Electoral Bonds Implementation Review: What the Supreme Court settled in 2026

The 2024 judgment declared the electoral bonds scheme unconstitutional. It directed SBI to release donor data. The data showed ₹16,518 crore in bonds purchased, with the ruling party receiving approximately 57 percent. But the judgment did not address what happens next: are past donations illegal? Can recipients be prosecuted? What about the companies that bought bonds while receiving government contracts?

A new set of petitions, collectively titled "In Re: Electoral Bonds Implementation," asked the Court to answer these questions. In February 2026, a three-judge bench did exactly that.

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The four questions the Court answered

Issue	Court's Ruling
Validity of past donations	Donations made under the electoral bonds scheme while it was legally valid (2018-2024) cannot be treated as illegal. The scheme was struck down prospectively, not retrospectively. Donors and recipients have no criminal liability for donations made when the scheme was in force
Investigation into quid pro quo	The Court directed the ED and the Income Tax Department to investigate cases where electoral bond donations coincided with government contracts, policy changes, or regulatory approvals granted to the donor company. A prima facie case of quid pro quo must be established — temporal coincidence alone is not enough
Transparency going forward	All political parties must disclose donations above ₹20,000 with donor identity. This was the law before the electoral bonds scheme amended it through the Finance Act, 2017. The 2017 amendment stands struck down. The pre-2017 transparency regime is restored
The Electoral Trusts route	Electoral trusts (under Section 25 of the Companies Act, 2013) remain legal. But they must also disclose donor identities. The Court directed the Election Commission to frame transparency guidelines for electoral trusts within six months

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The dissenting note

Justice Sanjiv Khanna, while concurring on all substantive points, wrote separately arguing that the Court should have directed a Special Investigation Team to investigate all electoral bond donations above ₹10 crore, given the systemic nature of the opacity. The majority declined, holding that a blanket SIT would be a fishing expedition without specific evidence of wrongdoing.

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Prelims traps

Statement	True or False	Why
"The Supreme Court declared past electoral bond donations illegal"	False	The Court applied prospective overruling. Donations made when the scheme was legally valid are not illegal
"Electoral trusts are now banned"	False	Electoral trusts remain legal but must disclose donor identities
"All anonymous corporate political donations are now prohibited"	False	Donations below ₹20,000 do not require donor identity disclosure

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Part of: Supreme Court Judgments: January to March 2026

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