Article 204 of the Costitution of India with Case law
🇮🇳 Article 204 of the Constitution of India
Subject: Appropriation Bills in State Legislature
🔹 Bare Text of Article 204:
(1) As soon as may be after the grants under Article 203 have been made by the Legislative Assembly of a State, an Appropriation Bill shall be introduced to provide for the appropriation out of the Consolidated Fund of the State of all moneys required to meet:
(a) the grants so made by the Assembly; and
(b) the expenditure charged on the Consolidated Fund of the State.
(2) No amendment shall be proposed to any such Bill in either House of the Legislature of a State if it will have the effect of varying the amount or altering the destination of any grant or expenditure charged on the Consolidated Fund of the State.
(3) Subject to the provisions of Articles 205 and 207, no money shall be withdrawn from the Consolidated Fund of the State except under appropriation made by law passed in accordance with this article.
🔍 Explanation:
Article 204 is concerned with the budgeting process in State Legislatures, particularly regarding Appropriation Bills.
It ensures legislative control over public finance, following the approval of grants (under Article 203).
Charged expenditure (like salaries of judges, speaker, etc.) cannot be altered by ordinary voting and must be included as-is.
⚖️ Key Concepts:
| Term | Meaning |
|---|---|
| Appropriation Bill | A legislative bill that authorizes the government to withdraw funds from the Consolidated Fund for specific expenditures. |
| Grants | Amounts voted by the Legislative Assembly under Article 203. |
| Charged Expenditure | Expenditures that are not votable, like salaries of the Governor, Judges, etc. |
| Consolidated Fund of the State | The chief government account holding all revenues and loans of the state. |
🧑⚖️ Important Case Laws on Article 204:
🔸 1. State of Kerala v. Gwalior Rayon Silk Manufacturing Co., (1973) 2 SCC 713
Issue: Legislative competence in financial matters and effect of Appropriation Acts.
Held: Appropriation Acts are not ordinary statutes and operate in a limited context of authorizing withdrawal of money. They do not create enforceable rights unless backed by substantive law.
🔸 2. Rai Sahib Ram Jawaya Kapur v. State of Punjab, AIR 1955 SC 549
Held: The executive cannot spend from the Consolidated Fund without legislative sanction, affirming the importance of Appropriation Bills under Article 204.
🔸 3. UOI v. Jyoti Saran, AIR 2016 SC 3912
Though about the central budget, it clarified that Appropriation Bills have a constitutional limit, i.e., money cannot be spent beyond what is sanctioned by the legislature.
🔸 4. R.K. Garg v. Union of India, (1981) 4 SCC 675
The Supreme Court stressed that constitutional procedures for taxing and spending (including Articles 203–204) must be strictly followed to uphold legislative supremacy.
🧾 Key Takeaways:
| Clause | Summary |
|---|---|
| (1) | Appropriation Bill introduced after grants are made |
| (2) | No amendment allowed to alter charged expenditure |
| (3) | No withdrawal from Consolidated Fund without appropriation by law |
🧭 Related Articles:
Article 202 – Annual Financial Statement (State Budget)
Article 203 – Procedure in Legislative Assembly with respect to estimates (voting on grants)
Article 205 – Supplementary or excess grants
Article 207 – Special provisions as to Financial Bills
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