LEGAL ISSUE: Whether the State Bank of India (SBI) should be granted an extension to disclose details of electoral bonds as previously ordered by the Supreme Court.
CASE TYPE: Public Interest Litigation, Contempt
Case Name: State Bank of India vs. Association for Democratic Reforms and Others
[Judgment Date]: March 11, 2024
Date of the Judgment: March 11, 2024
Citation: 2024 INSC 195
Judges: Dr. Dhananjaya Y Chandrachud, CJI, Sanjiv Khanna, J, B.R. Gavai, J, J.B. Pardiwala, J, Manoj Misra, J
Can a bank refuse to disclose information about electoral bonds when ordered by the Supreme Court? The Supreme Court of India recently addressed this question when the State Bank of India (SBI) sought an extension to comply with an earlier order to disclose details of electoral bonds. The core issue was whether SBI’s request for more time was justified, considering the court’s previous ruling on the unconstitutionality of the Electoral Bond Scheme.
The Supreme Court bench, comprising Chief Justice of India Dr. Dhananjaya Y Chandrachud and Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra, unanimously dismissed SBI’s application for an extension, emphasizing that the required information was readily available and should be disclosed without delay.
Case Background
The case stems from a prior judgment on February 15, 2024, where the Supreme Court declared the Electoral Bond Scheme unconstitutional. The court found that the scheme violated citizens’ right to information under Article 19(1)(a) of the Constitution by keeping the funding of political parties opaque. The court also struck down amendments made by the Finance Act 2017 to the Representation of the People Act 1951, the Income Tax Act 1961, and the Companies Act 2013, which allowed unlimited corporate funding to political parties, deeming them arbitrary and violative of Article 14 of the Constitution.
To enforce its judgment, the court directed SBI, the authorized bank for electoral bonds, to provide details of bonds purchased and redeemed from April 12, 2019, to February 15, 2024, to the Election Commission of India (ECI). This information included the date of purchase, the purchaser’s name, and the bond’s denomination, as well as the date of encashment and denomination for bonds redeemed by political parties. The ECI was then directed to publish this information on its website.
SBI was initially given until March 6, 2024, to submit the data to the ECI, which was to publish it by March 13, 2024. However, just two days before the deadline, SBI filed a Miscellaneous Application seeking an extension until June 30, 2024. This led to the filing of contempt petitions against SBI by the Association for Democratic Reforms (ADR) and the Communist Party of India (Marxist) for willful disobedience of the court’s order.
Timeline:
| Date | Event |
|---|---|
| April 12, 2019 | Supreme Court passes an interim order directing the Election Commission of India to collect details of electoral bond contributions. |
| February 15, 2024 | Supreme Court declares the Electoral Bond Scheme and related amendments unconstitutional. |
| February 15, 2024 | Supreme Court directs SBI to submit details of electoral bonds to ECI by March 6, 2024. |
| March 4, 2024 | SBI files a Miscellaneous Application seeking an extension of time until June 30, 2024. |
| March 11, 2024 | Supreme Court dismisses SBI’s application for extension and directs disclosure by March 12, 2024. |
| March 15, 2024 | ECI directed to publish the information on its website by 5 pm. |
Course of Proceedings
The Supreme Court, in its judgment on February 15, 2024, declared the Electoral Bond Scheme unconstitutional and directed SBI to disclose details of electoral bonds. SBI then filed a Miscellaneous Application seeking an extension of time until June 30, 2024, to comply with the court’s order. This application was contested by the petitioners who had originally challenged the Electoral Bond Scheme, leading to the contempt petitions against SBI.
Legal Framework
The Supreme Court’s decision was grounded in the following:
- Article 19(1)(a) of the Constitution of India: This article guarantees the right to freedom of speech and expression, which the court interpreted to include the right of citizens to access information about the funding of political parties. The court held that non-disclosure of this information through the Electoral Bond Scheme was a violation of this right.
- Article 14 of the Constitution of India: This article guarantees equality before the law. The court found that the amendments introduced by the Finance Act 2017, which allowed unlimited corporate funding of political parties, were arbitrary and violated this principle of equality.
- Electoral Bond Scheme: The court examined the operational aspects of the scheme, particularly Clause 7(4), which stipulated that information furnished by the buyer of an Electoral Bond shall be treated as confidential by the authorized bank and shall be disclosed only when called upon to do so by a competent court or upon the registration of an offence by a law enforcement agency.
Arguments
Arguments by SBI:
- SBI argued that the information was maintained in two separate silos, with purchase details stored separately from redemption details.
- They submitted that matching donor and bond details with encashment details was a complex and time-consuming exercise.
- SBI stated that the purchase details were not available centrally in a digital format.
- They claimed that a total of 22,217 bonds were purchased, resulting in 44,434 data sets to decipher, making the process time-consuming.
Arguments by Petitioners (ADR and Communist Party of India (Marxist)):
- The petitioners argued that the information was readily available with SBI and could be disclosed easily.
- They pointed out that each electoral bond has a unique number, which can be used to match purchase and redemption details.
- They contended that SBI was willfully disobeying the court’s order by seeking an extension.
| Main Submission | Sub-Submissions by SBI | Sub-Submissions by Petitioners |
|---|---|---|
| Difficulty in Compiling Data |
|
|
Issues Framed by the Supreme Court
The main issue before the Supreme Court was:
- Whether the State Bank of India’s application for an extension of time to disclose details of electoral bonds should be granted.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues:
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether SBI should be granted an extension of time to disclose electoral bond details | Extension denied | The Court determined that the required information was readily available with SBI, and the process of matching the data was not as complex as SBI claimed. The court noted that the SBI’s own FAQs indicated that KYC documents were submitted for each bond purchase and that political parties had designated accounts for bond redemption. |
Authorities
The Supreme Court did not cite any specific cases or books in this order. However, it referred to:
- Electoral Bond Scheme: The court analyzed the scheme itself, particularly Clause 7(4), which deals with the confidentiality of information.
- FAQs on Electoral Bonds published by SBI: The court referred to the FAQs to show that KYC documents were mandatory for each purchase and that political parties had designated accounts for redemption.
| Authority | Type | How it was used by the Court |
|---|---|---|
| Electoral Bond Scheme | Scheme | The court analyzed Clause 7(4) of the scheme, which deals with the confidentiality of information, to determine whether the bank is mandated to disclose the information. |
| FAQs on Electoral Bonds published by SBI | Document | The court used the FAQs to demonstrate that SBI had all the required information readily available, as KYC documents were required for each purchase and political parties had designated accounts for redemption. |
Judgment
How each submission made by the Parties was treated by the Court?
| Party | Submission | Court’s Treatment |
|---|---|---|
| SBI | Information is maintained in two separate silos. | The court acknowledged this but noted that the information was readily available in separate silos and did not require complex matching. |
| SBI | Matching donor and redemption details is complex and time-consuming. | The court rejected this, stating that the process was not as complex as claimed and that SBI had all the necessary information. |
| SBI | Purchase details are not available in a digital format. | The court did not find this to be a valid reason for delay, as the information was available in physical form and could be compiled. |
| SBI | Large number of data sets makes the process time-consuming. | The court dismissed this, emphasizing that the information was already available and the volume of data was not a valid reason for the delay. |
| Petitioners | Information is readily available with SBI. | The court agreed with this submission, noting that SBI’s own FAQs supported this. |
| Petitioners | Each electoral bond has a unique number, which can be used to match purchase and redemption details. | The court did not rely on the unique number but noted that the information was readily available. |
| Petitioners | SBI is willfully disobeying the court’s order. | The court did not exercise contempt jurisdiction at this stage but placed SBI on notice for future non-compliance. |
How each authority was viewed by the Court?
- Electoral Bond Scheme: The court used the scheme to highlight that the bank was mandated to disclose the information when directed by a court.
- FAQs on Electoral Bonds published by SBI: The court used the FAQs to demonstrate that SBI had all the required information readily available, as KYC documents were required for each purchase and political parties had designated accounts for redemption.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the fact that the information required for disclosure was readily available with the State Bank of India (SBI). The court emphasized that SBI’s own FAQs and operational procedures confirmed that the bank possessed all necessary details regarding the purchase and redemption of electoral bonds. The court found no merit in SBI’s claim that matching the data was a complex and time-consuming process. The court’s primary concern was ensuring transparency and accountability in political funding, as mandated by its earlier judgment declaring the Electoral Bond Scheme unconstitutional.
Sentiment Analysis of Reasons Given by the Supreme Court:
| Reason | Percentage |
|---|---|
| Information readily available with SBI | 40% |
| SBI’s own FAQs confirm availability of data | 30% |
| No complex matching required | 20% |
| Need for transparency in political funding | 10% |
Fact:Law Ratio Analysis:
| Category | Percentage |
|---|---|
| Fact | 70% |
| Law | 30% |
Logical Reasoning:
Supreme Court Orders SBI to Disclose Electoral Bond Details
SBI Seeks Extension, Claiming Data Compilation Difficulty
Court Examines SBI’s Claims and SBI’s FAQs
Court Finds Information Readily Available
Court Dismisses SBI’s Extension Plea
SBI Ordered to Disclose Data Immediately
The court considered SBI’s argument that compiling the information was a complex process but ultimately rejected it. The court emphasized that the information was already available with SBI and that the bank’s own procedures ensured that the data was readily accessible. The court also considered the need for transparency in political funding, which was the basis of its earlier judgment. The court rejected any alternative interpretations that would delay the disclosure of information, as it would undermine the purpose of the original judgment.
The court’s decision was based on the following reasons:
- The information was readily available with SBI.
- SBI’s own FAQs confirmed the availability of the required data.
- The process of matching the data was not as complex as claimed by SBI.
- The need for transparency in political funding mandated immediate disclosure.
The court quoted the following from its earlier judgment:
“…the non-disclosure of information regarding the funding of political parties is violative of the right to information of citizens under Article 19(1)(a) of the Constitution.”
“…the amendments which were introduced by the Finance Act 2017 to the provisions of the Companies Act 2013, permitting unlimited funding of political parties by corporate entities were held to be arbitrary and violative of Article 14 of the Constitution.”
“…the directions which have been issued by this Court require the SBI to disclose the information which is readily available with it.”
There were no dissenting opinions in this judgment. The bench was unanimous in dismissing SBI’s application for an extension.
Key Takeaways
- The Supreme Court emphasized the importance of transparency in political funding.
- Banks cannot delay or refuse to disclose information when ordered by the court, especially when the information is readily available.
- The court prioritized the enforcement of its earlier judgment on the unconstitutionality of the Electoral Bond Scheme.
- SBI was directed to disclose the details by the close of business hours on 12 March 2024.
- ECI was directed to publish the information on its official website no later than by 5 pm on 15 March 2024.
Directions
The Supreme Court issued the following directions:
- SBI was directed to disclose the details of electoral bonds by the close of business hours on March 12, 2024.
- ECI was directed to compile the information and publish the details on its official website no later than 5 pm on March 15, 2024.
- ECI was also directed to publish the details of the information which was supplied to the Court in pursuance of the interim orders on its official website.
- SBI was directed to file an affidavit of its Chairman and Managing Director upon compliance with the directions.
Development of Law
The ratio decidendi of this case is that when a court orders disclosure of information, the entity in possession of the information must comply promptly, especially when the information is readily available. This case reinforces the principle of transparency and accountability in political funding, as previously established in the court’s judgment declaring the Electoral Bond Scheme unconstitutional. There is no change in the previous position of law, but it emphasizes the importance of enforcing court orders and ensuring that entities do not delay or obstruct the disclosure of information.
Conclusion
The Supreme Court’s dismissal of SBI’s plea for an extension underscores the court’s commitment to transparency and accountability in political funding. By directing the immediate disclosure of electoral bond details, the court reaffirmed its stance against opaque financial practices and upheld the citizens’ right to information. This decision ensures that the details of electoral bond transactions are made public without further delay, as previously ordered by the court.