When can a bill be designated as a Money Bill?

What’s in today’s article?

• Why in news?
• What is Finance Bill?
• What is Money Bill?
• What is the difference between money Bills and financial Bills?
• Background of the present case

Why in News?

• Chief Justice of India said that a seven-judge bench will soon be set up to hear a batch of pleas challenging the Centre’s use of the money bill route to pass certain key legislations.
• CJI’s observation about setting up a seven-judge bench came during the hearing challenging set of amendments to the Prevention of Money Laundering Act (PMLA).

Background of the Present Case

Question regarding the validity of PMLA:

• In July 2022, a three-judge bench had upheld the PMLA and the vast powers of the ED. 
• However, the bench had left the validity of amendments to the PMLA through the Money Bill route open for a larger Constitution bench to hear.
• The Finance Acts passed in 2015, 2016, 2018 and 2019 brought in crucial amendments to the PMLA. 
• Finance Bills passed during the budget are introduced as money bills under Article 110 of the Constitution.

Aadhaar as money bill:

• The first major challenge on whether a bill qualified to be a money bill under the Constitution was in the Aadhaar case. 
• In a 4:1 majority, the Supreme Court in 2018, had ruled in favour of the government and had cleared the Aadhaar Act as a valid money bill under Article 110 of the Constitution.
  • Incidentally, Justice Chandrachud had been the lone dissenter in the Aadhaar ruling of 2018.
  • He had called it a “fraud on the Constitution” and “subterfuge”.

Tribunal reform:

• In November 2019, in Roger Matthew vs Union of India, the SC heard the challenge against tweaks in the service conditions of tribunal members which was also introduced as a money bill in the Finance Act, 2017.
• While a five judge bench of the court struck down the law as unconstitutional for interfering with judicial independence, it referred the money bill aspect to a larger constitution bench.
• In doing so, the court also expressed doubts over the correctness of a five-judge Constitution Bench’s 2018 verdict upholding the Aadhaar Act which had been passed as a money Bill.

Read More about the difference between Money Bill and Finance Bill here.

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Q1) What is Money Laundering?

Money laundering is the process of hiding the source of money obtained from illegal sources and converting it to a clean source, thereby avoiding prosecution, conviction, and confiscation of the criminal funds. It is an illegal exercise that converts black money into white money.

Q2) What is Aadhar?

Aadhaar is a 12-digit unique identification number issued by the Unique Identification Authority of India (UIDAI). It serves as proof of identity and address anywhere in India.

Source:

• When can a bill be designated as a ‘money bill’: SC to hear challenge
• PRS
• Legal Service India
• Economic Times