In his turn, Attorney General K. K. Venugopal on Thursday defended the passage of the Finance Act of 2017 as a Money Bill in circumvention of the Rajya Sabha.
A five-judge bench of the Supreme Court was hearing the challenge to the introduction as a Money Bill of the Act, which altered the mode of selection, appointment, removal, and the qualifications and terms of service of the Presiding Officers and Members of as many as 19 tribunals, conferring extensive powers on the Central government in this behalf.
"The provisions in the Aadhaar Act regarding the expenditure from the Consolidated Fund of India (CFI) are similar to this Act. It contains provisions regarding payment of salaries and compensation. Till Part XIV it is only a taxing statute. This Act would qualify as a Money Bill", the AG commenced his submissions.
He indicated Article 110(1)(g) which states that a Bill shall be deemed to be a Money Bill if its content is even incidental to any of the other matters specified in the sub-clauses (a) to (f). He drew the bench's attention to sub-clause (c) by virtue of which any Bill dealing with the custody of the CFI or the Contingency Fund of India, and the payments into or withdrawals from it is a Money Bill. Next, he read clause (2) of Article 110 which clarifies that a Bill, however, shall not be a Money Bill merely because it provides for the imposition of fines or other pecuniary penalties, or for the payment of fees for licences or services rendered, or for the imposition, abolition, remission, alteration or regulation of any tax by any local authority.
"What is significantly omitted (from this clause (2)) is the payment of salaries, pensions, gratuities and other allowances which also come out of the CFI. And by the rules of interpretation, if you don't fall within the excepted categories, you will come under the main provisions...the subject-matter of the incidental provision can be anything whatsoever provided it is incidental to a law which would otherwise come under (c) or (d) or any other sub-clause", explained the AG.
"The Finance Act has a large number of provisions regarding finance. Nobody can dispute the fact that it is covered under the definition of Money Bill. The certification of the (Lok Sabha) Speaker is not for any part of the Act but for the entire Finance Bill...Suppose a situation arises that the Rajya Sabha is unable to pass the Bill because of the majority it has, then irrespective of its objections, the Bill would be cleared as a money bill", he continued.
"What is required is a nexus between the provisions of the Bill and the provisions of Article 110. There is a nexus even if the provisions are incidental to sub-clauses (a) to (f). Part XIV provides for payments of salaries, gratuities, 3 months' compensation to those who lose their jobs because of the amalgamation of Tribunals, etc. These are provisions which are incidental to the Finance Act and will squarely come within the nexus as required by (g). In fact, there is a provision by which money is to be paid back to the Central government when a Tribunal is abolished, and by virtue of Article 266, any payments to the government of India form the CFI", he argued.
The AG proceeded to contend that the certification of the Speaker as to a Money Bill cannot even be the subject of judicial review in the first place.
"It is only because the certification is amenable to review that the question whether a Bill is a Money Bill is gone into. Otherwise, there was no question of going into that question...In Justice (A. K.) Sikri's majority judgment (in the Aadhaar case), the question whether the Aadhaar Act is a Money Bill arose for consideration because they had agreed that it is subject to review!", weighed in Justice D. Y. Chandrachud.
Justice Sikri , Author of Majority Judgment in Aadhaar Case
Refuting this observation respectfully, the AG advanced that the majority, having found that the Bill was rightly introduced as a Money Bill, did not deem it necessary to deal with the question of whether it is susceptible to review. He pointed out that the majority was of the view that Section 7 of the Aadhaar Act, which provides for the use of the scheme in the distribution of benefits and subsidies by the Government, falls within the parameters of the classes that can be legislated as a Money Bill and that all other provisions of the Act are incidental to this Section 7 and thus, protected by Article 110 as a Money Bill.
"By the decisions of this court, it has been repeatedly held that the decision of the Speaker cannot be called into question in a court of law", asserted the AG, relying on the Mohd. Saeed Siddiqui and Yogendra Kumar Jaiswal cases in which the amendment to the UP Lokayukta Act to extend the term of the anti-graft ombudsman and the introduction of the Bihar Special Courts Act for the day-to-day trial of corruption-related offences respectively were similarly challenged and the finality of the decision of the Speaker was reinforced, even as the said decisions were overruled by Justices Ashok Bhushan and Chandrachud in their minority Aadhaar judgments.
Justice Chandrachud had noted that in as much as Article 110(3) renders as final the decision of the Lok Sabha Speaker on the question whether a Bill is a Money Bill, this finality operates only inter se the Houses and not to exclude the jurisdiction of the courts. The judge had indicated how Article 329, in barring interference by courts in electoral matters, uses a separate phrase- "shall not be called in question in any court".
Chief Justice Rnajan Gogoi, AG KK Venugopal And Justice Chandrachud [LiveLaw]
Then Chief Justice Ranjan Gogoi inquired, "110(3) just says 'final', but other provisions say that it is beyond the jurisdiction of courts. How do you explain that? Take the 10th Schedule- the language expressly bars jurisdiction. But in 110, we don't find that?"
Responding to this, Mr. Venugopal referred to Article 122(2) which stipulates that no officer or member of the Parliament shall be subject to the jurisdiction of any court in the regulation of the procedure or the conduct of business by him in the Legislature.
"The Speaker certifying a bill under 110(3) is an officer of the parliament charged with the conduct of its business and he shall not be subject to the jurisdiction of any court...110(3) has to be read with 122(2)", he advanced placing reliance on the 2010 decision in Ramdas Athawale where the Speaker was held to be an officer of the Parliament for the purpose of Article 122(2).
"So far as the money bills are concerned, they are essential for the survival of the State. The salaries amount to sixty-seventy percent of the budget. If on account of political differences, you hold up money bills, the entire foundation of the country would be damaged...Articles 107-122 are part of one scheme. 107-111 are the legislative procedure, while 118, 119, 120, 121 and 122 constitute the procedure which generally applies to the entirety of the functioning 107 onwards...For every other provision as to the Speaker's powers, Your Lordships have said that you cannot interfere but you are picking this as an exception from a gamut of provisions. This is an internal matter of the Parliament, for it to function properly, and the finality is for everybody, not just the Parliament", iterated the AG.
"This is Consistent with the broad separation of powers under the constitution. Just like the Parliament cannot encroach upon the powers of judiciary, if a dispute arises as to a money bill, whether the upper house is ignored and the bill is put up for the assent of the President, these are all internal matters of the parliament...Nobody can challenge the bonafides of the Speaker...it is a part of the functioning of the parliament and to say that the finality will not stand is violence to the separation of powers...In the Raj Narain case, vast amendments were made to protect the PM, which were struck down by the court holding that the Parliament was in exercise of judicial powers. So even the courts must not exercise legislative powers! Would Your Lordships be treading upon the power of the speaker to decide finally, and would the court then step in and strike down an act which would lead to results that may not even be reversible?"
Justice Chandrachud reflected that while in S. R. Bommai, federalism was held to be a part of the Basic Structure of the Constitution, even in Raja Ram Pal's case (2007), it was noted that Article 122 protects only the procedure and not its legality.
The top law officer replied that federalism is a vast motion which by itself cannot govern the issue at hand and that even in Raja Ram Pal, the mandate of Article 122(2) was appreciated.
"Article 110(3) read with 122(2) would exclude judicial review wholly. The parliament, with the Speaker, would govern its own affairs. In case of abuse of power by the speaker, the MPs may revolt, as is happening in England. Or the No-Confidence Motion may be brought against the Speaker. There are checks-and-balances. But for the courts to see themselves as saviours in all situations is tantamount to trespassing...For the party system and the democracy to work, the belief that court interference will set everything right is not justified..."
"Nobody can dispute the fact that the certification is as to the whole Act. For Your Lordships to sever it and say that this part of the certification is invalid is not contemplated at all...If Your Lordships say that the certification is invalid, then the whole of the finance act with the amendments to all the statutes will go. The salaries of Central government employees cannot be paid then...", continued the AG.
Relying on the Constitution bench judgments in Anwar Ali Sarkar (1952) and R. K. Garg (1981), he stressed that where there is a challenge to the constitutional validity of a law enacted by the Legislature, the presumption should always be in favour of the constitutionality, that the legislature understands and correctly appreciates the needs of its own people.
He canvassed how in an earlier case, the Apex Court had considered whether different conditions of service could be prescribed for different tribunals and had taken on record the assurance of the then-AG that he would speak to the different ministries as to uniformity in retirement, functional facilities and accommodation of the Chairman and members of different tribunals.
"We brought the conditions of service for all tribunals as the court wanted us to. And this can't be done except through an amendment of this act as each tribunal has its own statute. A comprehensive legislation had to be passed", signed off the AG for the day.