Print Friendly, PDF & Email

SC Strikes Down Finance Act Rules for Appointments to Judicial Tribunals

Topics Covered:

Separation of powers between various organs dispute redressal mechanisms and institutions.


SC Strikes Down Finance Act Rules for Appointments to Judicial Tribunals


What to study?

For Prelims: All about tribunals and money bill.

For Mains: Issues and controversies over the passage of this act.


Context: The Supreme Court has passed an interim order that said the appointments to tribunals shall be on the basis of existing statutes and not the rules framed under the Finance Act of 2017.


What has the court said?

  1. The government should reframe the rules and ordered that until then, the existing laws will govern the tribunals.
  2. The Ministry of law should conduct an impact study and submit report to the apex court.
  3. Validity of passage of Finance Act 2017 as Money Bill should be decided by a larger bench.


What’s the issue?

The Finance Act had given the Centre the power to govern appointments, removal and service conditions of the members of judicial tribunals like National Green Tribunal, Income Tax Appellate Tribunal, National Company Law Appellate Tribunal.

The petitioners had challenged the Finance Act, 2017, particularly Part XIV on various grounds. The Part XIV had repealed provisions relating to the administration of 26 Tribunals established under diverse central laws.

The central government was given the powers to frame rules by virtue of Section 184.

The challenge to the Finance Act, 2017, was on the grounds that it was passed as a Money Bill.

The petitioners had argued that the passage of the Finance Act in the form of a Money Bill amounted to a fraud on the Constitution since they can only be introduced in the Lok Sabha.


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 therein. 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.

In the event a proposed legislation contains other features, ones that are not merely incidental to the items specifically outlined, such a draft law cannot be classified as a money bill. 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.


Sources: the Hindu.