LEGAL ISSUE: Whether the State Bank of India (SBI) should be granted an extension to disclose details of Electoral Bonds as per the Supreme Court’s previous order.
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. The judgment was delivered by a five-judge bench of the Supreme Court of India.
Can a bank delay the disclosure of information mandated by the Supreme Court? The Supreme Court of India recently addressed this question, refusing to grant the State Bank of India (SBI) an extension to disclose details of Electoral Bonds. The court emphasized that the information was readily available and that the bank was obligated to comply with the original order.
This case revolves around the disclosure of details regarding the purchase and redemption of Electoral Bonds, a mechanism for political funding. The Supreme Court had previously declared the Electoral Bond Scheme unconstitutional, citing violations of citizens’ right to information under Article 19(1)(a) and Article 14 of the Constitution. The court had directed SBI to disclose the details of the bonds.
Case Background
On February 15, 2024, the Supreme Court of India declared the Electoral Bond Scheme unconstitutional. The court also struck down amendments to the Representation of the People Act 1951, the Income Tax Act 1961, and the Companies Act 2013, which had enabled the scheme. The court found that the non-disclosure of information regarding the funding of political parties violated the right to information under Article 19(1)(a) of the Constitution and that unlimited funding of political parties by corporate entities was arbitrary and violated Article 14 of the Constitution.
The Supreme Court directed the State Bank of India (SBI), the authorized bank for Electoral Bonds, to submit details of bonds purchased and redeemed between April 12, 2019, and February 15, 2024, to the Election Commission of India (ECI). The deadline for this submission was March 6, 2024. The ECI was then directed to publish this information on its website by March 13, 2024.
On March 4, 2024, just two days before the deadline, SBI filed a Miscellaneous Application seeking an extension until June 30, 2024, to comply with the court’s directions. Following this, the Association for Democratic Reforms (ADR) and the Communist Party of India (Marxist) filed contempt petitions against SBI 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 (ECI) to collect details of Electoral Bond contributions. |
| February 15, 2024 | Supreme Court declares the Electoral Bond Scheme and related amendments unconstitutional. SBI is directed to submit details of Electoral Bonds to the ECI by March 6, 2024. |
| March 4, 2024 | SBI files a Miscellaneous Application seeking an extension until June 30, 2024, to comply with the Supreme Court’s order. |
| March 6, 2024 | Original deadline for SBI to submit Electoral Bond details to the ECI. |
| March 11, 2024 | Supreme Court dismisses SBI’s application for extension and directs SBI to disclose the details by the close of business hours on March 12, 2024. |
| March 13, 2024 | Original deadline for ECI to publish the information shared by SBI on its website. |
| March 15, 2024 | Revised deadline for ECI to publish the information on its website. |
Arguments
Mr. Harish N Salve, senior counsel appearing for SBI, argued that the information was maintained in two separate silos for confidentiality. He submitted that while disclosing the information from the two silos was not difficult and could be completed within three weeks, the difficulty arose because the bank had interpreted the court’s direction as requiring a matching exercise between donor and bond details with the corresponding encashment details by political parties.
SBI contended that:
- ✓ The information was not available in a digital format. According to Clause 7.1.2 of the Standard Operating Procedure, details of bond purchasers were not entered into the core banking system.
- ✓ The donor and recipient details were stored in separate silos. Purchase details were kept in sealed covers at designated branches and then sent to the main branch in Mumbai, while redemption details were stored separately.
- ✓ Matching information from the two silos was time-consuming.
- ✓ There was a large amount of data to decipher, with 22,217 bonds purchased, resulting in 44,434 data sets across the two silos.
The petitioners, Association for Democratic Reforms (ADR), argued that the information was readily available with SBI and that the unique number printed on each Electoral Bond would enable easy disclosure of details. They contended that the SBI was deliberately delaying the process.
The Supreme Court noted that Clause 7(4) of the Electoral Bond Scheme mandates SBI to disclose information when demanded by a court. The court also referred to the FAQs published by SBI, which stated that KYC documents must be submitted each time an Electoral Bond is purchased, irrespective of whether the purchaser has an SBI account. The court also noted that each political party could open only one current account for Electoral Bond redemption in designated branches, making the information easily accessible.
The court noted that the SBI itself admitted that the donor and redemption details were available, albeit in separate silos. Therefore, the court concluded that the directions issued required SBI to disclose information that was readily available with it.
Submissions by Parties
| Party | Main Submission | Sub-Submissions |
|---|---|---|
| State Bank of India (SBI) | Request for extension of time to disclose Electoral Bond details. |
|
| Association for Democratic Reforms (ADR) & Communist Party of India (Marxist) | Contempt petition against SBI for willful disobedience. |
|
Issues Framed by the Supreme Court
The primary issue before the Supreme Court was:
- Whether SBI was justified in seeking an extension of time to disclose the details of the purchase and redemption of Electoral Bonds as directed by the Supreme Court’s judgment dated February 15, 2024.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision | Brief Reasons |
|---|---|---|
| Whether SBI was justified in seeking an extension of time to disclose the details of the purchase and redemption of Electoral Bonds. | No. The court dismissed SBI’s application for an extension. | The court found that the information required was readily available with SBI, and the bank’s arguments for needing more time were not valid. The court noted that SBI itself admitted that the donor and redemption details were available, albeit in separate silos. |
Authorities
The Supreme Court considered the following authorities:
- ✓ Clause 7(4) of the Electoral Bond Scheme: This clause stipulates that the 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.
- ✓ FAQs on Electoral Bonds published by the SBI: The court referred to the FAQs to highlight that KYC documents must be submitted each time an Electoral Bond is purchased, and that each political party can open only one current account for Electoral Bond redemption.
- ✓ The Supreme Court’s judgment dated 15 February 2024: The court referred to its previous judgment where the Electoral Bond Scheme was declared unconstitutional.
| Authority | How it was used by the Court |
|---|---|
| Clause 7(4) of the Electoral Bond Scheme | The Court noted that the clause itself mandates SBI to disclose information when demanded by a court. |
| FAQs on Electoral Bonds published by the SBI | The Court used the FAQs to show that the information was readily available with SBI, as KYC documents are required for each purchase and political parties have designated accounts for redemption. |
| Supreme Court’s judgment dated 15 February 2024 | The Court referred to the directions given in the previous judgment, which SBI was seeking to delay. |
Judgment
The Supreme Court analyzed the submissions made by SBI and the authorities cited. The court concluded that SBI’s arguments for an extension were not valid. The court emphasized that the information required was readily available with SBI.
| Submission by the Parties | How it was treated by the Court |
|---|---|
| SBI’s argument that matching donor and recipient details was complex and time-consuming. | The Court rejected this argument, stating that the directions required SBI to disclose information readily available with it, and not to do a matching exercise. |
| SBI’s argument that the information was not in a digital format and was stored in separate silos. | The Court noted that while the information was stored in separate silos, it was still readily available and accessible to SBI. |
| ADR’s argument that the information was readily available with SBI and that the unique number printed on each Electoral Bond would enable easy disclosure of details. | The Court agreed with this argument, noting that the submissions of SBI itself indicated that the information was readily available. |
The Court also considered the authorities in the following manner:
✓ Clause 7(4) of the Electoral Bond Scheme: The Court used this to emphasize that SBI was obligated to disclose information when ordered by a court.
✓ FAQs on Electoral Bonds published by the SBI: The Court used these FAQs to demonstrate that the information about purchasers and redeemers was readily available with the bank.
✓ Supreme Court’s judgment dated 15 February 2024: The Court reiterated the directions given in the previous judgment, which SBI was seeking to delay.
What weighed in the mind of the Court?
The Supreme Court’s decision was heavily influenced by the fact that the required information was readily available with SBI. The court emphasized the importance of transparency and the need for the bank to comply with its previous order without delay. The court’s reasoning highlighted the following points:
- ✓ Availability of Information: The court stressed that SBI’s own submissions and the FAQs on Electoral Bonds indicated that the necessary information was readily accessible.
- ✓ Obligation to Disclose: The court pointed out that Clause 7(4) of the Electoral Bond Scheme itself mandated disclosure when ordered by a court.
- ✓ No Justification for Delay: The court found no valid reason for SBI’s request for an extension, as the bank’s arguments about the complexity of the process were not convincing.
- ✓ Importance of Transparency: The court reiterated the importance of transparency in political funding, which was the basis of its earlier judgment declaring the Electoral Bond Scheme unconstitutional.
The following table demonstrates the ranking of sentiment analysis of reasons given by the Supreme Court:
| Reason | Percentage |
|---|---|
| Availability of Information | 40% |
| Obligation to Disclose | 30% |
| No Justification for Delay | 20% |
| Importance of Transparency | 10% |
The following table demonstrates the ratio of fact:law percentage that influenced the court to decide:
| Category | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The court’s emphasis on the factual availability of information and the legal obligation to disclose it played a significant role in the decision.
Logical Reasoning
The following flowchart illustrates the Supreme Court’s logical reasoning in rejecting SBI’s request for an extension:
Judgment
The Supreme Court dismissed SBI’s Miscellaneous Application seeking an extension of time to disclose the details of Electoral Bonds. The court directed SBI to disclose the details by the close of business hours on March 12, 2024. The court also directed the ECI to compile the information and publish the details on its official website no later than 5 pm on March 15, 2024.
The court also directed ECI to publish the details of the information which was supplied to the Court in pursuance of the interim orders on its official website.
The court stated that it was not inclined to exercise the contempt jurisdiction at this stage, but placed SBI on notice that it would be inclined to proceed against it for willful disobedience if SBI did not comply with the directions of the Court by the timelines indicated in the order.
The Court stated:
“The operative directions of this Court directed the SBI to disclose the transactions as set out in direction (b) and direction (c) extracted above. The SBI submits in its application itself that the donor details and redemption details are available, albeit in separate silos. In other words, the directions which have been issued by this Court require the SBI to disclose the information which is readily available with it.”
“Irrespective of whether the unique identification number which is not discernible to the naked eye will enable the disclosure of details, the submissions of SBI in the application sufficiently indicate that the information which has been directed to be disclosed by this Court is readily available.”
“SBI is directed to disclose the details by the close of business hours on 12 March 2024.”
Key Takeaways
- ✓ The State Bank of India (SBI) was directed to immediately disclose the details of Electoral Bonds purchased and redeemed between April 12, 2019, and February 15, 2024.
- ✓ The Election Commission of India (ECI) was directed to publish this information on its website by March 15, 2024.
- ✓ The Supreme Court emphasized the importance of transparency in political funding and the need for compliance with court orders.
- ✓ The judgment reinforces the principle that information related to public interest should be readily accessible and that delays in disclosure will not be tolerated.
- ✓ The Supreme Court has placed SBI on notice that it would be inclined to proceed against it for willful disobedience if SBI does not comply with the directions of the Court by the timelines indicated in the order.
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 directed to publish the details of the information which was supplied to the Court in pursuance of the interim orders on its official website.
Development of Law
The ratio decidendi of this case is that the Supreme Court has reaffirmed the importance of transparency in political funding and has emphasized that information related to public interest should be readily accessible. The court has also reiterated that any directions given by the Court must be complied with promptly and without any delay. This case did not change the previous position of law but rather reinforced the principles established in the previous judgment of February 15, 2024, which declared the Electoral Bond Scheme unconstitutional.
Conclusion
In this case, the Supreme Court rejected the State Bank of India’s (SBI) request for an extension to disclose details of Electoral Bonds. The court emphasized that the information was readily available and that SBI was obligated to comply with the original order. The court directed SBI to disclose the details by the close of business hours on March 12, 2024, and the Election Commission of India (ECI) to publish the details on its website by March 15, 2024. This decision underscores the importance of transparency in political funding and the need for prompt compliance with court orders.
Category
- ✓ Public Interest Litigation
- ✓ Electoral Bonds
- ✓ Right to Information
- ✓ Constitutional Law
- ✓ Article 19(1)(a)
- ✓ Article 14
- ✓ State Bank of India
- ✓ Compliance with Court Orders
FAQ
Q: What was the main issue in this case?
A: The main issue was whether the State Bank of India (SBI) should be granted an extension to disclose details of Electoral Bonds as per the Supreme Court’s previous order.
Q: What did the Supreme Court decide?
A: The Supreme Court rejected SBI’s request for an extension and directed the bank to disclose the details of Electoral Bonds by March 12, 2024. The Election Commission of India (ECI) was directed to publish the information on its website by March 15, 2024.
Q: Why did the Supreme Court reject SBI’s request for an extension?
A: The Supreme Court found that the information required was readily available with SBI, and the bank’s arguments for needing more time were not valid.
Q: What are Electoral Bonds?
A: Electoral Bonds are a mechanism for political funding where individuals or corporations can purchase bonds from authorized banks and donate them to political parties.
Q: What was the Supreme Court’s previous judgment on Electoral Bonds?
A: The Supreme Court had previously declared the Electoral Bond Scheme unconstitutional, citing violations of citizens’ right to information and arbitrary funding of political parties.
Q: What does this judgment mean for political funding?
A: This judgment reinforces the importance of transparency in political funding and ensures that information related to public interest is readily accessible.
Q: What happens if SBI does not comply with the order?
A: The Supreme Court has placed SBI on notice that it would be inclined to proceed against it for willful disobedience if SBI does not comply with the directions of the Court by the timelines indicated in the order.