Challenge to money bill process in Supreme Court

Reference

In recent years, the Central Government has also introduced some normal laws in the Parliament in the form of so-called Money Bills to get them passed. The Supreme Court has agreed to 'take a decision' regarding hearing petitions challenging the adoption of the 'Money Bill route' for normal laws as well. It is worth mentioning that the Money Bill does not need to be passed in the Rajya Sabha.

Key points related to the case

• A team of senior lawyers has approached a bench headed by Chief Justice of India (CJI) DY Chandrachud seeking an urgent hearing in the matter. The constitution of a constitution bench will be decided by the CJI.
• The question of which bill can be designated as a money bill was referred by a five-judge bench headed by then CJI Ranjan Gogoi in November 2019 in the case of Roger Mathew vs South Indian Bank Ltd to a seven-judge bench which is yet to be constituted.

Important cases in Supreme Court regarding Money Bill

Challenge to the Aadhaar Act, 2016

• In September 2018, the court ruled in favour of the government by a 4-1 majority, upholding the constitutionality of the Aadhaar law.
• However, the only dissenter was Justice D.Y. Chandrachud, who was not the Chief Justice at the time.
• According to D.Y. Chandrachud, adopting the money bill route in this case is an 'abuse of the constitutional process'. Passing an ordinary bill as a money bill limits the role of the Rajya Sabha in lawmaking.

Finance Act, 2017   

• The Finance Act, 2017 amended several Acts. This amendment, among other points, empowered the government to notify rules regarding the service conditions of members of tribunals. Soon after, the Centre notified the Appellate Tribunal and other Authorities (Qualifications, Experience and other Service Conditions of Members) Rules, 2017 (Tribunal Rules).
• In November 2019, a five-judge bench struck down the Tribunal Rules as unconstitutional for interfering with judicial independence but referred the Money Bill aspect to a larger bench of seven judges.

Cases after the year 2019

• In the years since the 2019 verdict, the Court has refrained from addressing the Money Bill question in several cases because of the pending decision of a seven-judge bench.
• These include a challenge to the Enforcement Directorate’s sweeping powers under the Prevention of Money Laundering Act, 2002, where restrictive bail conditions under Section 45 were introduced through the Money Bill (Finance Act, 2018).
• There were also challenges to the Centre’s electoral bond scheme and the Foreign Contribution Regulation Act, 2010, which were passed through the Money Bill route.

About the Money Bill

Money Bill in Constitution  

• According to the definition of a Money Bill in Article 110 of the Constitution, a Bill shall be deemed to be a Money Bill if it contains one or more or all of the following provisions:
• Imposition, abolition, remission, alteration or regulation of any tax
• Regulation of moneys borrowed by the Central Government
• Custody of the Consolidated Fund of India or the Contingency Fund, the credit into or withdrawal of moneys from any such Fund
• Appropriation of moneys from the Consolidated Fund of India
• Proclamation of any expenditure charged on the Consolidated Fund of India or the increase in the amount of any such expenditure
• Receipt or custody of any moneys in or out of the Consolidated Fund of India or the Public Account or the audit of Union or State funds, or
• Any matter incidental to any of the matters specified above

A Bill shall not be a Money Bill if it is merely

• impose fines or other monetary penalties, or
• require fees for licences or fees for services rendered, or
• provide for the imposition, abolition, remission, alteration or regulation of any tax for local purposes by any local authority or body.

Privilege of the Speaker of Lok Sabha in respect of Money Bill

• Under Article 110(3), ‘if any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of Lok Sabha thereon shall be final’.
• The Speaker’s decision cannot be challenged by any court, Parliament or the President.
• When a Money Bill goes to the Rajya Sabha and the President for assent, the Speaker of Lok Sabha confirms it as a Money Bill.

Procedure for passing a Money Bill

• A money bill can be introduced in the Lok Sabha only on the recommendation of the President.
• Every such bill is considered a government bill and can only be introduced by a minister. It is passed in the Lok Sabha by a simple majority.

Money Bill in Rajya Sabha

• After being passed in the Lok Sabha, it is sent to the Rajya Sabha for consideration.
• The Rajya Sabha has restricted powers regarding the Money Bill, due to which it cannot reject or amend the Money Bill.
• The Rajya Sabha can only make recommendations in this regard and has to approve it within 14 days, otherwise it is considered passed by the Rajya Sabha.
• It is not necessary for the Lok Sabha to accept the recommendations of the Rajya Sabha regarding the Money Bill.
• If the Lok Sabha accepts any recommendation, then this amended bill is considered to be passed jointly by both the houses. But if the Lok Sabha does not accept any recommendation, then it is considered to be passed jointly by both the houses in its original form.

About the Finance Bill

• Generally, a Finance Bill is a Bill which is related to financial matters such as revenue or expenditure.
• It includes matters related to imposing a new type of tax or amendment in tax etc. in the coming financial year.

There are following three types of Finance Bills

1. Money Bill : Article 110
2. Finance Bill (I) : Article 117(1)
3. Finance Bill (II) : Article 117(3) 

• Although all Money Bills are Financial Bills, all Financial Bills are not Money Bills.
• In fact, only those Finance Bills are Money Bills which are mentioned in Article 110 of the Constitution.
• Finance Bills (I) and (II) are discussed in Article 117 of the Constitution.

Finance Bill (I)

• Finance Bill (I) is a Bill which covers all the matters mentioned in Article
• Other matters of income, such as a Bill which contains a loan clause but does not deal with a specific loan.

The Finance Bill (I) is similar to the Money Bill in two ways-

• Both are presented in the Lok Sabha
• Both can be presented after the assent of the President.
• In all other respects, a Finance Bill (I) is a Bill which is treated in the same manner as an ordinary Bill.

Finance Bill (II)

• The Finance Bill (II) contains provisions relating to expenditure charged on the Consolidated Fund of India but does not contain any matter mentioned in Article
• It is used like an ordinary bill and the same procedure is followed for it as for an ordinary bill.
• The only feature of this bill is that it cannot be passed by either House of the Parliament unless the President recommends to the House to do so.
• The Finance Bill (II) can be introduced in either House of Parliament. The President's assent is not required for its introduction. In other words, the President's recommendation is necessary not at the stage of introduction but at the stage of consideration. 

Ordinary Bill vs. Money Bill