Case Study 2 - A Cess, a Council and an Ordinance: The Bihar Route
The Bihar cabinet approves a Bill in the last fortnight of the budget session. Clause 4 levies a cess of 2% on stamp duty payable on instruments registered in the state, with the proceeds earmarked for a canal-lining fund. Clause 9 changes the procedure for registering agricultural land, adding a mandatory 30-day objection period and a new appellate forum. The Bill is introduced in the Legislative Assembly and certified by the Speaker as a Money Bill. The 75-member Legislative Council returns it after 12 days with an amendment deleting clause 9 and adding a sunset clause to the cess. The Assembly is to sit for only nine more days before prorogation. A cabinet note proposes that, if the Council does not agree, the Governor be advised to promulgate an ordinance containing both clauses, and to re-promulgate it as needed until the next budget session.
1. Is the Speaker's certificate as a Money Bill defensible for the Bill as drafted, and what follows for the Council's amendment?
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The test. Article 199(1) lists the matters that make a Bill a Money Bill; clause (a) covers the imposition, abolition, remission, alteration or regulation of any tax. Clause 4, a cess on stamp duty, squarely falls within it. Clause 9, which rewrites registration procedure and creates an appellate forum, falls within none of clauses (a) to (g). It can travel with the Bill only if it is truly incidental to the taxation proposal. The settled approach is that the Bill must be substantially a Money Bill, and a Speaker's certificate is not beyond judicial scrutiny.
Assessment. The certificate is defensible only if clause 9 is severed. As drafted, it is vulnerable, because a substantial procedural provision is being carried into a procedure where the Council's role is reduced.
Consequences. If it is a Money Bill, the Council had 14 days, could only recommend, and the Assembly may accept or reject its recommendations - the deletion of clause 9 can be ignored. If it is not a Money Bill, Article 197 applies: the Assembly may pass the Bill again and send it back; if the Council rejects it again, or one month passes, it is deemed passed by both Houses. There is no joint sitting in a state.
Safest course: split the Bill - cess in one, registration reform in the other.
2. Evaluate the ordinance-and-re-promulgation proposal under Article 213 and the case law arising from Bihar itself.
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Stage 1 - while the Assembly sits: not available. Article 213 permits promulgation only when the Legislative Assembly is not in session, and where there is a Council, only when both Houses are not in session. For the next nine sitting days the Governor cannot promulgate this ordinance at all.
Stage 2 - after prorogation: available, but short-lived. The ordinance must be laid before both Houses and ceases to operate six weeks after the legislature reassembles. It cannot be used to do what the legislature could not enact, and instructions from the President are needed where a Bill with the same provisions would have required previous sanction or reservation; stamp duty is a State List subject, so that proviso is unlikely to bite, but clause 9 must be checked for any High Court jurisdiction issue.
Stage 3 - re-promulgation: unconstitutional. D.C. Wadhwa v. State of Bihar (1987) concerned 256 ordinances re-promulgated in Bihar between 1967 and 1981 and held the practice a fraud on the Constitution. Krishna Kumar Singh v. State of Bihar (2017), a seven-judge bench, confirmed that an ordinance not laid before the legislature lapses and cannot be kept alive by re-promulgation; there is no presumption that the Governor's satisfaction was justified.
Conclusion: the cabinet note is unlawful in its central device. The legitimate course is to accept the Council's amendment or use Article 197.
3. Suppose the Governor neither assents nor returns the Bill for two months. Set out the constitutional position and the realistic remedies.
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What Article 200 allows. On presentation, the Governor may (i) assent, (ii) withhold assent, (iii) return a non-Money Bill with a message, or (iv) reserve the Bill for the President. A Money Bill cannot be returned. A two-month silence produces no deemed assent: the Constitution prescribes no time limit, and inaction is treated as withholding assent.
If the Bill is reserved, Article 201 applies. The President may assent, withhold assent, or direct the Governor to return the Bill. If returned, the House must reconsider it within six months and present it again; the President is then not obliged to assent. Reservation therefore transfers the decision, it does not guarantee it.
Realistic remedies.
- Political and parliamentary pressure: the Assembly can re-pass the Bill and present it afresh; a fresh Bill is a new occasion for a decision.
- The Council of Ministers can advise reservation, forcing the issue to the President.
- Judicial review lies against a withholding that is demonstrably arbitrary, but courts are slow and a plaque does not wait; litigation is a remedy of last resort, not a budget strategy.
Judgement: the government's practical route is to legislate the cess alone, which no Governor can plausibly resist, and to carry clause 9 separately.