On September 12, 2025, the Supreme Court of India issued notice on a Public Interest Litigation (PIL) seeking comprehensive rules for the registration and regulation of political parties in India. The petition, filed by Ashwani Kumar Upadhyay, points to the alarming misuse of political parties as conduits for black money laundering, hawala transactions, and criminalisation of politics.
A Bench of Justices Surya Kant and Joymalya Bagchi issued notice to the Election Commission of India (ECI) while directing the petitioner to implead all national political parties recognized by the ECI as respondents.
This case, at its core, highlights one of the most pressing issues in Indian democracy: the absence of a comprehensive legal framework regulating the internal functioning, transparency, and accountability of political parties, despite their enormous constitutional and statutory powers.
The Supreme Court’s Observation
During the hearing, the Court acknowledged the importance of the plea but cautioned about the procedural aspect. Since political parties themselves had not been impleaded, the Bench remarked:
“…we will issue [notice], but one problem may arise. We have not impleaded political parties. They will say that you are asking to regulate them and they aren’t here. Issue notice.”
The Court, therefore, ensured that the petitioner adds all national political parties to the list of respondents before the matter progresses further.
The Petitioner’s Concerns
The PIL stems from revelations during the July–August 2025 Income Tax raids which uncovered bogus political parties such as:
- Indian Social Party
- Yuva Bharat Atma Nirbhar Dal
- National Sarva Samaj Party
Investigations found that these outfits never contested elections but acted as fronts for converting black money into white through hawala networks, involving hundreds of crores of rupees.
The modus operandi, according to the plea, involved:
- Accepting large donations in cash.
- Returning equivalent amounts via cheque after deducting a commission.
- Laundering illicit funds while posing as legitimate political entities.
Such parties, the petition asserts, pose a grave threat to democracy. They not only launder black money but also appoint criminals and anti-social elements as office-bearers, misuse state resources, and gain undue police and security protection.
Constitutional and Statutory Status of Political Parties
Political parties enjoy a unique status under Indian law:
- Constitutional Status: Recognized under the Tenth Schedule of the Constitution in the context of anti-defection provisions.
- Statutory Recognition: Registered under Section 29A of the Representation of People Act, 1951.
- State-Conferred Benefits:
- Exemption from income tax under Section 13A of the Income Tax Act.
- Free airtime on Doordarshan and All India Radio.
- Electoral symbol allocation and recognition.
Despite these privileges, there is no comprehensive legislation governing their internal democracy, transparency in funding, or accountability mechanisms.
Reliefs Sought in the Petition
The PIL urges the Court to direct both the ECI and the Union of India to take urgent corrective measures. Specifically, it seeks:
- Rules for Registration and Regulation
Direct the Election Commission to frame detailed rules to prevent the misuse of political parties as vehicles for corruption and black money conversion. - Comprehensive Legislation
Ask the Union Government to enact a law ensuring inner-party democracy, financial transparency, and accountability of political outfits. - Curbing Corruption and Criminalisation of Politics
Ensure effective steps to prevent parties from becoming shelters for criminals, hawala operators, and money launderers. - Strengthening Democratic Values
Align political party functioning with the constitutional vision of secularism, political justice, and transparency.
Why Regulation of Political Parties Matters
The plea and the Supreme Court’s notice highlight a systemic gap in India’s electoral and governance framework. Regulation of political parties is necessary for several reasons:
1. Preventing Money Laundering
Political outfits acting as shell entities enable the circulation of black money, defeating the purpose of income tax laws and electoral finance reforms.
2. Promoting Inner-Party Democracy
Most political parties in India are controlled by dynasties or small elites. Without legal checks, members have little say in decision-making.
3. Transparency in Funding
Opaque political donations through cash and electoral bonds continue to undermine fair competition in elections. Regulating parties can ensure auditable financial disclosures.
4. Accountability and Public Trust
As recipients of state benefits and custodians of democracy, political parties must be accountable institutions. Without oversight, they risk losing public trust.
5. Aligning with Constitutional Goals
Articles 14 (equality), 19 (freedom of association), and 21 (right to dignity) require that political processes remain fair, inclusive, and transparent.
Judicial Role in Electoral Reforms
The Supreme Court has historically played a crucial role in pushing for electoral reforms, especially when the legislature has been reluctant. Notable interventions include:
- Association for Democratic Reforms v. Union of India (2002): Mandated disclosure of criminal records and assets of candidates.
- PUCL v. Union of India (2003): Introduced the NOTA (None of the Above) option.
- Lily Thomas v. Union of India (2013): Disqualified convicted legislators from contesting elections.
The present plea continues this tradition by asking the Court to ensure that political parties themselves are brought under a transparent and accountable regime.
Implications for Democracy
If the Supreme Court eventually directs the ECI and the government to regulate political parties, the following impacts can be expected:
- Crackdown on Bogus Parties: Hundreds of non-serious or fraudulent political outfits could lose registration.
- Stronger Electoral System: A transparent system of donations and inner-party democracy will strengthen India’s electoral credibility.
- Reduced Criminalisation of Politics: Preventing criminals and black money operators from using parties as safe havens.
- Enhanced Public Confidence: Voters will gain trust in the integrity of parties and the electoral process.
Conclusion
The Supreme Court’s decision to seek a response from the Election Commission of India on the regulation of political parties marks an important step in addressing corruption, black money, and lack of transparency in Indian politics.
While political parties enjoy vast constitutional and statutory privileges, the absence of a regulatory framework has allowed many to misuse these benefits. The revelations from recent Income Tax raids only underscore the urgency of reform.
As the Court examines this plea, its outcome could significantly shape the future of Indian democracy, ensuring that political parties—arguably the most powerful institutions in the country—function with transparency, accountability, and adherence to constitutional principles of secularism and political justice.
The next hearings will determine whether the judiciary can once again act as a catalyst for reform, compelling the ECI and the legislature to enact long-overdue changes in the way political parties are registered and regulated in India.
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