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Polity & Governance
Mahesh

23/07/24 12:36 PM IST

Money Bill

In News
  •  The Chief Justice of India (CJI) has agreed to list before Constitution Benches, the petitions challenging the money Bill route taken by the Centre to pass contentious laws/amendments.
Financial Bills
  • The Constitution defines certain categories of bills that deal with financial matters as money Bills and financial Bills.
  • Article 110(1)(a) to (f) defines a money Bill as a bill that contains ‘only’ provisions dealing with one or more of six specific matters.
  • They relate to taxation; borrowing by government; custody of consolidated fund or contingency fund and payment/withdrawal of money from such fund; appropriation out of consolidated fund; expenditure charged on consolidated fund; receipt on account of consolidated fund or public account or the audit of accounts of Union or States.
  • Clause (g) of Article 110 (1) provides that any matter incidental to these six matters can also be classified as a money Bill.
  • Classic examples of money Bills include the Finance Act and the Appropriation Act that deal primarily ‘only’ with taxation and spending out of the consolidated fund respectively.
  • Article 117 provides for two different categories of financial Bills. Category I contains any of the six matters mentioned in Article 110(1)(a) to (f) along with any other matter.
  • Category II Bills do not contain any of those six matters but would involve expenditures from the consolidated fund. 
Procedure for Money Bills
  • As per Article 109, a money Bill shall be introduced only in the Lok Sabha.
  • After it is passed in the Lok Sabha, the Rajya Sabha has only 14 days to provide its recommendations on such a Bill which may or may not be accepted by the Lok Sabha.
  • Money Bills deal ‘only’ with financial matters that are crucial for the administration of the country.
  • Hence, the Constitution provides for this special procedure that effectively requires only the approval of Lok Sabha where the ruling government enjoys a majority.
  • It has its origin in the U.K., where in 1911 the powers of the unelected House of Lords over the Budget were curtailed.
  • The Budget was required to be passed only by the House of Commons that reflected the will of the people.
  • However, it must be noted that the operative word of the definition of a money Bill is the word ‘only.’
  • It is the Speaker of Lok Sabha who certifies a Bill to be a money Bill.
  • Financial Bills of Category I and II do not enjoy this special procedure. 
Issues
  • Certification of a Bill as a ‘money Bill’ by the Speaker came under judicial review during the scrutiny of the Aadhaar Act passed in 2016.
  • This law contains provisions with respect to process for enrolment and authentication, establishment of authority for Aadhaar, mechanism for safeguards, and penalties for offences under the Act.
  • Section 7 of the Act provides that the Central or State government may require Aadhaar authentication of an individual as a condition for providing subsidy, benefit or service, for which expenditure is incurred from the consolidated fund.
  • Stating the withdrawal of funds from the consolidated fund as the primary purpose of the Act, with all other provisions being incidental to it, this law was passed as a ‘money Bill’.
  • While this was a debatable classification, the Supreme Court upheld this with a majority of 4:1.
  • The current CJI was the lone dissenting judge who held that the Aadhaar Act did not fulfil the definition of a ‘money Bill’
  • The Finance Act, 2017 was even more controversial, in passing amendments to various Acts for reorganisation of tribunals such as the National Green Tribunal, as a money Bill.
  • These amendments were struck down in Rojer Mathew versus South Indian Bank (2019) wherein a five-judge Bench opined that the Aadhaar case judgment did not substantially discuss the effect of the word ‘only’ in the definition of money Bill.
  • It referred the matter to a larger Bench for consideration.
  • A seven-judge Bench should be constituted for an authoritative judgment on the definition of money Bills. The Speakers should also uphold the spirit of the definition while certifying a ‘money Bill.’
Source- The Hindu

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