Judgement upholds federal structure

It is imperative for the Centre and states to adhere to the fine balance between their powers and domains

The judgement of the Supreme Court nullifying parts of 97th Constitutional Amendment Act, 2011, in so far as it related to state cooperatives is a welcome step in setting right the crumbling fine and delicate balance of federalism. In recent times, triggered by the Covid-19 pandemic, there have been many instances of Centre-state friction.

The 97th Constitutional Amendment, 2011, brought about many changes to the legal regime on cooperatives. It elevated the right to form cooperative societies as a fundamental right under Article 19(1)(c) of the Constitution and also inserted Part IX-B in the Constitution, delineating terms for governing cooperative societies, both state and inter-state. Interestingly, the amendment was passed by a special majority in Parliament and notified thereafter without obtaining ratification by at least half of the state legislatures. Upon challenge, it was struck down partly by the Gujarat High Court in 2013 on grounds of violating amendment procedure as laid down under Article 368 of the Constitution.

Article 368 lays down the procedure for amending the Constitution, which the 97th Amendment Act, 2011, was also bound by. Article 368 clearly provides that any amendment which affects the federal structure laid down under the Constitution requires not only a majority of not less than two-thirds of the total Members of Parliament present and voting, but also the ratification of not less than half of the legislatures of the states of the Union.

Under Entry 32, List II (State List) of Schedule VII of the Constitution, cooperative society is provided as a state subject and hence falls under the exclusive legislative domain of the states. The 97th Amendment Act, 2011, also sought to regulate state cooperatives, thereby encroaching upon the legislative domain of the state without following the procedure under Article 368.

The Constitution envisages a federal system of governance in the country, whereby there is distribution of legislative, administrative and financial powers between the states and the Union. This system was chosen by the framers of the Constitution on account of the peculiar characteristics of India – the large size of the country and its socio-cultural diversity. Additionally, the federal system ensures not only efficient governance of the country but also reconciles national unity with regional autonomy. In fact, state subjects of legislation are indicative of regional matters that the states are best suited to handle, rather than Parliament.

This unique and fine balance of federalism has been a subject of long-standing debate between scholars who have described our federalism as quasi-federal, sui generis federalism, cooperative federalism, and so on. In fact, our federalism has unique traits of unifying tendencies with a strong Union that becomes completely unitary during times of emergency.

At the same time, it must not be mistaken to mean that a strong, unifying tendency renders the states nugatory and at the mercy of the Union. It has been held by the Supreme Court and the High Courts in a plethora of cases that legislative lists, i.e., Union and State Lists, are exclusive domains of Parliament and state legislatures, respectively, which cannot be encroached upon.

While the trend of gradual increasing the Union’s power by transferring state subjects to the Concurrent list is not new, recent events have brought the issue of federalism to the forefront starkly. The Covid-19 pandemic has seen the states and the Union grappling with the legal regime, besides the undeclared state of medical emergency. This gained prominence when the Supreme Court, during hearing of a case on vaccine procurement, remarked that India under Article 1 provides for a Union and the central government had a duty to procure vaccines and provide it to the states, rather than leaving the individual states to struggle for them.

The federalism issue took an ugly turn when the Centre ordered the Chief Secretary of West Bengal to be attached to the central government. Further, the Maratha reservation issue also revolved around the 102nd Constitutional Amendment, whereby the Supreme Court held that the power to notify backward class did not rest with the states via the 102nd Amendment Act. The issue of GST compensation is also unfolding gradually which will again bring federalism to the spotlight, as will the most recent move to form a Union Ministry of Cooperation.

The Constitution strikes a fine balance through federalism for exercise of legislative, executive, financial powers in the country. It is imperative that functionaries of the Constitution adhere to this balance and work within its limits, failing which constitutional disputes are bound to arise in which the ultimate casualty is always the welfare of citizens for whom these functionaries are elected and the Constitution is made. In this regard, the judgement of the Supreme Court quashing parts of the 97th Amendment Act should be taken in the right spirit by the states and the Centre to mend their ways in working for India’s progress, rather than wasting energies in mutual conflicts.

(The writer is a student at NLSIU, Bengaluru)