Unchecked Proliferation & Misuse of Black Money: SC Issues Notice on PIL Seeking Regulation of Political Parties
The PIL by Advocate Ashwini Kumar Upadhyay also sought directions to the Union Government to take effective measures to curb the menace of corruption, casteism, linguism, regionalism, communalism, and criminalisation in public life
The Supreme Court on Friday agreed to examine a public interest litigation (PIL) filed by Advocate Ashwini Kumar Upadhyay, seeking directions to the Election Commission of India (ECI) to frame comprehensive rules for the registration and regulation of political parties with the aim of curbing the unchecked proliferation and misuse of black money in the electoral process.
The Bench of Justice Surya Kant and Justice Joymalya Bagchi took up the matter, with Upadhyay appearing in person.
At the outset, the petitioner stressed that the plea was not adversarial in nature and urged the Court to issue notice so that the matter could be considered on merits. “This is not an adversarial petition. Lordships may issue notice and tag it with connected matters,” he submitted.
Justice Surya Kant, while agreeing to issue notice, made a pointed observation in a lighter vein regarding the absence of political parties as respondents. “We’ll issue notice, no problem. But there is a problem… you’ve not included political parties. They will say you are asking something to regulate them and they are not here,” Justice Kant remarked.
He then suggested that national parties recognised by the ECI should be made parties to the proceedings. “Why don’t you implead them? Yaha pe bhi raunak-mela laga rahega (Here too, there will be a lively fair-like atmosphere),” he quipped, hinting that the inclusion of major political parties would inevitably lead to a heated contest.
Taking note of the submission, the Bench ordered issuance of notice and directed that the matter be made returnable on a specified date.
In the meantime, the Court asked the petitioner to examine the recognised national parties and include them as respondents so that the proceedings are not challenged later on technical grounds. “Just meanwhile examine the national parties recognised by the Election Commission of India, that can be included. So that tomorrow they will not come and say that notice has been issued without including them. Make them part of the respondents,” the Court directed.
The PIL also sought directions to the Union Government to take effective measures to curb the menace of corruption, casteism, linguism, regionalism, communalism, and criminalisation in public life.
The petitioner, Advocate Ashwini Kumar Upadhyay relies on recent Income Tax raids to highlight the urgency of reforms. On July 13, 2025, raids on the offices of two parties; Indian Social Party and Yuva Bharat Atma Nirbhar Dal, allegedly unearthed black money to the tune of ₹500 crore. According to the plea, these entities were created solely to accept donations in cash through hawala channels and return the money via cheque after deducting a 20% commission. A news report from Dainik Bhaskar has been annexed to the petition as evidence.
Similarly, on August 12, 2025, the Income Tax Department unearthed another party, National Sarva Samaj Party, which was allegedly engaged in converting black money into white. Raids at the residence of its office bearers revealed ₹271 crore in unaccounted funds. This news report, carried in Dainik Bhaskar on August 13, has also been annexed.
The petitioner contends that nearly 90% of registered political parties never contest elections but operate merely as conduits for money laundering. The plea alleges that some office bearers of these entities have criminal backgrounds, including drug trafficking, land mafia operations, kidnappings, and even serious offences like rape and contract killings, yet manage to gain police protection under the guise of politics.
According to the petition, bogus parties exploit political recognition to project legitimacy. Their office bearers allegedly flaunt SUVs with hooters and oversized nameplates, living off black money while posing as public leaders. “All this is happening only because there is no comprehensive law to regulate the functioning of political parties,” the PIL submits.
The petitioner recalls that the Law Commission of India (Justice Jeevan Reddy-led panel) and the National Commission to Review the Working of the Constitution (Justice M.N. Venkatachaliah-headed panel) had both flagged this gap decades ago. Further, in 2011, a draft law titled The Political Parties (Registration and Regulation of Affairs) Bill was prepared by an expert committee headed by Justice Venkatachaliah along with legal experts, journalists and civil society members. Despite repeated calls for reform, successive governments never acted on it.
The plea underlines that political parties enjoy significant constitutional status and wield enormous powers under the Tenth Schedule. They can bind legislators to party whips, recommend disqualification of members, and effectively control lawmaking and governance. Yet, unlike companies, cooperatives, trusts, or even religious institutions, parties remain outside any robust regulatory framework.
While Section 29A of the Representation of the People Act (RPA) requires registration, and Section 29C mandates disclosure of donations above Rs. 20,000, there is no law governing their internal democracy, funding transparency, or accountability. Parties enjoy substantial indirect state financing, including free airtime on All India Radio and Doordarshan, tax exemptions under Section 13A of the Income Tax Act, subsidised accommodation, and free copies of electoral rolls.
“Despite being substantially funded by the State and performing crucial public functions, political parties escape accountability,” the petitioner argues, stressing that they must be treated as “public authorities” within the meaning of law.
Case Title: Ashwini Kumar Upadhyay v. Union of India & Ors.
Hearing Date: September 12, 2025
Bench: Justice Surya Kant and Justice Joymalya Bagchi