SC quashes part of Upa-era constitutional amendment

BY 2:1 MAJORITY, SC SAYS 2011 LAW NOT VALID FOR STATE AND UT COOPERATIVES, UPHOLDS IT FOR MULTI-STATE UNITS

The Supreme Court on Tuesday held that the Parliament could not have introduced a law regulating cooperative societies within states and Union territories under the 97th Constitution amendment of 2011, without first getting it ratified from half of the state legislatures.

However, the three-judge bench of the top court by a 2:1 majority held that the Constitution (97th Amendment) Act 2011 will be valid and operational with regard to multistate cooperative societies which relate to cooperative societies existing across many states or union territories.

The majority view of Justices RF Nariman and BR Gavai said, “We declare that Part IXB of the Constitution of India is operative insofar as multi-state co-operative societies are concerned…. Part IXB, insofar as it applies to co-operative societies which operate within a State, would therefore require ratification under Article 368(2) of the Constitution of India. In the present case, ratification not having been effected, the Amendment is non est.”

Article 368 refers to the power of Parliament to amend the Constitution.

The third judge on the bench, Justice KM Joseph supported the

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view to the extent that Part IXB does not apply to state cooperative societies. He went a step further and held that the law cannot apply to multi-state cooperative societies either.

Justice Joseph in his separate dissenting view said, “To sustain these provisions, the court would have to resurrect the dead provisions contained in Article 243ZI to 243ZQ and Article 243ZT. The Doctrine of Severability must apply on surer foundations. It is my view that unless the provisions, which have been found unconstitutional are kept alive, Articles 243R and 243ZQ are plainly unworkable.”

Article 243ZR related to multi-state cooperative societies.

The 97th constitutional amendment, which dealt with issues related to effective management of co-operative societies in the country, was passed by Parliament in December 2011 and had come into effect from February 15, 2012.

The matter came to the Supreme Court by an appeal filed by Centre against a Gujarat high court judgment of April 22, 2013 which struck down the entire Part IXB of the Constitution introduced by the 2011 Constitution Amendment Act as “non est” (which means “does not exist”).

The Part IXB contained Articles 243ZH to Article 243ZT, which empowered Parliament (for multi-state cooperative societies) and state legislatures for other cooperative societies to make laws.

These laws could prescribe standards of incorporation, regulation, winding up, composition, tenure, audit, submission of periodic accounts and reports, provision for reservation and penalty clauses.

The high court found that the process adopted by Parliament to introduce the law was wrong as cooperative societies were a subject reserved exclusively for States under the Seventh Schedule. Any change required ratification of half of the state legislatures, the HC held.

The Centre’s appeal was argued by Attorney General KK Venugopal who said that since the passing of the Constitution Amendment law of 2011, 17 out of 28 States have already enacted legislative measures and therefore, it can be said that more than half of the states had accepted and applied the provisions of Part IXB.