[BREAKING] Co-operative societies: Supreme Court strikes down Part IXB of 97th constitutional amendment

In a big win for the states, the Supreme Court today struck down Part IXB of the 97th amendment to the Constitution of India, which deals with the effective management of the co-operative societies in the country (Union of India v. Rajendra Shah)..A three-judge bench of Justices RF Nariman, KM Joseph and BR Gavai delivered the judgment on the Central government's plea challenging the Gujarat High Court's 2013 decision striking down certain provisions of the 97th constitutional amendment while holding that Parliament cannot enact laws with regard to cooperative societies as it is a State subject.."The judgment of the High Court is upheld except to the extent that it strikes down the entirety of Part IXB of the Constitution of India. As held by us above, it is declared that Part IXB of the Constitution of India is operative only insofar as it concerns multi-State cooperative societies both within the various States and in the Union territories of India," the Supreme Court ruled..The High Court had ruled that Articles 243ZH to 243ZT are unconstitutional. The other parts of the Ninety-Seventh Amendment were found not to be affected.The top court noted that the scheme with respect to multi-State cooperative societies is separate from the scheme dealing with other cooperative societies, the Parliament being empowered, so far as multi-State cooperative societies are concerned, and the State legislatures having to make appropriate laws laying down certain matters so far as other cooperative societies are concerned..The Supreme Court stated that it" is always important to remember that in matters affecting the Constitution of India, form always gives way to substance."."There can be no manner of doubt that had exceptions been provided in Entry 32 List II itself, such amendment to Entry 32 List II would require ratification. There can also be no doubt that in effect if the subject matter “co-operative societies” had been either expanded or curtailed by adding a definition clause in Article 366 of the Constitution of India, such expansion or curtailment would also require ratification as significant changes have been made in effect in Entry 32 List II of the Constitution of India," read the judgment. .While Justices Nariman and Gavai struck down only Part IXB of the amendment, Justice Joseph wrote a separate judgment striking down the entire constitutional amendment..Justice Joseph in his judgment has stated that "Parliament was fully aware that laws had already been made by State Legislatures, but yet, the object was to usher in reforms by the legislative route, and what is more, a Constitutional Amendment, which clearly involved, a change in regard to the entrenched provisions." .Dissenting from the majority judgment, Justice Joseph states that "the Doctrine of Severability must apply on surer foundations.""It is my view that unless the provisions, which have been found 42 unconstitutional, are kept alive, Articles 243R and 243ZQ are plainly unworkable," Justice Joseph held. .The Constitution (Ninety Seventh Amendment) Act was passed by Parliament in December 2011 and had come into effect from February 15, 2012.BY virtue of the Act, Article 19(1)(c) of the Constitution was amended to give protection to the cooperatives and Article 43B (Promotion of cooperative societies) and Part IXB were inserted..During the hearing, the top court examined whether Part IXB denuded States of their exclusive power to enact laws to deal with management of cooperative societies. While the Centre had contended that the provision does not do so, intervenors had contended that it made a direct in-road into the exclusive domain of States to enact laws with regard to cooperatives..Attorney General KK Venugopal, appearing for Centre, said that the 97th amendment is not a direct or substantial attack on the States' power to enact law with regard to cooperatives.The Centre had stated that the amendment was enacted to bring in uniformity in the management of cooperative societies and does not take away the powers of the State to enact laws with regard to them..On April 22, 2013, the High Court, while striking down certain provisions of the 97th constitutional amendment, held that Parliament cannot enact laws or issue notifications with regard to cooperative societies as it is a State subject.The High Court verdict came on a PIL challenging the legality of the 97th constitutional amendment on the ground that Centre had no legislative competence to enact law for cooperative societies..[Read judgment]