SC to look into use of Money Bills to pass laws
Context:
Chief Justice of India D.Y. Chandrachud has agreed to list petitions challenging the use of the Money Bill route by the Centre to pass contentious amendments in Parliament.
Relevance:
GS-02 (Polity)
Key Highlights:
- Constitution Benches Formation: Chief Justice Chandrachud announced the listing of petitions once Constitution Benches are formed, addressing senior advocate Kapil Sibal who represented the petitioners, including Rajya Sabha MP Jairam Ramesh.
- Money Bill Question: Referred to a seven-judge Bench in November 2019 by a five-judge Bench led by Chief Justice Ranjan Gogoi in the case of Rojer Mathew vs. South Indian Bank Ltd, the core issue is whether such amendments can be passed as Money Bills, bypassing the Rajya Sabha and violating Article 110 of the Constitution.
- Definition and Scope of Money Bills: According to Article 110(1), a Money Bill is restricted to provisions dealing with specified financial matters such as the appropriation of money from the Consolidated Fund of India and taxation.
- Legal Concerns: The reference includes legal questions about amendments made from 2015 onwards in the Prevention of Money Laundering Act (PMLA) through Money Bills, giving the Enforcement Directorate extensive powers of arrest and raids. The court upheld the legality of the PMLA amendments but left the question of their passage as Money Bills to the seven-judge Bench.
- Finance Act of 2017: The case raises concerns about the Finance Act of 2017, passed as a Money Bill, altering appointments to 19 key judicial tribunals, which petitioner Jairam Ramesh argued was done to extend executive control over these institutions.
- Aadhaar Case Precedent: The issue of passing laws as Money Bills also arose in the Aadhaar case. While the Supreme Court, in a 2021 majority verdict, refused to review its 2018 judgment upholding the Aadhaar Act’s validity and its certification as a Money Bill, Justice Chandrachud delivered a dissenting opinion, suggesting the Review Bench should wait until the seven-judge Bench decided the larger Money Bill questions in the Rojer Mathew reference.
What is a Money Bill?
- In the Indian Constitution, Article 110 deals with the Money Bill in India.
- Money Bill is a type of legislation that primarily involves the appropriation of funds from the Consolidated Fund of India.
- These bills deal with financial matters such as taxation, public expenditure, and public debt.
Criteria for a Bill to be Considered a Money Bill
According to the Indian Constitution, a bill is deemed a Money Bill if it contains provisions exclusively related to:
- Imposition, abolition, remission, alteration, or regulation of any tax.
- Regulation of the borrowing of money or giving of any guarantee by the Government of India.
- Custody of the Consolidated Fund or the Contingency Fund of India, including payments into or withdrawals from these funds.
- Appropriation of money from the Consolidated Fund of India.
- Declaration of expenditure as charged on the Consolidated Fund of India or increasing such expenditure.
- Receipt of money on account of the Consolidated Fund of India or the public account of India.
- Any matter incidental to the above provisions.
Procedure for Passage of Money Bills in Parliament
- Introduction: Money Bills can only be introduced in the Lok Sabha, with the President’s recommendation. They are government bills introduced by a minister.
- Lok Sabha: After passing the Lok Sabha, the bill is sent to the Rajya Sabha.
- Rajya Sabha: The Rajya Sabha can only make recommendations within 14 days and cannot amend or reject the bill. The Lok Sabha may accept or reject these recommendations.
- Approval: If the Rajya Sabha does not return the bill within 14 days, it is deemed passed in its original form.
- Presidential Assent: The President can either give or withhold assent but cannot return the bill for reconsideration.
Issues Pertaining to the Misuse of the Money Bill
- Evading Scrutiny: Using Money Bill provisions to bypass legislative scrutiny, especially by the Rajya Sabha.
- Aadhaar Bill Controversy: The legality of the Aadhaar Act 2016 as a Money Bill was questioned since its primary focus was not on financial matters.
- Certifying Authority: The Speaker’s sole discretion in certifying Money Bills has raised concerns over partisan decisions.
- Separation of Powers: For instance, the Finance Act 2017, passed as a Money Bill, included provisions unrelated to the specified financial matters, such as tribunal appointments.
Difference between Money bill and Finance Bill:
