Supreme Court strikes down 97th Constitutional Amendment. The Supreme Court upheld a 2013 judgment of the Gujrat High Court which struck down the provisions of the Constitution (Supreme Court Strike Down 97th Const. Amendment) Act 2011 to the extent it introduced Part IX B in the Constitution to deal with co-operative societies.
The bench unanimously held that the 97th Constitutional Amendment required ratification by at least one-half of the state legislatures as per Article 368(2) of the Constitution, since it dealt with an entry which was an exclusive state subject (co-operative societies).
Since such ratification was not done in the case of the 97th Constitutional Amendment, it was liable to be struck down.
Split in the bench on the point of multi-state cooperative societies
•There was a split in the bench on the point of whether Part IX B will survive with respect to multi-state co-operative societies.
• While the majority comprising Justices Nariman and Gavai upheld those provisions of Part IX B which deal with multi-state co-operative societies by applying the doctrine of severability.
•Justice Joseph dissented on this count. Justice Joseph held that the doctrine of severability was not applicable and struck down the entire amendment. Last week, the bench had reserved the judgment after hearing extensive arguments by Attorney General for India KK Venugopal., Advocated Mansoon K Shah and Senior Advocates Masook K Shah and senior Advocate Prakash Jani and Advocate Ritika Sinha for the respondents.
Background to understand why Supreme Court Strike Down 97th Const. Amendment
• The Gujarat High Court had held that the amendment, to the extent it introduced conditions for state laws on co-operative societies, was liable to be struck down as it was passed without the ratification of one-half of the state legislatures as mandated by Article 368 ( 2 ) of the Constitution.
• As per Article 368 ( 2 ), ratification of one-half of state legislatures is required for an amendment that makes changes to an entry in the state list.
• Since co-operative societies were a state subject as per Entry 32 in List II of the Seventh Schedule, the amendment introducing Part IX B required ratification as per Article 368 ( 2 ), the High Court ruled.
The reason behind this
The High Court noted that Part IXB introduced several conditions restricting the scope of state legislatures on aspects related to cooperative societies.
Article 368(2) of the Constitution (which Supreme Court Strike Down 97th Const. Amendment)
(2) An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House present and voting, it shall be presented to the President who shall give his assent to the Bill and thereupon the Constitution shall stand amended in accordance with the terms of the Bill: Provided that if such amendment seeks to make any change in
( a ) Article 54 , Article 55 , Article 73 , Article 162 or Article 241 , or
( b ) Chapter IV of Part V, Chapter V of Part VI, or Chapter I of Part XI, or any of the Lists in the Seventh Schedule, or yo
( d ) the representation of States in Parliament, or
( e ) the provisions of this article, the amendment shall also require to be ratified by the Legislature of not less than one half of the States by resolution to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.
The 97th Constitutional Amendment Act ( 2011 ) (Supreme Court Strike Down 97th Const. Amendment)
• Fundamental right: Article 19 ( 1 ) ( c ) as ‘ Right to form cooperatives. ‘
• Directive Principle of State Policy: Art. 43 – B “The state shall endeavor to promote voluntary formation, democratic control, autonomous functioning and professional management of cooperative societies”.
• Part IX – B: ” The Co-operative Societies ” ( Articles 243 – ZH to 243 – ZT ) . ,
• State List: State Subject under entry No.32 (7th schedule) of the Constitution of India.
COOPERATIVE SOCIETIES
97TH CONSTITUTIONAL AMENDMENT ACT OF 2011:- The state legislature may make provision for the incorporation, regulation, and winding up of co-operative societies.
PART IXB OF CONSTITUTION:- INCORPORATION OF CO-OPERATIVE SOCIETIES NUMBER AND TERM OF MEMBERS OF BOARD AND ITS societies
• number of directors ( not more than 21 ) as may be provided by the state legislature
• state legislature shall provide for the reservation of 1 seat for the SCs or the STS and 2 seats for women on the board of every co-operative society
• Term of elected members: 5 years.
• Co-option of persons having experience in the field of banking, management, finance, or specialization in any other related field, as members of the board.
• ELECTION OF MEMBERS OF BOARD:- The
, direction and control of the preparation of electoral rolls and the conduct of elections to a co-operative society shall vest in such body, as may be provided by the state legislature.
SUPERSESSION AND SUSPENSION OF BOARD AND INTERIM MANAGEMENT:- No board shall be superseded or kept under suspension for a period exceeding six months
AUDIT OF ACCOUNTS OF CO-OPERATIVE SOCIETIES:- The state legislature may make provisions for the maintenance of accounts by the co-operative societies and the auditing of such accounts at least once in each financial year.
Issues
• a definite restriction has been imposed upon the State Legislatures regarding fixation of the maximum number of Directors of a Co-Operative Society which shall not exceed twenty – one;
• the duration of the term of office of the elected members of the board and its office bearers has been fixed to be five years.
• Conditions related to conducting of elections, time period of audits, filing of financial accounts, etc., were also introduced.
• Further, Part IX B prescribed the acts which would be offenses relating to the co-operative societies.
• In short, Part IX B laid down several mandates, from which the State Legislature cannot deviate.
• the amendments had the effect of Parliament encroaching into the domain of state legislatures.
•the amendment had the effect of parliament encroaching into the domain of state legislature.
•” … in spite of the fact that the law relating to Co-Operative Societies is still in the List Il of the 7th Schedule, without bringing the subject of Co-Operative Societies either into List I or List III, by way of this Amendment, the Parliament has controlled the said power without complying with the provisions of Article 368 (2) of the Constitution by taking ratification of the majority of the State Legislatures”, the Court observed.
•The High Court opined that it was an indirect way of shifting the subject of cooperative societies to the Union List or Concurrent List from the State List.
• Such a shifting of the subject out of state list would have required the ratification by the majority of the states.
•” ..a constitutional authority cannot do indirectly what it is not permitted to do directly “, the Court observed.
•Therefore, the Gujarat High Court struck down the provisions of Part IX B introduced by the Constitution ( 97th Amendment ) Act 2011 to the extent they related to co-operative societies.
Arguments by Center in SC
1. The power of Parliament to amend the constitution is not circumscribed by the allocation of legislative entries as per Article 246 read with Seventh Schedule. The constituent power of the Parliament is different from its legislative power.
2. Part IX B did not impact the state’s legislative power.
3. Article 368 lays down the procedure for amendment and a deviation from it will not amount to a violation of basic structure.
Amendment impacted exclusive legislative power of state legislatures: Supreme Court.
The majority of the judgment observed that the exclusive legislative power given to states in matters under the Second List of the Seventh Schedule was an important constitutional principle that forms part of the basic structure of the Constitution.
” There can be no doubt that our Constitution has been described as quasi-federal in that, so far as legislative powers are concerned, though there is a tilt in favor of the Center vis – – vis the States given the federal supremacy principle .. . yet within their own sphere, the States have exclusive power to legislate on topics reserved exclusively to them.
There can be no doubt whatsoever that Article 246 ( 3 ) read with List II of the 7th Schedule of the Constitution of India reflects an important constitutional principle that can be said to form part of the basic structure of the Constitution, namely, the fact that the Constitution is not unitary but quasi-federal in character”.
•Referring to the precedent in Builders’ Assn. of India v. Union of India and the commentaries of renowned constitutional jurist HM Seervai, Justice Nariman’s judgment stated an important principle as follows:
” … any significant addition or curtailment of a field of legislation which is contained in an Entry in List Il of the 7th Schedule of the Constitution would also amount to a ‘ change ‘ so as to attract the proviso to Article 368 ( 2 ). It is not necessary, as has been contended by the learned Attorney General, that a change referred to in the proviso to Article 368 ( 2 ) would only be if some part of a subject.
•” From all the above, it is clear that the exclusive legislative power that is contained in Entry 32 List II has been significantly and substantially impacted in that such exclusive power is now subjected to a large number of curtailments.
•Indeed, Article 243ZI specifically mandates that the exclusive legislative power contained in Entry 32 List Il of the State Legislature is now severely curtailed as it can only be exercised subject to the provision of Part IXB; and further, Article 243ZT makes it clear that all State laws which do not conform to the restrictions mentioned in Part IXB automatically come to an end on the expiration of one year from the commencement of the Constitution 97th Amendment Act”.
•” The aforesaid analysis of Part IXB of the Constitution leads to the result that though Article 246 ( 3 ) and Entry 32, List Il of the 7th Schedule have not been ‘ changed ‘ in the letter, yet the impact upon the aforesaid articles cannot be said to be insignificant.
• On the contrary, it is clear that by curtailing the width of Entry 32, List II of the 7th Schedule, Part IXB seeks to effect a significant change in Article246 ( 3 ) read with Entry 32 List Il of the 7th Schedule in as much as the State’s exclusive power to make laws with regard to the subject of co-operative societies is significantly curtailed thereby directly impacting the quasi-federal principle contained therein.
“Court Held,:- ” We reiterate that our judgment is confined to the procedural aspect of Article 368 (2) proviso, there being no substantive challenge to Part IX – B on the ground that it violates the basic structure doctrine as laid down in Kesavananda Bharati’s case ( supra ) “, the judgment stated.
• the bench noted that the 73rd and 74th amendments, which introduced provisions to deal with municipal corporations and panchayats, were also sent for ratification by states.
• The Court also rejected that argument of the Attorney General that since most of the States have changed their laws in tune with Part IXB, they have ratified the same by implication. The Court said that the procedure under Article 368 ( 2 ) has to be followed.
•When a citizen of India challenges a constitutional amendment as being procedurally infirm, it is the duty of the court to examine such challenge on merits as the Constitution of India is a national charter of governing affecting persons, citizens, and institutions alike “.
But Court upheld and Supreme Court Strike Down 97th Const. Amendment
• Validity of Provisions related to Multi-State Cooperative Societies :
• It did not strike down the portions of Part IXB of the Amendment concerning ‘ Multi-State Co-operative Societies ( MSCS ) ‘ due to the lack of ratification.
• When it comes to MSCS with objects not confined to one State, the legislative power would be that of the Union of India which is contained in Entry 44 List I (Union List).
• It is declared that Part IXB of the Constitution is operative only insofar as it concerns multi-State cooperative societies both within the various States and in the Union Territories.
Like this Supreme Court Strike Down 97th Const. Amendment.
