Former Election Commissioner Ashok Lavasa writes: With SC judgment on electoral bonds, truth will be out

The judgment establishes that corporate funding allowed under the Companies Act since inception permitted political funding with several riders, which meant that companies could donate for political purposes to a limited extent, with appropriate board resolutions only when they generated profits. However, in no circumstances, full disclosure was ever relaxed nor were corporates allowed to donate unlimited amounts even if they didn’t make profits in the business for which they were incorporated. The changes made per the impugned law tampered with the cardinal tenets of disclosure and perpetuated “the pre-existing inequality in power between shareholders and the Board/Promoters/management”.

After the din of victory and the defiance in defeat settle, let us ponder over the larger issues raised in the judgment. In fact, we will all lose if it is seen merely as victory or defeat and not as another opportunity to refine the system.

A few issues stand out. The motive behind a piece of legislation is as important as the statement of purpose. The EBS was designed to encourage a culture of secrecy while claiming to bring about transparency in electoral funding. The law cannot pretend to serve a purpose while providing for exactly the opposite. In his separate order, Justice Sanjiv Khanna says that “retribution, victimisation or retaliation cannot by any stretch be treated as a legitimate aim”.

The institutions created to guard larger public interest cannot allow themselves to be assimilated with a government cause. The RBI initially said the EBS “will not leave any trail of transactions” and the Election Commission said that the amendments introduced by the Finance Act, 2017, will have a “serious impact on transparency of political finance/funding of political parties” and that in the absence of reporting “it cannot be ascertained whether the political party has taken any donation in violation of provisions under Section 29B of the Representation of the People Act 1951 which prohibits the political parties from donations from Government Companies and Foreign sources”. The reasons for the change in the stand are unfathomable.

Equally intriguing is the SC’s refusal to stay the EBS while pronouncing its order in April 2019 observing that the operations under the scheme are not placed behind “iron curtains incapable of being pierced”, thereby converting the right to information into an arduous search allowing public authorities to hide information in a labyrinthine maze. In a civilised society, the right to know is a way of persuading public entities to move towards voluntary disclosure that minimises the need for petitions. The secrecy introduced in the scheme converted that right into a risky investigation. The SC has now held that “the right to information has an instrumental exegesis, which recognises the value of the right in facilitating the realisation of democratic goals. But beyond that, the right to information has an intrinsic constitutional value; one that recognises that it is not just a means to an end but an end in itself.”

“Public interest” is not a valid reason for denying information and invoking the principle of reasonable restrictions on fundamental rights. The government wanted the court to observe “judicial restraint” while scrutinising the law, and the citizens to consider the suppression of the right to information as a “reasonable restriction”.

Even though not specifically stated, the judgment implies that EBS would lead to the enrichment of political parties as there is no link between contributions received and expenditures incurred during elections. It is equally disturbing that the defaulting amount of the EB should enrich the PM’s Relief Fund as the scheme provided for “If the bond is not encashed within fifteen days, it will be deposited by the authorised bank with the Prime Minister’s Relief Fund.” The EBS is not the only means for curbing black money in election finance and that there are other alternatives such as the Electoral Trusts that “substantially fulfil the purpose and impact the right to information minimally when compared to the impact of electoral bonds on the right to information”.

While the annulment of EBS by itself cannot restore a level playing field, the scope of state support in queering the pitch for the parties not in power might reduce. The SC has expounded on the role of money in influencing voter behaviour and observed, “Money creates an exclusionary impact by reducing the democratic space for participation for both candidates and newer and smaller political parties”. Will this judgment lead us back to the dark alleys of cash funding? That is a legitimate concern. The government must consult all stakeholders in coming up with another alternative with strong sunshine clauses to address the rot that political funding has fallen into.

Finally, will this turn out to be a case of closing the stables after the horses have bolted? What would be the nature and fate of funds raised under an “unconstitutional” scheme? Is the violator entitled to enjoy the fruits of the violation?

March 13 is expected to lift the veil but will those blinded by the blaze of self-discovered glory see anything pernicious? Let not the outcome of the impending elections cast a shadow on the SC judgement. The Attorney-General argued that “The influence of contributions by companies to political parties ought not to be examined by this Court. It is an issue of democratic significance and should be best left to the legislature.”

Let us hope the new Parliament will bring about a law showing full respect to the findings of the SC so that India can justifiably hail itself as the mother of democracy without being accused of giving democracy a stepmotherly treatment.

The writer is a former Election Commissioner