The Supreme Court in a majority verdict quashed Part IX B of the Constitution on cooperatives inserted by 97th constitutional amendment.
Part IXB delineated the jurisdictions of what State legislation on cooperative societies ought to contain.
This applied to provisions on –
- the maximum number of directors in each society
- reservation of seats for SCs, or STs, and women
- the duration of the terms of elected members, among others
The question before the Court was whether the 97th Amendment impacted the legislative domain of the State Legislatures. If so, then it would require ratification by half of the states’ legislatures, in addition to the required two-thirds majority in Parliament.
The Gujarat High Court had found the amendment invalid for want of such ratification. It struck down certain provisions of the amendment. It held that the Parliament could not enact laws with regard to cooperative societies as it was a State subject.
The Centre challenged this 2013 decision of the Gujarat High Court in the Supreme Court. It believed that the subject of ‘cooperative societies’ in the State List was not altered in any way by the 97th Amendment. It only outlined the guidelines on any law on cooperatives that the State Assemblies may enact.
The provision does not denude the States of its power to enact laws with regard to cooperatives. So, it felt the ratification by states was not necessary.
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.
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.
97th Constitutional Amendment, 2011
It dealt with issues related to effective management of co-operative societies in the country. It had come into effect from February 15, 2012.
The changes made in the Constitution are,
- Amendment to the Article 19(1)(c) by adding the words “or cooperative societies” to expand the fundamental right to form associations or unions to cover cooperative societies too and
- Inserted Article 43 B and Part IX B, relating to the cooperatives.
Recognising that ‘cooperative societies’ came under Entry 32 of the State List in the Seventh Schedule, the Amendment proposed to create a framework for the functioning of cooperative societies.
The 97th Constitutional Amendment empowers,:
- Parliament to frame laws for cooperative societies that function across States (multi-State cooperative societies) and
State legislatures to make laws for all other cooperative societies falling under their jurisdiction.