SC questions government’s justification for passing Aadhaar Act as Money Bill

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Attorney General says the Act may have several “ancillary provisions”, but taken in its entirety, the Aadhaar Act comes within the ambit of the definition of Money Bill under Article 110 of the Constitution.

The Supreme Court on Wednesday questioned the government’s justification for passing the Aadhaar Act as a Money Bill.

Countering the Central government’s argument that the sole intent of the Aadhaar Act is to act as a weapon for delivering subsidies to targetted beneficiaries, the Constitution Bench led by Chief Justice of India Dipak Misra pointed to Section 57 of the Act.

This provisions contemplate the use of the Aadhaar card as an identification document not only by the government but also by “any body corporate or person”.

“A body corporate? That is as far as you can go away from the concept of a Money Bill,” Justice Chandrachud challenged Attorney General K.K. Venugopal.

Section 57 says “nothing contained in this Act [Aadhaar Act] shall prevent the use of Aadhaar number for establishing the identity of an individual for any purpose, whether by the State or any body corporate or person…”

Mr. Venugopal submittted that the Act’s Preamble itself encapsulated its objective as a legislative “tool” to provide “good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services”. The expenditure for these welfare activities would be drawn from the Consolidated Fund of India.

Mr. Venugopal said the Act may have several “ancillary provisions”, but taken in its entirety the Aadhaar Act came within the ambit of the definition of Money Bill under Article 110 of the Constitution.

The Attorney General countered that the Act contemplated the plight of 300 million people in the country living below the poverty line. “Money has to come necessarily from the Consolidated Fund of India to cover the expenditure of the delivery of targetted subsidies. Not a single provision in the Act is unneccessary or unrelated to the main purpose/pith and substance of the Act, which is giving subsidies,” he argued.

Jairam Ramesh’s petition

Mr. Venugopal was countering arguments raised in a petition by Rajya Sabha member Jairam Ramesh that the Aadhaar Act of 2016 was passed as a Money Bill to “bypass the scrutiny of the Rajya Sabha.”

Mr. Ramesh, represented by senior advocate P. Chidambaram, had argued that a Bill is declared as a Money Bill only in six specific circumstances or matters incidental to them as enumerated in Article 110. The Aadhaar law does not relate to any of these circumstances. The petition had termed the passage of the Aadhaar law a “constitutional fraud”.

On March 11, the Aadhaar Bill was passed by the Lok Sabha after the Speaker ruled it as a ‘MoneyBill’. It was then passed to the Rajya Sabha which, on March 16, returned the Bill with five amendments moved by Mr. Ramesh. These recommendations were rejected by the Lok Sabha, which passed the law called Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016.

Mr. Venugopal referred to Sections 7, 24 and 25 of the Aadhaar Act to show how closely the objective of the statute is linked to the Consolidated Fund. Section 7 says that the Centre or a State may use Aadhaar card to establish the identity of a person to provide him subsidy, benefit or service for which the expenditure is incurred from the Consolidated Fund.

Section 24 says that Centre could make grants of money to the authorities under the Act for the purpose of providing subsidies. Section 25 says that fees or revenue collected by the authority under the Aadhaar Act should be credited to the Consolidated Fund.

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