1

RSOL12

3rd AIU NATIONAL MOOT COURT COMPETITION,

2024
IN THE SUPREME COURT OF ARYAVARTA
[Whereas this Hon’ble Court in exercise of its powers, under Article 139A r/w Order XL of Supreme Court
Rules, 2013, has Clubbed the petitions challenging the Electoral Bonds Scheme, 2018 and has duly issued
notice upon the respondent, the following reply is filed as under:]

BEFORE THIS COURT

FROM WHOSE NOTICE THE RESPONSE HAS ARISEN

LOK HIT ABHIYAN & 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 THE RESPONDENT-

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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 E.C.I Election commission India

3 EBS Electoral Bond Scheme

4 Edn. Edition

5 FCRA Foreign Contribution

Regulation Act
6 H.L House of Lords

7 HC High Court

8 Hon'ble Honorable

9 i.e. Id Est

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

11 ICCPR International Covenant on

Civil and Political Rights

12 K.B Kings Bench

13 Ld. Learned

14 No. Number

15 Ors Others

16 p Page

17 pp Pages

18 Q.B Queen’s Bench

19 R.B.I Reserve Bank of India

20 RPA, 1951 Representation of People’s

Act,1951
 4

21 SC Supreme Court

22 SCC Supreme Court Cases

23 Supp. Supplemental

24 UDHR Universal Declaration of

Human rights

25 USSC United States Supreme

Court
 5

INDEX OF AUTHORITIES

TABLE OF CASES

S.no. Caseslaws Pg.No.

Speakers’ Discretion and limited judicial review on the same

1. Special Courts Bill, 1978, In re, (1979) 1 SCC 380 19

2. Kihoto Hollohan v. Zachillhu, 1992 SCR (1) 686 19
3. Sub-Committee on Judicial Accountability v. Union of India & Ors, AIR 1991 19
SC 1598
4. S.R. Bommai & Ors. v. Union of India & Ors, 1994 SCC (3) 1 19
5. Rajaram Pal v. Hon’ble Speaker, (2007) 3 SCC 184 19,20
6. Ramdas Athawale v. Union of India & Ors, AIR 2010 SC 1310 19
7. K.S. Puttaswamy (Aadhaar-5 J.) v. Union of India, (2019) 1 SCC 1 19
8. Mangalore Ganesh Beedi Works v. State of Mysore, 1963 Supp (1) SCR 275 19
9. Mohd Saeed Siddiqui v. State of Uttar Pradesh, (2014) 11 SCC 415 19
10. M.S.M. Sharma v. Dr. Shree Krishna Sinha & Ors, AIR 1960 SC 1186 19
11. Patna Zilla Truck Owners Association & Ors. v. State of Bihar & Ors, AIR 20
1963 Pat 16
12. State of Punjab v. Sat Pal Dang & Ors, (1969) 1 SCR 478 20
13. Yogendra Kumar Jaiswal v. State of Bihar, (2016) 3 SCC 183 20
Doctrine of Pith and Substance

14. A.S. Krishna v. State of Madras, 1957 AIR SCR 399 21

15. Prafulla Kumar Mukherjee v. Bank of Commerce Case, (1947) 49 BOMLR 21
568
16. State of Bombay v. F.N. Balsara, AIR 1951 SC 318 21
17. D.N. Banerjee v. P.R. Mukherjee, AIR 1953 SC 58 21
18. State of Rajasthan v. G. Chawla, AIR 1959 SC 544 21
19. State of Gujarat v. Shantilal Mangaldas, AIR 1969 SC 634 21
20. M. Ismail Farqui v. Union of India, AIR 1995 SC 605 21
21. Zameer Ahmed Latifur Rehman Sheikh v. State of Maharashtra, AIR 2010 21
SC 2633
22. Union of India & Ors. v. Shah Govardhan L. Kabra Teachers’ College, 21,22
(2002) 8 SCC 228
23. P.N. Krishna Lal & Ors. v. Government of Kerala & Anr, 1995 Supp (2) 22
SCC 187
Doctrine of Incidental & Ancillary Powers
24. Chaturbhuj V.Union of India, AIR 1960 SC 1962 22
25. Rai Ramkrishna v. State of Bihar, AIR 1963 SC 1667 22
26. Pathumma v. State of Kerala, AIR 1978 SC 771 22
27. State of Haryana v. Sant Lal, AIR 1993 SCW 3615 22
28. Godfrey Philips India Ltd v. State of UP, AIR 2005 SC 103 22
Bicameralism
29. Kuldip Nayar V. Union of India, AIR 2006 SC 3127 22
 6

Significance of the need to curb the menace of Black Money

30. Vinay Narayan Sharma v. Union of India & Ors, 2023 SCC OnLine SC 1 23
31. Ram Jethmalani v. Union of India, (2011) 8 SCC 1 24
Mischief Rule

32. Bengal Immunity Co. v. State of Bihar, AIR 1955 SC 661 24

33. C.I.T v. Sorda Devi, AIR 1957 SC 832 24
34. Mahijbhai v. Manibhai, AIR 1965 SC 1477 24
35. Patiala v. Shahzada Nand & Sons, AIR 1966 SC 1342 25
36. Sanghvi Jeevraj Ghewar Chand v. Madras Chillies, Grains & Kirana 25
Merchants Workers Union, AIR 1969 SC 530
The Test of Proportionality

37. Modern Dental College & Research Centre & Ors v. State of Madhya 25
Pradesh & Ors, 2016 7 SCC 353
38. Gujarat Mazdoor Sabha and Anr v. State of Gujarat, 2020 10 SCC 459 25
39. Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1 28
40. Supreme Court of India v. Subash Chandra Agrawal, (2020) 5 SCC 481. 28
41. K.S. Puttaswamy v. Union of India (Privacy-9 J.), (2017) 10 SCC 1. 28
42. S.N. Mukherjee v. Union of India, (1990) 4 SCC 594. 28
43. Douglas v. Hello! Ltd., [2001] QB 967. 28
44. PJS v. News Group Newspapers Ltd., (2016) 2 WLR 1253. 28
45. Ram Jethmalani v. Union of India, (2011) 8 SCC 1. 28
46. Matthew David Spencer v. R., (2014) 2 SCR 212. 29
Mere Possibility of Misuse is not sufficient to invalidate a provision of law

47. Collector of Customs v. Nathella Sampathu Chetty, 1962 SCC Online SC 30. 29
48. State of Rajasthan v. Union of India, (1977) 3 SCC 592. 29
49. People's Union for Civil Liberties v. Union of India, (2004) 9 SCC 580. 29
50. Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225. 29
51. Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536. 29
52. Commr., H.R.E. v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, 29
[1954] SCR 1005.
53. K.A. Abbas v. Union of India, (1970) 2 SCC 780. 29
54. Buckley v. Valeo, 424 U.S. (1976). 29
55. People's Union for Civil Liberties v Union of India (PUCL), (2003) 4 SCC 29
399.
56. Assn. for Democratic Reforms, V. Union of India (2002) 5 SCC 294. 30
On informational Self-determination or the Privacy of anonymity

57. K.S. Puttaswamy (Privacy-9 J.) v. Union of India. 30

58. Buckley V. Valeo (2014) 5 SCC 312, 31

Secret Ballot
59. Arikala Narasa Reddy v Venkata Ram Reddy Reddygari, (2014) 5 SCC 312, 31

60. S. Raghbir Singh Gill v S. Gurcharan Singh Tohra. (2014) 5 SCC 312, 31

Information can be accessed only if the same is already in State’s Possession

61. Supreme Court of India v. Subhash Chandra Agarwal 31

62. People's Union for Civil Liberties (PUCL), V. Union of india 31,32
 7

63. Assn. for Democratic Reforms, V. Union of India. 31,32

Judicial Review and its limits on policy matters

64. State of Tamil Nadu & Anr. V. National South Indian River interlinking 32
Agriculturist Association
65. Premium Granites v. State of T.N., (1994) 2 SCC 691. 32
66. Delhi Science Forum v. Union of India, (1996) 2 SCC 405. 32
67. State of M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639. 32
68. Peerless General Finance and Investment Co. Ltd. v. RBI, (1992) 2 SCC 32
343.
69. D.C.M. v. Paramjit Singh, (1990) 4 SCC 723. 33
70. Revanasiddappa v. Mallikarjun, (2011) 11 SCC 1. 33
71. Dr. Ashwani Kumar v. Union of India and Anr., (2020) 13 SCC 585. 33
72. Ravindra Ramchandra Waghmare v. Indore Municipal Corpn., (2017) 1 33
SCC 667.
73. State of H.P. v. Satpal Saini, (2017) 11 SCC 42. 33
74. Union of India v. Indian Radiological & Imaging Assn., (2018) 5 SCC 773. 33
75. P.T.R. Exports (Madras) Pvt. Ltd. v. Union of India. 33
76. Bajaj Hindustan Limited v. Sir Shadi Lal Enterprises Limited. 33
77. State of H.P. v. H.P. Nizzi Vyavsayik Prishikshan Kendra Sangh, (2011) 6 33
SCC 597.
78. Rustom Cavasjee Cooper v. Union of India, (1970) 1 SCC 248. 33
79. R.K. Garg v. Union of India, (1981) 4 SCC 675. 33
80. BALCO Employees' Union v. Union of India, (2002) 2 SCC 333. 33
81. Swiss Ribbons v. Union of India, (2019) 4 SCC 17. 33
82. Edukanti Kistamma v. S. Venkatareddy, (2010) 1 SCC 756. 34
83. S.P. Jain v. Krishna Mohan Gupta, (1987) 1 SCC 191. 34
84. RBI v. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 34
424.
85. Keshavan Madhava Menon v. State of Bombay, 1951 SCC 16. 34
Corporate Funding & Rationale behind the removing the cap on it

86. Jayantilal Ranchchoddas Koticha v. Tata Iron and Steel Co. Ltd, [1958] AIR 35
155 (Bombay).
87. Arizona Free Enterprise Club's Freedom Club PAC et al v. Bennett, 36
Secretary of State of Arizona, et al, 2011 SCC Online US SC 81.
88. McCutcheon et al v. Federal Election Commission, 2014 SCC Online US SC 36
100.
89. Special Courts Bill, 1978, In re, (1979) 1 SCC 3. 36
Intelligible differentia need not be on Mathematical niceties or perfect equality

90. Kedar Nath Bajoria v. State of W.B., (1953) 2 SCC 142. 36

91. Ganga Ram v. Union of India, (1970) 1 SCC 377. 36
92. Anant Mills Co. Ltd. v. State of Gujarat, (1975) 2 SCC 175. 36

STATUTES

1. Constitution of India, 1950;

2. The Representation of Peoples’ Act, 1951

3. The Income Tax Act,1961;

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4. The Reserve Bank of India Act, 1934

5. The Foreign Contribution regulation act,2010;

6. The Companies Act,2013;

7. The Universal Declaration of Human Rights;

8. The International Covenant on Civil and Political Rights;

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

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
 9

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).

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).
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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.

LEGAL DATABASES
India:

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)

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STATEMENT OF JURISDICTION
It is submitted that the Respondent most humbly submit to the jurisdiction of this honourable Court to entertain
Public Interest Litigations invoking writ jurisdiction of this court under Article-32 read with Order –
XXXVIII, Rule-12 of the Supreme Court Rules, 2013.

And wherefore, the court has Clubbed the petitions by virtue of its powers under Article- 139A (1) read with
Order – XL, Rule- 5 (5) of the Supreme Court Rules, 2013 of the Constitution of India and has notified the
Respondent of same, the Respondent has filed the following Written Submission as per the demand of Order
– XL, Rule- 7 (3) of the Supreme Court Rules, 2013.

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(3) of Supreme Court Rules,2013- “Dealing with procedure in cases of Transfer (inc.
Clubbing)”

“Within four weeks of the service of the written brief, the Respondent/Defendant shall file his written brief
setting out briefly the grounds on the basis of which he is opposing each of the propositions of the
Petitioner/Appellant/Plaintiff. Under each of those grounds, he shall cite such authorities as he may seek to
rely on in the same manner as is required under sub-rule (2) of Rule-7.”

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.
 12

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.
 14

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?
 15

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 the submission of the Respondent that the provisions of Finance Act, 2016 and 2017 incorporating the
provisions regarding the EBS, 2018 has been rightly passed as a money bill as they squarely fall under Article-
110(1)(a) read with Art-110(1)(g) of the same by virtue of the invocation of the doctrine of “Pith and
Substance” and the doctrine of “Incidental and ancillary powers” as “Taxation does not begin with levy but
begins long before and encompasses within its ambit all measures taken to “augment the total taxable amount
itself” and the 5 -amendments incorporated in the Finance Act, 2016 and 2017 (incentivizing the use of digital
payment to political funding) are tailored to achieve the very object of “Preventing the transformation of
clean money into unclean money and vice versa” ultimately bring back or augmenting the total taxable amount
available for the purpose of taxation and as such there is no breach of the Basic Structure of Bicameralism as
the same is itself limited by the constitution in cases of money bills and since the provisions (5-amendments)
under challenge have been rightly passed as money bills there is no question of breach 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 Submitted that the “Respondents do not dispute the existence of the fundamental right of every citizen
to know the sources (does not include donors) of funding to the political parties rather argue that it’s not
an absolute right and has to be balanced not only against the National interests but also against the
equivalent fundamental right to privacy of the donors” and for the same reason the Electoral bond scheme
is not violative of the of the same. The respondent bases the submissions under this issue on the propositions
that– “The EBS,2018 is Proportionality test compliant”, “The right to information” operates only against
information already within the states’ possession and since the right of Informational self-determination
(privacy of anonymity) operates even against the state the plea of Petitioner for information stands otiose.
Further, the Judgments of PUCL & ADR mandating disclosure of information pertained to the information
of Candidates standing in election and to against donors who are merely contributors of the candidates. The
Respondents have taken the best steps to balance the “Right of informational self-determination, financial
security, economic health against the Right to information”.

iii. Whether matters concerning the modus operandi of political funding amount to policy decisions
within the domains of government and free from judicial scrutiny?
 16

It is the submission of the Respondent that the matters concerning the modus operandi of the Political funding
is indeed a policy decision and the same is subject to only limited judicial review as has been the accepted
proposition by this very Hon’ble Court in a catena of cases. It is submitted that the limited judicial review is
invoked in cases where a “Question of illegality of the policy itself exist” and since there is none, the EBS,
2018 and the 5 amendments are not subject to Judicial review. Furthermore, it is trite in law that the “Judiciary
does not sit as super legislature to question the legislative wisdom behind the passage of the policy but rather
offers due deference to the policies taking int account the fact that policies (particularly) economic are based
on a Trial-and-Error approach and warrants a greater degree of latitude.

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 this issue centres around the alleged surmise of – “Arbitrariness”, “Lack of level playing
field”, “Absence of any upper limit” to the funding of the petitioners. It is submitted that the policy is none of
the above as – “The need to remove the cap on electoral funding by the corporate was left in light of the fact
that a discrimination existed between corporates and individual donors and the same was devoid of any
intelligible differentia as such going contrary to the mandate of Article-14 itself. The removal of such cap was
also necessitated by the existing practices of creation of shell companies for the sole purpose of political
funding as the limit on a company’ funding capacity propelled the reroute of funds to other shell companies.
The incumbent bias (as a structural distorter) as extrapolated by the petitioner essentially revolving around–
“The ruling party is the receiver of large amounts of money “and the same is wholly irrelevant in considering
the constitutionality of the scheme. Furthermore, even assuming that such an “incumbent bias” exists, this
existence is not a consequence or feature of the Scheme, rather a pre-existing part of the electoral landscape.
There may be a host of factors which govern the choice of an individual to donate to the incumbent, whether
or not the Electoral Bonds Scheme is in place. These factors are the result of the individual judgement
exercised by the donors. They cannot be attributed to the Scheme.

It is submitted that so far as the “Fear of Quid pro Quo Corruption” is concerned, the same stands donation
discovered to be made in pursuance of an illegal quid pro quowould be duly investigated as per law and the
anonymity requirement would have to give way in face of the criminal investigation. Furthermore, the right
of the voters “to see for themselves” who is funding political parties remains even under the present scheme.
Corporate entities are required to disclose the amounts donated under the Scheme and the same can be matched
against the records of funds received by political parties.
 17

ARGUMENTS ADVANCED
It is humbly submitted that the 4-issues have certain Common submissions which are crucial to appreciate the
Specific Submissions advanced under the issue and these Common Submissions are under;

COMMON SUBMISSIONS FOR THE 4 -ISSUES: -

 It is submitted that this Hon’ble Court “is not Considering the legality of the Political Funding Per
se”;
 The aim and objective of the Scheme must be “understood in the larger macro-economic context of
the Country”;
 The EBS, 2018 provided for by way of the 5 amendments “is an incentive driven realistic and not
idealistic approach.”
 It is submitted that the present scheme is not and need not be a “BE ALL and END ALL” solution to
the problem of political donations in the Country. Nevertheless, it is representative of an important
first step towards ensuring “Free and fair elections” and “Purity of elections” (which is impure due to
it being funded by black money) and it is to be taken into account that “Governmental or legislative
policies are ever evolving and often sequential” and it is important to allow the legislature to make
a judgment call on the sequential process.
 It is submitted that in matters of economic policies this Hon’ble Court ought to give deference to the
legislature and not second guess its objectives;
 All possible efforts have been taken to balance the right of “Privacy of donors” (which is the only
incentive to ensure the success of the scheme) and the “Right to information of Citizens”;
 It is to be consciously taken into consideration that the effect of “Political Funding from black money
coerces the funded (Politicians and Parties) to be amenable to the wishes of the funders (who are
largely in illegal activities) and turns Politicians pawns of these illegal perpetrators;
 The funding through cash leaves room for unaccountability, Counterfeiting and laundering and the
scheme seeks to do away with these very destructive economic practices of cash donations;
 The Present Scheme address the alarming and outrageous issue of “Conversion of Clean money to
Unclean money (by supply of the clean money as unaccounted cash to the political parties to avoid
retribution or victimization);
 Every “Unclean money” and Every Clean money converted to “Unclean money” is a money not
available for Taxation and a theft from the “Taxable income of the Economy” and all steps taken to
bring the clean money into the system and retaining the clean money in the system form part and parcel
of the “Process of taxation”;
 The determination of “Whether the present scheme is violative of the constitutional values of
democracy and freedom of information” has to be undertaken in juxtaposition of the same with the
 18

situation existing prior to the Scheme as the prior scheme was even more insalubrious to the Political
health of democracy;

PROBLEM BEFORE THE POLICY (Situation Prior to the Policy)

Moot Para- 6: -

‘The Expenditures run into hundreds of crores. Because of this Parties are compelled to be on the mercy of
the donations received from variety of sources such as rich individuals, HNIs, Large Corporates, and
sometimes even from money launderers and land mafias having enormous black money in cash. Many a
times money is donated in cash and also spent in cash by the parties receiving it, thereby completely
eliminating any scope for transparency in political funding on one hand and providing a purification
mechanism for the people having black money to get rid of the same on the other.’

Moot Para-7: -

‘Despite tax benefits available for making donations to registered political parties, donors prefer to maintain
secrecy about their amount for a variety of reasons such as – security from rival political groups, avoiding
political affiliations in view of public for good reputation, etc and the Political Parties too prefer to not make
disclosures of their donors for variety of reasons like – bad reputation of donors in the public view or the
donated money itself being proceeds of any illegal activity which adversely affect the election prospects of
the done party;’

Moot Para- 8: -

‘Both these reforms taken together resulted in only a small fraction of the donations coming in form of
transparent and accountable methods like Cheques. (These reforms were the “Pass through electoral trust
system” & “Provision of tax exemption to Political parties on the donations received by it upon making
disclosure of its donations in a prescribed manner”).’

Moot Para-9:

‘“Failure of the limited attempts toward eliminating the concerns surrounding political funding”
necessitated the introduction of the electoral bond scheme.’

Ergo, it is submitted that before appreciating the challenge to the present policy of the Respondent, it is
important to understand and appreciate the nature of the problem that is faced by the country. It is
submitted that while it is wholly possible to pick out purported issues in the solution implemented by the
Respondent, it is only when one understands the gravity, the complex nature and multi-dimensional
character of the problem of political donations in the country [or for that matter anywhere in the world],
 19

that one can appreciate the Impugned actions of the Respondent. It is submitted that in fact, even most of
the developed economies of the world have not been able to resolve the issues faced with politicaldonations.

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 submitted that the provisions of Finance Act, 2016 and 2017 incorporating the provisions regarding the
EBS, 2018 has been rightly passed as a money bill.
EXISTING JURISPRUDENCE ON SPEAKER’S DECISION AND CERTIFICATION
The Respondent humbly submit that the existing jurisprudence on the Speakers’ decision and Certification
points toward this court’s magnanimous deference toward such decisions with right balance of the same.
The same is so, for the fact that, the “Post of the Speaker is above Party Politics” as such his decisions are
not tainted with inherent bias and for the same reasons his decisions are given due deference by the Hon’ble
court. Constitutionally, a Speaker is elected by the house and does not represent any party. The discretionary
power of the Speaker as such need not imply Arbitrariness as has been rightly held in case of Special Courts
Bill,19781.
 All hitherto Judgments holding the – “Possibility of Judicial review of Speakers Decision pertain
only to instances wherein the speaker acted in a judicial capacity”.
It is submitted that existing judgments dealing with justiciability of the Speakers’ decision (Kihoto Hollohan
V. Zachillhu (1992)2, Sub-Committee on Judicial Accountability v Union of India & Ors3, S.R. Bommai &
Ors. v. Union of India & Ors4., Rajaram Pal v. Hon’ble Speaker5, Lok Sabha & Ors., Ramdas Athawale v.
Union of India & Ors6) relate to instances wherein the powers exercised by him was essentially of Judicial
Nature and the same cannot be said to apply to a constitutional and procedural function under Art-110(3) as
it is not a judicial power. The same has been the dictum in the case of K.S. Puttaswamy (Aadhaar-5 J.) v.
Union of India, (2019)7.

 There exists a judicial practice wherein – “Refrain has been exercised by the Hon’ble Courts
from Scrutinizing the decision of the Speaker”
The following cases of Mangalore Ganesh Beedi Works v State of Mysore, 19638, Mohd Saeed Siddiqui v
State of Uttar Pradesh, (2014) 9, Ramdas Athawale v. Union of India & Ors., (2010) , and M.S.M. Sharma
v. Dr. Shree Krishna Sinha & Ors., AIR 1960 10, Patna Zilla Truck Owners Association & Ors. v. State of

1
Special Courts Bill,1978, In re, (1979)1 SCC 380.
2
Kihoto Hollohan V. Zachillhu, 1992 SCR (1) 686
3
Sub-Committee on Judicial Accountability v Union of India & Ors AIR 1991 SC 1598
4
S.R. Bommai & Ors. v. Union of India & Ors 1994 SCC (3)1
5
Rajaram Pal v. Hon’ble Speaker(2007)3 SCC 184
6
Ramdas Athawale v. Union of India & Ors AIR 2010 SC 1310
7
K.S. Puttaswamy (Aadhaar-5 J.) v. Union of India, (2019) 1 SCC 1
8
Mangalore Ganesh Beedi Works v State of Mysore, 1963 Supp (1) SCR 275
9
Mohd Saeed Siddiqui v State of Uttar Pradesh, (2014) 11 SCC 415
10
M.S.M. Sharma v. Dr. Shree Krishna Sinha & Ors., AIR 1960 SC 1186
 20

Bihar & Ors., AIR 1963 11, State of Punjab v. Sat Pal Dang & Ors (1969) 12, Yogendra Kumar Jaiswal v
State of Bihar (2016) 13, it is submitted that, the holdings of the Hon’ble Court have been to refrain from judicially
reviewing a procedural decision of the Speaker and it has been iterated in these cases that the proper foram for
questioning such decision and Certification is the Parliament and not the Court and these decisions have been
accepted and referred to in the majority judgment of the K.S. Puttaswamy (Aadhaar-5 J.) v. Union of India case.

 The Marginal heading for the group of sections (Art-107 to Art-111) reads as – “Legislative
Procedure” and Article- 122 explicitly bars Courts’ inquiry into Proceedings of Parliament

It is submitted that Article 122 of the Indian Constitution explicitly bars courts intervention on the grounds of
alleged irregularity of procedure and since, the heading under which Article 110(3) falls is itself termed as a
procedure, the decision of the speaker and Certification is immune from being called into question in court.
Furthermore, it is vehemently submitted that there has not been any illegality in the certification of the Finance
Acts, 2016 and 2017 as money bills and as such there is no question of judicial review in accordance with the
Raja Rampal case14.

It also to be noted that Article 110(4) requires a certification of a bill as a whole and not clause-by-clause
certification.

It is submitted that the classification of the Finance Acts of 2016 and 2017 as money bills aligns with
established parliamentary practice and precedents. Numerous financial legislations, including budgetary
proposals and taxation measures, have historically been enacted through money bills, reflecting the
constitutional mandate to empower the Lok Sabha in fiscal matters.

THE 5 AMENDMENTS OUGHT TO BE APPRECIATED IN LIGHT OF THE ULTIMATE

OBJECT THEY SEEK TO ACHIEVE [the increase in flow of clean money into the economy and
in particular to the realm of electoral financing process which is the pith and substance of the 5
amendments and as such squarely fall under art-110(1)(a) read with (g)]

The Respondent Submits that the 5-amendments have to be appreciated in their substance and the object they
seek to achieve which is – “Prevention of Clean money from being turned to Unclean money and vice versa
for the purposes of Political financing”.

Each of the 5 amendments are in the form of incentives (incentive of non-disclosure, incentive of unlimited
funding) tailored to achieve the object of – “Prevention of Clean money from being turned to Unclean money
and vice versa for the purposes of Political financing”.

11
Patna Zilla Truck Owners Association & Ors. v. State of Bihar & Ors., AIR 1963 Pat 16
12
State of Punjab v. Sat Pal Dang & Ors (1969) 1 SCR 478
13
Yogendra Kumar Jaiswal v State of Bihar (2016) 3 SCC 183
14
Rajaram Pal v. Hon’ble Speaker (2007)3 SCC 184
 21

 Taxation does not begin with levy but begins long before and encompasses within its ambit all
measures taken to “augment the total taxable amount itself”.

It is submitted that any money converted to unclean money goes out of the Sight of the government Taxation
and results in “reduction of the total taxable amount for the govt.” and as such the measures taken by the
government although relate only to the realm of “Electoral financing” is nonetheless a measure aimed at –
“Bringing back to the system the lost taxable amounts and increasing the total Taxable amounts for the
purposes of taxation”. The wide wordings of Article-110(1)(a) which runs as under indicative of the fact the
it is intended to cover- A to Z of taxation.

Article- 110(1)(a)- “the imposition, abolition, remission, alteration or regulation of any tax”;

It is submitted that “Acts aimed at Bringing back to the system the lost taxable amounts and increasing the
total Taxable amounts for the purposes of taxation” are incidental to Article-110(1)(a) of the Constitution and
the same is provided for under Article 110(1)(g).

The above submission is further bolstered by virtue of the “Doctrine of Pith & Substance” & “Doctrine of
Incidental & Ancillary Powers”.

 Doctrine of Pith and Substance - The doctrine has been recognized and employed by this honourable
court in multifidus cases viz., A.S. Krishna v State of Madras (195615), Prafulla Kumar Mukherjee v
Bank of Commerce Case (1947)16, State of Bombay v F.N. Balsara (1951)17, D.N.Banerjee v P.R.
Mukherjee (1958)18, State of Rajasthan v G. Chawla (1958)19, State of Gujarat v Shantilal
Mangaldas20, M. Ismail Farqui v Union of India (1994)21, Zameer Ahmed Latifur Rehman Sheikh
v State of Maharashtra (2010)22. Although, traditionally this doctrine is applied only to check only the
legislative competence of the legislature, it has been held to have been applicable for other purposes
too. Reliance is placed on the following cases of “K.S. Puttaswamy (Aadhaar-5 J.) v. Union of India,
(2019) 1 SCC 1”, A.S. Krishna v State of Madras (1957) , Union of India & Ors. v Shah Govardhan
L. Kabra Teachers’ College, (2002) 23, and P.N. Krishna Lal & Ors. v Government of Kerala & Anr.,
(1995)24.

15
A.S. Krishna v State of Madras 1957 AIR SCR 399
16
Prafulla Kumar Mukherjee v Bank of Commerce Case (1947) 49 BOMLR568
17
State of Bombay v F.N. Balsara AIR 1951 SC 318
18
D.N.Banerjee v P.R. Mukherjee AIR 1953 SC 58
19
State of Rajasthan v G. Chawla AIR 1959 SC 544
20
State of Gujarat v Shantilal Mangaldas AIR 1969 SC 634
21
M. Ismail Farqui v Union of India AIR 1995 SC 605
22
Zameer Ahmed Latifur Rehman Sheikh v State of Maharashtra AIR 2010 SC 2633
23
Union of India & Ors. v Shah Govardhan L. Kabra Teachers’ College, (2002) 8 SCC 228
24
P.N. Krishna Lal & Ors. v Government of Kerala & Anr., 1995 Supp (2) SCC 187
 22

Ergo, it is submitted that the Doctrine of pith and substance has been rightly invoked in this case keeping in
view the “locus classicus” of the K.S. Puttaswamy (Aadhaar-5 J.) v. Union of India, (2019) wherein in a
similar argument on the afore-stated lines was allowed and accepted by the Majority of judges.

 Doctrine of Incidental & Ancillary Powers: It is submitted that this doctrine squarely finds itself
entrenched in Article-110(1)(g) of the Indian constitution and by virtue of it, any acts incidental to or
furthering the objects mentioned in any of the above clauses (a) to (f) themselves would be covered
under the ambit of that clause. In the present case, the respondent submits that the act of the 5-
amendments in the inance Acts of 2016 and 2017 aims are incidental to Article 110(1)(a) as raising the
Taxable amount itself is equivalent to Taxation and measures (which are the amendments) are
themselves only incidental to that object of taxation. The following case of Chaturbhuj V. Union of
India (1960) was placed reliance upon wherein the following was held:

“It was held that power to impose tax include power of raising revenue by imposing license fee”.

The rationale of this case’s holding sounds firm with the current rationale pleaded by the respondent justifying
the stance that ‘Taxation includes all measures undertaken to raise the total taxable amount itself.’ The same
doctrine has been applied in other cases too viz., Rai Ramkrishna v State of Bihar (1963)25, Pathumma v
State of Kerala (1978)26, State of Haryana v Sant Lal (1993)27, Godfrey Philips India ltd v State of UP28
(The power to impose tax includes all events concerning that tax, unless an event is included in another list).

Ergo, it is submitted that there is no breach of the Basic structure of Bicameralism as laid down in the Kuldip
Nayar case29 as the Constitution itself limits Bicameralism in the cases of a Money Bill and, in light of the
above arguments establishing the provisions as money bills, there cannot be any question of breach 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 submitted that the respondents do not dispute the existence of the fundamental right of every citizen to
know the sources (does not include donors) of funding to the political parties rather argue that it’s not an
absolute right and has to be balanced not only against the National interests but also against the equivalent
fundamental right to privacy of the donors and for the same reason the Electoral bond scheme is not violative
of the of the same.

25
Rai Ramkrishna v State of Bihar AIR 1963 SC 1667
26
Pathumma v State of Kerala AIR 1978 SC 771
27
State of Haryana v Sant Lal AIR 1993 SCW 3615
28
Godfrey Philips India ltd v State of UP AIR 2005 SC 103
29
Kuldip Nayar V. Union of India AIR 2OO6 SC 3127
 23

It is submitted that the legislature took into account such a need to balance the 2 fundamental rights and the
entire policy is a culmination of fine balance between the principles of free and fair elections, purity of
elections, “Right to Privacy of donors”, flow of clean money into the system, as against the “Right to
information of Citizens”.

Thus, it submitted that the issue is not merely related to balancing of “Right to Information” as against “Right
to Privacy” but rather related to balancing of the National interest of combating black money, Principles of
Free and fair elections, purity of elections, securing the financial health of the country which has a direct
bearing on its security and sovereignty on one hand and the Right to information of the citizens (which is
not absolute)” on the other.

It is submitted that the Article 19(2) which itself runs as under permits subjection of the right to information
to certain reasonable restriction –

‘Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from
making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred
by the said sub-clause in the interests of the sovereignty and integrity of India, the security of the State,
friendly relations with Foreign States, public order, decency or morality or in relation to contempt of court,
defamation or incitement to an offence.’

It is submitted that the utmost security of the state is its “Financial security” and measures aimed at threatening
the financial security ought to be addressed with utmost priority and all such measures taken to address such
“Financial security” cannot be said to be an infringement of the Right to information as those measures are
protected by the “Doctrine of reasonable restrictions”.

The presence of unclean money in the economy is a virus that gradually erodes the financial health of the state
and overtime threatens its financial security and the same needs to be combated gradually and no overnight
eradication of it is possible. The measures taken to combat its presence in any arena (including but not limited
to the arena of electoral financing) is protected by the doctrine of reasonable restriction as the ultimate object
of such measures is to “safeguard the security of the nation which is inclusive of the financial security”.

The need to combat such complex issue of black money itself has been emphasized by this hon’ble court in the
cases of Vinay Narayan Sharma v. Union of India & Ors. 2023 SCC OnLine SC 1 in the following words:

“315. Practices such as hoarding “black” money, counterfeiting, etc., when coupled withcorruption, are eating
into the vitals of our society and economy. Any measure intended to strike at such practices, and thereby
eliminate off shoots thereof, such as, terror funding, drug trafficking, emergence of a parallel economy,
money laundering including Havala transactions, must be commended. Such measures are necessary to
sanitize the economy and society, and enable it to recover from the plague caused by the evils listed
hereinabove.” (Emphasis Supplied)”

319 ………………on the strength of Entry 36 of List I of the Seventh Schedule of the Constitution. The Central
Government is not just concerned with the financial health of the country as well as its economy, but it is also
 24

concerned with the sovereignty and integrity of India; the security of the State; the defence of the country;its
friendly relations with foreign countries; internal and external security and various other aspects of
governance……………………. Therefore, if the Central Government is of the considered opinion that in order
to meet certain objectives such as the ones stated in the impugned notification, namely, to eradicate black
money, fake currency, terror funding etc., it is necessary to demonetise the currency notes in circulation, then
the Central Governmentmay initiate a proposal for demonetisation.”

Similar lines of reasoning were also given by this hon’ble court pertaining to the issue of unaccounted for
money in the case of Ram Jethmalani v Union of India30

Thus, in light of the afore-stated existing mischiefs in the existing system the right test to be adopted to test
the “Electoral bond scheme” itself is the test of “Oppremere Male est Promovere Remdedium” (Suppress the
mischief and Advance the remedy) which although was first laid down in the famous Heydon’s case, the same
has been affirmed in the cases of Bengal immunity Co. v State of Bihar31, C.I.T v Sorda Devi, 32Mahijbhai
v Manibhai.33

The questions as per the Heydon’s case and subsequently affirmed in all other cases are as under –

1st – What was the common law before making of the Act; (The existing state of affairs – The limited measures
of exemptions and electoral trust scheme);

2nd – What was the mischief and defect for which the common law did not Provide (The Black money, the
practice of clean money being turned to black money);

3rd – What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth or
State (The remedy of confidentiality, removal of cap on funding by corporates other incentives to promote
clean money entering the system);

4th – The true reason of the remedy (To combat black money and purification of the electoral financing aimed
at free and fair elections and purity of elections itself).

It is submitted that the job of judges is under such circumstances always to suppress the mischief and advance
the remedy and to add force and life to the cure and remedy, according to true intent of the makers of the
Act, (Pro bono Publico) and rather not strike the measure (remedy) as a whole.

As has been rightly held in the cases of Bengal Immunity Co v State of Bihar, CIT, Patiala v Shahzada
Nand & Sons, Sanghvi Jeevraj Ghewar Chand v Madras Chillies, Grains & Kirana Merchants
Workers Union, 34
It is submitted that the “The court ought to undertake the test of mischief rule under 2-propositions –

30
Ram Jethmalani v. Union of India, (2011) 8 SCC 1
31
Bengal Immunity Co. v. State of Bihar, AIR 1955 SC 661
32
C.I.T v. Sorda Devi, AIR 1957 SC 832

33
Mahijbhai v. Manibhai, AIR 1965 SC 1477
34
Sanghvi Jeevraj Ghewar Chand v. Madras Chillies, Grains & Kirana Merchants Workers Union, AIR 1969 SC 530
 25

1st – The interpreter should assume that the legislature is composed of reasonable people seeking to achieve
reasonable goals in a reasonable manner;

2nd – The interpreter should accept the non-rebuttable presumption that members of the legislative body sought
to fulfil their constitutional duties in good faith.

It is submitted that the respondent’s answer under this issue answers the 2 of the concerns of the petitioners
raised in the petition as per Moot para 18 viz. – “The concern of lack of transparency and anonymity allegedly
furthering the same” & “The Concern of anonymity promoting Quid-pro-Quo arrangements”.

THE EBS, 2018 IS COMPLIANT WITH THE PROPORTIONALITY TEST

It is submitted that the scheme is Proportionality Test compliant as it fulfils all the 5 stages of proportionality
test as laid down in the cases of Modern Dental College & Research Centre & Ors v State of Madhya Pradesh
& Ors35, and the 5th prong being recognized and added by the case of Gujarat Mazdoor Sabha and Anr v
State of Gujarat36, K.S Puttaswamy (RETD) and Anr (Aadhar) v Union of India & Anr (Supra)

THE LEGITIMATE AIMS/ OBJECTS  Prevention of Clean money being

converted to Unclean money and vice

versa;

 Shift from illegal donations to legal

donations;

 Incentivizing the use of Banking

Channels to make contributions over

the Cash system;

THE MEASURES TAKEN TO  The 5-amendments;

ACHIEVE THE LEGIITIMATE AIMS  The EBS,2018;

 The Para-7(4) of the EBS,2018 and

the Scheme itself (The balancing

Provision).

35
Modern Dental College & Research Centre & Ors v. State of Madhya Pradesh & Ors, 2016 7 SCC 353

36
Gujarat Mazdoor Sabha and Anr v. State of Gujarat, 2020 10 SCC 459
 26

1ST STAGE- Legitimate aim/purpose stage- The afore-stated are all legitimate objects of the State aimed at
not only at keeping the financial security and economic health intact but also the democracy (electoral process)
from being painted with the unclean flow of cash and the reduction of black money inflow into elections.
Furthermore, it is submitted that a clause-by-clause object of the scheme exists, which the respondent reserves
to display by means of interim submissions;

2ND Rational connection stage- It is submitted that the EBS, 2018 which is in the form of “Incentives to shift
from the cash driven illegal donations” to “Electronic Donations by means of banking Channels” possess a
rational connection as each incentive furthers the objects of “Prevention of illegal donations in the form of
unclean money and transformation of clean money to unclean money” (both of which is possible so long as
donations are made by means of Cash).

Rational relation of the incentive of “Anonymity” (Informational Self- determination) to ultimate object: -
In order to ensure that the person involved as stakeholders in this adopt this new regulated form of donations,
it is necessary to incentivisethe scheme in order to promote the adoption of the same by the parties involved.
It is submitted the importance of incentivisation cannot be overstated as the policy is voluntary and cannot be
forced or thrust upon the system. It is submitted that unless it is incentivised, it would not be adopted by the
parties involved and the previously existing cash driven unregulated illegal money political donations would
continue. It is further submitted that coercion in that scenario as a matter of policy would not yield result as
the same would further promote parties involved adopting other untraceable and illegal means of donations.

3RD STAGE- Minimal impairment/necessity test- It is submitted that all the requirements as laid by the
Anuradha Bhasin case have been duly fulfilled as the current scheme is certainly a development upon the older
scheme and the same cannot be denied as – “it to a great extent achieves the object effectively with minimal
transgression upon the “right to know” in comparison with the “Pre-existing scheme.”

THE EFFECTIVENESS OF THE SCHEME IN ACHIEVING THE OBJECTIVE VIS-A VIS THE
PRIOR SCHEME

It is submitted that prior to the introduction of Electoral Bonds, the major portion of income of political
parties from unknown sources, came through Voluntary Contributions. It must be noted that these voluntary
contributions were made in cash. As per the analysis report of Association for Democratic Reforms, out of
the total income of ₹710.80 crore received from Unknown Sources in the Financial Year 2016-17, i.e., the
immediately preceding year from the introduction of Electoral Bonds, ₹580.52 crore (81.671%) was
received by the Political Parties from Voluntary Contributions. The amount of voluntary contribution
received in cash was neither taxable nor regulated, which allowed black moneycirculation in the economy
thereby giving plethora of opportunities for money laundering. Furthermore, as such money remains
unaccountable, one cannot be sure if the amount disclosed as being received in voluntary contributions was
an accurate account of the money received.

It is submitted that with the amendments made by the Finance Act, 2017 and subsequent introduction of
 27

Electoral Bonds Scheme, such voluntary contributions havedrastically reduced. As per the said Report,
out of the total income of ₹ 690.67 crore received from Unknown Sources in the Financial Year, ₹325.06
Crore (47.06%) was received by way of Electoral Bonds while the Voluntary Contributions were
drastically reduced to 179.614 Crore (26.01%). At this juncture, it is important to mention here that most
of the voluntary contributions were made by the Corporate/Business Houses which is evident from the 2016
Report (supra) that clearly shows “Sector-wise share of donations received by National Parties: FY 2016-
17.” According to the report, 95.56% of the donors were Corporate/Business House. Previously, such
voluntary contributions were majorly made in cash with the insertion of sub-section 3A to Section 182 of
Companies Act, 2013, no company is allowed to donate to political parties, except in accordance with the
modes prescribed thereunder. Therefore, even if the electoral bonds may not entirely eliminate cash
donations, by introducing incentives of seeking tax benefits through electoral bonds, and limiting the cash
donating to Rs. 2000, the scheme in question has successfully resulted in drastic reduction of elections being
driven by black money and resultantly introduced transparency and reducedcorruption in political donations
in the country.

THE MINIMAL IMPAIRMENT OF THE SCHEME IN TRANSGRESSING THE RIGHT TO KNOW

It is to be taken into account that the “right to know” is not absolutely curtailed as the scheme perfectly
permits the “right to know” at the same time safe guarding yet another right of privacy. Further, it is
pertinent to note that - The old system of cash money donations was entirely opaque and the money was
untraceable. An entire parallel economy based on black money had arisen, as has been pointed out earlier. In
2014 alone, 200 crores worth of cash was seized by the Election Commission. Therefore, it became
necessary to change the system of campaign financing. However, in making the Scheme, it was necessary to
strike the correct balance between the donor right to privacy and the right to know.

4TH Balancing Act- It is to be borne in mind that identity is not lost but just kept confident and ergo, there
is no fear of any harm being caused as a result of the Privacy or informational self- determination. As has been
already tabulated under the “necessity stage” balance between both the rights have been duly established.
Several judicial pronouncements stress on the need to balance “Transparency” and “Confidentiality” giving
insights into when one may be allowed to triumph over the other or when the established balance may be
allowed to tilt in favour of the other.

These judgments are –

Supreme Court Advocates-on-Record Assn. v. Union of India37,

“953. The balance between transparency and confidentiality is very delicate and if some sensitive information
about a particular person is made public, it can have a far- reaching impact on his/her reputation and
dignity…… The balance between the two implied fundamental rights is difficult to maintain.”

37
Supreme Court Advocates-On-Record Assn. v. Union of India, (2016) 5 SCC 1
 28

What is disclosed? (Facilitating the Right to What is not disclosed? (Facilitating the Right to
information) Privacy)
- Section-399 of the Companies act, 2013 - The information provided by the company in
permits the inspection of the “Financial relation to the “Beneficiary” (The political
statements of a company” registered under party) is kept confidential;
the companies act and the same can be - The political party, in a given situation, in
obtained physically from the Registrar of any event, may or may not be aware about
companies upon payment of requisite fees. the identity of the person who has purchased
- Section-182(3A) makes it mandatory for the electoral bond, as the bond, in itself, does
the companies to make any political not carry the name or any personal details of
donations only by way of “payee cheque the donor and access to such information, as
drawn on a bank or an account payee bank stated hereinabove, is confidential in nature
draft or use of electronic clearing system as provided under Para 7(4) of the EBS,
through a bank account” or by way of 2018.
Electoral Bond. Resultantly, no cash Thus, the only confidential information is-
donations can be made by companies - Details of Donor and Donee; &
thereby stifling the rotation of black- - The Bifurcation of amounts;
money, which formed a huge part of
political donations. Further, the confidentiality veil of the
- The EBS,2018 mandates Political parties information of “Donors and Donees” may be
to file audited statement of accounts and still lifted in the interest of justice for the purposes of
the Section-139(4B) of the Income tax act
makes it incumbent for Political parties to investigation by virtue of Court Order as
make disclosure in profit and loss accounts provided under- Para-7(4) of the EBS, 2018.
to claim deductions under- 80(GGC) of the
I.T. Act, 1961.

Similar dictums have been laid down in the cases of K.S. Puttaswamy v. Union of India (Privacy-9 J) , S.N.
Mukherjee v. Union of India, Douglas v. Hello! Ltd38., and PJS v. News Group Newspapers Ltd., Ram
Jethmalani vs Union of India, etc.

Matthew David Spencer v. R39,-

“The disclosure of this information will often amount to the identification of a user with intimate or sensitive
activities being carried out online, usually on the understanding that these activities would be anonymous. A
request by a police officer that an ISP voluntarily disclose such information amounts to a search.”

It is submitted that the entirety of the donations process is required to be routed through formal banking
channels and in case of companies, accounts of expenditure are required to be kept which would show how

38
Douglas v. Hello! Ltd., (2001) QB 967
39
Matthew David Spencer v. R., (2014) 2 SCR 212
 29

much has been spent by a company on electoral bonds. In fact, in the order of the Hon’ble Supreme Court
dated 12.04.2019, the details of electoral bonds had been required to be kept with the Commission. This would
indicate that the involvement if an impartial and objective third party such as the Commission would go a long
way toward balancing the competing claims of anonymity and transparency.

5TH STAGE - The Safeguard against abuse stage - It is submitted that Sufficient Safeguards have been
undertaken to ensure that the Scheme is not abused or misused these have been incorporated under Section—
3, 4, 6,7,8 inter alia which ensure, that “only certain eligible donors and donees are in the scheme” by
prescription of KYC’s compliance before purchase of bonds and providing for triggering of investigation as
and when deemed necessary.

It is also submitted that the “mere possibility of misuse is not sufficient to invalidate a provision of law
and what is needed is the governmental measures to prevent such a mischief and the same needs to
evaluated in light of the pre-existing scheme”.

To substantiate the above, reliance is placed on the following cases of Collector of Customs v. Nathella
Sampathu Chetty40,, this Court observed that “the possibility of abuse of a statute otherwise valid does not
impart to it any element of invalidity.” Further, it was said in State of Rajasthan v. Union of India41, that “it
must be remembered that merely because power may sometimes be abused, it is no ground for denying the
existence of power. The wisdom of man has not yet been able to conceive of a government with power
sufficient to answer all its legitimate needs and at the same time incapable of mischief”.

People's Union for Civil Liberties v. Union of India42

22. Another issue that the petitioners have raised at the threshold is the alleged misuse of TADA and the large
number of acquittals of the accused charged under TADA. Here we would like to point out that this Court
cannot go into and examine the “need” of POTA. It is a matter of policy. Once legislation is passed the
Government has an obligation to exercise all available options prevent terrorism within the bounds of the
Constitution. Moreover, we would like to point out that this Court has repeatedly held that mere possibility of
abuse cannot be counted as a ground for denying the vesting of powers or for declaring a statute
unconstitutional in State of Rajasthan v. Union of India, Collector of Customs v. Nathella Sampathu Chetty,
Kesavananda Bharati v. State of Kerala, and Mafatlal Industries Ltd. v. Union of India43

40
Collector of Customs v. Nathella Sampathu Chetty, 1962 SCC Online SC 30
41
State of Rajasthan v. Union of India, (1977) 3 SCC 592
42
People's Union for Civil Liberties v. Union of India, (2004) 9 SCC 580
43
Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536
 30

The same has been the holding also in the case of Commr., H.R.E. v. Sri Lakshmindra Thirtha Swamiar of
Sri Shirur Mutt, K.A. Abbas v. Union of India44,.

It is further submitted, that in fact the safeguards provided in the current scheme more effectively protect the
right to know than the old system which existed before the scheme came into force. Prior to the scheme,
Individuals and Companies could donate to political parties and simply bypass their obligation to show the
donations on paper, because the same was done in cash and was generally untraceable. In that regard the
scheme represents a significant, though incremental improvement. This is because the near-total opacity of
the cash donation system has now been replaced by the relatively far more transparent regime of electoral
bonds. This important balancing mechanism was noted by the court in the order refusing stay on the scheme.

ANONYMITY IS THE NEED AND OUGHT TO BE VIEWED AS A PROTECTIVE FEATURE

The anonymity requirement of the scheme should be seen in its true sense, as a protective feature. It is
submitted that political affiliations of a citizen are required to be kept confidential in order to avoid the
possibility of harassment based on political opinions. Under the present scheme, even the incumbent
government is not entitled to know for instance, where a particular purchaser has bought bonds to donate to
them or to the political parties in opposition. This only strengthens democracy by ensuring that a citizen can
give full expression to his political choice without any fear of retaliation based on his political beliefs. It is
submitted that what was therefore required was a shift from a cash-based system to a digital donation system
where there would be improved accountability as well as traceability for the donations made. However, in
order to encourage such a shift, it was necessary to offer incentives. The anonymity requirement of the scheme
must be seen in that context. In the absence of that requirement, there would be no factor to convince donors
to transition from cash to digital payments and the scheme would have been stillborn. The same garners
support by virtue of the following paras reproduced from the K.S. Puttaswamy (Privacy-9 J.) v. Union of
India, (Supra).

“214. […] ‘anonymity may, depending on the totality of the circumstances, be the foundation of a privacy
interest that engages constitutional protection against unreasonable search and seizure.”

It is submitted that the same is further bolstered by this very courts’ order, refusing to stay on the sale of
Electoral bonds Paragraph 22 of the Moot proposition (which refers to the stay order) stated the following
as its reasoning. The importance of the same stands clarified in light of the case of Buckley V. Valeo 45

44
K.A. Abbas v. Union of India, (1970) 2 SCC 780

45
Buckley v. Valeo, 424 U.S. (1976)
 31

SECRET BALLOT AND INFORMATIONAL SELF-DETERMINATION (with respect to finances

donated are connected by virtue of the common object they seek to achieve viz. “Prevention of citizens
against retribution and reprisals for their political affiliations”)

It is submitted that therefore, once it is established that secret ballot is a part of free and fair elections, it is
clear that maintaining anonymity even in donations, subject to some exceptions as provided in Clause 7(4),
would be a part of concept of secret ballot. It is submitted that the concept of secret Ballot has its recognition
in numerous international and jurisprudential instruments like the Article-21(3) of UDHR, & Article-25(b)
of ICCPR and also in the cases of Arikala Narasa Reddy v Venkata Ram Reddy Reddygari46, S. Raghbir
Singh Gill v S. Gurcharan Singh Tohra47,.

“DISCLOSURE OF INFORMATION (applies only to information already in the states’ possession and
cannot apply to information not in the States’ knowledge)

Supreme Court of India v. Subhash Chandra Agarwal, (2020) 5 SCC 481, provided with the following
law;

“294. In common law countries, public interest has always been understood to operate as an interest
independent to that of the State. Public interest operates equally against the State as it does against non-State
actors. This is of significance in the context of the RTI Act as the right to information seeks to bring about
disclosure of information previously held exclusively by the State”.

It is submitted that specifically the judgments in People's Union for Civil Liberties (PUCL) 48and Assn. for
Democratic Reforms49, , sought disclosure of information which was already in the knowledge and possession
of the State authorities. In the present situation the confidentiality requirements operate against the State as
well and therefore, the corollary disclosure requirements do not come in to play.

HITHERTO, Balancing exercises undertaken by this court in the previous cases of (PUCL & ADR)
giving reign to right to information over right of privacy dealt with Candidates and not Donors (Donor’s
privacy cannot be equated to that of Candidates)

It is submitted that the jurisprudence of this Court on the right to know has primarily dealt with the right of
the voter to know antecedents as against the right to privacy of the candidate. It is submitted that the balancing
exercise being conducted in those cases was qualitatively different than that required in the present case
because the present case deals not with candidates but with donors. In its past judgements, the court was
dealing with the information of the candidates themselvesIt is submitted that further the judgements in

46
Arikala Narasa Reddy v Venkata Ram Reddy Reddygari, (2014) 5 SCC 312
47
S. Raghbir Singh Gill v S. Gurcharan Singh Tohra (2014) 5 SCC 312
48
People's Union for Civil Liberties V. Union of India (PUCL), (2003) 4 SCC 399

49
Assn. for Democratic Reforms, V. Union of India (2002) 5 SCC 294
 32

People’s Union for Civil Liberties v. Union of India, and Union of India v. Association for Democratic
Reforms, were in the context of making informed choices about electoral candidates and knowing their
criminal antecedents. It is submitted that the “right to know” that is sought to be canvassed in the present case
is qualitatively different from the one mentioned in the above cases.

Thus, in light of the above arguments it is asserted that the Electoral bond scheme is not violative of the right
to information rather balances both the rights of privacy and information proportionately.

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

The Respondent do not transgress by stating that the “Policy decisions” are free from judicial scrutiny as this
Hon’ble Court has itself been “self-restraint” in dealing with policy matters in its constitutional wisdom rightly
acting in pursuance of the Doctrine of separation powers and doing justice to its worthy role as the protector
of the constitution. It is submitted that like how a “rationale is the guide to the decisions of the court a “policy
is the reasoning and object that guides the decision of an authority (Government or legislature),” (State of
Tamil Nadu & Anr. V. National South Indian River interlinking Agriculturist Association).

 Principle of Non- interference with Policies so long as there is not any question of legality of the
Policy

It is submitted that this court has recognized the power of legislature to make policy decision elaborately in
the case of Vinay Narayan Sharma V. Union of India & ors., and ever since has upheld the view that “it will
not interfere with a policy as long as there is a question of illegality of the same and in reviewing the same, it
confines itself to such question of illegality solely.” The same is bolstered by the cases of Premium Granites
v. State of T.N., Delhi Science Forum v. Union of India50, , State of M.P. v Narmada Bachao Andolan,
Peerless General Finance and Investment Co. Ltd. v RBI 51

It is submitted that since there is no “Question of illegality in the immediate case there is no question
judicial review”.

 The Wisdom of the legislature in adopting the policy cannot be substituted by the court in the
exercise of the power of judicial review & Presumptive benefit to Legislature to be in possession of
expertise and in deeper understanding of the problems of state than the judiciary.

It is Submitted that this hon’ble Court has time and again held in a catena of cases that “legislative wisdom”
stemming out of its greater expertise and deeper understanding of the crude realities and problems encountered
by the state is no comparison to judicial wisdom. Reliance is placed on one such case of D.C.M. v. Paramjit

50
Premium Granites v. State of T.N., (1994) 2 SCC 691

51
Peerless General Finance and Investment Co. Ltd. v. RBI, (1992) 2 SCC 343
 33

Singh52, held: “The legislature in its wisdom is presumed to understand and appreciate correctly the problems
of the State and the needs of the people made manifest by experience. Absent blatant disregard of
constitutional provisions, legislative innovation by social and economic experimentation must be permitted to
continue without judicial interference.” The same has been the iteration in the cases of Revanasiddappa v.
Mallikarjun, , Dr. Ashwani Kumar v. Union of India and Anr53., Ravindra Ramchandra Waghmare v.
Indore Municipal Corpn., State of H.P. v. Satpal Saini, Union of India v. Indian Radiological & Imaging
Assn., P.T.R. Exports (Madras) Pvt. Ltd. v. Union of India and Bajaj Hindustan Limited v. Sir Shadi Lal
Enterprises Limited. It is submitted that the holding in these cases have been consistent with the view
expressed in the case of State of H.P. v. H.P. Nizzi Vyavsayik Prishikshan Kendra Sangh54, , which is:

“21. The courts do not substitute their views in the decision of the State Government with regard to policy
matters”.

 Great latitude and deference in matters of economic policies

It is submitted that this hon’ble court has recognized the need for granting great latitude in matters of economic
policies as they are largely based on trial-and-error approach and the legislature is better equipped with
knowledge and expertise owing to which the court gives empirical deference to the legislature, and the same
has been recognized in a catena case ranging from Rustom Cavasjee Cooper v. Union of India55, , R.K. Garg
v. Union of India, BALCO Employees' Union v. Union of India56

It is submitted that in Swiss Ribbons v Union of India57, another aspect of economic legislation was
highlighted which is worth noting. It is submitted that the judgment noted that economic beneficial legislations
are not just ones which are understood in the classical sense, but could also be “beneficial legislations” for
specified purposes. It is submitted that in the instant case the present Impugned policy is beneficial for the
entire macro-economic health of the country and a step in the right direction for strengthening of the
democratic health of the country. Specifically, it is beneficial for the democracy as it seeks to shift from an
unregulated, unaccounted and often illegal cash based political funded to regulated, clean and regulated
political donations. The same stands supported by virtue of the cases of Edukanti Kistamma v. S.
Venkatareddy, S.P. Jain v. Krishna Mohan Gupta , RBI v. Peerless General Finance and Investment Co.
Ltd., 58

52
D.C.M. v. Paramjit Singh, (1990) 4 SCC 723.

53
Dr. Ashwani Kumar v. Union of India and Anr., (2020) 13 SCC 585

54
State of H.P. v. H.P. Nizzi Vyavsayik Prishikshan Kendra Sangh, (2011) 6 SCC 597
55
Rustom Cavasjee Cooper v. Union of India, (1970) 1 SCC 248

56
BALCO Employees' Union v. Union of India, (2002) 2 SCC 333

57
Swiss Ribbons v. Union of India, (2019) 4 SCC 17
58
RBI v. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 424
 34

Kesavananda Bharati v. State of Kerala59, , noted as under:

“In exercising the power of judicial review, the Courts cannot be oblivious of the practical needs of the
government. The door has to be left open for trial and error. Constitutional law like other mortal contrivances
has to take some chances. Opportunity must be allowed for vindicating reasonable belief by experience.

 Scope of Judicial review under Art-13 is premised on the “established & actual provisions of the
Constitution” not premised upon the “Assumed spirit of the constitution and subjective private
interpretations of the petitioners”

It is submitted that in innumerable cases this Hon’ble court has cautioned against the undertaking of a judicial
review in accordance with the “subjective interpretations of a party appearing before it”. One such case has
be relied upon and reproduced under by the respondent is Keshavan Madhava Menon v. State of Bombay60

“9. An argument founded on what is claimed to be the spirit of the Constitution is always attractive, for it has
a powerful appeal to sentiment and emotion; but a court of law has to gather the spirit of the Constitution
from the language of the Constitution. What one may believe or think to be the spirit of the Constitution cannot
prevail if the language of the Constitution does not support that view”.

“11. ……. It is, therefore, quite clear that the court should construe the language of Article 13(1) according
to the established rules of interpretation and arrive at its true meaning uninfluenced by any assumed spirit of
the Constitution.”

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 the answer to this issue answers the concerns of – “Arbitrariness”, “Lack of level playing
field”, “Absence of any upper limit” to the funding all three of them could be said to be arising out of the
provision of that has removed cap on the funding by the corporates. It is primarily submitted that the court is
not considering the legality of corporate funding per se as the same has been recommended by this very court
in the case of Jayantilal Ranchchoddas Koticha v. Tata Iron and Steel Co. 61

The Argument of Structural Distortion & incumbent bias in the scheme is without any base as they have
been a part of the electoral landscape and would continue to be so owing to the fact that they are a result
of Individual judgment exercised by the Donors.

59
Keshavananda Bharti V. Union of India, (1973) 4 SCC 225
60
RBI v. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 424

61
Jayantilal Ranchchoddas Koticha v. Tata Iron and Steel Co. Ltd, (1958) AIR 155 (Bombay)
 35

The incumbent bias as extrapolated by the petitioner essentially is that – “The ruling party is the receiver of
large amounts of money” and the same is wholly irrelevant in considering the constitutionality of the scheme.
Furthermore, even assuming that such an “incumbent bias” exists, this existence is not a consequence or
feature of the Scheme, rather a pre-existing part of the electoral landscape. There may be a host of factors
which govern the choice of an individual to donate to the incumbent, whether or not the Electoral Bonds
Scheme is in place. These factors are the result of the individual judgement exercised by the donors. They
cannot be attributed to the Scheme.

The SBI is under no obligation at all to disclose to the government the details of funding received by parties
through electoral bonds. This information is held by the bank in its fiduciary capacity, and the bank is duty-
bound to maintain its confidentiality. Therefore, to suggest that the Central Government would in some
manner extract this confidential information from the SBI is an argument without any foundation in law
whatsoever.

It is submitted that so far as the “Fear of Quid pro Quo Corruption” is concerned, the same stands donation
discovered to be made in pursuance of an illegal quid pro quo would be duly investigated as per law and the
anonymity requirement would have to give way in face of the criminal investigation. Furthermore, the right
of the voters “to see for themselves” who is funding political parties remains even under the present scheme.
Corporate entities are required to disclose the amounts donated under the Scheme and the same can be matched
against the records of funds received by political parties.

 The Scheme is not arbitrary as it does not need to Classify between the “Individual Donors” &
“Corporate Donors”

It is submitted that the Scheme does not give “greater value” to corporate donors in comparison to individuals
as claimed by the petitioners. The Scheme is open to persons as well as corporations. The anonymity of
individuals is protected, not just of corporations. This creates an environment where political choice can be
exercised without fear of privacy violations by the State. Further it is entirely incorrect to state that the Scheme
equates corporate entities with citizens of India and allows them to interfere in elections. This submission
completely overlooks the fact that irrespective of the Scheme, funding by corporate entities through electoral
trusts is permitted. Companies may donate with or without going through the electoral bond route. Therefore,
to say that the scheme permits corporates to influence elections when in fact their ability to donate is
independent of the Scheme is not correct. To substantiate the submissions reliance is placed on the cases of
Arizona Free Enterprise Club's Freedom Club PAC et al v. Bennett, Secretary of State of Arizona, et al, 62,
the Supreme Court of United States of America while dealing with the issue that whether equalizing donations
of privately and publicly funded candidates’ conflict with the First Amendment (freedom of speech) held it to
be violative if such classification was made. Further, on the U.S Supreme Court has held the “imposing

62
Arizona Free Enterprise Club's Freedom Club PAC et al v. Bennett, Secretary of State of Arizona, et al, 2011 SCC Online US
SC 81.
 36

restrictions on the aggregate money an individual can contribute to a candidate or committee to be violative
of the 1st amendment (which grants freedom of speech and expression) in the case of Mccutcheon Et Al v.
Federal Election Commission, 63

Furthermore, the existing guidelines for reasonable classification laid down by this hon’ble court in the case
of Special Courts Bill, 1978, (Supra) has been duly considered and the following guideline is of utmost
significance and the same has been reproduced as under –

In light of the same, the state has not made any discrimination between “Corporate donors” and “Individual
Donors” as so far as the subject matter of “Electoral financing is concerned, their position is substantially the
same.”

It is also submitted that the Arguments of the petitioners with respect to “failure of the state to make
classifications” is concerned the said arguments may be relevant for the policy purpose, the same cannot be a
matter of constitutionality challenge. It is submitted that the submissions of the Petitioners on the classification
not be clear on based on unintelligible factors is misconceived. It is settled law that a 'mathematical nicety'
or 'perfect equality' are not required as per Article 14. Further, the constitutionality of a statute cannot be
questioned on the basis of fortuitous circumstances arising out of peculiar situations. The Respondent seeks
to rely on the following cases for the said purpose: Kedar Nath Bajoria v State of W.B64., Ganga Ram v
Union of India65, Anant Mills Co. Ltd. v State of Gujarat 66

Ergo, it is evident from the above cases that there exists no cause (intelligible differentia) for the state to
classify between the Corporate Donors and Individual donors and capping of the funding s such caps would
again go to defeat the object of the scheme as shell companies would be created just for the purposes of
contributions to increase the contributions as one company would be limited in the amount of its contribution.

63
McCutcheon et al v. Federal Election Commission, 2014 SCC Online US SC 100
64
Kedar Nath Bajoria v. State of W.B., (1953) 2 SCC 142
65
Ganga Ram v. Union of India, (1970) 1 SCC 377.

66
Anant Mills Co. Ltd. v. State of Gujarat, (1975) 2 SCC 175.
 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 graciously be pleased to:

 Uphold the EBS, 2018 and the 5 amendments incorporated in the finance Act, 2016 and 2017 as
Constitutional;
 Uphold the passage of the 5 amendments incorporated in the Finance Act, 2016 and 2017 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 Respondent.