A verdict on the Money Bill that India awaits
For Prelims:
Money Bill
- Defined in Article 110(1) of the Indian Constitution
- Can be passed without Rajya Sabha's approval
- Speaker of Lok Sabha has final say in determining if a bill is a Money Bill
Article 109
- Allows Money Bills to be enacted with only Lok Sabha's approval
- Rajya Sabha may make recommendations, but they are not binding on Lok Sabha
Article 110(3)
- Empowers the Speaker of Lok Sabha to determine if a bill is a Money Bill
For Mains:
GS II: Indian Polity - Parliament and State Legislatures
Context:
The article discusses the upcoming Supreme Court hearing on the definition and scope of Money Bills, stemming from the Rojer Mathew vs South Indian Bank Ltd. case challenging the Finance Act, 2017.
UPSC Exam Notes Analysis
1. Constitutional Provisions and Interpretation
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Definition of Money Bills:
- Article 110 of the Constitution defines a Money Bill. According to Article 110:
- A Bill is considered a Money Bill if it exclusively deals with:
- Imposition, abolition, remission, alteration, or regulation of any tax.
- Borrowing of money or giving guarantees by the government.
- Custody and application of the Consolidated Fund or Contingency Fund of India.
- Appropriation of funds from the Consolidated Fund of India.
- Matters incidental to the above.
- A Bill is considered a Money Bill if it exclusively deals with:
- Article 110 of the Constitution defines a Money Bill. According to Article 110:
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Procedure for Money Bills:
- Introduction in the Lok Sabha: Money Bills can only be introduced in the Lok Sabha, the lower house of Parliament (Article 110(1)).
- Consideration by Rajya Sabha: The Rajya Sabha (Council of States) can only make recommendations on a Money Bill, which the Lok Sabha may choose to accept or reject. The Rajya Sabha must return the Bill within 14 days, with or without recommendations (Article 110(3)).
- Presidential Assent: After being passed by both Houses, the Bill is sent to the President for assent. The President cannot refuse assent to a Money Bill (Article 110(3)).
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Financial Bills:
- Article 117 distinguishes between Money Bills and Financial Bills. Financial Bills can be categorized into:
- Financial Bills (Category I): These are Money Bills, which primarily deal with fiscal matters.
- Financial Bills (Category II): These Bills include provisions related to financial matters but do not fall under the definition of a Money Bill. They may be introduced in either House and are subject to the same legislative process as other Bills.
- Article 117 distinguishes between Money Bills and Financial Bills. Financial Bills can be categorized into:
2. Exercising of Power
- In many respects, the Court's task in the Rojer Mathew case should have been straightforward. The use of a Money Bill to alter terms of office, grant the executive unrestricted power to manage tribunals through delegated legislation, or introduce appointment qualifications could only be seen as an act of deception.
- Thus, it was evident that the Finance Act, 2017, represented an improper exercise of authority. The clear language of the Constitution had been distorted to undermine its fundamental purpose.
- However, the majority on the five-judge Bench felt bound by previous rulings. It noted that another Bench, in the K.S. Puttaswamy vs Union of India (2018) case, had not established clear guidelines for reviewing a Speaker’s decision to certify a draft law as a Money Bill. Specifically, the significance of the word “only” in Article 110(1) had been neglected in the K.S. Puttaswamy judgment.
- Justice A.K. Sikri, who authored the majority opinion, concluded that Section 7 of the Aadhaar Act, which dealt with subsidies, benefits, and services funded from the Consolidated Fund of India, qualified it as a Money Bill..
- These provisions could hardly be considered incidental to the subjects in Article 110(1). The seven-judge Bench now needs to interpret the word "only" in this context. The decision will have significant repercussions, as there have been other instances, before and after the Rojer Mathew reference, where the Rajya Sabha's role was bypassed.
- For example, the Finance Act, 2019, significantly amended the Prevention of Money Laundering Act, 2002 (PMLA), using a Money Bill. These amendments included changes to the definition of “proceeds of crime” and granted the Enforcement Directorate extensive powers of arrest, attachment, and search and seizure.
- While the Supreme Court upheld many of these changes in Vijay Madanlal Choudhary vs Union of India (2022), it left unresolved the issue of whether such amendments could validly be made through a Money Bill
- Article 110 and Money Bills: Article 110 lists subjects that qualify a bill as a Money Bill, which only requires Lok Sabha's approval, bypassing the Rajya Sabha.
- Speaker's Discretion: The Speaker of the Lok Sabha has the ultimate authority to certify a bill as a Money Bill
- Overreach: The Act included extensive changes to tribunal structures and powers, which petitioners argue should not be covered under a Money Bill.
- Judicial Independence: The Act's provisions affected the independence of the judiciary by altering tribunal functions and the appointment process.
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