Maintaining that “purity of the electoral process is fundamental to the survival of a healthy democracy”, the Supreme Court Friday ordered that candidates contesting an election and their associates — spouses and dependents — must disclose their sources of income. It directed that suitable amendments be made in rules and Form 26 — the affidavit filed by the candidate along with the nomination paper — to make candidates and their associates disclose sources of income. The bench of Justices J Chelameswar and S Abdul Nazeer, while slamming corruption in politics, said undue accretion of assets of lawmakers was a “sure indicator” of the beginning of a failing democracy which, if left unattended, would lead to the destruction of democracy and pave the way for the “rule of mafia”.
The bench, while ruling on a PIL by Lucknow-based NGO Lok Prahari, said there was need for a mechanism to “continuously” monitor assets and sources of income of legislators and their associates. “Information regarding the sources of income of candidates and their associates would, in our opinion, certainly help the voter to make an informed choice of candidate to represent the constituency in the legislature,” the bench said. The court said such disclosure would be a part of the fundamental right of the voter under Article 19(1)(a) as laid down in its 2002 judgment in Union of India vs Association for Democratic Reforms & Another in which it stated that “voter speaks out or expresses by casting vote”.
Non-disclosure of sources of income by candidates and their associates “would constitute a corrupt practice falling under the heading ‘undue influence’ as defined under Section 123(2) of the RP (Representation of the People) Act of 1951”.
The court said the candidate must also disclose his/her interest or stake in any government contract that he/she or any family member has with the government. The petitioner had raised the question of assets of some people’s representatives increasing manifold after their election. The bench noted that there was “need to make appropriate provision, declaring that the undue accretion of assets is a ground for disqualifying a legislator even without prosecuting the legislator for offences under the PC Act”.
The court said the government was competent to make rules to this effect and put in place a permanent mechanism to monitor the financial affairs of legislators and their associates.
“The State owes a constitutional obligation to the people of the country to ensure that there is no concentration of wealth to the common detriment and to the debilitation of democracy. Therefore, it is necessary, as rightly prayed by the petitioner, to have a permanent institutional mechanism dedicated to the task.”
The mechanism, the bench said, must collect data periodically and examine whether there is disproportionate increase in the assets and recommend action in appropriate cases, either to prosecute them or place it before the legislature to continue their eligibility to continue as members of the House. Such data, it said, should also be placed in the public domain to enable voters to make an informed choice.
“The most crude process by which a legislator or his associates could accumulate assets is by resorting to activities which constitute offences under the Prevention of Corruption Act, 1988. Gold is their God,” the bench said.
However, such growth in wealth, it said, may also be due to activities that are improper, but not illegal.
The bench pointed out that there were known cases of legislators or their associates availing of huge amount of loans for alleged commercial purposes from public financial institutions, either directly or through body corporates controlled by them. Such loans become non-performing assets (NPAs).
“It is equally a widely prevalent phenomenon that borrowers (legislators or even others) whose accounts have become NPAs are able to secure fresh loans in huge amounts either from the very same or other financial institutions,” it said.
The bench denied the plea for a probe into the assets of some politicians named in the petition, saying this “would amount to selective scrutiny of the matter in the absence of any permanent mechanism regularly monitoring the growth of the assets of all the legislators and/or their associates as a class. Such a selective investigation could lead to political witch-hunting”.