Why Aadhaar bill tabled as the money bill

The Supreme Court will begin hearing final arguments next month on a writ petition challenging the validity of the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Act, 2016 — or the Aadhaar Act.

What’s the issue?
The government had moved the Aadhar Bill in the parliament as a money bill. Through this categorisation, the government had the law enacted by securing a simple majority in the Lok Sabha while rendering redundant any opposition to the legislation in the Upper House of Parliament.

What was the need for legislative backing?
Originally, Aadhaar was conceived as a scheme to provide to every Indian a unique identity number, with a purported view to enabling a fair and equitable distribution of benefits and subsidies.

Given that the Aadhaar project was being implemented even without statutory support, public interest petitions were filed in the Supreme Court challenging the project’s legitimacy. In these cases, the court issued a series of interim orders prohibiting the state from making Aadhaar mandatory, while permitting its use only for a set of limited governmental schemes.

Then, in March 2016, the Union government withdrew the earlier bill, and introduced, in its place, as a money bill, a new draft legislation, titled the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Bill, 2016. This categorisation was extraordinary because a money bill, under India’s constitutional design, requires only the Lok Sabha’s affirmation for it to turn into law.

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 in that article.
• These comprise a set of seven features, broadly including items such as the imposition or regulation of a tax; the regulation of the borrowing of money by the Government of India; the withdrawal of money from the Consolidated Fund of India; and so forth.
• 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.
• The provision requires that a bill conform to the criteria prescribed in it for it to be classified as a money bill.
• Where a bill intends to legislate on matters beyond the features delineated in Article 110, it must be treated as an ordinary draft statute.

What is Aadhaar?

• Originally, Aadhaar was conceived as a scheme to provide to every Indian a unique identity number for enabling a fair and equitable distribution of benefits and subsidies
• A draft of a statute was introduced in the Rajya Sabha, in December 2010 as an ordinary bill.
• This meant that both Houses of Parliament had to provide their vote to the bill for it to become law.
• However it was not passed due to concerns over privacy and protection of data security.
• In March 2016, the Union government withdrew the earlier bill, and introduced the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Bill, 2016 as a money bill.
• Hence now it required only the Lok Sabha’s affirmation for it to turn into law.
• The legislation endangers the core liberties, in manners both explicit and implicit ways.
• Therefore this move was designed to bypass opposition in Rajya Sabha bill.

How is Aadhaar connected?

The NDA government chose to introduce the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 as a Money Bill. The Lok Sabha cleared the Bill and passed it to the Rajya Sabha.

While the NDA has a majority in the Lok Sabha, it does not in the Rajya Sabha. This led to intense debates in the Upper House, led by Congress leader Jairam Ramesh. The House recommended several amendments to the Bill, which was passed with a majority in the House.

What Aadhaar Act shows

A simple reading of the Aadhaar Act would show us that its contents go far beyond the features enumerated in Article 110. If anything, it is the provisions in the legislation that pertain to the Consolidated Fund and its use that are incidental to the Act’s core purpose — which, quite evidently, is to ensure, among other things, the creation of a framework for maintaining a central database of biometric information collected from citizens.

Ordinarily, a draft legislation is classified as a money bill when it provides for funds to be made available to the executive to carry out specific tasks. In the case of the Aadhaar Act, such provisions are manifestly absent. The Speaker’s decision to confirm the government’s classification is, therefore, an error that is not merely procedural in nature but one that constitutes, in substance, an unmitigated flouting of Article 110.

In many ways, Aadhaar has brought out to plain sight the worryingly totalitarian impulses of our state. The government has argued, with some force, that Indian citizens possess no fundamental right to privacy.

This argument, however, is predicated on judgments of the Supreme Court that have little contemporary relevance, and that have, in any event, been overlooked in several subsequent cases where the court has clarified the extent of the liberties that the Constitution guarantees.

Right to privacy
Privacy is important not merely because it advances the cause of equality and freedom but also because it is, in and of itself, a treasurable value. A failure to protect privacy adequately can have disastrous consequences that affect our abilities to determine for ourselves how we want to live our lives. And the Aadhaar Act hits at the core of this value.

It permits the creation of a database of not only biometric information but also various other private data, without so much as bothering about safeguards that need to be installed to ensure their security. We scarcely need to stretch our imaginations to wonder what the government — and other agencies to which this information can be shared without any regulatory checks — can do with all this material.

That a statute so pernicious in its breadth can be enacted after being introduced as a money bill only makes matters worse. It has the effect of negating altogether the Rajya Sabha’s legislative role, making, in the process, a mockery of our democracy.

It is imperative, therefore, that the court refers the present controversy to a larger bench, with a view to overruling Siddiqui. Suhrith Parthasarathy is an advocate practising at the Madras High Court

Opposition’s concern

The Opposition’s main concern was with the usage of Aadhaar data to facilitate mass surveillance. Originally, the Aadhaar project was supposed to be voluntary, but this Bill makes enrolment compuslory. The Bill contains a blanket ‘national security’ clause, a clause bound to induce misuse.

What happened next?
Parliament passed the Aadhaar Bill , even as debates raged in both Houses. “I am questioning the competence of this House to legislate the Bill,” Sitaram Yechury of the CPI(M) said, arguing that the Bill was also being considered by the Supreme Court and was beyond “the legislative authority” of the House.

What now?
Mr. Ramesh then moved the Supreme Court challenging the treatment of the Aadhaar Bill as a Money Bill. Earlier, Finance Minister Arun Jaitley, who moved the Bill and piloted them in both the Houses, had turned down the Opposition argument that Parliament cannot legislate as the matter is before the Supreme Court.

Does the Aadhaar bill fit the money bill criteria?

The bill provides for a mechanism to identify a person using biometrics, and states that this could be used for providing subsidies or government services. However, it also allows the Aadhaar system to be used for other purposes. Therefore, it seems to contain matters other than those that are incidental to expenditure from the Consolidated Fund. That is, it does not seem to fit the requirement of “only” the matters listed.

What is the government’s stand?

• In the Supreme Court’s judgment in Mohd. Saeed Siddiqui v. State of UP (2014), the court ruled that a Speaker’s decision to classify a draft statute as a money bill, was not judicially reviewable, even if the classification was incorrect.
• The court justified that this is because the error in question constituted nothing more than a mere procedural irregularity.
• The government sites this case to justify its stand

What experts say

According to experts, contents of Aadhar act go far beyond the features enumerated in Article 110. If anything, it is the provisions in the legislation that pertain to the Consolidated Fund and its use that are incidental to the Act’s core purpose — which, quite evidently, is to ensure, among other things, the creation of a framework for maintaining a central database of biometric information collected from citizens.

Ordinarily, a draft legislation is classified as a money bill when it provides for funds to be made available to the executive to carry out specific tasks. In the case of the Aadhaar Act, such provisions are manifestly absent. The Speaker’s decision to confirm the government’s classification is, therefore, an error that is not merely procedural in nature but one that constitutes, in substance, an unmitigated flouting of Article 110.

According to experts, Money bills are typically directly related to the finances of the government Article 110(1) of the constitution defines a money bill as one that deals only (only) with any of the following:

(a) Imposition, abolition, remission, alteration or regulation of any tax,
(b) 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) 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) Appropriation of moneys out of the Consolidated Fund of India,
(e) 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) 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-clauses (a) to (f).
The stress on “only” is well advised: the constituent assembly debated it and retained the word. In other words, “Bills which exclusively contain provisions for imposition and abolition of taxes, for appropriation of moneys out of the Consolidated Fund, etc., are certified as Money Bills.

Speaker’s decision to classify

The assertion that the Speaker’s decision is beyond judicial review finds support in the Supreme Court’s judgment in Mohd. Saeed Siddiqui v. State of UP (2014). Here, a three-judge bench had ruled, in the context of State legislatures, that a Speaker’s decision to classify a draft statute as a money bill, was not judicially reviewable, even if the classification was incorrect.

This is because the error in question, the court ruled, constituted nothing more than a mere procedural irregularity.

• But there are significant problems with this view. Chief among them is the wording of Article 110, which vests no unbridled discretion in the Speaker. The provision requires that a bill conform to the criteria prescribed in it for it to be classified as a money bill. Where a bill intends to legislate on matters beyond the features delineated in Article 110, it must be treated as an ordinary draft statute. Any violation of this mandate has to be seen, therefore, as a substantive constitutional error.
• There are other flaws too in the judgment. Most notably, it brushes aside the verdict of a Constitution Bench in Raja Ram Pal v. Hon’ble Speaker, Lok Sabha (2007), where the court had ruled that clauses that attach finality to a determination of an issue do not altogether oust the court’s jurisdiction. That is, the bench held, there are numerous circumstances where the court can review parliamentary pronouncements. These would include instances where a Speaker’s choice is grossly illegal, or disregards basic constitutional mandates, or, worse still, where the Speaker’s decision is riddled with perversities, or is arrived at through dishonest intentions.

What should be done?

But it brushes aside the verdict of a Constitution Bench in Raja Ram Pal v. Hon’ble Speaker, Lok Sabha (2007).
In this case, the court had ruled that clauses that attach finality to a determination of an issue is not altogether outside the court’s jurisdiction.
The bench held that there are numerous circumstances where the court can review parliamentary pronouncements like instances where a Speaker’s choice is grossly illegal, or disregards basic constitutional mandates, or where the Speaker’s decision is arrived at through dishonest intentions.
Therefore it should be understood that the Speaker’s decision to confirm the government’s classification is an error that is not merely procedural in nature but one that constitutes, in substance, an unmitigated violation of Article 110.

Way ahead

The government’s response is predicated on two prongs: that the Speaker’s decision to classify a draft legislation as a money bill is immune from judicial review, and that, in any event, the Aadhaar Bill fulfilled all the constitutional requirements of a money bill. A careful examination of these arguments will, however, show us that the government is wrong on both counts.

In this case, prima facie it appears that the government has taken the money bill route to bypass the upper house. This move is even backed by the speaker of the Lok Sabha, whose decision is final on the question of whether a bill is a money bill. However, this constitutional provision cannot be seen as a convenient tool to deal with an inconvenient second chamber.

The Constitution reposes faith in the speaker’s fairness and objectivity. Article 110(1) provides the touchstone of the decision to be taken by the speaker under Article 110(3). Any decision actuated by extraneous considerations can’t be a proper decision under Article 110(3). The speaker’s decision needs to be in conformity with the constitutional provisions. If not, it is no decision under the Constitution.