• Divah Sprik Law Notes


Published by: Sonali Jain


India has a bicameral form of Parliament. The two houses i.e. Lok Sabha and Rajya Sabha along with the President constitute the Parliament [Art 79]. Legislation is an important function of Government. A bill is a draft statute which becomes law when passed by both the houses of Parliament and signed by the President. A bill has to be passed through different stages in Parliament before it can become an Act. The first stage is called the ‘First Reading’ where the bills are introduced in either house of Parliament and normally there are no debates and discussions at this stage. Money/Appropriation and Financial bills can be introduced only in Lok Sabha as per Art 109, 110, and 117. Only the general structure of the bill is presented at this stage. The ‘Second Reading’ is the most important stage in the law making process where the detailed discussions and votes clause by clause in favour or against the bill are considered. The bill can be sent either to the house for consideration or can be sent to the select committee of the house of joint committee of the houses. At this stage all the relevant amendments are moved in the houses. The ‘Third Reading’ is where no amendments can be made but only the general character of the bill is considered.

The bill as a whole is voted and passed to the other House where the same process is followed. When the bill is passed by the other house, it is sent to the President for his assent as per Art 111. The President can return the bill for making some amendments but when the bill is sent to him for the second time, he is bound to give assent to the bill. Once the Bill receives President’s assent, it becomes an Act and is published in the Official Gazette.

Bills may be broadly classified into Government Bills and Private Members’ Bills depending upon their initiation in the House by a Minister or a Private Member.

  1. Public bill (Government Bill) reflects the government policies of the ruling party and is for the benefit of public at large. They are introduced in parliament by minister. They are drafted by concerned department in consultation with the law department. Eg. The Public Premises (Eviction of Unauthorised Occupants) Amendment Bill, 2014 was introduced in the Lok Sabha by the Minister of Urban Development, Mr.Venkaiah Naidu, on December 11, 2014.  

  2. Private Members’ Bill is a Bill introduced in either house of Parliament by a member of the Parliament who is not a Minister (i.e. not a member of the Government).PMBs’ can be for any issue including constitutional amendments or money bills and are not deliberated by the council of Ministers as in case of the Public Bill. They have a limited chance of being passed by Parliament as the powers of members are limited and the procedure followed is outside the Parliament. The Hindu Marriage (Amendment) Bill, 1963 is an example of Private Members’ Bills.

Private Bill is a proposal that applies only to a particular individual or group of individuals, or corporate entity. Private law can provide relief from another law, grant a special benefit or powers not available under the present law, or relieve someone from legal responsibility for some allegedly wrongful act. 

A private bill is not to be confused with a private member's bill. A private bill is just introduced in the legislature by a member of the house not by the minister of ruling party. It can be introduced by any member of the Parliament other than a minister. It is less likely to be passed by the Parliament. Its drafting is the responsibility of the concerned members. It reflects the policies of opposition party on public matter. Its introduction in the House requires 1 month’s prior notice unlike the 7 days’ notice in case of Public bills. The rejection of private bill has no loss of parliamentary confidence or resignation of Government.

Classification of Bills- At macro level analysis, there are four types of bills:

1. Ordinary Bill- It is a bill which can be introduced in any House of Parliament by a minister or a private member.

2. Financial Bill- It provides for imposition, remission, alteration, reduction and regulation of taxes proposed in the budget. It is supplemented by a memorandum explaining the provisions attached to it. There are 3 categories of Financial Bills-

  1. First type of financial bills is money bills as they are species of financial bills. Only the financial bills which are provided in Art 110 of the Constitution of India are money bills. They are certified by the Speaker of Lok Sabha.

  2. The second type is Financial Bills (I) which are provided in art 117(1) of the Constitution. A financial bill is basically a Money bill to which some other financial matters are attached apart from Art110. Both the financial and money bill can only be introduced in Lok Sabha on the recommendation of President.

  3. The third type is Financial Bills (II) is one which can be introduced in either house of Parliament. It is treated like an ordinary bill except the special feature that it cannot be passed by either house of Parliament unless the President has recommended that house to consider the bill.

Eg. The Compensatory Afforestation Fund Bill, 2015.

3. Constitutional Amendment bill- To propose amendments in the Constitution which can be passed in 3 ways – simple majority, special majority by not less than two thirds of members present at voting in Parliament and special majority with ratification of not less than one half of state legislatures as provided by Art 368 of the Indian Constitution.  

4. Money Bill-

As per Article 110 of the Constitution of India Money Bill deals only with the following matters and no other extraneous matter:

(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)

According to clause 2 of the above mentioned article, a Bill is neither a money or financial bill if it is 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. Thus this clause excludes Municipal taxes from the purview of money or financial bills.

According to clause 3,  the decision of the Speaker of the House of the People is final in case of confusion between money or financial bill.

  • Money bills include all the financial and appropriation bills and deal with issues like black money, receipt and expenditure of money and tax laws.

  • Parliamentary Procedure in Money Bills- A money bill originates in Lok Sabha only and can’t be introduced in Rajya Sabha [Article 109(1)]. It cannot be introduced or moved except on recommendation of the President [Art 117(1)]. After its passage in Lok Sabha, the money bill is transmitted to Rajya Sabha for its consideration and recommendation and is allowed a period of 14 days for this purpose from the date it receives the bill[Art 109(2)]. If Rajya Sabha fails to return the bill with its recommendation within 14 days allowed to it, the bill is deemed to have been passed by both the houses at the expiry of that period [Art 109(5)]. If Lok Sabha accepts the recommendation of Rajya Sabha, the bill is deemed to have been passed by both the houses in modified form. However if it rejects the recommendations, then the bill is deemed to have been passed in the original form. Presidential assent is necessary to make money bill legally effective after its passage in the two houses.

  • ​An ordinary bill differentiates from Money Bill as ordinary bill can be introduced in any House whereas money bill only originates in the Lok Sabha. All financial bills are not money bills.

  • Financial Bill must be passed by both the houses of Parliament whereas money bill can’t be amended or rejected by Rajya Sabha. Thus, Financial Bill is an ordinary bill except the fact that it can’t originate in Rajya Sabha.

Leading Case Law on Money Bill-

A 5-judge bench in Justice K.S. Puttaswamy (Retd.) and another v. Union  of India and others held that Right to Privacy is a fundamental right of every citizen of India flowing from Art.21 of the Constitution of India. The judgement popularly known as the Aadhaar judgement was delivered by CJI. Dipak Misra, J.A.K. Sikri, J.A.M. Khanwilkar (Majority opinion), J.Chandrachud and J.Ashok Bhushan (dissenting opinion) upheld the validity of Aadhaar Act,2016. It was observed that there should be a balancing of right of personal autonomy which is a part of dignity (and right to privacy) and the other part of dignity of the same individual to lead a dignified life as well (which is again a facet of Article 21 of the Constitution). From the basic structure of Aadhaar, it is difficult to infer that it can create a profile of person on the basis of biometric demographic information stored in CIDR. Thus, only those matters related to person intruding a person’s privacy are protected under Art.21. The linking of mobile number and banking accounts with Aadhaar are unconstitutional. The Aadhaar Act was passed as a money bill as the core provision of the Act i.e. section 7 satisfies all the provisions of Art.110 of the Constitution of India. 

However, the minority held that the Aadhaar Act, 2016 is unconstitutional for failing to meet the necessary requirements to have been certified as a Money Bill under Article 110(1). It was passed as a money bill only on the basis of section 7, 24 and 25 of the Act which dealt with the Consolidated Fund. Section 7 enables Government to regulate any information provided by citizens on Aadhaar platform. Adequate norms must be laid down for each step from the collection to retention of biometric data based on informed consent, along with specifying the time period for retention. Individuals must be given the right to access, correct and delete data.


India being a democratic country, laws are required at each and every step to meet the social, economic and political needs. New laws are made and old ones are abrogated on the recommendation of the Research Committee formed by Government to deal with the changing scenario of the country. 

Going through the mechanism provided for passing a bill, if a Bill isto be considered as a Financial Bill, it should go to Rajya Sabha for consideration after getting passed by the Lok Sabha and cannot become law if any objection is raised in the Upper House.

However, the Aadhaar was passed as money bill without paying heeds to the amendments raised by the Rajya Sabha to avoid the voting in Rajya Sabha because the ruling party NDA had the majority in the Lower House only and not the Upper House. A money bill only deals with spending and receiving money by the Union. The Hon’ble Supreme Court of India passed Aadhaar as money bill considering section 7 which provides benefits and subsidiaries to weaker section as a core provision. 

#Divahspriklawnotes #divahsprik #lawnotes #law #lawyersblog

#bill #financialbill #ordinarybill #moneybill #constitutional

#amendementbill #indianconstitution #parliament


2020. All rights reserved - © DIVAHSPRIK LAWNOTES


  • Facebook
  • Twitter
  • YouTube