A petition in the Supreme Court has reopened the debate over Money and Financial Bills. It has serious implications for parliamentary procedure

~By Devender Singh

“If the Speaker says blue is green, we will tell … that blue is blue and not green,” remarked the Chief Justice of India to the plea that “the judiciary had no jurisdiction to encroach on legislative procedure in Parliament, where the Speaker was the final authority”. This was during the preliminary hearing on the writ petition filed by Jairam Ramesh, Rajya Sabha MP, challenging the validity of Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, passed by Parliament during the Budget Session, 2016 as a Money Bill. The petition terms the Aadhaar Act a “clear case of Constitutional fraud” violating fundamental right of privacy and “a colourable exercise of power” open to judicial scrutiny.

The amendments to the Bill in the Rajya Sabha were overruled by the Lok Sabha as the Speaker had certified it as Money Bill under clause (4) of Article 110. The hearing in the case will begin shortly. The precise question is whether the Aadhar Bill, when introduced, was a Money Bill or a Financial Bill. Article 110 explicitly says that a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely, the imposition, abolition, remission, alteration or regulation of any tax; 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; 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; and the appropriation of moneys out of the Consolidated Fund of India. Every Money Bill must contain an endorsement by the Speaker, under article 110(4), while transmitting it to the Council of States and the President that it is a Money Bill.

The implications of a Money Bill are serious and many. A Money Bill has to be returned by the Rajya Sabha to the Lok Sabha (Art.109) within 14 days with or without recommendations. The Lok Sabha may accept or reject them.

The Constitution confers exclusively the power of the purse with the popular chamber to assent, or to refuse to assent, to any demand, the proposal to seek supplies or grants. Once the Lok Sabha approves the budget containing the Demands for Grants, the Appropriation Bill is introduced by the Finance Minister in the Lok Sabha, which authorises withdrawal of money, both charged and voted, from the Consolidated Fund of India. This is followed by, usually, a Finance Bill, which gives effect to the taxation proposals of the government. For instance, the Finance Bill, 2017-18 proposes 142 amendments to various tax laws whereas the Finance Act, 2016-17 made as many as 238 such amendments. The Annual Financial Statement, known as the budget, and all Additional or Supplementary or Excess Grants, Votes on Account (since done away with by the budget 2017-18), come within the ambit of a Money Bill. A Financial Bill, contoured in Article 117, apart from dealing with other matters, also makes provision for any of the matters referred to in article 110. The Rajya Sabha has equal power in respect of a Financial Bill except that a Financial Bill can be introduced in the Lok Sabha only and with the prior recommendation of the President in terms of Article 117(1). The Rajya Sabha may pass a Financial Bill, with or without amendments or reject it altogether.

In such an event, like any other ordinary law, the President can convene a joint sitting. (The Dowry Prohibition Bill,1959, The Banking Service Commission (Repeal) Bill,1977 and The Prevention of Terrorism Bill, 2002 were passed at joint sittings.) It would be worthy to note some of the important financial bills of wide-ranging national importance which were introduced in the Lok Sabha but not endorsed as Money Bills.

 The Direct Taxes Code Bill, 2010, for instance, sought to streamline the tax administration, widen the tax base and increase government revenue and to consolidate The Income Tax Acts. The object of The National Food Security Bill, 2011 was to provide food and nutritional security at affordable prices, to provide destitute persons at least one meal every day free of charge, to entitle every pregnant woman and lactating mother meals free of charge during pregnancy and and six months after birth, etc.

A telling example is that of The Mahatma Gandhi National Rural Employment Guarantee Act, 2005, the most ambitious and stellar programme of rural development which continues to get the highest allocation in consecutive budgets (Rs 48,000 crore in 2017-18). None of these Financial Bills were certified as Money Bills despite the laudable aims and objects and the huge expenditure involved. All these were passed by both the Houses independently except The Direct Taxes Code Bill which was referred back to the government for reconsideration by the Standing Committee on Finance.

An argument is often advanced that the Rajya Sabha blocks legislative reforms and frustrates the popular will. It’s true that the Lok Sabha is considered the popular chamber but equally, it must be reiterated that the Rajya Sabha represents the federal character of our polity and is an integral part of the doctrine of basic structure of our Constitution (Keshavanand Bharati case). Besides, the Second Chamber is expected to introduce an element of sobriety and second thought and “delay legislations which might be the outcome of the passions of the moment”. Without Rajya Sabha, it would not be possible to secure representation of States in the Union Legislature. As a federal chamber, if the Rajya Sabha passes a resolution under Article 249 that it is expedient and necessary in national interest to enact a law on which only State legislature can make law, Parliament can enact such a law for the specified period.

Likewise, if a resolution is passed by the Rajya Sabha under Article 312, Parliament can create one or more All India Services. Reliance has been placed on the judgment of the Supreme Court in Mohd Saeed Siddiqui vs State of UP (2004) in which the court ruled that the classification of bills, even if incorrect, was not judicially reviewable. However, the Constitution Bench of the Supreme Court in Raja Ram Pal vs Honourable Speaker, Lok Sabha ruled in 2007 that the jurisdiction of the Court cannot be ousted.

Judicial review is an unseverable adjunct of the doctrine of basic structure. Further, the Rajya Sabha cannot be likened to the Legislative Council of a State which can be abolished by an ordinary law passed by Parliament after a resolution to that effect is passed by the Legislative Assembly of the State.

The Rajya Sabha cannot be abolished by a resolution passed by the Lok Sabha nor its constitutional mandate curtailed or diluted. There is a palpable hope that the judgment of the Supreme Court will act as a great deterrent against the deluding notion of “invincible and unfettered power” of the Speaker with respect to certification of Bills.

—The author is former additional secretary, Lok Sabha, a scholar of constitutional and parliamentary studies and author of The Indian Parliament, Beyond the seal and signature of democracy