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Money Bills and the Future of the Rajya Sabha

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In Rojer Mathew v South Indian Bank Ltd (2019),1 the constitution bench of the Supreme Court, in its judgment delivered on 13 November 2019, struck down the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 (the “tribunal rules”) in their entirety on the grounds of these being unconstitutional and contrary to the law laid down by the Supreme Court on the question of tribunals.

This is not the first time that the Supreme Court has struck down a law related to tribunals in its entirety. In 2015, the Supreme Court struck down the National Tax Tribunal Act, 2005 on similar grounds (Madras Bar Association v Union of India 2015). Governments’ efforts to tribunalise the judiciary and bring it closer to executive control have been the subject of long and bitter litigation (Ghosh et al 2018) and the Rojer Mathew case adds another chapter to the same.

However, in this column, I want to discuss the Rojer Mathew case for a far more important finding made by the Supreme Court: the interpretation of Article 110(3) of the Constitution, specifically, what would constitute a “money bill” for the purposes of Article 110(1)—which deems a bill to be a “Money Bill” “if it contains only provisions” relating to six mentioned areas and ancillary subjects (emphasis mine)—thereby permitting its passage by the Lok Sabha without having the Rajya Sabha involved. This particular question arose in this case as the tribunal rules had been issued by the union government in exercise of its powers under Section 118 of the Finance Act, 2017, which was passed as a money bill. The petitioners contended that a law governing the merger of tribunals, and the appointment and removal of members as well as their terms and conditions could not possibly be a “money bill” in any sense of the word, and could not be passed as one merely because the rest of the Finance Act, 2017 relates to taxation.

In this column, I propose to examine why the Court has correctly appreciated the petitioners’ concerns and why their interpretation of the word “only” occurring in Article 110(1) is of grave consequence for the future of the Rajya Sabha and federalism in India.

Parsing the Puttaswamy Judgment

The petitioners in the Rojer Mathew case questioned the legality of the tribunal rules, among other grounds, on the fact that they have been made under Part XIV of the Finance Act, 2017 which dealt with, inter alia:

First, abolition and merger of existing Tribunals; second, uniformising and delegating to the Central Government through the Rules the power to lay down qualifications; method of appointment and removal, and terms and conditions of service of Presiding Officers and members; and third, termination of services and payment of compensation to presiding officers and members of certain tribunals that have now become de-funct. (Rojer Mathew v South Indian Bank Ltd 2019: para 112, p 52)

Such provisions, the petitioners contended, could not possibly form part of a money bill and, therefore, the Finance Act, 2017 insofar as it relates to tribunals must be struck down. In response, the union government relied on Article 122 (which forbids judicial review of the Lok Sabha speaker’s actions) and the judgment of the constitution bench of the Supreme Court in K S Puttaswamy v Union of India (2019) to contend that it was indeed validly passed as a money bill.

The Supreme Court immediately rejected the union’s argument that relied on Article 122(1) and two prior judgments in Yogendra Kumar Jaiswal v State of Bihar (2016) and Mohd Saeed Siddiqui v State of Uttar Pradesh (2014) which had held that the judicial review of a speaker certifying a money bill was impermissible. The Court relied on the constitution bench decisions in Kihoto Hollohan v Zachilhu (1992) and Raja Ram Pal v Lok Sabha (2007), apart from the Puttaswamy judgment itself to reject the notion that once a speaker certified a money bill as such, it could not be examined in court at all.

However, the Court found that on the question of what a money bill is, the judgment in the Puttaswamy case was less clear. While the dissenting opinions of Justices D Y Chandrachud and Ashok Bhushan in the Puttaswamy case made clear findings as to whether the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (“Aadhaar Act”) is a money bill or not, the main judgment which the other three judges signed on to did not. While upholding the Aadhaar Act as having been passed as a money bill, the judges did not explain why they think it is a money bill. Whereas Justice Bhushan upholds it on the ground that the “pith and substance” of the act makes it a money bill, Justice Chandrachud gives a much narrower interpretation to the word “only” in Article 110(1) arguing that the Aadhaar Act has very little to do with being a money bill. The majority in the Puttaswamy judgment, however, offer no test, no principle, or any discernible reasons for their conclusion that the Aadhaar Act was passed validly as a money bill (Kumar 2018).

The main judgment in the Rojer Mathew case notes this gap in the reasoning of the majority judgment in the Puttaswamy case. It notes that the key question in the interpretation of Article 110(1)—the interpretation of the word “only”—had been completely avoided by the majority judgment (Rojer Mathew v South Indian Bank Ltd 2019: para 122, p 58). The bench is also cognisant of the fact that the finding on what a money bill is could have a bearing on the Aadhaar Act itself and, being a coordinate bench, has referred the question to a seven-judge bench.

The majority’s approach here is more than welcome and has rightly highlighted the shoddiness of the reasoning in the Puttaswamy case (Datar and Unnikrishnan 2018). While one can agree or disagree on the constitutional validity of various provisions of the act, it cannot be disputed that such a key constitutional question that goes to the very root of the Aadhaar Act’s existence has been addressed in a slipshod and unsatisfactory manner by the majority in the Puttaswamy case. Needless to say, one can only hope that the seven-judge bench is convened quickly to interpret the proper scope and meaning of Article 110(1) of the Constitution and, specifically, the import of the word “only.”

Why It Matters

To the non-lawyer it may seem that a seven-judge bench being constituted to interpret the meaning of the word “only” is a case of overkill. After all the word is of fairly common usage among English speakers around the world and permits only a limited number of meanings.

But, when it comes to constitutional and statutory interpretation, matters are rarely that straightforward. Take, for example, the case of Jindal Stainless v State of Haryana (2017), where a bench of nine judges agonised over the meaning of the word “and” in Article 304 of the Constitution in the context of entry taxes. They were not engaged in an arcane form of hair-splitting, but were deciding the scope of the state’s powers to pass laws under the Constitution. Interpreting the word “and” as separating clauses (a) and (b) of Article 304 would mean that a state’s lawmaking powers would be further fettered, but reading it as connecting the two would make state powers to levy taxes subject to union control. Keeping in mind the principle of federalism, by a majority of six to three, the Supreme Court held that the word “and” in Article 304 had to be interpreted to mean that it was conjunctive, thereby giving state governments greater freedom to impose taxes on goods from outside the state.

The majority opinion in the Rojer Mathew case does recognise the difficulty of tying the word “only” to a particular definition. Any interpretation has to balance two competing concerns of upholding the supremacy of the Lok Sabha as the popularly elected body and of avoiding rendering the Rajya Sabha practically irrelevant for lawmaking purposes. Unlike the House of Lords on which it is largely based, the Rajya Sabha reflects not the interests of the nobility, but of the states in India and is an elected body.2 That at present it does not necessarily do so might have to do with political party dynamics and the Supreme Court’s problematic judgment in Kuldip Nayar v Union of India (2006) (Kumar 2018). Nonetheless, its core function of being a deliberative body that acts as a constitutional check against the Lok Sabha cannot be entirely lost sight of. The need for a second legislative chamber in both the union and state legislatures was debated extensively in the Constituent Assembly. Despite the somewhat unhappy experiences under the Government of India Act, 1935, when it came to progressive legislations being blocked by such second chambers in the Provinces, it was decided to retain them. As member L Krishnaswami Bharathiar has explained,

it is to check or prevent hasty legislation and not at all to impede progressive legislation. There shall be no mistake about it; the idea is not to check progressive legislation but to have some time so that cool, calm and deliberate conclusions may be arrived at.3

In Conclusion

In finally certifying the incorrectness of the judgments in the Jaiswal and Siddiqui cases, and acknowledging the absence of any coherent analysis in the Puttaswamy judgment, the constitution bench in the Rojer Mathew case has set the Court on the right path to the interpretation of Article 110(1). One hopes that the incoming Chief Justice of India constitutes the bench of seven judges soon given the magnitude of the issue in question. Given that review petitions on the correctness of the Puttaswamy judgment itself are still pending in the Supreme Court, any judgment of the seven-judge bench will have a bearing on the validity of the Aadhaar Act itself. Just as, if not more important, the seven-judge bench’s interpretation of the word “only” might make or break the Rajya Sabha as we know it.

Alok Prasanna Kumar (alok.prasanna@vidhilegalpolicy.in) is a senior resident fellow at Vidhi Centre for Legal Policy, and is based in Bengaluru.

Notes

1 This judgment is available at https://www.sci.gov.in/pdf/JUD_4.pdf. All paragraph and page numbers referred to in this column are based on this document.

2 For a detailed discussion on the history of the Rajya Sabha and the concept of a money bill, see Datta et al (2017).

3 Constituent Assembly Debates, Volume VII, 6 January 1949, http://www.constitutionofindia.net/constitution_assembly_debates/volume/7/1949-01-06.

References

Datar, Arvind P and Rahul Unnikrishnan (2018): “Aadhaar: The Money Bill Controversy,” Bar & Bench, 15 October, https://barandbench.com/aadhaar-money-bill-controversy/.

Datta, Pratik, Shefali Malhotra and Shivangi Tyagi (2017): “Judicial Review and Money Bills,” NUJS Law Review, Vol 10, No 2, pp 75–115.

Ghosh, Arijeet, Diksha Sanyal, Raunaq Chandrashekar and Reshma Sekhar (2018): “Reforming the Tribunals Framework in India: An Interim Report,” Vidhi Centre for Legal Policy, April, https://vidhilegalpolicy.in/wp-content/uploads/2019/05/8thJuneFinalDraft....

Jindal Stainless v State of Haryana (2017): SCC, SC, 12, p 1.

Kihoto Hollohan v Zachilhu (1992): SCC, Sc, Supp 2, p 651.

K S Puttaswamy v Union of India (2019): SCC, SC, 1, p 1.

Kuldip Nayar v Union of India (2006): AIR, SC, 3127.

Kumar, Alok Prasanna (2018): “By Passing Aadhaar Act as Money Bill, Has the SC Saved or Sacrificed the Rajya Sabha?” Wire, 27 September, https://thewire.in/law/aadhaar-verdict-money-bill-rajya-sabha.

Madras Bar Association v Union of India (2015): SCC, SC, 8, p 583.

Mohd Saeed Siddiqui v State of Uttar Pradesh (2014): SCC, Sc, 11, p 415.

Raja Ram Pal v Lok Sabha (2007): SCC, SC, 3, p 184.

Rojer Mathew v South Indian Bank Ltd (2019): Civil Appeal No 8588 of 2019, Supreme Court judgment dated 13 November 2019.

Yogendra Kumar Jaiswal v State of Bihar (2016): SCC, SC, 3, p 183.

[All URLs viewed on 17 November 2019.]

Updated On : 24th Nov, 2019

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