Kumar Pandey, Adv. Mr. Kartikay Aggarwal, Adv. Mr. Ameyvikrama Thanvi, Adv. Ms. Sonali Jain, Adv. Mr. R. Venkataramani, AG Mr. Tushar Mehta, SG Mr. R. Bala, Sr. Adv. Mr. Rajan Kumar Chourasia, Adv. Mr. Chinmayee Chandra, Adv. Ms. Seema Bengani, Adv. Ms. Shraddha Deshmukh, Adv. Mr. Ankur Talwar, Adv. Mr. Shyam Gopal, Adv. Mr. Raman Yadav, Adv. Mr. Chitvan Singhal, Adv. Mr. Arvind Kumar Sharma, AOR Page 2 of 4 WPC 880/2017 Mr. Amit Sharma, AOR Mr. Dipesh Sinha, Adv. Ms. Pallavi Barua, Adv. Ms. Aparna Singh, Adv. Mr. Varun K Chopra, Adv. Mr. Mehul Sharma, Adv. M/s. VKC Law Offices Mr. Kaleeswaram Raj, Adv. Ms. Thulasi K Raj, Adv. Ms. Aparna Menon, Adv. Mr. Mohammed Sadique T.a., AOR Ms. Sneha Kalita, AOR Mr. Prasanna S., AOR Mr. Sanjay R Hegde, Sr. Adv. Mr. Suren Uppal, Adv. Mr. Aviral Kashyap, AOR Mr. Prabhsharan Singh Mohi, Adv. Mr. Sanjeev Menon, Adv. Mr. Shahrukh Ali, Adv. Mr. Stuti Srivastava, Adv. Mr. Rajesh Kumar, Adv. Ms. Vimal Sinha, Adv. Mr. Ashish Jha, Adv. JUDGMENT Dr Dhananjaya Y Chandrachud, CJI A. Background ....................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utions to political parties ...... 96 II. Privacy vis- -vis political party .......................................................... 103 III. Balancing the right to information and the right to informational privacy 103 a) Judicial Approach towards balancing fundamental rights: establishing the double proportionality standard ...................................................... 103 b) Validity of the Electoral Bond Scheme, Section 11 of the Finance Act and Section 137 of the Finance Act ..................................................... 113 c. Validity of Section 154 of the Finance Act amending Section 182(3) to the Companies Act ............................................................................................ 120 G. Challenge to unlimited corporate funding .............................................. 124 i. The application of the principle of non-arbitrariness ........................ 127 a. Arbitrariness as a facet of Article 14 ..................................................... 127 b. Beyond Shayara Bano: entrenching manifest arbitrariness in Indian jurisprudence ........................................ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and rupees in a financial year or five percent of its average net profits during the three financial years immediately preceding the contribution, whichever is greater. Companies were also required to disclose the amount contributed in a financial year in their profit and loss accounts and furnish particulars of the total amount contributed and the name of the party, individual or entity to which or to whom such amount was contributed. Companies defaulting in complying with the disclosure requirement were punishable with a fine which could extend to rupees five thousand. 5. The Companies (Amendment) Act 1969 amended Section 293A8 so as to ban contributions to political parties and for political purposes. Companies acting in contravention of the prohibition were punishable with a fine which could extend to five thousand rupees, and every officer who defaulted was punishable with imprisonment which could extend to three years, besides being liable to fine. 6. The Companies (Amendment) Act 1985 amended Section 293A9 to permit contributions to political parties and for political purposes once again. The explanation of the phrase political purpose included donations made to a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the contribution was made. 9. Section 182 of the Companies Act 2013 made two modifications from Section 293-A of the Companies Act 1956: (a) the cap on the contributions which can be made by companies was increased from 5 % to 7.5% of their average net profits; and (b) more stringent consequences for violation of were imposed. The fine was extendable to five times (instead of three times prescribed in the earlier provision) of the contribution. 10. The Finance Act 2017 made three changes to Section 182 of the Companies Act: a. The first proviso to Section 182(1) which prescribed a cap on corporate funding was omitted; b. Section 182(3) was amended to only require a disclosure of the total amount contributed to political parties by a company in a financial year and excluded the requirement to disclose the particulars of the amount contributed to each political party; and c. Sub-section 3A was introduced, by which a company could contribute to a political party only by a cheque, bank draft, or electronic clearing system. The proviso to the sub-section states that a company may also contribute through any instrument issued pursuant to any scheme notified under any la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted to the Election Commission before the due date for furnishing a return of income of that financial year under the IT Act.20 A political party which fails to submit the report shall not be entitled to any tax relief as provided under the IT Act.21 15. The provision was amended by the Finance Act 2017 to include a proviso by which the political party was not required to disclose details of contributions received by electoral bonds. Annexure I to this Judgment depicts in a tabular form the amendments to the provisions of the RP Act, the IT Act, the Companies Act, and the RBI Act by the Finance Act 2017. 16. The effect of the amendments introduced by the Finance Act to the above legislations is that: a. A new scheme for financial contribution to political parties is introduced in the form of electoral bonds; b. The political parties need not disclose the contributions received through electoral bonds; c. Companies are not required to disclose the details of contributions made in any form; and d. Unlimited corporate funding is permissible. iv. Objections of RBI and ECI to the Electoral Bond Scheme 17. On 2 January 2017, the RBI wrote a letter to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty; e. The sale of electoral bonds will be open only for a limited period, may be twice a year for seven days each; and f. The electoral bonds will be issued only at RBI, Mumbai. 20. The draft of the Electoral Bond Scheme was circulated to the RBI for its comments. The draft conferred notified scheduled commercial banks, apart from the RBI, with the power to issue electoral bonds. The RBI objected to the draft Scheme by a letter dated 14 September 2017. The RBI stated that permitting a commercial bank to issue bonds would have an adverse impact on public perception about the Scheme, as also the credibility of India s financial system in general and the central bank in particular. The RBI again flagged the possibility of shell companies misusing bearer bonds for money laundering transactions. The RBI recommended that electoral bonds may be issued in electronic form because it would (a) reduce the risk of their being used for money laundering; (b) reduce the cost; and (c) be more secure. 21. The Electoral Bond Scheme was placed for deliberation and guidance by the RBI before the Committee of the Central Board. The Committee conveyed serious reservations on the issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rces. 23. Referring to the deletion of the provision in the Companies Act requiring companies to disclose particulars of the amount contributed to specific political parties, the ECI recommended that companies contributing to political parties must declare party-wise contributions in the profit and loss account to maintain transparency in the financial funding of political parties. Further, the ECI also expressed its apprehension to the deletion of the first proviso to Section 182(1) by which the cap on corporate donations was removed. The ECI recommended that the earlier provision prescribing a cap on corporate funding be reintroduced because: a. Unlimited corporate funding would increase the use of black money for political funding through shell companies; and b. Capped corporate funding ensured that only profitable companies with a proven track record could donate to political parties. v. Electoral Bond Scheme 24. On 2 January 2018, the Ministry of Finance in the Department of Economic Affairs notified the Electoral Bond Scheme 2018 in exercise of the power under Section 31(3) of the RBI Act. The Electoral Bond is a bond issued in the nature of promissory no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application does not meet the requirements of the scheme;38 h. The bond issued is non-refundable;39 i. The information furnished by the buyer is to be treated as confidential by the authorized bank. It shall be disclosed only when demanded by a competent court or upon the registration of criminal case by any law enforcement agency;40 j. The bond shall be available for purchase for a period of ten days on a quarterly basis, in the months of January, April, July, and October as specified by the Central Government.41 Bonds will be available for an additional period of thirty days as specified by the Central Government in a year when General Elections to the House of People are to be held;42 k. No interest is payable on the bond.43 No commission, brokerage, or any other charges for issue of a bond shall be payable by the buyer against purchase of the bond;44 l. The value of the bonds shall be considered as income by way of voluntary contributions received by an eligible political party for the purpose of exemption from Income Tax under Section 13A of the IT Act;45 and m. The bonds are not eligible for trading.46 25. The petitioners instituted proceedings under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven-Judge Bench and is pending adjudication. Roger Mathew v. South Bank of India, CA No. 8588/2019 The petitioners submitted that they would press the grounds of challenge to the Finance Act independent of the issue on Money Bills in view of the upcoming elections to Parliament. 28. By an order dated 31 October 2023, the batch of petitions was directed to be listed before a Bench of at least five-Judges in view of the provisions of Article 145(3) of the Constitution. It is in this background that the challenge to the Electoral Bond Scheme and the amendments is before the Constitution Bench. B. Issues 29. The present batch of petitions gives rise to the following issues: a. Whether unlimited corporate funding to political parties, as envisaged by the amendment to Section 182(1) of the Companies Act infringes the principle of free and fair elections and violates Article 14 of the Constitution; and b. Whether the non-disclosure of information on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to Section 29C of the RPA, Section 182(3) of the Companies Act and Section 13A(b) of the IT Act are violative of the right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They violate the rights of shareholders of Companies who are donating money to political parties by preventing disclosure of information to them; and e. The statutory amendments and the Electoral Bond Scheme subvert democracy and interfere with free and fair elections because the huge difference in the funds received by ruling parties in the States and Centre vitiates a level playing field between different parties and between parties and independent candidates. 31. Mr Kapil Sibal, learned senior counsel made the following submissions: a. 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; b. Freedom of a voter in the negative 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 contributions to political parties; c. The argument of the Union of India that Courts should show judicial restrai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendments permitting non-disclosure of information on political funding are violative of the right to information under Article 19(1)(a). The right to information on funding of political parties is a natural consequence of the judgment of this Court in ADR (supra) and PUCL (supra) because the underlying principle in the judgments is that an informed voter is essential for a functioning democracy. Information about funding to political parties is necessary for an informed voter since the Symbols Order 1968 and the provisions of the Tenth Schedule allow political parties to influence legislative outcomes and policies; l. The infringement of the right to information does not satisfy the proportionality standard vis- -vis the purpose of curbing black money. Even if the argument that the Electoral Bond Scheme fulfills the purpose is accepted, non-disclosure of information on political funding is not the least restrictive means to achieve the purpose; m. The infringement of the right to information does not satisfy the proportionality standard vis- -vis the purpose of guaranteeing informational privacy because: i. Protecting donor privacy is not a legitimate purpose. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2020) 10 SCC 459 and Ramesh Chandra Sharma v. State of Uttar Pradesh 2023 SCC OnLine SC 162 that the legislation should have sufficient safeguard to prevent abuse has also not been satisfied. d. The statutory amendments and the Scheme are manifestly arbitrary because (i) large scale corruption and quid pro quo arrangements would go unidentified due to the non-disclosure of information about political funding; (ii) they enable capture of democracy by wealthy interests; and (iii) they infringe the principle of one person-one vote because a selected few overpower the voice of the masses because of their economic wealth; e. The deletion of the limit on corporate contributions is manifestly arbitrary Relied on Shayara Bano v. Union of India, (2017) 9 SCC 1 because it (i) permits donations by loss making companies; (ii) removes the control of shareholders over the decisions of the Board; (iii) permits unlimited contribution by corporates and thereby abrogates democratic principles; f. The provision permitting non-disclosure of funding by companies is violative of the shareholders rights under: i. Article 25 which includes the right of the shareholder to know how t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed. The Finance Act 2017 does away with these transparency requirements; and c. International perspectives on political funding regulations, including those from the United States, the United Kingdom, Switzerland and Singapore, emphasize the importance of transparency, disclosure, and reporting in political contributions. These examples underscore the global consensus on transparency in the political funding process. 35. Mr Sanjay R. Hegde, learned senior counsel made the following submissions: a. Public listed companies are subject to scrutiny since they raise funds from the public. Information pertaining to the company is essential to be brought to the public domain. This will enable informed debates and discussions regarding the use of money by such companies. Such information must particularly be made available to shareholders to enable them to make an informed choice with regard to trading of securities. Thus, the amendment to the Companies Act which removes the requirement of disclosure of information about political contributions is violative of the right to information of shareholders which flows from Article 19(1)(a); b. Public listed companies should not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. The benefit of confidentiality to contributors ensures and promotes contribution of clean money to political parties; d. Citizens do not have a general right to know regarding the funding of political parties. Right to know is not a general right available to citizens; e. This Court has evolved the right to know for the specific purpose of enabling and furthering the voter s choice of electing candidates free from blemish; and f. The influence of contributions by companies to political parties ought not to be examined by this Court. It is an issue of democratic significance and should be best left to the legislature. 38. The learned Solicitor General of India made the following submissions: a. The legal framework prior to the enactment of the Electoral Bond Scheme was mostly cash-based which incentivized infusion of black money into political parties, and consequently, into the electoral process in India. The Electoral Bond Scheme is an improvement on the prior legal framework; b. Donors to a political party often apprehended retribution from other political parties. Such apprehension incentivized donors to contribute unaccounted money to political parties t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electoral bonds shall be accepted through banking channels. This provision curbs the circulation of black money. f. The right of a citizen to know how political parties are being funded must be balanced against the right of a person to maintain privacy of their political affiliations. Donating money to one s preferred party is a form political self-expression, which lies at the heart of privacy; g. Maintaining anonymity of donations to political parties is a part of the concept of secret ballot because it enables a person to make political choices without any fear of victimization or retaliation; h. The right to information only operates against information in the possession or in the knowledge of the state. It cannot operate for seeking information not in the knowledge or possession of the state; i. The amendments to the RBI Act, RPA, and the IT Act are intended to curb donations made by way of cash and other means to political parties and secure the anonymity of donors; j. The amendment to Section 182 of the Companies Act removes the limitation of seven and a half percent of the net profits on the amount contributed by political parties. The removal of the contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pse dixit of the government, that a legislation is an economic legislation. Courts before classifying the policy underlying a legislation as economic policy must undertake an analysis of the true nature of the law. The amendment to Section 31 of the RBI Act can be classified as a financial provision to the extent that it seeks to introduce a new form of a bearer banking instrument. However, any resemblance to an economic policy ends there. The amendments in question can be clubbed into two heads: first, provisions mandating non-disclosure of information on electoral financing; and second, provisions permitting unlimited corporate funding to political parties. Both these amendments relate to the electoral process. 42. In fact, it is evident from the correspondence between the Ministry of Finance and RBI (which have been summarized above) on the apprehensions of the Bonds being 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 India has itself classified the amendments as an electoral reform . Thus, the submission of the Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the constitutionality of the legislation, in a challenge laid to the validity of any legislation allegedly violating any right or freedom guaranteed by clause (1) of Article 19 of the Constitution, on a prima facie case of such violation having been made out, the onus would shift upon the respondent State to show that the legislation comes within the permissible limits of the most relevant out of clauses (2) to (6) of Article 19 of the Constitution, and that the restriction is reasonable. The Constitutional Court would expect the State to place before it sufficient material justifying the restriction and its reasonability. On the State succeeding in bringing the restriction within the scope of any of the permissible restrictions, such as, the sovereignty and integrity of India or public order, decency or morality etc. the onus of showing that restriction is unreasonable would shift back to the petitioner. Where the restriction on its face appears to be unreasonable, nothing more would be required to substantiate the plea of unreasonability. Thus the onus of proof in such like cases is an ongoing shifting process to be consciously observed by the Court called upon to decide the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that finance is crucial for the sustenance and progression of electoral politics. 47. It is believed that money does not vote but people do. However, studies have revealed the direct and indirect influence of money on electoral politics.64 The primary way through which money directly influences politics is through its impact on electoral outcomes. 48. 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. Campaigns have a measurable influence on voting behavior because of the impact of television advertisements, campaign events, and personal canvassing.65 An informed voter is one who is assumed to be aware of the policy positions of the candidate or the party they represent and votes on a thorough analysis of the pros and cons of electing a candidate. On the other hand, an uninformed voter is assumed to not possess knowledge of the policy positions of the candidates.66 Campaigns have an effect on the voting behavior of both an informed and an uninformed voter. The impact of campaigns on an informed voter is supplementary because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d newer and smaller political parties. 52. The judgments of this Court have recognized the influence of money on politics. They take a critical view of the role played by big business and big money in the electoral process in India. The decision in Kanwar Lal Gupta v. Amar Nath Chawla, (1975) 3 SCC 646 notices that money serves as an asset for advertising and other forms of political solicitation that increases a candidate s exposure to the public. 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 an equal voice and some candidates are denied an equal chance . 53. In Vatal Nagaraj v. R Dayanand Sagar, (1975) 4 SCC 127 Justice V R Krishna Iyer noted that candidates often evade the legal ceiling on expenditure by using big money channelled by political parties. The court acknowledged that large mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law on fundamental rights and other constitutional provisions must be determined while adjudicating its constitutional validity. The effect of provisions dealing with electoral finance cannot be determined without recognizing the influence of money on politics. Therefore, we must bear in mind the nexus between money and electoral democracy while deciding on the issues which are before us in this batch of petitions. F. The challenge to non-disclosure of information on electoral financing 56. Section 29C of the RPA as amended by the Finance Act 2017 stipulates that the political party need not disclose financial contributions received through electoral bonds. Similarly, Section 13A of the IT Act as amended does not require the political party to maintain a record of contributions for contributions received through electoral bonds. Section 182 of the Companies Act 2013 as amended by the Finance Act 2017 by which the earlier requirement of disclosure of particulars of the amount contributed by companies to political parties in their profit and loss accounts was deleted. The company which has made financial contributions is now only required to disclose the total amount contrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the underlying principle in the provisions of the Indian Evidence Act bearing on the disclosure of evidence related to the affairs of the State is that if such disclosure is denied, it would violate the private interest of the party. See State of Punjab v. Sodhi Sukhdev Singh, (1961) 2 SCR 371 [13] So, when a party seeks the disclosure of documents, and when such disclosure is denied on the ground that it would violate public interest, there is a conflict between private interest and public interest. In subsequent cases, the courts cast the principle underlying the provisions of disclosure in the Indian Evidence Act as a conflict between two conceptions of public interest. This Court held that disclosure of information aids the party to the proceedings. But beyond that, disclosure also serves the public interest in the administration of justice. See State of Punjab v. Sodhi Sukhdev Singh, (1961) 2 SCR 371 [Subba Rao J] 62. In State of Uttar Pradesh v. Raj Narain (1975) 4 SCC 428 , the respondent sought to summon documents in an election petition. The State made a claim of privilege from disclosure of documents. In his concurring opinion in the Constitution Bench, Justic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inactions, and they can effectively fulfil this duty only if the government is open and not clothed in secrecy. 65. In the second phase of the evolution of the jurisprudence on the right to information, this Court recognised the importance of information to form views on social, cultural and political issues, and participate in and contribute to discussions. Secy., Ministry of Information Broadcasting, Govt. of India v. Cricket Assn. of Bengal, (1995) 2 SCC 161; Indian Express Newspapers v. Union of India, AIR 1986 SC 515 ; Romesh Thappar v. State of Madras, AIR 1950 SC 124 Courts recognised that the relevance of information is to not only to hold the government accountable but also to discover the truth in a marketplace of ideas which would ultimately secure the goal of selfdevelopment. DC Saxena v. Hon ble The Chief Justice of India, (1996) 5 SCC 216 [29] This Court also recognised that freedom of speech and expression includes the right to acquire information which would enable people to debate on social, moral and political issues. These debates would not only foster the spirit of representative democracy but would also curb the prevalence of misinformation and mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused of any offences punishable with imprisonment;(b) assets possessed by a candidate, their spouse and dependents; (c) facts bearing on the candidate s competence, capacity, and suitability for representing the people; and (d) any other information which ECI considers necessary for judging the capacity of the candidate fielded by the political party. 67. The Union of India appealed against the decision of the High Court before this Court. This 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. Such information was held to be necessary for elections to be conducted in a free and fair manner : 34. the members of a democratic society should be sufficiently informed so that they may influence intelligently the decisions which may affect themselves and this would include their decision of casting votes in favour of a particular candidate. If there is a disclosure by a candidate as sought for then it would strengthen the voters in taking appropriate decision of casting their votes. [ ] we fail to understand why the right of a citizen/voter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred by political parties to maintain the purity of elections.86 However, the operative portion of the judgment did not reflect this observation. 70. Pursuant to the decision of this Court in ADR (supra), Parliament amended the RPA to incorporate some of the directions issued by this Court.87 Section 33-B of RPA stipulated that the candidate need not disclose any other information (other than the information required by law) notwithstanding any judgment. In PUCL v. Union of India (2003) 4 SCC 399 , proceedings were initiated before this Court under Article 32 for challenging Section 33-B of the RPA. Justice M B Shah, writing for the majority, noted that the decision of the three-Judge Bench in ADR (supra) tracing the right to know the antecedents of candidates contesting elections had attained finality and Section 33-B was unconstitutional because it had the effect of rendering the judgment of this Court inoperative. The learned Judge on an independent interpretation also held that the right to information of a voter is a facet of Article 19(1)(a). (2003) 4 SCC 399 [18, 27] 71. Justice Venkatarama Reddi observed in his concurring opinion that there are two postulates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve as broad indicators or parameters in enacting the legislation for the purpose of securing the right to information about the candidate. The paradigms set by the Court, though pro tempore in nature as clarified supra, are entitled to due weight. If the legislature in utter disregard of the indicators enunciated by this Court proceeds to make a legislation providing only for a semblance or pittance of information or omits to provide for disclosure on certain essential points, the law would then fail to pass the muster of Article 19(1)(a). Though certain amount of deviation from the aspects of disclosure spelt out by this Court is not impermissible, a substantial departure cannot be countenanced. The legislative provision should be such as to promote the right to information to a reasonable extent, if not to the fullest extent on details of concern to the voters and citizens at large. While enacting the legislation, the legislature has to ensure that the fundamental right to know about the candidate is reasonably secured and information which is crucial, by any objective standards, is not denied. [ ] The Court has to take a holistic view and adopt a balanced approach, keeping in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the learned Judge observed that disclosure which is in furtherance of the right to information would trump the former because it serves the larger public interest. Justice Reddi then observed that disclosure of the educational qualifications of a candidate is not an essential component of the right to information because educational qualifications do not serve any purpose for the voter to decide which candidate to cast a vote for since the characteristics of duty and concern of the people is not monopolised by the educated . A conclusion to the contrary, in the learned Judge s opinion, would overlook the stark realities of the society. (2003) 4 SCC 399 [122] 77. The following principles can be deduced from the decisions of this Court in ADR (supra) and PUCL (supra): a. The right to information of voters which is traced to Article 19(1)(a) is built upon the jurisprudence of both the first and the second phases in the evolution of the doctrine, identified above. The common thread of reasoning which runs through both the first and the second phases is that information which furthers democratic participation must be provided to citizens. Voters have a right to information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant political unit in the electoral process to answer the question whether funding details of political parties are essential information for the voter to possess. 80. The Constitution of India did not make a reference to political parties when it was adopted. A reference was made when the Tenth Schedule was included in the Constitution by the Constitution (Fifty-Second) Amendment Act 1985. However, even though the Constitution on its adoption did not make a reference to political parties, statutory provisions relating to elections accorded considerable importance to political parties, signifying that political parties have been the focal point of elections. 81. The ECI notified the Election Symbols (Reservation and Allotment) Order 196895 in exercise of the powers conferred by Article 344 of the Constitution read with Section 29A of the RPA and Rules 596 and 1097 of the Conduct of Election Rules 1961. In terms of the provisions of the Symbols Order, the ECI shall allot a symbol to every candidate contesting the election. The Symbols Order classifies political parties into recognised political parties and unrecognised political parties. The difference in the procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itical party in each General election. The candidates of a registered but unrecognised political party may be represented by a common symbol but the people would not attach a specific symbol to the political party because the symbol by which it is represented may change with every election. 86. The purpose of allotting symbols to political parties is to aid voters in identifying and remembering the political party. The law recognises the inextricable link between a political party and the candidate though the vote is cast for a candidate. The literacy rate in India was 18.33 percent when the first General Election was held in 1951. Most of the voters identified a political party only with its symbol and this still continues to the day. In a few cases, the voters would not possess any knowledge of the candidate being set up by the political party. They would vote solely based on the symbol which is allotted to the political party; knowledge of which they have obtained through campaigning activities or its sustained presence in the electoral fray. Gayatri Devi, the third Maharani consort of Jaipur who was later set up as a candidate by the Swatantra Party, recalls in her Autobiogr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idate who secures the highest number of votes is chosen to represent the people of that constituency. It could be argued that this system of elections gives prominence to candidates and not political parties unlike the system of closed list of elections where the voters do not have any knowledge of the candidates that are set up by the Political Party.106 89. However, it cannot be concluded that the decision of voting is solely based on the individual candidate s capabilities and not the political party merely because the voter has knowledge of the candidate who has been set up by the political party. Such a conclusion cannot be definitively drawn particularly in view of the design of the electoral voting machine which has a list of the names of the candidates who are contesting the election from the constituency along with the symbol of the political party which is fielding the candidate. Voters casts their votes based on two considerations: the capability of the candidate as a representative and the ideology of the political party. 90. Political parties publish electoral manifestos containing the ideology of the party, major policies of the political party, plans, programme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... candidate set up by a political party is elected on the basis of the programme of that political party. In the course of years, while deciding disputes related to the Tenth Schedule, judgments of this Court have further strengthened the centrality of political parties in the electoral system. In Ravi S Naik v. Union of India AIR 1994 SC 1558 , this Court observed that voluntarily giving up membership of a political party has a wider connotation and includes not just resignation of the member from the party and an inference can also be drawn from the conduct of the member. In Subash Desai v. Principal Secretary, Governor of Maharashtra, WP (C) No. 493 of 2022 a Constitution Bench of this Court while interpreting the provisions of the Tenth Schedule held that the political party and not the legislature party (which consists of the members of the House belonging to a particular political party) appoints the Whip of a political party for the purposes of Paragraph 2(1)(b) of the Tenth Schedule. Subash Desai [113]. 94. In summation, a political party is a relevant political unit in the democratic electoral process in India for the following three reasons: a. Voters associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by mandating reservation of seats for Scheduled Castes and Scheduled Tribes in Parliament118 and State Assemblies.119 98. The Constitution guarantees political equality by focusing on the elector and the elected . These two constitutional precepts foster political equality in the following two ways. First, 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. Second, the Constitution ensures that members of socially marginalized groups are not excluded from the political process. This guarantee ensures (a) equality in representation; and (b) equality in influence over political decisions. 99. However, political inequality continues to persist in spite of the constitutional guarantees. One of the factors which contributes to the inequality is the difference in the ability of persons to influence political decisions because of economic inequality. In a politically equal society, the citizens must have an equal voice to influence the political process.120 We have already in the preceding section elucidated the close association of money and politics where we expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onor contributions to be relevant and essential, it is not necessary that voters have to take the initiative to peruse the list of contributors to find relevant information which would enable them to cast their vote effectively. Electronic and print media would present the information on contributions received by political parties, and the probable link between the contribution and the licenses which were given to the company in an accessible format. The responses to such information by the Government and political parties would go a long way in informing the voter. 102. However, to establish the argument of quid pro quo arrangements between the contributor and the political party, it is necessary that the political party has knowledge of the particulars of funding to its party. The political party to whom contributions are made cannot enter into a quid pro quo arrangements if it is unaware of the donor. The Scheme defines electoral bond as a bond issued in the nature of promissory note which shall be a bearer banking instrument and shall not carry the name of the buyer or payee. 122 The Scheme also stipulates that the information furnished by the buyer shall be treated as conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ality standard to determine if the violation of the fundamental right is justified. Modern Dental College Research Centre v. State of Madhya Pradesh, (2016) 4 SCC 346 The proportionality standard is as follows: a. The measure restricting a right must have a legitimate goal (legitimate goal stage); b. The measure must be a suitable means for furthering the goal (suitability or rational connection stage); c. The measure must be least restrictive and equally effective (necessity stage); and d. The measure must not have a disproportionate impact on the right holder (balancing stage). 106. The legitimate goal stage requires this Court to analyze if the objective of introducing the law is a legitimate purpose for the infringement of rights. At this stage, the State is required to discharge two burdens. First, the State must demonstrate that the objective is legitimate. Second, the State must establish that the law is indeed in furtherance of the legitimate aim that is contended to be served. See Media One v. Union of India, Civil Appeal No. 8129 of 2022 [77-79] 107. The then Finance Minister, Mr. Arun Jaitley encapsulated the objective of introducing the Elector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Union of India AIR 1962 SC 305 , the constitutional validity of the Newspaper (Price and Page) Act 1965 and the Daily Newspaper (Price and Page) Order 1960 which regulated the number of pages according to the price charged, prescribed the number of supplements to be published and regulated the area for advertisements in the newspapers was challenged on the ground that it violated the freedom of press under Article 19(1)(a). The Union of India submitted that the restriction on the freedom of press was justified because the purpose of the law was to prevent unfair competition which was in furtherance of public interest. It was argued that the restriction was justified because the activities carried out by newspapers were also traceable to the freedom to carry out a profession which could be restricted on the ground of public interest under Article 19(6). Justice JR Mudholkar writing for the Constitution Bench observed that the impugned legislation directly and immediately curtails the freedom of speech guaranteed under Article 19(1)(a), and the freedom cannot be restricted on any ground other than the grounds stipulated in Article 19(2).128 In Express Newspapers v. Union of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into the First Amendment of the US Constitution which guarantees the freedom of speech and expression in unqualified terms. 113. In Cricket Association of Bengal (supra), one of the submissions of the petitioner (Union of India) was that the right to broadcast can be restricted on grounds other than those stipulated in Article 19(2). Justice P B Sawant writing for himself and Justice S Mohan observed while summarizing the law on freedom of speech and expression that Article 19(1)(a) can only be restricted on the grounds mentioned in Article 19(2). Ibid; [45]. The learned Judge specifically refuted the argument that the right can be restricted on grounds other than those stipulated in Article 19(2). Such an argument, the learned Judge states, is to plead for unconstitutional measures. However, while observing so, Justice P B Sawant states that the right to telecast can be restricted on the grounds mentioned in Article 19(2) and the dictates of public interest : 78. [ ] If the right to freedom of speech and expression includes the right to disseminate information to as wide a section of the population as is possible, the access which enables the right to be so exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied) 115. The observations of Justice Sawant and the concurring opinion of Justice Jeevan Reddy in Cricket Association of Bengal (supra) that the right under Article 19(1)(a) can be restricted on the ground of public interest even though it is not stipulated in Article 19(2) must be understood in the specific context of that case. Cricket Association of Bengal (supra), dealt with the access to and use of a public good (that is, airwaves) for dissemination of information. The Court distinguished airways from other means of dissemination of information such as newsprint and held that since broadcasting involves the use of a public good, it must be utilized to advance free speech rights and plurality of opinion (that is, public interest). Cricket Association of Bengal [201 (1)(a) and 201(1)(b)] The observations in Cricket Association of Bengal (supra) cannot be interpreted to mean that other implied grounds of restrictions have been read into Article 19(2). 116. From the above discussion, it is clear that the right to information under Article 19(1)(a) can only be restricted based on the grounds stipulated in Article 19(2). It could be argued that curbing black money ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the proportionality standard is the least restrictive means stage. At this stage, this Court is required to determine if the means adopted (that is, anonymity of the contributor) is the least restrictive means to give effect to the purpose based on the following standard: See Justice KS Puttaswamy (5J) (supra) and Media One Broadcasting (supra) [103]; a. Whether there are other possible means which could have been adopted by the State; b. Whether the alternative means identified realise the objective in a real and substantial manner ; c. Whether the alternative identified and the means used by the State impact fundamental rights differently; and d. Whether on an overall comparison (and balancing) of the measure and the alternative, the alternative is better suited considering the degree of realizing the government objective and the impact on fundamental rights. 120. Before we proceed to determine if the Electoral Bond Scheme is the least restrictive means to curb black money in electoral funding, it is important that we recall the regime on electoral funding. After the amendments introduced by the Finance Act 2017, donations to political parties exceeding rup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, a receipt recording the following information shall, inter alia, be provided: (i) Name and address of the contributor; (ii) Permanent account number of the contributor or the passport number if the contributor is not a resident of India; (iii) Amount contributed; (iv) The mode of contribution including the name and branch of the bank and the date of receipt of such contribution; and (v) PAN of the electoral trust; c. Contributions to the electoral trust can only be made through cheque, bank draft and electronic transfer. Contributions made in cash shall not be accepted by the Electoral Trust; d. The Electoral Trust shall spend five percent of the total contributions received in a year subject to a limit of Rupees five hundred thousand in the first year of incorporation and Rupees three hundred thousand in the second year.141 The remaining money (that is, ninety five percent of the total contributions received in that financial year along with any surplus from the previous year) shall be distributed to political parties registered under Section 29A of the RP Act;142 e. The political party to which the trust donated money shall provide a receipt indicating the name of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the objective of curbing black money substantially because contributors would resort to cash donations due to the fear of consequences is accepted, Electoral Trusts are an effective alternative. There will be a lesser degree of political consequences for contributions made to the Electoral Trust because the information about which of the contributors contributed to which of the parties will not be disclosed. It is only where the Electoral Trust contributes to one political party, would there be a possibility of political consequences and witch-hunting (assuming that there is a link between anonymity and contributions). However, in that case, it is a choice expressly made by the contributors. Additionally, the law mandates disclosure only of contributions made above twenty thousand in a financial year. So, for contributions less than twenty-five thousand, cheques and other modes of electronic transfer are an effective alternative. 125. When these three methods of political contribution (electronic transfer other than electoral bonds, contribution to Electoral Trust, and Electoral Bonds) are placed on a continuum, transfer through electronic means (other than electoral bonds) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s though Clause 14 of the Electoral Bond Scheme states that the bonds shall not be eligible for trading. 129. On an overall balance of the impact of the alternative means on the right to information and its ability to fulfill the purpose, for contributions below twenty thousand rupees, contributions through other means of electronic transfer is the least restrictive means. For contributions above twenty thousand rupees, contributions through Electoral Trust is the least restrictive means. Having concluded that the Electoral Bond Scheme is not the least restrictive means to achieve the purpose of curbing black money in electoral process, there is no necessity of applying the balancing prong of the proportionality standard. 130. Based on the above discussion, we conclude that Electoral Bond Scheme does not fulfill the least restrictive means test. The Electoral Bond Scheme is not the only means for curbing black money in Electoral Finance. There are other alternatives which substantially fulfill the purpose and impact the right to information minimally when compared to the impact of electoral bonds on the right to information. b. Donor Privacy 131. The Union of India s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivacy over thought (which leads to decision-making) would suppress voices and lead to homogeneity which is contrary to the values that the Constitution espouses148; c. Privacy over decisions and choices would enable the exercise of fundamental freedoms such as the freedom of thought, expression, and association freely without coercion;149 d. Privacy is attached to a person and not a space. The scope of privacy cannot be restricted only to the private space; and e. Privacy includes informational privacy. Information which may seem inconsequential in silos can be used to influence decision making behavior when aggregated.150 133. The content of privacy is not limited to private actions and decisions such as the choice of a life partner, procreation and sexuality. Neither is privacy merely defined from the point of direct State intrusion. Privacy is defined as essential protection for the exercise and development of other freedoms protected by the Constitution, and from direct or indirect influence by both State and non- State actors. Viewed in this manner, privacy takes within its fold, decisions which also have a public component . 134. The expression of politica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through voter surveillance could be used to invalidate the foundation of the electoral system. Information about political affiliation could be used to engage in gerrymandering, the practice by which constituencies are delimited based on the electoral preference of the voters. 138. Informational privacy to political affiliation is necessary to protect the freedom of political affiliation and exercise of electoral franchise. Thus, it follows from the judgment of this Court in Justice KS Puttaswamy (9J) (supra) and the observations above that the Constitution guarantees the right to informational privacy of political affiliation. 139. Having concluded that the Constitution guarantees a right to informational privacy of political affiliation, it needs to be decided if the right can be extended to the contributions to political parties. The Electoral Bond Scheme has two manifestations of privacy: first, informational privacy by prescribing confidentiality vis- -vis the political party; and second, informational privacy by prescribing non-disclosure of the information of political contributions to the public. The Union of India submitted that contributions made to political partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties even if contributions are not traceable to Article 19(1)(a) provided that the information on political contributions indicates the political affiliation of the contributor. 142. Financial contributions to political parties are usually made for two reasons. First, they may constitute an expression of support to the political party and second, the contribution may be based on a quid pro quo. The law as it currently stands permits contributions to political parties by both corporations and individuals. The huge political contributions made by corporations and companies should not be allowed to conceal the reason for financial contributions made by another section of the population: a student, a daily wage worker, an artist, or a teacher. When the law permits political contributions and such contributions could be made as an expression of political support which would indicate the political affiliation of a person, it is the duty of the Constitution to protect them. Not all political contributions are made with the intent of attempting to alter public policy. Contributions are also made to political parties which are not substantially represented in the legislatures. Contribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conflict between different constitutional values or different conceptions of the same constitutional value. Countries with a written Constitution attempt to resolve these conflicts by creating a hierarchy of rights within the constitutional order where a few fundamental rights are subjected to others. For example, Article 25 of the Indian Constitution which guarantees the freedom of conscience, and the profession, practice and propagation of religion is subject to public order, morality, health and other provisions of Part III. The first exercise that the Court must undertake while balancing two fundamental rights is to determine if the Constitution creates a hierarchy between the two rights in conflict. If the Constitution does not create a hierarchy between the conflicting rights, the Courts must use judicial tools to balance the conflict between the two rights. 146. The judicial approach towards balancing fundamental rights has evolved over the course of years. Courts have used the collective interest or the public interest standard, the single proportionality standard, and the double proportionality standard to balance the competing interests of fundamental rights. 147. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Chief Justice then was) observed that a contrary interpretation would completely abrogate the right to reputation.159 148. In the second modality of the public interest approach, the Courts undertook a comparison of the values which the rights (and the conceptions of the rights) espouse and gave more weightage to the right which was in furtherance of a higher degree of public or collective interest. In Asha Ranjan v. State of Bihar (2017) 4 SCC 397 , this Court held that when there is a conflict between two individuals with respect to their right under Article 21, the facts and circumstances must be weighed on the scale of constitutional norms and sensibility and larger public interest. In PUCL (supra), one of the issues before this Court was whether the disclosure of the assets of the candidates contesting the elections in furtherance of the right to information of the voters violates the right to privacy of candidates. Ibid, [121] Justice Reddi authoring the concurring opinion observed that the right to information of the assets of candidates contesting elections trumps the right to privacy because the former serves a larger public interest. In Mazdoor Kisan S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rture from the series of cases in which this Court balanced two fundamental rights based on doctrinal predominance. In Sahara (supra), the petitioner submitted a proposal for the repayment of OFCDs (optionally fully convertible bonds) to the investors. The details of the proposals were published by a news channel. Interlocutory applications were filed in the Court praying for the issuance of guidelines for reporting matters which are sub-judice. This Court resolved the conflict between the freedom of press protected under Article 19(1)(a) and the right to free trial under Article 21 by evolving a neutralizing device. This Court held that it has the power to evolve neutralizing devices such as the postponement of trial, retrial, change of venue, and in appropriate cases, grant acquittal in case of excessive media prejudicial publicity to neutralize the conflicting rights. This Court followed the Canadian approach in evolving a two prong standard to balance fundamental rights through neutralizing devices which partly resembled the structured proportionality standard. The two-pronged test was as follows : (2012) 10 SCC 603 [42, 22]. a. There is no other reasonable alternative mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ental right. The balancing stage will only account for the disproportionate impact of the measure on the right to information (the right) and not the right to privacy (the purpose) since the Court is required to balance the impact on the right with the fulfillment of the purpose through the selected means. Thus, the Court while applying the proportionality standard to resolve the conflict between two fundamental rights preferentially frames the standard to give prominence to the fundamental right which is alleged to be violated by the petitioners (in this case, the right to information).168 This could well be critiqued for its limitations. 154. In Campbell v. MGM Limited [2004] UKHL 22 , Baroness Hale adopted the double proportionality standard to adequately balance two conflicting fundamental rights. In this case, the claimant, a public figure, instituted proceedings against a newspaper for publishing details of her efforts to overcome drug addiction. Baroness Hale applied the following standard to balance the right to privacy of the claimant and the right to a free press: 141. [ ] This involved looking first at the comparative importance of the actual rights being claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterference with the right is proportional to the extent of fulfilment of the purpose. It is in this step that the Court undertakes an analysis of the comparative importance of the considerations involved in the case, the justifications for the infringement of the rights, and if the effect of infringement of one right is proportional to achieve the goal. Thus, the first two steps laid down by Baroness Hale are subsumed within the balancing prong of the proportionality analysis. 157. Based on the above discussion, the standard which must be followed by Courts to balance the conflict between two fundamental rights is as follows: a. Does the Constitution create a hierarchy between the rights in conflict? If yes, then the right which has been granted a higher status will prevail over the other right involved. If not, the following standard must be employed from the perspective of both the rights where rights A and B are in conflict: b. Whether the measure is a suitable means for furthering right A and right B; c. Whether the measure is least restrictive and equally effective to realise right A and right B; and d. Whether the measure has a disproportionate impact on right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traceable to the freedom of conscience recognized under Article 25 since it is subject to all other fundamental rights, including Article 19(1)(a). However, the right to privacy of financial contributions to political parties can also be traced to Article 19(1) because the informational privacy of a person s political affiliation is necessary to enjoy the right to political speech under Article 19(1)(a), the right to political protests under Article 19(1)(b), the right to form a political association under Article 19(1)(c), and the right to life and liberty under Article 21. The Constitution does not create a hierarchy amongst these rights. Thus, there is no constitutional hierarchy between the right to information and the right to informational privacy of political affiliation. 160. This Court must now apply the double proportionality standard, that is, the proportionality standard to both the rights (as purposes) to determine if the means used are suitable, necessary and proportionate to the fundamental rights. The Union of India submitted that Clause 7(4) of the Electoral Bond Scheme balances the right to information of the voter and the right to informational privacy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the suitability prong vis- -vis the purpose of information of political funding. However, let us proceed to apply the subsequent prongs of the double proportionality analysis assuming that the means adopted has a rational nexus with the purpose of securing information about political funding to voters. 164. The next stage of the analysis is the necessity prong. At this stage, the Court determines if the measure identified is the least restrictive and equally effective measure. To recall, the Court must determine if there are other possible means which could have been adopted to fulfill the purpose, and whether such alternative means (a) realize the purpose in a real and substantial manner; (b) impact fundamental rights differently; and (c) are better suited on an overall comparison of the degree of realizing the purpose and the impact on fundamental rights. 165. The provisions of the RPA provide an alternative measure. Section 29C states that contributions in excess of rupees twenty thousand received from a person or company for that financial year must be disclosed by the political party through a report. The report must be filled in the format prescribed in Form 24A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns below the threshold do not have the ability to influence decisions, and the right to information of financial contributions does not extend to contributions which do not have the ability to influence decisions. Similarly, the right to privacy of political affiliations does not extend to contributions which may be made to influence policies. It only extends to contributions made as a genuine form of political support that the disclosure of such information would indicate their political affiliation and curb various forms of political expression and association. 168. It is quite possible that contributions which are made beyond the threshold could also be a form of political support and not necessarily a quid pro quo arrangement, and contributions below the threshold could influence electoral outcomes. However, the restriction on the right to information and informational privacy of such contributions is minimal when compared to a blanket non-disclosure of information on contributions to political parties. Thus, this alternative realizes the objective of securing disclosure for an informed voter and informational privacy to political affiliation in a real and substantial manne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... political party. However, after the 2017 amendment, the Company is only required to disclose that it contributed rupees twenty thousand to a political party under the provision without disclosing the details of the contribution, that is, the political party to which the contribution was made. The profit and loss account of a company is included in the financial statement which companies are mandated to prepare.174 A copy of the financial statement adopted at the annual general meeting of the company must be filed with the Registrar of Companies.175 171. As discussed in the earlier segment of this judgment, the Companies Act 1956 was amended in 1960 to include Section 293A by which contributions by companies to political parties and for political purposes were regulated. Companies were permitted to contribute within the cap prescribed. All such contributions were required to be disclosed by the Company in its profit and loss account with details. Companies which contravened the disclosure requirement were subject to fine. It is crucial to note here that contributions to political parties by companies were regulated long before the IT Act was amended in 1978 to exempt the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to political parties through cheque or ECS, the political party had to disclose the details in its report. Thus, the information about contributions by the company would be in the public domain. The only purpose of amending Section 182(3) was to bring the provision in tune with the amendment under the RPA exempting disclosure requirements for contributions through electoral bonds. The amendment to Section 182(3) of the Companies Act becomes otiose in terms of our holding in the preceding section that the Electoral Bond Scheme and relevant amendments to the RPA and the IT Act mandating non-disclosure of particulars on political contributions through electoral bonds is unconstitutional. 174. In terms of Section 136 of the Companies Act, every shareholder in a company has a right to a copy of the financial statement which also contains the profit and loss account. The petitioners submitted that the non-disclosure of the details of the political contributions made by companies in the financial statement would infringe upon the right of the shareholders to decide to sell the shares of a company if a shareholder does not support the political ideology of the party to which contributi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt any amount contributed by it to any political party or for any political purpose to any individual or body during the financial year to which that account relates by giving particulars of the total amount contributed and the name of the party, individual, or body to which or to whom such amount has been contributed. 177. In 1963, the Report of the Santhanam Committee on Prevention of Corruption highlighted the prevalence of corruption at high political levels due to unregulated collection of funds and electioneering by political parties. Report of the Committee on Prevention of Corruption, 1964 [11.5]. The Committee suggested a total ban on all donations by incorporated bodies to political parties. Subsequently, Section 293A of the 1956 Act was amended through the Companies (Amendment) Act 1969 to prohibit companies from contributing funds to any political party or to any individual or body for any political purpose. 178. In 1985, Parliament again amended Section 293A, in the process reversing its previous ban on political contributions by companies. It allowed a company, other than a government company and any other company with less than three years of existence, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, (1959) Supp 1 SCR 528 Traditionally, Article 14 was understood to only guarantee non-discrimination. In this context, Courts held that Article 14 does not forbid all classifications but only that which is discriminatory. In State of West Bengal v. Anwar Ali Sarkar, (1951) 1 SCC 1; Also see State of Bombay v. FN Balsara, 1951 SCR 682 Justice S R Das (as the learned Chief Justice then was) laid down the following two conditions which a legislation must satisfy to get over the inhibition of Article 14: first, the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others; and second, the differentia must have a rational relation to the object sought to be achieved by the legislation. In the ensuing years, this Court followed this traditional approach to test the constitutionality of a legislation on the touchstone of Article 14. Kathi Raning Rawat v. State of Saurashtra, (1952) 1 SCC 215; Budhan Chowdhury v. State of Bihar, (1955) 1 SCR 1045; Ram Krishna Dalmia v. S R Tendolkar, 1959 SCR 279 182. In E P Royappa v. State of Tamil Nadu, (1974) 4 SCC 3 this Court expanded the ambit of Article 14 by layi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or acting according to reason or judgment, depending on the will alone. 184. While this Court accepted it as a settled proposition of law that a subordinate legislation can be challenged on the ground of manifest arbitrariness, there was still some divergence as to the doctrine s application with respect to plenary legislation. In State of Tamil Nadu v. Ananthi Ammal, (1995) 1 SCC 519 a three- Judge Bench of this Court held that a statute can be declared invalid under Article 14 if it is found to be arbitrary or unreasonable. Similarly, in Dr. K R Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226 a three-Judge Bench of this Court invalidated a legislation on the ground that it was arbitrary and in violation of Article 14. However, in State of Andhra Pradesh v. McDowell Co., (1996) 3 SCC 709 another three-Judge Bench of this Court held that a plenary legislation cannot be struck down on the ground that it is arbitrary or unreasonable. In McDowell (supra), this Court held that a legislation can be invalidated on only two grounds: first, the lack of legislative competence; and second, on the violation of any fundamental rights guaranteed in Part III of the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisprudence in India to observe that McDowells (supra) failed to consider two binding precedents, namely, Ajay Hasia (supra) and K R Lakshmanan (supra). This Court further observed that McDowells (supra) did not notice Maneka Gandhi v. Union of India, (1978) 1 SCC 248 where this Court held that substantive due process is a part of Article 21 which has to be read along with Articles 14 and 19 of the Constitution. Therefore, Justice Nariman held that arbitrariness of a legislation is a facet of unreasonableness in Articles 19(2) to (6) and therefore arbitrariness can also be used as a standard to strike down legislation under Article 14. It held McDowells (supra) to be per incuriam and bad in law. 189. Shayara Bano (supra) clarified In Re Special Reference No. 1 of 2012 (supra) by holding that a finding of manifest arbitrariness is in itself a constitutional infirmity and, therefore, a ground for invalidating legislation for the violation of Article 14. Moreover, it was held that there is no rational distinction between subordinate legislation and plenary legislation for the purposes of Article 14. Accordingly, the test of manifest arbitrariness laid down by this Court in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quate determining principle. In Joseph Shine (supra), the validity of Section 497 of the Indian Penal Code was challenged. Section 497 penalized a man who has sexual intercourse with a woman who is and whom he knows or has a reason to believe to be the wife of another man, without the consent and connivance of that man for the offence of adultery. Justice Nariman observed that the provision has paternalistic undertones because the provision does not penalize a married man for having sexual intercourse with a married woman if he obtains her husband s consent. The learned Judge observed that the provision treats a woman like a chattel: 23. [ ] This can only be on the paternalistic notion of a woman being likened to chattel, for if one is to use the chattel or is licensed to use the chattel by the ―licensor‖, namely, the husband, no offence is committed. Consequently, the wife who has committed adultery is not the subject matter of the offence, and cannot, for the reason that she is regarded only as chattel, even be punished as an abettor. This is also for the chauvinistic reason that the third-party male has seduced her, she being his victim. What is clear, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s must make a distinction between the ostensible purpose , that is, the purpose which is claimed by the State and the real purpose , the purpose identified by Courts based on the available material such as a reading of the provision201; and b. A provision is manifestly arbitrary even if the provision does not make a classification.202 195. This Court in previous judgments has discussed the first of the above applications of the doctrine by distinguishing between the ostensible purpose and the real purpose of a provision with sufficient clarity. The application of the doctrine of manifest arbitrariness by Chief Justice Misra and Justice Nariman in Navtej Singh Johar (supra) to strike down a provision for not classifying between consensual and non-consensual sex must be understood in the background of two jurisprudential developments on the interpretation of Part III of the Constitution. The first, is the shift from reading the provisions of Part III of the Constitution as isolated silos to understanding the thread of reasonableness which runs through all the provisions and elevating unreasonable (and arbitrary) action to the realm of fundamental rights. The second is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to and necessary for the full and effective exercise of its power of legislation. (3) It cannot abdicate its legislative functions, and therefore while entrusting power to an outside agency, it must see that such agency acts as a subordinate authority and does not become a parallel legislature. (4) The doctrine of separation of powers and the judicial interpretation it has received in America ever since the American Constitution was framed, enables the American courts to check undue and excessive delegation but the courts of this country are not committed to that doctrine and cannot apply it in the same way as it has been applied in America. Therefore, there are only two main checks in this country on the power of the legislature to delegate, these being its good sense and the principle that it should not cross the line beyond which delegation amounts to abdication and self-effacement . 197. In Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. v. Assistant Commissioner of Sales Tax and others, (1974) 4 SCC 98 a Constitution Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative action can also be tested for being manifestly arbitrary. However, we wish to clarify that there is, and ought to be, a distinction between plenary legislation and subordinate legislation when they are challenged for being manifestly arbitrary. ii. Validity of Section 154 of the Finance Act 2017 omitting the first proviso to Section 182 of the Companies Act 199. We now turn to examine the vires of Section 154 of the Finance Act 2017. The result of the amendment is that: (a) a company, other than a government company and a company which has been in existence for less than three financial years, can contribute unlimited amounts to any political party; and (b) companies, regardless of the fact whether they are profit making or otherwise, can contribute funds to political parties. The issue that arises for consideration is whether the removal of contribution restrictions is manifestly arbitrary and violates Article 14 of the Constitution. 200. As discussed in the earlier section, this Court has consistently pointed out the pernicious effect of money on the integrity of the electoral process in India. The Law Commission of India in its 170th Report also observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... integrity of the electoral process is a necessary concomitant to the maintenance of the democratic form of government. In Indira Nehru Gandhi v. Raj Narain, 1975 Supp SCC 1, Justice Khanna observed that periodical elections are a necessary postulate of a democratic setup as it allows citizens to elect their representatives. He further observed that democracy can function only upon the faith that elections are free and fair and not rigged and manipulated, that they are effective instruments of ascertaining popular will both in reality and form and are not mere rituals calculated to generate illusion of defence to mass opinion. 203. This Court has also consistently held that free and fair elections form an important concomitant of democracy. Digvijay Mote v. Union of India, (1993) 4 SCC 175; Union of India v. Association for Democratic Reforms, (2002) 5 SCC 294 In Kuldip Nayar v. Union of India, (2006) 7 SCC 1 a Constitution Bench of this Court held that a democratic form of government depends on a free and fair election system. In People s Union for Civil Liberties v. Union of India, (2013) 10 SCC 1 this Court held that free and fair elections denote equal opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been done away with. Lok Sabha Debates, Companies Bill (16 May 1985). 207. Thus, the object behind limiting contributions was to discourage loss-making companies from contributing to political parties. In 1985, Parliament prescribed the condition that only companies which have been in existence for more than three years can contribute. This condition was also included to prevent loss-making companies and shell companies from making financial contributions to political parties. If the ostensible object of the amendment, as contended by the learned Solicitor General, was to discourage the creation of shell companies, there is no justification for removing the cap on contributions which was included for the very same purpose: to deter shell companies from making political contributions. In fact, when the proposal to amend Section 182 of the 2013 Act was mooted by the Government in 2017, the Election Commission of India opposed the amendment and suggested that the Government reconsider its decision on the ground that it would open up the possibility of creating shell companies. The relevant portion of the opinion of the ECI is reproduced below: Certain amendments have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to wield their clout and resources to influence policy making. The purpose of Section 182 is to curb corruption in electoral financing. For instance, the purpose of banning a Government company from contributing is to prevent such companies from entering into the political fray by making contributions to political parties. The amendment to Section 182 by permitting unlimited corporate contributions (including by shell companies) authorizes unrestrained influence of companies on the electoral process. This is violative of the principle of free and fair elections and political equality captured in the value of one person one vote . 211. The amendment to Section 182 of the Companies Act must be read along with other provisions on financial contributions to political parties under the RPA and the IT Act. Neither the RPA nor the IT Act place a cap on the contributions which can be made by an individual. The amendment to the Companies Act when viewed along with other provisions on electoral funding, seek to equalize an individual and a company for the purposes of electoral funding. 212. The ability of a company to influence the electoral process through political contributions is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igher. Thus, the amendment to Section 182 is also manifestly arbitrary for not making a distinction between profit-making and loss-making companies for the purposes of political contributions. 215. Thus, the amendment to Section 182 is manifestly arbitrary for (a) treating political contributions by companies and individuals alike; (b) permitting the unregulated influence of companies in the governance and political process violating the principle of free and fair elections; and (c) treating contributions made by profit-making and loss-making companies to political parties alike. The observations made above must not be construed to mean that the Legislature cannot place a cap on the contributions made by individuals. The exposition is that the law must not treat companies and individual contributors alike because of the variance in the degree of harm on free and fair elections. H. Conclusion and Directions 216. In view of the discussion above, the following are our conclusions: a. The Electoral Bond Scheme, the proviso to Section 29C(1) of the Representation of the People Act 1951 (as amended by Section 137 of Finance Act 2017), Section 182(3) of the Companies Act (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and will abide by such orders as may be passed by the Court. 218. Paragraph 14 of the interim order does not limit the operation of Paragraph 13. Paragraph 13 contains a direction in unequivocal terms to political parties to submit particulars of contributions received through Electoral Bonds to the ECI. Paragraph 14 only prescribes a timeline for the submission of particulars on contributions when the window for Electoral Bond contributions was open in 2019. In view of the interim direction of this Court, the ECI must have collected particulars of contributions made to political parties through Electoral Bonds. 219. In view of our discussion above, the following directions are issued: a. The issuing bank shall herewith stop the issuance of Electoral Bonds; b. SBI shall submit details of the Electoral Bonds purchased since the interim order of this Court dated 12 April 2019 till date to the ECI. The details shall include the date of purchase of each Electoral Bond, the name of the purchaser of the bond and the denomination of the Electoral Bond purchased; c. SBI shall submit the details of political parties which have received contributions through Electoral Bonds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission. (4) Where the treasurer of any political party or any other person 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. Section 29C. Declaration of donation received by the political parties. (1) The treasurer of a political party or any other person authorized 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 subsection shall apply to the contributions received by way of an electoral bond. Explanation For the purposes of this subsection, electoral bond means a bond referred to in the Explanation to subsection (3) of section 31 of the Reserve Bank of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no such contribution shall be made by a company unless a resolution authorising the making of such contribution is passed at a meeting of the 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 of the contribution authorised by it. Section 182 (3) Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed. Section 182 (3) Every company shall disclose in its profit and loss account the total amount contributed by it under this section during the financial year to which the account relates. (3A) Notwithstanding anything contained in subsection (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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by way of electoral bond in excess of ten 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; and (c) the accounts of such political party are audited by an accountant as defined in the Explanation below sub- section (2) of section 288; and (d) no donation exceeding two thousand rupees is received by such political party otherwise than 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 or through electoral bond. Explanation.- For 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. Section 31, Reserve Bank of India Act 1931 Prior to Amendment by the Finance Act, 2017 Upon Amendment by Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the concerned financial year under section 139 of the Income-tax Act, 1961 (43 of 1961) and a certificate to this effect should be attached with the Income-tax return to claim exemption under the Income-tax Act, 1961 (43 of 1961).] 1. Name of Political Party: 2. Status of the Political Party: (recognised/unrecognised) 3. Address of the headquarters of the Political Party: 4. Date of registration of Political Party with Election Commission: 5. Permanent Account Number (PAN) and Income-tax Ward/Circle where return of the political party is filed:_______ 6. Details of the contributions received, in excess of rupees twenty thousand, during the Financial Year:20 . 20 . Serial number Name and complete address of the contributing person/company PAN (if any_ and Income-Tax Ward/Circle Amount of contribution (Rs.) Mode of contribution *(cheque/demand draft/cash) Remarks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or body to which or to whom such amount has been contributed. (3) If a company makes a default in complying with the provisions of sub-section (2), the company, and every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees. 8 Section 293A. (1) Notwithstanding anything contained in any other provision of this Act, neither a company in general meeting nor its Board of directors shall, after the commencement of the Companies (Amendment) Act 1960 contribute any amount or amounts- (a) To any political party or (b) For any political purpose to an individual or body. (2) If a company contravenes the provisions of sub-section (1) then- (i) the company shall be punishable with fine which may extend to five thousand rupees; and (ii) every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine 9 293A. (1) Notwithstanding anything contained in any other provision of this Act- (a) No Government company; and (b) No other company which has been in existence for less than th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to such political party, and (ii) where such publication is not by or on behalf of but for the advantage of a political party, to be a contribution for a political purpose to the publishing it. (4) Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any political party or for any political purpose to any person during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party or person to which or to whom such amount has been contributed. (5) If a company makes any contribution in contravention of the provisions of this section- (a) the company shall be punishable with fine which may extend to three times the amount so contributed; and (b) every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine. 10 Companies Act, First proviso to Section 182(1). 11 Companies Act, second proviso to Section 182(1) 12 IT Act, Proviso (a) to Section 13A 13 It was ten thousand rupees when Section 13A was introduced. It was incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Electoral Bond Scheme, Clause 13 46 Electoral Bond Scheme, Clause 14 47 Roger Mathew v. South Bank of India, CA No. 8588/2019 48 Relied on PUCL v. Union of India, (2003) 4 SCC 399; ADR v. Union of India, (2002) 5 SCC 294; Anjali Bhardwaj v. Union of India, (2019) 18 SCC 246 49 Relied on Kanwar Lal Gupta v. Amar Nath Chawla, 1975 SCC (3) 646 61 Section 77 of the RPA read with Section 169 provides the Central Government in consultation with the Election Commission, the power to prescribe the amount over which the total expenditure incurred by the candidate or their agent in connection with Parliamentary election and Assembly election shall not be exceeded. The total expenditure cap is prescribed in Rule 90 of the Conduct of Election Rules 1961 which is amended from time to time. 62 The expenditure limit is capped at seventy-five Lakhs for the states of Arunachal Pradesh, Goa, and Sikkim, and the Union Territories of Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Lakshadweep, Puducherry, and Ladakh. For the remaining States and Union Territories, the expenditure limit is capped at ninety-five Lakhs. 63 For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any offence referred to in sub-section (1) or sub-section (2), or covered in sub-section (3), of Section 8 and sentenced to imprisonment for one year or more. 91 The right to vote is classified as a statutory vote because only citizens who fulfill certain conditions (such as the age) laid down in a statute can vote. 92 ADR required disclosure related to information of whether the candidate has been convicted/acquitted or discharged of any criminal offence in the past, and whether six months prior to the filing of the nomination pape r, whether the candidate has been accused in any pending case for an offence punishable with imprisonment for more than two years and in which charge has been framed or cognizance is taken by the Court. With respect to the first direction, law created a distinction between serious and non-serious offences and mandates disclosure only if a candidate has been convicted of a serious offence. With respect to the second direction, the provision only mandated the disclosure of cases in which charge has been framed and excluded the disclosure of cases in which cognizance has been taken. The learned Judge held that while the non-disclosure of conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethia, Where s the party?: towards a constitutional biography of political parties, Indian Law Review, 3:1, 1-32 (2019) 109 Ibid. 111 65. Para 4.11.04 of the Sarkaria Commission Report specifically deals with the situation where no single party obtains absolute majority and provides the order of preference the Governor should follow in selecting a Chief Minister. The order of preference suggested is: a. An alliance of parties that was formed prior to the elections.; b. The largest single party staking a claim to form the Government with the support of others, including independents ; c. A post-electoral coalition of parties, with all the partners in the coalition joining the Government; d. A post-electoral alliance of parties, with some of the parties in the alliance forming a Government and the remaining parties, including Independents supporting the Government from outside. 116 Constitution of India 1950, Article 81 (2)(b). Also see Constitution of India, Article 170(2) where the Constitution prescribes the same principle with respect to the composition of seats in Legislative Assemblies of State 117 Constitution of India 1950 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Justice Kaul (Paragaph 19) 151 RPA, Section 123(2). The provision includes the threatening with injury including social ostracism and excommunication from any caste or community. 152 RPA; Section 123(4) 153 RPA; Section 123(5) 154 See Philip N Howard and Daniel Kreiss, Political Parties and Voter privacy: Australia, Canada, the United Kingdom, and United States in Comparative Perspective, First Monday 15(12) 2010 155 Colin Bennet, The politics of privacy and privacy of politics: Parties, elections, and voter surveillance in Western Democracies. First Monday, 18(8) 2013 159 144: [ ] Reputation being an inherent component of Article 21, we do not think it should be allowed to be sullied solely because another individual can have its freedom. It is not a restriction that has an inevitable consequence which impairs circulation of thought and ideas. In fact, it is control regard being had to another person's right to go to court and state that he has been wronged and abused. He can take recourse to a procedure recognised and accepted in law to retrieve and redeem his reputation. Therefore, the balance between the two rights needs to be struck. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the three immediately preceding financial years.4 A new condition stipulated that the board of directors5 in their meeting would pass a resolution giving legitimacy and authorisation to contributions to a political party.6 4. The Companies Act of 2013 replaced the Companies Act of 1956. Section 182(1) of the Companies Act, 20137 permitted contributions by companies of any amount to any political party, if the said company had been in existence for more than three immediately preceding financial years and is not a government company. The requirement of authorisation vide Board resolution is retained.8 The cap of 5% is enhanced to 7.5% of the average net profits during the three immediately preceding financial years.9 It is also mandated that the company must disclose the amount contributed by it to political parties in the profit and loss account, including particulars of name of political party and the amount contributed.10 In case of violation of the terms, penalties stand prescribed. 5. The Finance Act, 2017 made several amendments to the Companies Act, 2013, Income Tax Act, 1961, Reserve Bank of India11 Act, 1934, the Representation of the People Act, 1951, and the Forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed . 182 (3) Every company shall disclose in its profit and loss account the total amount contributed by it under this section during the financial year to which the account relates. (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 13-A of the Income Tax Act, 1961 Prior to Amendment by the Finance Act, 2017 Post Amendment by Section 11 of the Finance Act, 2017 13-A. Special provision re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived by such political party otherwise than 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 or through electoral bond. Explanation. For the purposes of this section, political party means a political party registered under Section 29-A of the Representation of the People Act, 1951 (43 of 1951). Explanation . For the purposes of this proviso, electoral bond means a bond referred to in the Explanation to subsection (3) of Section 31 of the Reserve Bank of India Act, 1934 (2 of 1934). Provided further that if the Treasurer of such political party or any other person authorised by that political party in this behalf fails to submit a report under subsection (3) of Section 29-C of the Representation of the People Act, 1951 (43 of 1951) for a financial year, no exemption under this section shall be available for that political party for such financial year. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation. For the purposes of this sub-section, electroal bond means a bond issued by any scheduled bank under the scheme as may be notified by the Central Government. Section 29-C of the Representation of the People Act 1951 Prior to Amendment by the Finance Act 2017 Post Amendment by Section 137 of the Finance Act 2017 29-C. Declaration of donation received by the political parties. (1) The treasurer of the 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. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment by Section 236 the Finance Act 2017 Section 2 (1) (j) (j ) foreign source includes, (i) the Government of any foreign country or territory and any agency of such Government; (ii) any international agency, not being the United Nations or any of its specialised agencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification, specify in this behalf; (iii) a foreign company; (iv) a corporation, not being a foreign company, incorporated in a foreign country or territory; (v) a multi-national corporation referred to in sub-clause (iv) of clause (g); (vi) a company within the meaning of the Companies Act, 1956 (1 of 1956), and more than one-half of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely (A) the Government of a foreign country or territory; (B) the citizens of a foreign country or territory; (C) corporations incorporated in a foreign country or territory; (D) trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory; (E) foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribution to political parties. 7. Section 13A of the Income Tax Act, 1961,17 exempts income of political parties, including financial contributions and investments, from income tax. The object of providing a tax exemption is to increase the funds of political parties from legitimate sources. However, conditions imposed require political parties to maintain books of accounts and other documents to enable the assessing officer to properly deduce their income.18 Political parties are required to maintain records of the name and addresses of persons who make voluntary contributions in excess of Rs.20,000/-.19 Accounts of the political parties are required to be audited.20 8. In 2003, Section 80GGB and 80GGC were inserted in the Income Tax Act, 1961, permitting contributions to political parties. These contributions are tax deductible, though they are not expenditure for purposes of business, to incentivise contributions through banking channels.21 9. By the Finance Act, 2017, Section 13A of the Income Tax Act, 1961, was amended. Section 13A now stipulates that a political party is not required to maintain a record of the contributions received by Bonds.22 Further, donations o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raft, cheque, ECS or direct debit to the buyer s account.42 The identity and information furnished by the buyer for the issuance of Bonds is to be treated as confidential by the authorised issuing bank.43 The details, including identity, can be disclosed only when demanded by a competent court or on registration of any criminal case by any law enforcement agency.44 Only eligible political parties, meaning a party that is registered under Section 29A of the Representation of the People Act, 1951, and has secured not less than 1% of the votes polled in the last general election to the House of People or the Legislative Assembly, can receive a Bond.45 The eligible political party can encash the Bond through their bank account in the authorised bank.46 The Bonds are made available for purchase for a period of 10 days every quarter, in the months of January, April, July and October, as may be specified by the Central Government.47 They are also made available for an additional period of 30 days, as specified by the central government in a year where general elections to the House of People are held.48 The Bonds are not eligible for trading,49 and commission, brokerage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olicy. R.K. Garg v. Union of India and Others, (1981) 4 SCC 675 The law is that the legislature has to be given latitude in matters of economic policy as they involve complex financial issues. Ibid. See also Bhavesh D. Parish and Others v. Union of India and Others, (2000) 5 SCC 471, and Directorate General of Foreign Trade and Others v. Kanak Exports and Another, (2016) 2 SCC 226 The degree of deference to be shown by the court while exercising the power of judicial review cannot be put in a straitjacket. 17. On the question of burden of proof, I respectfully agree with the observations made by the Hon ble Chief Justice, that once the petitioners are able to prima facie establish a breach of a fundamental right, then the onus is on the State to show that the right limiting measure pursues a proper purpose, has rational nexus with that purpose, the means adopted were necessary for achieving that purpose, and lastly proper balance has been incorporated. 18. The doctrine of presumption of constitutionality has its limitations when we apply the test of proportionality. In a way the structured proportionality places an obligation on the State at a higher level, as it is a pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tronage of the political parties, and are financed by them. The voters elect a candidate with the objective that the candidate s political party will come to power and fulfil the promises. 21. The Hon ble Chief Justice has referred to the Tenth Schedule of the Constitution. The Schedule incorporates a provision for the disqualification of candidates on the ground of defection, which reflects the importance of political parties in our democracy. Section 77 of the Representation of the People Act, 1951, requires monetary limits to be prescribed for expenditures incurred by candidates.65 As political parties are at the helm of the electoral process, including its finances, the argument that the right of the voter does not extend to knowing the funding of political parties and is restricted to antecedents of candidates, will lead to an incongruity. I, respectfully, agree with Hon ble the Chief Justice, that denying voters the right to know the details of funding of political parties would lead to a dichotomous situation. The funding of political parties cannot be treated differently from that of the candidates who contest elections. See observations of this court in Kanwar Lal Gupt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical contributions.73 (iii) The Scheme is an improvement to the prior legal framework. It has inbuilt safeguards such as compliance of donors with KYC norms, bearer bonds having a limited validity of fifteen days and recipients belonging to a recognised political party that has secured more than 1% votes in the last general elections. 24. Hon ble the Chief Justice has rejected the Union of India s submissions by applying the doctrine of proportionality. This is a principle applied by courts when they exercise their power of judicial review in cases involving a restriction on fundamental rights. It is applied to strike an appropriate balance between the fundamental right and the pursued purpose and objective of the restriction. 25. The test of proportionality comprises four steps:74 (i) The first step is to examine whether the act/measure restricting the fundamental right has a legitimate aim (legitimate aim/purpose). (ii) The second step is to examine whether the restriction has rational connection with the aim (rational connection). (iii) The third step is to examine whether there should have been a less restrictive alternate measure that is equally effective (mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s earlier judgments, applied German approach while applying proportionality test to the case at hand. We would like to proceed on that very basis which, however, is tempered with more nuanced approach as suggested by Bilchitz. This, in fact, is the amalgam of German and Canadian approach. We feel that the stages, as mentioned in Modern Dental College Research Centre and recapitulated above, would be the safe method in undertaking this exercise, with focus on the parameters as suggested by Bilchitz, as this projects an ideal approach that need to be adopted. 27. The said test was also referred to in Anuradha Bhasin v. Union of India and Others, (2020) 3 SCC 637 with the observation that the principle of proportionality is inherently embedded in the Constitution under the doctrine of reasonable restriction. This means that limitations imposed on a right should not be arbitrary or of excessive nature beyond what is required in the interest of public. This judgment thereupon references works of scholars/jurists who have argued that if the necessity prong of the proportionality test is applied strictly, legislations and policies, no matter how well intended, would fail the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formity in how the test is applied or the method of using the last two prongs in these jurisdictions. 30. The first two prongs of proportionality resemble a means-ends review of the traditional reasonableness analysis, and they are applied relatively consistently across jurisdictions. Courts first determine if the ends of the restriction serve a legitimate purpose, and then assess whether the proposed restriction is a suitable means for furthering the same ends, meaning it has a rational connection with the purpose. 31. In the third prong, courts examine whether the restriction is necessary to achieve the desired end. When assessing the necessity of the measure, the courts consider whether a less intrusive alternative is available to achieve the same ends, aiming for minimal impairment. As elaborated above, this Court Anuradha Bhasin (supra), relying on suggestions given by some jurists,83 emphasised the need to employ a moderate interpretation of the necessity prong. To conclude its findings on the necessity prong, this Court is inter alia required to undertake an overall comparison between the measure and its feasible alternatives.84 32. We will now delve into the fourth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary in Germany have the same goal, that is, to realise the values of the German Constitution.89 Canadian courts, some believe, in practice give wider discretion to the legislature when a restriction is backed by sufficient data and evidence.90 The constitutional court in South Africa, as per some jurists, collectively applies the four prongs of proportionality instead of a structured application.91 While proportionality is the predominant doctrine in Australia, an alternate calibrated scrutiny test is applied by a few judges.92 It is based on the premise that a contextual, instead of broad standard of review, is required to be adopted for constitutional adjudication. 35. Findings of empirical legal studies provide a more solid foundation for normative reasoning93 and enhance understanding of the relationship between means and ends.94 In our view, proportionality analyses would be more accurate when empirical inquiries on causal relations between a legislative measure under review and the ends of such a measure are considered. It also leads to better and more democratic governance. While one cannot jump from is to ought , to reach an ought conclusion, one has to rely on accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon my assessment of their winnability. But both would not know who is paid what. My Lord, sometimes what used to happen is in my business, I get only clean money or substantial part of the clean money, but practicalities require that I contribute to the political parties, and practicality again requires that I contribute with a degree of confidentiality so that I am not victimized in the future. And therefore clean money used to be converted into unclean money. White money is being converted into black money so that it can be paid, according to them anonymously, and according to me with confidentiality. And this is disastrous for the economy when white money is converted into black money. While introducing the Finance Act of 2017, the then Finance Minister had elucidated that the main purpose of the Scheme was to curb the flow of black money in electoral finance.99 This, it is stated, could be achieved only if information about political donations and the donor were kept confidential.100 It was believed that this would incentivise donations to political parties through banking channels. 38. I am of the opinion that retribution, victimisation or retaliation cannot by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uant to registration of a criminal case106 overlooks the fact that it is their stand that the identities of the contributors/donors should be concealed because of fear of retaliation, victimisation and reprisal. That fear would still exist as the identity of the purchaser of the Bond can always be revealed upon registration of a criminal case or by an order/direction of the court. Thus, the fear of reprisal and vindictiveness does not evaporate. The so-called protection exists only on paper but in practical terms is not a good safeguard even if we accept that the purpose is legitimate. It fails the rational nexus prong. 42. The fear of the identities of donors being revealed exists in another manner. Under the Scheme, political parties in power may have asymmetric access to information with the authorised bank. They also retain the ability to use their power and authority of investigation to compel the revelation of Bond related information. Ibid Thus, the entire objective of the Scheme is contradictory and inconsistent. 43. Further, it is the case of the Union of India that parties in power at the Centre and State are the recipients of the highest amounts of donations thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the money laundered on account of quid pro quo or illegal connection escapes eyeballs of the public. 47. The economic policies of the government have an impact on business and commerce. Political pressure groups promote different agendas, including perspectives on economic policies. As long as these pressure groups put forward their perspective with evidence and data, there should not be any objection even if they interact with elected representatives. The position would be different if monetary contributions to political parties were made as a quid pro quo to secure a favourable economic policy. This would be an offence under the Prevention of Corruption Act, 1988 and also under the PMLA. Such offences when committed by political parties in power can never see the light of the day if secrecy and anonymity of the donor is maintained. 48. In view of the aforesaid observations, the argument raised by the petitioners that there is no rational connection between the measure and the purpose, which is also illegitimate, has merit and should be accepted. 49. On the question of alternative measures, that is the necessity prong of the proportionality test, it is accepted that post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Union of India in a real and substantial manner without significantly impacting the fundamental right of the voter to know. The ECI, if required, can suitably modify the guidelines dated 06.06.2014. 52. I would now come to the fourth prong. I would begin by first referring to the judgment cited by Hon ble the Chief Justice in the case of Campbell v. MGM Limited [2004] 2 AC 457 . This judgment adopts double proportionality standard to adequately balance two conflicting fundamental rights. Double proportionality has been distinguished from the single proportionality standard in paragraph 152 of the judgment authored by Hon ble the Chief Justice. Campbell (supra) states that the single proportionality test and the principle of reasonableness are applied to determine whether a private right claim offers sufficient justification for the interference with the fundamental rights. However, this test may not apply when two fundamental rights are at conflict and one has to balance the application of one right and restriction of the other. 53. In Campbell (supra), Baroness Hale has suggested a three-step approach to balance conflicting fundamental rights, when two rights are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent silos and have to be read together as complementary rights. Rustom Cavasjee Cooper v. Union of India, (1970) 1 SCC 248; K.S. Puttaswamy (9J) (Privacy) (supra), and Maneka Gandhi v. Union of India and Another, (1978) 1 SCC 248. Therefore, the thread of reasonableness applies to all such restrictions. The test of single proportionality will apply. Secondly, Article 14, as observed by the Hon ble Chief Justice in his judgment See paragraphs 191 to 195 of the Hon ble Chief Justice s judgment. includes the facet of formal equality and substantive equality. Thus, the principle equal protection of law requires the legislature and the executive to achieve factual equality. This principle can be extended to any restriction on fundamental rights which must be reasonable to the identified degree of harm. If the restriction is unreasonable, unjust or arbitrary, then the law should be struck down. Further, it is for the legislature to identify the degree of harm. I have referred to the said observation in the context that there appears to be a divergent opinion in K.S. Puttaswamy (9-J) (Privacy) (supra) as to whether right of privacy is an essential component for effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ZAWCHC 105, para 67. observes that: (...) given the public nature of political parties and the fact that the private funds they receive have a distinctly public purpose, their rights to privacy can justifiably be attenuated. The same principles must, as a necessary corollary, apply to their donors. (...) (emphasis supplied) 60. The great underlying principle of the Constitution is that rights of individuals in a democratic set-up is sufficiently secured by ensuring each a share in political power. Harrison Moore, The Constitution of the Commonwealth of Australia, p.329 (1902) This right gets affected when a few make large political donations to secure selective access to those in power. We have already commented on pressure groups that exert such persuasion, within the boundaries of law. However, when money is exchanged as quid pro quo then the line between persuasion and corruption gets blurred. 61. It is in this context that the High Court of Australia in Jeffery Raymond McCloy and Others v. State of New South Wales and Another (2015) HCA 34 , observes that corruption can be of different kinds. When a wealthy donor makes contribution to a political party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the electorate with information as to where the political campaign money comes from and how it is spent. This helps and aides the voter in evaluating those contesting elections. It allows the voter to identify interests which candidates are most likely to be responsive to, thereby facilitating prediction of future performance in office. Secondly, it checks actual corruption and helps avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity. Relying upon Grosjean v. American Press Co. 297 U.S. 233 (1936) , it holds that informed public opinion is the most potent of all restraints upon misgovernment. Thirdly, record keeping, reporting and disclosure are essential means of gathering data necessary to detect violations of contribution limitations. 64. In Nixon, Attorney General of Missouri, et al v. Shrink Missouri Government PAC et al, 528 U.S. 377 (2000). the Supreme Court of the United States observes that large contributions given to secure a political quid pro quo undermines the system of representative democracy. It stems public awareness of the opportunities for abuse inherent in a regime of large contributions. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nopolies or duopolies and the rise of certain sections in the Media, the propensity for the electoral process to be afflicted with the vice of wholly unfair means being overlooked by those who are the guardians of the rights of the citizenry as declared by this Court would spell disastrous consequences. 66. The Law Commission of India in its 255th Report noted the concern of financial superiority translating into electoral advantage.135 It was observed that lobbying and capture give undue importance to big donors and certain interest groups, at the expense of the ordinary citizen, violating the right of equal participation of each citizen in the polity. R.C.Poudyal v. Union of India and Others, (1994) Supp 1 SCC 324 While noting the candidate-party dichotomy in the regulations under Section 77 of the Representation of the People Act, 1951, the Law Commission of India recommends to require candidates to maintain an account of contributions received from their political party (not in cash) or any other permissible donor. 67. At this stage, we would like to refer to the data as available on the website of the ECI and the data submitted by the petitioners for a limited pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -- -- AAP* 0.00 -- 17.765 5.950 25.1200 45.4500 JDU 0.00 0.000 13.000 1.400 10.0000 -- SP 0.00 0.000 10.840 0.000 3.2100 0.0000 JDS 6.03 35.250 7.500 0.000 0.0000 -- SAD 0.00 0.000 6.760 0.000 0.5000 0.0000 AIADMK 0.00 0.000 6.050 0.000 0.0000 0.0000 RJD 0.00 0.000 2.500 0.000 0.0000 -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.000 42.986 4.500 0.000 0.250 49.7660 CPI 0.003 0.003 0.000 0.000 0.000 0.000 0.0055 BSP 0.000 0.000 0.000 0.000 0.000 0.000 0.0000 TOTAL 563.253 422.010 881.260 921.950 480.649 625.716 3,894.8380 As per the said table, the data shows that the party-wise donation by the corporate houses has been more or less stagnant from the years 2016-17 to 2021-22. We do not have the comments or official details in this regard from the Union of India or the ECI. The figures support our conclusion, but I would not, without certainty, base my analysis on these figures. However, we do have data of denomination/sale of Bonds, as submitted by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterate that I have not applied proportionality stricto sensu due to the limited availability of data and evidence. 73. I respectfully agree with the reasoning and the finding recorded by Hon ble the Chief Justice, holding that the amendment to Section 182 of the Companies Act, deleting the first proviso thereunder should be struck down. While doing so, I would rather apply the principle of proportionality which, in my opinion, would subsume the test of manifest arbitrariness.138 In addition, the claim of privacy by a corporate or a company, especially a public limited company would be on very limited grounds, restricted possibly to protect the privacy of the individuals and persons responsible for conducting the business and commerce of the company. It will be rather difficult for a public (or even a private) limited company to claim a violation of privacy as its affairs have to be open to the shareholders and the public who are interacting with the body corporate/company. This principle would be equally, with some deference, apply to private limited companies, partnerships and sole proprietorships. 74. In consonance with the above reasoning and on application of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India in sealed cover, detailed particulars of the donors as against the each Bond; the amount of each such bond and the full particulars of the credit received against each bond, namely, the particulars of the bank account to which the amount has been credited and the date of each such credit. The intent of the order dated 12.04.2019 is that the ECI will continue to maintain full particulars of the donors against each Bond; the amount of each such Bond and the full particulars of the credit received against each Bond, that is, the particulars of the bank account to which the amount has been credited and the date of each such credit. This is clear from paragraph 14 of the order dated 12.04.2019 which had directed that the details mentioned in paragraph 13 of the order dated 12.04.2019 will be furnished forthwith in respect of the Bonds received by a political party till the date of passing of the order. 78. In view of the findings recorded above, I would direct the ECI to disclose the full particular details of the donor and the amount donated to the particular political party through Bonds. I would restrict this direction to any donations made on or after the interim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho contend that legal adjudication should be rule-based rather than principle-based.139 They argue that this provides legal certainty by virtue of rules being definitive in nature. In response, jurists in favour of balancing contend that neither rules nor principles are definitive but rather prima facie.140 Therefore, both rights and legislations/policies are required to be balanced and realized to the optimum possible extent. This jurisprudential clash is visible in the various forms and structures of adoptions of proportionality. Generally, two models can be differentiated from works of jurists. 1) Model I Firstly, the traditional two stages of the means end comparison is applied. After having ascertained the legitimate purpose of the law, the judge asks whether the imposed restriction is a suitable means of furthering this purpose (rational connection). Additionally in this model, the judge ascertains whether the restriction was necessary to achieve the desired end. The reasoning focuses on whether a less intrusive means existed to achieve the same ends (minimal impairment/necessity). 2) Model II This model adds a fourth step to the first model, namely the balancing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R1 and R2 stands for reliability of empirical and normative assumptions with regard to the question of how intensive the interpretation is. The weight formula is thereupon reduced to numbers on an exponential scale of 2. (i) The scale assigns following values to intensity of interference ( I ) and abstract weights ( W )- light ( l ), moderate ( m ), and serious ( s ) in numbers these are 20, 21, 22 i.e., 1, 2 and 4 respectively. (ii) To reliability ( R ), i.e., the epistemic side, the values assigned are reliable ( r ), plausible ( p ) and not evidently false (e) in numbers these are - 20, 2-1, 2-2 i.e., 1, 0.5 and 0.25 Germany Balancing was adopted by the German Constitutional Court in the 1950s as a new methodology for intensive judicial review of rights-restricting legislation. It stems from the belief that the German Constitution posits an original idea of values, and the government and courts, both have a duty to realise these values.142 The main premise of the criticisms of balancing is the wide discretion available to judges. To capture three contemporary criticisms in brief: (i) it leads to a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easure is only accepted as less restrictive when they prove to be as effective as the measure under challenge. David Bilchitz has also proposed that other alternatives must have both characteristics equal realization of the purpose and lesser invasion/restriction on the right in question.154 A stricter evaluation of evidence becomes crucial at the necessity stage for an objective standard of review, in contrast to ad hoc balancing. In Canada for instance, the onus of proof is on the person seeking to justify the limit, which is generally the government.147 The standard of proof is the civil standard or balance of probabilities.148 Where scientific or social science evidence is available, it will be required; However, where such evidence is inconclusive, or does not exist and cannot not be developed, reason and logic may suffice.149 David Blichitz s approach was followed in Aadhar (5J) (Privacy) (supra) case. This test was referenced in Anuradha Bhasin (supra) , which applied a moderate interpretation of the necessity test. To conclude the findings of the necessity stage this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually guided judicial approach.156 Strict Scrutiny Test This is considered one of the heightened forms of judicial review that can be used to evaluate the constitutionality of laws, regulations, or other governmental policies under legal challenge.157 Strict scrutiny is employed in cases of violation of the most fundamental liberties guaranteed to citizens in the United States of America. For instance, it is employed in cases of infringements on free speech. The test places the burden on the government to show a compelling, or strong interest in the law, and that the law is either very narrowly tailored or is the least speechrestrictive means available to the government. The usual presumption of constitutionality is removed, and the law must also pass the threshold of both necessity/end and means United States of America The courts in the United States use a tiered approach of review with strict scrutiny, intermediate scrutiny and rational basis existing in decreasing degree of intensity. Only a limited number of laws survive under the strict scrutiny test. Its application is reserved for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act, 1956. 7 As originally enacted. 8 Unamended second proviso to Section 182(1) of the Companies Act, 2013. This condition continues to remain. 9 Unamended first proviso to Section 182(1) of the Companies Act, 2013. 10 Unamended Section 182(3) of the Companies Act, 2013. 11 For short, RBI . 12 For short, Bonds . 13 First proviso to Section 182(1), Companies Act, 2013 has been omitted vide the Finance Act, 2017. 14 Section 182(3) of the Companies Act, 2013. 15 For short, ECS . 16 Section 182(3A) of the Companies Act, 2013 was introduced vide Section 154 of the Finance Act, 2017. 17 As amended in 1978. 18 First proviso 1(a) to the unamended Section 13A of the Income Tax Act, 1961. 19 Second proviso to the unamended Section 13A of the Income Tax Act, 1961. 20 Third proviso to Section 13A Income Tax Act, 1961. 21 See Section 37 of the Income Tax Act, 1961. 22 Second proviso to Section 13A of the Income Tax Act, 1961. 23 Fourth proviso to Section 13A of the Income Tax Act, 1961. 24 Introduced vide Section 2, Election and Other Related Laws (Amendment) Act, 2003. 25 For short, ECI . 26 Proviso to Section 29C(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are issues of common concern, epistemically well-grounded preferences, opinions, and decisions must be informed by, and take into consideration, the preferences and opinions of fellow citizens , Jane Mansbridge and others, A Systemic Approach to Deliberative Democracy in John Parkinson and Jane Mansbridge (eds), Deliberative Systems (1st edn, Cambridge University Press 2012) 11. 68 Ibid at 12. 69 James S Fishkin, When the People Speak: Deliberative Democracy and Public Consultation (Oxford University Press 2011) 33 34. 72 Paragraph 7(4) of the Scheme. 73 See Arun Jaitley, Why Electoral Bonds Are Necessary , Press Information Bureau, 2018. 74 See Aharon Barak, Proportionality Constitutional Rights and their Limitations , Cambridge University Press, 2012. 78 See David Bilchitz, Necessity and Proportionality: Towards a Balance Approach? , (Hart Publishing, Oxford and Portland, Oregon 2016). Also see Aparna Chandra, Proportionality: A Bridge to Nowhere? , (Oxford Human Rights Journal 2020). 80 Anuradha Bhasin (supra) at paragraph 71. 81 Dr. Justice D.Y. Chandrachud was in minority in K.S. Puttaswamy (Aadhaar) (supra), albeit his observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and judicial Activism: Fundamental Rights Adjudication in Canada, Germany and South Africa, (CUP 2017). 91 Ibid. 92 See Annexure A. 93 See Yun-chien Chand Peng-Hsiang Wang, The Empirical Foundation of Normative Arguments in Legal Reasoning (Univ. Chicago Coase-Sandor Inst. For L. Econ., Res. Paper No. 745, 2016). 94 Lee Epstein Andrew D. Martin, An Introduction to Empirical Legal Research 6 (2014). 95 See Joshua B. Fischman, Reuniting Is and Ought in Empirical Legal Scholarship, 162 U. Pa. L. Rev. 117 (2013). 96 Marilyn Strathern, Improving Ratings: Audit in the British University System, European review, Vol. 5 Issue 3, pp. 305-321 (1997). 97 Annexure A should not be read as an opinion of this Court or even as obiter dicta expressed by this Court. The Annexure is only for the purpose of pointing out different viewpoints on the test of proportionality. 98 See paragraph 23 of this judgment. 99 See Speech of Arun Jaitley, Minister of Finance, at paragraph 165, Budget 2017-18. 100 Ibid. 101 Section 182(3) of the Companies Act, 2013 requires companies to mention the total political contributions made. 102 Paragraph 4 of the Scheme. 103 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalysis of the permissible degree of harm for a constitutionally permissible purpose effectuates the guarantee of reasonableness. Therefore, any legislative action which is manifestly arbitrary, would be disproportionate and will fall foul when we apply the principle of proportionality. See also Shayara Bano v. Union of India, (2017) 9 SCC 1, where the Court held at paragraph 95, that rationality, logic and reasoning are the triple underpinnings of the test of manifest arbitrariness. 139 Francisco J. Urbina, A Critique of Proportionality, American Journal of Jurisprudence, Vol 57, 2012. Also see Ronald Dworkin, Taking Rights Seriously (Bloomsbury 2013), pp 41-42. 140 Robert Alexy, A Theory of Constitutional Rights, (translated by Julian Rivers, first published 2002, OUP 2010), pp. 47-48. 141 See Robert Alexy, A Theory of Constitutional Rights (Julian Rivers, trans. Oxford Univ. Press 2002). 143 See Francisco J. Urbina, Is It Really That Easy? A Critique of Proportionality and Balancing as Reasoning Canadian Journal of Law and Jurisprudence, 2014; and Bernhard Schlink, Abw gung im Verfassungsrecht , Duncker Humblot, 1976. Annexure Foot Note 141 See Robert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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