Supreme Court strikes down part of Constitution introduced by 97th Constitutional Amendment on co-operatives

The Supreme Court in the recent case upheld the 2013 judgment of the Gujarat High Court in which the Court had struck down the provisions of Constitutional (97th Amendment) Act 2011 to the extent it introduced Part IX B in the Constitution to deal with co-operative societies. It has been held that this required ratification by half of the state legislatures under Article 368(2) of the Constitution as it was absolutely related to the subject that was in the domain of the state subject (Entry 32 List II of the Seventh Schedule). Since such ratification was not done in the case of the 97th Constitutional amendment, it was liable to be struck down.

There was a spilt in the bench on the question that whether Part IX B will survive with respect to multi-state co-operative societies. The majority upheld the provisions of Part IX B that deals with the multi-state co-operative bodies by the way of the application of the Doctrine of Severability. The part IX B introduced plethora of the mandates which were beyond the say of the state legislature and demanded their obedience.  The Gujarat High Court held that these amendments have encroached the domain of the state legislatures and it was indirect shifting of the subject from State list to others.

The court further held that Co-operative societies as a subject matter belongs wholly and exclusively to the State legislatures to legislate upon whereas multi-state cooperative societies i.e., Co-operative societies having objects not confined to one state alone, is exclusively within the domain of the Parliament

The court recognized that Article 246(3) read with List II of 7th Schedule of the Constitution reflects an important constitutional principle that can be regarded as the part of basic structure of the Constitution which was the fact that the Constitution is not unitary but quasi-federal in character.