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.

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