116 As regards compatibility with the 259 principle of proportionality, national legislation governing the conditions under which the providers of electronic communications services must grant the competent national authorities access to the retained data must ensure, in accordance with what was stated in paragraphs 95 and 96 of this judgment, that such access does not exceed the limits of what is strictly necessary.”
278. The U.S. Supreme Court while considering the said test has repeatedly refused to apply the least intrusive test. Vernonia School District Vs. Wayne Acton, 515 US 646, 132 L.Ed. 2D 564, was a case where a Student Athlete Drug Policy was adopted by the School District, which authorised random urine analysis drug testing of students participating in the District School Athletic Programme. A student was denied participation in Football game since he and his parents had refused to sign the testing consent forms. The Actons filed suit, seeking for a declaratory and injunctive relief from enforcement of the Policy. One of the submissions raised was that Policy is disproportionate since it asks all the athletes to undergo urine analysis, the test is not least intrusive test. Repelling the least intrusive test, 260 following was held: “As to the efficacy of this means for addressing the problem: It seems to us self evident that a drug problem largely fueled by the "role model" effect of athletes' drug use, and of particular danger to athletes, is effectively addressed by making sure that athletes do not use drugs. Respondents argue that a "less intrusive means to the same end" was available, namely, "drug testing on suspicion of drug use." Brief for Respondents 4546. We have repeatedly refused to declare that only the "least intrusive" search practicable can be reasonable under the Fourth Amendment. Skinner, supra, at 629, n.9, 103 l Ed 2d 639, 109 S Ct. 1402 (collecting cases).
279. To the same effect is another judgment of U.S. Supreme Court in Board of Education of Independent School District Vs. Lindsay Earls, 536 US 822=153 L.Ed.2d. 735.
280. The submission of the respondents that least intrusive test cannot be applied to judge the proportionality of Aadhaar Act has been refuted by petitioners. Petitioners submit that least intrusive test is a test, which was applied in large number of cases and i.e. the test which may ensure that there is a minimal invasion of privacy. It is submitted that 261 the respondents could have switched to a smart card, which itself contain the biometric information of a person. Respondents submitted that least intrusive test has not been approved either in the Modern Dental (supra) or in the Puttaswamy case. We are also of the view that there are several reasons due to which least intrusive test cannot be insisted. For applying the least intrusive test, the Court has to enter comparative analysis of all methods of identification available, which need to be examined with their details and compared. Court has to arrive at finding as to which mode of identity is a least intrusive. We are of the view that comparison of several modes of identity and to come to a decision, which is least intrusive is a matter, which may be better left to the experts to examine. Further, there are no proper pleadings and material with regard to other modes of identification, which could have been adopted by the State, to come to a definite conclusion by this Court.
281. After noticing the parameters of proportionality, we now need to apply proportionality and other tests 262 to find out as to whether Section 57 satisfies the proportionality and other tests. Section 57 begins with the phrase “nothing contained in this Act shall prevent the use of Aadhaar number.....” for establishing the identity of an individual for any purpose. Section 57 reveals following concepts and ides, which can be para phrased in following manner:
(a) Nothing contained in this Act shall prevent the use of Aadhaar number for identifying the identity of an individual for any purpose.
(b) Whether by the State or body corporate or private person.
(c) Pursuant to any law, for the time being in force or any contract to this effect.
282. The basic theme of the Aadhaar Act to implement the Aadhaar programme was for purposes of disbursement of subsidies, benefits or services to individuals entitled for the same. By various notifications issued under Section 7, the Government has made applicable Aadhaar authentication for large number of 263 schemes namely 133 in number. The idea behind Section 57 is that Aadhaar is liberated from the four corners of the Act and it may not be confined to use under Section 7 alone. The Act does not prohibit the use of Aadhaar for any other purpose. Section 57 is thus in a way clarificatory in nature, which enable the use of Aadhaar for any other purposes. The petitioners have two basic objections. Firstly, they submitted that use of word “any purpose” is unguided and uncontrolled and secondly it can be used by body corporate or persons, pursuant to any law, for the time being in force or any contract to this effect. Puttaswamy judgment has already laid down that any infringement of Privacy right should pass threefold test as noticed above. The first test, which needs to be satisfied for nonintrusion in privacy right is that it should be backed by law. Section 57 cannot be treated as a law, which permit use of Aadhaar number for any purpose. The law providing for use of Aadhaar for any purpose should be rational and proportional. There has to be some object to be achieved by use of 264 Aadhaar, in a particular case, the legislature has ample power to provide for legislative scheme by an enactment making use of Aadhaar and use of Aadhaar has to be backed by a valid law. In event, it is accepted on the strength of Section 57 that a State or body corporate or person, on the basis of any contract to this effect, are permitted to use Aadhaar it shall be wholly unguided and uncontrolled, which is prone to violate the right of privacy. Section 57 makes use of Aadhaar on two basis. Firstly, “pursuant to any law, for the time being in force” and secondly “any contract to this effect”. When the legislature uses the phrase “pursuant to any law, for the time being in force”, obviously the word law used in Section 57 is a law other than Section 57 of Aadhaar Act, 2016 and the Regulations framed thereunder. When any law permits user of Aadhaar, its validity is to be tested on the anvil of threefold test as laid down in Puttaswamy case, but permitting use of Aadhaar on any contract to this effect, is clearly in violation of Right of Privacy. A contract entered between two parties, even 265 if one party is a State, cannot be said to be a law.
283. We thus, are of the view that Section 57 in so far as it permits use of Aadhaar on “any contract to this effect” is clearly unconstitutional and deserves to be struck down. We may again clarify that Section 57 has to be read only to mean that it clarifies that nothing contained in Aadhaar Act shall prevent the use of Aadhaar for establishing the identity of an individual for any purpose, in pursuant to any law. Section 57 itself is not a law, which may permit use of Aadhaar for any purpose. There has to be a valid law in existence, which should also pass the three fold test as laid down in Puttaswamy case for making provision for use of Aadhaar.
284. In view of the foregoing discussions, we held that Section 57, to the extent, which permits use of Aadhaar by the State or any body corporate or person, in pursuant to any contract to this effect is unconstitutional and void. Thus, the last phrase in main provision of Section 57, i.e. “or any contract to 266 this effect” is struck down. Issue No. 11 is answered in the following manner: Ans.11: Section 57, to the extent, which permits use of Aadhaar by the State or any body corporate or person, in pursuant to any contract to this effect is unconstitutional and void. Thus, the last phrase in main provision of Section 57, i.e. “or any contract to this effect” is struck down.
Issue No.12 Whether Section 59 is void or unconstitutional?
285. Learned counsel for the petitioners have submitted that prior to enactment of Aadhaar Act there was no law and all actions undertaken in pursuance of the executive order dated 28.01.2009 including taking of demographic and biometric information of an individual was not backed by any law violated fundamental right of privacy. Violation of fundamental right of privacy cannot be cured by any subsequent legislation. It is well settled that Executive 267 actions, which breach fundamental right of a person must have the authority of law to support it. A post constitutional law or executive act that violates fundamental rights is still born and void ab initio. Further there was no consent, let alone informed consent obtained from individuals at the time of enrolment under the said notification. A validating law must remove the cause of invalidity of previous acts. The cause of invalidity in the present case was the absence of a law governing privacy infringements. However, Section 59 does not create such a legal fiction where the Aadhaar Act is deemed to have been in existence since 2009. It only declares a legal consequence of acts done by Union since 2009, which it cannot do. No procedural safeguards existed pre2016 and thus, even assuming that Section 59 is validly enacted, it has to be declared unconstitutional for violating Articles 14 and 21.
286. Replying the above submissions, respondents submit that Section 59 is retrospective, saving provision which provides a retrospective effect to the 268 notification dated 28.01.2009 and anything done or action taken by the Central Government under the said Resolution.
287. The expression ‘anything done or any action under the Resolution’ is wide enough to cover all the actions including memorandum of undertaken which UIDAI executed as Department of Central Government. Section 59 seeks to save and continue under the said Act what was done under the executive scheme. The submission that breach of fundamental right cannot be retrospectively cured is incorrect. The last phrase of Section 59 uses the expression “shall be deemed”, this expression clearly indicates creation of fiction with the object of providing legislative support to the action taken before the Act. That seeks to continue the entire architecture of Aadhaar which established under the Government Resolution dated 28.01.2009. As a result of deeming provision all the actions under the aforesaid scheme shall be deemed to have been done under the Act and not under the aforesaid notification. We may have a look on Section 59 of the 269 Act which provides:
“59. Anything done or any action taken by the Central Government under the Resolution of the Government of India, Planning Commission bearing notification number A43011/02/2009 Admin. I, dated the 28th January, 2009, or by the Department of Electronics and Information Technology under the Cabinet Secretariat Notification bearing notification number S.O. 2492(E), dated the 12th September, 2015, as the case may be, shall be deemed to have been validly done or taken under this Act.”
288. Justice G.P. Singh in Principles of Statutory Interpretation, 14th Edition, while explaining the legal fiction sum up the Principle in the following words:
“The Legislature is quite competent to create a legal fiction, in other words, to enact a deeming provision for the purpose of assuming existence of a fact which does not really exist provided the declaration of non existent facts as existing does not offend the constitution. Although the word ‘deemed’ is usually used, a legal fiction may be enacted without using that word. For instance, the words ‘as if’ can also be used to create a legal fiction.
In interpreting a provision creating a legal fiction, the court is to ascertain for what purpose the fiction is created, and after ascertaining this, the Court is to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. But in so 270 construing the fiction it is not to be extended beyond the purpose for which it is created, or beyond the language of the section by which it is created.”
289. A Constitution Bench judgment of this Court in M/s. West Ramnad Electric Distribution Co. Ltd. vs. The State of Madras and another, AIR 1962 SC 1753, has been heavily relied by the respondents. The Madras Legislature had passed an Act, the Madras Electricity Supply Undertakings (Acquisition) Act, 1949 for supply of electricity in the province of Madras. By an order dated 17.05.1951 appellant undertaking was acquired and possession was directed to be taken. There was challenge to 1949 Act which challenge was upheld by this Court in Rajahmundry Electric Supply Corporation Ltd. v. State of Andhra Pradesh, AIR 1954 SC 251, on the ground that Act was beyond the legislative competence of the Madras Legislature. The Madras Legislature passed another Act, the Madras Electricity Supply Undertakings (Acquisition) Act, 1949, which also received the Presidential assent. The Act purported to validate the action taken under the 1949 271 Act. A writ petition was filed in Madras High Court challenging the action taken under 1949 Act to continue the possession. The writ petition was dismissed and the matter was taken to this Court. The contention which was raised before this Court has been noticed in paragraph 8 in the following words:
“8....Mr. Nambiar further contends that this notification was invalid for two reasons; it was invalid because it has been issued under the Provisions of an Act which was void as being beyond the legislative competence of the Madras Legislature, and it was void for the additional reason that before it was issued, the Constitution of India had come into force and it offended against the provisions of Art. 31 of the Constitution, and so, Art. 13(2) applied. Section 24 of the Act, no doubt, purported or attempted to validate this notification, but the said attempt has failed because the Act being prospective, s. 24 cannot have retrospective operation. That, in substance, is the first contention raised before us.”
290. Section 24 of the 1949 Act which created a deeming fiction validating the actions taken under the earlier Act has been noticed in paragraph 11 which is to the following effect:
“11. Let us then construe section 24 and decide whether it serves to validate the 272 impugned notification issued by the respondent on the 21st September, 1951.
Section 24 reads thus : "Orders made, decisions or directions given, notifications issued, proceedings taken and acts of things done, in relation to any undertaking taken ever, if they would have been validly made, given, issued, taken or done, had the Madras Electricity Supply Undertakings (Acquisition) Act, 1949 (Madras Act XLIII of 1949), and the rules made thereunder been in force on the date on which the said orders, decisions or directions, notifications, proceeding, acts or things, were made, given, issued, taken or done are hereby declared to have been validly made, given, issued, taken or done, as the case may be, except to the extent to which the said orders, decisions, directions, notifications, proceedings, acts or things are repugnant to the provisions of this Acts."”
291. Repelling the submission of counsel for the appellant it was held that Section 24 had been enacted for the purpose of retrospectively validating action taken under the provisions of the earlier Act. Following was held in paragraph 13:
273
“13....If the Act is retrospective in operation and s. 24 has been enacted for the purpose of retrospectively validating actions taken under the provisions of the earlier Act, it must follow by the very retrospective operation of the relevant provisions that at the time when the impugned notification was issued, these provisions were in existence. That is the plain and obvious effect of the retrospective operation of the statute. Therefore in considering whether Art. 31(1) has been complied with or not, we must assume that before the notification was issued, the relevant provisions of the Act were in existence and so, Art. 31(1) must be held to have been complied with in that sense.”
292. The submission was made that notification issued under the earlier Act contravenes Article 31 which is a fundamental right and cannot be cured by the subsequent law. The contention has been noted in paragraph 15:
15. That takes us to the larger issue raised by Mr. Nambiar in the present appeals. He contends that the power of the legislature to make laws retrospective cannot validly be exercised so as to care the contravention of fundamental rights retrospectively. His contention is that the earlier Act of 1949 being dead and nonexistent, the impugned notification contravened Art. 31(1) and this contravention of a fundamental right cannot be cured by the legislature by passing a subsequent law and making it retrospective. In support of this argument, he has relied on 274 the decision of this Court in Deep Chand v. The State of Uttar Pradesh (1959) Supp. 2 S.C.R. 8.(AIR 1959 SC 648)....”
293. It was held by the Constitution Bench that the Legislature can effectively exercise power of validating action taken under the law which was void for the reason that it contravened fundamental right. In paragraph 16 following has been held:
“16....If a law is invalid for the reason that it has been passed by a legislature without legislative competence, and action is taken under its provisions, the said action can be validated by a subsequent law passed by the same legislature after it is clothed with the necessary legislative power. This position is not disputed. If the legislature can by retrospective legislation cure the invalidity in actions taken in pursuance of laws which were void for want of legislative competence and can validate such action by appropriate provisions, it is difficult to see why the same power cannot be equally effectively exercised by the legislature in validating actions taken under law which are void for the reason that they contravened fundamental rights. As has been pointed out by the majority decision in Deep Chand's case, the infirmity proceeding from lack of legislative competence as well as the infirmity proceeding from the contravention of fundamental rights lead to the same result and that is that the offending legislation is void and honest. That being so, if the legislature can validate actions taken under 275 one class of void legislation, there is no reason why it cannot exercise its legislative power to validate actions taken under the other class of void legislation. We are, therefore, not prepared to accept Mr. Nambiar's contention that where the contravention of fundamental rights is concerned, the legislature cannot pass a law retrospectively validate actions taken under a law which was void because it contravened fundamental rights.”
294. Shri Shyam Divan submits that the above judgment of this Court in M/s. West Ramnad Electric Distribution Co.Ltd. is not applicable. He submits that unlike Section 59 of Aadhaar Act, the provisions in West Ramnad case had no limiting words such as ‘action taken by the Central Government’. Further even under the West Ramnad case principle, the action can be saved would have to be proper under the previous regime. West Ramnad actions were under an earlier statute that was declared ultra vires, which cannot be saved under Section 59 of the Aadhaar Act. The collection of biometrics from individuals right upto 2016 cannot be described as lawful and intra vires the 2009 notification. If it were ultra vires the 2009 276 notification, Section 59 of the Aadhaar Act cannot validate the action.
295. We have already noticed the ratio of the judgment as stated in paragraph 16 in the judgment in West Ramnad case that even if earlier action which is sought to be validated was ultra vires and violates constitutional right, it could have been very well validated by retrospective statute creating a deeming fiction. We are of the view that ratio laid down in West Ramnad case is fully applicable in the present case.
296. Another Constitution Bench in Bishambhar Nath Kohli and others v. State of Uttar Pradesh and others, AIR 1966 SC 573, had occasion to consider the deeming fiction as contained under Act 31 of 1950. Section 58(3) of Act 31 of 1950 as deeming provision that anything done or action taken in exercise of the power conferred under Ordinance 27 of 1949 is to be deemed to have been done or taken in exercise of the power 277 conferred by or under Act 31 of 1950. In paragraphs 7 and 8 of the judgment following has been laid down:
“7. By Ordinance 27 of 1949 a proceeding commenced under Ordinance 12 of 1949 or anything done or action taken in the exercise of the powers conferred under that Ordinance was to be deemed a proceeding commenced, thing done and action taken under the former Ordinance as if that Ordinance were in force on the date on which the proceeding was commenced, thing was done or action was taken. Section 58(3) of Act 31 of 1950 contained a similar deeming provision that anything done or action taken in exercise of the power conferred under Ordinance 27 of 1949 is to be deemed to have been done or taken in exercise of the power conferred by or under Act 31 of 1950, as if the Act were in force on the day on which such thing was done or action was taken.
8. By this chain of fictions, things done and actions taken under Ordinance 12 of 1949 are to be deemed to have been done or taken in exercise of the powers conferred under Act 31 of 1950, as if that Act we re in force on the day on which such thing was done or action taken. The order passed by the Deputy Custodian under s. 6 of Ordinance 12 of 1949 was, therefore, for the purpose of this proceeding, to be deemed an order made in exercise of the power conferred by Act 31 of 1950 as if that Act were in force on the day on which the order was passed.”
297. The ratio of judgment in West Ramnad(supra) has been repeatedly applied by this Court in several 278 judgments. Reference is made to Hari Singh and others vs. The Military Estate Officer and another, 1972 (2) SCC 239, which was a case rendered by a sevenJudge Constitution Bench. In paragraph 16 following has been held:
“16. The ruling of this Court in West Ramnad Electric Distribution Co. Ltd.(1) case establishes competence of the legislature to make laws retrospective in operation for the purpose of validation of action done under an earlier Act which has been declared by a decision of the court to be invalid. It is to be appreciated that the validation is by virtue of the provisions of the subsequent piece of legislation.”
298. Justice Krishna Iyer, J. in Krishna Chandra Gangopadhyaya and others vs. The Union of India and others, 1975 (2) SCC 302, while considering validation of Act held that the Legislature can retrospectively validate what otherwise was inoperative law or action. In paragraph 25 following has been held:
“25. The ratio of West Ramnad (supra) is clear. The Legislature can retrospectively validate what otherwise was inoperative law or action. Unhappy wording, infelicitous expression or imperfect or inartistic drafting may not necessarily defeat, for that reason alone, the obvious object of the 279 validating law and its retrospective content.”
299. This Court again in ITW Signode India Ltd. vs. Collector of Central Excise, 2004 (3) SCC 48, held that curative statutes by their very nature are intended to operate upon and affect past transaction. In paragraph 61 following has been held:
“61. A statute, it is trite, must be read as a whole. The plenary power of legislation of the Parliament or the State Legislature in relation to the legislative fields specified under Seventh Schedule of the Constitution of India is not disputed. A statutory act may be enacted prospectively or retrospectively. A retrospective effect indisputably can be given in case of curative and validating statute. In fact curative statutes by their very nature are intended to operate upon and affect past transaction having regard to the fact that they operate on conditions already existing. However, the scope of the validating act may vary from case to case.”
300. The argument that an action or provision hit by Article 14 can never be validated was specifically rejected by this Court in The State of Mysore and another vs. d. Achiah Chetty, Etc., (1969) 1 SCC 248, in paragraph 15 following has been held:
280
“15. Mr. S. T. Desai, however, contends that an acquisition hit by Article 14 or anything done previously cannot ever be validated, unless the vice of unreasonable classification is removed and the Validating Act is ineffective for that reason. This argument leads to the logical conclusion that a discrimination arising from selection of one law for action rather than the other, when two procedures are available, can never be righted by removing retrospectively one of the competing laws from the field. This is a wrong assumption....”
301. A statute creates a legal fiction to achieve a legislative purpose. We may refer to the celebrated judgment of Lord Asquith in East End Dwelling Co.Ltd. And Finsury Borough Council, 1952 AC 109, following is the enunciation of Lord Asquith:
“If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it... The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.”
302. Legislature has often created legal fiction to save several actions which had happened prior to 281 enactment. Reference is made to judgment of this Court in Nar Bahadur Bhandari and another vs. State of sikkim and others, (1998) 5 SCC 39. In the above case deeming fiction was created by Section 30 of Prevention of Corruption Act, 1988. Section 30 provides that any action taken or purported to have been done or taken under or in pursuance of the Acts so repeated shall be deemed to have been done or taken under 1988 Act. Following was stated in paragraph 10:
“10....In the present case, the Act of 1988 is the repealing Act. Subsec. (2) of Section 30 reads as follows:
"30(2) Notwithstanding such repeal, but without prejudice to the application of section 6 of the General Clauses Act 1897 (10 of 1897), anything done or any action taken or purported to have been done or taken under or in pursuance of the Acts so repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under or in pursuance of the corresponding provision of this Act."
12. The said Subsection while on the one hand ensures that the application of Section 6 of the General Clauses Act is not prejudiced, on the other it expresses a different intention as contemplated by the said Section 6. The last part of the above 282 Subsection introduces a legal fiction whereby anything done or action taken under or in pursuance of the Act of 1947 shall be deemed to have been done or taken under or in pursuance of corresponding provisions of the Act of 1988. That is, the fiction is to the effect that the Act of 1988 had come into force when such thing was done or action was taken.”
303. An elaborate consideration on deeming fiction was made by threeJudge Bench of this Court in State of Karnataka vs. State of Tamil Nadu and others, (2017) 3 SCC 362, one of us, Justice Dipak Misra, as he then was, speaking for the Court in paragraphs 72 to 74:
“72. The second limb of submission of Mr. Rohatgi as regards the maintainability pertains to the language employed Under Section 6(2) of the 1956 Act, which reads as follows:
“6(2) The decision of the Tribunal, after its publication in the Official Gazette by the Central Government under Subsection (1), shall have the same force as an order or decree of the Supreme Court.”
73. Relying on Section 6(2), which was introduced by way of Amendment Act 2002 (Act No. 14 of 2002) that came into force from 6.8.2002, it is submitted by Mr. Rohatgi that the jurisdiction of this Court is ousted as it cannot sit over in appeal on its own decree. The said submission is seriously resisted by Mr. Nariman and Mr. Naphade, 283 learned senior Counsel contending that the said provision, if it is to be interpreted to exclude the jurisdiction of the Supreme Court of India, it has to be supported by a constitutional amendment adding at the end of Article 136(2) the words "or to any determination of any tribunal constituted under the law made by Parliament Under Article 262(2)" and, in such a situation, in all possibility such an amendment to the Constitution may be ultra vires affecting the power of judicial review which is a part of basic feature of the Constitution. Learned senior Counsel for the Respondent has drawn a distinction between the conferment and the exclusion of the power of the Supreme Court of India by the original Constitution and any exclusion by the constitutional amendment. Be that as it may, the said aspect need not be adverted to, as we are only required to interpret Section 6(2) as it exists today on the statute book. The said provision has been inserted to provide teeth to the decision of the tribunal after its publication in the official gazette by the Central Government and this has been done keeping in view the Sarkaria Commission's Report on CentreState relations (1980). The relevant extract of the Sarkaria Commission's Report reads as follows:
17.4.19 The Act was amended in 1980 and Section 6A was inserted. This Section provides for framing a scheme for giving effect to a Tribunal's award. The scheme, inter alia provides for the establishment of the authority, its term of office and other condition of service, etc. but the mere creation of such an agency will not be able to ensure implementation of a Tribunal's award.
Any agency set up Under Section 6A 284 cannot really function without the cooperation of the States concerned.
Further, to make a Tribunal's award binding and effectively enforceable, it should have the same force and sanction behind it as an order or decree of the Supreme Court. We recommend that the Act should be suitably amended for this purpose.
17.6.05 The InterState Water Disputes Act, 1956 should be amended so that a Tribunal's Award has the same force and sanction behind it as an order or decree of the Supreme Court to make a Tribunal's award really binding.
74....Parliament has intentionally used the words from which it can be construed that a legal fiction is meant to serve the purpose for which the fiction has been created and not intended to travel beyond it. The purpose is to have the binding effect of the tribunal's award and the effectiveness of enforceability. Thus, it has to be narrowly construed regard being had to the purpose it is meant to serve.
304. In paragraphs 75, 76 and 77 following has been laid down:
“75. In this context, we may usefully refer to the Principles of Statutory Interpretation, 14th Edition by G.P. Singh. The learned author has expressed thus:
“In interpreting a provision creating a legal fiction, the court is to ascertain for what purpose the 285 fiction is created1, and after ascertaining this, the Court is to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. But in so construing the fiction it is not be extended beyond the purpose for which is created, or beyond the language of the Section by which it is created4.
It cannot also be extended by importing another fiction5. The principles stated above are 'well settled'. A legal fiction may also be interpreted narrowly to make the statute workable.”
76. In Aneeta Hada v. Godfather Travels and Tours, (2012) 5 SCC 661, a threeJudge Bench has ruled thus:
“37. In State of T.N. v. Arooran Sugars Ltd., (1997) 1 SCC 326 the Constitution Bench, while dealing with the deeming provision in a statute, ruled that the role of a provision in a statute creating legal fiction is well settled. Reference was made to Chief Inspector of Mines v. Karam Chand Thapar, AIR 1961 SC 838, J.K. Cotton Spg. and Wvg. Mills Ltd. v. Union of India, 1987 Supp.
SCC 350, M. Venugopal v. LIC, (1994) 2 SCC 323 and Harish Tandon v. ADM, Allahabad, (1995) 1 SCC 537 and eventually, it was held that when a statute creates a legal fiction saying that something shall be deemed to have been done which in fact and truth has not been done, the Court has to examine and ascertain as to for what purpose and between which persons such a statutory fiction is 286 to be resorted to and thereafter, the courts have to give full effect to such a statutory fiction and it has to be carried to its logical conclusion.”
38. From the aforesaid pronouncements, the principle that can be culled out is that it is the bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term "deemed" has to be read in its context and further, the fullest logical purpose and import are to be understood. It is because in modern legislation, the term "deemed" has been used for manifold purposes. The object of the legislature has to be kept in mind.”
77. In Hari Ram, the Court has held that in interpreting the provision creating a legal fiction, the court is to ascertain for what purpose the fiction is created and after ascertaining the same, the court is to assume all those facts and consequences which are incidental or inevitable corollaries for giving effect to the fiction.”
305. Applying the ratio of this Court as noticed above, it is clear that Parliamentary legislative intent of Section 59 is to save all actions taken by Central Government under the notification dated 287 28.01.2009 and notification dated 12.09.2015 deeming the same to have been validly done under the Aadhaar Act by creating a legal fiction. The intention to save all actions taken under the aforesaid two notifications and treat them to have done under that Act is clear, it is the purpose and object of Section
59. Section 59 has to be interpreted to give meaning to the legislative intent to hold otherwise shall defeat the purpose of Section 59. As observed, Legislature by legislative device can cover actions taken earlier while creating any legal fiction which has actually been done by Section 59.
306. There is one more submission of the petitioners to be considered. Petitioner’s case is that there was no consent or informed consent obtained from individuals for enrolment made consequent to notification dated 28.01.2009, the notification dated 28.01.2009 and the scheme thereafter does not clearly indicate that the enrolment for Aadhaar was voluntary. This Court has issued an interim order directing the enrolment be treated as voluntary, hence, it cannot be 288 accepted that those got enrolled after 28.01.2009 did not give consent. The individual provided demographic information and gave biometric information and also signed the enrolment form. The residents after the enrolment were required to confirm that information contained were provided by them and are of his own true and correct. On sign slip, he was required to sign or put his thumb impression themselves. It is on the record that more than 100 crores enrolment were completed prior to enforcement of Aadhaar Act 2016. On the basis of Aadhaar Act large number of persons must have received benefits of subsidies and services, thus, the enrolments prior to enforcement of Act, 2016 cannot be declared illegal and void. In view of the aforementioned discussion, we answer the Issue No.12 in the following manner;
Ans.12: Section 59 has validated all actions taken by the Central Government under the notifications dated 28.01.2009 and 289 12.09.2009 and all actions shall be deemed to have been taken under the Aadhaar Act.
Issue No. 13 Whether Collecting the identity information of children between 5 to 18 years is unconstitutional?
307. Section 5 of the Act provides that the Authority shall take special measures to issue Aadhaar number to women, children, senior citizens, persons with disability, unskilled and unorganised workers, nomadic tribes or to such other persons who do not have any permanent dwelling house and such other categories of individuals as may be specified by regulations. Section 5 contemplates special measures for issuance of Aadhaar number to children. The Aadhaar (Enrolment and Update) Regulations, 2016 contains some special measures. One of the special measures is Regulation 5, which provides for information required for enrolment of children below five years of age. Regulation 5 is as follows:
5. Information required for enrolment of 290 children below five years of age. — (1) For children below the five years of age, the following demographic and biometric information shall be collected:
(a) Name
(b) Date of Birth
(c) Gender
(d) Enrolment ID or Aadhaar number of any one parent, preferably that of the mother in the event both parents are alive, or guardian. The Aadhaar number or EID of such parent or guardian is mandatory, and a field for relationship will also be recorded.
(e) The address of such child which is the same as that of the linked parent / guardian.
(f) Facial image of the child shall be captured. The biometric information of any one parent / guardian shall be captured or authenticated during the enrolment.
(2) The Proof of Relationship (PoR) document as listed in schedule II for establishing the relationship between the linked parent/guardian and the child shall be collected at the time of enrolment. Only those children can be enrolled based on the relationship document (PoR), whose names are recorded in the relationship document.
308. For children below five, no core biometric 291 informations are captured and only biometric information of any one parent/guardian is captured. The objection raised by petitioners is with regard to children between 5 to 18 years on the ground that they being minors, parental consent is not taken. We have noted above that for Aadhaar enrolment, for verification of information consent is obtained from the person submitting for enrolment. Thus, the enrolment for Aadhaar number is on consent basis. Although, it is different matter that for the purpose of obtaining any benefit or service, a person is obliged to enrol for Aadhaar. The petitioners are right in their submissions that for enrolment of a children between 5 and 18 years, there has to be consent of their parents or guardian because they themselves are unable to give any valid consent for enrolment. We, thus, have to read parental consent in Regulation 4 in so far as children of 5 to 18 years are concerned so that the provision in reference to children between 5 to 18 years may not become unconstitutional. We thus answer Question No. 13 in 292 following manner: Ans.13: Parental consent for providing biometric information under Regulation 3 & demographic information under Regulation 4 has to be read for enrolment of children between 5 to 18 years to upheld the constitutionality of Regulations 3 & 4 of Aadhaar (Enrolment and Update) Regulations, 2016.
Issue No.14 Whether Rule 9 as amended by the Prevention of MoneyLaundering (Second Amendment) Rules, 2017 is unconstitutional?
309. For answering the above issue we need to advert to the objects and scheme of the Prevention of Money Laundering Act, 2002(PMLA, 2002). The scheme as delineated by the Prevention of MoneyLaundering (Maintenance of Records) Rules, 2005 also need to be looked into before coming to the Second Amendment Rules, 2017. The PMLA, 2002 has been enacted to prevent moneylaundering and to provide for confiscation of property derived from, or involved in, 293 moneylaundering and for matters connected therewith or incidental thereto. The Act has long Preamble entire of which needs to be noted, which is as follows:
“An Act to prevent moneylaundering and to provide for confiscation of property derived from, or involved in, moneylaundering and for matters connected therewith or incidental thereto.
WHEREAS the Political Declaration and Global Programme of Action, annexed to the resolution S17/2 was adopted by the General Assembly of the United Nations at its seventeenth special session on the twenty third day of February, 1990;
AND WHEREAS the Political Declaration adopted by the Special Session of the United Nations General Assembly held on 8th to 10th June, 1998 calls upon the Member States to adopt national moneylaundering legislation and programme; AND WHEREAS it is considered necessary to implement the aforesaid resolution and the Declaration;
310. Two international declarations have been specifically mentioned in the Preamble which pave the way for the enactment. The resolution adopted by the General Assembly of the United Nations on 23rd February, 1990 contained the recommendations on 294 moneylaundering of the Financial Action Task Force aforesaid. The Political Declaration and Action Plan against moneylaundering by the United Nations General Assembly held on 10.06.1998 which called upon the States Members of the United Nations to adopt its declaration to the following effect:
“Political Declaration and Action Plan against Money Laundering adopted at the Twentieth Special Session of the United Nations General Assembly devoted to “countering the world drug problem together” New Your, 10 June 1998(excerpts) “We, the States Members of the United Nations, … … … …
15. Undertake to make special efforts against the laundering of money linked to drug trafficking and, in that context, emphasize the importance of strengthening international, regional and subregional cooperation, and recommend that States that have not yet done so adopt by the year 2003 national moneylaundering legislation and programmes in accordance with relevant provisions of the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988, as well as the measures for countering moneylaundering, adopted at the present session;
… … … …
“COUNTERING MONEYLAUNDERING”
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The General Assembly,
… … … …
Emphasizing the enormous efforts of a number of States to draw up and apply domestic legislation that identifies the activity of moneylaundering as a criminal offence, Realizing the importance of progress being made by all States in conforming to the relevant recommendations and the need for States to participate actively in international and regional initiatives designed to promote and strengthen the implementation of effective measures against moneylaundering,
1. Strongly condemns the laundering of money derived from illicit drug trafficking and other serious crimes, as well as the use of the financial systems of States for that purpose;
2. Urges all States to implement the provisions against moneylaundering that are contained in the United Nations Convention against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances of 1988 and the other relevant international instruments on moneylaundering, in accordance with fundamental constitutional principles, by applying the following principles:
(a) Establishment of a legislative framework to criminalize the laundering of money derived from serious crimes in order to provide for the prevention, detection, investigation and prosecution of the crime of moneylaundering through, inter alia:
(i) Identification, freezing, seizure and confiscation of the proceeds of crime;
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(ii) International cooperation; and mutual legal assistance in cases involving money laundering;
(iii) Inclusion of the crime of money laundering in mutual legal assistance agreements for the purpose of ensuring judicial assistance in investigations, court cases or judicial proceedings relating to that crime;
(b) Establishment of an effective financial and regulatory regime to deny criminals and their illicit funds access to national and international financial systems, thus preserving the integrity of financial systems worldwide and ensuring compliance with laws and other regulations against money laundering through:
(i) Customer identification and verification requirements applying the principle of "know your customer", in order to have available for competent authorities the necessary information on the identity of clients and the financial movements that they carry out;
(ii) Financial recordkeeping;
(iii) Mandatory reporting of suspicious activity;
(iv) Removal of bank secrecy impediments to efforts directed at preventing, investigating and punishing moneylaundering;
(v) Other relevant measures;
(c) Implementation of law enforcement measures to provide tools for, inter alia:
(i) Effective detection, investigation, prosecution and conviction of criminals engaging in moneylaundering activity;
(ii) Extradition procedures;
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(iii) Informationsharing mechanisms;”
311. The modern world is more focused on economic growth. Every nation tries to march forward in achieving the rapid economic growth. Economics is factor which not only plays a major role in the future of nation but also in all human organisations. Most of the individuals also aspire for their financial well being but for the financial system and working of economic, road blocks are felt both by the nations and human organisations. The siphoning away of huge volumes of money from normal economic growth poses a real danger to the economics and affects the stability of the global market which also empowers corruption organised crime. Proceeds of moneylaundering are disguised to acquire properties and other assets or to make investments. At some stage moneylaundering involves conversion process with the objective to give the appearance that the money has a legitimate source. The banking and financial secrecy is another bottleneck for countries who genuinely want to counter moneylaundering. It is inherent in the activity of 298 moneylaundering to keep the entire process secret. The Parliament with the objectives outlined in the international declaration enacted the PMLA Act. Para 1 of the Statement of Objects and Reasons of Act is stated as follows:
“STATEMENT OF OBJECTS AND REASONS It is being realised, world over, that moneylaundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. Some of the initiatives taken by the international community to obviate such threat are outlined below:—
(a) the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, to which India is a party, calls for prevention of laundering of proceeds of drug crimes and other connected activities and confiscation of proceeds derived from such offence.
(b) the Basle Statement of Principles, enunciated in 1989, outlined basic policies and procedures that banks should follow in order to assist the law enforcement agencies in tackling the problem of moneylaundering.
(c) the Financial Action Task Force established at the summit of seven major industrial nations, held in Paris from 14th to 16th July, 1989, to examine the problem of moneylaundering has made forty recommendations, which provide the foundation material for comprehensive legislation to combat the problem of moneylaundering. The 299 recommendations were classified under various heads. Some of the important heads are—
(i) declaration of laundering of monies carried through serious crimes a criminal offence;
(ii) to work out modalities of disclosure by financial institutions regarding reportable transactions;
(iii) confiscation of the proceeds of crime;
(iv) declaring moneylaundering to be an extraditable offence; and
(v) promoting international co operation in investigation of moneylaundering.
(d) the Political Declaration and Global Programme of Action adopted by United Nations General Assembly by its Resolution No. S17/2 of 23rd February, 1990, inter alia, calls upon the member States to develop mechanism to prevent financial institutions from being used for laundering of drug related money and enactment of legislation to prevent such laundering.
(e) the United Nations in the Special Session on countering World Drug Problem Together concluded on the 8th to the 10th June, 1998 has made another declaration regarding the need to combat moneylaundering. India is a signatory to this declaration.
….................................”
312. Paragraph two of the Statement of Objects and Reasons noticed the legislative process which was 300 initiated by introducing the Prevention of Money Laundering Bill, 1998 which was introduced in the Lok Sabha. The Bill was referred to the Standing Committee on Finance, which submitted its report on 04.03.1999 to the Lok Sabha. Various recommendations of the Standing Committee were accepted by the Central Government and made provisions of the said recommendations in the Bill. Thereafter, the Bill was presented in the Parliament which after receiving the assent of the President published in the Gazette on 01.07.2005. Act, 2002 has been amended by various Parliamentary Acts. By amendments made in the year 2013 by Act 2 of 2013, the Legislature has attempted to keep the pace with the other countries of the world by making more stringent provision to prevent money laundering which is the root as well as the result of the black money economy. Moneylaundering is defined under Section 3 which is to the following effect:
“3. Offence of moneyLaundering.Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected proceeds of crime including its concealment, possession, 301 acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of moneylaundering.”
313. Section 2 (ha) defines client and Section 2(wa) defines reporting entity which are as follows;
“2.(ha) "client" means a person who is engaged in a financial transaction or activity with a reporting entity and includes a person on whose behalf the person who engaged in the transaction or activity, is acting;
(wa) "reporting entity" means a banking company, financial institution, intermediary or a person carrying on a designated business or profession;”
314. Section 12 lays down various obligations on reporting entity to maintain records. Section 12(1)(c) reads:
“Section 12. Reporting entity to maintain records.(l) Every reporting entity shall … … … …
(c) verify the identity of its clients in such manner and subject to such conditions, as may be prescribed; “ 302
315. The Central Government in exercise of its rule making power has made Rules, namely, the Prevention of Moneylaundering (Maintenance of Records) Rules, 2005 (hereinafter referred to as “Rules, 2005). In the present case challenge is to Rule 9 as amended by Second Amendment Rules, 2017. We may thus notice the amendments made in Rule 9 by Second Amendment Rules, 2017. By Second Amendment Rules, 2017, subRule (4) to subRule (9) of Rule 9 were substituted in following manner:
“(b) in rule 9, for subrule (4) to subrule (9), the following subrules shall be substituted, namely:— “(4) Where the client is an individual, who is eligible to be enrolled for an Aadhaar number, he shall for the purpose of subrule (1) submit to the reporting entity,—
(a) the Aadhaar number issued by the Unique Identification Authority of India; and
(b) the Permanent Account Number or Form No. 60 as defined in Incometax Rules, 1962, and such other documents including in respect of the nature of business and financial status of the client as may be required by the reporting entity:303
Provided that where an Aadhaar number has not been assigned to a client, the client shall furnish proof of application of enrolment for Aadhaar and in case the Permanent Account Number is not submitted, one certified copy of an 'officially valid document' shall be submitted.
Provided further that photograph need not be submitted by a client falling under clause (b) of subrule (1).
(4A) Where the client is an individual, who is not eligible to be enrolled for an Aadhaar number, he shall for the purpose of subrule (1), submit to the reporting entity, the Permanent Account Number or Form No. 60 as defined in the Incometax Rules, 1962:
Provided that if the client does not submit the Permanent Account Number, he shall submit one certified copy of an ‘officially valid document' containing details of his identity and address, one recent photograph and such other documents including in respect of the nature or business and financial status of the client as may be required by the reporting entity.
(5) Notwithstanding anything contained in subrules (4) and (4A), an individual who desires to open a small account in a banking company may be allowed to open such an account on production of a selfattested photograph and affixation of signature or thumb print, as the case may be, on the form for opening the account:
Provided that
(i) the designated officer of the banking company, while opening the 304 small account, certifies under his signature that the person opening the account has affixed his signature or thump print, as the case may be, in his presence;
(ii) the small account shall be opened only at Core Banking Solution linked banking company branches or in a branch where it is possible to manually monitor and ensure that foreign remittances are not credited to a small account and that the stipulated limits on monthly and annual aggregate of transactions and balance in such accounts are not breached, before a transaction is allowed to take place;
(iii) the small account shall remain operational initially for a period of twelve months, and thereafter for a further period of twelve months if the holder of such an account provides evidence before the banking company of having applied for any of the officially valid documents within twelve months of the opening of the said account, with the entire relaxation provisions to be reviewed in respect of the said account after twentyfour months;
(iv) the small account shall be monitored and when there is suspicion of money laundering or financing of terrorism or other high risk scenarios, the identity of client shall be established through the production of officially valid documents, as referred to in subrule (4) and the Aadhaar number of the client or where an Aadhaar number has 305 not been assigned to the client, through the production of proof of application towards enrolment for Aadhaar along with an officially valid document;
Provided further that if the client is not eligible to be enrolled for an Aadhaar number, the identity of client shall be established through the production of an officially valid document;
(v) the foreign remittance shall not be allowed to be credited into the small account unless the identity of the client is fully established through the production of officially valid documents, as referred to in sub rule (4) and the Aadhaar number of the client or where an Aadhaar number has not been assigned to the client, through the production of proof of application towards enrolment for Aadhaar along with an officially valid document:
Provided that if the client is not eligible to be enrolled for the Aadhaar number, the identity of client shall be established through the production of an officially valid document.
(6) Where the client is a company, it shall for the purposes of subrule (1), submit to the reporting entity the certified copies of the following documents:—
(i) Certificate of incorporation;
(ii) Memorandum and Articles of Association;
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(iii) A resolution from the Board of Directors and power of attorney granted to its managers, officers or employees to transact on its behalf;
(iv) (a) Aadhaar numbers; and
(b) Permanent Account Numbers or Form 60 as defined in the Incometax Rules, 1962.
issued to managers, officers or employees holding an attorney to transact on the company’s behalf or where an Aadhaar number has not been assigned, proof of application towards enrolment for Aadhaar and in case Permanent Account Number is not submitted an officially valid document shall be submitted:
Provided that for the purpose of this clause if the managers, officers or employees holding an attorney to transact on the company's behalf are not eligible to be enrolled for Aadhaar number and do not submit the Permanent Account Number, certified copy of an officially valid document shall be submitted.
(7) Where the client is a partnership firm, it shall, for the purposes of subrule (1), submit to the reporting entity the certified copies of the following documents:—
(i) registration certificate;
(ii) partnership deed; and
(iii) (a) Aadhaar number; and
(b) Permanent Account Number or Form 60 as defined in the Incometax Rules, 1962.
307issued to the person holding an attorney to transact on its behalf or where an Aadhaar number has not been assigned, proof of application towards enrolment for Aadhaar and in case Permanent Account Number is not submitted an officially valid document shall be submitted:
Provided that for the purpose of this clause, if the person holding an attorney to transact on the company's behalf is not eligible to be enrolled for Aadhaar number and does not submit the Permanent Account Number, certified copy of an officially valid document shall be submitted.
(8) Where the client is a trust, it shall, for the purposes of subrule (1) submit to the reporting entity the certified copies of the following documents:—
(i) registration certificate;
(ii) trust deed; and
(iii) (a) Aadhaar number; and
(b) Permanent Account Number or Form 60 as defined in the Incometax Rules, 1962, issued to the person holding an attorney to transact on its behalf or where Aadhaar number has not been assigned, proof of application towards enrolment for Aadhaar and in case Permanent Account Number is not submitted an officially valid document shall be submitted:
Provided that for the purpose of this clause if the person holding an attorney to transact on the 308 company's behalf is not eligible to be enrolled for Aadhaar number and does not submit the Permanent Account Number, certified copy of an officially valid document shall be submitted.
(9) Where the client is an unincorporated association or a body of individuals, it shall submit to the reporting entity the certified copies of the following documents:—
(i) resolution of the managing body of such association or body of individuals;
(ii) power of attorney granted to him to transact on its behalf;
(iii) (a) the Aadhaar number; and
(b) Permanent Account Number or Form 60 as defined in the Incometax Rules, 1962, issued to the person holding an attorney to transact on its behalf or where Aadhaar number has not been assigned, proof of application towards enrolment for Aadhaar and in case the Permanent Account Number is not submitted an officially valid document shall be submitted; and
(iv) such information as may be required by the reporting entity to collectively establish the legal existence of such an association or body of individuals:
Provided that for the purpose of this clause if the person holding an attorney to transact on the company’s behalf is not eligible to be enrolled for Aadhaar number and does not 309 submit the Permanent Account Number, certified copy of an officially valid document shall be submitted.”
(c) after subrule (14), the following subrules shall be inserted, namely,— “(15) Any reporting entity, at the time of receipt of the Aadhaar number under provisions of this rule, shall carry out authentication using either eKYC authentication facility or Yes/No authentication facility provided by Unique Identification Authority of India.
(16) In case the client referred to in subrules (4) to (9) of rule 9 is not a resident or is a resident in the States of Jammu and Kashmir, Assam or Maghalaya and does not submit the Permanent Account Number, the client shall submit to the reporting entity one certified copy of officially valid document containing details of his identity and address, one recent photograph and such other document including in respect of the nature of business and financial status of the client as may be required by the reporting entity.
(17) (a) In case the client, eligible to be enrolled for Aadhaar and obtain a Permanent Account Number, referred to in subrules (4) to (9) of rule 9 does not submit the Aadhaar number or the Permanent Account Number at the time of commencement of an account based relationship with a reporting entity, the client shall submit the same within a period of six months 310 from the date of the commencement of the account based relationship:
Provided that the clients, eligible to be enrolled for Aadhaar and obtain the Permanent Account Number, already having an account based relationship with reporting entities prior to date of this notification, the client shall submit the Aadhaar number and Permanent Account Number by 31st December, 2017.
(b) As per regulation 12 of the Aadhaar (Enrolment and Update) Regulations, 2016, the local authorities in the State Governments or Unionterritory Administrations have become or are in the process of becoming UIDAI Registrars for Aadhaar enrolment and are organising special Aadhaar enrolment camps at convenient locations for providing enrolment facilities in consultation with UIDAI and any individual desirous of commencing an account based relationship as provided in this rule, who does not possess the Aadhaar number or has not yet enrolled for Aadhaar, may also visit such special Aadhaar enrolment camps for Aadhaar enrolment or any of the Aadhaar enrolment centres in the vicinity with existing registrars of UIDAI.
(c) In case the client fails to submit the Aadhaar number and Permanent Account Number within the aforesaid six months period, the said account shall cease to be operational till the time the Aadhaar number and 311 Permanent Account Number is submitted by the client:
Provided that in case client already having an account based relationship with reporting entities prior to date of this notification fails to submit the Aadhaar number and Permanent Account Number by 31st December, 2017, the said account shall cease to be operational till the time the Aadhaar number and Permanent Account Number is submitted by the client.
(18) In case the identity information relating to the Aadhaar number or Permanent Account Number submitted by the client referred to in subrules (4) to (9) of rule 9 does not have current address of the client, the client shall submit an officially valid document to the reporting entity.”
316. The challenge to Second Amendment Rules, 2017 is on the ground that it violate Articles 14, 19(1)(g), 21 and 300A of the Constitution of India; Sections 3, 7 and 51 of the Aadhaar Act and also ultra vires to the provisions of PMLA Act, 2002.
317. Elaborating his submissions Shri Arvind P. Datar learned senior counsel submits that Second Amendment Rules violate Article 14 and 21 since persons choosing 312 not to enrol for Aadhaar number cannot operate bank account and valid explanation has to be given as to why all banks have to be authenticated.
318. Violative of Article 19(1)(g) because the Rules refer to companies, firms, trusts, etc. whereas Aadhaar Act is only to establish identity of individuals. Violative of Article 300A since even temporary deprivation can only be done by primary legislation. The Second Amendment Rules do not pass proportionality test. No proper purpose has been established. No explanation has been given that the measures undertaken to such are rationale and connected to the fulfillment of the purpose and there are no alternative measures with a lesser degree of legislation. When the banks have already verified all accounts as per eKYC norms, it is completely arbitrary to make permanent linking/seeding of all Aadhaar numbers with the bank accounts. Second Amendment Rules fail to satisfy the proportionality test, are irrational, and manifestly arbitrary. 313
319. Shri Tushar Mehta, learned Additional Solicitor General refuting the submission, submits that Second Amendment Rules carry on the object of 2002, Act. The verification of bank account by way of Aadhaar is done for the reason that often bank accounts are opened in either fictitious names or in the name of wrong persons on the basis of forged identity documents and financial crimes are committed. It is seen that accommodation entries are mostly provided through the banking channels by bogus companies to convert black money into white. Benami transactions routinely take place through banking channels. All of the above, can to a large extent be checked by verifying Aadhaar with bank accounts to ensure that the account belongs to the person who claims to be the account holder and that he or she is a genuine person. Verification of bank account with Aadhaar also ensures that the direct benefit transfer of subsidies reach the Aadhaar verified bank account and is not diverted to some other account. Shell companies are often used to open bank accounts to hold unaccounted money of other 314 entities under fictitious identities which will also be curbed once Aadhaar verification is initiated.
320. Now, we come to the respective submissions of the parties. A perusal of the Second Amendment Rules, 2017 indicates that the State has sought to make the provisions of PMLA more robust and ensure that the ultimate object of the Act is achieved. Aadhaar Act, 2016 having been enacted with effect from 01.07.2016, it was decided to get the accounts verified by Aadhaar. Amended Rules help all concerned to detect fictitious, ghost and benami accounts. The object of the PMLA and the definition of beneficial owner Act seeks to traverse behind the corporate veil of shell companies and spurious Directors in order to ascertain the real natural persons controlling the accounts in the reporting entities. The Amendment Rules applicable to reporting entities and the legitimate aim sought to be achieved by the State that is conclusive identification of a natural person or the beneficial owner. The statutory rules cast an obligation on all account holders to get their identity verified by 315 Aadhaar mechanism and those who are already holding account in the reporting entity they are required to submit the Aadhaar number or proof of their applied Aadhaar identity. When a statute puts obligation on account holder to get identity verification in a particular manner a person chose not to obtain Aadhaar number cannot complain his disentitlement of operating his account. The submission of the petitioner that there is no valid explanation as to why all bank accounts have to be authenticated also cannot be accepted. Aadhaar provides a mechanism truly identifies an account holder, which eliminates fraudulent accounts existed of nonexisted persons and in ghost names. The object of inserting the Rule is to make it possible to weed out fake and duplicate PANs and false bank accounts. The Second Amendment Rules are step in direction to cure the menace of fake bank accounts held by the shell companies in the name of dummy directors, money laundering, terror financing etc. It is relevant to notice that Aadhaar number is required to be given at the time of opening of the 316 account based relationship and not for every transaction conducted by an account holder of the bank. Those who have already existing accounts are required to submit only once their Aadhaar number for verification. The requirement of Aadhaar number being given only for once is not any cumbersome or undue burden on an account holder. The object of the Second Amendment Rules is towards the legitimate aim of the State and having nexus with the object sought to be achieved by the enactment. The submission of Aadhaar number only once by an account holder is a proportionate measure. We have already referred to judgments where doctrine of proportionality has been expounded. While adjudging a statutory provision from the angle of the proportionality the Court has to examine as to whether statutory measure contained in statutory provision is not excessive as against the object which seeks to achieve. The legislature has margin of discretion while providing for one or other measures to achieve an object. Unless the measures foully unreasonable and disproportionate, court does 317 not normally substitutes its opinion. On the basis of Rule 9(17)(c), petitioner contends that in the event account holder fails to submit the Aadhaar number and PAN within a period as mentioned in the aforesaid Rules account shall cease to be operational till the time Aadhaar number and PAN is submitted by the client. Petitioner alleged violation of Article 300A. The petitioner’s case is that account of a person is his property to which he cannot be deprived, saved by the authority of law. For nonsubmission of Aadhaar number and PAN only consequence which is contemplated by subrule (c) is that account shall cease to be operational. We are of the view that the account remains belonging to the account holder and the amount in the account is only his amount and there is no deprivation of the property of account holder. Under the banking rules and procedures, there are several circumstances where account becomes unoperational. A nonoperational account also is an account which belongs to the account holder and amount laying in the nonoperational account is neither forfeited by the 318 bank nor taken out from the said account. Further, account is ceased operational only till the time Aadhaar number and PAN is submitted. The consequences provided is only to effectuate the purpose of the Act and the Rules i.e. account be verified by Aadhaar mechanism. It is not the intent to deprive the account holder of the amount lying in the account. We, thus, do not find any substance in the submission of the petitioner that Rule 9(17)(c) violates right under Article 300A. Aadhaar number providing for verification of an account also cannot be held to be violating right under Article 21. The reporting entity i.e. banks and financial institutions under various statutes are required to provide information of a bank account to different authorities including income tax authority, account verification by Aadhaar is not for the purpose of keeping a track on the transaction done by an individual. As noted above Aadhaar number has to be given only once for opening of the account or for verification of the account and transactions are not 319 to be made on the basis of Aadhaar verification each time.
321. One of the submissions which has been made by the petitioner also is that Rules violate Article 19(1)(g). It is submitted that Rule refers to companies, firms, trusts etc. whereas Aadhaar Act is only to establish identity of individual. For example subrule (6) of Rule 9 as amended by Second Amendment Rules, 2017 provides that where client is a company, it shall for the purposes of subrule (1), submit to the reporting entity the certified copies of the documents enumerated therein. Rule requiring Aadhaar number and PAN or Form 60 as defined in Income Tax Rules, 1962, issued to managers, officers or employees holding an attorney to transact on the company’s behalf, is for the purpose to find out the beneficial owner behind the company. One of the objects of the Act is to detect moneylaundering wherever it is found. Inquiring details of the company to find out shell companies and ghost companies and the real beneficial owner cannot be said to be foreign to the 320 object of the Act. Companies, partnership firms, trusts or incorporated institutions or body of individuals cannot complain any violation of rights under Article 19(1)(g). There is no amount of restriction in the right of aforesaid in carrying out any profession, or any trade or business. Petitioners have also contended that amended Rule 9 also violates Section 3, 7 and 51 of the Aadhaar Act. Section 3 provides for enrolment under Aadhaar scheme. Section 7 provides for requirement of proof of Aadhaar number for receipt of certain subsidies, benefits and services, etc. Section 51 relates to delegation by the authority to any Member, officer of the authority or any other person such of the powers and functions under the said Act except the power under Section 54. Rules cannot be held in any manner violating Sections 3, 7 and 51. The rules provide for use of Aadhaar for verification of bank account by law as contemplated by Section 57 of the Aadhaar Act.
322. It is further submitted that Amendment Rules are also ultra vires to the PMLA, 2002. Shri Arvind P 321 Datar has also referred to judgment of the U.K. Supreme Court in Bank Mellat v. Her Majesty’s Treasury, (2013) UKSC 39. He has relied on principle of proportionality as summed in paragraph 20 which is to the following effect:
“20....The classic formulation of the test is to be found in the advice of the Privy Council, delivered by Lord Clyde, in De Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 at 80. But this decision, although it was a milestone in the development of the law, is now more important for the way in which it has been adapted and applied in the subsequent caselaw, notably R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532 (in particular the speech of Lord Steyn), R v Shayler [2003] 1 AC 247 at paras 5759 (Lord Hope of Craighead), Huang v Secretary of State for the Home Department [2007] 2 AC 167 at para 19 (Lord Bingham of Cornhill) and R (Quila) v Secretary of State for the Home Department [2012] 1 AC 621 at para 45. Their effect can be sufficiently summarised for present purposes by saying that the question depends on an exacting analysis of the factual case advanced in defence of the measure, in order to determine (i) whether its objective is sufficiently important to justify the limitation of a fundamental right; (ii) whether it is rationally connected to the objective; (iii) whether a less intrusive measure could have been used; and (iv) whether, having regard to these matters and to the severity of the consequences, a fair balance has been struck between the rights of 322 the individual and the interests of the community. These four requirements are logically separate, but in practice they inevitably overlap because the same facts are likely to be relevant to more than one of them.”(emphasis added)
323. The principles of proportionality as noticed in the aforesaid judgment are substantially same which had been laid down in Puttaswamy case and Modern Dental (supra) only one difference in the above two judgments is that although both the judgments noticed the least intrusive test but in ultimate conclusion the said test was not reflected in the ratio of the above two judgments.
324. In the foregoing discussions, we come to the conclusion that Rule 9 of Second Amendment Rules, 2017 fully satisfies threefold test as laid down in Puttaswamy case and the submission that the Rule is unconstitutional has to be rejected. We answer Issue No. 14 in the following manner: Ans.14: Rule 9 as amended by PMLA (Second Amendment) Rules, 2017 is not unconstitutional and does not violate Articles 14, 19(1)(g), 21 & 300A 323 of the Constitution and Sections 3, 7 & 51 of the Aadhaar Act. Further Rule 9 as amended is not ultra vires to PMLA Act, 2002.
Issue No. 15 Circular dated 23.03.2017 issued by Ministry of Communications, Department of Telecommunications
325. The petitioners have attacked the circular dated 23.03.2017 and submitted that the circular is ultra vires. By circular dated 23.03.2017, Department of Telecommunications has directed that all licensees shall reverify all existing mobile subscribers (prepaid and postpaid) through Aadhaar based ekyc process. Petitioners submitted that linking the sim with Aadhaar number is breach of privacy violating Article 21 of the Constitution. Elaborating their challenge, it is contended that circular dated 23.03.2017 is not covered by any of the provisions of Aadhaar Act neither Section 7 nor Section 57. Circular dated 23.03.2017 is not a law under Part III of the Constitution and thus same cannot put any restriction on privacy right. It is submitted that 324 circular dated 23.03.2017 does not satisfy threefold test as laid down in Privacy judgment.
326. Learned counsel for the respondents justifying the linking of Aadhaar with sim card submits that non verifying sim cards, have caused serious security threats, which has been noticed by this Court in several judgments. It is submitted that circular dated 23.03.2017 was issued on the basis of recommendation of Telecom Regulatory Authority of India. Respondents further submits that circular dated 23.03.2017 has been issued in reference to this Court's direction in Lokniti Foundation Vs. Union of India and Another, (2017) 7 SCC 155. This court having approved the action, no exception can be taken by the petitioner to the circular dated 23.03.2017. It is submitted that the Central Government, which has right to grant license can always put a condition in the license obliging the licensee to verify the sim cards under the Aadhaar verification. To impose such condition is in the statutory power granted to the Government under Section 4 of the Indian Telegraph 325 Act, 1885.
327. We need to scrutinise the circular dated 23.03.2017 on the ground of attack alleged by the petitioners and justification as offered by the respondents. Circular dated 23.03.2017 has been addressed by the Ministry of Communications, Department of Telecommunications to all Unified Licensees/Unified Access Service Licensees/Cellular Mobile Telephone Service Licensees with subject: implementation of orders of Supreme Court regarding 100% EKYC of existing subscribers. Para 1 to 3 of the circular may be noticed, which are to the following effect: “Hon'ble Supreme Court, in its order dated 06.02.2017 passed in Writ Petition (C) No. 607/2016 filed by Lokniti Foundation v/s Union of India, while taking into cognizance of "Aadhaar based EKYC process for issuing new telephone connection" issued by the Department, has interalia observed that "an effective process has been evolved to ensure identity verification, as well as, the addresses of all mobile phone subscribers for new subscribers. In the near future, and more 326 particularly, within one year from today, a similar verification will be completed, in case of existing subscribers." This amounts to a direction which is to be completed within a time frame of one year.
2. A meeting was held on 13.02.2017 in the Department with the telecom industry wherein UIDAI, TRAI and PMO representatives also participated to discuss the way forward to implement the directions of Hon'ble Supreme Court.
Detailed discussions and deliberations were held in the meeting. The suggestions received from the industry have been examined in the Department.
3. Accordingly, after taking into consideration the discussions held in the meeting and suggestions received from telecom industry, the undersigned is directed to convey the approval of competent authority that all Licensees shall reverify all existing mobile subscribers (prepaid and postpaid) through Aadhaar based EKYC process as mentioned in this office letter no. 800 29/2010VAS dated 16.08.2016. The instructions mentioned in subsequent paragraphs shall be strictly followed while carrying out the reverification exercise.” 327
328. The circular of the Department of Telecommunications directing the licensees to mandatorily verify existing sim subscribers in turn resulted in mobile telephone service licensees directing the subscribers to get their sim seeded with Aadhaar. Repeated messages and directions have been issued by Cellular Mobile Telephone Service operators. Compulsory seeding of Aadhaar with mobile numbers has to be treated to be an intrusion in Privacy Right of a person. Any invasion on the Privacy Right of a person has to be backed by law as per the threefold test enumerated in Puttaswamy case (supra). Existence of a law is the foremost condition to be fulfilled for restricting any Privacy Right. Thus, we have to first examine whether circular dated 23.03.2017 can be said to be a 'law'.
329. The law as explained in Article 13(3) has to be applied for finding out as to what is law. Article 13(3)(a) gives an inclusive definition of law in following words:
(a) “law” includes any Ordinance, order, bye 328 law, rule, regulation, notification, custom or usage having in the territory of India the force of law;
330. The circular dated 23.03.2017 at best is only an executive instruction issued on 23.03.2017 by the Ministry of Communications, Department of Telecommunications. The circular does not refer to any statutory provision or statutory base for issuing the circular. The subject of circular as noted above indicate that circular has been issued for implementation of orders of Supreme Court regarding 100% EKYC based reverification of existing subscribers. It is necessary to notice the judgment of this Court dated 06.02.2017, a reference to which is made in the circular itself. The order dated 06.02.2017 was issued by this Court in a Writ Petition filed by Lokniti Foundation Vs. Union of India and Another, (2017) 7 SCC 155. The petitioners have filed a writ petition with a prayer that identity of each subscriber and also the members should be verified so that unidentified and unverified subscribers cannot misuse mobile phone. After issuing the notice, Union 329 of India had filed a counter affidavit, where Union of India stated that Department has launched Aadhaar based EKYC for issuing mobile connections on 16.8.2016.
331. Paras 2 to 6 of the judgment, which is relevant for the present purpose are as follows:
2. Consequent upon notice being issued to the Union of India, a short counter affidavit has been filed on its behalf, wherein, it is averred as under:
“22. That however, the department has launched `Aadhaar based EKYC for issuing mobile connections' on 16th August, 2016 wherein the customer as well as Point of Sale (PoS) Agent of the TSP will be authenticated from Unique Identification Authority of India (UIDAI) based on their biometrics and their demographic data received from UIDAI is stored in the database of TSP along with time stamps. Copy of letter No.800 29/2010VAS dated 16.08.2016 is annexed herewith and marked as Annexure R1/10.
23. As on 31.01.2017, 111.31 Crores Aadhaar card has been issued which represent 87.09% of populations.
However, still there are substantial number of persons who do not have Aadhaar card because they may not be interested in having Aadhaar being 75 years or more of age or not availing 330 any benefit of pension or Direct Benefit Transfer (DBT). Currently Aadhaar card or biometric authentication is not mandatory for obtaining a new telephone connection.
As a point of information, it is submitted that those who have Aadhaar card/number normally use the same for obtaining a new telephone connection using EKYC process as mobile connection can be procured within few minutes in comparison to 12 days being taken in normal course.
24. That in this process, there will be almost `NIL' chances of delivery of SIM to wrong person and the traceability of customer shall greatly improve. Further, since no separate document for Proof of Address or Proof of Identity will be taken in this process, there will be no chances of forgery of documents.”
3. The learned Attorney General, in his endeavour to demonstrate the effectiveness of the procedure, which has been put in place, has invited our attention to the application form, which will be required to be filled up, by new mobile subscribers, using eKYC process. It was the submission of the learned Attorney General, that the procedure now being adopted, will be sufficient to alleviate the fears, projected in the writ petition.
4. Insofar as the existing subscribers are concerned, it was submitted on behalf of the Union of India, that more than 90% of the subscribers are using prepaid connections. It was pointed out, that each prepaid connection holder, has to per force renew his 331 connection periodically, by making a deposit for further user. It was submitted, that these 90% existing subscribers, can also be verified by putting in place a mechanism, similar to the one adopted for new subscribers. Learned Attorney General states, that an effective programme for the same, would be devised at the earliest, and the process of identity verification will be completed within one year, as far as possible.
5. In view of the factual position brought to our notice during the course of hearing, we are satisfied, that the prayers made in the writ petition have been substantially dealt with, and an effective process has been evolved to ensure identity verification, as well as, the addresses of all mobile phone subscribers for new subscribers. In the near future, and more particularly, within one year from today, a similar verification will be completed, in the case of existing subscribers. While complimenting the petitioner for filing the instant petition, we dispose of the same with the hope and expectation, that the undertaking given to this Court, will be taken seriously, and will be given effect to, as soon as possible.
6. The instant petition is disposed of, in the above terms.”
332. Para 5 of the judgment contains the operative portion of the order, which states "we dispose of the same with the hope and expectation, that the undertaking given to this Court, will be taken 332 seriously, and will be given effect to, as soon as possible”. The order of this Court as extracted above itself states that the Court itself did not give any direction rather noticed the stand of Union of India where it informed to the Court that the department has already launched Aadhaar based eKYC for issuing mobile connections. For 90 per cent of the existing subscribers, Attorney General has stated that an effective programme would be devised at the earliest and will be completed within one year.
333. We are clear in our mind that this Court on 06.02.2017 only noticed the stand of the Union of India and disposed of the writ petition expecting that undertaking given to this Court shall be given effect to.
334. The circular dated 23.03.2017 cites the order of this Court as a direction, which according to department was to be completed within the time frame of one year. Circular further states that the meeting was held on 13.02.2017 in the Department with the 333 telecom industry wherein UIDAI, TRAI and PMO representatives also participated.
335. This Court thus in Lokniti case (supra) did not examine the Aadhaar based eKYC process in context of right of privacy. Thus, the order of this Court dated 06.02.2017 cannot absolve the Government from justifying its circular as per law.
336. One of the submissions, which has been raised by the respondents to cite a statutory base to the circular is that the circular has been issued in pursuance of recommendation made by TRAI under Section 11(1)(a) of TRAI Act, 1997. Section 11 of the TRAI Act, 1997 provides for function of authority Section 11(1)(a):
(a) make recommendations, either suo motu or on a request from the licensor, on the following matters, namely:—
(i) need and timing for introduction of new service provider;
(ii) terms and conditions of licence to a service provider;
(iii) revocation of licence for non compliance of terms and conditions of licence;
334
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337. One of the functions of the TRAI is to give recommendations as per Section 11(1)(a) on the matters enumerated therein. The recommendations of TRAI were only recommendations and the mere fact that circular dated 23.03.2017 was issued after the recommendation was sent by TRAI, circular dated 23.03.2017 does not acquire any statutory character. Circular dated 23.03.2017 thus cannot be held to be a law within the meaning of Part III of the Constitution.
338. Shri Rakesh Dwivedi, learned counsel appearing for the respondents has submitted that the Central Government being licensor, it is fully entitled to provide for any condition in its license, which condition becomes binding on the licensee. Referring to license agreement for Unified Licensees, Shri Dwivedi submits that one of the conditions in the agreement was Condition No. 16.1 which is to the following effect: "16.1 The Licensee shall be bound by the 335 terms and conditions of this License Agreement as well as instructions as are issued by the Licensor and by such orders/directions/regulations of TRAI as per provisions of the TRAI Act, 1997 as amended from time to time.”
339. Shri Dwivedi has also relied on a number of judgments in support of his submissions that conditions can be validly laid down. he has relied on Bagalkot Cement Co. Ltd. Vs. R.K. Pathan and Others, AIR 1963 SC 439, where this Court while considering the Industrial Employment (Standing Orders) Act, 1946 observed that object of the Act was to require the employers to make the conditions of employment precise and definite and the Act ultimately intended to prescribe these conditions in the form of Standing Orders so that what used to be governed by a contract herebefore would now be governed by the Statutory Standing Orders.
340. The above judgment at best can be read to mean that conditions, which are enumerated in the Standing Orders become statutory conditions. No benefit of the judgment can be taken by the respondents in the 336 present case since even if it is put in the condition in the agreement between licensee and subscribers that licensee shall be bound to instructions as issued by licensor, the said condition does not become statutory nor take shape of a law. Sukhdev Singh and Others Vs. Bhagatram Sardar Singh Raghuvanshi and Another, (1975) 1 SCC 421 was relied, where this Court held that rules and regulations framed by ONGC, LIC and Industrial Finance Corporation have the force of law. There cannot be any denial that rules framed under statutory provisions will have force of law, thus, this case has no application. Similarly, reliance on Lily Kurian Vs. Sr. Lewina and Others, (1979) 2 SCC 124, Alpana V. Mehta Vs. Maharashtra State Board of Secondary Education and Another, (1984) 4 SCC 27, St. Johns Teachers Training Institute Vs. Regional Director, National Council for Teacher Education and Another, (2003) 3 SCC 321 were all cases, where conditions were laid down under the regulations, which were statutory in nature. Those cases in no manner help the respondents.
337
341. Shri Dwivedi has also relied on judgment of this Court in Union of India and Another Vs. Association of Unified Telecom Service Providers of India and Others, (2011) 10 SCC 543. This Court referring to Section 4 of the Telegraph Act laid down following in paragraph 39: “39. The proviso to Subsection (1) of Section 4 of the Telegraph Act, however, enables the Central Government to part with this exclusive privilege in favour of any other person by granting a license in his favour on such conditions and in consideration of such payments as it thinks fit. As the Central Government owns the exclusive privilege of carrying on telecommunication activities and as the Central Government alone has the right to part with this privilege in favour of any person by granting a license in his favour on such conditions and in consideration of such terms as it thinks fit, a license granted under proviso to Subsection (1) of Section 4 of the Telegraph Act is in the nature of a contract between the Central Government and the licensee.”
342. There cannot be any dispute to the right of the Central Government to part with exclusive privilege in favour of any person by granting license on such a condition and in consideration of such terms as it 338 thinks fit. But mere issuing an instruction to the licensees to adopt mandatory process of eKYC by Aadhaar verification in no manner exalt the instructions or directives as a law. Circular dated 23.03.2017, thus, cannot be held to be a law and direction to reverification of all existing mobile subscribers through Aadhaar based eKYC cannot be held to be backed by law, hence cannot be upheld.
343. There is one more aspect of the matter, which needs to be looked into. Aadhaar Act has only two provisions under which Aadhaar can be used, i.e. Section 7 and Section 57. Present is not a case of Section 7 since present is not a case of receiving any subsidy, benefit or service. What Section 57 contemplate is that "use of Aadhaar can be provided by a law". Words "by a law" used in Section 57 obviously mean a valid law framed by competent legislation and other than the Aadhaar Act. No law has been framed by permitting use of Aadhaar for verification of sim of existing subscribers. There being no law framed for such use of Aadhaar, Section 57 is also not attracted. 339
344. There are only above two contingencies, where Aadhaar can be used and circular dated 23.03.2017 being not covered by any of above contingencies, circular dated 23.03.2017 deserves to be set aside. Ans.15: Circular dated 23.03.2017 being unconstitutional is set aside.
Issue No. 16 Whether Aadhaar Act is a Money Bill and decision of Speaker certifying it as Money Bill is not subject to Judicial Review of this Court?
345. The Aadhaar Act has been passed by Parliament as Money Bill. Shri P. Chidambaram, learned senior counsel appearing for the petitioners contends that Aadhaar Act is not a Money Bill, it being not covered by any of the Clauses under Article 110 of the Constitution of India. He further submits that decision of the Speaker certifying Aadhaar Bill as Money Bill being illegal and contrary to the express constitutional provisions deserves to be interfered with and such decision of the Speaker is also subject to Judicial Review by this Court. The word “only” 340 used in Article 110 has significance and a Bill, which does not contain only, the provisions pertaining to Clause (a) to (f) cannot be regarded as Money Bill. Respondents cannot fall on Clause (g) to support the Money Bill, which clause cannot be invoked unless the provisions of Bill are covered by any of the clauses from (a) to (f).
346. Shri K.K. Venugopal, learned Attorney General refuting the above submission submits that Aadhaar Bill has correctly been passed as Money Bill. He submits that the certification granted by Speaker that Aadhaar Bill is a Money Bill has been made final by virtue of Article 110(3), hence it cannot be questioned in any Court. The decision of Speaker certifying the Bill as Money Bill is not subject to Judicial Review. It is further submitted by learned Attorney General that even on looking the Aadhaar Bill on merits, it satisfies the conditions as enumerated under Article 110(1). He submits that Aadhaar Bill is clearly referable to Clause(c), Clause(e) and Clause(g) of Article 110(1). He submits that the 341 heart of the Aadhaar Act is Section 7 which is with regard to payment of subsidies, benefits or services and for which the expenditure is incurred form the Consolidated Fund of India. Article 122 also puts an embargo in questioning validity of any proceedings in Parliament. Certification of Bill as Money Bill is matter of Parliamentary procedure hence Article 122 also save the said decision from being questioned in a Court of Law.
347. Article 110 and Article 122, which falls for consideration in the present case are as follows: “110. Definition of "Money Bills". (1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it 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 to be undertaken by the Government of India;
(c) the custody of the Consolidated Fund or the Contingency Fund of 342 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 subclauses
(a) to (f).
(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides 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. (3) 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.
4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States 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.
343
122. Courts not to inquire into proceedings of Parliament.(1) The validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.”
348. We need to first advert to the submission pertaining to question as to whether decision of Speaker certifying the Bill as Money Bill is subject to Judicial Review of this Court or being related to only procedure, is immuned from Judicial Review under Article 122. Article 110(3) gives finality to the decision of the Speaker of the House of the People on question as to whether a Bill is Money Bill or not. The word occurring in subarticle (3) of Article 110 are “shall be final”. Article 122(1) puts an embargo on questioning the validity of any proceeding in the Parliament on the ground of any alleged irregularity or procedure. The Constitution uses different expressions in different articles like “shall be 344 final”, “shall not be questioned”, “shall not be questioned in any Court of Law” etc.
349. This Court has examined the scope of Judicial Review in reference to Parliamentary proceedings. A similar Constitutional provision giving finality to the decision of the Speaker is contained in Para 6 of Tenth Schedule where a question whether a person has become disqualified or not is to be referred to the decision of the Chairman or the Speaker and his decision shall be final. Para 6 subclause(1) is quoted as below: “6. Decision on questions as to disqualification on ground of defection.— (1) If any question arises as to whether a member of a House has become subject to disqualification under this Schedule, the question shall be referred for the decision of the Chairman or, as the case may be, the Speaker of such House and his decision shall be final:
Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final.” 345
350. The Constitution Bench had occasion to consider Para 6 in Kihoto Hollohan Vs. Zachillhu and Others, 1992 Supp. (2) SCC 651, Justice M.N. Venkatachaliah, as he then was elaborately considered the rival contentions. It was also contended before this Court that in view of the finality of the decision of the Speaker in Para 6 of Tenth Schedule, the decision of the Speaker is beyond Judicial Review. In Para 78, following has been stated: “78. These two contentions have certain overlapping areas between them and admit of being dealt with together. Paragraph 6(1) of the Tenth Schedule seeks to impart a statutory finality to the decision of the Speaker or the Chairman. The argument is that, this concept of `finality' by itself, excludes Courts' jurisdiction. Does the word "final" render the decision of the Speaker immune from Judicial Review? It is now well accepted that a finality clause is not a legislative magical incantation which has that effect of telling off Judicial Review. Statutory finality of a decision presupposes and is subject to its consonance with the statute...............” In Para 80 to 85, following has been held:
80. In Durga Shankar Mehta v. Raghuraj Singh, AIR 1954 SC 520 the order of the Election Tribunal was made final and 346 conclusive by Section 105 of the Representation of the People Act, 1951. The contention was that the finality and conclusiveness clauses barred the jurisdiction of the Supreme Court under Article 136. This contention was repelled. It was observed: (AIR p. 522) ...[B]ut once it is held that it is a judicial tribunal empowered and obliged to deal judicially with disputes arising out of or in connection with election, the overriding power of this Court to grant special leave, in proper cases, would certainly be attracted and this power cannot be excluded by any parliamentary legislation.
... But once that Tribunal has made any determination or adjudication on the matter, the powers of this Court to interfere by way of special leave can always be exercised......
... The powers given by Article 136 of the Constitution however are in the nature of special or residuary powers which are exercisable outside the purview of ordinary law, in cases where the needs of justice demand interference by the Supreme Court of the land....
Section 105 of the Representation of the People Act certainly gives finality to the decision of the Election Tribunal so far as that Act is concerned and does not provide for any further appeal but that cannot in any way cut down or effect the overriding powers which this Court can exercise in the matter of granting special leave under 347 Article 136 of the Constitution.
81. Again, in Union of India v. Jyoti Prakash Mitter [1971] 3 SCR 483 a similar finality clause in Article 217(3) of the Constitution camp up for consideration. This Court said: (SCC pp.4101, Para32) ...The President acting under Article 217(3) performs a judicial function of grave importance under the scheme of our Constitution. He cannot act on the advice of his Ministers.
Notwithstanding the declared finality of the order of the President the Court has jurisdiction in appropriate cases to set aside the order, if it appears that it was passed on collateral considerations or the rules of natural justice were not observed, or that the President's judgment was coloured by the advice or representation made by the executive or it was founded on no evidence."
82. Referring to the expression "final"
occurring in Article 311(3) of the Constitution this Court in Union of India v. Tulsiram Patel, [1985] Supp. 2 SCR 131 held: (SCC p.507. Para 138) ...The finality given by Clause (3) of Article 311 to the disciplinary authority's decision that it was not reasonably practicable to hold the inquiry is not binding upon the court. The court will also examine the charge of mala fides, if any, made in the writ petition. In examining the relevancy of the reasons, the court will consider the situation which according to the disciplinary authority made it come 348 to the conclusion that it was not reasonably practicable to hold the inquiry. If the court finds that the reasons are irrelevant, then the recording of its satisfaction by the disciplinary authority would be an abuse of power conferred upon it by Clause (b)....
83. If the intendment is to exclude the jurisdiction of the superior Courts, the language would quite obviously have been different. Even so, where such exclusion is sought to be effected by an amendment the further question whether such an amendment would be destructive of a basic feature of the Constitution would arise. But comparison of the language in Article 363(1) would bring out in contrast the kind of language that may be necessary to achieve any such purpose.
84. In Brundaban Nayak v. Election Commission of India [1965] 3 SCR 53, in spite of finality attached by Article 192 to the decision of the Governor in respect of disqualification incurred by a member of a State Legislature subsequent to the election, the matter was examined by this Court on an appeal by special leave under Article 136 of the Constitution against the decision of the High Court dismissing the writ petition filed under Article 226 of the Constitution.
Similarly in Union of India v. Jyoti Prakash Mitter [1971] 3 SCR 483, in spite of finality attached to the order of the President with regard to the determination of age of a Judge of the High Court under Article 217(3) of the Constitution, this Court examined the legality of the order passed by the President during the pendency of an appeal filed under Article 136 of the Constitution.
85. There is authority against the acceptability of the argument that the word 349 "final" occurring in Paragraph 6(1) has the effect of excluding the jurisdiction of the Courts in Articles 136, 226 and 227.”
351. The above Constitution Bench Judgment clearly support the case of the petitioners that finality attached to the decision of the Speaker under Article 110(3) does not inhibit the Court in exercising its Judicial Review. We may also refer to the Constitution Bench judgment of this Court in Special Reference No. 1 of 1964, AIR 1965 SC 745 where this Court had occasion to consider Article 212, which is a provision relating to the legislature of the State para materia to Article 122. Constitution Bench has held that what is protected under Article 212 from being questioned is on the ground of any alleged irregularity or procedure. The said ground does not apply in case of illegality of the decision. The next case, which needs to be considered is again a Constitution Bench judgment of this Court in Raja Rampal Vs. Hon'ble Speaker, Lok Sabha and Others, (2007) 3 SCC 184. The Constitution Bench in the above case had occasion to 350 consider the question of issue of Judicial Review of a decision of Speaker disqualifying from membership of the Parliament. A submission was raised before the Court by virtue of Article 122 of the Constitution, which puts an embargo on questioning any proceeding of the Parliament, the decision of the Speaker is immuned from the Judicial Review. The above submission has been noticed in Para 364 of the judgment in following words: “364. The submissions of the learned Counsel for the Union of India and the learned Additional Solicitor General seek us to read a finality clause in the provisions of Article 122(1) in so far as parliamentary proceedings are concerned. On the subject of finality clauses and their effect on power of judicial review, a number of cases have been referred that may be taken note of at this stage. ”
352. In Paras 376, 377, 384 and 386 following has been held: “376. In our considered view, the principle that is to be taken note of in the aforementioned series of cases is that notwithstanding the existence of finality clauses, this Court exercised its jurisdiction of judicial review whenever and 351 wherever breach of fundamental rights was alleged. The President of India while determining the question of age of a Judge of a High Court under Article 217(3), or the President of India (or the Governor, as the case may be) while taking a decision under Article 311(3) to dispense with the ordinarily mandatory inquiry before dismissal or removal of a civil servant, or for that matter the Speaker (or the Chairman, as the case may be) deciding the question of disqualification under Para 6 of the Tenth Schedule may be acting as authorities entrusted with such jurisdiction under the constitutional provisions. Yet, the manner in which they exercised the said jurisdiction is not wholly beyond the judicial scrutiny. In the case of the Speaker exercising jurisdiction under the Tenth Schedule, the proceedings before him are declared by Para 6(2) of the Tenth Schedule to be proceedings in Parliament within the meaning of Article
122. Yet, the said jurisdiction was not accepted as nonjustifiable. In this view, we are unable to subscribe to the proposition that there is absolute immunity available to the Parliamentary proceedings relating to Article 105(3). It is a different matter as to what parameters, if any, should regulate or control the judicial scrutiny of such proceedings.
377. In U.P. Assembly case (Special Reference No.1 of 1964), AIR 1965 SC 745, the issue was authoritatively settled by this Court, and it was held, at SCR pp. 45556, as under: (AIR p.768, para 62) “Article 212(1) seems to make it possible for a citizen to call in question in the appropriate court of law the validity of any proceedings 352 inside the legislative chamber if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinized in a court of law, though such scrutiny is prohibited if the complaint against the procedure is no more than this that the procedure was irregular.” (Emphasis supplied)
384. The prohibition contained in Article 122(1) does not provide immunity in cases of illegalities. In this context, reference may also be made to Sarojini Ramaswami v. Union of India, (1992) 4 SCC 506. The case mainly pertained to Article 124(4) read with the Judges (Inquiry) Act, 1968. While dealing, inter alia, with the overriding effect of the rules made under Article 124(5) over the rules made under Article 118, this Court at pp. 18788 made the following observations: (SCC p. 572, para 94) “94. We have already indicated the constitutional scheme in India and the true import of clauses(4) and (5) of Article 124 read with the law enacted under Article 124(5), namely, the Judges (Inquiry) Act, 1968 and the Judges (Inquiry) Rules, 1969, which, inter alia contemplate the provision for an opportunity to the Judge concerned to show cause against the finding of 'guilty' in the report before Parliament takes it up for consideration along with the motion for his removal. Along with the decision in U.P. Assembly Case 353 (Special Reference No. 1 of 1964) has to be read the declaration made in SubCommittee on Judicial Accountability, (1991) 4 SCC 699 that 'a law made under Article 124(5) will override the rules made under Article 118 and shall be binding on both the Houses of Parliament. A violation of such a law would constitute illegality and could not be immune from judicial scrutiny under Article 122(1).' The scope of permissible challenge by the Judge concerned to the order of removal made by the President under Article 124(4) in the judicial review available after making of the order of removal by the President will be determined on these considerations.” (Emphasis supplied)
386. Article 122(1) thus must be found to contemplate the twin test of legality and constitutionality for any proceedings within the four walls of Parliament. The fact that the U.P. Assembly case (Special Reference No.1 of 1964) dealt with the exercise of the power of the House beyond its four walls does not affect this view which explicitly interpreted a constitutional provision dealing specifically with the extent of judicial review of the internal proceedings of the legislative body. In this view, Article 122(1) displaces the English doctrine of exclusive cognizance of internal proceedings of the House rendering irrelevant the case law that emanated from courts in that jurisdiction. Any attempt to read a limitation into Article 122 so as to restrict the court's jurisdiction to examination of the Parliament's procedure in case of unconstitutionality, as opposed to illegality 354 would amount to doing violence to the constitutional text. Applying the principle of "expressio unius est exclusio alterius" (whatever has not been included has by implication been excluded), it is plain and clear that prohibition against examination on the touchstone of "irregularity of procedure"
does not make taboo judicial review on findings of illegality or unconstitutionality.”
353. The above case is a clear authority for the proposition that Article 122 does not provide for immunity in case of illegality. What is protected is only challenge on the ground of any irregularity or procedure. The immunity from calling in question the Parliamentary decision on the ground of violation of procedure as has been provided in the Constitution is in recognition of the principles that Parliament has privilege regarding procedure and any challenge on the ground of violation of any procedure is not permissible.
354. Shri K.K. Venugopal relied on Two Judgments of this Court in support of his submission namely, Mohd. Saeed Siddiqui Vs. State of Uttar Pradesh and Another, 355 (2014) 11 SCC 415 and Yogendra Kumar Jaiswal and Others Vs. State of Bihar and Others, (2016) 3 SCC
183. He submits that in both the decisions, this Court while dealing with the question of challenge to Money Bill has clearly held that the decision of Speaker certifying a Bill as Money Bill is final and cannot be questioned.
355. We need to consider the above decisions in detail. Mohd. Saeed Siddiqui (supra) was a judgment delivered by a Three Judge Bench of this Court. U.P. Lokayukta Act and U.P. Lokayukta (Amendment) Act, 2012 was subject matter of challenge. One of the submissions in that regard has been noted in Para 12, which is to the following effect: “12. It was further submitted by Mr. Venugopal that the Amendment Act was not even passed by the State Legislature in accordance with the provisions of the Constitution of India and is, thus, a mere scrap of paper in the eye of the law. The Bill in question was presented as a Money Bill when, on the face of it, it could never be called as a Money Bill as defined in Articles 199(1) and 199(2) of the Constitution of India. Since the procedure for an Ordinary Bill was not followed and the assent of the Governor was obtained to an inchoate and incomplete Bill 356 which had not even gone through the mandatory requirements under the Constitution of India, the entire action was unconstitutional and violative of Article 200 of the Constitution of India.”
356. This Court after noticing Articles 199 and 212, which are pari materia to Articles 109 and 122 stated that proceeding in support of legislature cannot be called into question on the ground that they have not been carried on in accordance with the rules of business. This Court considered the issues from Paragraphs 34 to 38, which is to the following effect: “34. The above provisions make it clear that the finality of the decision of the Speaker and the proceedings of the State Legislature being important privilege of the State Legislature, viz., freedom of speech, debate and proceedings are not to be inquired by the Courts. The "proceeding of the legislature" includes everything said or done in either House in the transaction of the Parliamentary business, which in the present case is enactment of the Amendment Act. Further, Article 212 precludes the courts from interfering with the presentation of a Bill for assent to the Governor on the ground of noncompliance with the procedure for passing Bills, or from otherwise questioning the Bills passed by the House. To put it clear, proceedings inside the legislature cannot be called into question on the ground that they 357 have not been carried on in accordance with the Rules of Business. This is also evident from Article 194 which speaks about the powers, privileges of the Houses of the Legislature and of the members and committees thereof.
35. We have already quoted Article 199. In terms of Article 199(3), the decision of the Speaker of the Legislative Assembly that the Bill in question was a Money Bill is final and the said decision cannot be disputed nor can the procedure of the State Legislature be questioned by virtue of Article 212. We are conscious of the fact that in the decision of this Court in Raja Ram Pal v. Lok Sabha (2007) 3 SCC 184, it has been held that the proceedings which may be tainted on account of substantive or gross irregularity or unconstitutionality are not protected from judicial scrutiny.
36. Even if it is established that there was some infirmity in the procedure in the enactment of the Amendment Act, in terms of Article 255 of the Constitution the matters of procedures do not render invalid an Act to which assent has been given by the President or the Governor, as the case may be.
37. In M.S.M. Sharma v. Shree Krishna Sinha AIR 1960 SC 1186 and Mangalore Ganesh Beedi Works v. State of Mysore, AIR 1963 SC 589, the Constitution Benches of this Court held that:
(i) the validity of an Act cannot be challenged on the ground that it offends Articles 197 to 199 and the procedure laid down in Article 202;
(ii) Article 212 prohibits the validity of any proceedings in a Legislature of a State from being called in question on the ground of 358 any alleged irregularity of procedure; and
(iii) Article 255 lays down that the requirements as to recommendation and previous sanction are to be regarded as a matter of procedure only.
It is further held that the validity of the proceedings inside the legislature of a State cannot be called in question on the allegation that the procedure laid down by the law has not been strictly followed and that no Court can go into those questions which are within the special jurisdiction of the legislature itself, which has the power to conduct its own business.
38. Besides, the question whether a Bill is a Money Bill or not can be raised only in the State Legislative Assembly by a member thereof when the Bill is pending in the State Legislature and before it becomes an Act. It is brought to our notice that in the instant case no such question was ever raised by anyone. ”
357. This Court came to the conclusion that question pertaining to the procedure in the House could not have been questioned by virtue of Article 212. Another judgment, which has been relied by learned Attorney General is judgment of this Court in Yogendra Kumar Jaiswal (supra). The above judgment was rendered by Two Judge Bench. This Court in the above case examined the question whether introduction of 359 Orissa Special Courts Act, 2006 as a Money Bill could be called in question in a Court. This Court considered the issue in Paragraphs 38 to 43, which are to the following effect: “38. First, we shall take up the issue pertaining to the introduction of the Bill as a Money bill in the State Legislature. Mr. Vinoo Bhagat, learned Counsel appearing for some of the appellants, has laid emphasis on the said aspect. Article 199 of the Constitution, defines “Money Bills”. For our present purpose, Clause (3) of Article 199 being relevant is reproduced below:
“199.(3). If any question arises whether a Bill introduced in the legislature of a State which has a Legislative Council is a Money Bill or not, the decision of the Speaker of the Legislative Assembly of such State thereon shall be final.
We have extracted the same as we will be referring to the authorities as regards interpretation of the said clause.
39. Placing reliance on Article 199, the learned Counsel would submit that the present Act which was introduced as a money bill has remotely any connection with the concept of money bill. It is urged by him that the State has made a Sisyphean endeavour to establish some connection. The High Court to repel the challenge had placed reliance upon Article 212 which stipulates that the validity of any proceedings in the Legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure.
40. The learned Counsel for the appellants 360 has drawn inspiration from a passage from Powers, Privileges and Immunities of State Legislatures. In re, Special Reference No. 1 of 1964 AIR 1965 SC 745, wherein it has been held that Article 212(1) lays down that the validity of any proceedings in the legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure and Article 212(2) confers immunity on the officers and members of the legislature in whom powers are vested by or under the Constitution for regulating procedure or the conduct of business, or for maintaining order, in the legislature from being subject to the jurisdiction of any court in respect of the exercise by him of those powers. The Court opined that Article 212(1) seems to make it possible for a citizen to call in question in the appropriate court of law the validity of any proceedings inside the Legislative Chamber if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinised in a court of law, though such scrutiny is prohibited if the complaint against the procedure is not more than that the procedure was irregular. Thus, the said authority has made a distinction between illegality of procedure and irregularity of procedure.
41. Our attention has also been drawn to certain paragraphs from the Constitution Bench decision in Raja Ram Pal v. Lok Sabha (2007) 3 SCC 184. In the said case, in paras 360 and 366, it has been held thus: (SCC pp.
347 & 350) “360. The question of extent of judicial review of parliamentary matters has to be resolved with 361 reference to the provision contained in Article 122(1) that corresponds to Article 212 referred to in M.S.M.
Sharma v. Shree Krishna Sinha AIR 1960 SC 1186 [Pandit Sharma (2)]. On a plain reading, Article 122(1) prohibits "the validity of any proceedings in Parliament” from being 'called in question' in a court merely on the ground of "irregularity of procedure". In other words, the procedural irregularities cannot be used by the court to undo or vitiate what happens within the four walls of the legislature. But then, "procedural irregularity" stands in stark contrast to "substantive illegality' which cannot be found included in the former. We are of the considered view that this specific provision with regard to check on the role of the judicial organ visàvis proceedings in Parliament uses language which is neither vague nor ambiguous and, therefore, must be treated as the constitutional mandate on the subject, rendering unnecessary search for an answer elsewhere or invocation of principles of harmonious construction.
* * *
366. The touchstone upon which parliamentary actions within the four walls of the legislature were examined was both the constitutional as well as substantive law. The proceedings which may be tainted on account of substantive illegality or unconstitutionality, as opposed to those suffering from mere irregularity thus cannot be held 362 protected from judicial scrutiny by Article 122(1) inasmuch as the broad principle laid down in Bradlaugh (1884) LR 12 QBD 271 : 53 LJQB 290 :
50 LT 620 (DC), acknowledging exclusive cognizance of the legislature in England has no application to the system of governance provided by our Constitution wherein no organ is sovereign and each organ is amenable to constitutional checks and controls, in which scheme of things, this Court is entrusted with the duty to be watchdog of and guarantor of the Constitution.”
42. In this regard, we may profitably refer to the authority in Mohd. Saeed Siddiqui v.
State of U.P. (2014) 11 SCC 415, wherein a threeJudge Bench while dealing with such a challenge, held that Article 212 precludes the courts from interfering with the presentation of a Bill for assent to the Governor on the ground of noncompliance with the procedure for passing Bills, or from otherwise questioning the Bills passed by the House, for proceedings inside the legislature cannot be called into question on the ground that they have not been carried on in accordance with the Rules of Business.
Thereafter, the Court referring to Article 199(3) ruled that the decision of the Speaker of the Legislative Assembly that the Bill in question was a Money Bill is final and the said decision cannot be disputed nor can the procedure of the State Legislature be questioned by virtue of Article 212. The Court took note of the decision in Raja Ram Pal (supra) wherein it has been held that the proceedings which may be tainted on account of substantive or gross irregularity or unconstitutionality are not protected from 363 judicial scrutiny. Eventually, the Court repelled the challenge.
43. In our considered opinion, the authorities cited by the learned Counsel for the appellants do not render much assistance, for the introduction of a Bill, as has been held in Mohd. Saeed Siddiqui (supra), comes within the concept of "irregularity" and it does come with the realm of substantiality. What has been held in the Special Reference No. 1 of 1964 (supra) has to be appositely understood. The factual matrix therein was totally different than the case at hand as we find that the present controversy is wholly covered by the pronouncement in Mohd. Saeed Siddiqui (supra) and hence, we unhesitatingly hold that there is no merit in the submission so assiduously urged by the learned Counsel for the appellants.”
358. The consideration in the above case indicate that this Court has merely relied on judgment of Three Judge Bench in Mohd. Saeed Siddiqui (supra). The Court based its decision on finality attached to the decision of the Speaker in Article 199(3) as well as bar on challenge of proceeding of the legislature on an irregularity procedure as contained in Article
212. The question is, where a Speaker certify a Bill as a Money Bill and it is introduced and passed as a Money Bill, this only a question of procedure or not? Article 107 contains provisions as to introduction of 364 passing of bills. Article 107(2) state that subject to the provisions of Articles 108 and 109, a Bill shall not be deemed to have been passed by the Houses of Parliament unless it has been agreed to by both Houses of Parliament. However, the requirement of passing a Bill by both the Houses is not applicable in case of Money Bills. Article 110 defines as to what is the Money Bill. A Money Bill is constitutionally defined and a Bill shall be a Money Bill only if it is covered by Article 110(1). A Bill, which does not fulfill the conditions as enumerated in Article 110(1) and it is certified as Money Bill, whether the Constitutional conditions enumerated in Article 110(1) shall be overridden only by certificate of Speaker?