Supreme Court Refers Aadhaar Judgment To A Larger Bench Which Will Examine Validity Of Its Passage As A Money Bill

The Supreme Court has referred the issue of examining the validity of the passage of the Finance Act 2017 as Money Bill to a larger bench of the Supreme Court.

A five-judge Constitution Bench of the Supreme Court has doubted the correctness of the Aadhaar judgment, stating that the Aadhaar Act could not have been passed as Money Bill. The Supreme Court bench headed by Chief Justice Ranjan Gogoi said, “The issue and question of Money Bill, as defined under Article 110(1) of the Constitution, and the certification accorded by the Speaker of the Lok Sabha in respect of Part-XIV of the Finance Act, 2017, is referred to a larger Bench”.

Therefore, it is apparent now that a larger bench will look into the Aadhaar judgment. The Finance Act 2017 brought in provisions concerning the functioning of tribunals, which was challenged, as it was passed as Money Bill. The Supreme Court recently struck down the rules formulated by the central government on appointment and service conditions for members of various tribunals.

The central government relied on the Aadhaar judgment to strengthen its case. This led the Supreme Court to examine the judgment in connection with Article 110, which defines ‘Money Bills’. The Supreme Court noted that the Attorney General has propounded that the constitutionality of the Finance Act, 2017, would be safe if its dominant provisions, which form the core of the enactment, fall within the ambit of Article 110 provisions.

“As per such interpretation, provisions ought not to be read in a piece-meal manner, and judicial review ought to be applied deferentially,” the court said.

The Supreme Court observed that the majority judgment in Aadhaar did not clarify and explain the scope of sub-clauses (a) to (f) to clause (1) of Article 110 of the Constitution.

“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 offers 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),” said the court.

Making an observation on the concurring opinion of Justice Ashok Bhushan in the Aadhaar case, the Supreme Court said the judgment was based on the dominant purpose test “It is evident that the judgments of both Justice D Y Chandrachud and Justice Ashok Bhushan categorically held that the decision of the Speaker to certify a Bill as a Money Bill is not immune from judicial review,” said the Supreme Court.

Justice Chandrachud, one of the judges on the bench, had said, “I am in agreement with the reasons which have been set out by the Chief Justice of India to refer the aspect of Money Bill to a larger bench and direct accordingly”.

The Supreme Court observed that the Aadhaar Act veers around the government's constitutional obligation to provide for subsidies, benefits and services to individuals and other the provisions are only incidental to the main provision. Therefore, the Aadhaar Bill was rightly certified by the Speaker as a ‘Money Bill’.

The Supreme Court also observed that without expressing a firm and final opinion, it has to be observed that the analysis in K S Puttaswamy (Aadhaar) makes its application difficult to the present case and raises a potential conflict between the judgments of co-ordinate benches. Therefore, the correctness of the same needs to be looked into, the court observed.

“We accordingly direct that this batch of matters be placed before the Chief Justice of India, on the administrative side, for consideration by a larger bench,” said the court.