The Money Bill issue

Why in the News?

The Supreme Court has constituted a 7-judge bench to hear a challenge to the Centre’s use of money bills for passing important laws.

What is a money bill issue?

1. The plea was filed for challenging set of amendments to the Prevention of Money Laundering Act (PMLA).
2. A three-judge bench upheld the PMLA and the vast powers of the ED in 2022, but left the validity of amendments to the PMLA through the Money Bill route open for a larger Constitution bench to hear.
3. Significant amendments to the PMLA were brought through Finance Acts passed in 2015, 2016, 2018 and 2019.
4. Other challenges include:
   1. Aadhar case:
      1. The Supreme Court in 2018 in a 4:1 majority ruled in favour of the government that Aadhaar Act is a valid money bill under Article 110 of the Constitution.
   2. Tribunal reform
      1. In Roger Matthew vs Union of India, a challenge involved changes in the service conditions of tribunal members which was also introduced as a money bill in the Finance Act, 2017.
      2. The law was struck down by the judiciary as unconstitutional for interfering with judicial independence, it referred the money bill aspect to a larger constitution bench.

About:

Money Bill:

1. Under Article 110(1), a Bill is deemed to be a money Bill if it deals only with matters specified in Article 110 (1) (a) to (g)
   1. Taxation
   2. Borrowing by the government
   3. Appropriation of money from the Consolidated Fund of India among others.
2. A money Bill can only be introduced in Lok Sabha and does not need the consent of Rajya Sabha (it can neither reject nor amend the Bill, and must return it within 14 days).
3. Article 110 (3) of the Constitution: 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. This means that once the Speaker has certified a Bill as a Money Bill, its nature cannot be questioned in a court of law, in the Houses of Parliament, or even by the President.
4. However, in the Aadhaar case the Supreme Court held that the Speaker’s decision will be subject to judicial scrutiny.
5. A Bill shall not be deemed to be a Money Bill by reason only that it provides for the,
   1. Imposition of fines or other pecuniary penalties
   2. Demand or payment of fees for licences or fees for services rendered
   3. Imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

Financial Bill:

1. Any Bill that relates to revenue or expenditure is called as a Financial Bill.
2. A Money Bill is a specific kind of Financial Bill which deals only with matters specified in Article 110 (1) (a) to (g). 
3. Only those Financial Bills that carry the Speaker’s certification are Money Bills.
4. Financial Bills not certified by the Speaker are of 2 kinds:
   1. Bills that contain any of the matters specified in Article 110, but do not contain only those matters [Article 117 (1)]
      1. It can be introduced only in Lok Sabha, and only with the recommendation of the President.
      2. Other restrictions that apply to Money Bills do not apply to these Bills.
   2. Ordinary Bills that contain provisions involving expenditure from the Consolidated Fund [Article 117 (3)].
      1. It can be introduced in either House of the Parliament.
      2. President’s recommendation is essential for their consideration, and therefore, passage.