On Aadhaar: Part IV (Aadhaar as a Money Bill)

By: Digvijay Chaudhary


When the Aadhaar bill was first introduced in the Rajya Sabha, its nature was not that of a money bill and a few recommendations were made by the Rajya Sabha which advised that the controversial section 57 be dropped and Aadhaar be made voluntary. Both of which were ignored and subsequently Aadhaar was introduced as a money bill and the recommendations of the Rajya Sabha were no longer needed. This is a character of money bill that it needs to be presented only in the Lok Sabha and not both the houses as is the case in the course of an ordinary bill.

The usage of the provision for a money bill to enact the Aadhaar Act, 2016 was not a solitary exception. In the last few years, key legislative reforms have been enacted as money bills; the Specified Bank Notes (Cessation of Liabilities) Bill, 2017, which was passed by the Lower House to fully implement the recent demonetisation scheme, was certified as a ‘money bill’ by the speaker. Moreover, the Finance Bill 2017, which is to be enacted as a money bill, proposes to amend various statutes like Payments and Settlements Act, 2007; and the Securities Exchange Board of India Act, 1992 to expand the Securities Appellate Tribunal (SAT).

Money bill as defined in the Article 110 of the Constitution is any bill which fulfils certain conditions mentioned in the article. One condition is that any bill whose expenses are incurred from the consolidated fund of the country shall be termed as a money bill. A money bill is different than other bills and does not require to be introduced in the upper house (Rajya Sabha) of the Parliament. Due to this reason, a government may introduce any bill as a money bill to bypass the recommendations of the upper house or if it has the majority in the lower house only. However, the decision of the speaker is final in this regard; he is the ‘final’ authority to decide whether a bill is a money bill or ordinary bill. It has been settled by various judgments that the decision of the speaker with regard to a money bill is final and cannot be questioned in a court. Not only this, any procedural flaw that happens inside a house cannot be questioned in a court; there is no judicial review of the irregularities that occur in the house. There are, thus, two questions that need to be answered in the present case; first,  Does Aadhaar bear the character of a money bill?; second, Can there be judicial review of the speaker’s decision on whether a bill is a money bill or not?

According to the government, the Aadhaar Act satisfies the requirements of a money bill as mentioned in Article 110. The Aadhaar act in its statement of objects mentions that the expenses of the Aadhaar act are to be incurred from the consolidated fund of India (hereinafter ‘CFI’). There is a mention of the CFI in Section 7 and Section 25 too, which directs that fees or revenue collected by the UIDAI should be credited to the CFI. As such, on the face of it, the aadhaar act seems to justify the essentials of a money bill.

However, the opponents of Aadhaar differ. The purpose of the act is different and unrestricted, which runs contrary to the concept of a money bill where the purposes are restricted and well-defined. The whole act talks about the establishment of aadhaar, a nation-wide identity system based on biometric authentication, and usage of a centralised database. Section 7 (which mentions CFI) deals with “Proof of Aadhaar number necessary for receipt of certain subsidies, benefits and services, etc.” This section isn’t in any way essential to whole act. It’s just incidental. What is needed to be understood is that Section 7 is incidental to the whole purpose of the act; to create a new national identity mechanism. The act could have been passed without section 7 and still served its purpose; efficient, transparent, and targeted delivery of subsidies, benefits and services.

How is it not essential you ask, the answer lies in Section 57 of the act which allows anyone, even private entities, to use Aadhaar for any purpose, and further, as per the State, allows Aadhaar to be made mandatory for any purpose. Here, aadhaar can be used for any purpose, by even private entities and be mandatory for any purpose. Contrast this with Section 7 which says that proof of Aadhaar may be necessary for receipt of certain subsidies, benefits and services. This is the reason why section 7 is not essential to the act because Section 7 solely doesn’t talk about the purpose of the act. Both these provisions aim differently and something such as Section 57 cannot hold any place in money bill. By virtue of section where the purpose isn’t defined and restricted, the act permits private entities require the Aadhaar number for any purpose. This runs contrary to the concept of a money bill as the purposes of a money bill are clear and well defined.

The restrictive nature of a money bill can also be seen under the Irish Constitution (which we will further discuss was the inspiration behind the language used in Article 110(3) envisaged as being one which deals “only” with taxation, appropriation of or charge on public money or loan raised by the state. Article 55 of the Australian Constitution also states that “laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect”. These provisions show that a money bill is restrictive in its purposes.

This takes us to the next question: Even if Aadhaar is not a money bill, is the challenge of this decision of the speaker immune from judicial review?

For our concern here, are two articles: Article 110(3) and Article 122. Article 110(3) says that decision of the speaker shall be final if any question arises whether a bill is a money bill or not. Article 122 says that the validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure. In Mangalore Ganesh Bedi v. The State of Mysore, the same question was put up, that the bill has been wrongly passed as a money bill and is an ordinary bill. The court, even after finding that the bill was not a money bill, held that the question whether a bill is a money bill or not is the decision of the speaker and falls within irregularity of procedure and therefore, in light of article 110, 122 and article 255, it is immune from judicial review. After this judgment, several other judgments (Mohd Saeed Siddiqui v. State of U.P and Yogendra Kumar Jaiswal v. State of Bihar) followed the same route and declared such decision to be immune from judicial review. According to the above discussion it seems clear that the question whether a bill is money bill cannot be challenged in a court of law and procedural irregularity is also, not subject to judicial review.

Considering now, that the decisions taken, orders made, findings recorded or conclusions arrived at by the Parliament and State Legislatures are subject to judicial review, albeit on limited grounds and parameters. However, if there is a gross abuse of power by the Parliament or a State Legislature, the Court should not hesitate in discharging its duty by quashing the order or setting aside unreasonable action. This decision of the speaker regarding money bill is therefore, illegality of procedure and not mere irregularity. It has been held in Kihoto Hollohan v. Zachillhu, that “the legal fiction in para 6(2) of the Tenth Schedule brings a proceeding under para 6(1) within the ambit of Article 122(1) and Article 212(1) of the Constitution, and, therefore, makes it justiciable on the ground of illegality or perversity in spite of the immunity it enjoys to a challenge on the ground of ‘irregularity of procedure’” (paragraph 6 of the Tenth Schedule deals with the power of the Speaker or the Chairman, as the case may be, to decide on the disputed disqualification of a member of the Parliament).

In the above judgment too, the decision of the speaker was challenged, and the court clearly termed it as illegality in spite of the protection it enjoys on the ground of ‘irregularity of procedure’.

However, subsequent judgments which have followed the ratio (or obiter) laid down in Mangalore Ganesh Bedi v. The State of Mysore, have wrongly interpreted it. The subsequent judgments cite the same three articles – Articles 110, 122, and 255 which were cited in Mangalore, without taking into account that Article 255 did not apply in those judgments. Further, the statement of the court in Mangalore Ganesh Bedi v. The State of Mysore that had it been a Money Bill passed as an ordinary bill, the issue was a procedural irregularity and immune from judicial review, is obiter (just an observation), and not ratio (a binding rule of law).

The subsequent cases adopted this without any analysis or judgment; this is reminiscent of the Kharak Singh and MP Sharma cases where the observation that right to privacy is not a fundamental right was just an obiter and not the ratio of the judgment. This was criticised by the court in K.S. Puttaswamy judgment and it rightly overruled all those judgments. This reduction of Rajya Sabha to but a namesake feature of the legislative process strikes at the heart of democratic and federal structure of the constitution. Through this, any bill would be allowed to be passed as a money bill to protect it from judicial review and also exclude from the approval of the Rajya Sabha.

This is how, on the basis of previous court judgments, judicial review of the speaker’s decision has not been barred. However, if Article 122 specifically bars the judicial review of the speaker’s decision, then should the courts take cognizance of this matter? This question shall be answered in the next part which deals with, how the constitution makers did not intend to bar the judicial review of the speaker’s decision.


(Digvijay is currently a student at Dr. Ram Manohar Lohiya National Law University, Lucknow.)

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