Privacy, proportionality and a Companies Act clause
Published 5 October 2026
Does privacy cover political contributions? The Court set out the Union's argument: Bonds protect donor informational privacy about political affiliation, and that privacy is itself a fundamental right, so the voter's right to information can be limited even if privacy is not among the Article 19(2) heads. The Court asked two questions: Does the nine-judge Puttaswamy decision on privacy cover political affiliation, and is a contribution part of affiliation? The Court summarised Puttaswamy: Privacy includes "repose", "sanctuary" and informational privacy, and "information which may seem inconsequential in silos can be used to influence decision making behavior when aggregated". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
Next, the Court said privacy is not limited to "private" actions such as the choice of a life partner and is defined as essential protection for exercising other freedoms, so that it "takes within its fold, decisions which also have a 'public component'". Forming political beliefs is "the first stage of political expression", and information about them can be used by the State "to suppress dissent" and at a personal level "to discriminate by denying employment or subjecting them to trolls", which would "disproportionately affect those whose political views do not match the views of the mainstream". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
For the franchise, the Court said that a lack of privacy of political affiliation "would be catastrophic", pointing to the corrupt practices in the RPA (section 123) that go beyond bribery: Undue influence on voters, publishing false statements about a candidate's character, and providing vehicles for conveying electors. It described how political affiliation could be used to disenfranchise voters through "voter surveillance" (the example given is inferring leanings from online purchases or news consumed), and at the system level for gerrymandering. The Court held that informational privacy of political affiliation is necessary to protect the freedom of affiliation and the exercise of the franchise, and concluded that the Constitution guarantees it. Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The Court's most human passage on this point comes next. Contributions are made either as support or as quid pro quo, and "The huge political contributions made by corporations and companies should not be allowed to conceal the reason for financial contributions made by another section of the population: A student, a daily wage worker, an artist, or a teacher." Not all contributions are made to change policy: "contributions to such political parties [those without legislative strength] are made purely with the intent of expressing support". The Court held: "to not grant the umbrella of informational privacy to political contributions only because a portion of the contributions is made for other reasons would be impermissible. The Constitution does not turn a blind eye merely because of the possibilities of misuse." Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The Court dealt with privacy as against the party. The Union had said the scheme was "akin to the secret ballot" since the party does not know the donor. The Court said it could not see how disclosure of donors to the party would infringe expression. It had already held that the scheme gives "only de jure and not de facto confidentiality vis-a-vis the political party", so "it is still open to the political party to coerce persons to contribute", and the secret-ballot analogy "is erroneous". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The case lineage behind the test. Here the Court said that where two fundamental rights conflict, the Court first asks whether the Constitution ranks them (its example is Article 25 being subject to public order and morality). If it does not, courts use judicial tools. The Court named three ways Indian courts have balanced two fundamental rights: The "collective interest or the public interest standard", the "single proportionality standard" and the "double proportionality standard". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The Court described the first modality of the old public-interest approach, in which the Court narrows one right so that there is no real conflict. In Re Noise Pollution ((2005) 5 SCC 733) the Court said free speech does not include the freedom to "engage in aural aggression". In Subramanian Swamy v. Union of India ((2016) 7 SCC 221), on criminal defamation, the Court held that Article 19(1)(a) "does not include the right to defame a person", quoting Justice Dipak Misra on reputation being part of Article 21. The second modality compares the values behind the two rights and favours the one serving the "higher degree of public or collective interest". Asha Ranjan v. State of Bihar ((2017) 4 SCC 397) weighed conflicts "on the scale of constitutional norms and sensibility and larger public interest". In PUCL, Justice Reddi's concurrence held that voters' right to information about assets "trumps" candidates' privacy because it serves a larger public interest. In Mazdoor Kisan Shakti Sangathan v. Union of India ((2018) 17 SCC 324), on the Jantar Mantar protest ban, the Court weighed the right to protest against residents' right to peaceful residence. Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
From there the Court read Mazdoor Kisan Shakti as "the gradual shift from the pre-proportionality phase to the proportionality stage", because the Court used one prong, least restrictive means, and named lesser measures such as earmarked protest areas and limits on loudspeakers and parking. The Court described Sahara India Real Estate Corporation Ltd v. SEBI ((2012) 10 SCC 603, five judges) as "the first departure" from balancing by doctrinal predominance. That case set press freedom (Article 19(1)(a)) against fair trial (Article 21), allowed "neutralizing devices" such as postponing a trial, and used a two-prong test following the Canadian approach: No other reasonable alternative measure is available (necessity), and the salutary effects must outweigh the deleterious effects on the rights. The Court described Puttaswamy (5J), the Aadhaar case ((2019) 1 SCC 1), which applied the structured four-prong test to a conflict between informational privacy and the right to food. Justice Sikri, for the majority, held that the provisions furthering the right to food served "a larger public interest" while the invasion of privacy was "minimal". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The Court explained why it did not use the single test. It works to test whether a right can be restricted for a State interest, but "would prove to be ineffective when the State interest in question is also a reflection of a fundamental right". Applied here, it would ask at the suitability stage whether non-disclosure suits the aim of protecting privacy, at necessity whether it is the least restrictive way, and at balancing whether it has a disproportionate effect on the right holder. The Court said "the necessity and the suitability prongs will inevitably be satisfied because the purpose is substantial: It is a fundamental right", and the balancing stage would count only the harm to the right to information, not the benefit to privacy. The standard therefore "preferentially frames the standard to give prominence to the fundamental right which is alleged to be violated by the petitioners". It added: "This could well be critiqued for its limitations." The Court cited a 2019 Hong Kong lecture by Justice Andrew Cheung PJ on the double proportionality test. Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
After that the Court introduced Campbell v. MGM Ltd ([2004] UKHL 22), where Baroness Hale balanced a public figure's privacy (details of her treatment for drug addiction) against press freedom. The Court noted that Justice Chandrachud, in his concurring opinion in Central Public Information Officer, Supreme Court of India v. Subhash Chandra Agarwal, had already adopted the double proportionality standard. The example given there: Where an applicant asks how many leaves a public employee took and why, accountability favours disclosure and the medical reasons for leave engage privacy, so proportionality "may necessitate that the number of and reasons for the leaves be disclosed and the medical reasons for the leave be omitted". The Court said Baroness Hale's three-step approach "must be slightly tempered" to fit Indian law: Her first two steps (the comparative importance of the rights and the justifications for infringement) are subsumed within the balancing prong of the four-prong test. Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The standard. (a) Does the Constitution create a hierarchy between the rights? If yes, the higher one prevails. If not, then from the view of both rights A and B: (b) is the measure "a suitable means for furthering right A and right B"; (c) is it "least restrictive and equally effective to realise right A and right B"; (d) does it have "a disproportionate impact on right A and right B". The Court did not pick double proportionality because it favoured the petitioners. It reasoned that the single test is built to favour the right being attacked, so a contest between two rights needs a test that examines each. Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
Applying it. The Union said Clause 7(4) (buyer details confidential, disclosed only to a competent court or on a criminal case) balances the voter's right and the donor's privacy. On suitability for the privacy aim, the Court said yes: Non-disclosure "is certainly one of the ways capable of realizing the purpose of informational privacy". On suitability for the voter's aim the answer was no: "There is no nexus between the balancing measure adopted with the purpose of disclosure of information to the voter... The purpose of securing information about political funding can never be fulfilled by absolute non-disclosure." The Court nevertheless went on "assuming that the means adopted has a rational nexus". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
On necessity, the alternative is Section 29C of the RPA, under which parties must report contributions above Rs 20,000 from a person or company in a year, in Form 24A. The Court said Parliament had fixed Rs 20,000 as the point where disclosure outweighs privacy, and set that beside Section 13A of the Income Tax Act (record keeping of every contribution). It held: "The Union of India has been unable to establish that the measure employed in Clause 7(4)... Is the least restrictive means." So the amendment to Section 13A(b) of the Income Tax Act and the amendment to Section 29C(1) of the RPA "are unconstitutional". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
Then came the key step on remedy: Could the Court strike only Clause 7(4)? It held no, because "the anonymity of the contributor is intrinsic to the Electoral Bond Scheme", and without it a bond "is not distinguishable from other modes of contributions through the banking channels such as cheque transfer, transfer through the Electronic Clearing System or direct debit". So "the Electoral Bond Scheme 2018 will also consequentially have to be struck down". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
Before the 2017 amendment, Section 182(3) required a company to disclose in its profit and loss account the amount given and the party it was given to. The Finance Act 2017 required only the total. The Court said the total "would ensure that the money... Is accounted for", but that dropping the particulars "violates the right to information of the voter since they would not possess information about the political party to which the contribution was made which, as we have held above, is necessary to identify corruption and quid pro quo transactions in governance." Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The Court said Section 182(3) and Section 29C of the RPA must be read together. Section 182(3) applies to all modes of transfer, but the only purpose of amending it was to match the bond exemption in the RPA, so once the exemption is struck the amendment is "otiose". Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
The shareholders' argument got a shorter answer. Under Section 136 of the Companies Act every shareholder may ask for a copy of the company's financial statement, and the petitioners said that leaving party donations out of it would stop a shareholder who disliked a party's ideology from selling the shares, which they said engaged Articles 19(1)(a), 19(1)(g), 21 and 25. The Court said it did not see the need to view the non-disclosure in Section 182(3) through a shareholder's lens when it had already identified the effect from the wider position of the citizen and voter. On that basis Section 182(3), as amended by the Finance Act 2017, was unconstitutional. Source: Judgment, ADR v. Union of India, 2024 INSC 113 (Feb 15, 2024)
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