2013 (4) TMI 972 - HC - Indian Laws

Constitutional Amendment Act Violates Federal Principles: State Powers Unconstitutionally Curtailed

RAJENDRA N SHAH Versus UNION OF INDIA & ANR.

The Court held that the Constitution (97th Amendment) Act, 2011, inserting Part IXB, was ultra vires the Constitution of India as it violated the basic ... - Issues Involved:1. Whether the Constitution (97th Amendment) Act, 2011 violates any provisions of the Constitution of India.2. Whether the amendment required ratification by the State Legislatures under Article 368(2).Issue 1: Violation of Constitutional ProvisionsThe writ-petitioner contended that the Constitution (97th Amendment) Act, 2011, which introduced Part IXB, was ultra vires the Constitution of India. The petitioner argued that the amendment violated the basic structure of the Constitution by not following the procedure prescribed in Article 368(2), which recognizes the federal structure as a basic structure. The petitioner asserted that 'Cooperative Societies' fall under the State List (List II) and not the Union List (List I) or Concurrent List (List III), and thus, the State Legislature is the only competent authority to enact laws for cooperative societies. The amendment, according to the petitioner, indirectly achieved what it could not do directly, violating the basic structure of the Constitution.Issue 2: Requirement of Ratification by State LegislaturesThe Central Government argued that the amendment did not require ratification by the State Legislatures as it did not change any matters enumerated in clauses (a) to (e) of the proviso to Article 368(2). The Union of India contended that the amendment was within the Parliament's constituent power and did not alter the basic structure of the Constitution. The State Government supported this contention.Judgment:The Court held that the State Legislature is authorized to enact laws relating to 'Cooperative Societies' as it is listed in List II of the Seventh Schedule. The Court acknowledged that the Parliament can amend the Constitution to shift an item from List II to List I or List III, but such an amendment requires compliance with Article 368(2), including ratification by the Legislatures of not less than one-half of the States.The Court found that the formalities indicated in Article 368(2) for ratification were not complied with before presenting the amendment to the President for assent. The Court noted that the amendment imposed various restrictions on the State Legislatures' power to enact laws relating to cooperative societies, which were earlier unfettered. This inclusion of Part IXB effectively constrained the jurisdiction of the State Legislatures without following the required procedure of Article 368(2).The Court concluded that the amendment violated the basic structure of the Constitution, specifically the principles of federalism, by curtailing the State Legislatures' power without the necessary ratification. The Court declared the Constitution (97th Amendment) Act, 2011, inserting Part IXB, as ultra vires the Constitution of India for not taking recourse to Article 368(2). The judgment, however, did not affect other parts of the Constitution (97th Amendment) Act, 2011. The Court refused the Union of India's request for a stay of the judgment.