Supreme Court Reserves Judgement On Appeals Against Gujarat HC Judgment Striking Down 97th Constitution Amendment On Cooperative Societies

The Supreme Court on Thursday reserved its judgement in the appeals filed by the Union of India challenging Gujarat High Court's judgment striking down certain provisions of the 97th Constitutional amendment relating to Cooperative Societies. .

The Gujarat High Court had quashed the amendment for no recourse being taken to Article 368(2) of the Constitution providing for ratification by the majority of the State Legislatures.

A three-judge bench of Justice RF Nariman, Justice KM Joseph, and Justice BR Gavai reserved the order after hearing extensive arguments by Attorney General KK Venugopal, Adv Masoom Shah and Senior Adv Prakash Jain and Advocate Ritika Shah.

After a day- long hearing yesterday, the Bench today heard arguments by the Respondent, Intervenors and the Attorney General.

During today's hearing, Mr Masoom Shah, appearing for the Respondent (PIL Petitioner before High Court), began his submissions by referring to and quoting the following portions from the Minerva Mills case :

"It was undisputed common ground, both on the Bar and on the Bench in Kesavnanda Bharti case that any amendment of the Constitution which did not conform to procedure prescribed by clause 2 and its proviso was no amendment at all. Thus if an amendment was passed by simple majority in House of people and Council of States and President assented to the amendment, it would in law be no amendment at all, because the requirement of clause 2 is that it should be passed by a majority of each house separately and by not less 2/3 of the members present and voting."

Shah stated that he is only relying on this to show that if procedure under 368 is not followed, it will be no amendment at all and Constitution will not stand amended.

Justice Nariman responded to Shah's submissions saying :  "Mr Shah, Justice Bhagwati lays down no such proposition. What Justice Bhagwati says is, he is adding to what majority is saying by saying that, if we cannot look into Constitutional amendment at all, we can also not look at the procedural lapse. That's all he is saying, from that you can't derive something much further that there is no amendment."

Shah further submitted that the aspect of Multi State Cooperative Society was not broadly argued before the High Court but the challenge was a wide one.

Advocate Ritika Sinha, appearing for the intervenor, an IIM Professor, submitted that the short issue that has already been canvassed is whether this amendment makes any change to sub clause a to e of the proviso to Article 368(2).

"In my submission just two provisions of Part 9 B will show that a substantial change has been made to Entry 32 of list II and Article 246(3)", she said.

Referring to Article 246 ZI, Sinha stated that this provision can be seen in three parts. "First part purports to confer power to State Legislature, a power which already existed with the State Legislature by virtue of Entry 32 and it was an exclusive power by virtue of Article 246(3). The second part is that this power is now to be based on principles of voluntary formation, democratic member control, etc. And most important part in my submission is that this power is now subject to provisions of Part 9 B. It's as if Entry 32 has now been amended to say that the States may make Laws with respect of formation of Cooperative societies subject to provisions of Part B. This is a direct inroad on State's law making power."

Sinha added that "the provisions not only set limits to what the State Legislatures can do, but also prescribe mandatory content of those Legislations, by prescribing maximum number of members of the Boards, how many seats have to be reserved for members of Scheduled Tribes, Scheduled Castes, etc."

Referring to Article 243 ZT, Ms Sinha submitted that expiration date has been set on any State Legislation, which do not confer to Part 9 B and therefore in light of 243 ZI and ZT it can't be said that the amendment that has been made to this part is indirect, incidental or insignificant. There is a change both in terms and effect of Article 246(3) to the extent that State's exclusive law making power has been taken away.

"It has also been argued that decisions in Shankari Prasad and Sajjan Singh imply that, because no change has been made to text of entry 32 or 246(3) there is infact no amendment which requires ratification by the State." Sinha submitted.

She added that "Article 243 ZI and ZT show that a direct and substantial inroad has been made into State's Legislative powers in respect of Regulation of Cooperative Societies."

"I concur that Article 368 (2) proviso doesn't say that only when a change is made in list II or list III, does the requirement of State's ratification get triggered. The obligation is triggered even when a change is made to any list including list I. The Court may want to consider if it could have been intention of Framers of the Constitution, to require State's ratification under Article 368(2) even if a change is made to a List I item, with no corresponding effect on List II or List III, and therefore no corresponding disturbance of the Federal character of the Constitution." Sinha submitted.

Attorney General KK Venugopal submitted before the Court that "So far as this Parliamentary law is concerned, it'd be rather extra ordinary if Parliament says I can make this law myself by exercising through ordinary law making power. I do this now, by using Constitutional amending power. If I do so, then so far as that is concerned, it would be invalid as ratification is necessary, I'd say no." AG stated.

Referring to Article 54 which provides for election of President, AG stated that "this is a President who exists in Westminister System of Parliamentary Democracy. Now if therefore we amend this and covert it into the Executive President, where there is no Council of Ministers, other than Advisors and sole executive powers vests in President, it affects the State directly."

AG added "In this background what would alone effect so far as 97th amendment is concerned, is any of the list in the 7th schedule. They do not say list II or III in the schedule, list I is also included. One has to wonder, as to what place List I has. Now, suppose, the Parliament instead of 2/3 rd majority passing a constitutional amendment decides that it will achieve the same process of amending the Multi State Cooperative Societies Act through a normal law, in exercise of its Legislative Power under 245, it can do whatever it likes provided that competence should be there, and it doesn't violate fundamental rights. If this is done, no one would have subjection, and these provisions like 243 ZI, ZR etc would be perfectly valid, and no challenge would be made. "

"Instead of that, a Constitutional amendment has been made by Parliament. If Parliament makes a Constitutional amendment, what it could achieve directly through making ordinary law, in which case, according to me, this provision that it seeks to make any change in List I of 7th schedule will not be attracted in my submission, because it will be highly anomalous to say you can make a ordinary law, but you can't make a constitutional amendment." AG said.

"Therefore in those circumstances of Parliament passing laws which effect Parliamentary legislation which is existing by way of amendment, it would not come within scope of proviso as it will be a meaningless exercise." Attorney General added

"The advantage of making a Constitutional amendment instead of an ordinary law, the basis on which it could be challenged, would be more lucrative than in regard to an ordinary law making power. And therefore my submission is, it would be wholly unnecessary to declare the Chapter Part IX B, to be unconstitutional" AG submitted.