1

PSOL12
3rd AIU NATIONAL MOOT COURT COMPETITION,

2024

IN THE SUPREME COURT OF ARYAVARTA

[Whereas this Hon’ble Court was pleased to admit the PILs of the petitioners challenging the Electoral Bonds
Scheme, 2018 and its related amendments under Article 32 r/w Order XXXVIII Rule 12 of the Supreme
Court Rules, 2013 and in exercise of its powers under Article 139A has clubbed the petitions, the Written
Submissions of the Petitioners for the purposes of the hearing scheduled on 6 th April, 2024 is filed as under:]

IN THE MATTER

ARISING OUT OF THE IMPUGNED CONSTITUTIONALITY

OF&THE
LOKHIT ABHIYAN ELCETORAL BONDS SCHEME
ANR.

& PETITIONERS

COMMUNIST PARTY OF ARYAVARTA

UNION OF INDIA RESPONDENT

DULY SUBMITTED TO THE HON’BLE CHIEF JUSTICE OF ARYAVARTA AND

HIS LORDSHIP’S COMPANION JUSTICES

-MEMORIAL FILED ON BEHALF OF PETITIONERS-

 2

TABLE OF CONTENTS
S Content Page
no. no.

1. List of abbreviations 3-4

2. Index of authorities 5-10

3. Statement of jurisdiction 11

4. Statement of facts 12-

13
5. Issues raised 14

6. Summary of arguments 15-

16
7. Arguments advanced 17-
36
8. Prayer 37
 3

LIST OF ABBREVIATIONS
S.No ABBREVIATION FULL FORM

1 AIR All India Reporter

2 Art. Article

3 E.C.I Election commission India

4 EBS Electoral Bond Scheme

5 Edn Edition

6 FERA The Foreign Contribution

regulation act,
7 H.L House of Lords

8 HC High Court

9 Hon'ble Honorable

10 i.e. Id Est

11 I.T, Act, 1961 Income Tax Act,1961

12 ICCPR International Covenant on

Civil and Political Rights

13 K.B Kings Bench

14 Ld. Learned

15 No. Number

16 Ors Others

17 p Page

18 pp Pages

19 Q.B Queen’s Bench

 4

20 R.B.I Reserve Bank of India

21 RPA,1951 Representation of People’s

Act,1951
22 SC Supreme Court

23 SCC Supreme Court Cases

24 UDHR Universal Declaration of

Human rights

25 USSC United States Supreme Court

 5

INDEX OF AUTHORITIES

TABLE OF CASES

S.NO. CASE LAWS Page

No.

Review of Substance over form

1. State of Tamil Nadu and ors v National South Indian River Interlinking 21
Agriculturalist Association, (2021) 15 SCC 534

Interpretation of the word “Only”

2. Hari Ram v Baby Gokul Prasad, (1991) Supp (2) SCC 608 21
3. M/s Saru Smelting (P) Ltd V. Commissioner of Sales Tax, Lucknow, (1993) 21
Supp (3) SCC 97

4. Justice KS Puttaswamy (RETD) & Anr v Union of India & Ors, (2017) 10 SCC 21
1

Uncurtailed Discretion Equals Arbitrariness

5. S.G. Jaisinghani v Union of India, AIR 1967 SC 1427 21

6. United States v Wunderlich, 1951 SCC OnLine US SC 93 22
7. R. v Wilkes, (1770) 4 Burr 2527 22
8. E.P. Royappa V State of Tamil Nadu, AIR 1974 SC 555 22
9. Shayra Bano v Union of India & ors., AIR 2017 SC 4609 22
10. Maneka Gandhi v Union of India, AIR 1978 SC 597 22
11. S.G. Jaisinghani v. Union of India, AIR 1967 SC 1427 22
12. Sharma Transport v Govt of Andhra Pradesh, (2002) 2 SCC 188 22
Doctrine of Colorable Legislation or Fraud on the Indian Constitution

13. K.C. Gajapati Narayan Deo v State of Orissa, AIR 1953 Ori 185 24
14. K.T. Moopil Nair v State of Kerala, AIR 1961 SC 552 24

15. Kuldip Nayar v. Union of India AIR 2006 SC 3127 24

16. M.R. Balaji v State of Mysore, AIR 1963 SC 649 24

Right to Information on Public Affairs

17. Union of India v Association of Democratic Reforms, (2002) 5 SCC 294 (LB) 24

18. People’s Union of Civil liberties (PUCL) & Anr. v Union of India & Anr, AIR 24
2003 SC 2363
 6

19. State of Uttar Pradesh v Raj Narain, AIR 1975 SC 865 25

20. State of Punjab v Sodhi Sukhdev Singh, AIR 1961 SC 493 25

21. SP Gupta v Union of India, 1981 Supp (1) SCC 87 25

Treatment of Right to Information as an “END IN ITSELF”

22. Secy., Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. 26
of Bengal, (1995) 2 SCC 161
23. Indian Express Newspapers v. Union of India, AIR 1986 SC 515 26

24. Romesh Thappar v. State of Madras, AIR 1950 SC 124 26

25. DC Saxena v. Hon’ble The Chief Justice of India, (1996) 5 SCC 216 26

26. Supriyo Chakraborty v. Union of India, 2023 INSC 920 26

Doctrine of Proportionality

27. Modern Dental College & Research Centre & Ors v State of Madhya Pradesh 27
& Ors, (2016) 7 SCC 353

28. Gujarat Mazdoor Sabha and Anr v State of Gujarat, 2020 10 SCC 459 27

29. Anuradha Bhasin V. Union of India & Ors, (2020) 3 SCC 637 27

Judicial Review on Policy matters

30. L. Chandra Kumar v Union of India, AIR 1997 SC 1125 32

31. S.P.Sampath Kumar v Union of India, 1987 SCR (3) 233 32

32. Keshavananda Bharti v State of Kerala, AIR 1973 SC 1461 32

33. Indira Nehru Gandhi v Raj Narain, AIR 1975 SC 865 32

34. Kuldip Nayar v Union of India, AIR 2006 SC 3127 32

51. Bhavesh D. Parish and Others v. Union of India and Others, (2000) 5 SCC 471 32

35. Directorate General of Foreign Trade and Others v. Kanak Exports and 32
Another, (2016) 2 SCC 226

36. Premium Granites v. State of T.N. (1994) 2 SCC 691 32

37. State of M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639 32

 7

38. Delhi Science Forum v. Union of India, (1996) 2 SCC 405 32

39. Peerless General Finance and Investment Co. Ltd. v. RBI, (1992) 2 SCC 343 32

On Corruption Impairing polity and Democracy

40. Keshavananda Bharti v State of Kerala AIR 1973 SC 1461 33

41. 33
Indira Nehru Gandhi V. Raj Narain AIR 1975 SC 865

42. Digvijay Mote v. Union of India, (1993) 4 SCC 175 33

43. Union of India v. Association for Democratic Reforms, (2002) 5 SCC 294 33

44. PUCL V. Union of India, (2013) 10 SCC 1 33,35

45. State Trading Corporation of India Ltd V. CTO AIR 1963 SC 1811 34

46. Citizens United v. Federal Election Commission, 558 U.S 310 34

47. Shayra Bano v Union of India, AIR, 2017 9 SCC 1 (SC) 34

48. Navtej Singh Johar v Union of India, AIR 2018 SC 4321 35

49. Joseph Shine v Union of India, AIR 2018 SC 4898 35

STATUTES

Constitution of India, 1950;

The Representation of Peoples’ Act, 1951;

The Income Tax Act,1961;

The Reserve Bank of India Act, 1934

The Foreign Contribution regulation act,2010;

The Companies Act,2013;

The Universal Declaration of Human Rights;

The International Covenant on Civil and Political Rights;

REPORTS
1. Law Commission of India, 170th Report: Reform of Electoral Laws (1999).
 8

2. Law Commission of India, Electoral Reforms, Report No. 255 (March 2015).

3. Association for Democratic Reforms, Analysis of Sources of Funding of National and Regional Parties of
India, FY 2004-2005 to FY 2014-15 (11 years)

BOOKS
1. "Constitutional Law of India" by Dr. J.N. Pandey

2. "Constitutional Law of India: Text, Cases and Materials" by H.M. Seervai

3. "Introduction to the Constitution of India" by D.D. Basu

4. "Constitutional Law of India: A Critical Commentary" by Prof. H.M. Seervai

5. "The Indian Constitution: Cornerstone of a Nation" by Granville Austin

6. "Constitutional Law of India: A Comparative Study" by Dr. J.N. Pandey

7. "The Indian Constitution: Oxford India Short Introductions" by Madhav Khosla

8. "The Constitution of India: Bare Act with Short Notes" by Professional's Bare Act

9. "Constitutional Law of India: Institutional Method" by Prof. M.P. Jain

10. "Constitutional Law of India: Power, Separation and Federalism" by Prof. M.P. Jain

11. "Constitutional Law of India: With Legal Maxims" by Dr. Lokendra Malik

12. "Indian Constitutional Law: With Constitutional Text and Select Cases" by Prof. M.P. Jain

13. "Constitutional Law of India: Including Fundamental Rights and Directive Principles" by Dr. P.M.
Bakshi

14. "Constitutional Law of India: An Overview" by Dr. V.N. Shukla

15. "Basic Structure of Indian Constitution: A Critical Reappraisal" by Subhash C. Kashyap

16. "Introduction to Constitution of India: Indian Polity and Constitutional Law" by Dr. Durga Das Basu

17. "Supreme Court of India: The Beginnings" by Arghya Sengupta

18. "The Framing of India's Constitution: Select Documents" edited by Granville Austin

19. "The Making of the Constitution of India" by Surendra Kumar

20. "Selected Articles on the Indian Constitution and International Law" by K. Balakrishnan

JOURNALS
1. John Hart Ely, Democracy and Distrust: A Theory of Judicial Review (Harvard University Press, 2002).

2. Conrad Foreman, Money in Politics: Campaign Finance and its Influence over the Political Processes and
Public Policy, 52 UIC J. Marshal L. Rev. 185 (2018).
 9

3. D. Sunshine Hillygus, Campaign Effects on Vote Choice in The Oxford Handbook of American Elections
and Political Behaviour (Jan E. Leighley ed., 2010).

4. David P. Baron, Electoral Competition with Informed and Uninformed Voters, 88 Am. Pol. Sci. Rev. 1
(1994).

5. Michael A. Collins, Navigating Fiscal Constraints in Costs of Democracy: Political Finance in India
(Devesh Kapur & Milan Vaishnav eds., OUP 2018).

6. Neelanjan Sircar, Money in Elections: The Role of Personal Wealth in Election Outcomes in Costs of
Democracy: Political Finance in India (Devesh Kapur & Milan Vaishnav eds., OUP 2018).

7. Dominik Hangartner et al., Open or Closed? How List Type Affects Electoral Performance, Candidate
Selection, and Campaign Effort, VAT Institute for Econ. Res. Working Papers 120 (2019).

8. Aradhya Sethia, Where's the Party?: Towards a Constitutional Biography of Political Parties, 3 Indian L.
Rev. 1 (2019).

9. Ben Ansell & Jean Gingrich, Political Inequality, in The IFS Deaton Review of Inequalities (Institute for
Fiscal Studies, London, 2021).

10. Colin Bennet, The Politics of Privacy and Privacy of Politics: Parties, Elections, and Voter Surveillance
in Western Democracies, 18 First Monday 8 (2013).

11. Philip N. Howard & Daniel Kreiss, Political Parties and Voter Privacy: Australia, Canada, the United
Kingdom and United States in Comparative Perspective, 15 First Monday 12 (2010). (2010).

12. Arun Jaitley, Why Electoral Bonds are Necessary, Press Information Bureau, 2018.

13. Aharon Barak, Proportionality: Constitutional Rights and Their Limitations (Cambridge University
Press, 2012).

14. David Bilchitz, Necessity and Proportionality: Towards a Balanced Approach? (Hart Publishing, Oxford
and Portland, Oregon, 2016).

15. Aparna Chandra, Proportionality: A Bridge to Nowhere?, Oxford Hum. Rts. J. 2020.

16. Niels Peterson, Proportionality and Judicial Activism: Fundamental Rights Adjudication in Canada,
Germany, and South Africa (CUP 2017).

17. Marilyn Strathen, Improving Ratings: Audit in the British University System, 5 Eur. Rev. 305 (1997).

18. Parties' Unknown Income Raise Despite Electoral Bonds, The Hindu, Nov. 2, 2023, at 7.
 10

LEGAL DATABASES
Indian
1. Manupatra
2. SCC Online
3. Westlaw India
4. LexisNexis India
5. India Law
6. Legal Information Management and Briefing System (LIMBS)
7. Indian Kanoon
8. Law Octopus
9. Legal Crystal
10. Jstor - Law section

International
1. Westlaw
2. LexisNexis
3. HeinOnline
4. Bloomberg Law
5. JSTOR
6. Google Scholar
7. ProQuest
8. SSRN (Social Science Research Network)
 11

STATEMENT OF JURISDICTION
It is with utmost humility submitted before this Hon’ble Court that the Petitioners have approached this
hon’ble court by means of a P.I.L (Public Interest Litigation) under Article 32 of the Indian read with Order-
XXXVIII, Rule 12 of the Supreme Court Rules, 2013.

And wherefore, this Hon’ble Court was pleased to invoke its powers under Art-139A to Club the petitions
Suo moto under Order XL, Rule-5 (5) of the Supreme Court Rules, 2013. The petitioners have in
compliance of the Order XL, Rule 7 of the Supreme Court Rules, 2013 duly file the written submissions
hereunder.

Order XL, Rule 5 (5) of the Supreme Court Rules, 2013- “Where the Court has directed the transfer of a
case on its own motion, the record shall be prepared in accordance with the rules of the High Court or subject
to the directions of the Court, if any, regarding the Cost thereof:

Order XL, Rule 7 of the Supreme Court Rules, 2013- “Within sixty days of the receipt of the said notice
(inc. the notice of the clubbing or transfer) regarding the dispatch of the record to this court, the
petitioner/appellant/plaintiff/ shall file his written brief prepared in the following manner prescribed in sub
rule (1) and (2).

Article -139A. Transfer of certain cases of the Indian Constitution

(1)Where cases involving the same or substantially the same questions of law are pending before the
Supreme Court and one or more High Courts or before two or more High Courts and the Supreme Court is
satisfied on its own motion or an application made by the Attorney-General of India or by a party to any such
case that such questions are substantial questions of general importance, the Supreme Court may withdraw
the case or cases pending before the High Court or the High Courts and dispose of all the cases itself:

Provided that the Supreme Court may after determining the said questions of law return any case so withdrawn
together with a copy of its judgment on such questions to the High Court from which the case has been
withdrawn, and the High Court shall on receipt thereof, proceed to dispose of the case in conformity with such
judgment.

(2)The Supreme Court may, if it deems it expedient so to do for the ends of justice, transfer any case, appeal
or other proceedings pending before any High Court to any other High Court.
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STATEMENT OF FACTS
Background

1. The Republic of Aryavarta is a Sovereign, Socialist, Secular, Democratic, Republic country. Its
political parties require funds not only for contesting elections but for many other purposes
essential for their sustenance. These expenditures run into hundreds of crores, compelling the
parties to seek donations. The money is donated and spent mostly in cash, hence eliminating
transparency and flowing of black money.

Government Initiative to amend existing system of electoral financing

2. NAA Government led by Shri Dr. Bihari Singh amended The Income Tax Act to provide that
donations made to political parties would be treated as expenditure and give a tax advantage to the
donor. If the political party disclosed its donations in a prescribed manner, it would also not be
liable to pay any tax.
3. The UAA Government made amendments for “pass through” electoral trust so that the donors
would park their money with the electoral trusts which in turn would distribute the same to
various political parties.

Current initiative under dispute

4. The then finance minister Mr. Ram Jetli in the annual budget of 2016-2017 introduced the
electoral bond scheme. As per this scheme, any person or body corporate can donate money to
political parties by purchasing electoral bonds and by depositing the bonds in the verified bank
account of the donee political party, to be encashed in a specified time limit.
5. A notification was published by the central government on 02-01-2018, revealing the elaborate
provisions of the scheme.
6. The government of Aryavarta made amendments in the Representation of People’s Act, 1951,
Foreign Contribution Regulation Act, 2010. Income Tax Act, 1961, and The Companies Act,
2013, which were passe as a part of the Finance Act of 2017 and had become the law after getting
passed in the parliament on 28-02-2017 and getting the assent of the president of Aryavarta on 03-
03-2017.

Justifications in favour of the initiative

7. The scheme was defended by the Finance Minister through a post published on Facebook. He
maintained that a donor can purchase electoral bonds from a specified bank only by a banking
instrument. He would have to disclose in his accounts the amount of political bonds that he has
purchased. The life of the bond would be only 15 days. A bond can only be encashed in a pre-
declared account of a political party. Every political party in its returns will have to disclose the
amount of donations it has received through electoral bonds to the Election Commission.
 13

8. He stated that the choice was now to be consciously made between the existing system of
substantial cash donations which involves total unclean money and is non-transparent and the new
scheme which gives the option to the donors to donate through entirely a transparent method of
cheque, online transaction or through electoral bonds.

Concerns pertaining to the current scheme

9. The said scheme faced heavy criticism on a number of subjects by the Election Commission of
India, RBI, press, Opposition and citizens. Some of the common points are-
 It is violative of Article 19(1)(a) of the Indian Constitution, which is the fundamental
right to know available to all the citizens.
 The policy makes arbitrary distinction between political party and individuals contesting
independently, and thereby results into the lack of level playing field for candidates in
obtaining political funding.
 It allows the Indian subsidiary of a foreign company to make donations without any
upper limit, this may give rise to formation of many shell companies only to be formed
for the purposes of donations to any particular party.
 No cap on the upper limit of the donations is detrimental to the interests of the
shareholders of the company.
 Anonymous donations without any upper limit may also lead to quit pro quo
arrangements being made between the doners and donee, which will ultimately go
against the policy of a level playing field.

Judicial Developments

10. In May 2018, a non-profit organization named Lokhit Abhiyan filed a PIL in the apex court under
article 32 of the constitution to challenge the impugned scheme including the notification and the
relevant portions of the finance Act 2017, which was also joined by some of the members of the
opposition parties. The court clubbed all the petitions including the petition filed by Communist
Party in May 2017 and constituted a 3-judge bench comprising the then CJ of Aryavarta.
11. By an order pronounced in April 2019, the apex court refused to stay the scheme but directed the
political parties to make disclosure to the EC in sealed covers regarding the details of the funding
received through electoral bonds.

Present stage

12. In a hearing conducted on 16-10-2023, the advocate for petitioners urged the court to constitute
the larger bench and hear the matter before the Lok Sabha election of 2024. Consequently, the
incumbent CJ of Aryavarta acceded to this request and constituted the 5-judge bench, which shall
hear the matter on 6th April 2024.
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ISSUES RAISED
i. Whether the Finance Acts of 2016 and 2017 incorporating the provisions
regarding electoral bonds scheme are illegally passed as money bill bypassing the
adequate representation and scrutiny by Rajya Sabha?

ii. Whether it is a fundamental right of every citizen to know the sources of funding
to the political parties, if yes, does the electoral bonds scheme violates the same?

iii. Whether matters concerning the modus operandi of political funding amount to
policy decisions within the domains of government and free from judicial scrutiny?

iv. Whether the electoral bonds scheme tampers with and distorts the principles of
fair elections in the democratic setup which is also the basic structure of the
Constitution?
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SUMMARY OF ARGUMENTS

i. Whether the Finance Acts of 2016 and 2017 incorporating the provisions
regarding electoral bonds scheme are illegally passed as money bill bypassing the
adequate representation and scrutiny by Rajya Sabha?

It is with utmost humility submitted before this Hon’ble Court that “the Finance Acts of 2016 & 2017
incorporating the provisions regarding electoral bonds scheme were indeed illegally passed as money
bill bypassing the adequate representation and scrutiny by Rajya Sabha.” The Petitioner Submit the same
in light of the fact that the 5 amendments by no stretch be brought within the ambit of the Definition of the
Money Bill under Article 110 of the Indian Constitution; The Unfettered Discretion Conferred on the Speaker
to certify a bill as a money bill and the finality of such certification is arbitrary and in effect contrary to the
“Doctrine of Rule of law” and the amendments are in direct clash with the “Doctrine of Fraud on the
Constitution” or “Doctrine of Colourable legislation” and as such is violative of the “Basic structure of
Bicameralism”.

ii. Whether it is a fundamental right of every citizen to know the sources of funding
to the political parties, if yes, does the electoral bonds scheme violates the same?

It is with utmost humility submitted before this Hon’ble Court that “it is a fundamental right of every citizen
to know the sources of funding to the political parties and the electoral bonds scheme does violate the
same”. As the Judgments of this Hon’ble Court granted the “Right to information concerning the affairs of
the public and the government” in their natural corollary includes the Right to information on political
contributions; The amendments granting non-disclosure with the purported object of “informational privacy
of the Donors” fails the “Doctrine of reasonable restrictions” and the “Tests of Proportionality and
Double proportionality”. The Provision permitting non-disclosure of funding by companies is violative of
the Shareholders’ right to conscience under Article 25 of the Constitution.

iii. Whether matters concerning the modus operandi of political funding amount to
policy decisions within the domains of government and free from judicial scrutiny?

It is with utmost humility submitted before this Hon’ble Court that “the matters concerning the modus
operandi of political funding although amount to policy decisions within the domains of government
 16

nevertheless, are not free from judicial scrutiny” as the power of Judicial Review exists in Policy matters,
even, if the matter in question is allegedly an economic policy as what is allowed by the existing jurisprudence
is some latitude and not exclusion from the judicial review itself. Furthermore, EBS, 2018 is not an economic
policy but rather a socio-political policy pertaining to electoral process. It is submitted that since the
amendments is question are violative of Article-14 and 19, the same has to checked by application of the triple
tests of – “Proportionality”, “Double Proportionality” and “Manifest Arbitrariness.”

iv. Whether the electoral bonds scheme tampers with and distorts the principles of
fair elections in the democratic setup which is also the basic structure of the
Constitution?

It is submitted that electoral bonds scheme tampers with and distorts the principles of fair elections in two
ways. Firstly, by doing away with the Right to Information of voters about the Source and Quantum of
Political funding which impairs with the 1 st aspect of the Right to vote discussed under the previous issue in
great detail and; secondly, by Providing for – “Unlimited Corporate Funding” including but not limited to
Indian Corporate Bodies. Furthermore, the amendment removing the cap on corporate funding Promotes 3
types of Corruption – “Quid -Pro-Quo Corruption”, “Clientelism”, “War-Chest Corruption”; and the
“Unlimited Corporate funding” undermines the constitutional guarantee of “Political equality”.

Lastly, the amendment to Section-182 of Companies act,2013 by Section-154 of the Finance act,2017 omitting
the first proviso is fails the “Test of Manifest Arbitrariness” and by virtue of the same also suffers from
“Disproportionality”.
 17

ARGUMENTS ADVANCED
i. Whether the Finance Acts of 2016 and 2017 incorporating the provisions regarding electoral
bonds scheme were illegally passed as money bill bypassing the adequate representation and
scrutiny by Rajya Sabha?

It is with utmost humility submitted before this Hon’ble Court that “The Finance Acts of 2016 & 2017
incorporating the provisions regarding electoral bonds scheme were indeed illegally passed as money
bill bypassing the adequate representation and scrutiny by Rajya Sabha.”

“The 5 amendments may further be reproduced in a Tabular form as of the total of 189 Sections of Finance
Act, 2017 and a total of 241 Sections of Finance Act, 2016 only 4 Sections out of 189 Sections of Finance
Act of 2017 and only 1 Section out of 241 Sections of Finance Act, 2016 are not dealing with any of the
matters laid down from (a) to (g) of the Article 110(1) of the Constitution. These Sections Run as under;

FINANCE ACT, 2016

Section not dealing with any of the matters from The Amended Act & its Section
(a) to (g) of the Article-110(1)
Section- 236 The Foreign Contribution regulation act,2010
Added Proviso to Section- 2(1)(j)

FINANCE ACT, 2017

Sections not dealing with any of the matters The Amended Act & its Section
from (a) to (g) of the Article-110(1)
Section- 11 The Income Tax Act,1961
Amended - Section- 13A (Proviso’s in Particular)

Section-135 The Reserve Bank of India Act,1931

Introduced – Section- 31(3)

Section- 137 The Representation of People Act,1951

Introduced – Proviso to Section- 29C and an
Explanation
Section- 154 The Companies,2013
Amended- Section- 182.
 18

The 5 amendments are not stricto sensu within the ambit of the definition of the Money Bill under
Article 110 of the Indian Constitution-

It is submitted that the cumulative object of all the five amendments is to give birth to the- “Electoral bonds
Scheme, 2018” and all the 5 amendments are incidental to the afore-stated Electoral Bond Scheme and not
incidental to any of the matters mentioned in Article-110(1).

The evidence of the same is found from the ‘Notification of the Ministry of finance’ which employs the
following words to describe the Source of the Notification-

“S.O. 29(E). —In exercise of the powers conferred by sub-section (3) of Section 31 of the Reserve Bank
of India Act, 1934 (2 of 1934), the Central Government hereby makes the following Scheme,”

The effect of these 5 amendments is summed up as under –

 A new scheme for financial contribution to political parties is introduced in the form of the electoral
bonds;
 The political parties need not disclose the contributions received through electoral bonds;
 Companies are not required to disclose the details of contributions made in any form; and
 Unlimited corporate funding is permissible.

Thus, the 5 amendments may be classified as promoting and aiding 3- objectives which are the heart and
soul of the Electoral Bonds Scheme-

1st - Contributions to Political Parties (including but not limited to Corporate Funding);

2nd – Non- Disclosure of Information on Such Contributions;

3rd – Income Tax exemptions on such Donations;

The 5 amendments may be clubbed together under two different heads on the basis of the purpose they serve,
which is tabulated as under;

The Amendments The Purported Purpose they Serve

The Amendments to RPA, 1951;

The Amendment to Income Tax Act,1961 “Mandated the non-disclosure of information

on electoral financing”
The Amendment to 183(3) of Companies
Act,2013
 19

The Amendment to 182(1) of the Companies “Permitted unlimited Corporate funding to

Act,2013 Political Parties”

“The 5 amendments are nothing more than the facilitators of the electoral bonds scheme itself and aside from
their linkage to the electoral bonds scheme they do not possess any substance of their own and by virtue of
the same , the Substance of the electoral bonds scheme becomes also the Substance of these amendments”
The relation of each of the amended sections to the Electoral bonds scheme itself is Tabulated as under:

The Amendments To which Provision of the “Notified Electoral

bond Scheme, 2018” they gave birth to.
 Section-31(3) and Explanation of the The Power to bring the scheme into operation and
Reserve Bank of India Act,1931 the legalization of the issue of electoral bond by
any Scheduled bank notified by the Central govt.

 The Annexure 1 of the is the EBS,2018 is

the giving of the Section- 31(3) of RBI Act

 Section 182(3) & (3A) & Proviso of the It opened up Corporate Contributions , Promoted
Companies Act, 2013 Contributions through banking channels and
Contribution through bonds .

 Inclusion of Corporate Bodies in definition

of Person under- Section 2(d) r/w Section
3 of the EBS,2018 is the giving of the
amendments made to Section-182 of the
Companies Act;
 Section- 11 of the EBS,2018 may be said to
be the giving of the Section 182 (3A) of the
Companies Act which facilitates payment
through banking Channel;
 It also did away with the disclosure of Party
Names to which the contribution was made
and the same can be said to be aiding the
Confidentiality clause of 7(4) of the
 20

EBS,2018

 Section- 13A Proviso to (b) & (d) of the It did away with the requirement for political
Income Tax, 1961 parties to maintain the record of contributions if the
“Contribution was received by electoral bonds”
and made it mandatory for a political party to
receive donations in excess of INR- 2000 only by
way of banking channels or electoral bonds.
 The Sec.11 of EBS,2018 can be said to be a
giving of the Proviso(d) to Sec.13A of the
Income Tax Act,1961;
 The Confidentiality Clause of 7(4) of the
EBS,2018 is strengthened by the Proviso
(b) to Section.13A of the Income Tax
Act,1961

 Section- 29C Proviso to (1) of the It made the mandatory requirement for political
Representation of People Act, 1951 parties to prepare a report of the contributions
received in excess of the 20,000 rupees from any
person or Corporate bodies inapplicable to
Contributions received by way of electoral bonds
Scheme.
 The Section-7(4) is again aided by the
Proviso to(1) of Section 29C of RPA,1951
 Proviso to Section- 2(1)(j) of The Foreign It amended the definition of ‘Foreign Source’ to
Contribution regulation act,2010 relax the consideration of a foreign source
identified by the nominal value of the share-capital.
 The Inclusion of Corporate Bodies
including any agency, office or branch
owned or controlled by such person.(VII) in
definition of Person under- Section 2(d)
r/w Section 3 of the EBS,2018 is the giving
of the amendments made to Proviso to
Section-2(1)(j) of the Foreign Contribution
regulation act,2010 .
 21

In light of the above table, it is established the entire “EBD, 2018 “ is the giving of the 5-amendments and
the Substance of the 5 amendments is the same as the substance of the EBS Scheme, 2018 although they may
be dawn in the form of a finance act. The same was held in State of Tamil Nadu and ors v National South
Indian River Interlinking Agriculturalist Association.1

Ergo, “a substantive review of the 5 amendments to ascertain its falling under the Article-110 of the Indian
Constitution is essentially the Substantive review of the EBS Scheme, 2018 to ascertain its falling under
the Article 110 of the Indian Constitution”.

The Significance of the word- “Only” in article- 110 and its interpretation points to the fact that it is
employed in article-110 in an exhaustive sense

The afore-stated view point is bolstered by virtue of the case of Hari Ram v Baby Gokul Prasad2 & M/s
Saru Smelting (P) Ltd V. Commissioner of Sales Tax, Lucknow3 referred to and affirmed in the case of
Justice KS Puttaswamy (RETD) & Anr v Union of India & Ors4 as under –

“97. ………This Court has interpreted the expression “only” as a word of exclusion and restriction. The
interpretation of Article 110(1) as being restrictive in nature is also supported by the proceedings in the
Constituent Assembly of India”

The Unfettered Discretion Conferred on the Speaker to certify a bill as a money bill and the finality
of such certification is arbitrary and in effect contrary to the “Doctrine of Rule of law”

It is submitted that the finality of the speakers’ decision on the question of whether a bill is a money bill or
not goes against the Doctrine of the rule of law. As an unfettered discretion is Arbitrary and is anti -thesis of
Reasonableness.
To quote A.V. Dicey himself, “Wherever there is discretion, there is room for arbitrariness.”
Thus, “Arbitrariness” nurtures in the ambience of Discretion and is an antithesis to the rule of law and the
finality of the speakers’ Decision and Certification of a bill as money bill “without assigning any reasons
for such Certification itself nurtures arbitrariness”.
Reliance is placed on the following excerpts drawn from the following judgments:

In S.G. Jaisinghani v Union of India5, it was held;

1
State of Tamil Nadu and ors v National South Indian River Interlinking Agriculturalist Association , (2021) 15 SCC 534
2
Hari Ram v Baby Gokul Prasad, (1991) Supp (2) SCC 608
3
M/s Saru Smelting (P) Ltd V. Commissioner of Sales Tax, Lucknow, (1993) Supp (3) SCC 97
4
Justice KS Puttaswamy (RETD) & Anr v Union of India & Ors, (2017) 10 SCC 1
5
S.G. Jaisinghani v Union of India, AIR 1967 SC 1427
 22

“The Court, for the first time held “absence of arbitrary power” as sine qua non to rule of law with confined
and defined discretion, both of which are essential facets of Article 14. Quoting the celebrated saying of
Douglas, J., in United States v. Wunderlich6, when it has freed man from the unlimited discretion of
some rule. Where discretion is absolute, man has always suffered. It is in this sense that the rule of law may
be said to be the sworn enemy of caprice.”

“Discretion” as Lord Mansfield stated it in classic terms in R. v Wilkes7 “… means sound discretion
guided by law. It must be governed by rule, not by humour: it must not be arbitrary, vague, and
fanciful….” In E.P. Royappa V State of Tamil Nadu8, it was held;
‘85. … From a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality and
arbitrariness are sworn enemies; one belongs to therule of law in a republic, while the other, to the
whimand caprice of an absolute monarch. Where an act isarbitrary, it is implicit in it that it is unequal
both according to political logic and constitutional law and is therefore violative of Article 14….’
The same passage has been referred to in the case of Shayra Bano v Union of India9 from Paras 67 to 69
and also in Maneka Gandhi v Union of India10 in Para-7.
The need to curtail “discretion” was articulately stressed upon by this Hon’ble Court in the case of S.G.
Jaisinghani v. Union of India11.

In Sharma Transport v Govt of Andhra Pradesh12 & Indian Express Newspapers (Bombay) (P) Ltd. v Union
of India13, the Hon’ble Supreme Court Defined Arbitrary as “to do something in an unreasonable manner, as
fixed or done capriciously or at pleasure, without adequate determining principle.”

Ergo, it is evident from the afore-stated authorities that “discretion ought to be curtailed within clearly
defined limits and any discretion un-curtailed leads to arbitrariness and there can be no better example than
this very case at hand , where in the Speaker has availed his un-curtailed discretion to certify a bill as a
money bill despite it containing provisions which can by no stretch be brought within the constitutionally
envisaged definition of money bill under Article 110(1).

In light of such arbitrary exercise, the pressing need of the hour is to curtail such arbitrary exercise of
discretion by interpreting the conferring Articles 110(3) and 110(4) to read in circumscribed limits on to

6
United States v Wunderlich, 1951 SCC OnLine US SC 93
7
R. v Wilkes, (1770) 4 Burr 2527
8
E.P. Royappa V State of Tamil Nadu, AIR 1974 SC 555
9
Shayra Bano v Union of India & ors., AIR 2017 SC 4609
10
Maneka Gandhi v Union of India, AIR 1978 SC 597
11
S.G. Jaisinghani v. Union of India, AIR 1967 SC 1427.
12
Sharma Transport v Govt of Andhra Pradesh, (2002) 2 SCC 188
13
Indian Express Newspapers (Bombay) (P) Ltd. v Union of India, (1985) 1 SCC 641
 23

them.

It is pertinent to produce the following case laws which dealt with the “judicial review of speakers’
decision”.

It is submitted that the “Present language of the wordings employed in Article-110” is a result of the
consideration of the following –

 The Parliament of Act,1911;

 The Section-53 of the Common Wealth of Australian Constitution Act,1900;
 The Article-36 of the Commonwealth of India Bill,1925;
 The Article- 17 & 18 & 19 of the Nehru Report,1928;
 The Article- 22 of the Constitution of Ireland,1937;
 The Section-37 of the Govt. of India Act,1935;
 The Article-147 of the Draft Constitution of India;

The Constitution makers did not adopt the words “Shall not be questioned in any court of law” after the
words- “Shall be final”

It is submitted that the Constitution makers did not consciously adopt the words “Shall not be questioned in
any Court of law” as they did not intend the Exclusion of the judicial review as intended by the British
Parliament by means of the employment of those words in the “Parliament Act, 1911 under Section 3 of the
said act. It is submitted that the primary reason for such selection non-adoption of those words is due to that
the “India unlike Britain does not follow the doctrine of parliamentary Sovereignty” but rather follows the
doctrine of – “Constitutional supremacy.”

In light of the afore-mentioned authority it is argued that the “Speaker’s certification is subject to judicial
review” as there exists no reason for exclusion from the same and in the immediate case at hand it also suffers
from Constitutional infirmity.

The amendments are in direct clash with the “Doctrine of Fraud on the Constitution” or “Doctrine of
Colourable legislation” and as such is violative of the Basic structure of Bicameralism”
 24

It is submitted that the act of the Doctrine of fraud on the constitution or the Doctrine of Colourable legislation
is invoked to strike down a law which is enacted by the Legislature when it is not within its legislative limits
or particularly when the Constitution prohibits the legislation.

It is submitted that the 5 Amendments were indeed passed without fulfilling the necessary requirement of the
constitution (Viz., the requirement of passage through Rajya Sabha as it can by no stretch of imagination be
brought under the ambit of a money bill) and by so doing the amendments are hit by the Doctrine of Fraud on
the Constitution.

It is submitted that the Amendments merely because they have been clothed with the form of a finance act are
not excluded from the passage through Rajya Sabha as in substance they deal with none of the matters
mentioned in Article 110 of the Constitution as they are in Substance provisions giving birth to the “Electoral
bond scheme” which is not a subject falling under the ambit of Article 110 as Bicameralism is a basic structure
of the Indian Constitution.14

In this respect the following cases are relied upon, where the Court applied the Doctrine of Colourable
legislation to Strike down a law K.C. Gajapati Narayan Deo v State of Orissa, (1953)15, K.T. Moopil Nair v
State of Kerala (1960)16 and M.R. Balaji v State of Mysore (1962)17.

ii. Whether it is a fundamental right of every citizen to know the sources of funding to the political
parties, if yes, does the electoral bonds scheme violates the same?

It is with utmost humility submitted before this Hon’ble Court that “it is a fundamental right of every citizen
to know the sources of funding to the political parties and the electoral bonds scheme does violate the same”.

It is submitted that the issue essentially pertains to the question of “whether the non-disclosure of information
on voluntary contributions to political parties under the Electoral Bond Scheme and the amendments to
Section 29C of the RPA, Section 182(3) of the Companies Act and Section 13A(b) of the IT Act are violative
of the right to information of citizens under Article 19(1)(a) of the Constitution”.

The petitioners humbly assert that the “3 amendments” granting non-disclosure of the information on
voluntary contributions to Political parties is violative of the right to information of the Citizens under Article-
19(1)(a) of the Constitution.

The Judgments of this Hon’ble Court in Union of India v Association of Democratic Reforms (2002)18 & in
People’s Union of Civil liberties (PUCL) & Anr. v Union of India & Anr, (2003)19 which granted the “Right

14
Kuldip Nayar & Ors v Union of India & Ors (2006) 7 SCC 1
15
K.C. Gajapati Narayan Deo v State of Orissa, AIR 1953 Ori 185
16
K.T. Moopil Nair v State of Kerala, AIR 1961 SC 552
17
M.R. Balaji v State of Mysore, AIR 1963 SC 649
18
Union of India v Association of Democratic Reforms, (2002) 5 SCC 294 (LB)
19
People’s Union of Civil liberties (PUCL) & Anr. v Union of India & Anr, AIR 2003 SC 2363
 25

to information concerning the affairs of the public and the government” in their natural corollary includes
the Right to information on political contributions;

At the outset, it is the submission of the petitioner that “right to information” as a right evolved under 2 Phases
and the difference in the phases pertain to “conception of the right in that particular phase”.

 The 1st Phase – “Treatment of Right to information – as a MEANS”

The Right to information was treated in this phase as a “means” to hold government accountable and the
judgments in this phase were premised on the principle that the citizens have a duty to hold the government
of the day accountable for their actions and inactions, and they can effectively fulfil this duty only if the
government is open and not clothed in secrecy. Thus, this phase involved the tracing the right to information
to the values of good governance, transparency and accountability.

Some of the judgments of this phase are as under “Which permitted disclosures, when the disclosures
themselves were in public interest akin to holding government accountable.”

State of Uttar Pradesh v Raj Narain20; State of Punjab v Sodhi Sukhdev Singh21; SP Gupta v Union of
India22 are in tune with the submissions.

 The 2nd Phase- “Treatment of Right to Information – as an END in itself”

The Right to information ceased to be treated as a means to achieve public interest and disclosures are made
not just when they are in interest of public or for the purposes of holding government accountable but also to
discover the truth in a market place of ideas which would ultimately secure the goal of self-development.

It was based on the premise that fundamental rights including Art 19(1)(a) exist for securing conditions for
self-development at both an individual and group level.

The Court recognized recognised that freedom of speech and expression includes the right to acquire
information which would enable people to debate on social, moral and political issues. These debates would
not only foster the spirit of representative democracy but would also curb the prevalence of misinformation
and monopolies on information.

Thus, the Right to information currently is treated as an interest in itself as it is public information that can
facilitated self-development of an individual. A crucial aspect of the expansion of the right to information in
the second phase is that right to information is not restricted to information about state affairs, that is, public
information. It includes information which would be necessary to further participatory democracy in other
forms and is not restricted to information about the functioning of public officials. Some of the judgments of
this phase are as under: Secy., Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of

20
State of Uttar Pradesh v Raj Narain, AIR 1975 SC 865
21
State of Punjab v Sodhi Sukhdev Singh, AIR 1961 SC 493
22
SP Gupta v Union of India, 1981 Supp (1) SCC 87
 26

Bengal23; Indian Express Newspapers v. Union of India24; Romesh Thappar v. State of Madras 25; DC
Saxena v. Hon’ble The Chief Justice of India26; Supriyo v. Union of India.27

It is submitted that the judgments of “ADR & PUCL” can be attributed to either of the Phases- the means
phase or the Ends phase as the common thread running between the 2 phases is that “information which
furthers democratic participation must be provided to citizens.”

The common ratio of the both the judgments is “voters have a right to receive information which is essential
for them to cast their votes”.

Further, it is pertinent at this juncture to quote Justice Venkatrama Reddi (PUCL case) who in his
Concurring opinion that there are two-postulates which govern the right to vote –

1st – “Formulation of an opinion about Candidates”;

2nd- “Expression of Choice based on the opinion formulated by casting votes in favour of a
preferred Candidate.

The relevant excerpt of the judgment is;

“Though the initial right cannot be placed on the pedestal of a fundamental right, but, at the stage when the
voter goes to the polling booth and casts his vote, his freedom to express arises. The casting of vote in favour
of one or the other candidate tantamount to expression of his opinion and preference and that final stage in
the exercise of voting right marks the accomplishment of freedom of expression of the voter. That is where
Article 19(1)(a) is attracted.”

Ergo, the disclosure on the political contributions relates the 1st postulate of – “Formulation of an opinion
about Candidates” and in light of the above judgments the right to information of political funding is a natural
consequence of judgments of this hon’ble court in ADR and PUCL Cases as the Freedom to vote in negative
sense denotes the freedom to vote without any interference or intimidation. Freedom to vote in Positive
Connotation refers to the freedom to vote on the basis of complete and relevant information.

The amendments granting non-disclosure with the purported object of “informational privacy of the
Donors” fails the “Doctrine of reasonable restrictions” and the “Tests of Proportionality and Double
proportionality

It is submitted that Prima facilely the right to information which is traceable to Article 19(1)(a) can only be
restricted on the grounds stipulated in Article- 19(2) which incorporates the “Doctrine of Reasonable
Restrictions.” The Purposes of “Donor Privacy” and “Curbing Black Money” is not traceable to the grounds
in Article-19(2).

23
Secy., Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal, (1995) 2 SCC 161
24
Indian Express Newspapers v. Union of India, AIR 1986 SC 515
25
Romesh Thappar v. State of Madras, AIR 1950 SC 124
26
DC Saxena v. Hon’ble The Chief Justice of India, (1996) 5 SCC 216
27
Supriyo Chakraborty v. Union of India, 2023 INSC 920
 27

Even, if the purposes are traceable to Article-19(2). The Scheme nevertheless does not pass the “Test of
Proportionality” and the “Test of Double Proportionality”.

In the Indian jurisprudence, the test of proportionality comprises of – “5 prongs”.

While, the initial 4 stages have been recognized in the case of Modern Dental College & Research Centre
& Ors. v State of Madhya Pradesh & Ors.28, the 5th prong was recognized and added by the case of
Gujarat Mazdoor Sabha and Anr v State of Gujarat.29

The test of proportionality comprises five stages: legitimate aim/purpose stage, rational connection stage,
Minimal impairment/necessity test, balancing act, The Safeguard against abuse stage.

It is to be submitted that the “Necessity Stage” itself was tempered with for a Stricter test in Anuradha Bhasin
V. Union of India & Ors,30 the following moderate interpretation test was evolved for the necessity stage-

“PARA- 27(MN1) All feasible alternatives need to be identified, with courts being explicit as to criteria of
feasibility;

(MN2) The relationship between the government measure under consideration, the alternatives identified in
MN1 and the objective sought to be achieved must be determined. An attempt must be made to retain only
those alternatives to the measure that realise the objective in a real and substantial manner;

(MN3) The differing impact of the measure and the alternatives (identified in MN2) upon fundamental rights
must be determined, with it being recognised that this requires a recognition of approximate impact; and

(MN4) Given the findings in MN2 and MN3, an overall comparison (and balancing exercise) must be
undertaken between the measure and the alternatives. A judgment must be made whether the government
measure is the best of all feasible alternatives, considering both the degree to which it realises the government
objective and the degree of impact upon fundamental rights (“the comparative component”).

Applicability of the Proportionality Test to the ascertain the proportionality of the “3 Amendments”
restricting the right to information by doing away with disclosures

It is submitted that before the undertaking of the applicability of the Proportionality test to the afore-stated
amendments, it is crucial to identify the “legitimate aim” and “measures” taken in the form of amendments
to the legitimate aim which may tabulated as under-

THE ALLEGED LEGITIMATE AIMS  Curbing of Black money;

 Prevent Retribution, Victimization
 Incentivizing the use of Banking
Channels to make contributions;
THE MEASURES TAKEN TO  Non- disclosure of the Contribution

28
Modern Dental College & Research Centre & Ors v State of Madhya Pradesh & Ors, (2016) 7 SCC 353
29
Gujarat Mazdoor Sabha and Anr v State of Gujarat, 2020 10 SCC 459
30
Anuradha Bhasin V. Union of India & Ors, (2020) 3 SCC 637
 28

ACHIEVE THE LEGIITIMATE AIMS information (by way of the 3-

amendments);
 The Section-7(4) of the EBS,2018
and the Scheme itself;

STAGE-1 “Legitimate Aim stage”

It is submitted that “even if the afore-stated aims are treated as legitimate aims, the scheme doing away with
mandatory disclosure does not pass muster in the other stages”.

STAGE-2 “Rational Connection Stage”-

It is submitted that the “measures” afore-stated are not only unsuccessful in fulfilling the legitimate aims but
they are also self- negating or self-defeating of the legitimate aims as:

 Retribution, victimisation or retaliation against any donor exercising their choice to donate to a
political party is an abuse of law and power. This has to be checked and corrected. As it is a wrong,
the wrong itself cannot be a justification or a purpose. The argument, therefore, suffers on the grounds
of inconsistency and coherence as it seeks to perpetuate and accept the wrong rather than deal with the
malady and correct it;
 The plea of infringement of the right to privacy has no application at all if the donor makes the
contribution, that too through a banking channel, to a political party. It is the transaction between the
donor and the third person. The fact that donation has been made to a political party has to be specified
and is not left hidden and concealed. What is not revealed is the quantum of the contribution and the
political party to whom the contribution is made. Further, when a donor goes to purchase a Bond, he
has to provide full particulars and fulfil the KYC norms of the bank. His identity is then
asymmetrically known to the person and the officers of the bank from where the Bond is purchased.
Similarly, the officers in the branch of the authorised bank where the political party has an account and
encashes the Bond are known to the officers in the said bank.

STAGE- 3 “Necessity Stage”-

“The alternative Scheme of Electoral Trusts passes the necessity test propounded in Anuradha Bhasin case
as afore-mentioned” as;

Post the amendments brought about by the Finance Act, 2017, political parties cannot receive donations in
cash for amounts above Rs.2,000/-. However, political parties do not have to record the details and
particulars of donations received for amounts less than Rs.20,000/-. Therefore, the reduction of the upper
limit of cash donations from Rs.20,000/- to Rs.2,000/- serves no purpose. It is open to the political parties to
 29

bifurcate the law and camouflage larger donations in smaller stacks. There is no way or method to verify the
donor if the amount shown in the books of the political party is less than Rs.2,000/-

As per the Trust Scheme, contributions could be made by a person or body corporate to the trust. The trust
would thereafter transfer the amount to the political party. The trust is, therefore, treated as the contributor
to the political party. Interestingly, it is the ECI that had issued guidelines dated 06.06.2014 whereby the
trusts were required to specify and give full particulars to the ECI of the depositors with the trust and
amounts which were subsequently transferred as a contribution to the political party. The guidelines were
issued by the ECI to ensure transparency and openness in the electoral process.

STAGE – 4 “Balancing stage”

“It is at this juncture; the Single proportionality stage falls short and give way to Double proportionality
stage as “ordinarily the balancing stage envisages the “Checking of proportionality between a
“Fundamental right and the object to be achieved (the object itself is not in a reflection of the
fundamental right”).

But, Since, in the case at hand the object to be achieved is itself a reflection of the Fundamental right to
Privacy, the balancing stage sides and gives way to the “Double proportionality test”.

THE DOUBLE PROPORTIONALITY TEST: -

“It is called so because, it involves the application of the single proportionality test to the both the
conflicting fundamental rights.” Applicability of the double proportionality test to balance the “right to
Privacy of donors” and “the right to information of the voters” with respect of the measure of “Electoral
bond scheme”:

1st STAGE – “SUITABILITY”

To the “Right of Privacy” This Court while applying the suitability prong to the purpose of privacy of political
contribution must consider whether the non-disclosure of information to the voter and its disclosure only when
demanded by a competent court and upon the registration of criminal case has a rational nexus with the purpose
of achieving privacy of political contribution. Undoubtedly, the measure by prescribing non-disclosure of
information about political funding shares a nexus with the purpose. The non-disclosure of information grants
anonymity to the contributor, thereby protecting information privacy. It is certainly one of the ways capable
of realizing the purpose of informational privacy of political affiliation.

To the “Right to information,” the suitability prong must next be applied to the purpose of disclosure of
information about political contributions to voters. There is no nexus between the balancing measure
adopted with the purpose of disclosure of information to the voter. According to Clause 7(4) of the Electoral
Bond Scheme and the amendments, the information about contributions made through the Electoral Bond
 30

Scheme is exempted from disclosure requirements. This information is never disclosed to the voter. The
purpose of securing information about political funding can never be fulfilled by absolute non-disclosure.
The measure adopted does not satisfy the suitability prong vis-à-vis the purpose of information of political
funding.

However, let us proceed to apply the subsequent prongs of the double proportionality analysis assuming that
the means adopted has a rational nexus with the purpose of securing information about political funding to
voters.

2nd STAGE- “NECESSITY”

At this stage, the Court determines if the measure identified is the least restrictive and equally effective
measure. To recall, the Court must determine if there are other possible means which could have been adopted
to fulfil the purpose, and whether such alternative means (a) realize the purpose in a real and substantial
manner; (b) impact fundamental rights differently; and (c) are better suited on an overall comparison of the
degree of realizing the purpose and the impact on fundamental rights.

The provisions of the RPA provide an alternative measure. Section 29C states that contributions in excess of
rupees twenty thousand received from a person or company for that financial year must be disclosed by the
political party through a report. The report must be filled in the format prescribed in Form 24 A of the Conduct
of Election Rules 1961. A crucial component of this provision when juxtaposed with Section 13A of the IT
Act must be noted. Section 13A of the IT Act requires the political party to maintain a record of the
contributions made in excess of rupees twenty thousand. Section 29C of the RPA requires the political party
to disclose information about contributions in excess of rupees twenty thousand made by a person or company
in a financial year. Section 13A mandates record keeping of every contribution. On the other hand, Section
29C mandates disclosure of information of contributions beyond rupees twenty thousand per person or per
company in one financial year.

It is quite possible that contributions which are made beyond the threshold could also be a form of political
support and not necessarily a quid pro quo arrangement, and contributions below the threshold could influence
electoral outcomes. However, the restriction on the right to information and informational privacy of such
contributions is minimal when compared to a blanket non-disclosure of information on contributions to
political parties. Thus, this alternative realizes the objective of securing disclosure for an informed voter
and informational privacy to political affiliation in a ‘real and substantial manner’. The measure in the
Electoral Bond Scheme completely tilts the balance in favour of the purpose of informational privacy and
abrogates informational interests. On an overall comparison of the measure and the alternative, the alternative
is better suited because it realizes the purposes to a considerable extent and imposes a lesser restriction on the
fundamental rights. Having concluded that Clause 7(4) of the Scheme is not the least restrictive means to
balance the fundamental rights, there is no necessity of applying the balancing prong of the proportionality
standard. It is also pertinent to note that the so-called confidentiality granted to the donor in the alleged
 31

furtherance of the object of “Donor privacy” is only “De jure Confidentiality” and not “De facto
Confidentiality.”

The Provision permitting non-disclosure of funding by companies is violative of the Shareholders’ right
to conscience under Article-25 of the Constitution

Article 25 which includes the right of the shareholder to know how the resources generated from their
property are utilized.

“Once a shareholder comes to know that a company is financing a political party and their conscience does
not permit it, as an exercise of the right to conscience, the shareholder should be entitled to sell those shares;
and If the shareholder feels that the political contributions are not a sound business decision, they must be
entitled to exit the business by selling the shares. The information that would enable the shareholder to make
such a decision is not disclosed, thus, infringing upon their right under Article 19(1)(g).”

Public listed companies are subject to scrutiny since they raise funds from the public. Information pertaining
to the company is essential to be brought to the public domain. This will enable informed debates and
discussions regarding the use of money by such companies. Such information must particularly be made
available to shareholders to enable them to make an informed choice with regard to trading of securities. Thus,
the amendment to the Companies Act which removes the requirement of disclosure of information about
political contributions is violative of the right to information of shareholders which flows from Article
19(1)(a);

Public listed companies should not be allowed to make contributions without the consent of the majority of
the shareholders or the consent of three-fourths of shareholders. Non-disclosure of information about political
funding denies shareholders the right to choose that flows from Article 21. Shareholders are incapacitated
from making a choice about whether they wish to invest in shares of a company which has contributed to a
political party whose ideology that shareholder does not agree with. The amendment to Section 182(3)
perpetuates the pre-existing inequality in power between shareholders and the Board/Promoters/management
and puts the shareholders in an even weaker position violating the right to substantive equality under Article
14.

iii. Whether matters concerning the modus operandi of political funding amount

to policy decisions within the domains of government and free from judicial
scrutiny?
It is with utmost humility submitted before this Hon’ble Court that “the matters concerning the modus
operandi of political funding although amount to policy decisions within the domains of government
nevertheless, are not free from judicial scrutiny”

Petitioner has humbly this issue vide 2 aspects which are as under;
 32

The Power of Judicial Review exists in Policy matters, even, if the matter in question is allegedly an
economic policy and the present EBS, 2018 is not an economic policy but rather a socio-political policy

It is submitted that while deciding on a constitutional challenge, the Court does not rely on the ipse dixit of
the government, that a legislation is an economic legislation. Courts before classifying the policy underlying
a legislation as economic policy must undertake an analysis of the true nature of the law. The amendment to
Section 31 of the RBI Act can be classified as a financial provision to the extent that it seeks to introduce a
new form of a bearer banking instrument. However, any resemblance to an economic policy ends there. The
amendments in question can be clubbed into two heads: first, provisions mandating non-disclosure of
information on electoral financing; and second, provisions permitting unlimited corporate funding to political
parties. “Both these amendments relate to the electoral process and not Economic matter.”

It is submitted that these amendments are violative of Article-14 and Article-19 of the Constitution as a reason
of which they are subject to the judicial review of this honourable court vested in it by virtue of article-13 read
with Article-32 of the Indian Constitution and in the same respect reliance is based on the cases of L. Chandra
Kumar v Union of India, (1997)31 and S.P.Sampath Kumar v Union of India (1987)32. Furthermore, the
judicial review of this Hon’ble court is also invoked in light of the fact that the impugned amendments strike
at the basic feature of democracy itself. Reliance in this respect is placed in the cases of Keshavananda Bharti
v State of Kerala33 and Indira Nehru Gandhi v Raj Narain34, Kuldip Nayar v Union of India (2006)35.

It is submitted that it is wrong to even otherwise state that Judicial review cannot be exercised over every
matter pertaining to economic policy in light of the cases of Bhavesh D. Parish and Others v. Union of India
and Others36, and Directorate General of Foreign Trade and Others v. Kanak Exports and Another.37 As
the law is simply this that – “Legislature has to be given latitude in matters of economic policy as they involve
complex issues and not total absence of judicial review” and the same may be exercised when the law(Policy) in
question is plagued with illegality as has been the dictum in the cases of Premium Granites v. State of T.N.,38
Delhi Science Forum v. Union of India,39 State of M.P. v. Narmada Bachao Andolan,40 Peerless General
Finance and Investment Co. Ltd. v. RBI,41 and it is submitted that the degree of deference to be exercised by
the court cannot be expressed in straitjacket formulae.

The Standard of Judicial review is that of the tests of – “Proportionality”, “Double Proportionality”
and “Manifest Arbitrariness

31
L. Chandra Kumar v Union of India, AIR 1997 SC 1125
32
S.P.Sampath Kumar v Union of India, 1987 SCR (3) 233
33
Keshavananda Bharti v State of Kerala, AIR 1973 SC 1461
34
Ibid. Indira Nehru Gandhi v Raj Narain, AIR 1975 SC 865
35
Kuldip Nayar v Union of India, AIR 2006 SC 3127
36
Bhavesh D. Parish and Others v. Union of India and Others, (2000) 5 SCC 471
37
Directorate General of Foreign Trade and Others v. Kanak Exports and Another, (2016) 2 SCC 226
38
Premium Granites v. State of T.N. (1994) 2 SCC 691
39
Delhi Science Forum v. Union of India, (1996) 2 SCC 405
40
State of M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639
41
Peerless General Finance and Investment Co. Ltd. v. RBI, (1992) 2 SCC 343
 33

It is submitted that the 5 amendments ought to be reviewed on the triple tests of “Proportionality, Double
Proportionality” and “Manifest Arbitrariness” as the amendments are concerned with “Violation fundamental
rights and the established tests on review of the same are the above 3 -tests. It is submitted that, when tested
on these 3 tests the 5 amendments are prone to be violative of the Fundamental rights.

iv. Whether the electoral bonds scheme tampers with and distorts the principles of fair

elections in the democratic setup which is also the basic structure of the Constitution?

It is with utmost humility submitted before this Hon’ble Court that “the electoral bonds scheme tampers with
and distorts the principles of fair elections in the democratic setup which is also the basic structure of the
Constitution.” It is submitted that electoral bonds scheme tampers with and distorts the principles of fair
elections in two ways –

1st- By doing away with the Right to Information of voters about the Source and Quantum of Political funding
which impairs with the 1st aspect of the Right to vote discussed under the previous issue in great detail;

2nd- By Providing for – “Unlimited Corporate Funding” including but not limited to Indian Corporate Bodies
and it is by virtue of it the issue pertains to the question of-

Democracy is a basic structure of the Constitution

In Keshavananda Bharti v State of Kerala42, it was held that the “Republican and democratic form of
government” form the basic elements of the constitutional structure. In Indira Nehru Gandhi V. Raj Narain43,
Justice HR Khanna reiterated that the democratic set up of government is a part of the basic features of the
Constitution;

“Periodical elections are a necessary postulate of a democratic setup as it allows citizens to elect their
representatives. He further observed that democracy can function “only upon the faith that elections are free
and fair and not rigged and manipulated, that they are effective instruments of ascertaining popular will both
in reality and in form and are not mere rituals calculated to generate illusion of defence to mass opinion.”

In Digvijay Mote v. Union of India44 and Union of India v. Association for Democratic Reforms,45 the court
said, “Integrity of the Electoral Process is a necessary concomitant to the maintenance of the democratic form
of government”.

In Kuldip Nayar v. Union of India46, the Constitutional Bench of this Court held that a “democratic form of
government depends on a free and fair election system”.

42
Keshavananda Bharti v State of Kerala AIR 1973 SC 1461
43
Indira Nehru Gandhi V. Raj Narain AIR 1975 SC 865
44
Digvijay Mote v. Union of India, (1993) 4 SCC 175
45
Union of India v. Association for Democratic Reforms, (2002) 5 SCC 294
46 . Kuldip Nayar v. Union of India AIR 2006 SC 3127
 34

Meaning of free and Fair Elections-

In PUCL V. Union of India,47 the verbatim of the Hon’ble Court was free and fair elections denote equal
opportunity to all people (political equality). It was further observed that a free and fair election is one which
is not “rigged and manipulated and the candidates and their agents are not able to resort to unfair means and
malpractices.”

The “Unlimited Corporate funding” undermines the constitutional guarantee of “Political equality”

The Preamble to the Constitution describes India as a “democratic republic”; a democracy in which citizens
are guaranteed political equality irrespective of caste and class and where the value of every vote is equal.
Democracy does not begin and end with elections. Democracy sustains because the elected are responsive
to the electors who hold them accountable for their actions and inactions. Would we remain a democracy if
the elected do not heed to the hue and cry of the needy? We have established the close relationship between
money and politics above where we explained the importance of money for entry to politics, for winning
elections, and for remaining in power. That being the case, the question that we ask ourselves is whether the
elected would truly be responsive to the electorate if companies which bring with them huge finances and
engage in quid pro quo arrangements with parties are permitted to contribute unlimited amounts. The
reason for political contributions by companies is as open as day light which is to curry favours and bend the
elected govt. to cater to its wishes. The so Called, “Privacy of donors” can by no stretch of imagination be
attributed to “Corporate Bodies” as a right under Article- 19(1)(a) is right available to citizens only and it is
an established proposition that a Company is not a Citizen in case of “State Trading Corporation of India
Ltd V. CTO.48

A Company cannot be equated to a Citizen on Political Funding

A company and a Citizen cannot be equalized by the logic that there exists no cap on the electoral funding by
an individual as the ability of a company to influence the electoral process through Political Contributions is
much higher when compared to that of an individual. In Citizens United v. Federal Election Commission,49
the issue before the Supreme Court of the United States was whether a corporation can use the general treasury
funds to pay for electioneering communication. The majority held that limitations on corporate funding bans
political speech (through contributions) based on the corporate identity of the contributor. Justice Steven
writing for the minority on the issue of corporate funding observed that companies and natural persons cannot
be treated alike for the purposes of political funding.

47
PUCL V. Union of India, (2013) 10 SCC 1
48
State Trading Corporation of India Ltd V. CTO AIR 1963 SC 1811
49
Citizens United v. Federal Election Commission, 558 U.S 310
 35

The amendment to Section-182 of Companies act,2013 by Section-154 of the Finance act,2017 omitting
the first proviso is fails the “Test of Manifest Arbitrariness” and by virtue of the same also suffers from
“Disproportionality”

At the outset it is submitted that the – “Challenge or Judicial Review of a legislative enactment through the
Test of Manifest arbitrariness has been evolved through the cases of

Shayra Bano v Union of India50 (the judgment that entrenched the test of Manifest Arbitrariness in Indian
Jurisprudence by clarifying its applicability not only to test the “Subordinate legislation” but also to
“Plenary Legislation”.) should the Plenary legislation be in direct non-consonance with the Constitutional
values. Thus, distinguishing between arbitrariness (Where there is no adequate determining principles and
the decision in taken on whim and caprice) and Manifest Arbitrariness (Where there is not only lack of
adequate determining principles and the decision is taken on whim and caprice but also such decision
or action directly is in non-consonance with the Constitutional values) and lastly through the cases of Navtej
Singh Johar v Union of India51 and Joseph Shine v Union of India52; etc. Derived from a long evolution
through the afore-stated cases the Test of Manifest Arbitrariness comprises of the following components –

A provision lacks an “adequate determining principle” if the purpose is not in consonance with constitutional
values. In applying this standard, Courts must make a distinction between the “ostensible purpose”, that is,
the purpose which is claimed by the State and the “real purpose”, the purpose identified by Courts based on
the available material such as a reading of the provision; and

A provision is manifestly arbitrary even if the provision does not make a classification.

Applying the Test of Manifest Arbitrariness to Section 154 of the Finance Act, 2017 which omitted the
1st proviso to Section 182 of the Companies Act, 2013

“The removal of Contribution restrictions is manifestly arbitrary and violative of Article 14”

There exists a Distinction between “Ostensible Object” of the Scheme & its “Real Object”: -

The ostensible object of the amendment, was to discourage the creation of shell companies, there is no
justification for removing the cap on contributions which was included for the very same purpose: to deter
shell companies from making political contributions. In fact, when the proposal to amend Section 182 of the
2013 Act was mooted by the Government in 2017, the Election Commission of India opposed the amendment
and suggested that the Government reconsider its decision on the ground that it would open up the possibility
of creating shell companies. The relevant portion of the opinion of the ECI is reproduced below:

“Certain amendments have been proposed in Section 182 of the Companies Act, where the first proviso has
been omitted and consequently the limit of seven and a half percent (7.5 %) of the average net profits in the

50
Shayra Bano v Union of India, AIR, 2017 9 SCC 1 (SC)
51
Navtej Singh Johar v Union of India, AIR 2018 SC 4321
52
Joseph Shine v Union of India, AIR 2018 SC 4898
 36

preceding three financial years on contributions by companies has been removed from the statute. This opens
up the possibility of shell companies being set up for the sole purpose of making donations to political parties
with no other business of consequence having disbursable profits.”

The legislature Fails to make a Classification by recognizing the Degrees of Harm & The Purpose is not
in Consonance with Constitutional Values

One of the reasons for which companies may contribute to political parties could be to secure income tax
benefit. However, companies have been contributing to political parties much before the Indian legal regime
in 2003 exempted contributions to political parties. Contributions are made for reasons other than saving
on the Income Tax. The chief reason for corporate funding of political parties is to influence the political
process which may in turn improve the company’s business performance. A company, whatever may be
its form or character, is principally incorporated to carry out the objects contained in the memorandum.
However, the amendment now allows a company, through its Board of Directors, to contribute unlimited
amounts to political parties without any accountability and scrutiny. Unlimited contribution by companies
to political parties is antithetical to free and fair elections because it allows certain persons/companies
to wield their clout and resources to influence policy making. The purpose of Section 182 is to curb
corruption in electoral financing. For instance, the purpose of banning a government company from
contributing is to prevent such companies from entering into the political fray by making contributions to
political parties. The amendment to Section 182 by permitting unlimited corporate contributions (including
by shell companies) authorizes unrestrained influence of companies on the electoral process. Unlimited
Corporate Funding comes with unlimited Corporate Influence. This is violative of the principle of free and
fair elections and political equality captured in the value of “one person one vote.”
 37
PRAYER
Wherefore, in the light of the facts stated, issues raised, arguments advanced, and authorities cited, it is most
humbly and respectfully prayed before this Hon’ble Supreme Court that it may be pleased to:

 Hold - The Electoral Bond Scheme, the proviso to Section 29C (1) of the Representation of the People Act 1951
(as amended by Section 137 of Finance Act 2017), Section 182(3) of the Companies Act (as amended by Section
154 of the Finance Act 2017), and Section 13A(b) (as amended by Section 11 of Finance Act 2017) are violative
of Article 19(1)(a) and unconstitutional and;
 Direct- The deletion of the proviso to Section 182(1) of the Companies Act permitting unlimited corporate
contributions to political parties is arbitrary and violative of Article 14 and;
 Formulate- The guidelines for curtailing the discretion accorded on the Speaker in certification of a bill as
money bill and hold that the Amendments incorporating the provisions of the EBS,2018 in the Finance acts of
2016 and 2017 have been erroneously passed as money bill;

AND/OR

 To pass any other Order, Direction, or Relief that it may deem fit in the Best Interests of Justice,
Fairness, Equity and Good Conscience.

All of which is humbly prayed.

Submitted on behalf of the Petitioners.