Context
∙ In the backdrop of several notable cases, including the decisions to strike down the electoral bond scheme and upholding the Aadhaar Act in 2018, the Supreme Court has been asked to clarify a key question: what constitutes a money Bill?
∙ The issue is now pending consideration before a seven-judge constitution bench of the court.
What is a Money Bill?
∙ Article 110 of Constitution of India has Definition of “Money Bills”. A Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:–
∙ the imposition, abolition, remission, alteration or regulation of any tax;
∙ the regulation of the borrowing of money or the giving of any guarantee by the Government of India;
∙ the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
∙ the appropriation of money out of the Consolidated Fund of India;
∙ the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
∙ the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
∙ A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
∙ If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final.
∙ There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.
Procedure
∙ Typically, both the Lok Sabha and the Rajya Sabha must pass a Bill before it can become law under Article 107 of the Constitution.
∙ However, under Article 109, a Bill introduced as a “money Bill” only requires assent from the Lok Sabha and the Rajya Sabha merely has 14 days to consider the Bill and return it with recommendations.
∙ The Lok Sabha may either accept or reject these recommendations and enact the money Bill into law.
Arguments for using Money Bills
∙ Quick Passage of Crucial Legislation: In cases where urgent financial measures are needed, using Money Bills can expedite the passage of legislation stuck in the Rajya Sabha due to its lack of a majority for the ruling party.
∙ Constitutional Provision: Article 110 of the Indian Constitution allows the use of Money Bills under specific circumstances, suggesting its intended use in certain scenarios.
∙ Legislative Flexibility: Proponents argue that some flexibility is necessary for the government to function effectively and respond to pressing economic needs.
∙ Judicial Scrutiny of Contents: While the Speaker’s certification is final, courts can still examine the contents of a Money Bill and strike down provisions deemed unrelated to financial matters.
Issues
∙ Excessive Interpretation: Concerns exist about the expansive interpretation of what constitutes a Money Bill, allowing the government to include unrelated provisions through this route.
∙ Reuse and misuse: The issue has assumed significance because Parliament has recently enacted several ‘Finance Acts’ through the money Bill route.
∙ E.g. Amendments to laws such as the PMLA 2002, the Foreign Contributions (Regulation) Act, 2010, and the Representation of the People Act, 1951.
∙ Undermines bicameralism: Passing an ordinary Bill as a money Bill, especially for contentious legislation, would limit the role of the Rajya Sabha in lawmaking – a necessary part of ensuring executive accountability.
∙ Erosion of Federalism: Some argue that Money Bills can be used to unfairly benefit certain states by including non-financial provisions, impacting federal principles.
Related Supreme court judgements
∙ Aadhar case, 2018: The Supreme Court upheld the Aadhaar Act, 2016, as constitutional. The main aim of the Act was to provide subsidies and benefits which involved expenditure from the Consolidated Fund of India hence, the Act was validly passed as a money Bill.
∙ However, it added that the Speaker’s decision on whether a Bill is a money Bill or not, despite being “final” as per the constitution, can still be subject to judicial review.
∙ But, Justice DY Chandrachud authored a dissenting opinion in the same case, holding that the Aadhaar act was unconstitutional. He said, “The passage of the Aadhaar Act as a Money Bill is an abuse of the constitutional process.”
∙ He pointed out the use of Aadhaar as identification “for any purpose”, goes beyond the scope of what can be passed through a money Bill under Article 110.
∙ Appellate Tribunal Rules case 2019: The Supreme Court struck down the Appellate Tribunal and Other Authorities Rules of 2017, were introduced through a money Bill in the Finance Act, 2017.
∙ The rules gave the central government additional control over the service conditions (appointment, tenure, and eligibility among others) of tribunal members.
∙ Further, the court observed that the five-judge bench in the Aadhaar case had not detailed the scope of what constitutes a money Bill. As they were a bench of the same size, the court referred the question to a larger seven-judge bench, which is still pending in the court.
∙ Electoral bonds scheme case, 2024: The court in February 2024 struck down the amendments to various statutes through the Finance Act, 2017, which facilitated the introduction of the central government’s electoral bond scheme in 2018.
∙ Though these amendments and the scheme were struck down, the court noted that the challenge to the passing of the Finance Act, 2017, as a money Bill is pending before the seven-judge bench.
Way Ahead
∙ The use of Money Bills in India presents complex issues with valid arguments on both sides. Finding a balance between ensuring effective governance and upholding parliamentary checks and balances remains a crucial challenge.∙ Depending on how the seven-judge bench decides the money Bill issue, it may open the door to renewed challenges against the PMLA and the Aadhaar Ac
