SC in Review 2019 – Panel 1 Long Brief

Panel 1: Strengthening Democracy

Panellists:

• Dr. Jagdeep S. Chhokar, Founder and Trustee, Association for Democratic Reforms
• Malavika Prasad, Advocate and Doctoral Fellow, NALSAR
• Nitin Sethi, Independent Journalist and Writer

2019 saw a number of decisions from the Supreme Court with substantial implications for the Indian democracy. In April, the Court directed that the Voter Verified Paper Audit Trail (VVPAT) slip matching be carried out in more voting booths. In the same month, it made an interim order to all political parties to confidentially declare to the Election Commission the funding they had received under the Electoral Bonds Scheme.

At around the same time, the Court also engaged with questions of citizenship. It closely monitored the National Register of Citizens (NRC) exercise in the State of Assam. The final draft of the NRC was published on 31 August, excluding around 19 lakh residents. Finally, in the case concerning the Finance Act, 2017, the Court cast a shadow over the way in which the Aadhaar judgment had validated the passing of Aadhaar legislation as a Money Bill. In doing so, it placed special emphasis on the importance of bicameralism for the healthy functioning of parliamentary democracy.

Given that a final judgment in the Electoral Bonds Scheme is awaited and the scope of Money Bill will come up before a larger bench, these decisions may hold clues to the Court’s approach towards vital questions concerning India’s democracy.

A brief background of these key cases and Court’s responses in them are provided below:

VVPAT: Since 2004, voting in all Parliamentary Constituencies has been carried out using the Electronic Voting Machines (EVMs). In August, 2013 the Conduct of Elections Rules, 1961 were amended to allow the Election Commission (EC) to use EVMs with VVPATs. VVPAT is an independent vote verification system, which allows a voter to check whether their vote was cast correctly. In 2013, the Supreme Court in Dr. Subramanium Swamy v. Election Commission of India, upheld the indispensable nature of VVPAT in the free and fair conduct of elections.

Four years later, in 2017, the EC decided to undertake mandatory verification of VVPAT slips in one randomly selected polling station per Assembly Segment/Constituency. In February 2019, the then Chief Minister of Andhra Pradesh, Mr. Chandrababu Naidu and a number of other political leaders, approached the Supreme Court to direct the Election Commission (EC) to verify a higher number of Voter Verified Paper Audit Trail (VVPAT) slips.

Specifically, the Petitioners requested the Court to quash the EC guideline of verifying VVPAT slips in only one polling station and direct it to verify 50% of VVPAT slips in each Assembly Segment/Constituency.

The EC though submitted that if 50% VVPAT slips were double-counted, it would delay the announcement of results by at least 6 days.

On 8 April 2019, the Supreme Court ordered the Election Commission to increase the number of EVMs that undergo VVPAT physical verification from 1 to 5 per Assembly Constituency or Assembly Segment in a Parliamentary Constituency. Soon thereafter, the Court briefly heard the review petitions but declined to modify its order.

Although the Court in its 8 April order had held that it was “certain that the system ensures accurate electoral results”, it nevertheless went on to increase the physical verification requirement of VVPATs. The reason adduced by the Court to increase the verification requirement to 5 VVPATs in total rather than 50% of VVPAT slips in each Assembly Segment/Constituency, as sought by the petitioners, was keeping in mind the “viable number of machines that should be subjected to the verification of VVPAT paper trails” and “the infrastructure and the manpower difficulties pointed out by the Deputy Election Commissioner”.

While the Court’s imprimatur to the electoral results may have been prompted by the proximity of the 2019 Lok Sabha elections when it was deciding the case, it now has a chance to take a closer look at the issue. Recent petitions filed by the Association for Democratic Reforms (ADR) and others have pointed to an irregularity in the final votes counted when compared against the voter turnout in the 2019 elections. Court has now issued notice to the EC in the matter.

It will be interesting to see whether the Court adopts the deferential approach it took in the VVPAT petitions or takes a more proactive role in regulating the electoral process, with the time pressure of impending elections gone.

Electoral Bonds: The Electoral Bonds Scheme was notified by the Central Government on 2 January, 2018. An Electoral Bond is a bearer instrument payable to the bearer on demand. It can be used by individuals and corporations incorporated in India to make donations to political parties. Bonds can be purchased in denominations ranging from Rs 1,000 to Rs 1 crore from the State Bank of India using a KYC compliant bank account, with no upper limit on the donation amount. Political parties can then encash the bond within 15 days. The identity of the donor is anonymous and only known only to the bank.

The current Electoral Bonds Scheme was  introduced through the Finance Acts of 2016 & 2017, which amended four legislations – Foreign Contribution Regulation Act, 2010 (FCRA), Representation of the People Act, 1951 (RoPA), Income Tax Act, 1961 and the Companies Act, 2013.

Petitions were filed before the Supreme Court to challenge the scheme. The petitioners contend that the scheme should not have been introduced through the Finance Acts, as this bypasses scrutiny by the Rajya Sabha. Additionally, the petitioner has sought a stay on the Scheme on the ground that it primarily benefits the party in power at the Central Government.

The Election Commission (EC) submitted an affidavit in the matter stating that the scheme is adverse to transparency in party funding. The Government’s defense of the scheme is that it will promote transparency in political donations as it requires donors to donate through a verified KYC account with an audit trail.

On 12 April, the Bench passed an interim order directing all political parties to submit the details of all bonds received until 15 May to the Election Commission.

Despite its alleged detrimental effects on the transparent funding of political parties, the Court has been reluctant to grant a stay on its operation. Moreover, even after the Court had noted that the matter involved “weighty issues which have a tremendous bearing on the sanctity of the electoral process in the country”, no substantive hearing has taken place in the Petitions for the last 8 months.

The petitions are now expected to come up in January, 2020. Nevertheless, one of the issues – the passing of amendments as a Money Bill – is now tied up with the decision in the Tribunals case, where a reference to a larger bench on the scope of Money Bill was recommended. Given this, it would be interesting to see if the Petitions will have to wait till the reference is decided.

Tribunals and the Finance Act: Part XIV of the Finance Act, 2017 brought about amendments to certain legislations governing the structure, organization and functioning of tribunals. In doing so, it also provided for the formulation of a fresh set of rules to govern these tribunals. Pursuant to this, the Central Government notified the Appellate Tribunal and Other Authorities (Qualifications, Experience and Other Conditions of Service of Members) Rules 2017 (Appellate Tribunal Rules).

Upon the passing of the amendments, several petitions were filed challenging the constitutional validity of the Act. Specifically, they challenged the passage of the Act as a Money Bill, which typically otherwise only contains purely fiscal measures (passing of Money Bills do not require the consent of the upper house – Rajya Sabha). Further, the petitioners argued that Part XIV violated certain basic features of the Constitution, namely the independence of the judiciary and the separation of powers.

On November 13th 2019, the Bench delivered its judgment. Although the Court struck down the Appellate Tribunal Rules as being destructive of judicial independence, it referred the questions of what falls within the scope of a Money Bill and whether Part XIV of the Act was validly passed as a Money Bill, to a larger Bench. The reference was prompted by the majority’s finding that the decision in the Aadhaar case (which was cited as a precedent by both petitioners and respondents) was given without properly determining the scope of a Money Bill. Given that the Aadhaar Bench was one of co-equal strength, the Court found it prudent to refer the issue to a larger bench to avoid any conflict.

The reference to the larger bench on the Money Bill questions holds significance for not just the validity of Part XIV of the Finance Act. It has repercussions for issues such as the Electoral Bonds Scheme and the Aadhaar Scheme, which too were passed as Money Bills. On an even broader canvas, the decision will likely illuminate the bright lines for the circumstances in which Rajya Sabha’s scrutiny may be done away with.