17-July-2024-Editorial

MONEY BILL 

Recently, the Chief Justice of India (CJI) has agreed to review petitions that challenge the government’s use of the Money Bill route for passing controversial amendments in Parliament. This issue is significant because it pertains to bypassing the Rajya Sabha and potential violations of Article 110 of the Constitution. 

Concerns Regarding the Money Bill 

Circumventing the Rajya Sabha: 

• Using the Money Bill classification to pass controversial amendments allows the government to sidestep the Rajya Sabha, compromising the bicameral structure of Parliament. 

• When a bill is classified as a Money Bill, the Rajya Sabha is restricted to making recommendations without the power to amend or reject it. 

• The Rajya Sabha offers additional scrutiny to legislation, and bypassing it reduces the chances for thorough debate and oversight. 

Violation of Article 110: 

• Article 110 defines what qualifies as a Money Bill. There are concerns that some amendments labeled as Money Bills do not strictly follow these provisions. 

Speaker’s Certification: 

• The Speaker of the Lok Sabha has the authority to certify a bill as a Money Bill under Article 110, and this decision cannot be challenged in court. 

• This raises concerns about the potential misuse of this power, which could allow for the bypassing of standard legislative procedures. 

Specific Cases Highlighting Concerns 

Aadhaar Act: 

• The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits, and Services) Act, 2016, was classified as a Money Bill, leading to widespread controversy. 

• In 2018, the Supreme Court upheld the constitutionality of the Aadhaar law, but Justice D.Y. Chandrachud dissented, arguing that the use of the Money Bill route was an “abuse of the constitutional process.” 

Finance Act, 2017: 

• The Finance Act, 2017, included amendments to various Acts, empowering the government to notify rules regarding the service conditions of members of Tribunals. 

• Petitioners argued that the Finance Act should be struck down as it contained provisions unrelated to the subjects listed in Article 110. 

• In 2019, a five-judge Bench referred the Money Bill aspect to a larger seven-judge Bench in the case of Rojer Mathew vs South Indian Bank Ltd. 

Prevention of Money Laundering Act (PMLA) Amendments: 

• Amendments to the PMLA passed as Money Bills gave the Enforcement Directorate extensive powers, including the authority to arrest and conduct raids. 

• The Supreme Court upheld the legality of these amendments but left the question of their classification as Money Bills to the seven-judge Bench. 

Developments Following the 2019 Ruling 

• The seven-judge Bench has yet to address key questions about what constitutes a valid Money Bill, affecting subsequent legislation. 

• The court has postponed addressing the issue of Money Bill in cases related to the powers of the Enforcement Directorate and electoral laws, awaiting the decision of a larger Bench. 

Potential Consequences of Misclassifying Money Bills 

Legal Challenges: 

• Misclassifying bills as Money Bills can result in extended legal disputes, introducing uncertainty into the legislative process. 

Legislative Precedents: 

• If upheld by the judiciary, the inappropriate use of Money Bills could set a precedent for future governments to bypass the Rajya Sabha. 

Public Trust: 

• Disputes over Money Bills can undermine public confidence in the legislative process and the integrity of parliamentary procedures. 

Broader Implications for Indian Democracy 

• The ongoing debates and judicial reviews highlight the importance of maintaining a balance of power between the Lok Sabha and the Rajya Sabha. 

• Ensuring that significant legislation undergoes adequate scrutiny and debate is crucial for legislative transparency and accountability. 

• Upholding constitutional provisions and preventing their misuse is essential for the integrity of India’s democratic processes. 

What is a Money Bill? 

About: 

• Article 110 of the Constitution of India defines a Money Bill, stating that a bill is considered a Money Bill if it contains only provisions dealing with specific financial matters. 

Key Provisions Include: 

• Taxation Matters: Imposition, abolition, remission, alteration, or regulation of any tax. 

• Borrowing Regulation: Regulation of the borrowing of money by the Union government. 

• Custody of Funds: Management of the Consolidated Fund of India or the Contingency Fund. 

• Appropriation of Funds: Appropriation of money out of the Consolidated Fund. 

• Expenditure Declaration: Declaration of any expenditure charged on the Consolidated Fund. 

• Receipt of Money: Receiving funds associated with the Consolidated Fund or public accounts. 

• Other Matters: Any matters incidental to the above provisions. 

Speaker’s Certification: 

• The Speaker of the Lok Sabha determines whether a bill qualifies as a Money Bill. This decision is conclusive and cannot be challenged in any court, by either House of Parliament, or by the President. 

• Upon certification, the Speaker endorses the bill as a Money Bill when it is transmitted to the Rajya Sabha for recommendations. 

Legislative Procedure: 

• Only the Lok Sabha can introduce Money Bills, which must receive the President’s recommendation. These bills are classified as government bills and can only be presented by a minister. 

• Once a Money Bill is passed in the Lok Sabha, it is forwarded to the Rajya Sabha, which holds limited authority: it cannot decline or alter the bill, but can only provide suggestions. The Rajya Sabha must return the bill within 14 days, irrespective of whether it offers recommendations. 

• The Lok Sabha has the prerogative to accept or decline the suggestions made by the Rajya Sabha. If the Lok Sabha approves any recommendations, the bill is considered passed in its amended version; if it rejects them, the bill passes in its original form. 

Presidential Assent: 

• Once a Money Bill is submitted to the President, he has the option to grant assent or withhold it, but he cannot send it back for further deliberation. 

• Generally, the President gives assent to Money Bills as they are introduced with his prior permission.