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Report No. 255

D. Legal Framework

7.23. Currently the problems of paid content identified above are tackled in a piecemeal manner. Neither is there a blanket prohibition on paid news, nor is there a provision exclusively dealing with political advertisement or paid news. However, several aspects of the current statutory regime regulating elections in India have impact on political advertisement and paid news.

(i) Restrictions on election expenses

Mandatory lodging of accounts

7.24.1. Section 77 of the RPA requires every candidate to keep account of expenses in connection with elections. If a candidate has failed to lodge an account of election expenses within the time and in the manner required by or under this Act and has no good reason or justification for the failure, the candidate shall be declared disqualified vide section 10A, RPA.

7.24.2. In LR Shivaramagowda v. TM Chandrasekhar, AIR 1999 SC 252 the Supreme Court held that mere lodging of accounts is not sufficient. The accounts should also be correct and true. In the Ashok Chavan case of false accounts, the ECI held that it could go into the correctness or falsity of the account of election expenses filed by Ashok Chavan.257 Both the Delhi High Court and the Supreme Court258 upheld the decision of the ECI.

In September 2014, however, through a judgment of Kait J., the Delhi High Court set aside the ECI's Order regarding Ashok Chavan's failure to lodge his accounts, on the ground that the Rules had not been complied with, as well as the fact that the Commission did not frame an issue regarding the knowledge and consent of the candidate. Ashok Chavan v. Election Commission of India, W.P. (C) No. 459/2014 These proceedings reveal a loophole in the legal system. Although the case involved paid news and political advertising, the only section that the ECI could proceed under was the section dealing with disclosure of accounts.

257. ECI Order on Account of Election Expenses of Shri Ashok Chavan, 13th July 2014,
<http://eci.nic.in/eci_main1/current/Ashok_Chavan_order_13072014.pdf>

258. SLP (C) NO.29882 of 2011

7.24.3. The Supreme Court in Common Cause v. Union of India, AIR 1996 SC 3081 exempted the expenses incurred by political parties or any other association or body of persons apart from the candidate or his/her election agent. The court further issued directions to political parties to submit a statement of expenditure of elections to the ECI. Such statements are required to be submitted within 75 days of assembly elections and 90 days of Lok Sabha elections.261

261. Writ (Civ) No. 13 of 2003

7.24.4. After going through multiple amendments and judicial interpretations, section 77 was amended again in 2003. By this amendment, all expenditure incurred by supporters and workers of a candidate is deemed to be expenditure incurred or authorised by the candidate and subject to the overall ceiling fixed on his election expenses under the law.

The section as it stands now excludes only the expenditure incurred on the travel of leaders of the political party for general party propaganda. This means that paid new.- or political advertisement.- that are paid for not by a candidate himself, but on his behalf, will also fall within the expenditure ceiling.



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