TEAM CODE 69

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

CHRIST ACADEMY INSTITUTE OF LAW 14TH

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

In Matter of

TEAM CODE 69………………………………………PETITIONER

vs.

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

BEFORE SUMISSION TO HON’BLE CHIEF JUSTICE

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

MEMORANDUM ON BEHALF OF THE PETITIONERS

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

TABLE OF CONTENTS

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 India 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. Kihoto Hollohan v. Zachillhu & Ors (1992 Supp (2) SCC 651)
2. People’s Union For Civil Liberties & Anr. V. Union Of India & Anr [2013]
12 S.C.R. 283
3. Mohinder Singh Gill v. Chief Election Commissioner ,
4. State of U.P. v. Raj Narain [(1975) 4 SCC 428]
5. Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India [(1985) 1
SCC 641]
6. Kanhiya Lal Omar v. R.K. Trivedi [(1985) 4 SCC 628]
7. Common Cause (A Registered Society) v. Union of India [(1996) 2 SCC 752]
8. Jyoti Basu v. Debi Ghosal [(1982) 1 SCC 691]
9. Smt. Indira Nehru Gandhi v. Shri Raj Narain and another [1975 Supp.
SCC 1]
10. Raghbir Singh Gill vs Gurcharan Singh Tohra, 1980 SCR (3) 1302
11. Kanwar Lal Gupta v. Amar Nath Chawla, (1975) 3 SCC 646
12. Brown vs Socialist Workers Comm., 459 U.S. 87 (1982
13. People’s Union for Civil Liberties vs Union of India, (2003) 4 SCC 399.
14. Lily Thomas (Ms), Advocate vs Speaker, Lok Sabha and Ors. (1993) 4 SCC
234
15. Union of India vs Association for Democratic Reforms, (2002) 5 SCC 294
16. Romesh Thapar vs State of Madras, 1950 SCR 594
17. People’s Union of Civil Liberties (PUCL) v. Union of India (2003) 2 S.C.R.
1136
18. Buckley vs Valeo, 424 U.S. 1 (1976)
19. Nixon vs Shrink Missouri Government PAC, 528 U.S. 377 (2000)

B. BOOKS AND TREATISES

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 INDEX OF AUTHORITIES

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

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

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

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 INDEX OF AUTHORITIES

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=site
map&xid=5d93534a. Accessed 27 May 2024
2. Association for Democratic Reforms, Updated Analysis of Income and
Expenditure of National Political Parties for FY 2020-21 (2021),
[Link]
nd_Expenditure_Of_National_Political_Parties_For_Fy_2020-
21_English.pdf.
3. Association for Democratic Reforms, *Analysis of Donations Above Rs
20,000 Received by National Political Parties – FY 2022-23* (2023),
[Link]
received-national-political-parties-fy-2022-23-0.
4. 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 India

Article 32 of the Constitution of India reads as follows:

“32. Remedies for enforcement of rights conferred by

this Part

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

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

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

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

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

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

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

except as otherwise provided for by this Constitution.”

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 SYNOPSIS

SYNOPSIS

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

The petitioners contend that the EBS violates the constitutional principles of
free and fair elections and citizens' right to information. Firstly, the amendment
allowing unlimited corporate funding to political parties contravenes Article 14
by undermining the principles of free and fair elections. The lack of disclosure
regarding voluntary contributions to political parties under the EBS, and the
amendments to Sections 29C of the PP Act, 182(3) of the CG Act, and 13A(b) of
the RR Act, violate citizens’ right to information under Article 19(1)(a) of the
Constitution. The petitioners argue that these provisions undermine electoral
integrity and transparency by allowing anonymous political donations, thereby
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 SYNOPSIS

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.

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

Section 31 of the Reserve Bank of India Act, 1931

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

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 SYNOPSIS

(2) Notwithstanding anything (2) Notwithstanding anything contained

contained in the Negotiable in the Negotiable Instruments Act,
Instruments Act, 1881, no person in 1881, no person in India other than the
India other than the Bank or, as Bank or, as expressly authorised by this
expressly authorised by this Act, the Act, the Central Government shall make
Central Government shall make or or issue any promissory note expressed
issue any promissory note expressed to be payable to the bearer of the
to be payable to the bearer of the instrument.
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
political parties.- the political parties.-
(1) The treasurer of a political party or (1) The treasurer of a political party or
any other person authorized by the any other person authorized by the
political party in this behalf shall, in political party in this behalf shall, in
each financial year, prepare a report in each financial year, prepare a report
respect of the following, namely; in respect of the following, namely;
(a) the contribution in excess of twenty (a) the contribution in excess of
thousand rupees received by such twenty thousand rupees received by
political party from any person in that such political party from any person in
financial year; that financial year;
(b) the contribution in excess of twenty (b) the contribution in excess of twenty
thousand rupees received by such thousand rupees received by such
political party from companies other political party from companies other
than Government companies in that than Government companies in that
financial year. financial year.

(2) The report under sub-section Provided that nothing contained

(1) shall be in such form as may be in this sub-section shall apply to
prescribed. (3) The report for a financial the contributions received by way
year under sub- section(1) shall be of an electoral bond.
submitted by the treasurer of a political Explanation – For the purposes of
party or any other person authorized by this sub-section, “electoral bond”
the political party in this behalf before means a bond referred to in the
the due date for furnishing a return of Explanation to sub-section (3) of
income of that financial year under section 31 of the Reserve Bank of
section 139 of the Income -tax Act, 1961 India Act, 1934.
(43 of 1961), to the Election (2) The report under sub-section (1)
Commission. shall be in such form as may be
(4) Where the treasurer of any political prescribed.
party or any other person authorized by (3) The report for a financial year
the political party in this behalf fails to under sub- section(1) shall be
submit a report under sub-section (3) submitted by the treasurer of a
then, notwithstanding anything political party or any other person
contained in the Income-tax Act, 1961 authorized by the political party in
(43 of 1961), such political party shall this behalf before the due date for
not be entitled to any tax relief under furnishing a return of income of that
that Act. 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,

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SYNOPSIS

notwithstanding anything contained

in the Income-tax Act, 1961 (43 of
1961), such political party shall not be
entitled to any tax relief under that
Act.

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 SYNOPSIS

Section 182 of the Companies Act, 2013

Section 182. Prohibitions and

Section 182.
restrictions regarding political
Prohibitions and restrictions
contributions- (1) Notwithstanding regarding political contributions-
anything contained in any other (1) Notwithstanding anything
provision of this Act, a company, other contained in any other provision of
than a Government company and a this Act, a company, other than a
company which has been in existence Government company and a company
for less than three financial years, may which has been in existence for less
contribute any amount directly or than three financial years, may
indirectly to any political party contribute any amount directly or
indirectly to any political party: [First
Provided that the amount referred to in proviso omitted]
sub- section (1) or, as the case may be,
the aggregate of the amount which may Provided further that no such
be so contributed by the company in any contribution shall be made by a
financial year shall not exceed seven company unless a resolution
and a half per cent of its average net authorising the making of such
profits during the three immediately contribution is passed at a meeting of
preceding financial years: Provided the Board of Directors and such
further that no such contribution shall resolution shall, subject to the other
be made by a company unless a provisions of this section, be deemed to
resolution authorising the making of be justification in law for the making
such contribution is passed at a meeting and the acceptance of the contribution
of the Board of Directors and such authorised by it.
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 disclose in its profit and loss account
any amount or amounts contributed by the total amount contributed by it
it to any political party during the under this section during the financial
financial year to which that account year to which the account relates.
relates, giving particulars of the total
amount contributed and the name of the (3A) Notwithstanding anything
party to which such amount has been contained in sub-section (1), the
contributed contribution under this section shall
not be made except by an account
payee cheque drawn on a bank or an
account payee bank draft or use of
electronic clearing system through a
bank account: Provided that a
company may make contribution
through any instrument, issued
pursuant to any scheme notified under
any law for the time being in force, for
contribution to the political parties.
Section 13A Income Tax Act, 1961

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 SYNOPSIS

13A. Special provision relating to 13A. Special provision relating to

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

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 SYNOPSIS

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

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

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

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

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 SUMMARY OF ARGUMENTS

ISSUES RAISED

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

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

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

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 ARGUMENTS ADVANCED

IN THE SUPREME COURT OF INDUSLAND

ORIGNAL WRIT JURISDICTION

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

IN THE MATTER OF:

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

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

MOST RESPECTFULLY SHOWETH :

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

1.1. The Elements of Free And Fair elections.

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

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

the basic features of the Constitution of India.

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

held,

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

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

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

election in the following words:

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

Anr [2013] 12 S.C.R. 283

1 (1992 Supp (2) SCC 651)

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 ARGUMENTS ADVANCED

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

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 ARGUMENTS ADVANCED

“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 India constitution vests power to Election

Commission with “superintendence, direction and control” to conduct

all elections to the Parliament as well as the state legislature.

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

vested in an Election Commission
(1) The superintendence, direction and control of the
preparation of the electoral rolls for, and the conduct of, all
elections to Parliament and to the Legislature of every State and
of elections to the offices of President and Vice-President held
under this Constitution shall be vested in a Commission
(referred to in this Constitution as the Election Commission).
(2) The Election Commission shall consist of the Chief Election
Commissioner and such number of other Election
Commissioners, if any, as the President may from time to time
fix and the appointment of the Chief Election Commissioner and
other Election Commissioners shall, subject to the provisions of
any law made in that behalf by Parliament, be made by the
President.
(3) When any other Election Commissioner is so appointed the
Chief Election Commissioner shall act as the Chairman of the
Election Commission.
(4) Before each general election to the House of the People and to
the Legislative Assembly of each State, and before the first
general election and thereafter before each biennial election to
the Legislative Council of each State having such Council, the
President may also appoint after consultation with the Election
Commission such Regional Commissioners as he may consider
necessary to assist the Election Commission in the performance
of the functions conferred on the Commission by clause (1).
(5) Subject to the provisions of any law made by Parliament, the
conditions of service and tenure of office of the Election

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 ARGUMENTS ADVANCED

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
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

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 ARGUMENTS ADVANCED

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 been communicated to the Election
Commission and the Chief Electoral Officers of the States by the
political party to be leaders for the purposes of such election,
within a period of seven days from the date of the notification
for such election published in the Gazette of India or Official
Gazette of the State, as the case may be, under this Act:
Provided that a political party may, in the case where any of the
persons referred to in clause (i) or, as the case may be, in clause
(ii) dies or ceases to be a member of such political party, by
further communication to the Election Commission and the
Chief Electoral Officers of the States, substitute new name,
during the period ending immediately before forty-eight hours
ending with the hour fixed for the conclusion of the last poll for

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 ARGUMENTS ADVANCED

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 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

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 ARGUMENTS ADVANCED

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

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 ARGUMENTS ADVANCED

information and ideas through any media and regardless of

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

transparency and conceals the source of contributions undermines the

essence of free and fair elections, which is a fundamental aspect of the

Basic Structure. Free and fair elections inherently require

transparency and the public’s right to know who is financing the

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

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

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

essential for maintaining the integrity of free and fair elections.

Consequently, the Electoral Bond Scheme (EBS) is inherently

unconstitutional.

1.2 “Freedom” and “Fairness”

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

both negative and positive dimensions. In the context of "free"

elections, the negative dimension of "freedom" pertains to the voter's

ability to cast their vote safely, without interference or intimidation,

and without fear of repercussions for their electoral choice. This is

ensured by the use of a secret ballot and the security infrastructure

surrounding elections.

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 ARGUMENTS ADVANCED

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

based on complete and relevant information, free from undue

influences. In a functional democracy, elections should be determined

by a candidate’s ability to understand and address the wants, needs,

and interests of their constituents through comprehensive and

systematic policies. This process should remain uninfluenced by

monetary power and the ways in which financial resources are utilized

in the context of elections.

Representation of the People Act, 1951 Section 123 as follows

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

be corrupt practices for the purposes of this Act:— 3 [(1)
“Bribery” that is to say— (A) any gift, offer or promise by a
candidate or his agent or by any other person with the
consent of a candidate or his election agent of any
gratification, to any person whomsoever, with the object,
directly or indirectly of inducing— (a) a person to stand or
not to stand as, or 4 [to withdraw or not to withdraw] from
being a candidate at an election, or (b) an elector to vote or
refrain from voting at an election, or as a reward to— (i) a
person for having so stood or not stood, or for 5 [having
withdrawn or not having withdrawn] his candidature; or
(ii) an elector for having voted or refrained from voting; (B)
the receipt of, or agreement to receive, any gratification,
whether as a motive or a reward— (a) by a person for
standing or not standing as, or for 6 [withdrawing or not
withdrawing] from being, a candidate; or (b) by any person
whomsoever for himself or any other person for voting or
refraining from voting, or inducing or attempting to induce
any elector to vote or refrain from voting, or any candidate
3 [to withdraw or not to withdraw] his candidature.
Explanation.—For the purposes of this clause the term
“gratification” is not restricted to pecuniary gratifications
or gratifications estimable in money and it includes all
forms of entertainment and all forms of employment for
reward but it does not include the payment of any expenses
bona fide incurred at, or for the purpose of, any election
and duly entered in the account of election expenses
referred to in section 78.] (2) Undue influence, that is to

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 ARGUMENTS ADVANCED

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) The appeal by a candidate or his agent or by
any other person with the consent of a candidate or his
election agent to vote or refrain from voting for any person
on the ground of his religion, race, caste, community or
language or the use of, or appeal to religious symbols or the
use of, or appeal to, national symbols, such as the national
flag or the national emblem, for the furtherance of the
prospects of the election of that candidate or for
prejudicially affecting the election of any candidate: 2
[Provided that no symbol allotted under this Act to a
candidate shall be deemed to be a religious symbol or a
national symbol for the purposes of this clause.] (3A) The
promotion of, or attempt to promote, feelings of enmity or
hatred between different classes of the citizens of India on
grounds of religion, race, caste, community, or language,
by a candidate or his agent or any other person with the
consent of a candidate or his election agent for the
furtherance of the prospects of the election of that
candidate or for prejudicially affecting the election of any
candidate.] 3 [(3B) The propagation of the practice or the
commission of sati or its glorification by a candidate or his
agent or any other person with the consent of the candidate
or his election agent for the furtherance of the prospects of
the election of that candidate or for prejudicially affecting
the election of any candidate. Explanation.—For the
purposes of this clause, “sati” and “glorification” in
relation to sati shall have the meanings respectively

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 ARGUMENTS ADVANCED

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.
1.2.3 This is recognized under the Representation of the People Act, 1951. To

guarantee the freedom off

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

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

bribery and undue influence” upon voters. Additionally, “free” elections

are secured by the imposition of model codes of conduct, which limit

what political parties can say or do during an election campaign, and

when they can say or do it.

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 ARGUMENTS ADVANCED

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

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

this Hon’ble Court held that “fairness” implies “fairness to all parties

and candidates.” Integral to the concept of fairness is the idea of a level

playing field.

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

field between individual citizens and groups, as it can give some voices

a disproportionate influence in deciding the agenda of political parties

and, consequently, the laws and policies that govern the entire country.

In pluralistic democracies like India, it is crucial to develop practices

that preserve the equal voice of all citizens and ensure that the special

needs of all groups are heard.

1.2.7 To address this concern, various regulatory regimes have been

proposed across countries to equalize the capacity of each candidate to

campaign. These include caps on electoral funding, uniformly state-

sponsored campaign funding, and televised public debates that allow

all contesting candidates to participate. Until the amendments to the

Finance Act and the issuance of the EBS, the Indian regulatory regime

also addressed this concern through funding caps and disclosure

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

prohibits the receipt of any funding from foreign sources (whether

individuals or companies) by candidates for elections, political parties,

or organizations of a political nature. This is based on the recognition

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 ARGUMENTS ADVANCED

that money power wields influence over political parties and is

ultimately reflected in governance policies.

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

as a constitutional issue. As observed by Hon’ble Justice P.N. Bhagwati

(as he then was) in Kanwar Lal Gupta v. Amar Nath Chawla,

(1975) 3 SCC 646, “the small man's chance is the essence of Indian

democracy, and that would be stultified if large contributions from rich

and affluent individuals or groups are not divorced from the electoral

process.”

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

inconsistent with the elements of a free and fair election. Corporate

funding, by its very nature, conflicts with the Constitution.

Corporations are not citizens and therefore are not entitled to rights

under Article 19(1)(a). Their primary purpose is not to intervene in the

political process, and their involvement in corporate funding severely

undermines parity, thus compromising the fairness of elections.

1.3 Violation Of Article 14 of the Indian Constitution

1.3.1 Article 14 of the Indian Constitution

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

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

Constitution, which guarantees equality before the law and equal

protection of the laws, by severing the link between elections and

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 ARGUMENTS ADVANCED

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:

[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.

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

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[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 voters from making informed choices and

undermines the accountability of political representatives. In the

absence of transparency, the political process becomes opaque, which

directly contradicts the equal protection clause of Article 14, as it

denies citizens the information necessary to hold their representatives

accountable.

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

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

as the representative’s actions are substantively oriented towards the will

and interests of the donor rather than those of the voter.

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

for private financing of elections, which in turn, open the door to methods

of “off-the-books” or illicit financing. To quench the thirst for such

financing, there are at least five mechanisms that seem to be growing in

intensity.

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 ARGUMENTS ADVANCED

[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

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

party nominations (“tickets,” in the Indian 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

4 one of the most important demand-side explanations for the “criminalization” of politics in India
is the fact that alleged criminal candidates have significant financial assets at their disposal that
allow them to self-finance.
5 businessmen constitute 22 percent of the Lok Sabha (lower house of Parliament) and 16 percent

of the Rajya Sabha (upper house of Parliament). These figures represent significant increases
over the last decade—and possibly understate the increase, given the lack of transparency
concerning members’ business interests. Businessmen or not, the membership of elected bodies is
increasingly being restricted to a plutocratic minority. More than 50 percent of both chambers of
parliament are crorepatis or the Indian equivalent of millionaires ( one “crore” rupees is
equivalent to Rs. 10 million or about $225,000), while the average wealth of a state-level Member
of the Legislative Assembly (MLA) is 1.28 crores
6 For instance, the Reddy bothers (a sibling trio of mining magnates) from Karnataka have used

their vast mining wealth to bankroll the BJP’s rise to power in that state. As a reward, two of the
three brothers received cabinet berths while the third was awarded directorship of a powerful
state corporation
7 Uttar Pradesh Chief Minister Mayawati readily admitted that asking candidates to “make a

donation to the party” was a key component of her BSP party’s election strategy, with the
proceeds derived from ticket buying used to subsidize less well-off candidates
8 Since the onset of economic liberalization in 1991 India has become much more integrated with

the global economy, making it easier to move money into and out of the country. As a result, high
net-worth individuals and participants in India’s underground economy have begun stashing
their assets abroad to take advantage of generous foreign tax regimes. Assets sent abroad can
also be repatriated for domestic use under the guise of foreign investment and are widely
reported to be a source of election financing

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 ARGUMENTS ADVANCED

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 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

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 ARGUMENTS ADVANCED

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 India is made even more egregious by the fact

that funds contributed through the EBS can be utilized by political parties

in whatever manner they wish, without having any link to electoral

campaigns, including periods between election campaigns. The EBS, thus,

is a colorable exercise of power by the executive branch to enable the

untrammeled funneling of money through masked corporate structures,

making any quid pro quo between political parties and the economically

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

of secrecy.

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

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 ARGUMENTS ADVANCED

achieve it fail the second prong of the proportionality test

(rational nexus).
2.2.2 However, even if it is held that the second prong has been
satisfied, it is respectfully submitted that the justification
cannot pass muster under the necessity prong, i.e., the
requirement of the "least restrictive measure." This is
because it is evident that the rooting out of black money from
the electoral process does not require donor anonymity. In
other words, a strong regulatory system of campaign
financing can co-exist with a regime of transparency, where
voters are provided the relevant information with respect to
the funding of political candidates. Therefore, depriving
voters of this information is not the "least restrictive
alternative," insofar as the goal of the EBS is the rooting out
of black money.
2.3 Donor privacy
2.3.1 With respect to donor privacy, it is respectfully submitted
that this justification fails at the first prong itself. Other than
the secret ballot, democracy—and the process of elections—
are quintessentially public acts, which take place in the
public sphere. While there is no compulsion upon any
citizen—or corporation—to participate in the political or
electoral process (including through the means of financial
donations), should an individual or corporation choose to do
so, they cannot claim that right on conditions of blanket
anonymity. The argument of unregulated donor privacy,
thus, has no place in the context of participation in the
political and electoral process, and is not a "legitimate State
aim."
2.3.2 However, even if it is held that in certain cases, donor privacy
might be a legitimate State aim, it is evident that the EBS
fails on the second limb of proportionality. This is because the

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 ARGUMENTS ADVANCED

privacy it purportedly provides is asymmetric: information

about donations is known to the State Bank of India (SBI),
which is owned by the Union Government and is bound by
directions issued by the Union from time to time under
section 18 of the SBI Act, 1955. There is no section or
mechanism that restricts sharing of this information with the
government. Unlike the Census Act, 1948, for example, which
restricts the sharing of information for any purpose other
than for the census, there is no imposition of any restriction
on the sharing of this data with the government or on the use
of it for any other purpose. That being the case, donor privacy
is always subject to the Central Government’s broad powers
to obtain the identity of the donors. In other words, the
“donor privacy” guaranteed by the EBS is “privacy except
from the central government.”
2.3.3 It is respectfully submitted that insofar as the principle
underlying donor privacy in the electoral context is to
safeguard donors from political persecution or reprisals, the
availability of such information to the central 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,

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this can be addressed on a case-by-case basis, and not

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

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ISSUE 3

Whether the lack of disclosure regarding voluntary contributions to

political parties under the Electoral Bond Scheme and amendments to

Sections 29C of the PR Act, 182(3) of the CG Act, and 13A(b) of the RR Act

violates citizens’ right to information under Article 19(1)(a) of the

Constitution?

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

information about the political process, which enables her to cast an

informed vote, is guaranteed by Article 19(1)(a) of the Constitution.

Article 19(1)(a) guarantees the freedom of speech and expression.

3.1.2 Article 19(1)(a):

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

freedom of speech and expression;”

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

democratic process has been held to be an expressive act protected

under Article 19(1)(a) People’s Union for Civil Liberties vs

Union of India, (2003) 4 SCC 399.

“Communication of emotion and display of talent

through music, painting etc., is also a sort of expression.
Having regard to the comprehensive meaning of phrase
'expression', voting can be legitimately regarded as a
form of expression. Ballot is the instrument by which the
voter expresses his choice between candidates or in

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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

“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;

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 ARGUMENTS ADVANCED

(b) the contribution in excess of twenty thousand

rupees received by such political party from
companies other than Government companies in that
financial year.
[Provided that nothing contained in this sub-section
shall apply to the contributions received by way of an
electoral bond.
Explanation.––For the purposes of this sub-section,
“electoral bond” means a bond referred to in the
Explanation to sub-section (3) of section 31 of the
Reserve Bank of India Act, 1934 (2 of 1934).]
(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

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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.

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 below9 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,

9Association for Democratic Reforms, Updated Analysis of Income and Expenditure of National
Political Parties for FY 2020-21 (2021),
[Link]
nal_Political_Parties_For_Fy_2020-21_English.pdf.

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 ARGUMENTS ADVANCED

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 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

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 ARGUMENTS ADVANCED

donations. The below mentioned figure shows the breakup of

sources of donations available in the public domain.10

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

10Associationfor Democratic Reforms, *Analysis of Donations Above Rs 20,000 Received by

National Political Parties – FY 2022-23* (2023), [Link]
above-rs-20000-received-national-political-parties-fy-2022-23-0.

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 ARGUMENTS ADVANCED

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.”

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

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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

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govern respective rights of the parties. However, voters’

fundamental right to know the antecedents of a candidate
is 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

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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 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

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“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

3.1.23 In the US case of Nixon vs Shrink Missouri Government PAC,

528 U.S. 377 (2000) the court held the following

“It could not have, given the reality that donations

“make a significant contribution to freedom of
expression by enhancing the ability of candidates to
present, and the public to receive, information necessary
for the effective operation of the democratic process.”

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

has been seen that voters who are informed about a candidate’s

source of political funding are able to exercise their vote on par with

voters who have actively researched the policy positions of a

particular candidate.11 Put simply, information about a candidate’s

11Elizabeth 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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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.

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 PRAYER

PRAYER

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

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

as being unconstitutional, illegal and void.

2. Issue a writ of mandamus or any other appropriate writ directing that no

political parties would accept any donation in cash

AND/OR

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

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

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