By Ganesh Khemka and Parv Garg
Yesterday, the Supreme Court pronounced an important judgment in Rojer Mathews v. South Indian Bank wherein it referred the dispute of constitutional validity of the Finance Act, 2017 to a larger seven-judge Constitution Bench.Whilst keeping the constitutionality of the Finance Act, 2017 in a state of suspended animation, the Court adjudicated that its provisions did not excessively delegate legislative powers to the executive. The Court in its over-250-page order, also issued multiple directions for functioning of tribunals and for furtherance of access to justice in India. Although seemingly routine, this case raises crucial questions regarding legislative procedure and relevance of the Rajya Sabha.
The Constitution of India through Article 79, envisages two houses of Parliament which when acting collectively frame laws under Article 107. Constituent Assembly Debates highlight how an indirectly elected Rajya Sabha was deliberately envisaged as a check on the possibility of untrammelled majoritarianism by a directly-elected Lok Sabha. Such bicameralism was to infuse an important element of deliberation and balance, and has many-a-times been held to be an important facet of the Constitutional structure.
However, having colonial roots also vests the Rajya Sabha with certain disabilities. Similar to the House of Lords in the United Kingdom, which in addition to not being able to select the Government or Prime Minister also lost its ability to veto certain financial and public bills post the Constitutional Crisis of 1909, the Rajya Sabha too has a limited role with respect to‘Money Bills’ by virtue of Article 109. In stark contrast to the general procedure wherein every bill introduced in one house has to also be ratified by the other, for such ‘Money Bills’ concerning taxation and monetary expenditure, the role of the Rajya Sabha is curtailed to being merely recommendatory. Such an exception to our bicameral polity, is and ought to be exercised, extremely restrictively.
Practice makes clear that there has been a slow, yet steady, effacement of the Rajya Sabha’s role. In 2016, the then Finance Minister claimed that the Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016 which permitted the government to make Aadhaar cards mandatory for availing public subsidies and created corollary Rules and governing institutions, to be a ‘Money Bill’. They argued that Section 7 formed the core of the enactment, and it governed the manner in which monies could be withdrawn from the Consolidated Fund of India. All other provisions were claimed as being incidental thereto and the entire Aadhaar Act was sought to be pigeon-holed under Article 110(1)(e)&(g).
Such an argument was accepted by the Supreme Court in KS Puttaswamy v. Union of India. Although the Court harped upon the importance of the Rajya Sabha and of bicameralism, it acquiesced to the government’s weak legal façade meant to overcome its lack-of-numbers in the Upper House. In doing so, the Court not only allowed the government to dilute the strict constitutional requirement of only having those provisions which satisfy Articles 110(1)(a-g) but it also conflated alteration of a ‘charge’ on the Consolidated Fund of India [a term defined under Article 112(3)] with method of withdrawal of amounts. Even more peculiarly, without first answering the preliminary issue of whether the Court had jurisdiction to judicially review certifications of ‘Money Bills’, what the scope of such judicial review should be and the principles guiding determination of their nature, the Court directly held the Aadhaar Act as being a Money Bill.
The possibility of abuse conveyed by Chandrachud, J. in his dissent against validity of the Aadhaar Act, shortly turned true. Whilst introducing the annual budget, the government added an entire portion to the Finance Act, 2017 through which sweeping amendments were made to numerous other enactments with the aim of uniformizing appointment, qualifications and service conditions of members and presiding officers of Tribunals. It must be taken note that the government had earlier attempted to introduce an ordinary bill making such changes in 2014, but had failed due to lack of numerical strength in the Rajya Sabha. This time however, the government extended the argument of Puttaswamy one step further, arguing that the Finance Bill as a whole had the character of a money bill and that the mere presence of certain provisions which were not strictly under the ambit of Article 110(1)(a-g) would not invalidate its passage as a money bill.
In doing so, the government has turned a blind eye towards the text and spirit of the Constitution. Not only were provisions making substantial changes to the governance of justiceinthecountryincorporatedinbills aresupposedto“only”haveprovisionsenumerated in Article 110, but further it claimed that certification of Money Bill by the Speaker of the Lok Sabha would be final and not subject to judicial scrutiny. Further, even if classification of a bill was erroneous, it would amount at worst to a procedural irregularity which cannot be remedied per Article 122. Such an interpretation is unsupported by constitutional history which shows that such provisions were inserted in colonial Britain to protect freedom of speech in Parliament and to insulate elected representatives from the tyranny of the unelected House of Lords. Further, the conscious insertion of the word “only” as compared to the Government of India Act, 1935 and express omission of phraseology ousting jurisdiction of Courts as compared to British formulations leaves no doubt that the government’s interpretation is one of opportunistic convenience. The glaring relevance of this issue on the political landscape is further obvious from the five amendments made by the Rajya Sabha to the Finance Act, 2017 (including veto of a clause which removed limits for corporate donations to political parties) and the Opposition’s protests against its designation as a Money Bill, which were summarily ignored by the government-controlled Lok Sabha.
Although reference of the case to a larger bench paves way for a possibility of reversing the dilutions to bicameralism by Puttaswamy, the Supreme Court is however stuck between a rock and a hard place. If the Court allows the challenge and holds the Finance Act, 2017 as not being a money bill, then in addition to its impact on tribunalisation and electoral funding, it would paralyse the functioning of the Parliament for every classification of MoneyBill would be challenged before the Supreme Court. If it dismisses the challenges and holds the classificationas MoneyBill constitutionally sound,it would encourage further abuse and open the doors on further centralisation of powers with the Lok Sabha. Either way, this case would have far reaching impacts on the power of the Opposition and the relevance of the Rajya Sabha.
-The authors are advocates at the Supreme Court