The 3-Judges’ Supreme Court bench on 20th of July 2021, passed a majority verdict striking off the 97th Constitutional amendment to the extent it dealt with the cooperative societies by 2:1 ratio. The Supreme Court in its decision upheld the 2013 Gujarat High Court’s judgment which also struck down this amendment to the extent it introduced Part IX B in the Constitution.
These changes in the constitution have further amended Article 19(1) (c) to give protection to the cooperatives and inserted Article 43 B, relating to cooperative societies.
Justice KM Joseph expressed disagreement with the majority opinion of striking down the amendment given by Justice Nariman and Justice BR Gavai. The full copy of the judgment is awaited.
The 97th constitutional amendment, which dealt with issues related to the effective management of cooperative societies in the country was passed by the Parliament and had come into effect from February 15, 2012. This amendment introduced conditions related to conducting of elections, time-period of audits, filing of financial accounts, restrictions upon the State Legislatures regarding fixation of the maximum number of Directors of a Co-Operative Society, etc.
According to the provisions of Article 368(2), ratification from one-half of State legislatures is required for an amendment to make changes to an entry in the State list.
Attorney General K K Venugopal on behalf of the Center stated that the amendment was enacted to bring in uniformity in the management of cooperative societies and it does not take away the powers of the State to enact laws with regard to them.
The Gujarat High Court in its judgment held that this amendment was an encroachment on the powers of the State legislature. Further, it was added that it was an indirect attempt to shift the subject from the State list to Centre list or Concurrent list which in the procedure requires the ratification by the majority of the States.