A judgment that must be taken in the right spirit

Relevance: Judgment is related to the procedures and steps required to enact a particular bill.

Synopsis:

The striking down of the 97th Amendment is a reminder that the power to regulate cooperatives must stay with States.

Background:

• The 97th Constitutional Amendment came into effect on February 15, 2012, and brought about many changes to the legal regime of cooperative societies.
• However, it was recently struck down by the Supreme court in a limited manner in the Union of India vs Rajendra N. Shah case.

About the 97th Constitutional amendment:

• The amendment added “cooperative societies” to the protected forms of association under Article 19(1)(c), elevating it to a fundamental right. 
• It also inserted Part IXB in the Constitution which laid down the terms by which cooperative societies would be governed, in more granular detail than was palatable.

How to amend the constitution?

• It can be amended only by the procedure provided in Article 368. 
• The amendment procedure requires a majority of the total strength of each of the Houses of Parliament and two-thirds majority of those present and voting. 
• A proviso to the Article lists out some articles and chapters of the Constitution, which can be amended only by a special procedure. 
• The special procedure requires that the amendment will also have to be ratified by the legislatures of half of the States.

Why was the amendment challenged?

• The challengers pointed towards the procedural lacuna in passing the amendment. They said the government failed to ratify the amendment from at least half the states as per the proviso of Article 368.
• The proviso desires ratification whenever there is a change in the distribution of powers between the Centre and the States.

Judgement of Courts:

• Gujarat High Court (2013): It struck down the amendment in 2013 on the grounds that it had failed to comply with the requirements under Article 368(2). Because it was not ratified by the States.
• It had also given an additional finding that the 97th Amendment violated the basic structure of the Constitution.
• The Union Government challenged the Gujarat High Court judgment before the Supreme Court. It argued that the amendment neither directly nor effectively changed the scheme of distribution of powers between the Centre and the States.
• Supreme Court (July 2021): The court took the example of the 73rd and 74th Amendments which introduced the chapters on panchayats and municipalities, respectively. Those amendments, similar in impact on the legislative power of the States, had been passed by the special procedure involving ratification by State legislatures. 
• The court noted that the procedure had not been followed in this case. It did not go into the question of the amendment being violative of the basic structure of the Constitution. Hence it struck down provisions related to it. 

Way Forward:

• The cooperative sector has always been in the domain of the States or provinces.
  • The organising principles and mechanisms of these cooperatives differ from area to area. They depend on the industry or crop which forms the fulcrum of the cooperative.
• Hence, it is best that the Government takes this judgement in the right spirit. It should stay away from further meddling in the cooperative sector, notwithstanding the creation of the new Ministry.