Money Bill's Scope, Ambit And Recent Issues

First published on: 2019-12-06 Polity & Governance

Supreme Court has decided to reexamine Money Bill case

Recently money bill came in for a debate. The background of the debate should be briefly understood. Supreme Court in the Aadhar case had extensively examined and discussed Article 110 that deals with the money bill. For an authoritative ruling, the Supreme Court has decided to refer the issue to a seven-bench judge.   

Why was the Case Referred?

The case was referred because there was a need for absolute clarity with regard to provisions of the money bill, according to a five – judge constitution bench of CJI Ranjan Gogoi and Justices N V Ramana, D Y Chandrachud, Deepak Gupta and Sanjiv Khanna. There was a need to iron out ambiguities and debates.

So far, it was the Lok Sabha speaker who decided whether a legislation is a money bill or not. The court’s view will be important but the majority judgment in the Aadhaar case, which upheld the Centre’s decision to introduce the Aadhaar Act as a money bill can’t be ignored. However, it did not elucidate and explain the scope and ambit of sub-clauses (a) to (f) to clause (1) of Article 110 and this needed a comprehensive examination. Therefore, according to the court, “The issue and question of money bill, as defined under Article 110(1) of the Constitution, and certification accorded by the speaker of Lok Sabha in respect of Part-XIV of the Finance Act, 2017 (under which rules were framed for regulation of tribunals) is referred to a larger bench,”

Why was Clarity Needed?

The majority judgment in K S Puttaswamy (Aadhaar case) did not examine and answer use of the word ‘only’ in relation to sub-clauses (a) to (f) in the context of Article 110(1) of the Constitution. The use of the word ‘only’ can be easily applied in a bill relating to imposition, abolition, remission, alteration or regulation of any tax, the problem might likely arise in context of a bill “relating to borrowing of money or giving of any guarantee by the government of India, or an amendment of law concerning financial obligation,” according to the bench.

Points To Remember

    • Recently money bill came in for a debate
    • Article 110 that deals with the money bill
    • SC has referred the money bill case to a seven-judge constitutional bench
    • The case was referred because there was a need for absolute clarity with regard to provisions of the money bill

What Qualifies as a Money Bill?

For a Bill to be considered as a Money Bill, it must only contain provisions related to

  • Taxation,
  • Borrowing of money by the government,
  • Expenditure from or receipt to the Consolidated Fund of India, and matters that are incidental to such taxation,
  • Expenditure and related subjects.
  • For example, the Finance Bill, which only contains provisions related to tax proposals, would be a Money Bill.

What was the Intention of the Constitutional Makers in the Use of the Word ‘Only’?

The use of the word ‘only’ (in context of taxations or expenditure provisions) in the definition of the money bill, according to some Constitutional experts was meant to safeguard the Upper House against the abuse of this provision by the lower house. This special procedure is limited only to Money Bills as against any other bill that cannot be treated as a money bill simply by adding some financial clause. The first speaker of Lok Sabha G V Malvankar, said that if a Bill substantially deals with the imposition of a tax, it should be certified as a Money Bill.

What was the Centre’s Contention?

The Centre argued that there is no scope of judicial scrutiny in matters relating to passage of bills in Parliament. The court rejected this plea. Terming the Centre’s contention far-fetched, the bench said if such a blanket exemption were to be granted, then it would open floodgates to deviation from any constitutional provision governing the functioning of Parliament and its legislative procedure. At the same time, it said that scope of judicial review in matters such as money bill was “extremely limited” in deference to the speaker’s certification.

On the power to review a legislation, the court said, “Since the Constitution explicitly provides a self-contained detailed procedure for enactment of legislation, and does not suggest that mere assent of the President to a law, by whatsoever method adopted, would become a valid law, it is necessary that this court being the highest constitutional forum for judicial review is provided with enough space for enforcement and protection of the constitutional scheme.”

The Adhar Judgement was thus pronounced in the following words: “Upon an extensive examination of the matter, we notice that the majority in Puttaswamy case pronounced the nature of the impugned enactment without first delineating the scope of Article 110(1) and principles for interpretation or the repercussions of such process. It is clear to us that the majority dictum in the case did not substantially discuss the effect of the word ‘only’ in Article 110(1) and offers little guidance on the repercussions of a finding when some of the provisions of an enactment passed as a money bill do not conform to Article 110(1)(a) to (g).”



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Tags: Misuse of Money Bill, Money Bill, Aadhaar as Money Bill, Money Bill Controversy, Money bill’s scope, Money bill in India

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