Association for Democratic Reforms v. Union of India (Electoral Bonds)

The story

For years, anyone could buy a bond from the State Bank of India and hand it to a political party without anyone—voters, rivals, even the Election Commission—knowing who gave what. The government called it a shield against black money; critics called it a shield for crony capitalism. Two civil society groups, the Association for Democratic Reforms and Common Cause, refused to let the scheme go unchallenged, dragging the fight to the Supreme Court over several years. In February 2024, a five-judge bench led by Chief Justice D.Y. Chandrachud delivered its verdict. The judges said democracy cannot survive on secrets: if citizens are to vote wisely, they must know who bankrolls the parties asking for their trust. The scheme, the Court held, was not a reasonable restriction but a disproportionate blackout on information. In a dramatic follow-up, the Court ordered the SBI to hand over every bond's buyer and recipient details to the Election Commission, which then published them online. Within days, Indians could see, for the first time, which companies had funded which parties—turning a story about anonymous money into one of hard-won transparency.

The facts

The Association for Democratic Reforms and Common Cause, NGOs working on electoral transparency, challenged the Electoral Bond Scheme, 2018, introduced by the Union Government to allow anonymous donations to political parties through bearer bonds purchased from the State Bank of India. The scheme was accompanied by amendments to the Representation of the People Act, Companies Act, Income Tax Act, and RBI Act that removed prior disclosure requirements and caps on corporate political donations. Petitioners argued the scheme concealed the identity of donors from voters and enabled unchecked corporate influence over political parties, undermining free and fair elections.

The question before the court

Whether the Electoral Bond Scheme and the accompanying statutory amendments permitting anonymous, unlimited political donations violate the voters' right to information under Article 19(1)(a) and the constitutional guarantee of free and fair elections.

The holding

A five-judge Constitution Bench unanimously struck down the Electoral Bond Scheme and the related amendments as unconstitutional, holding that anonymity in political funding violates the citizens' right to information under Article 19(1)(a), which includes the right to know about the funding of political parties necessary for informed voting. The Court held the amendments permitting unlimited, undisclosed corporate donations were manifestly arbitrary and disproportionate, and directed the State Bank of India to disclose complete details of bonds purchased and encashed to the Election Commission of India, which was ordered to publish this information publicly.

The principle it stands for

The right to freedom of speech and expression under Article 19(1)(a) encompasses the voters' right to information essential for meaningful participation in a democracy, including information about sources of political funding. Anonymity in electoral financing that shields such information from public scrutiny is not a proportionate restriction and cannot be justified merely to curb black money, especially where less restrictive means exist. Unlimited, non-transparent corporate contributions to political parties undermine political equality and the integrity of free and fair elections.

Provisions this case shaped

• Art. 14Equality before lawstruck_down — Companies Act amendment removing cap on corporate donations held manifestly arbitrary
• Art. 19Protection of certain rights regarding freedom of speech, etcexpanded — Article 19(1)(a) held to include voters' right to information on political funding sources.