Context: The Supreme Court of India is poised to resolve a critical constitutional question regarding the definition and usage of Money Bills, which will impact India''s legislative procedures and the balance of power between the Parliament''s two Houses.

• This issue arose from the Rojer Mathew vs South Indian Bank Ltd. case, where the Finance Act, 2017, was challenged for being certified as a Money Bill despite containing provisions that seemingly extend beyond its constitutional definition.

Issue with Money Bills

• A Money Bill involves matters like taxation, government borrowing, and spending, as outlined in Article 110 of the Indian Constitution. It requires only the Lok Sabha’s approval, with the Rajya Sabha having limited influence.

• Issue with Money Bills: The problem arises when legislation with broader implications, beyond financial matters, is passed as a Money Bill. This strategy bypasses the need for approval from the Rajya Sabha, raising concerns about the balance of power in Parliament.

• Specific Example – Finance Act 2017: This act, certified as a Money Bill, made extensive changes to tribunal structures, affecting the judiciary’s independence. This is argued to stretch beyond the intended scope of a Money Bill.

Background: The Finance Act, 2017

• The Finance Act, 2017, was enacted as a Money Bill, allowing it to bypass the Rajya Sabha, the Upper House of Parliament. This Act introduced significant changes to the structure and functioning of various tribunals. Key modifications included:

• Abolition and Merger of Tribunals: The Act dissolved certain tribunals and merged others, restructuring the judicial and quasi-judicial bodies in the country.

• Changes in Appointment and Service Conditions: It prescribed qualifications for the appointment of members to these tribunals and altered their terms of service.

• Executive Power over Tribunals: The Act granted the executive branch extensive authority to frame rules governing these tribunals, raising concerns about judicial independence.

Constitutional Framework: Articles 109 and 110

• The Indian Constitution mandates that all Bills, except Money Bills, require the approval of both the Lok Sabha and the Rajya Sabha. However, Article 109 provides an exception for Money Bills, which can be passed solely by the Lok Sabha, with the Rajya Sabha limited to making non-binding recommendations.

• Article 110(1) specifically defines what constitutes a Money Bill. It includes provisions exclusively dealing with:

1. Imposition or abolition of taxes.

2. Regulation of government borrowing.

3. Withdrawal of money from the Consolidated Fund of India.

4. Appropriation of money for government expenditure.

5. Matters incidental to the aforementioned subjects.

• The crucial word "only" indicates that a Bill must exclusively deal with these subjects to qualify as a Money Bill. The Speaker of the Lok Sabha has the final authority to certify a Bill as a Money Bill, a decision that has significant constitutional and political implications.

The Core Issue: Scope and Definition of a Money Bill

• The controversy in Rojer Mathew hinges on whether the Finance Act, 2017, which extensively altered the administration of tribunals, legitimately qualified as a Money Bill. The petitioners argued that the Act included numerous provisions unrelated to the subjects specified in Article 110(1). For instance:

• Jurisdictional Changes and Qualifications: The Act redefined the jurisdiction of tribunals and set qualifications for their members, areas typically covered by ordinary legislation rather than financial provisions.

• Delegated Legislation: It empowered the executive to make detailed rules, potentially compromising judicial independence by shifting control over tribunals from the judiciary to the executive.

• The petitioners contended that such sweeping changes could not be deemed merely "incidental" to financial matters, as required under Article 110(1).

Judicial Precedents and the Need for Clarification

• The Supreme Court''s decision in the K.S. Puttaswamy vs Union of India case (2018) is particularly relevant. In that case, the Aadhaar Act was passed as a Money Bill, despite containing provisions on enrolment, data collection, and the establishment of the Unique Identification Authority of India (UIDAI). The Court upheld the Act''s classification as a Money Bill based on certain sections relating to subsidies, benefits, and services funded by the Consolidated Fund of India.

• However, the Rojer Mathew Bench noted that the Puttaswamy ruling did not adequately address the significance of the word "only" in Article 110(1), leading to ambiguity in determining the limits of a Money Bill. The current seven-judge Bench must clarify these limits and decide whether the inclusion of extraneous matters in a Bill certified as a Money Bill constitutes a "colourable exercise of power."

Broader Implications: Federal Structure and Legislative Checks

• The Supreme Court''s ruling will have far-reaching consequences beyond the specific cases at hand. It will affect the legislative process, particularly the role of the Rajya Sabha. Justice D.Y. Chandrachud, in his concurring opinion in Rojer Mathew, emphasized the importance of the Rajya Sabha in representing India''s federal diversity and acting as a check on the Lok Sabha''s legislative powers.

• Bypassing the Rajya Sabha through the misuse of the Money Bill route undermines this bicameral structure and diminishes the role of the Upper House in legislative scrutiny. The Court''s decision will, therefore, play a crucial role in upholding the federal principles embedded in the Constitution and preventing potential abuses of legislative procedures.

Key Suggestion

• Chief Justice Chandrachud: The Rajya Sabha is an indispensable constitutive unit of the federal backbone of the Constitution.

• “Potential differences between the two houses of the Parliament cannot be resolved by simply ignoring the Rajya Sabha.

• The efficacy of a constitutional body created to subserve the purpose of a deliberate dialogue, cannot be defeated by immunizing from judicial review the decision of the Speaker to certify a Bill as a Money Bill.”

• Money Bills are a means of ensuring that the Rajya Sabha does not scuttle the efforts of the government of the day to access the treasury for basic administration.

• To use the measure as a tool to circumvent the Council’s role in serving as a check on the state’s legislative function amounts to playing a ruse on the Constitution.

Conclusion

• The Supreme Court''s forthcoming decision on the scope of Money Bills will be a landmark judgment, shaping the future of India''s constitutional law and legislative practices. It will clarify the interpretation of Article 110 and ensure that the distinction between Money Bills and other types of legislation is respected. This decision will not only address the immediate concerns of legislative bypass but also reinforce the constitutional checks and balances that safeguard India''s democratic and federal structure.