Identity of the Aadhaar Act: Supreme Court and the Money Bill Question

Published by and cross-posted from The Wire.

The Aadhaar Act 2016, passed in the Lok Sabha on March 16, 2016, faced opposition ever since it was tabled in parliament. In particular, the move to introduce it as a money bill has been vehemently challenged on grounds of this being an attempt to bypass the Rajya Sabha completely. A writ petition has been filed by former Union minister Jairam Ramesh on April 6 challenging the constitutionality and legality of the treatment of this Act as a money bill. The Supreme Court heard the matter on April 25 and invited the Union government to present its view.

It is our view that the Supreme Court can not only review the Lok Sabha speaker’s decision, but should also ask the government to draft the Aadhaar Bill again, this time with greater parliamentary and public deliberation.

The money bill question

M.R. Madhavan has argued that the Aadhaar Act contains matters other than “only” those incidental to expenditure from the consolidated fund, as it establishes a biometrics-based unique identification number for beneficiaries of government services and benefits, but also allows the number to be used for other purposes beyond service delivery. While Pratap Bhanu Mehta calls this a subversion of “the spirit of the constitution”, P.D.T. Achary, former secretary general of the Lok Sabha, expressed concern about the attempts to pass off financial bills like Aadhaar as money bills as a means to circumvent and erode the supervisory role of the Rajya Sabha. Arvind Datar has further emphasised that when the primary purpose of a bill is not governed by Article 110(1), then certifying it as a money bill is an unconstitutional act.

Article 110(1) of the Constitution identifies a bill as a money bill if it contains “only” provisions dealing with the following matters, or those incidental to them:

1. imposition and regulation of any tax,
2. financial obligations undertaken by Indian Government,
3. payment into or withdrawal from the Consolidated Fund of India (CFI) or Contingent Fund of India,
4. appropriation of money and expenditure charged on the CFI or receipt, and
5. custody, issue or audit of money into CFI or public account of India.

However, the link of the Act with the Consolidated Fund of India is rather tenuous, since it depends on the Union or state governments declaring a certain subsidy to be available upon verification of the Aadhaar number. The objectives and validity of the Act would not actually change if the Aadhaar number no longer was directly connected to the delivery of services. The use of the word “if” in section 7 explicitly leaves scope for a situation where the government does not declare an Aadhaar verification as necessary for accessing a subsidy. In such a scenario, the Act will still be valid but without any formal connection with any charges on the Consolidated Fund of India.

A case of procedural irregularity?

The constitution of India borrows the idea of providing the speaker with the authority to certify a bill as money bill from British law, but operationalises it differently. In the UK, though the speaker’s certificate on a money bill is conclusive for all purposes under section 3 of the Parliament Act 1911, the speaker is required to consult two senior members, usually one from either side of the house, appointed by the committee from amongst those senior MPs who chair general committees. In India, the speaker makes the decision on her own.

Although article 110 (3) of the Indian constitution states that the decision of the speaker of the Lok Sabha shall be final in case a question arises regarding whether a bill is a money bill or not, this does not restrict the Supreme Court from entertaining and hearing a petition contesting the speaker’s decision. As the Aadhaar Act was introduced in the Lok Sabha as a money bill even though it does not meet the necessary criteria for such a classification, this treatment of the bill may be considered as an instance of procedural irregularity.

There is ample jurisprudence on what happens when the Supreme Court’s power of judicial review comes up against Article 122 – which states that the validity of any proceeding in the parliament can (only) be called into question on the grounds of procedural irregularities. In the crucial judgment of Raja Ram Pal vs Hon’ble Speaker, Lok Sabha and Others (2007), the court evaluated the scope of judicial review and observed that although parliament is supreme, unlike Britain, proceedings which are found to suffer from substantive illegality or unconstitutionality, cannot be held protected from judicial scrutiny by article 122, as opposed to mere irregularity. Deciding upon the scope for judicial intervention in respect of exercise of power by the speaker, in Kihoto Hollohan vs Zachillhu and Ors. (1992), the Supreme Court held that though the speaker of the house holds a pivotal position in a parliamentary democracy, the decision of the speaker (while adjudicating on disputed disqualification) is subject to judicial review that may look into the correctness of the decision.

Several past decisions of the Supreme Court discuss how the tests of legality and constitutionality help decide whether parliamentary proceedings are immune from judicial review or not. In Ramdas Athawale vs Union of India (2010), the case of Keshav Singh vs Speaker, Legislative Assembly (1964) was referred to, in which the judges had unequivocally upheld the judiciary’s power to scrutinise the actions of the speaker and the houses. It was observed that if the parliamentary procedure is illegal and unconstitutional, it would be open to scrutiny in a court of law and could be a ground for interference by courts under Article 32, though the immunity from judicial interference under this article is confined to matters of irregularity of procedure. These observations were reiterated in Mohd. Saeed Siddiqui vs State of Uttar Pradesh (2014) and Yogendra Kumar Jaiswal vs State of Bihar (2016).

Thus, the decision of the Lok Sabha speaker to pass and certify a bill as a money bill is definitely not immune from judicial review. Additionally, the Supreme Court has the power to issue directions, orders or writs for enforcement of rights under Article 32 of the constitution, therefore, allowing the judiciary to decide upon the manner of introducing the Aadhaar Act in parliament.

National implications demand public deliberation

As the provisions of the Aadhaar Act have far reaching implications for the fundamental and constitutional rights of Indian citizens, the Supreme Court should look into the matter of its identification and treatment as a money bill and whether such decisions lead to the thwarting of legislative and procedural justice.

The Supreme Court may also take this opportunity to reflect on the very decision making process for classification of bills in general. As Smarika Kumar argues, experience with the Aadhaar Act reveals a structural concern regarding this classification process, which may have substantial implications in terms of undermining public and parliamentary deliberative processes. This “trend,” as Arvind Datar notes, of limiting legislative discussions and decisions of national importance within the space of the Lok Sabha must be swiftly curtailed.

Apart from deciding upon the legality of the nature of the bill, it is vital that the apex court ask the government to categorically respond to the concerns red-flagged by the Standing Committee on Finance, which had taken great exception to the continued collection of data and issuance of Aadhaar numbers in its report, and to the recommendations passed in the Rajya Sabha recently. Further, the repeated violation of the Supreme Court’s interim orders – that the Aadhaar number cannot be made mandatory for availing benefits and services – in contexts ranging from marriages to the guaranteed work programme should also be addressed and responses sought from the Union government.

Evidently, the substantial implications of the Aadhaar Act for national security and fundamental rights of citizens, primarily privacy and data security, make it imperative to conduct a duly balanced public deliberation process, both within and outside the houses of parliament, before enacting such a legislation.