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Money Bill Misuse Under Scrutiny
«21-Jul-2025
Introduction
The legislative process in India is the constitutional mechanism through which proposed laws (Bills) are transformed into enforceable statutes (Acts). Article 107-111 of the Constitution of India governs this process. Parliament, consisting of the Lok Sabha and Rajya Sabha, exercises the primary law-making function of the Indian democracy. The journey from Bill to Act involves multiple stages of deliberation, committee scrutiny, and constitutional safeguards to ensure comprehensive legislative oversight.
What are Bills?
A Bill is a statute in draft form presented to Parliament for consideration and enactment. It represents a legislative proposal that seeks to create, modify, or repeal existing laws.
Types of Bills:
- Government Bills: Introduced by Ministers on behalf of the Government
- Private Member's Bills: Introduced by members who are not Ministers
- Money Bills: Bills exclusively dealing with taxation, government expenditure, and financial matters (Article 110)
- Constitution Amendment Bills: Bills seeking to amend the Constitution (Article 368)
- Ordinary Bills: All other legislative proposals not falling under specific categories
Classification by Subject Matter:
- Financial Bills: Containing provisions related to taxation, borrowing, or expenditure
- Non-Financial Bills: Dealing with general legislative matters
- Joint Category Bills: Containing both financial and non-financial provisions
What are Acts?
An Act is a Bill that has successfully completed the entire legislative process and received Presidential assent. It represents the law of the land with binding legal force.
Key Characteristics of Acts:
- Legal Authority: Acts have the force of law and are enforceable by courts
- Supremacy: Subject only to constitutional provisions
- Amendment: Can only be modified through subsequent parliamentary legislation
- Implementation: Executed through government machinery and judicial enforcement
When Does a Bill Become an Act?
- A Bill becomes an Act through a six-stage process: Introduction, Three Readings (introduction, general discussion with clause-by-clause consideration, and final passage), transmission to the other House, and Presidential assent.
- Bills may be referred to Standing Committees or Select/Joint Committees for detailed examination before final consideration.
- Ordinary Bills require both Houses' concurrence, Money Bills need only Lok Sabha approval with Rajya Sabha's 14-day recommendation period, while Constitution Amendment Bills require special majority and possible State ratification.
- Presidential assent is mandatory for Money Bills and Constitution Amendment Bills but discretionary for ordinary Bills.
Special Procedures
- Money Bills (Article 110): Exclusively contain financial provisions, introduced only in Lok Sabha with Presidential recommendation, requiring Speaker's certificate, with Rajya Sabha having 14 days for recommendations.
- Constitution Amendment Bills (Article 368): Require special majority for passage and possible State ratification, with mandatory Presidential assent.
- Joint Sitting (Article 108): Summoned for deadlocked ordinary Bills after six months, decided by simple majority, used three times historically.
Cases Related to the misuse of Money Bill Route
- Justice K.S. Puttaswamy (Retd.) v. Union of India (Aadhaar case, 2018),
- The Court upheld the Aadhaar Act's passage as Money Bill by 4-1 majority despite containing non-financial provisions, while Justice Chandrachud dissented calling it constitutional abuse.
- The Rojer Mathew v. South Indian Bank Ltd. case (2019)
- Regarding Finance Act 2017 invalidated certain provisions and referred the Money Bill definition to a larger seven-judge bench, which remains pending and has influenced subsequent cases involving Prevention of Money Laundering Act amendments and Electoral Bonds scheme.
- Association for Democratic Reforms v. Union of India (2024)
- The Supreme Court's judgment on ADR's petition challenging the Finance Act, 2017; Electoral Bonds and Removal of company's limit to donate was delivered on 15th February 2024.
- This case challenged the constitutional validity of electoral bonds and removal of company donation limits passed through Finance Act 2017 as a Money Bill, ultimately leading to the striking down of the electoral bond scheme.
- Vijay Madanlal Choudhary v. Union of India (2022) -
- The Supreme Court upheld the Constitutional validity of Prevention of Money Laundering Act (PMLA) but referred the question of whether PMLA amendments passed through Finance Acts as Money Bills were constitutionally valid to a larger bench.
- The Finance Act 2019 amended the PMLA to bring offences unrelated to money laundering under the purview of the ED raising questions about the Money Bill route being used for non-financial matters.
- Common Cause v. Union of India (2018)
- This PIL challenged the electoral bond scheme's passage as a Money Bill, arguing that the provisions in Finance Act 2017 relating to electoral bonds were not exclusively financial in nature and should not have been passed through the Money Bill route.
These cases collectively states the judicial scrutiny of the government's increasing tendency to use the Money Bill route to bypass Rajya Sabha's deliberative powers, with the larger constitutional bench's decision still pending on the fundamental question of what constitutes a legitimate Money Bill under Article 110.
Conclusion
The transformation of Bills into Acts through India's parliamentary procedure ensures democratic scrutiny and constitutional compliance. The bicameral structure, committee system, and Presidential oversight create a robust lawmaking framework that balances efficiency with thoroughness, serving Indian democracy for over seven decades.