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Money Bills And Judicial Review: A Major Constitutional Challenge Is Brewing

As three High Courts issue notices to the Central Government,this article throws up new insights questioning SC’s earlier decisions

Aadhaar has kicked up two major constitutional debates. First, whether the right to privacy is a fundamental right under the Indian Constitution or not. Second, whether the Speaker’s decision classifying a bill as a ‘money bill’ is subject to judicial review or not. While the first issue has snowballed into a major hearing before a nine-judge bench of the Supreme Court, the second issue is slowly gathering momentum in a wholly different context.

Three different High Courts – Bombay, Madras and Gujarat – have issued notices to the Central Government in separate writ petitions challenging the merger of tribunals through the Finance Act, 2017. Sections 156 to 189 of the Finance Act, 2017, amend various provisions of other statutes to re-structure and re-organise Indian tribunals. However, the Finance Act, 2017 was enacted as a ‘money bill’, rejecting all amendments proposed by the Rajya Sabha. In the recent past, various reforms have also been similarly enacted through the money bill route. These include the Aadhaar Act, 2016, demonetisation, merger of Forward Markets Commission with Securities and Exchange Board of India, and many others. All of them were enacted through bills certified as “money bill” by the Speaker of the Lok Sabha.

But what if the Speaker’s decision was incorrect? What if her decision was in violation of the definition of “money bill” under Article 110(1) of the Indian Constitution? Can such a decision be challenged through a writ petition? Can courts exercise judicial review powers against the Speaker’s decision? These critical questions are at the heart of the writ petitions before the three High Courts. In this backdrop, our article titled “Judicial review and money bills” in the forthcoming issue of NUJS Law Review, offers new insights from comparative constitutional law jurisprudence questioning Supreme Court’s earlier decisions on this issue.

The article begins by tracing the evolution of the concept of ‘money bill’ across British constitutional history and its influence on the Indian constitutional jurisprudence. We show that the Indian Constitution adopted the Speaker’s ‘money bill’ certificate from the UK Parliament Act, 1911. The 1911 Act explicitly states that the UK Speaker’s certificate is “conclusive for all purposes” and that it “shall not be questioned in any court of law”. In contrast, Article 110(3) of the Indian Constitution neither makes the Speaker’s decision “final” for all purposes nor immune from questioning by courts.

Why did our Constitution framers consciously choose to differ from the UK model? We argue that by giving a “final” status to the Speaker’s decision, our Constitution framers were only trying to avoid any future controversy about a bill being a ‘money bill’ within the two Houses and before the President – something the UK experienced across its constitutional history. The “final” status was never intended to oust judicial review powers over the Speaker’s decision in India. We also argue that a contrary interpretation would effectively amount to a complete delegation of the judicial power of interpreting the Constitution to one legislative officer. This would fall foul of separation of powers as well as the excessive delegation doctrines. Hence, the Constitution framers consciously chose to differ from the UK model, which, unlike India, is based on parliamentary sovereignty.

The article also highlights the inherent contradiction within the Supreme Court’s own jurisprudence on judicial review of legislative proceedings vis-a-vis the Speaker’s decision on money bills. Table 1 of the article shows that the Constitution of India grants the “final” status to 17 types of decisions made by different constitutional authorities, including the Supreme Court, the President, the Governor and the Speaker. 5 of such “final” decisions have been subjected to judicial review by the Supreme Court itself. Yet, the same court has refused to extend judicial review to the Speaker’s certificate of ‘money bill’ since it is “final”. We argue that this reasoning is inherently self-contradictory.

The article proposes an alternative interpretation of Article 122 (and Article 212) which protects “proceedings in Parliament” (or State Legislature) from being “called into question on the ground of any alleged irregularity of procedure”. We argue that the procedure followed by the Parliament could be of three types: (1) procedure under rules of the respective Houses (Article 118);  (2) procedure in a legislation enacted by the Parliament (Article 119); (3) procedure in the Constitution itself (Articles 109 and 110). Are all these three procedures covered by Article 122? Relying on a 7 judge bench decision, we argue that a constitutional procedure – type (3) – is not covered by Article 122. Therefore, a violation of constitutional procedures under Articles 109 and 110 by the Speaker is not immune from judicial review under Article 122.

The article also compares the constitutional jurisprudence on this issue across Australia, Canada, South Africa, the United States of America and Pakistan. We conclude that the jurisprudence evolved by the Indian Supreme Court is at odds with the position adopted by foreign courts across these common law countries.

In view of the contradictory precedents of the Supreme Court on the above issues, one commentator had suggested that the Supreme Court should refer this issue to a constitution bench. Now that three  High Courts are seized of the matter, it remains to be seen how each of the High Courts deal with this issue in light of the unique comparative constitutional jurisprudence around money bills highlighted in the article.

Pratik Datta is a researcher at the National Institute of Public Finance and Policy.

This Article is first published in NUJS Law Review

[The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of LiveLaw and LiveLaw does not assume any responsibility or liability for the same]

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