SC Quashes Provisions of 97th Amendment
Source : Indian Express
Indian Polity

What is discussed under SC Quashes Provisions of 97th Amendment ?

1. About the News
2. Impacted over Newly created Ministry of Co-operation

Why in News ?

Supreme Court  struck down certain provisions of the Constitution 97th Amendment Act, 2011 in so far as it introduced clauses dealing with the working of cooperative societies working within a state.

• The subject matter fell in the state list and belongs wholly and exclusively to the State legislatures to legislate upon and any change would require the ratification by at least one-half of the state legislatures as per Article 368(2) of the Constitution.
• Supreme Court in the case Union of India vs Rajendra Shah and others which annulled Part IXB introduced by the Constitution(97th Amendment).

Key Facts

• SC upheld a 2013 Gujarat High Court verdict that struck down parts of the amendment.
• Struck down only that part of Part IXB which dealt with cooperative societies confined to states.
  • Part IXB of the Constitution of India is operative only in so far as it concerns multi-State co-operative societies both within the various States and in the Union territories of India.
• The amendment introduced Part IX B of the Constitution
  • Defining powers of the state legislature and the Centre to regulate incorporation, elections and governing of these cooperative societies.
  • For multi-state cooperatives and Union Territories, Parliament has the power to issue regulations.
• The powers defined under Part IX B would “restrict” the power of the states to regulate the cooperative societies, since the states already had power to regulate cooperative societies as they fall under Entry 32 of the State List.
  • Entry 43 of List I specifically says that co-operative societies is excluded from the Union List.
  • Entry 43 of List I  : Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities.

The amendment required ratification by the legislatures of at least one-half of the states, as prescribed under Article 368(2) of the Constitution. The ratification of state legislatures is needed if an amendment makes changes to an entry which is included in the List II(State List) of Seventh Schedule.

• Since the states had not ratified the amendment, the Supreme Court struck down the provisions under Articles 243ZJ-243ZS, which prescribed the rules under which the state governments could regulate societies.
• Impact over newly created Ministry of Co-operation
  • The bench by a 2:1 majority held that Part IXB of the Constitution of India is operative only in so far as it concerns multi-state co-operative societies both within the various states and in the Union Territories of India.
  • The newly created central government ministry could well have a huge impact in regulating the large multi-state corporations that are cooperative societies.
  • Based on the new verdict by SC the executive power of the Union Ministry of Cooperation is with respect to multi-state co-operative societies alone.

97th Amendment Major Provisions

• New Article 43B was added in the Directive Principles of State Policy (Part IV) regarding the promotion of cooperative societies.
• Cooperatives was added after unions and associations in Article 19(1)(c) under Part III of the Constitution as part of fundamental rights.
• Introduced Part IX B to the Constitution, which laid down several stipulations for the state legislations governing cooperative societies.

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