Supreme Court Strikes Down 97th Constitutional Amendment To The Extent It Relates To Co-operative Societies [Updated With Judgment]

The Supreme Court on Tuesday upheld a 2013 judgment of the Gujarat High Court which struck down the provisions of the Constitution(97th Amendment) Act 2011 to the extent it introduced Part IX B in the Constitution to deal with co-operative societies.A 3-judge bench comprising Justices Rohinton Nariman, KM Joseph and BR Gavai dismissed the appeals filed by the Union of India against the judgment of the Gujarat High Court. 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 a 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 societiesThere was a split in the bench on the point 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, Advocates Masoom K Shah and Senior Advocate Prakash Jani and Advocate Ritika Sinha for the respondents.BackgroundThe 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 which makes changes to an entry in the state list. Since co-operative societies was 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 High Court noted that Part IXB introduced several conditions restricting the scope of state legislatures on aspects related to cooperative societies. As per the amendment, state laws are subject to the stipulations in Part IXB. For example, a definite restriction has been imposed upon the State Legislatures regarding fixation of 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 conduct of elections, time-period of audits, filing of financial accounts etc., were also introduced. Further, Part IX B prescribed the acts which would be offences relating to the co-operative societies. In short, Part IX B laid down several mandates, from which the State Legislature cannot deviate from. The Gujarat High Court held that the sweep of the amendments had the effect of Parliament encroaching into the domain of state legislatures. "…in spite of the fact that the law elating to Co-Operative Societies is still in the List II of the 7thSchedule, 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 subject out of state list would have required the ratification by majority of the states. "…what could not be achieved except by complying with the provisions of Article 368 (2) of the Constitution, the self-same purpose has been sought to be achieved by the amendment impugned in this writ-application without complying with the provisions of Article 368 (2) of the Constitution", the High Court division bench of the then Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala held. "..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. In its appeal before the Supreme Court, the Union Government, represented by the Attorney General for India KK Venugopal, raised the following main arguments: The power of Parliament to amend the constitution is not circumscribed by the allocation of legislative entries as per ...

Supreme Court Strikes Down 97th Constitutional Amendment To The Extent It Relates To Co-operative Societies [Updated With Judgment]

Manu Sebastian

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