24 Apr 2016

Unravelling 'Money Bills'

The recent introduction of Aadhar Bill [The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016] in the Parliament as a 'Money Bill' created quiet a furor and debate both on the floor of Parliament and outside. In this post we examine the nuances of Money Bill to unravel the shroud of mystery surrounding it. 

First and foremost, Money Bill is not a different species of law. Once passed it is like any other law passed by the Parliament. The only difference between a 'Money Bill' and ordinary 'Bill' is vis-a-vis the manner of its introduction on the floor of the Parliament and the special procedure for passing it in the house. Article 107 of the Constitution prescribes the "provisions as to the introduction and passing of Bills". Article 109 prescribes the "special procedure in respect of Money Bills" and Article 110 stipulates the "definition of Money Bills".

In terms of Article 110, a Bill qualifies as a 'Money Bill' "if it contains only provisions dealing with all or any of the" six matters or matters incidental to such six matters, which are the following;
"(a) the imposition, abolition, remission, alteration or regulation of any tax;
(b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
(c) the custody of the consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) the appropriation of moneys out of the consolidated Fund of India;
(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
(f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
(g) any matter incidental to any of the matters specified in sub clause (a) to (f)."
Besides the above positive traits of a 'Money Bill', there is an accompanying negative stipulation in Article 110 which states that "a Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes". 

The crux of the matter, however, is not the above. What is relevant is the fact that whether a Bill qualifies as a Money Bill or not is one to be tested on the basis of the objective facets set out about but based upon a subject satisfaction of the Speaker of Lok Sabha. The Constitution vide Article 110 on this count states that "if any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final". In practice, therefore, one is required to hinge solely upon the subjective satisfaction of the Speaker of Lok Sabha. 

A question arises, why such differentiation between an ordinary bill and a money bill. The answer perhaps likes in the nature of representation between the constituents of Lok Sabha and Rajya Sabha. As it is known, the member of Lok Sabha are directly represented by the citizens whereas the members of the Rajya Sabha are indirectly represented. While the Rajya Sabha equally constitutes the Parliament, the framers of the Constitution perhaps wanted that the nation's financial resources should be governed directly and exclusively by the elected members constituting the Lok Sabha. The Constitution therefore stipulates that a Money Bill can be introduced only in the Lok Sabha [Article 109(1)] and the Rajya Sabha only gets 14 days time to examine a Money Bill passed by the Lok Sabha. Technically the Rajya Sabha can make suggest changes to a Money Bill passed by the Lok Sabha but their acceptance is subject to exclusive discretion of the Rajya Sabha [Article 109(2)]. Similar stipulations exist for the State Legislatures. [Article 199 and 199].

The above discussion, practically implies, that once Speaker of the Lok Sabha declares that a bill is a Money Bill, the Rajya Sabha technically becomes just a place for discussion without any legislative competence. This is a big departure from the normal legislative practice and thus bound to raise issues. 

In a recently reported decision [Yogendra Kumar Jaiswal versus State of Bihar (2016) 3 SCC 183] the Supreme Court had an occasion to consider a similar issue i.e. a contention having been raised by the Appellant therein that the impugned legislation relating to prevention of corruption was not a Money Bill and thus not enacted properly. The Supreme Court considered the issue in detail and the judgments related to it but only to hold that once the Speaker of the Lower House had declared the Bill as a Money Bill, there was no further scope for examination. 

The legal position was examined by the Court in the following terms;
33.    First, we shall take up the issue pertaining to the introduction of the Bill as a money bill in the State legislature. Mr. Vinoo Bhagat, learned counsel appearing for some of the appellants, has laid emphasis on the said aspect. Article 199 of the Constitution, defines Money Bills. For our present purpose, sub-article (3) of Article 199 being relevant is reproduced below:-

“(3). If any question arises whether a Bill introduced in the Legislature of a State which has a Legislative Council is a Money Bill or not, the decision of the Speaker of the Legislative Assembly of such State thereon shall be final.”

We have extracted the same as we will be referring to the authorities as regards interpretation of the said sub-article.

34.    Placing reliance on Article 199, learned counsel would submit that the present Act which was introduced as a money bill has remotely any connection with the concept of money bill. It is urged by him that the State has made a Sisyphean endeavour to establish some connection. The High Court to repel the challenge had placed reliance upon Article 212 which stipulates that the validity of any proceedings in the Legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure.

35.    Learned counsel for the appellants has drawn inspiration from a passage from Special Reference No. 1 of 1964, wherein it has been held that Article 212(1) lays down that the validity of any proceedings in the legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure and Article 212(2) confers immunity on the officers and members of the legislature in whom powers are vested by or under the Constitution for regulating procedure or the conduct of business, or for maintaining order, in the legislature from being subject to the jurisdiction of any court in respect of the exercise by him of those powers. The Court opined that Article 212(1) seems to make it possible for a citizen to call in question in the appropriate Court of law the validity of any proceedings inside the Legislative Chamber if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinised in a Court of law, though such scrutiny is prohibited if the complaint against the procedure is not more than that the procedure was irregular. Thus, the said authority has made a distinction between illegality of procedure and irregularity of procedure.

36. Our attention has also been drawn to certain paragraphs from the Constitution Bench decision in Raja Ram Pal v. Hon’ble Speaker, Lok Sabha and Others. In the said case, in paragraphs 360 and 366, it has been held thus:-

“360. The question of extent of judicial review of parliamentary matters has to be resolved with reference to the provision contained in Article 122(1) that corresponds to Article 212 referred to in M.S.M. Sharma v. Dr. Shree Krishna Sinha, AIR 1960 SC 1186 [Pandit Sharma (II)]. On a plain reading, Article 122(1) prohibits “the validity of any proceedings in Parliament” from being “called in question” in a court merely on the ground of “irregularity of procedure”. In other words, the procedural irregularities cannot be used by the court to undo or vitiate what happens within the four walls of the legislature. But then, “procedural irregularity” stands in stark contrast to “substantive illegality’ which cannot be found included in the former. We are of the considered view that this specific provision with regard to check on the role of the judicial organ vis-à-vis proceedings in Parliament uses language which is neither vague nor ambiguous and, therefore, must be treated as the constitutional mandate on the subject, rendering unnecessary search for an answer elsewhere or invocation of principles of harmonious construction.


366. The touchstone upon which parliamentary actions within the four walls of the legislature were examined was both the constitutional as well as substantive law. The proceedings which may be tainted on account of substantive illegality or unconstitutionality, as opposed to those suffering from mere irregularity thus cannot be held protected from judicial scrutiny by Article 122(1) inasmuch as the broad principle laid down in Bradlaugh, (1884) 12 QBD 271 : 53 LJQB 290 : 50 LT 620, acknowledging exclusive cognizance of the legislature in England has no application to the system of governance provided by our Constitution wherein no organ is sovereign and each organ is amenable to constitutional checks and controls, in which scheme of things, this Court is entrusted with the duty to be watchdog of and guarantor of the Constitution.”

37.    In this regard, we may profitably refer to the authority in Mohd. Saeed Siddiqui v. State of Uttar Pradesh and another, wherein a three-Judge Bench while dealing with such a challenge, held that Article 212 precludes the courts from interfering with the presentation of a Bill for assent to the Governor on the ground of non-compliance with the procedure for passing Bills, or from otherwise questioning the Bills passed by the House, for proceedings inside the legislature cannot be called into question on the ground that they have not been carried on in accordance with the Rules of Business. Thereafter, the Court referring to Article 199(3) ruled that the decision of the Speaker of the Legislative Assembly that the Bill in question was a Money Bill is final and the said decision cannot be disputed nor can the procedure of the State Legislature be questioned by virtue of Article 212. The Court took note of the decision in Raja Ram Pal (supra) wherein it has been held that the proceedings which may be tainted on account of substantive or gross irregularity or unconstitutionality are not protected from judicial scrutiny. Eventually, the Court repelled the challenge.

38.    In our considered opinion, the authorities cited by the learned counsel for the appellants do not render much assistance, for the introduction of a bill, as has been held in Mohd. Saeed Siddiqui (supra), comes within the concept of “irregularity” and it does come with the realm of substantiality. What has been held in the Special Reference No. 1 of 1964 (supra) has to be appositely understood. The factual matrix therein was totally different than the case at hand as we find that the present controversy is wholly covered by the pronouncement in Mohd. Saeed Siddiqui (supra) and hence, we unhesitatingly hold that there is no merit in the submission so assiduously urged by the learned counsel for the appellants.

The long and short of the above discussion is that while the Constitution makes elaborate stipulations over what constitutes and what does not constitute a 'Money Bill', in view of the decision of the Supreme Court that it is the prerogative of the Speaker, it appears that the provisions are to guide the Speaker on when a Bill should be declared a Money Bill for the Speaker's decision is final.

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