Money Bill, Doctrine of Pith and Substances, Doctrine of Colourable Legislation, Financial Emergency .

money bill
Write short notes on the following:
(1) Money Bill
(2) Doctrine of Pith and Substances
(3) Doctrine of Colourable Legislation
(4) Financial Emergency .

Ans. Money Bill—A Money Bill and Financial Bill (Money Bill involving some other matter also) differ from other Bills in that these can be introduced in the House of people and that also with the recommendation of the President. Council of States has no power to amend Money Bill and there is no provision of joint session for Money Bill because House of People has power to accept or deny the amendment made by the Council of States. Article 110 defines Money Bill : According to Article 110, a Money Bill is a Bill which 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 lo 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 money from any such fund;

(d) the appropriation of moneys out of the Consolidated Fund of India;

(e) the declaration of any expenditure to be 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 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)

A Bill shall not be deemed to be a Money Bill by reason only that it provides for—

(i) the imposition of fines or other pecuniary penalties; or

(ii) the demand or payment of fees or licences; or

(iii) 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.

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.

There shall be endorsed on every Money Bill when it is transmitted to the Council of State 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.

A Money Bill can only be introduced in the Lok Sabha. When a Money Bill is passed by the Lok Sabha it is sent to the Rajya Sabha. The Rajya Sabha must return the Bill within 14 days with its recommendations. The Lok Sabha may either accept or reject its recommendation. If the Lok Sabha accepts the recommendation the Bill shall be deemed to be passed by Lok Sabha and if it rejects even then the Bill shall be deemed to be passed by Lok Sabha and sent to the President for his assent.

2. Doctrine of Pith and Substance: There is distribution of the legislative powers of the State between the Union and the State Legislatures under the Indian Constitution. If a law made with respect to the matter or subject enumerated in one list encroaches on the matter or subject enumerated in another list, the doctrine of pith and substance is applied by the Court in order to determine whether the Legislature enacting the law was competent to enact it. If the pith and substance of the law, i.e., the true nature and character of the law relates to a matter which is within the competence of the Legislature which enacted it, it should be held to be ultra vires even though it might incidentally trench on matters not within the competence of the Legislature. [A. S. Krishna v. State of Maharashtra, AIR 1957 SC 2971.

In Kartar Singh v. State of Punjab, (1994) 3 SCC 567, the Supreme Court made it clear that where the legislative competence of a Legislature with regard to a particular enactment is challenged with reference to the entries in the various lists, the doctrine of pith and substance is applied. If the legislation in substance is found to be one on a matter within the competence of the Legislature enacting that statute, then the Act as a whole must be held to be valid notwithstanding any incidental trenching upon matter beyond its competence.

In State of Bombay v. F N. Balsara, AIR 1951 SC 318, the Bombay Prohibition Act, enacted by the Bombay Legislature, prohibiting sale and possession of liquors in the State of Bombay was challenged on the ground that it incidentally encroached upon import and export of liquors across custom frontier, which is a Central subject. The Apex Court held the Act valid on the ground that the pith and substance of the Act fell under the State List and not under the Union List even though the Act incidentally trenched upon the legislative power of the Union.

3. Doctrine of Colourable Legislation: Explaining the meaning and scope of the doctrine of Colourable Legislation, the Supreme Court observed in K.C.G Narayan Deo v. State of Orissa. AIR 1953 SC 375, as follows—If the Constitution distributes the legislative power among different legislative bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of Fundamental Rights, question arises as to whether the Legislature in a particular case has or has not, in respect to the subject matter of the statute or in the method of enacting it, transgressed the limits of its Constitutional powers. Such transgression may be patent, manifest or direct, but it may also be disguised, covert or indirect, or/and it is to this latter class of cases that the expression “Colourable legislation” has been applied in judicial pronouncements. The idea conveyed by the expression is that although apparently a Legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise. In other words, it is the substance of the Act that is material and not merely the formalotitward appearance, and if the subject-matter in substance is something which is beyond the powers of that Legislature to legislate upon the form in which the law is clothed cannot save it from condemnation. The Legislature cannot violate the Constitutional prohibitions by emplOying indirect methods.

In K. T Moopil Nair v. Stale of Kerala, AIR 1961 SC 252, the Apex Court held that the Tranvancore Cochin Land Tax Act apparently purported to be a Taxing Act but it was confiscatory in character and in reality it was not a Taxing Act and therefore it was void.

4. Financial Emergency: Article 360 proVides that if the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory th7reof is threatened, he may by proclamation make a declaration to thatteffect. [Article 360 (I)]. Article 360(2) lays down that a proclamation issued under clause

(a) may be revoked or varied by a subsequent Proclamation;

(b) shall be laid before each House of Parliament;

(c) shall cease to operate at the expiration of two months, unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:

Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub-clause (c), and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that,’ period, the Proclamation shall cease to operate at the expiration of thkty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.

Effects of Financial Emergency. —Article 360 (3) and Article 360 (4) deal with the effects of Financial emergency.

Article 360(3). — During the period any such Proclamation as is mentioned in clause (1) is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose.

Article 360(4). — Notwithstanding anything in this Constitution —

(a) any such direction may include —

(i) a provision requiring the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of a State;

(ii) a provision requiring all Money Bills or other Bills to which the provisions of Article 207 apply to be reserved for the consideration of the President after they are passed by the Legislature of the State.

(b) it shall be competent for the President during the period any Proclamation issued under this Article is in operation to issue directions for the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of the Union including the Judges of the Supreme Court and the High Courts.