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Provisions of 97th Amendment Struck Down: SC

Provisions of 97th Amendment Struck Down: SC

Why in news?

  • Recently, the Supreme Court (SC) upheld a 2013 judgment of the Gujarat High Court and struck down certain provisions of the Constitution (97th Amendment) Act, 2011.
  • It gave a major boost for federalism as the 97th Amendment shrank the exclusive authority of States over its co-operative societies, a sector considered as a massive contributor to the economy.

Background

  • The Gujarat High Court in 2013 had held that the amendment, to the extent it introduced conditions for state laws on co-operative societies, was liable to be struck down.
  • This amendment was passed without the ratification of one-half of the state legislatures as mandated by Article 368(2) of the Constitution.
  • As per Article 368(2), ratification of one-half of state legislatures is required for an amendment that makes changes to an entry in the state list.
  • Since co-operative societies were a state subject as per Entry 32 in List II of the Seventh Schedule, the amendment introducing Part IX B required ratification as per Article 368(2), the High Court ruled.                                                            Provisions of 97th Amendment Struck Down: SC

The 97th constitutional amendment

  • It dealt with issues related to effective management of co-operative societies in the country.
  • It was passed by Parliament in December 2011 and had come into effect from February 15, 2012.
  • It amended Article 19(1)(c) to give protection to the cooperatives and inserted Article 43 B and Part IX B, relating to them.

What is the SC verdict?

  • The Supreme Court, by a 2:1 majority, upheld the Gujarat HC judgment holding the amendment invalid.
  • But this is only in relation to cooperatives under the States.                                      Provisions of 97th Amendment Struck Down: SC
  • The elaborate amendment would hold good for multi-State cooperative societies, on which Parliament was competent to enact laws.
  • So, the Supreme Court Upheld the validity of the 97th constitutional amendment.
  • It has however struck down part IX B of the Constitution.                                          Provisions of 97th Amendment Struck Down: SC

What does this imply?

  • Significantly, the 97th Constitutional Amendment Infused autonomy, democratic functioning and professional management into the cooperatives.
  • But the recent verdict implies that even well-intentioned efforts towards reforms cannot be at the cost of the quasi-federal principles.
  • In other words, reforms in cooperative sector should not be at the cost of federal principles.
  • The ratification requirement will apply if there is any attempt to constrain the State legislatures in any way.
  • In the absence of States’ ratification, the amendment that sought to prescribe the outlines of State laws on a State subject becomes invalid.
  • The judgment may also mean that the concern expressed, that the formation of a new Ministry of Cooperation would affect federal principles, could be true.
  • Having said all these, undeniably, the cooperative movement needs reform and revitalisation, (within constitutional parameters).

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