AADHAR: TEST OF FEDERALISM ?
AADHAR:
TEST OF FEDERALISM ?
(BY
SHUBHAM BUDHIRAJA)
INTRODUCTION:
A State as defined in
International law as “an Independent political entity occupying a defined
territory, the members of which are united together for the purpose of
resisting the external force and presentation of internal order”.
However, the said definition
paid emphasis more on Police functions of a state to protect the territory from
external aggression. But the modern state is much more than being merely a
police or Law & Order State. Modern State is a Social Welfare State.
Legal System of country is
largely divide into two categories: (i) Law governing the state, and (ii) law
by which state govern or regulate the conduct of its members.
The term Constitutional law
is wider than the term Constitution as it comprises – the constitution,
relevant statutory law, judicial decisions and conventions.
The Constitution of any
country may be a written or unwritten. By saying a written Constitution, it
means one which is written down in from of a constitutional document whereas
Unwritten Constitution is one which is not embodied in one comprehensive
document and is governed by Constitutional principles, Court decisions , Common
law principles, Conventions and usage. Constitution of India is a written
constitution whereas British Constitution is an unwritten Constitution.
One of Central Doctrine of
an Unwritten Constitution is Sovereignty of Parliament which means parliament
can make and unmake any law and there is no difference between an ordinary law
and the constitutional law.
Though Constitution of India
is a written constitution but there has been instances where Conventions have
been recognized and applied. E.g.- U.N.R. Rao v Indira Gandhi, AIR 1971 SC
1002, Samsher Singh v. State of Punjab, AIR 1974 SC212, Ram Jawaya Kapur v.
State of Punjab, AIR 1955 SC549.
A Country may have the
Constitution but not necessarily Constitutionalism. Constitutionalism
ensures the check and balance and Putting the Power of Legislation and executive under Some restrictions.
Constitutionalism recognizes
the need for government with power but at the same time it insist that
limitation be placed on such powers.
Unlimited Power jeopardize
Freedom of people and as it’s been said- Power corrupts and absolute power corrupt
absolutely.
ARTICLE
110 IN THE CONSTITUTION OF INDIA 1949:
110. Definition of Money
Bill
(1) For the purposes of this
Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions
dealing with all or any of the following matters, namely
(a) the imposition,
abolition, remission, alteration or regulation of any tax;
(b) the regulation of the
borrowing of money or the 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;
(c) the custody of the
consolidated Fund or the Contingency Fund of India, the payment of moneys into
or the withdrawal of moneys from any such Fund;
(d) the appropriation of
moneys out of the consolidated Fund of India;
(e) the declaring of any
expenditure to be expenditure charged on the Consolidated Fund of India or the
increasing of the amount of any such expenditure;
(f) the receipt of money on
account of the Consolidated Fund of India 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; or
(g) any matter incidental to
any of the matters specified in sub clause (a) to (f)
(2) A Bill shall not be
deemed to be a Money Bill by reason only that it provides for the imposition of
fines or other pecuniary penalties, or for the demand or payment of fees for
licences or fees for services rendered, or by reason that it provides for the
imposition, abolition, remission, alteration or regulation of any tax by any
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 thereon shall be final
(4) There shall be endorsed
on every Money Bill when it is transmitted to the Council of States under
Article 109, and when it is presented to the President for assent under Article
111, the certificate of the Speaker of the House of the People signed by him
that it is a Money Bill
Constitution of India under Articles 107 to 117 indicates the
following kinds of Bills:
(i) General Bills (Art 107)
(ii) Money Bills (Art 110)
(iii) Appropriation Bills (Art
114)
(iv) Financial Bills (Art 117)
As per the Rajya Sabha website,
Financial Bills can be further sub-divided in two categories i.e. Category-I
and Category II.
If Aadhaar would be passed as
an ordinary bill or, at best, as a
Financial Bill-Category-II. That would have required the approval of the Rajya
Sabha as well.
Article 199 is the equivalent
provision relating to Money Bills that is applicable to State Legislatures.
It should be noted that
passing a Bill as money Bill is much easier than that of an ordinary Bill for
the reason being that the provisions regarding passing for a bill as money bill are relaxed in comparison
to an Ordinary Bill.
A Bill
can be introduced either in the Rajya Sabha or in the Lok Sabha. If a Bill is
First introduced in the Rajya Sabha, and a question arises as to whether it is
a Money Bill, Article 110(3) makes it clear that this doubt of question cannot
be resolved by the Chairman or Deputy Chairman of the Rajya Sabha but will have
to be referred to the Speaker of the Lok Sabha and his/her decision on this
issue will be Final. This is the main reason for “Finality”; there was never
any intention to place the Speaker’s certificate beyond judicial review.
AADHAR ACT
The
Aadhaar Bill was first introduced as a Money Bill in 2016. This Bill contained
59 sections of which only section 7 referred to the Consolidated Fund of India
and the relevant portion of that
section
reads as follows:-
“7. Proof of Aadhaar number necessary for receipt of certain
subsidies, benefits and services, etc.− The Central Government or, as the case
may be, the State Government may, for the purpose of establishing identity of
an individual as a condition for receipt of a subsidy, benefit or service for
which the expenditure is incurred from, or the receipt therefrom forms part of,
the Consolidated Fund of India, require that such individual undergo
authentication, or furnish proof of possession of Aadhaar number or in the case
of an individual to whom no Aadhaar number has been assigned, such individual
makes an application for enrolment.”
ARTICLE 110 VIS-À-VIS SECTION 7 OF AADHAR LAW
Article
110(1) of the Constitution specifically states that a Money Bill must contain only
provisions that deal with the matters enumerated therein.
Section
7 refers to expenditure which is “incurred” from the Consolidated
Fund of India but Article 110(d) covers only expenditure “charged” to Consolidated
Fund of India. Significantly, the expenditure on the Aadhaar scheme is not
“charged” to the Consolidated Fund of India.
So the
only question arise what are expenditure which are charged upon consolidated
fund of India ?
Article 112(3)
enumerates expenditure which is charged to the Consolidated Fund of India. It
reads as follows:
“(3)
The following expenditure shall be expenditure charged on the Consolidated Fund
of India-
(a) the
emoluments and allowances of the President and other expenditure relating to
his office
(b) the
salaries and allowances of the Chairman and the Deputy Chairman of the Council
of States and the Speaker and the Deputy Speaker of the House of the People;
(c)
debt charges for which the Government of India is liable including interest,
sinking fund charges and redemption charges, and other expenditure relating to
the raising of loans and the service and redemption of debt;
(d) (i)
the salaries, allowances and pensions payable to or in respect of Judges of the
Supreme Court,
(ii)
the pensions payable to or in respect of Judges of the Federal Court,
(iii)
the pensions payable to or in respect of Judges of any High Court which
exercises jurisdiction in relation to any area included in the territory of
India or which at any time before the commencement of this Constitution exercises
jurisdiction in relation to any area included in a Governors Province of the
Dominion of India;
(e) the
salary, allowances and pension payable to or in respect of the Comptroller and
Auditor General of India;
(f) any
sums required to satisfy any judgment, decree or award of any court or arbitral
tribunal;
(g) any
other expenditure declared by this Constitution or by Parliament by law to be
so charged.”
The
other provisions which create such charge are Articles 146(3), 148(6), 273(1),
275(1), 290, 291(1)(a), 293(2) and 322 of the Constitution.
AADHAAR JUDGMENT - KS PUTTASWAMY V UNION OF INDIA - was whether the Aadhaar (Targeted Delivery of Financial and
Other Subsidies, BenefIts and Services) Act, 2016 was rightly passed as a
“Money Bill”. By a majority, it was held that it was indeed a Money Bill while
the dissenting judgment of Chandrachud J. held to the contrary.
Reasoning of
Majority for upheld Aadhar as
Money Bill: (a) The Aadhaar Bill was a
Money Bill as it had a substantial nexus with the appropriation of funds
from the Consolidated Fund of India and was directly connected with
Article 110 of the Constitution
(Justice
Sikri’s opinion for himself, and Misra & Khanwilkar JJ).
(b) section
7 would be covered by clauses (c) and (e) of Article 110 (1). The
expenditure for the Aadhaar scheme is “chargeable” to the Consolidated Fund of
India. (Bhushan J., in a concurring view)
Thus,
the majority view has introduced a new concept of “substantial nexus with the
appropriation of funds and direct connection” .
The Minority
View Chandrachud J. held that the Aadhaar
Bill was not a Money Bill.
Historical reasons of Article 110, the learned Judge emphasized the significance of bicameral
legislation and the importance of the Rajya Sabha as a check against the abuse
of power by Lok Sabha.
The legislative history of the Aadhaar Act itself. The provision of a unique identity was first contemplated by
the National Identification Authority of India Bill, 2010 which was introduced
in the Rajya Sabha on December 3, 2010. Obviously, this Bill was not a Money
Bill. It also faced several objections by the Standing Committee of the Finance
and this Bill lapsed because of the change in government in 2014. Although the
earlier Bill did not contain a provision that was similar to section 7 of the
present Aadhaar Act, it still would not make the present enactment as a Money
Bill.
ISSUES WITH MAJORITY VIEW:
The
majority introduces a test of “substantial nexus with the appropriation of
funds and direct connection” . This will enable any future Parliament to
introduce any Bill with just one provision that has a substantial nexus with
the “appropriation of funds and direct connection” and it would pass muster as
a “Money Bill”.
The
majority has wrongly presumed that expenditure under section 7 is “charged” to
the Consolidated Fund of India. Article 112(3) of the Constitution specifically
enumerates expenditure that will be charged to the Consolidated Fund of India.
Expenditure on the Aadhaar scheme is “incurred” from the Consolidated Fund of
India and will not be covered by Articles 110(c) or 110(e). Consequently,
Article 110(g) will also have no application.
It
completely destroys the meaning of the word “only”, which is a deliberate
restriction on the powers of the Lok Sabha. A Bill need not be sent to the
Rajya Sabha if it is a “Money Bill”. All other Bills have to go to the Rajya
Sabha for approval. Therefore, any Bill, which has various substantive
provisions, in addition to Clause (a) to (g), cannot passed as a Money Bill.
In the
Constituent Assembly Debates, the proposal to delete the word “only” in Article
110 was made by Ghanshyam Singh Gupta. This was specifically rejected.
FINANCE ACT, 2017 AND REFERENCE TO LARGE BENCH:
The
Finance Act 2017 which brought in provisions concerning the functioning of
tribunals was challenged on the ground that it was passed a money bill. It was
the argument that the same was not a money bill and passing the same couching
it as a money bill was done to circumvent the Rajya Sabha. The Central
government had, in turn, placed reliance on the Aadhaar judgment to make its
case.
This led to the Court examining the Aadhaar
judgment in detail particularly in relation to Article 110 of the constitution.
The
Supreme Court today stated that the majority judgment in Aadhaar did not
elucidate and explain the scope and ambit of sub-clauses (a) to (f) to clause
(1) of Article 110 of the Constitution, a legal position and facet which arises
for consideration in the present case and assumes considerable importance
The
Court concluded that the majority judgment in the Aadhaar case pronounced the
nature of the Aadhaar act without first delineating the scope of Article 110(1)
and principles for interpretation or the repercussions of such process. The
majority dictum in Aadhaar judgment did not substantially discuss the object of
the word ‘only’ in Article 110(1) and provides little guidance on the
repercussions of a finding when some of the provisions of an enactment passed
as a “Money Bill” do not conform to Article 110(1)
(a) to (g), the Court ruled.
“Upon an extensive examination of the matter, we notice that the
majority in K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the impugned
enactment without first delineating the scope of Article 110(1) and principles
for interpretation or the repercussions of such process. It is clear to us that
the majority dictum in K.S. Puttaswamy (Aadhaar-5) did not substantially
discuss the effect of the word ‘only’ in Article 110(1) and provides little
guidance on the repercussions of a finding when some of the provisions of an
enactment passed as a “Money Bill” do not conform to Article 110(1)(a) to (g).
Its interpretation of the provisions of the Aadhaar Act was arguably liberal
and the Court’s satisfaction of the said provisions being incidental to Article
110(1)(a) to (f), it has been argued is not convincingly reasoned, as might not
be in accord with the bicameral Parliamentary system envisaged under our
constitutional scheme.”
“Being a Bench of equal strength as that in K.S. Puttaswamy
(Aadhaar-5), we accordingly direct that this batch of matters be placed before
Hon’ble the Chief Justice of India, on the administrative side, for
consideration by a larger Bench.”
TEST OF FEDERALISM:
Article
1 of the Constitution states that India shall be a Union of States. Thus, the
states are constitutionally recognized units and not mere convenient
administrative divisions. H.M. Seervai,
in his commentary Constitutional law of India (p 166, 3rd Edn.) has
summed up the federal nature of our constitution by observing that the federal principle is dominant in our
constitution. (PB SAWANT, J. on behalf of himself and
Kuldip Singh, J in S.R. Bommai v. Union of India)
Federal
Character of the constitution is a basic structure of the constitution. (S.M.
SIKRI C.J, Kesavananda Bharati v. State of Kerala AIR1973 SC 1461)
A
Constitution reflects the hopes and aspirations of people. Constitution is not
a gate but a road. (H.R. KHANNA, J, Kesavananda
Bharati v. State of Kerala AIR1973 SC 1461)
The
fact that under the scheme of our constitution, greater power is conferred upon
the centre vis-à-vis the states doesn’t mean that states are mere appendages of
the centre. The center cannot tamper with their powers. More Particularly, the
courts should not adopt an approach, an interpretation, which has the effect of
or trends to have the whittling down the powers reserved to the states. (BP Jeevan Reddy , J in S.R. Bommai v. Union
of India)
The Rajya
Sabha or Council of States is the upper house of the bicameral Parliament of
India. In the Indian federal structure, the Rajya Sabha is a representative of
the States in the Union legislature (hence the name, Council of States). For
this reason, the Rajya Sabha has powers that protect the rights of States
against the union.
Having the
Rajya sabha in the legislative system at center which is undermined by the
constitution of India is an essential illustration of federal character of the
constitution of India.
However
at the same time, the Constitution of India places some restrictions on Sabha powers
in certain areas. For instance, money bill can be introduced only in the Lok
Sabha by a minister and only on recommendation of President of India. When the
Lok Sabha passes a money bill then the Lok Sabha sends money bill to the Rajya
Sabha for 14 days during which it can make recommendations. Even if Rajya Sabha
fails to return the money bill in 14 days to the Lok Sabha, that bill is deemed
to have passed by both the Houses. Also, if the Lok Sabha rejects any (or all)
of the amendments proposed by the Rajya Sabha, the bill is deemed to have been
passed by both Houses of Parliament of India in the form the Lok Sabha finally
passes it. Hence, Rajya Sabha can only give recommendations for a money bill
but Rajya Sabha cannot amend a money bill. This is to ensure that Rajya Sabha
must not add any non money matters in money bill. There is no joint sitting of
both the houses with respect to money bills, because all final decisions are
taken by the Lok Sabha.
It
should be recorded that the constitution of India has empowered the Rajya sabha
with ample power alike of the lok sabha but at the same time marginal
biasedness is been made in favor in lok sabha as in compare to Rajya sabha. As it has already
been submitted that the Article 110 which defined money bill is one of those
instances where powers of Rajya sabha has been sacrificed. However at the same
using Article 110 to pass any ordinary bill on name of money bill would itself
be against the very objective behind giving marginal biasedness favor the lok
sabha. Article 110 has used the word only in
order to keep a check of federalism.
CONCLUSION:
Thus,
under the opinion of author passing AADHAR Act as money bill while using
Article 110 despite its failure of consonance to the word only and failure to bring
itself into the grounds so as to comply the menace of Article 110 is nothing but prima facie failure to pass
the Test of federalism.
DISCLAIMER:
The
views and opinions expressed in this article are those of the authors and do
not necessarily reflect the official policy or position of any agency of the
Indian government. Examples of analysis performed within this article are only
examples. They should not be utilized in real-world analytic products as they
are based only on very limited and dated open source information. Assumptions
made within the analysis are not reflective of the position of any Indian
government State.
REFERENCES:
The author is company
secretary by qualification and has completed its CS management trainee with a
reputed corporate law firm. Further, he is a Second Year Law student at faculty
of law, University of Delhi. He is enrolled as Para Legal volunteer with Delhi
State Legal Service authority and is an active Participant in Moot Court.
+919654055315
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