Parliament – Sessions, Procedures, Motions, Committees etc

Money Bill verdict holds the key: SC


From UPSC perspective, the following things are important :

Prelims level : Money Bill

Mains level : Issues with PMLA

The court has left it open for a seven-judge Bench to decide whether the amendments to the PMLA could have been made to the PMLA through the Money Bill route.

What was the case about Money Bill?

  • In November 2019, a five-judge Bench led by then CJI Ranjan Gogoi had referred to a larger Bench the issue and question posed in the Roger Mathew vs South Indian Bank Ltd. Case.
  • It inquired to whether amendments like these can be passed as a Money Bill in violation of Article 110 of the Constitution.
  • The petitioners had questioned the legality of the PMLA amendments which were introduced via Finance Acts/Money Bills.

Correlation Money Bill

  • A Money Bill is deemed to contain only provisions dealing with all or any of the matters under clauses (a) to (g) of Article 110(1), largely including the appropriation of money from the Consolidated Fund of India and taxation.
  • In other words, a Money Bill is restricted only to the specified matters and cannot include within its ambit any other matter.

What is a Money Bill?

  • A money bill is defined by Article 110 of the Constitution, as a draft law that contains only provisions that deal with all or any of the matters listed therein.
  • These comprise a set of seven features, broadly including items such as-
  1. Imposition, abolition, remission, alteration or regulation of any tax
  2. Regulation of the borrowing of money by the GOI
  3. Custody of the Consolidated Fund of India (CFI) or the Contingency Fund of India, the payment of money into or the withdrawal of money from any such fund
  4. Appropriation of money out of the CFI
  5. Declaration of any expenditure charged on the CFI or increasing the amount of any such expenditure
  6. Receipt of money on account of the CFI or the public account of India or the custody or issue of such money, or the audit of the accounts of the Union or of a state
  7. Any matter incidental to any of the matters specified above.

Who controls such bills?

  • In the event proposed legislation contains other features, ones that are not merely incidental to the items specifically outlined, such a draft law cannot be classified as a money bill.
  • Article 110 further clarifies that in cases where a dispute arises over whether a bill is a money bill or not, the Lok Sabha Speaker’s decision on the issue shall be considered final.

Difference between money and finance bill

  • While all Money Bills are Financial Bills, all Financial Bills are not Money Bills.
  • For example, the Finance Bill which only contains provisions related to tax proposals would be a Money Bill.
  • However, a Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered a Financial Bill.
  • Again, the procedure for the passage of the two bills varies significantly.

Issues with notifying a bill as Money Bill

  • The Rajya Sabha (where the ruling party might not have the majority) has no power to reject or amend a Money Bill.
  • However, a Financial Bill must be passed by both Houses of Parliament.
  • The Speaker (nonetheless, a member of the ruling party) certifies a Bill as a Money Bill, and the Speaker’s decision is final.
  • Also, the Constitution states that parliamentary proceedings, as well as officers responsible for the conduct of business (such as the Speaker), may not be questioned by any Court.


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