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Political exigencies no reason to speed up money bill case: Centre

Oct 13, 2023 06:42 AM IST

“We would request that your lordships may go by seniority (of the cases),” solicitor general Tushar Mehta said

Political exigencies cannot be a reason to speed up the Constitution bench hearing of a clutch of petitions that seek the court to determine the subjects and objective of a draft legislation for justifying its passage as a money bill, obviating the need of Rajya Sabha oversight, the Union government submitted in the Supreme Court on Thursday.

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As a seven-judge bench issued procedural directions to keep the matter ready for hearing after four weeks, the petitioners, led by senior advocate Kapil Sibal, urged the court to hear the matter on priority. While the bench, led by Chief Justice of India Dhananjaya Y Chandrachud, said that he would look into the request, solicitor general Tushar Mehta objected to prioritising the matter.

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“We would request that your lordships may go by seniority (of the cases). Priority cannot be based on political exigencies,” Mehta told the bench, which also included justices Sanjay Kishan Kaul, Sanjiv Khanna, BR Gavai, Surya Kant, JB Pardiwala and Manoj Misra. Responding, the CJI said the court would take a call.

The bunch of 22 petitions on money bill chronologically stands at the fifth position in the list of six cases before the seven-judge bench. The oldest case in the list is a petition from 1994 while the money bill case arose in 2019.

The controversy before the court revolved around the interpretation and applicability of Article 110 of the Constitution, which defines a money bill. The provision states that a money bill is a draft law that must deal “only” with matters specified in Article 110 (1)(a) to (g) — taxation, borrowing by the government, and appropriation of money from the Consolidated Fund of India, among others. Any other matter incidental to the subjects mentioned above, the provision states, can also be classified as a money bill.

Unlike any other bill, a money bill can be introduced only in the Lok Sabha, and the Rajya Sabha cannot reject or amend such bills. While the Rajya Sabha can surely suggest amendments, it is for the Lok Sabha to accept or reject them. The Lok Sabha Speaker decides whether a bill can be considered a money bill or not.

In 2018, a five-judge bench dwelled on the contours of a money bill as it examined whether the Aadhaar Act could be passed as a money bill or not. By 4:1 majority, the Constitution bench ruled that no illegality was committed by passing the draft law on Aadhaar as a money bill in Parliament.

The majority opinion pointed out that since the chief objective of the Aadhaar act is to grant social welfare benefits from the Consolidated Fund of India, there was nothing wrong with it being certified as a money bill. Other provisions in the law, the majority said, were incidental and could not change the fundamental nature of the act.

Writing the lone minority opinion, justice Chandrachud said that the passage of the act as a money bill constituted a “fraud on the Constitution” because anything can then be passed as a money bill by linking it to the Consolidated Fund of India. The dissenting opinion pointed out that Article 110 is clear that the draft law must deal “only” with the subjects pertaining to taxation, credits, consolidated money, Union government’s spending and borrowings.

Almost a year on, another five judge-bench was called upon to decide the validity of the 2017 Finance Act and the rules framed thereunder in the wake of the government’s move to revamp the functioning of tribunals. The constitutional validity of Part XIV of the Finance Act was challenged on the ground that the provisions relating to the functionality of tribunals could not form part of a money bill for the purposes of Act 110 of the Constitution. The petitioners argued that Part XIV of the Finance Act was not a money bill and was inserted only in order to circumvent the Rajya Sabha.

In its 2019 judgment, the Constitution bench not only struck down a raft of rules concerning the appointment and service conditions of the members of tribunals, but it also referred the issue of money bill to a bench of seven judges after noting that the Aadhaar Act judgment in 2018 did not substantially discuss the effect of the word “only” in Article 110(1). Further, the 2018 judgment, it said, did not examine the repercussions of a finding when some of the provisions of an enactment passed as a money bill do not conform to the subjects enumerated under the constitutional provision.

Notably, a bundle of amendments in the Prevention of Money Laundering Act (PMLA) pertaining to bail and classification of predicate offences were made between 2015 and 2019 through finance acts, which were also passed as money bills.

When a three-judge bench in July 2022 affirmed the sweeping powers given to the Enforcement Directorate under the PMLA for summoning individuals, making arrests, conducting raids and attaching properties of the suspects, it also left it to the seven-judge bench to decide whether these amendments could have been passed through the money bill route.

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