DATE OF JUDGEMENT:
2Oth JULY 2021
BENCHES
Justice RF Nariman and Justice K.M Joseph
Justice B.R Gavai
PARTIES:
UNION OF INDIA………………….(APPELLANT)
RAJENDRA SHAH&ANR…………(RESPONDENT)
SUBJECT
The Supreme Court struck down Part IX of the 97th Amendment to the Constitution of India, which deals with the effective management of the co-operative societies in the country.
AN OVERVIEW
- The three-judge bench of Justices RF Nariman, KM Joseph, and BR Gavai delivered the judgment challenging Gujarat the Central Government's plea challenging the Gujarat High Court’s 2013 decision striking down the certain provisions of the 97thconstitutional Amendment, while holding that the Parliament cannot enact laws concerning co-operative societies, as it is a state subject.
- While Justices Nariman and Gavai struck down only part IX B of the amendment, Justice Joseph wrote a dissenting judgment striking down the entire constitutional Amendment.
- The Constitution (97th Amendment)Act was passed by Parliament in December 2011 and had come into effect from Feb 15th,2012.
- Mr. Rajendra N. Shah, who is an activist associated with NGO Consumer Protection Analytic Committee [CPAC], in September 2012, filed a Public Interest Litigation before the Gujarat High Court seeking quashing of the Constitution Amendment Act, 2011, as ultra vires the Constitution of India.
- On 22nd April 2013, the bench of the Gujarat High Court has allowed his writ petition by declaring that the Constitution [97th amendment] Act, 2011, including part IXB containing Articles 243ZH to 243ZT, is ultra vires to the Constitution of India, for not taking recourse to Article 368(2) of the Constitution.
- Thereafter, the appellant has filed an appeal before the Supreme Court challenging the High Court judgment.
- The Supreme Court disposed of the appeals filed by the Union of India, and upheld the High Court judgment, except to the extent that it strikes down the entirety of Part IXB of the Constitution of India.
IMPORTANT PROVISIONS
Constitution of India
- Part IXB: The co-operative societies constitute Article 243ZH to Article 243ZT.
- Article 19(1)(c):Protection of certain rights regarding freedom of speech, etc.; to form associations or unions or co-operative societies.
- Article 43B: Directive Principles of State Policy
The states shall endeavor to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies.
ISSUES
- Whether the Part IXB of the Constitution of India can denude states of their exclusive power to enact laws to deal with the management of cooperative societies?
ANALYSIS OF THE JUDGEMENT
Our Constitution is described not as unitary but a quasi-federal. So far as legislative power is concerned, though there is a tilt in favor of the Centre, the states, given the federal supremacy principle, have the exclusive power to legislate on topics reserved exclusively for them.
- In the majority of judgment, the Court held that cooperative societies come under the “exclusive legislative power” of the State legislatures. Part IX B, which consists of Article 243ZH TO 243ZT has significantly impacted state’s legislative power over its co-operative sectors which come under Entry 32 of the State List.
- The Court has pointed out how Article 243ZI makes it clear that a state may only make law on the incorporation, regulation and winding up of a society, subject to the provision.
- The 97th Amendment, which inserts the Chapter dealing with cooperative societies, has not been so ratified by the states.
- Though an amendment is the exercise of constituent power, which differs from ordinary legislative power, such constituent power does not convert the Parliament into an original Constituent Assembly.
- The Parliament, being of a limited power, may only exercise such power by both the procedural and substantive limitations contained in the Constitution.
- The Court did not strike down the portions concerning Multi-State Co-operative Societies(MSCS) due to 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 in Entry 44 List I which declares it as operative only insofar as it concerns MSCS, both within the various States and in the Union Territories.
- Justice Joseph, in his dissent judgment, stated that the doctrine of severability would not operate to distinguish between single-state co-operatives and MSCS. The entire Part IXB should be struck down on the ground of absence of ratification under Article 368(2) of the Indian Constitution.
CONCLUSION
The judgment of the High Court is upheld except to the extent that it strikes down the entirety of Part IXB. The Supreme Court declared that it is operative only insofar as it concerns multi-state co-operative societies, both within the various states and in Union Territories of India.
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