Explainer: What is Money Bill Route Why SC Agrees to Hear Controversial Bills Case

New Delhi (Viswas News). Before the presentation of the first full budget of Modi Government 3.0, the issue of Money Bill came into the limelight when the Supreme Court gave its consent to hear the petitions challenging the government’s decision to make laws through this bill.

News Report According to, in October 2023, the Chief Justice had said that a constitutional bench of seven judges would soon be constituted to hear these cases. Before the budget was presented on July 23, senior advocates and Congress leaders Abhishek Manu Singhvi and Kapil Sibal appealed to the Supreme Court for an urgent hearing on the matter in view of the upcoming budget.

In recent years, important bills like the Aadhaar Act, 2016, the Prevention of Money Laundering Act, 2022 (PMLA) and the Foreign Contributions Act, 2010 have been passed as money bills by Parliament and made into law. When these bills were introduced in the Rajya Sabha, the number of opposition MPs in the Rajya Sabha was higher.

What is legislative or parliamentary reference?

If we try to understand this issue in a very simple way, then it can be understood that a bill becomes a law after being passed by both the houses of the Parliament and with the approval of the President. But when a bill is marked as a money bill, then in that case Rajya Sabha is ignored or the approval of Rajya Sabha is not required to pass that bill, as is the case in the normal law making process.

In the case of Money Bill, the role of Lok Sabha is more effective and to understand why the government presents a bill as a Money Bill, it is important that we understand what a Money Bill is and what is the constitutional arrangement regarding it?

Constitutional context

of the constitution Article 109(1) Under the Money Bill, a Money Bill cannot be introduced in the Rajya Sabha. It will be introduced only in the Lok Sabha and after being passed from there, it is sent to the Rajya Sabha.

Article 109 (2) clearly states that a Money Bill, after being passed by the Lok Sabha, is transmitted to the Rajya Sabha and the Rajya Sabha has to return the Bill to the Lok Sabha with its recommendations within fourteen days of the receipt of the Bill.

However, it is up to the Lok Sabha to reject or accept all or some of those recommendations. According to Article 109 (3), if the Lok Sabha accepts any of the recommendations of the Rajya Sabha on the relevant Money Bill, the Bill shall be deemed to have been passed by both Houses with the amendments suggested by the Rajya Sabha.

At the same time, according to Article 109 (4), even if the Lok Sabha does not accept any recommendation of the Upper House, the same shall be deemed to have been passed without any amendment in the form in which it was passed by the Lok Sabha and sent to the Rajya Sabha.

That is, if any bill is introduced as a money bill in the Lok Sabha and after its passing is sent to the Rajya Sabha, then the Lok Sabha is completely free to accept or reject the recommendations of the Rajya Sabha on the concerned bill either fully or partially.

Now the question arises here that what will happen if the relevant bill is sent to the Rajya Sabha after being passed by the Lok Sabha and the Rajya Sabha does not return that bill to the Lok Sabha within 14 days (Article 109-2)?

Article 109(5) of the Constitution answers this situation. According to this article, if the Lok Sabha does not return a Money Bill passed by it within 14 days, then after the expiry of this period, the concerned Bill shall be deemed to have been passed by both the Houses in the same form in which it was passed by the Lok Sabha.

Now the question arises as to which bill can be labelled as a money bill or dhan bill, which is the reason behind the entire controversy.

Posting on July 15, 2024 from his official X handle, senior Congress leader and former minister Jairam Ramesh wrote, “In the last ten years, many bills have been passed by Parliament by declaring them as ‘money bills’ under Article 110 of the Constitution. A case in point is the Aadhaar Act of 2016. I had challenged its declaration as a money bill in the Supreme Court, and the then CJI in his dissenting judgment called this declaration a ‘fraud on the Constitution’. I have challenged other such cases as well.”

He wrote, “The CJI’s decision today to constitute a separate constitutional bench to hear petitions on the widespread misuse of Article 110 since 2014 is a welcome step. Hopefully a final and definitive announcement will come before he retires in November 2024.”

The Hindu of 25 December 2018 Report According to the report, “Rajya Sabha MP Jairam Ramesh has appealed for a review of the Supreme Court’s September 29 decision, in which the court had upheld the decision to introduce the Aadhaar Act in Parliament as a money bill.”

What is the controversy related to Aadhaar Act?

In January 2021, the Constitutional Bench of the Supreme Court upheld its September 2018 decision by 4-1, in which the Supreme Court had validated the country’s biometric identity system and made Aadhaar registration mandatory for availing benefits of government welfare schemes.

Available on the website of Supreme Court Observer Information According to the Judiciary Committee, the 2018 Aadhaar judgment had to answer two important questions. First, whether the decision of the Lok Sabha Speaker to classify a bill as a ‘money bill’ is final or can be judicially reviewed. Second, whether the Aadhaar Act was validly certified as a ‘money bill’.

On the first question, the majority opinion was that a money bill could be subjected to judicial review under certain circumstances that may involve a violation of the Constitution. But on the Aadhaar Act, the majority was of the view that since it had the ‘elements’ of a money bill, it was valid to classify it as a money bill.

The case was heard by a five-judge constitutional bench of the Supreme Court, which also included the current Chief Justice DY Chandrachud. DY Chandrachud was the dissenting judge in this decision. Expressing disagreement with this decision, he said that the entire Act did not stand the test of constitutional validity.

But the decision given on 20 January 2021 was by a majority of 4:1, so the review petition filed against it (despite DY Chandrachud’s dissent) was dismissed. In the context of this decision of the Supreme Court, it is important for us to understand on what grounds a bill can be introduced in Parliament as a money bill.

A Money Bill is defined in Article 110 of Part V (Union) of the Constitution of India.

A bill containing provisions for the imposition, amendment, removal or regulation of taxes, or for the regulation of debts or the custody of the Consolidated Fund or the Emergency Fund or for the withdrawal or transfer of money from or to such Funds, or for the announcement of any expenditure charged on the Consolidated Fund of India or for the increase of the amount of any such expenditure, is known as a Money Bill. In simple terms, a Money Bill deals with financial matters such as taxes, government expenditure and budget.

exception

However, a bill relating to matters such as the imposition of penalty or the imposition, repeal, amendment or alteration of any tax by any local authority or body for local purposes will not be classified as a money bill. Or a payment made in lieu of any service or license fee is also not classified as a money bill.

How will the dispute be resolved in case of dispute?

Article 110 (2) provides that if any question arises whether a Bill is a Money Bill or not, the decision of the Speaker thereon shall be final.

According to Article 111, if the money bill is presented before the President after being passed by both the houses, he can either give his assent to it or keep it with him. But in no case can he send this bill back to the Parliament for reconsideration.

Often, financial bills are also mentioned along with money bills. But these two are not the same, but are very different. While Article 110 is about money bills, Article 117 explains financial bills. Issues that are related to financial issues but do not fall under the purview of money bills come under the purview of financial bills.

For example, the Banking Regulation (Amendment) Bill or the Companies (Amendment) Act are financial bills. The budget is a money bill. Another important difference between the two is that while a money bill can be introduced only in the Lok Sabha, a financial bill can be introduced in either House of Parliament. A money bill is also a type of financial bill, which deals with the issues mentioned in Article 110(1) (1) to (g) of the Constitution.

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