How and when can a bill be defined as a money Bill?

• The Chief Justice of India (CJI) has agreed to list before Constitution Benches, the petitions challenging the money Bill.

Context:

• Certification of a Bill as a ‘money Bill’ by the Speaker came under judicial review during the scrutiny of the Aadhaar Act passed in 2016.

Money and Financial Bills

• The Constitution defines certain categories of bills that deal with financial matters as money Bills and financial Bills.
• Article 110(1)(a) to (f) defines a money Bill as a bill that contains ‘only’ provisions dealing with one or more of six specific matters.
• They relate to taxation; borrowing by government; custody of consolidated fund or contingency fund and payment/withdrawal of money from such fund; appropriation out of consolidated fund; expenditure charged on consolidated fund; receipt on account of consolidated fund or public account or the audit of accounts of Union or States.
• Clause (g) of Article 110 (1) provides that any matter incidental to these six matters can also be classified as a money Bill.
• Classic examples of money Bills include the Finance Act and the Appropriation Act that deal primarily ‘only’ with taxation and spending out of the consolidated fund respectively.
• Article 117 provides for two different categories of financial Bills.
• Category I contains any of the six matters mentioned in Article 110(1)(a) to (f) along with any other matter.
• Category II Bills do not contain any of those six matters but would involve expenditures from the consolidated fund.

Procedure for a money Bill

• As per Article 109, a money Bill shall be introduced only in the Lok Sabha.
• After it is passed in the Lok Sabha, the Rajya Sabha has only 14 days to provide its recommendations on such a Bill which may or may not be accepted by the Lok Sabha.
• This concept is actually taken from the UK.
• It is the Speaker of Lok Sabha who certifies a Bill to be a money Bill.
• Financial Bills of Category I and II do not enjoy this special procedure.

Issues

• Certification of a Bill as a ‘money Bill’ by the Speaker came under judicial review during the scrutiny of the Aadhaar Act passed in 2016.
• This law contains provisions with respect to process for enrolment and authentication, establishment of authority for Aadhaar, mechanism for safeguards, and penalties for offences under the Act.
• Section 7 of the Act provides that the Central or State government may require Aadhaar authentication of an individual as a condition for providing subsidy, benefit or service, for which expenditure is incurred from the consolidated fund.
• Stating the withdrawal of funds from the consolidated fund as the primary purpose of the Act, with all other provisions being incidental to it, this law was passed as a ‘money Bill’.
• While this was a debatable classification, the Supreme Court upheld this with a majority of 4:1.
• The Finance Act, 2017 was even more controversial, in passing amendments to various Acts for reorganisation of tribunals such as the National Green Tribunal, as a money Bill.
• These amendments were struck down in Rojer Mathew versus South Indian Bank (2019) wherein a five-judge Bench opined that the Aadhaar case judgment did not substantially discuss the effect of the word ‘only’ in the definition of money Bill.
• It referred the matter to a larger Bench for consideration.