Insights into Editorial: What exactly is a money bill?

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Insights into Editorial: What exactly is a money bill? 


 

Summary:

The Supreme Court will begin hearing final arguments next month on a writ petition challenging the validity of the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Act, 2016 — or the Aadhaar Act.

 

What’s the issue?

The government had moved the Aadhar Bill in the parliament as a money bill. Through this categorisation, the government had the law enacted by securing a simple majority in the Lok Sabha while rendering redundant any opposition to the legislation in the Upper House of Parliament.

 

What was the need for legislative backing?

Originally, Aadhaar was conceived as a scheme to provide to every Indian a unique identity number, with a purported view to enabling a fair and equitable distribution of benefits and subsidies. Given that the Aadhaar project was being implemented even without statutory support, public interest petitions were filed in the Supreme Court challenging the project’s legitimacy. In these cases, the court issued a series of interim orders prohibiting the state from making Aadhaar mandatory, while permitting its use only for a set of limited governmental schemes.

Then, in March 2016, the Union government withdrew the earlier bill, and introduced, in its place, as a money bill, a new draft legislation, titled the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Bill, 2016. This categorisation was extraordinary because a money bill, under India’s constitutional design, requires only the Lok Sabha’s affirmation for it to turn into law.

 

What is a Money bill?

A money bill is defined by Article 110 of the Constitution, as a draft law that contains only provisions that deal with all or any of the matters listed therein. These comprise a set of seven features, broadly including items such as the imposition or regulation of a tax; the regulation of the borrowing of money by the Government of India; the withdrawal of money from the Consolidated Fund of India; and so forth.

In the event a proposed legislation contains other features, ones that are not merely incidental to the items specifically outlined, such a draft law cannot be classified as a money bill. Article 110 further clarifies that in cases where a dispute arises over whether a bill is a money bill or not, the Lok Sabha Speaker’s decision on the issue shall be considered final.

 

Does the Aadhaar bill fit the money bill criteria?

The bill provides for a mechanism to identify a person using biometrics, and states that this could be used for providing subsidies or government services. However, it also allows the Aadhaar system to be used for other purposes. Therefore, it seems to contain matters other than those that are incidental to expenditure from the Consolidated Fund. That is, it does not seem to fit the requirement of “only” the matters listed.

 

What experts say?

According to experts, contents of Aadhar act go far beyond the features enumerated in Article 110. If anything, it is the provisions in the legislation that pertain to the Consolidated Fund and its use that are incidental to the Act’s core purpose — which, quite evidently, is to ensure, among other things, the creation of a framework for maintaining a central database of biometric information collected from citizens. Ordinarily, a draft legislation is classified as a money bill when it provides for funds to be made available to the executive to carry out specific tasks. In the case of the Aadhaar Act, such provisions are manifestly absent. The Speaker’s decision to confirm the government’s classification is, therefore, an error that is not merely procedural in nature but one that constitutes, in substance, an unmitigated flouting of Article 110.

 

Is Speaker’s decision to classify a draft legislation as a money bill is immune from judicial review?

The assertion that the Speaker’s decision is beyond judicial review finds support in the Supreme Court’s judgment in Mohd. Saeed Siddiqui v. State of UP (2014). Here, a three-judge bench had ruled, in the context of State legislatures, that a Speaker’s decision to classify a draft statute as a money bill, was not judicially reviewable, even if the classification was incorrect. This is because the error in question, the court ruled, constituted nothing more than a mere procedural irregularity.

  • But there are significant problems with this view. Chief among them is the wording of Article 110, which vests no unbridled discretion in the Speaker. The provision requires that a bill conform to the criteria prescribed in it for it to be classified as a money bill. Where a bill intends to legislate on matters beyond the features delineated in Article 110, it must be treated as an ordinary draft statute. Any violation of this mandate has to be seen, therefore, as a substantive constitutional error.
  • There are other flaws too in the judgment. Most notably, it brushes aside the verdict of a Constitution Bench in Raja Ram Pal v. Hon’ble Speaker, Lok Sabha (2007), where the court had ruled that clauses that attach finality to a determination of an issue do not altogether oust the court’s jurisdiction. That is, the bench held, there are numerous circumstances where the court can review parliamentary pronouncements. These would include instances where a Speaker’s choice is grossly illegal, or disregards basic constitutional mandates, or, worse still, where the Speaker’s decision is riddled with perversities, or is arrived at through dishonest intentions.

 

Way ahead:

The government’s response is predicated on two prongs: that the Speaker’s decision to classify a draft legislation as a money bill is immune from judicial review, and that, in any event, the Aadhaar Bill fulfilled all the constitutional requirements of a money bill. A careful examination of these arguments will, however, show us that the government is wrong on both counts.

 

Conclusion:

In this case, prima facie it appears that the government has taken the money bill route to bypass the upper house. This move is even backed by the speaker of the Lok Sabha, whose decision is final on the question of whether a bill is a money bill. However, this constitutional provision cannot be seen as a convenient tool to deal with an inconvenient second chamber. The Constitution reposes faith in the speaker’s fairness and objectivity. Article 110(1) provides the touchstone of the decision to be taken by the speaker under Article 110(3). Any decision actuated by extraneous considerations can’t be a proper decision under Article 110(3). The speaker’s decision needs to be in conformity with the constitutional provisions. If not, it is no decision under the Constitution.