Supreme Court strikes down rules framed under Sec 184 of Finance Act, 2017

A five-judge Constitution bench of the Supreme Court on Wednesday struck down the rules framed under Section 184 of the Finance Act, 2017 by which the Central government sought to control the terms of services of members of Tribunals and Appellate Tribunals. The apex court also referred the challenge to the passage of the said Act as a Money Bill to a larger, seven-judge bench. This bench shall now decide whether the Finance Act passed by the Modi government in 2017 could have been passed as a money bill or not.

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Delivering the verdict, Chief Justice of India Ranjan Gogoi nonetheless upheld the validity of Section 184 and directed the Centre to reframe the rules in consonance with the top court's judgment in R Gandhi v. Union of India case. The 5-judge bench also comprised Justices DY Chandrachud, Sanjiv Khanna, NV Ramana, and Deepak Gupta. Justice Chandrachud observed that there is no bar on the judicial review of a Speaker's decision to certify a bill as a Money Bill.

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What is the case about?

A batch of petitions, led by the Revenue Bar Association, had challenged the validity of the Finance Act, 2017 and the Tribunal, Appellate Tribunal, and other Authorities (Qualifications, Experience, and Other Conditions of Service of Members) Rules, 2017 (Rules). The main bone of contention was Part XIV of the Finance Act. Part XIV of the Finance Act repealed substantive provisions relating to the administration of 26 Tribunals established and codified under 26 different Central laws. As a substitute, by virtue of Section 184, the Centre was given the powers to frame rules in this regard.

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The petitioners contended the passing of such a law as a Money Bill. Money Bills are those Bills that exclusively contain provisions for the appropriation of money out of the Consolidated Fund of India and the imposition of taxes. Such bills can only be introduced in the Lok Sabha while the Rajya Sabha can only suggest amendments. In this case, all recommendations made by the Upper House regarding the bill passed in the Lok Sabha were ditched, and the Act came into force on April 1, 2017. Petitioners say this passage of the Act as a Money Bill was entirely inappropriate and unconstitutional. The provisions affecting the administration of tribunals can hardly qualify as a purely fiscal measure or enacted purely on financial considerations, the petitioner argued. This basically means that the Centre can't use the excuse of utilisation of public funds to take greater control of the way judicial bodies like the National Green Tribunal and National Company Law Tribunal work.

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