Arvind P Datar and Rahul Unnikrishnan

While considering the validity of various provisions of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, the Supreme Court had also to consider whether the entire Act would have to be struck down as it had been passed as a money bill.

Article 110(1) mandates that a bill can be called a Money Bill “only” if it deals with matters mentioned in sub-clauses (a) to (g) thereof. The majority held that it was a money bill while the minority (Justice DY Chandrachud) held that it was not a money bill and the Aadhar Act was held to be unconstitutional on that ground. An unhealthy practice had developed in India whereby laws that could never pass muster as money bills were certified as such by the Speaker.

Two earlier decisions of the Supreme Court had erroneously held that it could not exercise its powers of judicial review if the Speaker had certified a bill as a 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 the House of the People thereon shall be final.

In Mohd. Siddiqui, an amendment to extend the term of office of a Lokayukta through the Uttar Pradesh Lokayuktas (Amendment) Act, 2012, which was introduced and certified as a Money Bill, was upheld on the ground that the Speaker’s decision was final. A similar view was taken in Yogendra Kumar Jaiswal [2016 3 SCC 183], wherein it upheld the amendments that provided for confiscation of property, which were passed as Money Bills, on the ground that the Speaker’s decision was final. This was, in spite of the fact that the Supreme Court had taken a consistent view that the power of judicial review was a part of the basic structure of the Constitution, and that finality clauses could not exclude its power of judicial review. The Speaker’s decision is final only for the purposes of the legislative business in the Lok Sabha.

These decisions were clearly wrong and it would be completely unconstitutional for a Speaker to certify a bill which was clearly not a money bill. In such a case, the Speaker’s certificate would be an unconstitutional act and liable to be struck down.

In the recent past, the Insolvency and Bankruptcy Code, 2016 was also introduced as a money bill, which was clearly unconstitutional. Then followed the Aadhaar Act, even though its predecessor bill had been introduced in the Rajya Sabha as a regular bill. By no stretch of the imagination could the Aadhar Act be termed as a money bill, since it did not deal only with matters mentioned in sub-clauses (a) to (g) of Article 110(1). Therefore, this issue was argued in great detail in the Aadhaar case. The majority held that it was a money bill although its reasons were highly unsatisfactory.

The controversy once again came up when Part XIV of the Finance Act, 2017 amended as many as twenty-six different statutes dealing with the appointment and service conditions of tribunal members. It was elementary that this could not have been passed as a money bill. As the Aadhaar judgment had overruled the two earlier incorrect decisions in Mohd. Saeed Siddiqui and Yogendra Kumar Jaiswal, it was absolutely clear that Part XIV would have to be struck down as violative of Articles 245, 246 read with Article 110. This Part could not have been introduced and passed in the Lok Sabha without the approval of Rajya Sabha.

Recently, the Supreme Court has referred this controversy to a larger bench after noticing that the majority verdict in the Aadhaar judgment had not given a proper interpretation to Article 110. The majority in the recent decision held as follows:

“123.Given the various challenges made to the scope of judicial review and interpretative principles (or lack thereof) as adumbrated by the majority in K.S. Puttaswamy (Aadhaar-5) and the substantial precedential impact of its analysis of the Aadhaar Act, 2016, it becomes essential to determine its correctness. Being a Bench of equal strength as that in K.S. Puttaswamy (Aadhaar-5), we accordingly direct that this batch of matters be placed before Hon’ble the Chief Justice of India, on the administrative side, for consideration by a larger Bench.” (emphasis added)

The matter now will be eventually decided by a bench of seven judges and it is hoped that it is made absolutely clear that a bill that contains anything outside sub-clauses (a) to (g) of Article 110(1) cannot be introduced as a money bill. Any such subject matter would be fatal to the validity of the bill.

In stark contrast with the unsatisfactory state of the decisions of the Supreme Court of India, are three important decisions of the Supreme Court of Pakistan.

The provisions relating to Money Bills of both the Constitutions of India and Pakistan are almost the same. The Constitution of Pakistan contains Article 73(5), which states that the certificate of the Speaker shall be final. In this background, three decisions will highlight the cases where the Supreme Court of Pakistan has struck down laws that have transgressed the constitutional provisions of what constitutes a money bill.

1. In Federation of Pakistan v. Durrani Ceramics & Others [(2014) SCC Online Pak SC 9], the Supreme Court held that the imposition of a cess under the Gas Infrastructure Development Cess Act, 2011 was not a tax but a fee and, accordingly, it could not have been imposed through a money bill. Article 73(2)(a) of the Constitution of Pakistan reads as – the imposition, abolition, remission, alteration or regulation of any tax. The Court set the bar so high by holding that a “cess” could not have been introduced through a Money Bill as jurisprudentially, a cess was different from a tax.
2. In Sindh High Court Bar Association v. Federation of Pakistan [(2009) SCC Online Pak SC 4], the amendment to the Supreme Court (Number of Judges) Act, 1997 through a money bill the Finance Act, 2008, was held to be unconstitutional. Though there is no express discussion on the scope of a money bill, the Supreme Court of Pakistan held as follows:

“Since the Constitution, through its Article 176, authorizes only the Parliament to determine the number of judges of the Supreme Court of Pakistan and since the Parliament had so done through the Supreme Court (Number of Judges) Act XXXIII of 1997, therefore, the increase in the strength of the judges through the Finance Act of 2008 which Act was not passed by the Parliament but was passed only by the National Assembly would be deemed to be valid only for financial purposes and not for the purposes of Article 176 of the Constitution. It is resultantly declared that the number of judges of the Supreme Court for purposes of the said Article 176 shall continue to remain sixteen.” (emphasis added)

In other words, without going into detail, the Supreme Court of Pakistan held that a non-money bill, if passed as a money bill, would be valid only for financial purposes and not for anything else. Consequently, certain judges were made to relinquish office!

3. The above decision in Sindh High Court Bar Association was followed in Mir Muhammad Idris v. Federation of Pakistan [(2011) SCC Online Pak SC 9], wherein the amendment to the Bank Nationalisation Act, 1974, (which related to  the  appointment  of  Chairman, President and  members of  the Board of the National Bank of  Pakistan)  by  the  Finance  Act, 2007 was held to be impermissible. The Court held that the subject matter of the bill did not fall within clauses (a) to (g) of Article 73(2) of the Constitution of Pakistan [similar to Article 110 (1)(a) to (g) of the Indian constitution], and therefore, it lacked the essential constitutional requirement of approval of both the Houses of the Parliament. Accordingly, the amendment was struck down by the Supreme Court of Pakistan.

Significantly, it must be noted that Article 73(2) of the Constitution of Pakistan does not contain the term “only”, which is the bone of contention in Article 110(1) of the Indian Constitution. Suffice it to say that the Supreme Court of Pakistan has given a strict interpretation to clauses (a) to (g) of Article 73(2), even without the restricting term “only’ in its operative part.

When this is the case, the express inclusion of the term “only” in Article 110(1) of the Indian Constitution must be given an even stricter interpretation by the Supreme Court of India. Hopefully, when the larger bench hears the reference, they will take note of these decisions of the Supreme Court of Pakistan and preserve the constitutional sanctity of both Money Bills and the Rajya Sabha.

The authors are practicing advocates.