This Article has been written by J.AKSHAYA from The Tamil Nadu Dr. Ambedkar Law University, School of Excellence in Law, Chennai

INTRODUCTION:

A bill is said to be a draft statute that is presented in either house of the parliament and it has received president’s assent. A bill is a proposal for new law or a proposal to significantly change an existing law. A bill does not become law until it is passed by the legislature and as in most cases approved by the executive. These are legislative proposals that are introduced in the forms of bills. In India there are three types of bills introduced in the parliament they are ordinary bills (Article 107), Finance bills (Article 117) and money bills (Article 109 and 110).India adopted the concept of money bill from the British.

The money bill is an exception to the general rule of mandatory approval of both the houses of the parliament. A money bill related to the matters which are financial in nature, such as taxation matters, bills related to public expenditure, financial obligations of the government or expenditure out of the consolidated fund of India. All financial bills are money bills but not all money bills are finance bills. There are many differences between money bills and finance bills. Under this article we are going to see in detail about money bills and its procedures in the parliament and also the key difference between the money bill and finance bill.

WHAT IS MONEY BILL?

The Money bill is introduced in Article 110 of the Indian Constitution. It asserts any bill shall be pronounced as money bill if it has the following characteristics:(1)

1. The imposition, abolition, remission, alteration or regulation of any tax;
2. The regulation of the borrowing of money or giving of any guarantee by the government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
3. The custody of the consolidated Fund or Contingency fund of India, the payment of money onto or the withdrawal of money from any such fund;
4. The appropriation of moneys out of consolidated fund of India;
5. The declaring of any expenditure to be expenditure charged on the consolidated fund of India or the increasing amount of any such expenditure;
6. The receipt of money on account of the consolidated fund of India or the Public account or the audits of the accounts of the Union or the state; or
7. Any matter incidental to any of the matters specified in clauses (a) to(f)

(2) A bill shall not be deemed to be a money bill by reason only it provides for the imposition of fines or other pecuniary penalties, or the demand or payment of fees for licences or fees for services rendered or by reason that it provides for the imposition, abolition, alteration, remission, alteration or regulation of any tax by local authority or body for local purposes.

(3) If any question arises whether a bill is a money bill or not, the decision of the speaker of the house of the people is final.

(4) There shall be endorsed on every money bill when it is transformed to the council of states under Article 109, and when it is presented to the president for the assent under article 111, the certificate of the speaker of the house of the people signed by him that it is a money bill.

WHAT IS CONSOLIDATED FUND OF INDIA?

Consolidated fund is the most crucial part of the Government. It is where all the money that the government receives from taxes, fees, and other sources. The money in this fund is used to meet the government’s expenses such as salaries, pensions and public services. No money can be relinquished without the approval of the parliament. This fund was comprised under Article 266(1) of the constitution of India. All earnings received by the government by means of direct and indirect taxes, money leased and certificates from loans given by the government ebb into consolidated fund of India.

WHAT IS CONTINGENCY FUND OF INDIA?

The contingency fund of India is like a safety net for the government. It is a reserve fund set aside to deal with unforeseen and urgent expenses. If there is an emergency or an unexpected situation, the government can dip into this fund to overcome the expenses. The Article 267(1) of the Indian constitution deals with the contingency fund. The contingency fund of the union Government is at the disposal of the president of India who discharges the reserves at the petition of the Union Cabinet, which later gets clearance from parliament.

Parliament approval is important. After the crises have been handled with, the reserve is repaid to its full quantity of Rs.300crore. This needed money comes from the consolidated fund of India.

DIFFERENT TYPES OF MONEY BILL:

A money bill is a type of financial bill. There are three types of financial bills:

1. Money bills
2. Category 1 of Finance bill; Finance bill as envisaged under Article 117(1). These bills contain provisions as provided under Article 110(1) to 110(f). These bills have feature of both money bill and an ordinary bill. This bill can be placed before both the houses of the parliament.
3. Category 2 of Finance bill as envisaged under Article 117(3). These bills are primarily in the nature of ordinary bills with only one difference they involve consolidated fund expenditure. These bills can be introduced in either house of the parliament upon the recommendation of the president.

These are the following types of money bills:

1. Appropriation Bill: This bill authorises appropriation to the relevant grants from the consolidated fund. Once a grant is authorised by the house, the bill authorises the expenditure and funds required to meet the grant. Appropriation bill deals with Article 114 of the Indian Constitution.
2. Finance Bill: It is a bill introduced in the Lower House every year, soon after the general budget and deals with the financial affairs such as amendments to tax related laws. It is placed before the parliament at the time of presenting the annual financial Statement.

WHEN A BILL CONSIDERED BEING MONEY BILL?

Article 110 of the constitution envisages money bill. It provides that a money bill is a bill relating to the following matters:

• Taxation
• Financial obligations or borrowings of the government
• Matters related to contingency fund or consolidated fund of India
• The audit of the Union or any of the state’s accounts.

However, a bill cannot be considered to be a money bill merely because it deals with;

• Imposition of pecuniary fines or penalties.
• The imposition, alteration and remission of tax for any local objective or any local officer or any payer
• The levying of any licence tax.

PROCEDURES FOR PASSING MONEY BILL:

The Constitution lays down a special procedure for passing Money bills in the state legislature:

• A money bill cannot be introduced in the legislative council. It can be introduced in the legislative assembly only and that to on the recommendation of the governor. Every such bill is considered as government bill and can be introduced only by the minister.
• After the money bill is passed by the legislative assembly, it is transmitted to the legislative council for its consideration. The legislative council has restricted powers with regard to money bill .It cannot reject or amend a money bill. It can only make recommendations and must return the bill to legislative assembly within 14 days. The legislative assembly can either accept or reject all or any of the recommendations of the legislative council.
• If the legislative assembly accepts any recommendation, the bill is then deemed to have been passed by both the houses. If the legislative assembly does not accept any recommendation, the bill is then deemed to have been passed by both the houses in the form originally passed by the legislative assembly without any change.
• If the legislative council does not return the bill to the legislative assembly within 14 days, the bill is deemed to have been passed by both the houses at the expiry of the said period in the form originally passed by the legislative assembly. Thus the legislative assembly has more powers than legislative council with regard to money bill. At most then, the legislative council can detain or delay money bill for a period of 14 days.
• Finally, when the money bill is presented to the governor, he may either give his assent, withhold his assent but cannot return the bill for reconsideration of the state legislature. Normally the governor gives his assent to a money bill as it is introduced in the state legislature with his prior permission. When a money bill is reserved for the president he may either give his assent or withhold his assent but cannot return the bill for reconsideration of the state legislature.

STAGES OF PASSING A MONEY BILL:

A money bill has to follow these stages to become an Act:

First Reading:

This is the first step towards the money bill to become an Act. The money bill is introduced in the Lower House ( Lok Sabha_), the money bill cannot be introduced in the Upper house (Rajya Sabha). The main ingredients of the bill are laid down, the information of which is the official gazette of India, the public journal. Then the bill is sent fir Rajya Sabha.

Second Reading:

This is the second step. In this phase, there are two vitals in which the procedure can be subdivided. The reading takes place in Lok Sabha, in the First half the main points are discussed and debated in the second phase, every clause is read one after another thoroughly and the debate takes place questioning the feasibility. The same process takes place in Rajya Sabha but they don’t get the privilege to turn it over. They can only recommend amendments if not satisfied which may or may not seriously take by Lok Sabha.

Third Reading:

In this phase voting takes place in Lok Sabha, if the bill gets a simple majority, the bill gets passed. The same procedure is followed in Rajya Sabha but their approval is not considered.

Finally the bill reaches the president, he has to give his assent and the money bill becomes an Act.

CONTROVOSARIES OVER MONEY BILL:

Aadhar Card Act, 2016 and Aadhar Card Amendment Act, 2018

The Aadhar (Targeted Delivery of Financial and other subsidies, benefits and services) Bill 2016 was introduced as a money bill in the parliament. The rajya Sabha has made certain recommendation which were rejected by the lower house. In th eland mark judgement of K.S. Puttaswamy v Union Of India(2018), the contention was whether Aadhar bill was lawfully passed as money bill or not. The Aadhar bill has been introduced as a money bill merely because one of the 59 sections of the bill that is section 7 was concerned with the consolidated fund. The court by majority held that bill was indeed a money bill as it was directly connected with the consolidated fund.

The dissenting judgement was given by Justice Chandrachud, was of the opinion that the Aadhar bill being concerned with unique identification, was certainly not a money bill. He further highlighted the importance of Rajya Sabha in keeping a check on the arbitrary exercise of powers by the lower house.

L.Ponnammal v. Union Of India (2022);

In this case, the petitioner contended before the Madras High Court that sections 128 to 146 of the Finance Act 2021 were in contravention of Article 110 of the constitution. The petitioner pleaded that the amendment did not fall under the ambit of Article 110. The petitioner further challenged the IPO of the Life insurance Corporation (LIC) also. The respondents on the other hand, pleaded that the court must respect and save the speakers wisdom unless it is blatantly in violation of the constitution. The court held that the amendments primary objective was to receive funds in the consolidated fund of India. The fund was to be used for development purposes; hence the amendment bill was within the ambit of Article 110. Thus the case was dismissed.

Mohd. Saeed Siddiqui v State of Up.(2014):

In this case, the speakers decision to certify the U.P Lokayukta and Up- Lokayuktas (Amendment) Act 2012 as a money bill was challenged before the supreme court. The court held that such questions could be raised by a member before the legislative Assembly. The court relied on Article 212 and 255 to hold that the court shall not interfere in the speaker’s decision and thus dismissed the petition.

KEY DIFFERENCE BETWEEN MONEY BILL AND FINANCE BILL:

WHAT IS FINANCE BILL?

Article 117 of the Indian Constitution lays down special provision as to Finance Bills. According to this article, a bill or amendment making provision for any of the matters specified in sub clauses (a) – (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the president and a bill making such provision shall not be introduced in the council of states. However no recommendation shall be required under this clause for moving an amendment making provision for reduction or abolition of any tax. A bill if enacted and operated would involve fund from consolidated fund of India shall not be padded by either house of parliament unless the president has recommended to that house for consideration of the bill.

CONCLUSION:

This is how bills become acts and Indian Parliament legislates. Similarly, the State Legislature of India has to legislate acts and for that state government has to introduce bills. The procedure of passing a bill through the state legislature is almost similar to the central legislation. This is how the money bill is being passed and mainly all the procedures have to be followed properly. Money bill is specific type of finance bill that deals exclusively with matters related to money such as taxation, appropriation of funds, or consolidated fund of India. This article tries to cover the important stages and procedures for passing money bill and key difference between finance bill and money bill.

REFERENCE:

1. M. Laxmikanth , Indian Polity ,McGraw Hill Education (India) Private Limited, 6^th edn;2020
2. J.N. Pandey , The Constitution Of India, Central Law Agency Hyderabad, 59^th edn.; 2022.
3. A note on Money Bills/
4. How a money bill is passed in India
5. Gowtham Baldlani, Article 110 of Indian Constitution , June 25 2022