TEAM CODE 69

Team
CHRIST ACADEMY INSTITUTE Code
OF LAW - 69
14TH INTRA MOOT COURT COMPETITION

CHRIST ACADEMY INSTITUTE OF LAW 14TH INTRA

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

In Matter of

TEAM CODE 69………………………………………PETITIONER

vs.

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

BEFORE SUMISSION TO HON’BLE CHIEF JUSTICE

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

MEMORANDUM ON BEHALF OF THE PETITIONERS

TABLE OF CONTENTS

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

S. No. Particulars Pg. No.

1. Memorial Cover / Title Page 1
2. Table of Contents 2
3. List of Abbreviations 3
4. Index of Authorities 4
5. Statement of Jurisdiction 7
6. Synopsis 8
7. Issues Raised 17
8. Arguments Advanced 18
8.1 ISSUE 1 19
Whether the amendment allowing unlimited corporate funding to
political parties violates the principles of free and fair elections and
contravenes Article 14 of the Constitution?
8.2 ISSUE 2 38
Whether the government's justifications for eliminating black
money and protecting donor privacy fail the test of proportionality?
8.3 ISSUE 3 42
Whether the lack of disclosure regarding voluntary contributions to
political parties under the Electoral Bond Scheme and amendments to
Sections 29C of the PR Act, 182(3) of the CG Act, and 13A(b) of the RR
Act violates citizens’ right to information under Article 19(1)(a) of the
Constitution?
9. Prayer 54

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 LIST OF ABBREVIATIONS

LIST OF ABBREVIATIONS

SC Supreme Court

AIR All Indusland Reporter

Ori Orissa

Mad Madras

All Allahabad

Cal Calcutta

IC Indian Cases

Del Delhi

[Link] Criminal Law Journal

SCR Supreme Court Reporter

SCJ Supreme Court Journal

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 INDEX OF AUTHORITIES

INDEX OF AUTHORITIES

A. CASES CITED
1. Brown vs Socialist Workers Comm., 459 U.S. 87 (1982)

2. Buckley vs Valeo, 424 U.S. 1 (1976)

3. Common Cause (A Registered Society) v. Union of India [(1996) 2 SCC 752]

4. Indian Express Newspapers (Bombay) (P) Ltd. v. Union of Indusland [(1985) 1 SCC

641]

5. Justice K S Puttaswamy (Retd.) And Anr. v. Union of India 2019 (1) SCC 1, (2018)

6. Jyoti Basu v. Debi Ghosal [(1982) 1 SCC 691]

7. Kanhiya Lal Omar v. R.K. Trivedi [(1985) 4 SCC 628]

8. Kanwar Lal Gupta v. Amar Nath Chawla, (1975) 3 SCC 646

9. Kihoto Hollohan v. Zachillhu & Ors (1992 Supp (2) SCC 651)

10. Lily Thomas (Ms), Advocate vs Speaker, Lok Sabha and Ors. (1993) 4 SCC 234

11. Modern Dental College and Research Centre & Ors. v. State of Madhya Pradesh &

Ors (2016) 7 SCC 353

12. Mohinder Singh Gill v. Chief Election Commissioner

13. Nixon vs Shrink Missouri Government PAC, 528 U.S. 377 (2000)

14. People’s Union for Civil Liberties vs Union of India, (2003) 4 SCC 399.

15. People’s Union For Civil Liberties & Anr. V. Union Of India & Anr [2013] 12 S.C.R.

283

16. People’s Union of Civil Liberties (PUCL) v. Union of India (2003) 2 S.C.R. 1136

17. R. v. Oakes, [1986] 1 SCR 103

18. Raghbir Singh Gill vs Gurcharan Singh Tohra, 1980 SCR (3) 1302

19. Romesh Thapar vs State of Madras, 1950 SCR 594

4
 INDEX OF AUTHORITIES

20. Smt. Indira Nehru Gandhi v. Shri Raj Narain and another [1975 Supp. SCC 1]

21. State of U.P. v. Raj Narain [(1975) 4 SCC 428]

22. Union of India vs Association for Democratic Reforms, (2002) 5 SCC 294

B. BOOKS AND TREATISES

1. Kiran Gupta and P.C. Jain, Chawla’s Elections - Law & Practice (10th ed., 2014)
2. MP Jain’s Constitutional Law (8th Edition, 2018)
3. V.S. Rama Devi and S.K. Mendiratta, How India Votes – Election Laws, Practice
and Procedure (4thed., 2017).
C. REPORTS
1. Law Commission of India Report No.255 Electoral Reforms March 2015
2. OECD (2016), Financing Democracy: Funding of Political Parties and Election
Campaigns and the Risk of Policy Capture, OECD Public Governance Reviews,
OECD Publishing, Paris, [Link]
3. Association for Democratic Reforms, Updated Analysis of Income and
Expenditure of National Political Parties for FY 2020-21 (2021),
[Link]
diture_Of_National_Political_Parties_For_Fy_2020-21_English.pdf.
4. Association for Democratic Reforms, *Analysis of Donations Above Rs 20,000
Received by National Political Parties – FY 2022-23* (2023),
[Link]
national-political-parties-fy-2022-23-0.

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

E. LEGISLATIONS
1. Constitution of Indusland 1950
2. Finance Act 2017
3. Representation of the People Act, 1951

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 INDEX OF AUTHORITIES

4. Right to Information (RTI) Act 2005

5. Income Tax Act, 1961
6. The Reserve Bank of India Act, 1934
7. The Reserve Bank of India (Amendment) Act, 2018
8. Companies Act, 2013
9. Prevention of Money Laundering Act 2002
10. Prevention of Corruption Act, 1988
11. Electoral Bond Scheme, 2018 Ministry of Finance (Department of Economic
Affairs) Notification New Delhi, the 2nd January, 2018 S.O. 29(E)
12. Conduct of Election Rules, 1961
13. United Nations Convention Against Corruption, 2004, Article 7(3)
14. The Foreign Contributions (Regulation) Act, 2010
15. State Bank of India Act, 1955
16. Census Act, 1948

F. MISCELLANEOUS
1. Herkewitz, William. "How a Soviet Social Experiment Became a Game for
Liars." Popular Mechanics, vol. 195, no. 7, Oct. 2019, pp. 30+. Gale Academic
OneFile, [Link]/apps/doc/A600917457/AONE?
u=anon~d1c6743&sid=sitemap&xid=5d93534a. Accessed 27 May 2024
2. Elizabeth Garrett, “The Future of Campaign Finance Reform Laws in the Courts
and in Congress,” University of Chicago Public Law & Legal Theory Working
Paper No. 19 (2001).

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 STATEMENT OF JURISDICTION

SSTATEMENT
TATEMENT O
OFF JJURISDICTION
URISDICTION

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

Article 32 of the Constitution of Indusland reads as follows:

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

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

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

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

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

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

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

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

as otherwise provided for by this Constitution.”

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 SYNOPSIS

SYNOPSIS

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

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

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 SYNOPSIS

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

Section 31 of the National Monetary Authority Act Act, 1931

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

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 SYNOPSIS

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

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

Explanation.- For the purposes of this sub-

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

Section 29C of the RPA, 1951

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 SYNOPSIS

Section 29C. Section 29C.

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

(4) Where the treasurer of any political

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

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 SYNOPSIS

Section 182 of the Corporate Governance Act, 2013

Section 182. Prohibitions and restrictions Section 182.

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

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 SYNOPSIS

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

Section 13A Corporate Governance Act, 1961

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 SYNOPSIS

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

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 SYNOPSIS

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

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

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

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

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 SUMMARY OF ARGUMENTS

ISSUES RAISED

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

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

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

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 ARGUMENTS ADVANCED

IN THE SUPREME COURT OF INDUSLAND

ORIGNAL WRIT JURISDICTION

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

IN THE MATTER OF:

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

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

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 ARGUMENTS ADVANCED

MOST RESPECTFULLY SHOWETH :

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

1.1. The Elements of Free And Fair elections.

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

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

features of the Constitution of Indusland.

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

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

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

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

the following words:

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

12 S.C.R. 283

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

rule of law and free and fare election are basic features of
democracy. Democracy postulates that there should be periodical
elections so that people may be in a position either to re-elect the
same representatives or choose new representatives. Democracy
also contemplates that elections should be free and fair and the
voters should be in a position to vote for the candidates of their
choice. The pre-requisite of this is that the elections are not rigged
1
(1992 Supp (2) SCC 651)

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 ARGUMENTS ADVANCED

and manipulated and the candidates or their agents are not able to
resort to unfair means and malpractices.”2

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

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

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

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

[(1996) 2 SCC 752]

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

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

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

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

1.1.6 Article 324 of the Indusland constitution vests power to Election Commission

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

Parliament as well as the state legislature.

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

an Election Commission
2
Smt. Indira Nehru Gandhi v. Shri Raj Narain and another [1975 Supp. SCC 1] ;

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 ARGUMENTS ADVANCED

(1) The superintendence, direction and control of the preparation of the

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

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

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

respect to the elections.

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

Legislatures
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 ARGUMENTS ADVANCED

Subject to the provisions of this Constitution, Parliament may from time

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

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

feature of having free and fair elections.

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

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

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

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

towards ensuring a free and fair election.

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

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

candidate at an election shall, either by himself or by his election agent,
keep a separate and correct account of all expenditure in connection
with the election incurred or authorised by him or by his election agent
between 2 [the date on which he has been nominated] and the date of
declaration of the result thereof, both dates inclusive. 3 [Explanation 1.
—For the removal of doubts, it is hereby declared that— (a) the
expenditure incurred by leaders of a political party on account of travel
by air or by any other means of transport for propagating programme of
the political party shall not be deemed to be the expenditure in
connection with the election incurred or authorised by a candidate of
that political party or his election agent for the purposes of this sub-
section; (b) any expenditure incurred in respect of any arrangements
made, facilities provided or any other act or thing done by any person in
the service of the Government and belonging to any of the classes
mentioned in clause (7) of section 123 in the discharge or purported
discharge of his official duty as mentioned in the proviso to that clause
shall not be deemed to be expenditure in connection with the election
incurred or authorised by a candidate or by his election agent for the
purposes of this sub-section. Explanation 2.—For the purposes of clause
(a) of Explanation 1, the expression “leaders of a political party”, in
respect of any election, means,— (i) where such political party is a
recognised political party, such persons not exceeding forty in number,
and (ii) where such political party is other than a recognised political
party, such persons not exceeding twenty in number, whose names have
21
 ARGUMENTS ADVANCED

been communicated to the Election Commission and the Chief Electoral

Officers of the States by the political party to be leaders for the purposes
of such election, within a period of seven days from the date of the
notification for such election published in the Gazette of Indusland or
Official Gazette of the State, as the case may be, under this Act:
Provided that a political party may, in the case where any of the persons
referred to in clause (i) or, as the case may be, in clause (ii) dies or
ceases to be a member of such political party, by further communication
to the Election Commission and the Chief Electoral Officers of the
States, substitute new name, during the period ending immediately before
forty-eight hours ending with the hour fixed for the conclusion of the last
poll for such election, for the name of such person died or ceased to be a
member, for the purposes of designating the new leader in his place.] (2)
The account shall contain such particular, as may be prescribed. (3) The
total of the said expenditure shall not exceed such amount as may be
prescribed.”

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

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

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

account is to be kept under section 77 and which is incurred or
authorized in connection with an election in a State or Union territory
mentioned in column 1 of the Table below shall not exceed— (a) in any
one parliamentary constituency of that State or Union territory, the
amount specified in the corresponding column 2 of the said Table; and
(b) in any one assembly constituency, if any, of the State or Union
22
 ARGUMENTS ADVANCED

territory, the amount specified in the corresponding column 3 of the said

Table—

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

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

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

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

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

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

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

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

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

1.1.12 Declaration adopted by the Inter-Parliamentary Council at its 161st session (Cairo,

16 September 1997)

“7. Democracy is founded on the primacy of the law and the exercise
of human rights. In a democratic State, no one is above the law and
all are equal before the law.
16. Individual participation in democratic processes and public life at
all levels must be regulated fairly and impartially and must avoid any
discrimination, as well as the risk of intimidation by State and non-
State actors.
21. The state of democracy presupposes freedom of opinion and
expression; this right implies freedom to hold opinions without
interference and to seek, receive and impart information and ideas
through any media and regardless of frontiers.

23
 ARGUMENTS ADVANCED

22. The institutions and processes of democracy must accommodate

the participation of all people in homogeneous as well as
heterogeneous societies in order to safeguard diversity, pluralism and
the right to be different in a climate of tolerance.”
1.1.13 As will be elaborated below, any form of funding that lacks transparency and

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

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

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

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

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

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

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

Bond Scheme (EBS) is inherently unconstitutional.

1.2 “Freedom” and “Fairness”

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

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

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

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

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

infrastructure surrounding elections.

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

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

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

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

comprehensive and systematic policies. This process should remain uninfluenced

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 ARGUMENTS ADVANCED

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

context of elections.

Peoples Participation Act, 1951 Section 123 as follows

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

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

The appeal by a candidate or his agent or by any other person with

the consent of a candidate or his election agent to vote or refrain
from voting for any person on the ground of his religion, race,
caste, community or language or the use of, or appeal to religious
symbols or the use of, or appeal to, national symbols, such as the
national flag or the national emblem, for the furtherance of the
prospects of the election of that candidate or for prejudicially
affecting the election of any candidate: 2 [Provided that no symbol
allotted under this Act to a candidate shall be deemed to be a
religious symbol or a national symbol for the purposes of this
clause.] (3A) The promotion of, or attempt to promote, feelings of
enmity or hatred between different classes of the citizens of
Indusland on grounds of religion, race, caste, community, or
language, by a candidate or his agent or any other person with the
consent of a candidate or his election agent for the furtherance of
the prospects of the election of that candidate or for prejudicially
affecting the election of any candidate.] 3 [(3B) The propagation
of the practice or the commission of sati or its glorification by a
candidate or his agent or any other person with the consent of the
candidate or his election agent for the furtherance of the prospects
of the election of that candidate or for prejudicially affecting the
election of any candidate. Explanation.—For the purposes of this
clause, “sati” and “glorification” in relation to sati shall have the
meanings respectively assigned to them in the Commission of Sati
(Prevention) Act, 1987 (3 of 1988)]. (4) The publication by a
candidate or his agent or by any other person 4 [with the consent
of a candidate or his election agent], of any statement of fact which
is false, and which he either believes to be false or does not believe
to be true, in relation to the personal character or conduct of any
candidate or in relation to the candidature, or withdrawal, 5*** of
any candidate, being a statement reasonably calculated to
prejudice the prospects of that candidate’s election. (5) The hiring
or procuring, whether on payment or otherwise, of any vehicle or
vessle by a candidate or his agent or by any other person 4 [with
the consent of a candidate or his election agent] 6 [or the use of
such vehicle or vessel for the free conveyance] of any elector
(other than the candidate himself the members of his family or his
agent) to or from any polling station provided under section 25 or
a place fixed under sub-section (1) of section 29 for the poll:
Provided that the hiring of a vehicle or vessel by an elector or by
several electors at their joint costs for the pupose of conveying him
or them to and from any such polling station or place fixed for the
poll shall not be deemed to be a corrupt practice under this clause
if the vehicle or vessel so hired is a vehicle or vessel not propelled
by mechanical power: Provided further that the use of any public
transport vehicle or vessel or any tramcar or railway carriage by
any elector at his own cost for the purpose of going to or coming
from any such polling station or place fixed for the poll shall not
be deemed to be a corrupt practice under this clause.

26
 ARGUMENTS ADVANCED

1.2.3 This is recognized under the Peoples Participation Act, 1951. To guarantee the

freedom off elections, the PP Act enacts a statutory prohibition of “corrupt

practices,” defined under Section 123 of the Act to include “all forms of bribery

and undue influence” upon voters. Additionally, “free” elections are secured by

the imposition of model codes of conduct, which limit what political parties can

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

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

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

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

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

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

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

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

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

Indusland, it is crucial to develop practices that preserve the equal voice of all

citizens and ensure that the special needs of all groups are heard.

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

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

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

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

the amendments to the Fiscal Act and the issuance of the EBS, the Induslandn

regulatory regime also addressed this concern through funding caps and disclosure

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

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

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

27
 ARGUMENTS ADVANCED

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

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

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

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

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

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

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

divorced from the electoral process.”

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

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

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

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

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

undermines parity, thus compromising the fairness of elections.

1.3 Violation Of Article 14 of the Indian Constitution

1.3.1 Article 14 of the Induslandn Constitution

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

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

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

the link between elections and representative democracy through the removal of

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

documented in several ways, highlights this violation:

28
 ARGUMENTS ADVANCED

[Link] When a political candidate or party takes money from a donor and explicitly

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

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

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

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

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

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

individuals.3

[Link] The influence of large political donations is often indirect and subtle. Donors

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

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

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

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

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

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

[Link] The EBS facilitates a system where policy-makers may prioritize the interests of

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

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

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

conflicts with the egalitarian principles enshrined in Article 14.

[Link] The removal of transparency under the EBS means that the public cannot see who

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

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

29
 ARGUMENTS ADVANCED

voters from making informed choices and undermines the accountability of

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

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

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

accountable.

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

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

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

donor rather than those of the voter.

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

private financing of elections, which in turn, open the door to methods of “off-the-

books” or illicit financing. To quench the thirst for such financing, there are at least

five mechanisms that seem to be growing in intensity.

[Link] First, parties are actively recruiting candidates involved in serious criminal

activity because they possess both the financial resources and the connections

necessary to contest elections successfully4

[Link] Second, there is a growing number of businessmen directly contesting national

elections.5

[Link] Third, wealthy individuals are not only contesting elections directly but they are

also bankrolling entire political movements.6

4
one of the most important demand-side explanations for the “criminalization” of politics in Indusland is the
fact that alleged criminal candidates have significant financial assets at their disposal that allow them to self-
finance.
5
businessmen constitute 22 percent of the Lok Sabha (lower house of Parliament) and 16 percent of the Rajya
Sabha (upper house of Parliament). These figures represent significant increases over the last decade—and
possibly understate the increase, given the lack of transparency concerning members’ business interests.
Businessmen or not, the membership of elected bodies is increasingly being restricted to a plutocratic minority.
More than 50 percent of both chambers of parliament are crorepatis or the Induslandn equivalent of millionaires
( one “crore” rupees is equivalent to Rs. 10 million or about $225,000), while the average wealth of a state-level
Member of the Legislative Assembly (MLA) is 1.28 crores
6
For instance, the Reddy bothers (a sibling trio of mining magnates) from Karnataka have used their vast
mining wealth to bankroll the BJP’s rise to power in that state. As a reward, two of the three brothers received

30
 ARGUMENTS ADVANCED

[Link] Fourth, many parties are said to readily accept payment in exchange for party

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

[Link] Finally, parties and their private sector allies launder funds through domestic and

international markets.8

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

between political donations and policy formation and to judge for themselves

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

political party or candidate.

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

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

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

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

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

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

Corruption, 2004, Article 7(3) and [Para 2.31(b)6], [Para 2.31(b)8] of Law

Commission report).

1.3.7 Removing caps on funding and eliminating transparency drive the relationship

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

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

unchecked funding severely undermines the right to equality and equal protection

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

cabinet berths while the third was awarded directorship of a powerful state corporation
7
Uttar Pradesh Chief Minister Mayawati readily admitted that asking candidates to “make a donation to the
party” was a key component of her BSP party’s election strategy, with the proceeds derived from ticket buying
used to subsidize less well-off candidates
8
Since the onset of economic liberalization in 1991 Indusland has become much more integrated with the global
economy, making it easier to move money into and out of the country. As a result, high net-worth individuals
and participants in Indusland’s underground economy have begun stashing their assets abroad to take advantage
of generous foreign tax regimes. Assets sent abroad can also be repatriated for domestic use under the guise of
foreign investment and are widely reported to be a source of election financing

31
 ARGUMENTS ADVANCED

to exert disproportionate influence over political candidates and parties, thereby

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

equal representation of all citizens in the democratic process.

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

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

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

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

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

pronounced with corporate donations, given the symbiotic relationship between

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

economy.

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

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

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

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

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

donors by giving them substantially greater opportunities to influence political parties

and electoral outcomes than the ordinary, individual voter.

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

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

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

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

executive branch to enable the untrammeled funneling of money through masked

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

32
 ARGUMENTS ADVANCED

economically powerful doyens of the corporate sector undetectable under the EBS's

veil of secrecy.

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

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

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

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

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

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

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

with economic power, thereby contravening the fundamental democratic value of

equal participation for all citizen

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 ARGUMENTS ADVANCED

ISSUE 2

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

2.1 Proportionality
2.1.1 The Respondents have proffered two justifications for the EBS: first,
that by formalizing the process of political donations, black money will
be eliminated from politics; and secondly, that the EBS protects the
donor’s right to privacy. It is respectfully submitted that both
justifications fail the test of proportionality.
2.1.2 Modern Dental College and Research Centre & Ors. v. State of
Madhya Pradesh & Ors (2016) 7 SCC 353
“Thus, while examining as to whether the impugned
provisions of the statute and Rules amount to reasonable
restrictions and are brought out in the interest of the
general public, the exercise that is required to be
undertaken is the balancing of fundamental right to
carry on occupation on the one hand and the restrictions
imposed on the other hand. This is what is known as
'Doctrine of Proportionality'. Jurisprudentially,
'proportionality' can be defined as the set of rules
determining the necessary and sufficient conditions for
limitation of a constitutionally protected right by a law
to be constitutionally permissible.”
2.1.3 This Hon’ble court in the matter of Justice K S Puttaswamy (Retd.)
And Anr. v. Union of India 2019 (1) SCC 1, (2018) while deciding
the limits on state’s discretion to constrict fundamental rights it was
held

“The concerns expressed on behalf of the petitioners

arising from the possibility of the State infringing the
right to privacy can be met by the test suggested for

34
 ARGUMENTS ADVANCED

limiting the discretion of the State: “ (i) The action must

be sanctioned by law; (ii) The proposed action must be
necessary in a democratic society for a legitimate aim;
(iii) The extent of such interference must be
proportionate to the need for such interference; (iv)
There must be procedural guarantees against abuse of
such interference.”
2.1.4 According to Aharon Barak (former Chief Justice, Supreme Court of
Israel), there are four sub-components of proportionality which need to
be satisfied9, a limitation of a constitutional right will be
constitutionally permissible if:
(i) it is designated for a proper purpose;
(ii) the measures undertaken to effectuate such a limitation are
rationally connected to the fulfillment of that purpose; (iii) the
measures undertaken are necessary in that there are no alternative
measures that may similarly achieve that same purpose with a lesser
degree of limitation; and finally (iv) there needs to be a proper relation
('proportionality stricto sensu' or 'balancing') between the importance
of achieving the proper purpose and the social importance of
preventing the limitation on the constitutional right.10
2.1.5 This essence of Doctrine of Proportionality is beautifully captured by
Chief Justice Dickson of Canada in R. v. Oakes, [1986] 1 SCR 103 in
the following words:
“To establish that a limit is reasonable and demonstrably
justified in a free and democratic society, two central
criteria must be satisfied. First, the objective, which the
measures, responsible for a limit on a Charter right or
freedom are designed to serve, must be “of” sufficient
importance to warrant overriding a constitutional
protected right or freedom...Second … the party invoking
Section 1 must show that the means chosen are reasonable
and demonstrably justified. This involves “a form of
proportionality test...” Although the nature of the
proportionality test will vary depending on the

9
Proportionality: Constitutional Rights and Their Limitation by Aharon Barak, Cambridge University Press
2012. ; Modern Dental College and Research Centre & Ors. v. State of Madhya Pradesh & Ors (2016) 7 SCC
353
10
Ibid

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 ARGUMENTS ADVANCED

circumstances, in each case courts will be required to

balance the interests of society with those of individuals
and groups. There are, in my view, three important
components of a proportionality test. First the measures
adopted must be ...rationally connected to the objective.
Second, the means ...should impair “as little as possible”
the right or freedom in question...Third, there must be a
proportionality between the effects of the measures which
are responsible for limiting the Charter right or freedom,
and the objective which has been identified as of
“sufficient importance”. The more severe the deleterious
effects of a measure, the more important the objective
must be if the measure is to be reasonable and
demonstrably justified in a free and democratic society.”

2.1.6 It is well-established that State action that infringes Article 19 must—

in order to constitute a "reasonable restriction" upon the right—pass
the four-pronged test of proportionality: a legitimate State aim, a
rational nexus with the aim, the requirement of necessity, and
proportionality stricto sensu (i.e., a balance between the intensity of the
goal and the restriction of the right).
2.2 Black money
2.2.1 With respect to black money, it is respectfully submitted that the fact
that under the EBS financial contributions are now routed through the
State Bank of Indusland (SBI), and therefore have to pass a Know-
Your-Customer (KYC) check, is of no assistance. This process cannot
address a donor’s ability to funnel "black" money through a legitimate
company or individual, a risk that is enhanced by the fact that under
the EBS, there is no requirement of keeping a record of large donations
or donors. In other words, the EBS does not tackle the problem of the
legitimacy of the origin of political donations, and arguably, makes
scrutiny even more difficult. Even if the State’s goal is taken at face
value, the means to achieve it fail the second prong of the
proportionality test (rational nexus).
2.2.2 However, even if it is held that the second prong has been satisfied, it
is respectfully submitted that the justification cannot pass muster under
the necessity prong, i.e., the requirement of the "least restrictive
measure." This is because it is evident that the rooting out of black

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money from the electoral process does not require donor anonymity. In
other words, a strong regulatory system of campaign financing can co-
exist with a regime of transparency, where voters are provided the
relevant information with respect to the funding of political candidates.
Therefore, depriving voters of this information is not the "least
restrictive alternative," insofar as the goal of the EBS is the rooting out
of black money.
2.2.3 A lack of regulatory coverage in certain countries is leaving them
exposed to undue influence through political financing. Anonymous
contributions, especially where private donations play a significant role
in a country’s political funding, increase the risk of policy capture and
undue influence as they do not allow for scrutiny of the sources of
funding nor an assessment of the lawfulness of donations. They also
preclude scrutiny and overall analysis of donations and influence, such
as trends in volume of donations by sector, or the share which certain
donors have in the overall funding of political parties. This also
enables other high-risk factors, such as foreign donations and
donations from state-owned enterprises to contribute anonymously and
circumvent current prohibitions.11

2.3 Donor privacy

2.3.1 With respect to donor privacy, it is respectfully submitted that this
justification fails at the first prong itself. Other than the secret ballot,
democracy—and the process of elections—are quintessentially public
acts, which take place in the public sphere. While there is no
compulsion upon any citizen—or corporation—to participate in the
political or electoral process (including through the means of financial
donations), should an individual or corporation choose to do so, they
cannot claim that right on conditions of blanket anonymity. The
argument of unregulated donor privacy, thus, has no place in the

11
OECD (2016), Financing Democracy: Funding of Political Parties and Election Campaigns and the Risk of
Policy Capture, OECD Public Governance Reviews, OECD Publishing, Paris,
[Link]

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context of participation in the political and electoral process, and is not

a "legitimate State aim."
2.3.2 However, even if it is held that in certain cases, donor privacy might be
a legitimate State aim, it is evident that the EBS fails on the second
limb of proportionality. This is because the privacy it purportedly
provides is asymmetric: information about donations is known to the
State Bank of Indusland (SBI), which is owned by the Union
Government and is bound by directions issued by the Union from time
to time under section 18 of the SBI Act, 1955. There is no section or
mechanism that restricts sharing of this information with the
government. Unlike the Census Act, 1948, for example, which restricts
the sharing of information for any purpose other than for the census,
there is no imposition of any restriction on the sharing of this data with
the government or on the use of it for any other purpose. That being
the case, donor privacy is always subject to the Central Government’s
broad powers to obtain the identity of the donors. In other words, the
“donor privacy” guaranteed by the EBS is “privacy except from the
central government.”
2.3.3 It is respectfully submitted that insofar as the principle underlying
donor privacy in the electoral context is to safeguard donors from
political persecution or reprisals, the availability of such information to
the central government—which has exclusive control over the
instruments of state coercion—is entirely irrational and defeats the
stated purpose entirely. This is also manifestly unfair and violative of
Article 14 of the Constitution inasmuch as it privileges one party, i.e.,
the party ruling at the center, with crucial electoral information that
other parties are not privy to, thereby undermining the level playing
field that the electoral process must guarantee.
2.3.4 Finally, even if it is held that, as far as the goal of donor privacy is
concerned, the EBS passes both the legitimate State aim and rational
nexus prongs of the proportionality standard, it fails the necessity test.
To the extent that the concern around reprisals and political
persecution is valid, this can be addressed on a case-by-case basis, and

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not through an omnibus guarantee of donor privacy. For example, in

Brown vs Socialist Workers Comm., 459 U.S. 87 (1982), the US
Supreme Court noted that disclosure requirements could be waived
where there existed “specific evidence of hostility, threats, harassment
and reprisals.” This determination—made on a case-by-case basis—is
a more proportionate way of addressing the concern. In its existing
form, therefore, EBS evidently fails the proportionality test.
2.3.5 Even assuming that donor privacy is a valid justification for the
measure, it is manifestly arbitrary and overbroad inasmuch as it
includes corporate entities within its protective opacity fold.
Individuals have privacy rights flowing from Article 19 read with
Article 21. Corporate persons, as non-citizens, do not have privacy
rights.

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ISSUE 3

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

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

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

19(1)(a) of the Constitution?

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

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

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

freedom of speech and expression.

3.1.2 Article 19(1)(a):

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

speech and expression;”

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

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

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

“Communication of emotion and display of talent through

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

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

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

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 ARGUMENTS ADVANCED

“Voting is formal expression of will or opinion by the

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

by the political parties.

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

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

(2) The report under sub-section (1) shall be in such form as

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

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

interest of the voters as specifically exempting the electoral bonds in

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

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

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

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

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

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

Association for Democratic Rights 2022-23 as per the figure provided below 12

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

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

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

seven National Parties came from Donations through Electoral Bonds (Rs

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

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

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

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

Bonds worth Rs 447.498 cr.

3.1.9 The Petitioner respectfully submits that the disproportionate influence of

corporate donations on national political parties necessitates the

12
Association for Democratic Reforms, Updated Analysis of Income and Expenditure of National Political
Parties for FY 2020-21 (2021),
[Link]
ical_Parties_For_Fy_2020-21_English.pdf.

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implementation of stringent transparency measures to preserve the democratic

integrity of the electoral process and the impugned Electoral Bonds Scheme

only contributes to the degradation of this imperative transparency.

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

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

received 3318 donations from corporate/business sectors totalling Rs 680.495

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

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

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

donations available in the public domain.13

13
Association for Democratic Reforms, *Analysis of Donations Above Rs 20,000 Received by National Political
Parties – FY 2022-23* (2023), [Link]
national-political-parties-fy-2022-23-0.

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3.1.11 The Petitioners humbly submit data reveals an overwhelming dominance of

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

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

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

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

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

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

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

For the aforementioned reasons, the Petitioner respectfully submits that

increased transparency in political donations is imperative to safeguard the

democratic framework of our nation.

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

specific, enumerated fundamental right under the Constitution entails the

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

meaningless, or redundant.

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

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

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

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

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

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

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

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

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

candidates must disclose their assets, educational qualifications, and

involvement in criminal cases.

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

Indian constitutional jurisprudence right from the origins of the Constitution.

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

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

that

“The public interest in freedom of discussion stems from the

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

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

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

scrutiny is one of the surest means to cleanse our democratic

governing system and to have competent legislatures.”

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

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

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

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

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independent of statutory rights under the election law. A voter is

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

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

“(1) Securing information on the basic details concerning

the candidates contesting for elections to Parliament or the
State Legislature promotes freedom of expression and
therefore the right to information forms an integral part of
Article 19(1)(a). This right to information is, however,
qualitatively different from the right to get information
about public affairs or the right to receive information
through the press and electronic media, though, to a certain
extent, there may be overlapping.
(2) The right to vote at the elections to the House of the
People or Legislative Assembly is a constitutional right but
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not merely a statutory right; freedom of voting as distinct

from right to vote is a facet of the fundamental right
enshrined in Article 19(1)(a). The casting of vote in favour
of one or the other candidate marks the accomplishment of
freedom of expression of the voter.”
3.1.20 It is respectfully submitted that the legal proposition (i.e., that voters have a

fundamental right to receive relevant information about electoral candidates),

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

the functioning of democracy), establishes beyond cavil that information

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

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

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

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

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

disclosure requirements.

“provide the electorate with information as to where

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

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

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

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

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

said candidate might represent their interests especially when such interests

are in conflict

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

377 (2000) the court held the following

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

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

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

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

researched the policy positions of a particular candidate.14 Put simply,

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

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

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

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

impossible for the latter to understand when their elected representatives might

be acting in favour of large campaign donors.

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

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

14
Elizabeth Garrett, “The Future of Campaign Finance Reform Laws in the Courts and in Congress,” University
of Chicago Public Law & Legal Theory Working Paper No. 19 (2001).

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 PRAYER

PRAYER

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

a. Section 135 of the Fiscal Act 2017 and the corresponding amendment carried out
in Section 31 of the National Monetary Authority Act, 1934,
b. Section 137 of the Fiscal Act, 2017, and the corresponding amendment carried
out in Section 29C of the Peoples Participation Act, 1951
c. Section 11 of the Fiscal Act, 2017 and the corresponding amendment carried out
in Section 13A, the Corporate Governance Act, 1961
d. Section 154 of the Fiscal Act, 2017 and the corresponding amendment carried out
in Section 182 of the Corporate Governance Act, 2013 and,
e. Section 236 of Fiscal Act, 2016 and the corresponding amendment carriedout in
Section 2(1)(j) of the Foreign Regulations Contribution Act, 2010

as being unconstitutional, illegal and void.

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

AND/OR

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

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

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