This week in Indian law: The Supreme Court unanimously struck down the Electoral Bonds Scheme as unconstitutional, delivering what may be the most consequential constitutional judgment of the decade. The Court directed the State Bank of India to disclose all bond transaction data to the Election Commission. The MCA also notified revised company registration fees. Four significant developments this week dominated by the landmark electoral bonds verdict.
Top story
Supreme Court Strikes Down Electoral Bonds as Unconstitutional
Category: constitutional-rights | Date: 15 February 2024 | Source: Supreme Court of India
In a unanimous judgment that will reshape India's political funding landscape, the five-judge Constitution Bench led by Chief Justice D.Y. Chandrachud — with Justices Sanjiv Khanna, B.R. Gavai, J.B. Pardiwala, and Manoj Misra — struck down the Electoral Bonds Scheme 2018 as violative of voters' fundamental right to information under Article 19(1)(a) of the Constitution. The Court held that the scheme's core mechanism of donor anonymity was disproportionate to the government's stated objective of curbing black money, and that informational privacy of political donors cannot override the public interest in electoral transparency.
The Court directed the State Bank of India to furnish complete details of all bond transactions — purchaser identity, denomination, date of purchase, and recipient political party — to the Election Commission of India within three weeks. The ECI was directed to publish this data on its website within one week of receipt. The Finance Act, 2017 amendments to the Representation of the People Act, Income Tax Act, and Companies Act that enabled the scheme were also struck down.
Why it matters: This verdict fundamentally reshapes the legal framework governing political finance in India. All electoral bond transactions over six years will become public, revealing the pattern of corporate and individual funding to political parties. Any future anonymous donation mechanism will need to satisfy the proportionality standard articulated by the Court, making the reintroduction of such schemes extremely difficult.
Read more: Veritect analysis
Regulatory updates
MCA Notifies Revised Company Registration and Filing Fees
Date: 16 February 2024 | Source: Ministry of Corporate Affairs
The Ministry of Corporate Affairs notified revised fee structures for company incorporation, annual filings, and other statutory compliances under the Companies Act, 2013. The revised fees apply to filings on the MCA21 portal and affect companies of all sizes.
Key point: Corporate practitioners should update their compliance cost estimates and advise clients on the revised fee schedules, particularly for companies planning incorporation or restructuring in the near term.
Also this week
- Electoral bonds political fallout begins — The judgment triggered immediate political debate, with opposition parties demanding accelerated disclosure and the government evaluating its response. The practical impact will be visible once SBI's data is made public.
- Corporate disclosure implications — Companies that purchased electoral bonds face imminent public disclosure of their political donations, with boards beginning to assess reputational and shareholder communication strategies.
By the numbers
- 5-0 — Unanimous Constitution Bench verdict striking down electoral bonds
- 6 years — Duration the Electoral Bonds Scheme was operational (2018-2024), with all transactions now subject to disclosure
- 3 weeks — Deadline for SBI to furnish bond transaction data to the Election Commission
- ₹16,518 crore — Approximate total value of electoral bonds purchased since scheme inception
Looking ahead
- SBI disclosure deadline: The State Bank of India has until approximately 7 March to furnish all electoral bond data to the ECI.
- ECI publication: One week after receiving SBI data, the Election Commission must publish the information online.
- Political funding reform: Parliament and the government will need to consider alternative transparent funding mechanisms.
- General elections: The electoral bonds data will become public just weeks before the Lok Sabha election process commences.
This is the Veritect Weekly Legal Roundup for Week 7 of 2024. For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.