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97th Constitutional Amendment | Declared Unconstitutional | Co-operative societies

Updated: Aug 5, 2021


CAUSE TITLE | UNION OF INDIA vs RAJENDRA SHAH

CITATION | LL 2021 SC 312

JUDGMENT DATED | 20 JULY 2021

SUBJECT | Constitutional Law


WHAT HAPENNED ? SC struck 97th constitutional amendment to the extent it relates to co-operative societies within state.


What is 97th constitutional amendment ? 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.


Facts of the case | A writ petition was filed before the Gujarat High Court raising the question as to vires of the 97th Constitutional Amendment which introduces Part IXB- ‘The Co-operative Socieities’.


Other notable changes made by 97th amendment

· Article 19(1)(c)- All the citizens shall have the right to form associations or unions or co-operative societies.

· Article 43B provides for a Directive principle of State policy for promotion of co-operative societies.


Issue before the court | Whether Part IXB of the Constitution is non- est for want of ratification by half of the States under the proviso to Article 368(2).


High Court’s Decision | It held that the 97th Constitutional Amendment which inserts Part IXB into Constitution is ultra vires the Constitution for want of ratification by the States under Article 368(2) proviso, but it will not have any effect on amendments that were made under Article 19(1)(c) and Article 43B of the Constitution which were also inserted by this 97th Amendment.


Supreme Court’s Decision

The apex court also struck down most of the provisions inserted by 97th Amendment on the ground that requisite ratification from states was not obtained as per Article 368(2) of the Constitution.


What Article 368(2) demands ? Any amendment relating to entries in state list then the amendment must be ratified by at least one half of the state.


Do co-operative society belong to state list ? Of course ! Entry 32 of state list has it.

Result | Centre’s amendment relating to co-operative society will not be operative without ratification of one half of states.


Inoperative only against co-operative societies within state !


COURT’S VIEW | Court distinguished between co-operative society within state ( falls under state list ) and multi state co-operative society ( which center can control )


· 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.


Doctrine of severability also invoked | The majority judgment invoked the doctrine of severability to hold that Part IXB of the Constitution remains operative under certain provisions whereas

Provisions which remain unaffected –

· Article 19(1)(c)

· Article 43

· Provisions of Part IXB of the Constitution are operative in respect to multi-State co-operative societies.


The Kihoto Hollon’s case was referred where the court came to the rescue of Parliament by applying the Doctrine of Severability and found there was no issue in sustaining the provisions of Tenth Schedule.


Dissenting View | J. Joseph in his dissenting opinion held that such provisions cannot be saved.


 
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