Tuesday, July 20, 2021

SC upholds Gujarat HC verdict on cooperative societies as state subject

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On Tuesday, the Supreme Court upheld a 2013 Gujarat High Court judgment, which struck down certain provisions of the 97th constitutional amendment while holding that Parliament cannot enact laws concerning cooperative societies as it is a state subject.

A three-judge bench of justices R.F. Nariman, K.M. Joseph and B.R. Gavai delivered the judgment dismissing Centre’s appeal against the high court order.

Justices Nariman and Gavai struck down only Part IXB of the amendment, while Justice Joseph wrote a dissenting judgment striking down the entire constitutional amendment.

Justice Nariman said: “I have struck down Part IXB as far as cooperative societies are concerned. Justice Joseph has given a dissenting judgment where the entire constitution amendment has been struck down”.

The 97th constitutional amendment dealt with issues related to effective management of the cooperative societies passed by Parliament in December 2011 and came into effect from February 15, 2012.

The Centre had argued that the provision did not denude the state governments of their power to enact laws concerning cooperatives. During the hearing, the apex court had examined a question of whether the provision denuded states of their exclusive power to enact laws to deal with the management of cooperative societies. Under the Act, Article 19(1)(c) of the Constitution was amended to give protection to the cooperatives and Article 43B (Promotion of cooperative societies) and Part IXB was inserted.

The high court verdict came on a PIL challenging the legality of the 97th constitutional amendment on the ground that the Centre had no legislative competence to enact a law for cooperative societies.

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