Law Commission of India Submits its Report on Electoral Reforms to the Ministry of Law & Justice

Wide Ranging Reforms Proposed

The law Commission of India today submitted its Report No. 255 on “Electoral Reforms” to the Union Law and Justice Ministry. Informing this to the Media persons here in New Delhi Justice Shri A. P. Shah, Chairman Law Commission of India said the  201 page report has come after due consideration and deliberations with the stake holders including of register national and state political party and extensive and in-depth analysis of various issues by the commission. He said this report is sequel of the request of Ministry of Law and Justice made in January 2013 to the Twentieth Law Commission of India to consider the issue of ‘Electoral Reforms’ in its entirety and suggest comprehensive measures for changes in the law. While working on the subject, the Supreme Court of India, in the matter of ‘Public Interest Foundation & Others V. Union of India & Anr- Writ Petition (Civil) No. 536 of 2011, directed the Law Commission of India to make its suggestions on two specific issues, viz., (i) ‘curbing criminalization of politics and needed law reforms’; and (ii) ‘impact and consequences of candidates filing false affidavits and needed law reforms to check such practice’. In the light of this judgment, the Commission worked specifically on these two areas and, after series of discussions, followed by a National Consultation held on 1st February 2014, submitted its 244th Report titled ‘Electoral Disqualification’  on 24th February 2014 to the Government of India. Justice Shah further said that after the submission of Report No. 244, the commission circulated another questionnaire to all registered national and state political parties seeking their views on ten points, the response received was not very encouraging, though. However, the Commission undertook an extensive study to suggest electoral reforms, held various rounds of discussions with the stakeholders and analysed in-depth the issues involved. After detailed deliberations, the Commission has come up with its recommendations which are put in the form its final Repot, Repot No.255, titled ‘Electoral Reforms’, which been submitted for  for consideration by the Government. Following is the summery of the report on various issues discussed in the report. The amendments to the Constitution, RPA, Election Rules and any other laws have been made in track changes in the Annexure appended to this Report. The detailed report is available on the website of the commission: 1.Election Finance    The Law Commission has proposed wide ranging reforms on the issue of candidate expenditure limits; disclosure obligations of individual candidates and political parties; and penalties imposable on political parties; as well as examining the issue of state funding of elections. a.       Section 77 of the RPA, regulating the election expenses incurred or authorized by candidates or their election agents, currently extends from the date of nomination to the date of declaration of results. This period should be extended by amending section 77(1) to apply from the date of notification of the elections to the date of declaration of results. [Para 2.31(a)1] b.      Section 182(1) of the Companies Act, 2013 should be amended to require the passing of the resolution authorising the contribution from the company’s funds to a political party at the company’s Annual General Meeting (AGM) instead of its Board of Directors. [Para 2.31(a)2] c.       The existing disclosure obligations of individual candidates are limited to maintaining an account of electoral expenses under sections 77 and 78, RPA. This is sought to be amended by inserting a new section 77A to require candidates or their election agents to maintain an account and disclose the particulars (names, addresses and PAN card numbers of donors and amounts contributed) of i.            any individual contribution received by them from any person or company, not being a Government company and ii.            any contribution by the political party from the date of notification of elections, which have to be made by the party by a crossed account payee cheque or draft or bank transfer. [Para 2.31(b)3] d.      Section 78 should be amended in light of the proposed amendment to section 77A above, and the reference to more than one returned candidate should be removed. [Para 2.31(b)4] e.       A new section 78A should be inserted requiring the district election officer to make publicly available, on his website or on file for public inspection on payment of prescribed fee, the expenditure reports submitted by every contesting candidate under section 78. [Para 2.31(b)5] f.       Political parties should be required to maintain and submit annual accounts, duly audited by a qualified and practicing chartered accountant from a panel of such accountants maintained for the purpose by the Comptroller and Auditor General, to the ECI every financial year. These accounts will fully and clearly disclose all the amounts received by the party and the expenditure incurred by it. The ECI will then upload these accounts online or keep them on file for public inspection on payment of fee. [Para 2.31(b)6] g.       Disclosure provisions governing political parties has been substantially recast, with the existing 29C being deleted and replaced by a new section 29D requiring all parties to: i.                        mandatorily disclose all contributions in excess of Rs. 20,000; ii.                        include aggregate contributions from a single donor amounting to Rs. 20,000 within its scope; iii.                        disclose the names, addresses and PAN card numbers (if applicable) of these donors along with the amount of each donation above Rs. 20,000; iv.                        disclose such particulars even for contributions less than Rs. 20,000 if such contributions exceed Rs. 20 crore or 20 % of the party’s total contributions, whichever is less. Consequential amendments will need to be made to the Election Rules and the IT Act. [Para 2.31(b)7] h.      A new section 29E to be inserted in the RPA requiring the ECI to make publicly available, on its website or on file for public inspection on payment of prescribed fee, all the contribution reports submitted by all political parties under section 29D. [Para 2.31(b)8] i.        ECI’s transparency guidelines prescribing, first, a “statement of election expenditure” to be filed with it, by every party contesting an election within 75 days of the Assembly elections and 90 days of the General elections election; and second, expenses incurred by political parties to be usually in the form of cheque or draft, unless banking facilities are not easily available or the payment is made to a party functionary in lieu of salary or reimbursement, should be given a statutory basis vide a newly inserted section 29F. [Para 2.31(b)9] j.        The disqualification of a candidate for a failure to lodge an account of election expenses and contributions reports under section 77 and proposed 77A should be extended from the current three period up to a five year period, so that a defaulting candidate may be ineligible to contest at least the next elections. [Para 2.31(c)10] k.      Express penalties, apart from losing tax benefits, should be imposed on political parties vide section 29G for the non-compliance with the disclosure provisions of proposed section 29D of the RPA. This should include a daily fine of Rs. 25,000 for each day of non-compliance, with the possibility of de-registration if the default continues beyond 90 days. Further, ECI may levy a fine of up to Rs. 50 lakhs if its finds any particulars in the party’s statements as having been falsified. [Para 2.31(c)11] l.        A new section 29H should be inserting penalising parties that contravene the stipulations of section 29B, RPA and section 182 of the Companies Act in terms of accepting contributions from impermissible donors, by levying a penalty of five times the amount so accepted. [Para 2.31(c)12] m.    A new Part IVB, section 29I should be inserted to the RPA dealing with the “Regulation of Electoral Trusts”, and detailing provisions pertaining to their entitlement to accept contributions, disclosure obligations, and penal provisions (apart from losing income tax exemptions) so that the RPA can be amended in line with the changes already made to the IT Act and the ECI guidelines on “Electoral Trust Companies” of 2013. [Para 2.31(c)13] n.      The Commission does not consider a system of complete state funding of elections or matching grants to be feasible, given the current conditions of the country. Instead, it supports the existing system of indirect in-kind subsidies, with section 78B of the RPA being possibly amended in the future to expand these subsidies. [Para 2.31(d)1-4] 2.Regulation of Political Parties and Inner Party Democracy a.       The Commission recommends amending sub-section (5) of section 29A of the RPA requiring that the accompanying memorandum/rules/ regulations with the party’s application under sub-section (1). This accompanying document, by whatever name it is called, should also contain a specific provision stating that the party would shun violence for political gains, and would avoid discrimination or distinction based on race, caste, creed, language or place of residence. [Para 3.17.4, 1] b.      A new Chapter IVC should be inserted dealing with the “Regulation of Political Parties” and incorporating the Commission’s previous recommendations in its 170th Report with certain modifications. Thus, sections 29J to 29Q will deal with internal democracy, party Constitutions, party organisation, internal elections, candidate selection, voting procedures, and the ECI’s power to de-register a party in certain cases of non-compliance. c.       Another section, section 29R should be inserted in the same Part, providing for the de-registration of a political party for failure to contest Parliamentary or State elections for ten consecutive years. [Para 3.17.4, 2] 3.Proportional Representation It is clear that both the electoral systems come with their own merits and demerits – proportional representation theoretically being more representative, while the FPTP system being more stable It is also clear, from the experience of other countries that any changes in India’s electoral system will have to follow a hybrid pattern combining elements of both direct and indirect elections. This, in turn will necessitate an increase in the number of seats in the Lok Sabha, which raises concerns regarding its effective functioning. [Para 4.19.1] As a result, the Law Commission recommends that the findings of the 170th Law Commission Report on the proportional system may be examined by the Government to determine whether its proposals can be made workable in India at present. [Para 4.19.2] 4.Anti Defection Law in India             The Law Commission recommends a suitable amendment to the Tenth Schedule of the Constitution, which shall have the effect of vesting the power to decide on questions of disqualification on the ground of defection with the President or the Governor, as the case may be, (instead of the Speaker or the Chairman), who shall act on the advice of the ECI. This would help preserve the integrity of the Speaker’s office. [Para 5.22] 5.Strengthening the office of the Election Commission of India The ECI should be strengthened by first, giving equal constitutional protection to all members of the Commission in matters of removability; second, making the appointment process of the Election Commissioners and the CEC consultative; and third, creating a permanent, independent Secretariat for the ECI. a.       Article 324(5) of the Constitution should be amended to equate the removal procedures of the two Election Commissioners with that of the Chief Election Commissioner. Thus, equal constitutional protection should be given to all members of the ECI in matters of removability from office. [Para 6.9] b.      The appointment of all the Election Commissioners, including the CEC, should be made by the President in consultation with a three-member collegium or selection committee, consisting of the Prime Minister; the Leader of the Opposition of the Lok Sabha (or the leader of the largest opposition party in the Lok Sabha in terms of numerical strength); and the Chief Justice of India. Elevation of an Election Commissioner should be on the basis of seniority, unless the three member collegium/committee, for reasons to be recorded in writing, finds such Commissioner unfit. Amendments should be made in the Election Commission (Conditions of Service of Election Commissioners and Transaction of Business) Act, 1991 to reflect this. [Para 6.12.5] c.       A new sub-clause (2A) should be added to Article 324 of the Constitution to provide for a separate independent and permanent Secretariat for the ECI along the lines of the Lok Sabha/Rajya Sabha Secretariats under Article 98 of the Constitution. This will further improve the independence of the ECI. [Para 6.19 & 6.20] 6.Paid News and Political Advertisements             The issue of paid news and political advertisements should be regulated in the RPA in the following manner: a.       The definitions of “paying for news”, “receiving payment for news” and “political advertisement” should be inserted in section 2 of the RPA. [Para 7.48.4 & 7.48.5] b.      The consequences attached to those indulging in such practices should be delineated by creating i.                  an electoral offence of “paying for news” / “receiving payment for news” in a newly inserted section 127B of the RPA - Not only will the incorporation of this electoral offence make paying for news / receiving payment for news penal, the stringent punishment will ensure that if the candidate themselves are found guilty, then, in all likelihood, they will be disqualified pursuant to section 8(3) of the RPA; [Para 7.49.1] ii.                  a corrupt practice of paying for news under newly inserted sub-clause (iii) in section 123(2)(a) of the RPA. [Para 7.50] c.       In order to curb the practice of disguised political advertisement, disclosure provisions should be made mandatory for all forms of media. The purpose of disclosure is two fold; first, to help the public identify the nature of the content (paid content or editorial content); and second, to keep the track of transactions between the candidates and the media. Thus, a new section 127C should be inserted in the RPA to deal with the non-disclosure of interests in political advertising. The ECI can regulate the specifics of the disclosure required. [Para 7.51.2] 7.Opinion Polls Section 126(1)(b) of the RPA, which prohibits the display of any election matter forty-eight hours before polling begins, is limited to display by means of “cinematograph, television or other similar apparatus”; and does not deal with the independence and robustness of the opinion polls themselves. Thus: a.       The ban on opinion polls in the electronic media does not extend to the print media and section 126(1)(b) should be amended to prevent the publication, publicity, or dissemination of any election matter by print or electronic media. [Para 8.27.1] b.      Section 126(1)(b) should also provide for cognizance being taken only on the basis of a complaint made by order of, or under authority from, the ECI or the Chief Electoral Officer of the State. [Para 8.27.2] c.       The regulation of opinion polls is necessary to ensure that first, the credentials of the organisations conducting the poll is made known to the public; second, the public has a chance to assess the validity of the methods used in conducting the opinion polls; and third, the public is made adequately aware that opinion polls are in the nature of forecasts or predictions, and as such are liable to error. Consequently, new sections 126C and 126D should be inserted in the RPA. [Para 8.28.3] Compulsory Voting The Law Commission does not recommend the introduction of compulsory voting in India and in fact, believes it to be highly undesirable for a variety of reasons described above such as being undemocratic, illegitimate, expensive, unable to improve quality political participation and awareness, and difficult to implement. [Para 9.24] 8. Election Petitions Wide-ranging reforms have been suggested to Part VI of the RPA dealing with “disputes regarding elections” and the proposed amendments have been drafted in the annexure appended to this Report. These include, inter alia: a.         The introduction of one or more “election benches” in each High Court, designated so by the Chief Justice of the particular High Court, exercising jurisdiction over all election disputes under the RPA. A single Judge shall ordinarily exercise such jurisdiction, although the Chief Justice can assign more judges, if they so desire. b.        The procedure for presenting election petitions should be made simpler and less formalistic by:       i.            requiring election petitions to be ordinarily filed in the Principal seat of the relevant High Court, although this can be shifted to another bench or place in the interest of justice;     ii.            removing requirement of impleading those candidates who have lost their security deposit as respondents to an election petition, if the petitioner makes an additional declaration that he himself or any candidate has been duly elected; and   iii.            removing non-compliance with section 117’s stipulation of security for costs as a ground for summarily dismissal under section 86. c.                    The trial of election petitions by the election bench of the High Court should be expedited by providing for       i.                daily trial;     ii.               minimising adjournments, with the possibility of imposing exemplary costs;   iii.               a time limit of 45 days to file a written statement, with a further extension of 15 days, after which such right shall be forfeited; d.      The trial should be concluded within six months from the date of presentation of the petition; otherwise, a report should be sent to the Chief Justice of the High Court explaining the reasons for the delay. e.       The election bench of the High Court should pass its order under section 98 within ninety days from the conclusion of arguments. f.       A new provision, section 98A, should be inserted pertaining to the collection of data (such as thenumber of election petitions filed and pending, the status of each petition, the names of the parties, and designated election bench) by the High Court and uploading it on its website. The ECI has been mandated to prepare an annual report after compiling such data from all the High Courts across the country. g.       Appeals to the Supreme Court should now only be on the basis of a question of law, instead of the earlier provision permitting questions of fact or law as grounds for appeal. This appeal should be filed within 30 days of the High Court’s order, although an extension of a maximum of 30 more days can be granted, with nothing thereafter. The Supreme Court should try and conclude the appeal within three months from the date of appeal. h.      The security for costs has been increased from the existing Rs. 2000 to Rs. 10,000, although section 117 has been amended to empower the election bench of the High Court to grant an extension of time, as considered reasonable, to deposit this new security amount. [Para 10.37] 9.NOTA and the Right to Reject The Law Commission currently rejects the extension of the NOTA principle to introduce a right to reject the candidate and invalidate the election in cases where a majority of the votes have been polled in favour of the NOTA option. This is premised on the fact that, first, the underlying premise of the Supreme Court’s decision in NOTA was the importance of safeguarding the right to secrecy, and this secrecy rationale does not pre-empt the right to reject. Second, good governance, the motivating factor behind the right to reject, can be successfully achieved by bringing about changes in political horizontal accountability, inner party democracy, and decriminalisation. However, the issue might be reconsidered again in the future. [Para 11.15] 10. The Right to Recall             The Law Commission is not in favour of introducing the right to recall in any form because it can lead to an excess of democracy, undermines the independence of the elected candidates, ignores minority interests, increases instability and chaos, increases chances of misuse and abuse, is difficult and expensive to implement in practice, especially given that India follows the first past the post system. [Para 12.20] 11. Totaliser for Counting of Votes The Commission reiterates and endorses the ECI’s suggestion for introducing a totaliser for the counting of votes recorded in electronic voting machines to prevent the harassment of voters in areas where voting trends in each polling station can be determined. Prior to the introduction of EVMs, ballot papers could be mixed under Rule 59A of the Election Rules, although this was not permitted for EVMs. Using a totaliser would increase the secrecy of votes during counting, thus preventing the disclosure of voting patterns and countering fears of intimidation and victimisation. Thus, similar to the existing Rule 59A, the Commission proposes to amend Rule 66A to empower the ECI to decide when, and in which constituency and polling booths, to employ a totaliser, after taking into consideration various factors and the overall context of the elections. [Para 13.7] 12.Restriction on Government Sponsored Advertisements The Commission recommends regulating and restricting government sponsored advertisements six months prior to the date of expiry of the House/Assembly to maintain the purity of elections; prevent the use of public money for partisan interests of, inter alia, highlighting the government’s achievements; and ensure that the ruling party or candidate does not get an undue advantage over another in the spirit of free and fair elections. This can be achieved by inserting a new Chapter VIIB in Part V of the RPA prohibiting State/Central government sponsored advertisements in the print or electronic media or by way of banners and hoarders, six months prior to date of expiry of the term of the Lok Sabha/Vidhan Sabha. However, an exception has been carved out for advertisements highlighting the government’s poverty alleviation programmes or any health related schemes [Para 14.6] 13.Restriction on the Number of Seats from which a Candidate May Contest The  Nomination of Candidates  from only one constituency.hcih e determinede has been used,--High Courts across the country.rome Con Commission recommends an amendment of section 33(7) of the RPA, which permits a candidate to contest any election (parliamentary, assembly, biennial council, or bye-elections) from up to two constituencies. In view of the expenditure of time and effort; election fatigue; and the harassment caused to the voters, section 33(7) should be amended to permit candidates to stand from only one constituency. [Para 15.4] 14.Independent Candidates             The Law Commission recommends that independent candidates be disbarred from contesting elections because the current regime allows a proliferation of independents, who are mostly dummy/non-serious candidates or those who stand (with the same name) only to increase the voters’ confusion. Thus, sections 4 and 5 of the RPA should be amended to provide for only political parties registered with the ECI under section 11(4) to contest Lok Sabha or Vidhan Sabha elections. [Para 16.16&16.17] 15. Preparation and Use of Common Electoral Rolls             The Law Commission endorses the ECI’s suggestions regarding the introduction of common electoral rolls for Parliamentary, Assembly and local body elections. However, given that introducing common electoral rolls will require an amendment in the State laws pertaining to the conduct of local body elections, the Central Government should write to the various States in this regard. We hope that the States will consider amending their laws based on the suggestions of the ECI and the Law Commission.