UNION OF INDIA versus RAJENDRA N. SHAH AND ANOTHER

[2021] 5 S.C.R.

UNION OF INDIA

RAJENDRA N. SHAH AND ANOTHER

(Civil Appeal Nos. 9108-9109 of 2014)

BJULY 20, 2021

[R. F. NARIMAN, K. M. JOSEPH AND B. R. GAVAI, JJ.]

Constitution (Ninety Seventh Amendment) Act, 2011 –Challenge to, on procedural grounds – Vires of the Constitution97[th] Amendment Act, which inter alia introduced Part IXB (consistingCof Arts.243ZH to 243ZT) under the chapter heading ‘The Co-operative Societies’ – Whether the constitutional amendmentinserting Part IXB was ultra vires the Constitution for want ofrequisite ratification under Art.368(2) proviso – Held: From therestrictions contained in Part IXB, it is clear that the exclusiveDlegislative power contained in Entry 32 List II of the 7[th] Schedulehas been significantly and substantially impacted in that suchexclusive power is now subjected to large number of curtailments– By curtailing the width of Entry 32, List II of the 7[th] Schedule,Part IXB seeks to effect significant change in Art.246(3) readwith Entry 32 List II of the 7[th] Schedule inasmuch as the State’sEexclusive power to make laws with regard to the subject of co-operative societies is significantly curtailed thereby directlyimpacting the quasi-federal principle contained therein – Quiteclearly, therefore, Part IXB, insofar as it applies to co-operativesocieties which operate within State, would therefore requireFratification under both sub-clauses (b) and (c) of the proviso toArt.368(2) of the Constitution – Ratification not having beeneffected, the Amendment is non-est – The Constitution 97[th] AmendmentAct is void for want of ratification – Constitution of India – PartIXB (Arts.243ZH to 243ZT); Art. 368(2) proviso and Schedule VII,List II, Entry 32 – Co-operative Societies.G

Constitution of India, 1950 – Part IXB (consisting ofArts.243ZH to 243ZT) inserted by the Constitution 97[th] AmendmentAct and Art.368(2) proviso – Constitutional amendment insertingPart IXB found to be ultra vires the Constitution for want of requisiteratification under Art.368(2) proviso – Whether, even if Part IXB isH

constitutionally infirm qua co-operative societies operating withina State, it would yet operate qua multi-State co-operative societiesand in Union territories which are not States – Held (per R.F.Nariman, J. [for himself and B.R. Gavai, J.]) (per majority) – TheConstitution 97[th] Amendment Act is void for want of ratification butit cannot be said that this would render the entire amendment still-born – The Statement of Objects and Reasons for the Constitution97[th] Amendment Act makes it clear that the Scheme qua multi-Statecooperative societies is separate from the Scheme dealing with“other cooperative societies”, Parliament being empowered, so faras multi-State cooperative societies are concerned, and the Statelegislatures having to make appropriate laws laying down certainmatters so far as “other cooperative societies” are concerned –Part IXB of the Constitution is operative insofar as it concerns multi-State co-operative societies both within the various States and inthe Union territories of India – Held (per K.M. Joseph, J.)(dissenting) – Doctrine of Severability must apply on surerfoundations – Provisions relating to Art.243ZI to Art.243ZQ andArt.243ZT, are unconstitutional for non-compliance, with themandate of the proviso to Art.368(2) of the Constitution – However,it cannot be said that the Doctrine of Severability will apply tosustain Art.243ZR and Art.243ZS to the multistate cooperativesocieties operating in the Union Territories, and that, it would notapply to cooperative societies confined to the Union Territories –Once the Court has painted the substantial provisions (Art.243ZI to243ZQ), with the brush of unconstitutionality, rendering thoseprovisions, still born, the provisions contained in Art.243ZR andArt.243ZS cease to be workable and are impossible to sustain –Constitution (Ninety Seventh Amendment) Act, 2011 – Doctrine ofSeverability – Applicability – Co-operative Societies.

Disposing of the appeals, the Court

HELD:

Per R. F. Nariman, J. [for himself and B. R. Gavai, J.)]

1.1. Our Constitution has been described as quasi-federalin that, so far as legislative powers are concerned, though thereis tilt in favour of the Centre vis-à-vis the States given the federalsupremacy principle, yet within their own sphere, the States have

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Aexclusive power to legislate on topics reserved exclusively tothem. Article 246(3) read with List II of the 7[th] Schedule of theConstitution of India reflects an important constitutional principlethat can be said to form part of the basic structure of theConstitution, namely, the fact that the Constitution is not unitarybut quasi-federal in character. [Paras 57, 58][517-B-D]B

1.2. Article 246 of the Constitution contains the power tolegislate, the topics of legislation contained in the three Listsare described as ‘fields of legislation’. The non-obstante clausecontained in Articles 246(1) and 246(2) and the ‘subject to’ clausecontained in Article 246(3) lay down the doctrine of federalCsupremacy, i.e. topics in the State List have to give way to topicscontained in the Union or Concurrent List in the event of anoverlap between entries in these lists. Such overlap is not to beeasily found – on the contrary, it is only in the case of an inevitableand irreconcilable conflict that the width of an entry in the StateDList can be curtailed by an overlap with an entry in either List 1or List 3. [Paras 16, 17][491-G; 492-A-C]2.1. So far as co-operative societies are concerned, it isentirely matter for the States to legislate upon, being the lastsubject matter mentioned in Entry 32 List II. Entry 43 of List I,Ewhich deals with incorporation, regulation and winding up oftrading corporations including banking, insurance and financialcorporations expressly excludes co-operative societies from itsambit. Entry 44 List I, which is wider than Entry 43 in that it isnot limited to trading corporations, speaks of corporations withobjects not confined to one State. When it comes to Multi StateFCo-operative Societies with objects not confined to one state,the legislative power would be that of the Union of India which iscontained in Entry 44 List I. [Para 23][497-E-G]

2.2. There are two separate spheres relating to multi-Stateco-operative societies and cooperative societies. There is noGoverlap whatsoever so far as the subject ‘co-operative societies’is concerned. Co-operative societies as subject matter belongswholly and exclusively to the State legislatures to legislate upon,whereas multi-State cooperative societies i.e., co-operative

societies having objects not confined to one state alone, isexclusively within the ken of Parliament. This being the case, itmay safely be concluded, on the facts of this case, that there is nooverlap and hence, no need to apply the federal supremacyprinciple. There is exclusive power to make laws, so far as co-operative societies are concerned, with the State Legislatures,which is contained in Article 246(3) read with Entry 32 of List II.[Para 26][499-D-F]

3.1. The power of amendment of the Constitution iscontained in Article 368 of the Constitution of India. Article 368(1)refers to Parliament, which may exercise its “constituent power”to amend the constitution by way of addition, variation or repealof any provision of the Constitution. This however has to be inaccordance with the mandatory procedure laid down in the Article.So far as amendments that are made to any of the provisions ofthe Constitution, save and except Articles like Article 4 whichexpressly state that though the Constitution may be amended,no such amendment shall be deemed to be an amendment of theConstitution for the purpose of Article 368, all other articles ofthe Constitution may be amended but only in accordance withthe procedure laid down in Sub-Article (2). However, there is aprocedure when it comes to amending certain specified articles/provisions in the proviso to Article 368(2). [Paras 27, 28 and29][500-A; 501-A-D]

3.2. Sub-clause (b) of the proviso speaks of Chapter IV ofPart V which deals with the Union Judiciary consisting of theSupreme Court of India, Chapter V of Part VI which deals withthe High Courts in the States, and Chapter I of Part XI whichdeals with legislative relations between the Union and the States.Sub-clause (c) of the proviso then speaks of any change beingmade in any of the lists in the 7th Schedule, which would certainlyinclude Entry 32 List 2 of the 7th Schedule. [Paras 30, 31][501-D-G]

3.3. If the subject matter of an amendment falls within theproviso, then the additional procedural requirement is that suchamendment shall also be required to be ratified by the legislaturesof not less than one half of the States by resolution to that effectpassed by those legislatures before the bill making provision for

Asuch amendment is presented to the President for assent. Unlikethe 73rd and 74th Constitution Amendments Acts, which insertedPart IX dealing with Panchayats and Part IXA dealing withMunicipalities, which amendments were also ratified by not lessthan one half of the States, the 97th Amendment which insertsthe chapter dealing with co-operative societies has not been soBratified. [Para 32][501-G-H; 502-A-B]

4.1. The ambit of Parliament’s ‘constituent power’ isreferred to in Article 368(1). Though an amendment of theConstitution is the exercise of constituent power which differsfrom ordinary legislative power, such constituent power does notCconvert Parliament into an original constituent assembly.Parliament being the donee of limited power may only exercisesuch power in accordance with both the procedural and substantivelimitations contained in the Constitution of India. The procedurallimitations are contained in Sub-Article 2 of Article 368. TheDsubstantive limitation is that constitutional amendment can onlypass muster if it does not damage the basic structure or essentialfeatures of the Constitution. [Para 33][502-B-E]

4.2. challenge to constitutional amendment may,therefore, be on procedural or substantive grounds. The presentEcase concerns itself with the procedural ground contained inArticle 368(2) proviso. For Article 368(2) proviso to apply, varioustests have been laid down by this Court in some of its judgments.The tests laid down in Sankari Prasad Singh and Sajjan Singh arereferred to in Kihoto Hollohan’s case. reading of the judgmentswould indicate that the “change” spoken about by Article 368 (2)Fproviso in any provision of the Constitution need not be direct inthe sense of adding, subtracting, or modifying the language ofthe particular Article or provision spoken of in the proviso. Thejudgments speak of ‘change-in effect’ which would mean changewhich, though not in the language of any provision of theGConstitution, would yet be change which would impact aparticular article and the principle contained therein in somesignificant way. [Paras 36, 37 and 56][504-F-G; 516-G-H; 517-A]

5. reading of the Builders’ Assn. of India case and theSeervai’s commentary would show that any significant addition

or curtailment of field of legislation which is contained in anEntry in List II of the 7[th] Schedule of the Constitution would alsoamount to ‘change’ so as to attract the proviso to Article 368(2).It is not necessary that change referred to in the proviso toArticle 368(2) would only be if some part of subject matter givento the States were transferred to Parliament or vice versa. Evenwithout such transfer, if there is enlargement or curtailment ofthe subject matter contained in field of legislation exclusivelyreserved to the States, then in effect change has been made toan entry in legislative list, which change, if significant, wouldattract the proviso to Article 368(2) and therefore requireratification. [Para 60][520-D-F]6. In matters affecting the Constitution of India, form alwaysgives way to substance. Had exceptions been provided in Entry32 List II itself, such amendment to Entry 32 List II would requireratification. Also, in effect if the subject matter “co-operativesocieties” had been either expanded or curtailed by adding adefinition clause in Article 366 of the Constitution of India, suchexpansion or curtailment would also require ratification assignificant changes have been made in effectin Entry 32 List IIof the Constitution of India. Likewise, if separate part is addedin the Constitution of India, the direct effect of adding such partbeing to curtail the width of Entry 32 List II in significant manner,again, in effect Entry 32 List II is directly impacted, againrequiring ratification. It is of no moment that one method is chosenor preferred to another so long as Entry 32 List II is curtailedeither by adding or deleting words in Entry 32 itself or by doingso through an indirect methodology, namely, adding newdefinition clause in Article 366 or adding new part to theConstitution of India. [Para 61][520-G-H; 521-A-C]

7.1. Part IX of the Constitution consists of Articles 243ZHto 243ZT. From the restrictions contained in Part IXB, it is clearthat the exclusive legislative power that is contained in Entry 32List II has been significantly and substantially impacted in thatsuch exclusive power is now subjected to large number ofcurtailments. Indeed, Article 243ZI specifically mandates that theexclusive legislative power contained in Entry 32 List II of the

AState Legislature is now severely curtailed as it can only beexercised subject to the provisions of Part IXB; and further,Article 243ZT makes it clear that all State laws which do notconform to the restrictions mentioned in Part IXB automaticallycome to an end on the expiration of one year from thecommencement of the Constitution 97[th] Amendment Act.B[Paras 64, 65][521-E-G; 523-C-D]

7.2. An analysis of Part IXB of the Constitution leads to theresult that though Article 246(3) and Entry 32, List II of the 7[th]Schedule have not been ‘changed’ in letter, yet the impact uponthe aforesaid articles cannot be said to be insignificant. On theCcontrary, it is clear that by curtailing the width of Entry 32, List IIof the 7[th] Schedule, Part IXB seeks to effect significant changein Article 246(3) read with Entry 32 List II of the 7[th] Scheduleinasmuch as the State’s exclusive power to make laws with regardto the subject of co-operative societies is significantly curtailedDthereby directly impacting the quasi-federal principle containedtherein. Quite clearly, therefore, Part IXB, insofar as it appliesto co-operative societies which operate within State, wouldtherefore require ratification under both sub-clauses (b) and (c)of the proviso to Article 368(2) of the Constitution of India.[Para 67][524-A-C]E

8. Part IX of the Constitution of India was inserted into theConstitution by the Constitution (73[rd] Amendment) Act, 1992 andPart IXA inserted into the Constitution by the Constitution (74[th]Amendment) Act, 1992 made similar provisions qua Panchayatsand Municipalities. Both the Constitution 73[rd] and 74[th]FAmendments were sent for ratification and were ratified byLegislatures of more than half the States. The reason is not far tosee – like Part IXB, several restrictions are laid down before theStates can legislate on Panchayats and Municipalities. Like PartIXB, such legislation is subject to Parts IX and IXA – see ArticleG243C and Article 243R. Again, like Article 243ZT in Part IXB,Articles 243N and 243ZF provide that State laws which areinconsistent with the provisions of Parts IX and IXA respectivelywill automatically cease after the expiration of one year from thecommencement of the two Constitutional Amendments. Inaddition to these provisions, Parts IX and IXA also contain ArticleH243O and Article 243ZG ousting the jurisdiction of the courtsand thereby, in effect, curtailing the provisions of Articles 136,226 and 227 of the Constitution of India. Ratification of theConstitution 72[nd] and 73[rd] Amendments was therefore necessaryboth under clauses (b) and (c) of the proviso to Article 368(2) inthat Article 136 was in effect curtailed (Article 136 occurring inChapter IV of Part V of the Constitution of India); Articles 226and 227 were in effect curtailed (which occur in Chapter V of PartVI of the Constitution of India); Article 246(3) was in effectcurtailed (which forms part of the Chapter I of Part XI of theConstitution of India); and Entry 5 List 2, 7[th] Schedule was alsoin effect curtailed, which is referrable to sub-clause (c) of theproviso to Article 368(2) of the Constitution of India. It is cleartherefore that even previous constitutional practice of Parliamentacting in its constituent capacity qua similar subject mattersreinforces the submission of the respondent that, like the 73[rd]and 74[th] Amendments, the Constitution 97[th] Amendment Act alsorequired ratification. [Paras 68, 69][524-C-H; 525-A-C]

9.1. It was argued that the constituent power that isexercised in enacting the 97[th] Amendment cannot be assimilatedwith legislative power, and that once the Constitution standsamended by insertion of Part IXB, Article 245 mandates that alllegislation made under Article 246 read with Lists in the 7[th]Schedule to the Constitution of India is subject to the provisionsof the Constitution, so that legislation made under Article 246(3)read with Entry 32 List II becomes subject to the provisions ofPart IXB which is now part of the Constitution of India. Thisargument is classic instance of putting the cart before the horse.Nobody doubts that had the amendment been ratified under Article368(2) proviso, it would then operate, as result of whichlegislation under Article 246(3) read with Entry 32 List II of the7[th] Schedule would then become subject to Part IXB. In thepresent case, ratification not having been effected, theAmendment is non est. This argument is therefore rejected. [Paras70, 71][525-D-F]

9.2. It was then argued that 17 out of 28 States had enactedlegislations incorporating provisions of Part IXB, and that,

Atherefore, they had impliedly accepted the restrictions laid downin the said Part. This argument need not detain this Courtinasmuch as the procedure laid down in Article 368(2) provisorequires ratification of legislatures of one half of the States byresolutions to that effect. This has admittedly not been done inthe present case. Also, the argument that no State has comeBforward to challenge the 97[th] Constitution Amendment does nottake the matter any further. When citizen of India challenges aconstitutional amendment as being procedurally infirm, it is theduty of the court to examine such challenge on merits as theConstitution of India is national charter of governance affectingCpersons, citizens and institutions alike. [Para 72][525-G-H; 526-A-B]10.1. It was then argued that instead of having two separateparts within Part IXB, one dealing with State co-operativesocieties and one dealing with multi-State co-operative societies,Dthe well-known legislative device of “reference” to existingprovisions was instead utilised by Article 243ZR and thereforeone should view the matter as if separate part within Part IXBhas been enacted insofar as multi-State co-operative societiesare concerned. There is substance in this argument. TheStatement of Objects and Reasons for the Constitution 97[th]EAmendment Act makes it clear that the Scheme qua multi-Statecooperative societies is separate from the Scheme dealing with“other cooperative societies”, Parliament being empowered, sofar as multi-State cooperative societies are concerned, and theState legislatures having to make appropriate laws laying downFcertain matters so far as “other cooperative societies” areconcerned. The effect of Article 246ZR is as if multi-State co-operative societies are separately dealt with in separate sub-chapter contained within Part IXB. Also, there is no doubt thatafter severance what survives can and does stand independentlyand is workable. [Paras 76, 77][531-G-H; 532-D-G]G

10.2. It was suggested by the Respondents that theconsequence of this Court holding that the Constitution 97[th]Amendment Act is void for want of ratification would render theentire amendment still-born, as result of which no part of theamendment can survive. This argument is rejected for twoHreasons. If the doctrine of severability were not to apply for the

afore-stated reason, then the majority judgment in KihotoHollohancase would be incorrect. This very reasoning would thenrender the entire Constitution 52[nd] Amendment, which insertedthe Tenth Schedule to the Constitution of India, constitutionallyinfirm as then the entirety of the amendment would have to bedeclared void for want of ratification, which would be in the teethof the majority judgment in Kihoto Hollohan case. Further, onthis reasoning, the amendments made in Article 19 and theaddition of Article 43B would also have to be struck down, whichwas not pleaded or argued before either the High Court or beforethis Court. This being the case, it is declared that Part IXB of theConstitution of India is operative insofar as multi-State co-operative societies are concerned. [Para 77][532-G-H; 533-A-C]

11.1. There can be no doubt that Article 246(3) does notapply to Union territories. Instead, Article 246(4) applies to Unionterritories, by means of which Parliament can use the State Listalso to legislate insofar as the Union territories are concerned.However, given the truncation of Entry 32 List II of the 7[th]Schedule by Part IXB, what would operate in Union territories isPart IXB only insofar as it applies to multi-State co-operativesocieties. So far as co-operative societies within Union territoryare concerned, the same infirmity as is found in the main part ofthe judgment continues insofar as the legislative subject “co-operative societies” is concerned under Entry 32 List II.Therefore, for co-operative societies which have no ramificationsoutside the Union territory itself, Part IXB will have noapplication. [Para 78][533-C-F]

11.2. The judgment of the High Court is upheld except tothe extent that it strikes down the entirety of Part IXB of theConstitution of India. It is declared that Part IXB of theConstitution of India is operative only insofar as it concerns multi-State co-operative societies both within the various States and inthe Union territories of India. [Para 80][534-A-B]

Kihoto Hollohan v. Zachillhu 1992 Supp (2) SCC 651 :[1992] 1 SCR 686 – followed.

Sankari Prasad Singh Deo v. Union of India [1952]SCR 89; Sajjan Singh v. State of Rajasthan [1965] 1SCR 933; Hoechst Pharmaceuticals Ltd. v. State of

ABC

468SUPREME COURT REPORTS

ABihar, (1983) 3 SCR 130; Kerala SEB v. IndianAluminium Co. Ltd., (1976) 1 SCC 466 : [1976] 1SCR 552; Goodricke Group Ltd. v. State of W.B., 1995Supp (1) SCC 707: [1994] 6 Suppl. SCR 120; Govt.of A.P. v. J.B. Educational Society, (2005) 3 SCC 212 :[2005] 2 SCR 302; Greater Bombay Coop. Bank Ltd.Bv. United Yarn Tex (P) Ltd. (2007) 6 SCC 236 : [2007]4 SCR 823; State of W.B. v. Committee for Protectionof Democratic Rights, (2010) 3 SCC 571 : [2010] 2SCR 97; Daman Singh v. State of Punjab, (1985) 2 SCC670 : [1985] 3 SCR 580; Apex Cooperative Bank ofUrban Bank of Maharashtra & Goa Ltd. v.CMaharashtra State Cooperative Bank Ltd., (2003) 11SCC 66; Thalappalam Service Coop. Bank Ltd. v. Stateof Kerala (2013) 16 SCC 82 : [2013] 14 SCR 475; K.Damodarasamy Naidu & Bros. v. State of T.N., (2000)1 SCC 521 : [1999] 3 Suppl. SCR 597; KesavanandaBharati v. State of Kerala, (1973) 4 SCC 225 : [1973]DSuppl. SCR 1; M. Nagaraj v. Union of India, (2006) 8SCC 212 : [2006] 7 Suppl. SCR 336; I.R. Coelho v.State of T.N., (2007) 2 SCC 1 : [2007] 1 SCR 706; Dr.Jaishri Laxmanrao Patil v. Chief Minister and Ors.,2021 SCC OnLine SC 362; Bhim Singh v. Union ofIndia, (2010) 5 SCC 538: [2010] 6 SCR 218; B.P.ESinghal v. Union of India, (2010) 6 SCC 331; Builders’Assn. of India v. Union of India (1989) 2 SCC 645 andVipulbhai M. Chaudhary v. Gujarat Coop. Milk Mktg.Federation Ltd. (2015) 8 SCC 1: [2015] 3 SCR 997 –relied on.FGolak Nath v. State of Punjab [1967] 2 SCR 762;Cellular Operators Assn. of India v. TRAI, (2016) 7 SCC703 : [2016] 9 SCR 1 and D.C. Wadhwa v. State ofBihar, (1987) 1 SCC 378 : [1987] 1 SCR 798 –referred to.

‘Constitutional Law of India’ (4[th] Edition) by H.M.GSeervai, p.3156 – referred to.

per K.M. Joseph, J. (partly dissenting)

1. The provisions relating to Article 240ZI to Article 243ZQand Article 243ZT, are unconstitutional for non-compliance, withthe mandate of the proviso to Article 368(2) of the ConstitutionHof India. However, it cannot be said that the Doctrine of

Severability will apply to sustain Article 243ZR and Article 243ZSto the multistate cooperative societies operating in the UnionTerritories, and that, it would not apply to cooperative societiesconfined to the territories of the Union Territories. [Para 2][534-C-E]

2. The Doctrine of Severability came up for considerationin R.M.D. Chamarbaugwalla case. Therein, this Court has laiddown certain Rules in this regard. [Para 10][542-E]

3.1. The first Rule laid down in R.M.D. Chamarbaugwallacase is that, it is the intention of the Legislature, that is thedetermining factor. The test is also laid down that the question tobe asked is, whether the Legislature would have enacted thevalid Part, if it had known that the rest of the Statute was invalid.Also, in determining the legislative intent, it will be legitimate totake into account, the history of the legislation and its objects,inter-alia. [Para 16][552-C-D]

3.2. From the Statement of Objects and Reasons for theNinety-Seventh Amendment, it is discernible that there wereweaknesses found in safeguarding the interests of the membersof the cooperative societies. Elections were being postponedindefinitely. There was inadequate professionalism inmanagement. It was found that cooperatives needed to be run onwell-established democratic principles and elections had to beheld on time and in free and fair manner. It was further notedthat “cooperative societies” is subject enumerated in Entry 32of the State List of the Seventh Schedule. That laws were madeby the State Legislatures, were noticed. Reforms, were in short,found necessary in the Cooperative Society Acts of the States.Consultation with the State Governments were held severaltimes. The Central Government was committed, it is stated toensure that the cooperative societies, in the country, were tofunction in democratic, professional, autonomous andeconomically sound manner. It is in this connection that Part IXBwas inserted to empower Parliament in respect of multistatecooperative societies, and State Legislatures, in case of othercooperative societies, to make appropriate law. [Para 18][554-F-H; 555-A-C]

EFG

A3.3. The intention discernible was that Parliament intendedto provide uniform set of legislative norms and create rights,liabilities and powers across the board through the length andbreadth of the country. In fact, it was to inform all cooperativesocieties, whether they were governed by laws made by the StateLegislatures, falling under Entry 32 of List II of Seventh Schedule,Bor the appropriate Entry under List I. In other words,homogeneity was sought to be introduced without anydiscrimination between cooperative societies falling within thelegislative domain of State Legislatures and of Parliament. Thesetting and the manner, in which the Articles have been orderedCin Part IXB, would go to show that the substantive provisions,which actually conditioned the legislative power, among otherthings, was directed against the State Legislatures.[Paras 19, 20][555-C-E]

4. The second Rule laid down in R.M.D. ChamarbaugwallaDcase is to enquire whether the valid and invalid provisions are soinextricably mixed up that they cannot be separated from oneanother. It is further declared that if the seemingly valid provisionsare so distinct and separate, that after declaring the other set ofprovisions as invalid, the remaining provisions would remain acomplete Code, independent of the rest, then, the distinct andEseparate provisions, which manifests complete Code, canbecome enforceable. [Para 21][555-E-G]

5. The third Rule provides that even if they (the provisions)are distinct and separate, if they all form part of single scheme,which is intended to be operative as whole, then, also theFinvalidity of part, will result in failure of whole. In KihotoHollohan case, this Court, after bearing in mind the Rules,apparently laid down in R.M.D. Chamarbaugwalla case, hasproceeded to clearly articulate the test, inter-alia, viz., as towhether, after severance, what survives, can stand independentlyGand is workable. [Para 22][555-G-H; 556-A]

6. It is plain from the Statement of Objects and Reasons,that Parliament was fully aware that Entry 32 clothed theLegislatures of the State with exclusive legislative power to makelaws in regard to cooperative societies, which were not multistate

cooperative societies. Parliament was fully aware that laws hadalready been made by State Legislatures, but yet, the object wasto usher in reforms by the legislative route, and what is more, aConstitutional Amendment, which clearly involved, change inregard to the entrenched provisions. The Ninety-SeventhAmendment was passed in 2012, several years after the decisionin Kihoto Hollohan case. It is clear that the law was laid down bythe Constitution Bench of this Court in Kihoto Hollohan case,that having regard to the sublime purpose behind the proviso toArticle 368(2), which was to foster and secure the federal natureof the Constitution, what mattered was the substance and not theform. It appears to be further clear that an effort was made totake the States on board by holding several meetings betweenthe States, and what is more, Resolutions were passed apparentlyat the meet of State Cooperative Ministers. All of this appears topoint out that, having regard to the law holding the field and therelevant principles in question, it appears that Parliament wouldnot have made the amendment, had it known that the provisionscontained in Articles 243ZI to 243ZQ would not pass muster.The object was clearly to have identical provisions in place togovern cooperative societies. Uniformity and, in fact, identicaltreatment for all cooperative societies whether they are createdunder State Law or by Parliament, was the goal. [Para 23][556-B-F]

7. It is the duty of the Court to strive to uphold the lawmade by the Legislature. When it comes to an amendment to theConstitution, this presumption of constitutionality, and also theduty of the Court, becomes even more pronounced. If, indeed,on the Doctrine of Severability, the provisions contained in Article243QR and Article 243QS, can be sustained, the law must surviverather than perish. The question, however, is on the terms of theprovisions in question (Articles 243QR and 243QS), and bearingin mind the principles, can they survive on their own, after theinvalidation of Article 243ZH to Article 243ZQ and Article 243ZT.Are the provisions of Article 243ZR and 243ZS independentprovisions and workable? Both these provisions are entirelydependent upon the provisions contained in Article 243ZI to243ZQ. This is for the reason that both these provisions expresslyprovide that the ‘provisions of this part’, which clearly means

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[2021] 5 S.C.R.

Athe foregoing provisions, which are contained in Article 243ZI to243ZQ, are to apply in regard to multistate cooperative societiesand to Union Territories with the modifications, which are indicatedtherein. There can be application and modifications of somethingwhich exists. There cannot be either, when the elaborateprovisions are to be treated as not born. Are these provisionsBindependent and workable? One will proceed on the basis thatParliament intended to produce homogeneity in regard to certainlegislative value judgments which would be cast in stone in amanner of speaking by having those values declared in thegrundnorm itself. It would appear to be that these values were toapply, across the board, to cooperative societies born under lawsCmade by the State Legislatures, as also, to those made byParliament. More importantly, once the Court has painted therelevant provisions, which are the substantial provisions (Article243ZI to 243ZQ), with the brush of unconstitutionality, renderingthose provisions, still born, it would appear that the provisionscontained in Article 243ZR and Article 243ZS would not have theDcrutches without which these provisions cease to be workableand are impossible to sustain. The unconstitutional part, which isto be an integral part of Article 243ZR and Article 243ZS, mustcontinue to exist, if the provisions’, in question, are to bear life.In other words, to sustain these provisions the court would haveto resurrect the dead provisions contained in Article 243ZI toE243ZQ and Article 243ZT. The Doctrine of Severability must applyon surer foundations. Unless the provisions, which have beenfound unconstitutional, are kept alive, Articles 243ZR and 243ZQare plainly unworkable. [Paras 25, 27, 28, 29, 30][556-G-H; 557-A-C, G-H; 558-A-E]

FKihoto Hollohan v. Zachillhu and others (1992) Suppl.2 SCC 651 : [1992] 1 SCR 686 – followed.

R.M.D. Chamarbaugwalla and another v. Union ofIndia and another AIR 1957 SC 628: [1957] SCR 930– relied on.

GCase Law Reference

In the Judgment of R.F. NARIMAN, J. (for himself and

B.R. GAVAI, J.)

[1952] SCR 89[1965] 1 SCR 933

relied onPara 8

UNION OF INDIA v. RAJENDRA N. SHAH AND ANOTHER

ACIVIL APPELLATE JURISDICTION : Civil Appeal No. 9108-9109 of 2014.

From the Judgment and Order dated 22.04.2013 of the High Courtof Gujarat at Ahmedabad in W.P. (PIL) No.166 of 2012 and 29.04.2013in Misc. Civil Application No.890 of 2013.

BWith

Civil Appeal Nos. 281 And 282 Of 2020, Civil Appeal Nos. 2825,2826 And 2827 of 2021.

K.K. Venugopal, AG, Tushar Mehta, SG, P.K. Jani, Ms. ManishaLavkumar, Sr. Advs., Kanu Agrawal, Zoheb Hussain, Ms. MeenakshiCGrover, S.K. Gupta, Ms. Shraddha Deshmukh, Chinmayee Chandra,Amrish Kumar, Raj Bahadur Yadav, Mohit Paul, Ms. Shikha Sarin, Ms.Sunaina Phul, Sahil M. Shah, Shivang Jani, Masoom K. Shah, VishwasK. Shah, Mrs. Neha Shah, Dhrupad Patel, Anup Jain, Udit Gupta,Abhishek Baid, Pulkit Tare, Ms. Ritika Sinha, V. K. Monga, K. MaruthiRao, Mrs. K. Radha, Mrs. Anjani Aiyagari, Ms. Hemantika Wahi,DAniruddha P. Mayee, Advs. for the appearing parties.

The Judgment of the Court was delivered by

R. F. NARIMAN, J.

1. Applications for intervention are allowed. Leave granted.

E2. These appeals raise an important question as to the vires of theConstitution (Ninety Seventh Amendment) Act, 2011 [the “Constitution97[th] Amendment Act”] which inter alia introduced Part IXB underthe chapter heading ‘The Co-operative Societies’. The Constitution 97[th]Amendment Act was passed by the requisite majority of the Lok Sabhaon 27.12.2011 and the Rajya Sabha on 28.12.2011. The Presidential assentFto the aforesaid Amendment followed on 12.01.2012 and the saidAmendment was published in the Official Gazette of India on 13.01.2012,coming into force with effect from 15.02.2012. The important questionraised in these petitions and decided by division bench of the GujaratHigh Court by the impugned judgment dated 22.04.2013 is whether PartGIXB is non est for want of ratification by half of the States under theproviso to Article 368(2). The impugned judgment of the High Court hasdeclared that the said constitutional amendment inserting Part IXB isultra vires the Constitution of India for want of the requisite ratificationunder Article 368(2) proviso, which however will not impact amendmentsthat have been made in Article 19(1)(c) and in inserting Article 43B inHthe Constitution of India.

3. The co-operatives movement in India can be legislatively tracedto two British Acts, namely, the Cooperative Societies Act, 1904 and theCo-operative Societies Act, 1912. Under the Government of India Act,1919, the subject ‘co-operative societies’ was contained in entry 13 ofthe Provincial list. This was continued by the Government of India Act,1935, ‘co-operative societies’ being contained in entry 33 of the Provinciallist. This was then further continued by the Constitution of India, thistime the same entry falling within Schedule VII List II, i.e., the StateList as part of entry 32 thereof. It is therefore important at this stage toset out the constitutional scheme insofar as it applies to co-operativesocieties thus:

Art 19. Protection of certain rights regarding freedom of—speech, etc.

(1) All citizens shall have the right—

xxx xxx xxx

(c) to form associations or unions or co-operative societies;

xxx xxx xxx

Art 43B. Promotion of co-operative societies.—

The State shall endeavour to promote voluntary formation,autonomous functioning, democratic control and professionalmanagement of co-operative societies.

SEVENTH SCHEDULE

(Article 246)

List I—Union List

xxx xxx xxx

43. Incorporation, regulation and winding up of trading corporations,including banking, insurance and

financial corporations, but not including co-operative societies.

44. Incorporation, regulation and winding up of corporations,whether trading or not, with objects not confined to one State, butnot including universities.

xxx xxx xxx

List II—State List

xxx xxx xxx

32. Incorporation, regulation and winding up of corporations, otherthan those specified in List I, and universities; unincorporatedtrading, literary, scientific, religious and other societies andBassociations; cooperative societies.

xxx xxx xxx

4. On 07.12.2004, conference of ministers dealing with co-operatives in the various states resolved to amend the Constitution toCensure democratic, autonomous and professional functioning of co-operatives; to address key issues of empowerment of co-operativesthrough voluntary formation, autonomous functioning, democratic controland professional management; for regular and timely conduct of elections,general body meetings and professional audit. The meeting ended stating:

D“The conference also noted that the central government has takena laudable step by enacting the Multi-State Co-operative SocietiesAct, 2002, conforming to the thrust areas of reforms in co-operativelegislation and has been widely appreciated. The conference whileappreciating the initiative taken by the central government resolvedthat this subject too should be considered by the high powerEcommittee.

It was, therefore, resolved high power committee would beconstituted by the Central Government consisting ofrepresentatives of the State governments, concerned Ministriesof the central government, eminent cooperators and other publicFofficials to review the achievements during the last 100 years andchallenges before it and to suggest ways and means to face themand to give new direction to movement. The constitution of theCommittee and terms of reference are to be decided by the CentralGovernment.”

G5. Pursuant to these minutes, and after various consultations bythe Centre with the State Governments, the Constitution (Ninety SeventhAmendment) Act, 2011 was passed. The Statement of Objects andReasons for the aforesaid Constitution Amendment is important and isset out hereunder:

“STATEMENT OF OBJECTS AND REASONS

The co-operative sector, over the years, has made significantcontribution to various sectors of national economy and hasachieved voluminous growth. However, it has shown weaknessesin safeguarding the interests of the members and fulfillment ofobjects for which these institutions were organised. There havebeen instances where elections have been postponed indefinitelyand nominated office bearers or administrators remaining in-chargeof these institutions for long time. This reduces the accountabilityof the management of co-operative societies to their members.Inadequate professionalism in management in many of the co-operative institutions has led to poor services and low productivity.Co-operatives need to run on well established democratic principlesand elections held on time and in free and fair manner. Therefore,there is need to initiate fundamental reforms to revitalize theseinstitutions in order to ensure their contribution in the economicdevelopment of the country and to serve the interests of membersand public at large and also to ensure their autonomy, democraticfunctioning and professional management.

2. The “co-operative societies” is subject enumerated in Entry32 of the State List of the Seventh Schedule of the Constitutionand the State Legislatures have accordingly enacted legislationson co-operative societies. Within the framework of State Acts,growth of co-operatives on large scale was envisaged as part ofthe efforts for securing social and economic justice and equitabledistribution of the fruits of development. It has, however, beenexperienced that in spite of considerable expansion of co-operatives, their performance in qualitative terms has not been upto the desired level. Considering the need for reforms in the Co-operative Societies Acts of the States, consultations with the StateGovernments have been held at several occasions and in theconferences of State Co-operative Ministers.A strong need hasbeen felt for amending the Constitution so as to keep the co-operatives free from unnecessary outside interferences and alsoto ensure, their autonomous organisational set up and theirdemocratic functioning.

3. The Central Government is committed to ensure that the co-operative societies in the country function in democratic,

professional, autonomous and economically sound manner.Witha view to bring the necessary reforms, it is proposed to incorporatea new Part in the Constitution so- as to provide for certainprovisions covering the vital. aspects of working of co-operativesocieties like democratic, autonomous and professional functioning.A new article is also proposed to be inserted in Part IV of theConstitution (Directive Principles of State Policy) for the Statesto endeavor to promote voluntary formation, autonomousfunctioning, democratic control and professional management ofcooperative societies. The proposed new Part in the Constitution,inter alia, seeks to empower the Parliament in respect of multi-State co-operative societies and the State Legislatures in case ofother co-operative societies to make appropriate law, laying downthe following matters, namely:-

(a) provisions for incorporation, regulation arid winding up ofco-operative societies based on the principles of democraticmember-control, member-economic participation andautonomous functioning;

(b) specifying the maximum number of directors of co-operative society to be not exceeding twenty-one members;

(c) providing for fixed term of five years from the date ofelection in respect of the elected members of the board and itsoffice bearers;

(d) providing for maximum time limit of six months duringwhich board of directors of co-operative society could bekept under supersession or suspension;

(e) providing for independent professional audit;

(f) providing for right of information to the members of the co-operative societies;

(g) empowering the State Governments to obtain periodicreports of activities and accounts of co-operative societies;

(h) providing for the reservation of one seat for the ScheduledCastes or the Scheduled Tribes and two seats for women onthe board of every co-operative society, which have individualsas members from such categories;

(i) providing for offences relating to co-operative societies andpenalties in respect of such offences.

4. It is expected that these provisions will not only ensure theautonomous and democratic functioning of co-operatives, but alsoensure the accountability of management to the members andother stakeholders and shall provide for deterrence for violationof the provisions of the law.

5. The Bill seeks to achieve the above objectives.”

(Emphasis supplied)

6. new Part IXB was then inserted as follows:

PART IXB

THE CO-OPERATIVE SOCIETIES

243ZH. Definitions. —

In this Part, unless the context otherwise requires,—

(a) “authorised person” means person referred to as such inarticle 243ZQ;

(b) “board” means the board of directors or the governing bodyof co-operative society, by whatever name called, to which thedirection and control of the management of the affairs of societyis entrusted to;

(c) “co-operative society” means society registered or deemedto be registered under any law relating to co-operative societiesfor the time being in force in any State;

(d) “multi-State co-operative society” means society with objectsnot confined to one State and registered or deemed to be registeredunder any law for the time being in force relating to suchcooperatives;

(e) “Office bearer” means President, Vice-President,Chairperson, Vice-Chairperson, Secretary or Treasurer, of co-operative society and includes any other person to be elected bythe board of any co-operative society;

(f) “Registrar” means the Central Registrar appointed by theCentral Government in relation to the multi-State co-operative

Asocieties and the Registrar for co-operative societies appointedby the State Government under the law made by the Legislatureof State in relation to co-operative societies;

(g) “State Act” means any law made by the Legislature of aState;

(h) “State level co-operative society” means co-operative societyhaving its area of operation extending to the whole of State anddefined as such in any law made by the Legislature of State.

243ZI. Incorporation of co-operative societies. —

CSubject to the provisions of this Part, the Legislature of Statemay, by law, make provisions with respect to the incorporation,regulation and winding up of co-operative societies based on theprinciples of voluntary formation, democratic member-control,member-economic participation and autonomous functioning.

243ZJ. Number and term of members of board and its officeDbearers. —

(1) The board shall consist of such number of directors as may beprovided by the Legislature of State, by law:

Provided that the maximum number of directors of co-operativeEsociety shall not exceed twenty-one:

Provided further that the Legislature of State shall, by law, providefor the reservation of one seat for the Scheduled Castes or theScheduled Tribes and two seats for women on board of every co-operative society consisting of individuals as members and havingFmembers from such class of category of persons.

(2) The term of office of elected members of the board and itsoffice bearers shall be five years from the date of election andthe term of office bearers shall be coterminous with the term ofthe board:

GProvided that the board may fill casual vacancy on the board bynomination out of the same class of members in respect of whichthe casual vacancy has arisen, if the term of office of the board isless than half of its original term.

(3) The Legislature of State shall, by law, make provisions forHco-option of persons to be members of the board having experience

in the field of banking, management, finance or specialisation inany other field relating to the objects and activities undertaken bythe co-operative society, as members of the board of such society:

Provided that the number of such co-opted members shall notexceed two in addition to twenty-one directors specified in thefirst proviso to clause (1):

Provided further that such co-opted members shall not have theright to vote in any election of the cooperative society in theircapacity as such member or to be eligible to be elected as officebearers of the board:

Provided also that the functional directors of co-operative societyshall also be the members of the board and such members shallbe excluded for the purpose of counting the total number ofdirectors specified in the first proviso to clause (1).

243ZK. Election of members of board. —

(1) Notwithstanding anything contained in any law made by theLegislature of State, the election of board shall be conductedbefore the expiry of the term of the board so as to ensure that thenewly elected members of the board assume office immediatelyon the expiry of the term of the office of members of the outgoingboard. (2) The superintendence, direction and control of thepreparation of electoral rolls for, and the conduct of, all electionsto co-operative society shall vest in such an authority or body,as may be provided by the Legislature of State, by law: Providedthat the Legislature of State may, by law, provide for theprocedure and guidelines for the conduct of such elections.

243ZL. Supersession and suspension of board and interim—management.

(1) Notwithstanding anything contained in any law for the timebeing in force, no board shall be superseded or kept undersupersession for period exceeding six months:

Provided that the board may be superseded or kept undersuspension in case—

(i) of its persistent default; or

(ii) of negligence in the performance of its duties; or

482SUPREME COURT REPORTS

(iii) the board has committed any act prejudicial to the interestsof the co-operative society or its members; or

(iv) there is stalemate in the constitution or functions of theboard; or

(v) the authority or body as provided by the Legislature of aBState, by law, under clause (2) of article 243ZK, has failed toconduct elections in accordance with the provisions of the StateAct:

Provided further that the board of any such co-operative societyshall not be superseded or kept under suspension where there isCno Government shareholding or loan or financial assistance orany guarantee by the Government:

Provided also that in case of co-operative society carrying onthe business of banking, the provisions of the Banking RegulationAct, 1949 shall also apply:

Provided also that in case of co-operative society, other than amulti- State co-operative society, carrying on the business ofbanking, the provisions of this clause shall have the effect as if forthe words “six months”, the words “one year” had been substituted.

(2) In case of supersession of board, the administrator appointedto manage the affairs of such cooperative society shall arrangefor conduct of elections within the period specified in clause (1)and hand over the management to the elected board.

(3) The Legislature of State may, by law, make provisions forthe conditions of service of the administrator.

243ZM. Audit of accounts of co-operative societies. —F

(1) The Legislature of State may, by law, make provisions withrespect to the maintenance of accounts by the co-operativesocieties and the auditing of such accounts at least once in eachfinancial year.

(2) The Legislature of State shall, by law, lay down the minimumGqualifications and experience of auditors and auditing firms thatshall be eligible for auditing accounts of the co-operative societies.

(3) Every co-operative society shall cause to be audited by anauditor or auditing firms referred to in clause (2) appointed by thegeneral body of the co-operative society:

Provided that such auditors or auditing firms shall be appointedfrom panel approved by State Government or an authorityauthorised by the State Government in this behalf.

(4) The accounts of every co-operative society shall be auditedwithin six months of the close of the financial year to which suchaccounts relate.

(5) The audit report of the accounts of an apex co-operativesociety, as may be defined by the State Act, shall be laid beforethe State Legislature in the manner, as may be provided by theState Legislature, by law.

243ZN. Convening of general body meetings. —

The Legislature of State may, by law, make provisions that theannual general body meeting of every co-operative society shallbe convened within period of six months of close of the financialyear to transact the business as may be provided in such law.

243ZO. Right of member to get information. —

(1) The Legislature of State may, by law, provide for access toevery member of co-operative society to the books, informationand accounts of the cooperative society kept in regular transactionof its business with such members.

(2) The Legislature of State may, by law, make provisions toensure the participation of members of the management of theco-operative society providing minimum requirement of attendingmeetings by the members and utilising the minimum level ofservices as may be provided in such law.

(3) The Legislature of State may, by law, provide for co-operativeeducation and training for its members.

243ZP. Returns. —

(1) Every co-operative society shall file returns, within six monthsof the close of every financial year, to the authority designated bythe State Government including the following matters, namely: —

(a) annual report of its activities;

(b) its audited statement of accounts;

(c) plan for surplus disposal as approved by the general bodyof the co-operative society;

(d) list of amendments to the bye-laws of the co-operativesociety, if any;

(e) declaration regarding date of holding of its general bodymeeting and conduct of elections when due; and

(f) any other information required by the Registrar in pursuanceof any of the provisions of the State Act.

243ZQ. Offences and penalties. —

(1) The Legislature of State may, by law, make provisions forthe offences relating to the co-operative societies and penaltiesfor such offences.

(2) law made by the Legislature of State under clause (1)shall include the commission of the following act or omission asoffences, namely:—

(a) co-operative society or an officer or member thereofwilfully makes false return or furnishes false information, orany person wilfully not furnishes any information required fromhim by person authorised in this behalf under the provisionsof the State Act;

(b) any person wilfully or without any reasonable excusedisobeys any summons, requisition or lawful written order issuedunder the provisions of the State Act;

(c) any employer who, without sufficient cause, fails to pay toa co-operative society amount deducted by him from itsemployee within period of fourteen days from the date onwhich such deduction is made;

(d) any officer or custodian who wilfully fails to handovercustody of books, accounts, documents, records, cash, securityand other property belonging to co-operative society of whichhe is an officer or custodian, to an authorised person; and

(e) whoever, before, during or after the election of membersof the board or office bearers, adopts any corrupt practice.

243ZR. Application to multi-State co-operative societies.—

The provisions of this Part shall apply to the multi-State co-operative societies subject to the modification that any referenceto “Legislature of State”, “State Act” or State Government”shall be construed as reference to “Parliament”, “Central Act”or “the Central Government” respectively.

243ZS. Application to Union territories. —

The provisions of this Part shall apply to the Union territories andshall, in their application to Union territory, having no LegislativeAssembly as if the references to the Legislature of State werea reference to the administrator thereof appointed under article239 and, in relation to Union territory having LegislativeAssembly, to that Legislative Assembly:

Provided that the President may, by notification in the OfficialGazette, direct that the provisions of this Part shall not apply toany Union territory or part thereof as he may specify in thenotification.

243ZT. Continuance of existing laws.—

Notwithstanding anything in this Part, any provision of any lawrelating to co-operative societies in force in State immediatelybefore the commencement of the Constitution (Ninety-seventhAmendment) Act, 2011, which is inconsistent with the provisionsof this Part, shall continue to be in force until amended or repealedby competent Legislature or other competent authority or untilthe expiration of one year from such commencement, whicheveris less.]

7. As stated hereinabove, in the public interest, Writ Petitionbeing WP No. 166 of 2012 filed before the Gujarat High Court succeededvide the impugned judgment dated 22.04.2013, by which Part IXB wasdeclared to be ultra vires for want of ratification by the State Legislaturesunder Article 368(2) proviso.

8. Shri K.K. Venugopal, the learned Attorney General for India,has submitted, relying upon the Statement of Objects and Reasons, thatthe Constitution 97[th] Amendment Act sought to achieve vital social andeconomic objectives in regard to the functioning of co-operative societiesin India, which is sector that has made significant contribution to the

Aeconomy of the nation. He referred to and relied upon Article 243ZR tostate that, in reality, Part IXB is in two separate parts – one dealing withmulti-State co-operative societies which have ramifications beyond merelyone State, and co-operative societies which exist and operate within aparticular state. He argued that even though there was no challengeinsofar as multi-State co-operative societies were concerned, the entiretyBof Part IXB has been struck down, throwing out the baby with the bathwater. The same is true for Part IXB as applicable to Union territorieswhich is clear from reading of Article 243ZS. He then argued that asmany as 17 out of 28 States have, after the 97th Amendment, alreadyenacted legislative measures in conformity with Part IXB and thatCtherefore more than half of the States had, in effect, accepted and appliedthe provisions of Part IXB. What is also of significance is that theConstitution 97th Amendment was preceded by detailed consultationwith the State Governments as result of which no State Governmenthas come forward to challenge the same. The learned Attorney General,on reading of several judgments of this Court dealing with ratificationDof constitutional amendments, argued that there is no change eitherdirectly or in effect to Article 246(3) of the Constitution of India, fromwhich the legislative power of the States contained in List II of the 7thSchedule flows, or in Entry 32 of List II of the 7th Schedule. In point offact, reading of Part IXB would show that no additional legislativeEpower has been given to the Union. All subject matters relating to co-operative societies fall solely within the legislative domain of the States.Apart from reading out passages in Sankari Prasad Singh Deo v. Unionof India, 1952 SCR 89;Sajjan Singh v. State of Rajasthan, (1965) 1SCR 933 and Kihoto Hollohan v. Zachillhu, 1992 Supp (2) SCC651, the learned Attorney General relied strongly upon observations inFthe dissenting judgments of Wanchoo, J. Ramaswamy, J. and Bachawat,J. in Golak Nath v. State of Punjab, (1967) 2 SCR 762. According tohim, the examples given by Wanchoo, J. are apposite. On the otherhand, Kihoto Hollohan’s case (supra) is distinguishable in that, para 7of the 10[th] Schedule of the Constitution had the direct effect of curtailingGthe operation of Articles 136, 226 and 227 of the Constitution and, bybarring the jurisdiction of all courts including the Supreme Court and theHigh Courts, in regard to all matters covered by the 10[th] Schedule, thisCourt held that ratification would be necessary. The learned AttorneyGeneral then argued that the additional finding of the Division Benchthat the Constitutional Amendment violated the basic structure of theHConstitution, in that it tinkered with the federal structure of the Constitution,was wholly uncalled for and unwarranted inasmuch as the real issue inthis case is one and one only, as to whether ratification is or is notnecessary. If it be held that ratification is necessary, then it is unnecessaryto fall back upon basic structure. Likewise, if it is held that ratificationwould not be necessary, then the Constitutional Amendment, which infact strengthens the basic structure of the Constitution in streamliningthe co-operative movement, would belie the finding of the High Court.

9. He also argued that if the doctrine of severability is to be applied,then in the event of this Court finding that State co-operative societiescannot be impacted without following ratification, multi-State co-operativesocieties, which have ramifications beyond one state can be held to becovered by Part IXB, as would Union territories, and that on applyingthe aforesaid doctrine, Part IXB ought to be upheld, at least insofar asthe multi-State co-operative societies are concerned. He has cited anumber of judgments to buttress his submissions which will be reflectedin this judgment.

10. Shri Prakash Jani, learned senior advocate appearing on behalfof the Mehsana District Co-operative Milk Producers Union in CivilAppeal No. 282 of 2020 supported the arguments of the learned AttorneyGeneral. In addition, he argued that it must never be forgotten that whileinserting Part IXB into the Constitution of India, Parliament has exercisedits ‘constituent’ power and not ‘legislative’ power. Read with Article245 of the Constitution of India, it would then be clear that since thelegislative power of the States in Article 246(3) is subject to the provisionsof the Constitution of India, the legislative head ‘co-operative societies’contained in Entry 32, List II of the 7[th] Schedule is now being madesubject to Part IXB which is part of the Constitution of India. Heargued that Parliament in its constituent capacity can deal with Statesubjects, and relied upon the insertion of Article 21A by Constitution(Eighty Sixth Amendment) Act, 2002. He then argued that as matterof fact, Part IXB read with Article 43B enhances the basic structure ofthe Constitution and relied strongly upon the judgment in Vipulbhai M.Chaudhary v. Gujarat Coop. Milk Mktg. Federation Ltd., (2015) 8SCC 1 to demonstrate that this judgment, though not dealing with theconstitutional validity of the 97th Amendment, yet held that the saidAmendment is great step forward in bringing uniformity and order tothe co-operatives movement in India.

A11. Shri Masoom K. Shah, learned counsel appearing for theRespondent No.1 in Civil Appeal No. 9108-9109 of 2014, has made animpassioned plea that the donee of limited amending power cannot doindirectly what it is not permitted to do directly. According to him, acoach-and-four is driven into the principle of federalism as understoodby our Constitution, by curtailing/restricting the State’s legislative powersBcontained in Entry 32 List 2, 7th Schedule. According to the learnedcounsel, careful reading of Part IXB of the Constitution would showthat the unfettered power of the State legislatures prior to the amendmenthas now been fettered by the provisions of Part IXB in several materialparticulars; for example, the fixation of the maximum number of directorsCof co-operative societies; the reservation provision contained in 243ZJ;the duration of the term of office of elected members of the board of co-operative societies etc. In short, what has been done is to add exceptionafter exception to Entry 32 thereby carving out of Entry 32 number ofmatters which otherwise were exclusively within the domain of the StateLegislatures. He relied strongly upon Articles 243ZI & 243ZT, making itDclear that there is direct assault on Entry 32, List II of the 7[th] Scheduleinasmuch as after one year, all State legislations that are contrary to theprovisions of Part IXB are of no effect, and that an affirmative obligationis cast upon the States to enact legislation only in accordance with therestrictions contained in Part IXB. He also strongly relied upon the veryEjudgments cited by the learned Attorney General to argue that, in effect,as direct inroad is made into Article 246(3) and Entry 32 List 2, suchamendment would have to be struck down for want of ratification as itimpacts very important part of the Constitution, namely, the federalstructure and the distribution of legislative powers between the Unionand the States. He also placed strong reliance on Builders’ Assn. ofFIndia v. Union of India, (1989) 2 SCC 645, and passage fromSeervai’s Constitutional Law of India to argue that even if no legislativepower is transferred qua co-operative societies from the States to theUnion, yet the curtailment (or expansion) of legislative field whichpertains exclusively to the States and which impacts federalism wouldGcertainly amount to “change” both in Article 246(3) and in the legislativelists and would thus require ratification. For this purpose, he also stronglyrelied upon para 21 of K. Damodarasamy Naidu & Bros. v. State ofT.N., (2000) 1 SCC 521. He then countered the learned AttorneyGeneral’s argument with reference to Cellular Operators Assn. of Indiav. TRAI, (2016) 7 SCC 703 (para 57), to argue that even if 17 StatesH

thereafter amend their laws in furtherance of the ConstitutionalAmendment, this would make no difference to the constitutional positionif in fact the requisite ratification under Article 368(2) proviso is lacking.The validity of constitutional amendment does not depend upon whethera State government accepts it or whether State government challengesit. He then went on to make two further arguments insofar as multi-State co-operative societies are concerned. First and foremost, giventhe tests of severability, he argued that multi-State co-operative societiesare inextricably entwined with co-operative societies and the 97thConstitution Amendment would never have been enacted for multi-Stateco-operative societies alone. Even otherwise, the challenge made in theWrit Petition was to the entirety of Part IXB and the part relating tomulti-State co-operative societies, not being severable, the entirety ofPart IXB has correctly been held to be unconstitutional by the impugnedjudgment. He also argued that if this Constitutional Amendment isallowed to pass constitutional muster without ratification, there would beno end to further amendments which would then indirectly rob the Statesof their legislative powers, changing quasi-federal state into unitaryone.12. He then argued point that was neither raised in the pleadingsnor in arguments in the High Court. He submitted that even qua Multi-State Co-operative Societies, since change has been made in Entry 44List I which contains the power to legislate qua Multi-State Co-operativeSocieties, the width of the Entry is curtailed by Part IXB of theConstitution, which would, therefore, in any case require ratification bythe States. To this contention, the learned Attorney General replied bysubmitting that it is only those Entries such as Entry 2A of List I (referredto in Entry 2 which is subject to Entry 2A) that would be covered by theproviso to Article 368(2) if one were to bear in mind that Article 368(2)proviso has been enacted with the object of preserving the quasi-federalstructure of the Constitution.

13. Smt. Ritika Sinha, learned counsel appearing for the Intervenorin IA No. 3/2014 in CA Nos. 9108-9109/2014, stressed the language ofArticle 243ZI and 243ZT. According to her, these Articles make it clearthat the States’ legislative competence has expressly been made subjectto the provisions of Part IXB, thereby engrafting an exception, directly,to Entry 32 of List II. Also, the non-obstante clause in Article 243ZTwould make it clear that State legislation that has been enacted under

Aplenary power has now been edged out to make way for the provisionsof Part IXB, which have to be compulsorily enacted by State legislaturesin the place of earlier State legislations to the contrary. For this purpose,she relied upon paras 26 and 27 of Vipulbhai M. Chaudhary v. GujaratCoop. Milk Mktg. Federation Ltd.(supra). She then relied uponpassages in Sajjan Singh (supra) and Wanchoo, J’s judgment in GolakBNath (supra) to argue that even if the stringent tests laid down thereinare to be applied, they would apply on the facts of this case, inasmuch asa direct and substantial inroad has been made into Entry 32 List II of the7[th] Schedule. She concluded by relying upon D.C. Wadhwa v. State ofBihar, (1987) 1 SCC 378 (para 7), by submitting that what cannot beCachieved directly cannot now be achieved indirectly by means of insertingPart IXB to the Constitution of India. Shri Maruthi Rao, learned counselfor the Intervenor in IA No. 4/2014 CA Nos. 9108-9109/2014, broadlysupported the submissions made by Shri Shah and Ms. Sinha.

14. Having heard learned counsel for all the parties, it is firstDimportant to advert to the constitutional scheme of legislative relationsbetween the Union of India and the States. This is laid down in PartIXB, Chapter I in Articles 245 and 246 as follows: -

PART XI

RELATIONS BETWEEN THE UNION AND THE STATESECHAPTER I.—LEGISLATIVE RELATIONS

Distribution of Legislative Powers

245. Extent of laws made by Parliament and by theLegislatures of States. —F(1) Subject to the provisions of this Constitution, Parliament maymake laws for the whole or any part of the territory of India, andthe Legislature of State may make laws for the whole or anypart of the State.

(2) No law made by Parliament shall be deemed to be invalid onGthe ground that it would have extraterritorial operation.

246. Subject-matter of laws made by Parliament and by theLegislatures of States. —

(1) Notwithstanding anything in clauses (2) and (3), ParliamentHhas exclusive power to make laws with respect to any of the

matters enumerated in List I in the Seventh Schedule (in thisConstitution referred to as the “Union List”).

(2) Notwithstanding anything in clause (3), Parliament, and, subjectto clause (1), the Legislature of any State 1*** also, have powerto make laws with respect to any of the matters enumerated inList III in the Seventh Schedule (in this Constitution referred to asthe “Concurrent List”).

(3) Subject to clauses (1) and (2), the Legislature of any State hasexclusive power to make laws for such State or any part thereofwith respect to any of the matters enumerated in List II in theSeventh Schedule (in this Constitution referred to as the “StateList”).

(4) Parliament has power to make laws with respect to any matterfor any part of the territory of India not included 2 [in State]notwithstanding that such matter is matter enumerated in theState List.

15. cursory reading of these Articles would show that whereasParliament may make laws for the whole or any part of the territory ofIndia, the legislation of State may make laws for the whole or any partof the State. Article 246 then goes on to refer to laws with respect toany of the matters enumerated in 3 Lists contained in the 7th schedule tothe Constitution of India. List I contains subjects or topics on whichParliament has exclusive power to make laws; List III in the ConcurrentList contains topics on which both Legislatures may make laws; andList II, with which we are directly concerned, gives the States exclusivepower to make laws for such State or part thereof with respect to any ofthe matters contained therein. So far as Union territories are concerned,Parliament is given power under Article 246(4) without constraint as tosubject matter as it may also legislate with respect to topics covered byList II.

16. In catena of judgments of this Court, it has been declaredthat whereas Article 246 contains the power to legislate, the topics oflegislation contained in the three Lists are described as ‘fields oflegislation’. This is felicitously set out in Hoechst Pharmaceuticals Ltd.v. State of Bihar, (1983) 3 SCR 130:

“It is equally well settled that the various entries in the three Listsare not ‘powers’ of legislation, but ‘fields’ of legislation. The power

[2021] 5 S.C.R.

Ato legislate is given by Article 246 and other Articles of theConstitution”(at pg. 184)

17. Dealing with the non-obstante clause contained in Articles246(1) and 246(2) and the ‘subject to’ clause contained in Article 246(3),this Court, following Federal Court and Privy Council judgments, hasBheld that these non-obstante and ‘subject to’ clauses lay down the doctrineof federal supremacy, which can be stated thus: topics in the State Listhave to give way to topics contained in the Union or Concurrent List inthe event of an overlap between entries in these lists. Such overlap isnot to be easily found – on the contrary, it is only in the case of aninevitable and irreconcilable conflict that the width of an entry in theCState List can be curtailed by an overlap with an entry in either List 1 orList 3. Thus, in Kerala SEB v. Indian Aluminium Co. Ltd., (1976) 1SCC 466, this Court held: -“5. In view of the provisions of Article 254, the power ofParliament to legislate in regard to matters in List III, which areDdealt with by clause (2), is supreme the Parliament has exclusivepower to legislate with respect to matters in List 1. The StateLegislature has exclusive power to legislate with respect to mattersin List II. But this is subject to the provisions of clause (1) [leavingout for the moment the reference to clause (2)]. The power ofEParliament to legislate with respect to matters included in List I issupreme notwithstanding anything contained in clause (3) [againleaving out of consideration the provisions of clause (2)]. Nowwhat is the meaning of the words “notwithstanding” in clause (1)and “subject to” in clause (3)? They mean that where an entry isin general terms in List II and part of that entry is in specificFterms in List I, the entry in List I takes effect notwithstanding theentry in List II. This is also on the principle that the “special”excludes the “general” and the general entry in List II is subjectto the special entry in List 1. For instance, though houseaccommodation and rent control might fall within either the StateGlist or the concurrent list, Entry 3 in List I of Seventh Schedulecarves out the subject of rent control and house accommodationin Cantonments from the general subject of house accommodationand rent control (see Indu Bhusan v. Sundari Devi [(1969) 2SCC 289]. Furthermore, the word “notwithstanding” in clause (1)also means that if it is not possible to reconcile the two entries the

entry in List I will prevail. But before that happens attempt shouldbe made to decide in which list particular legislation falls. Fordeciding under which entry particular legislation falls the theoryof “pith and substance” has been evolved by the courts. If in pithand substance legislation falls within one list or the other butsome portion of the subject-matter of that legislation incidentallytrenches upon and might come to fall under another list, the Actas whole would be valid notwithstanding such incidentaltrenching. These principles have been laid down in number ofdecisions.”

18. In Hoechst Pharmaceuticals Ltd. (supra), this Court held: -

The words “notwithstanding anything contained in clauses (2) and(3)” in Article 246(1) and the words “subject to clauses (1) and(2)” in Article 246(3) lay down the principle of federal supremacyviz. that in case of inevitable conflict between Union and Statepowers, the Union power as enumerated in List I shall prevailover the State power as enumerated in Lists II and III, and incase of overlapping between Lists II and III, the former shallprevail. But the principle of federal supremacy laid down in Article246 of the Constitution cannot be resorted to unless there is an“irreconcilable” conflict between the entries in the Union and StateLists. In the case of seeming conflict between the entries in thetwo Lists, the entries should be read together without giving anarrow and restricted sense to either of them. Secondly, an attemptshould be made to see whether the two entries cannot bereconciled so as to avoid conflict of jurisdiction. It should beconsidered whether fair reconciliation can be achieved by givingto the language of the Union Legislative List meaning which, ifless wide than it might in another context bear, is yet one that canproperly be given to it and equally giving to the language of theState Legislative List meaning which it can properly bear. Thenon obstante clause in Article 246(1) must operate only if suchreconciliation should prove impossible. Thirdly, no question ofconflict between the two Lists will arise if the impugned legislation,by the application of the doctrine of ‘pith and substance’ appearsto fall exclusively under one list, and the encroachment uponanother list is only incidental.

(at page 165)

DEFG

A19. Likewise, in Goodricke Group Ltd. v. State of W.B., 1995Supp (1) SCC 707, this Court reiterated this constitutional scheme asfollows:

12. The scheme of the entries in the three lists in the SeventhSchedule is set out in the decision of this Court in M.P.V.BSundararamier & Co. v. State of A.P. [1958 SCR 1422] andneeds no reiteration. Similarly, the proposition that the severalentries are legislative heads and must be construed liberally is toowell-settled to require any elaboration. It is equally well-recognisedthat where there are three lists containing large number of entries,there is bound to be some overlapping among them. In such aCsituation, the rule of pith and substance has to be applied todetermine to which entry does given piece of legislation relate.Once it is so determined, any incidental trenching on the fieldreserved to the other legislature is of no consequence. Of course,the extent of encroachment may be an element in determiningDwhether the Act is colourable piece of legislation. Yet anotherrelevant principle is the one enunciated in Union of India v. H.S.Dhillon [(1971) 2 SCC 779] where the legislative competence ofParliament to enact law is questioned, all that one has to ask iswhether it relates to any of the entries in List II and if it does not,no further question need be asked and Parliament’s legislativeEcompetence must be upheld. This decision also explains why didthe Founding Fathers find it necessary to have three lists. InInternational Tourist Corpn. v. State of Haryana [(1981) 2SCC 318] however, caution has been administered that beforeexclusive legislative competence can be claimed for Parliament,Fthe legislative incompetence of the State Legislature must be clearlyestablished. In S.R. Bommai v. Union of India [(1994) 3 SCC 1]one of us (B.P. Jeevan Reddy, J.) cautioned that in our constitutionalsystem, where all important legislative heads are assigned toCentre, the courts should be slow to adopt any interpretation whichtends to deprive the States of the few powers assigned to themGunder the Constitution.

20. In Govt. of A.P. v. J.B. Educational Society, (2005) 3 SCC212, the aforesaid was reiterated as follows:

9. Parliament has exclusive power to legislate with respect to anyHof the matters enumerated in List I, notwithstanding anything

contained in clauses (2) and (3) of Article 246. The non obstanteclause under Article 246(1) indicates the predominance orsupremacy of the law made by the Union Legislature in the eventof an overlap of the law made by Parliament with respect to amatter enumerated in List I and law made by the StateLegislature with respect to matter enumerated in List II of theSeventh Schedule.

10. There is no doubt that both Parliament and the State Legislatureare supreme in their respective assigned fields. It is the duty ofthe court to interpret the legislations made by Parliament and theState Legislature in such manner as to avoid any conflict.However, if the conflict is unavoidable, and the two enactmentsare irreconcilable, then by the force of the non obstante clause inclause (1) of Article 246, the parliamentary legislation would prevailnotwithstanding the exclusive power of the State Legislature tomake law with respect to matter enumerated in the State List.

21. In Greater Bombay Coop. Bank Ltd. v. United Yarn Tex(P) Ltd., (2007) 6 SCC 236, it was held:

92. The first three clauses of Article 246 of the Constitution relateto the demarcation of legislative powers between Parliament andthe State Legislatures. Under clause (1), notwithstanding anythingcontained in clauses (2) and (3), Parliament has been given theexclusive power to make laws with respect to any of the mattersenumerated in List I or the Union List in the Seventh Schedule.Clause (2) empowers Parliament and the State Legislatures subjectto the power of Parliament under sub-clause (1), to make lawswith respect to any of the matters enumerated in List III in theSeventh Schedule described in the Constitution as the “ConcurrentList” notwithstanding anything contained in sub-clause (3). Underclause (3) the State Legislatures have been given exclusive powersto make laws in respect of matters enumerated in List II in theSeventh Schedule described as the “State List” but subject toclauses (1) and (2). The three lists while enumerating in detail thelegislative subjects carefully distribute the areas of legislativeauthority between Parliament (List I) and the State (List II). Thesupremacy of Parliament has been provided for by the nonobstante clause in Article 246(1) and the words “subject to” inArticles 246(2) and (3). Therefore, under Article 246(1) if any of

Athe entries in the three lists overlap, the entry in List I will prevail.Additionally, some of the entries in the State List have been madeexpressly subject to the power of Parliament to legislate eitherunder List I or under List III. Entries in the lists of the SeventhSchedule have been liberally interpreted; nevertheless courts havebeen wary of upsetting this balance by process of interpretationBso as to deprive any entry of its content and reduce it to “uselesslumber”. The use of the word “exclusive” in clause (3) denotesthat within the legislative fields contained in List II, the StateLegislatures exercise authority as plenary and ample asParliament’s.

(Emphasis supplied)

22. In State of W.B. v. Committee for Protection of DemocraticRights, (2010) 3 SCC 571, this Court held:

25. The non obstante clause in Article 246(1) contemplates theDpredominance or supremacy of the Union Legislature. This poweris not encumbered by anything contained in clauses (2) and (3)for these clauses themselves are expressly limited and madesubject to the non obstante clause in Article 246(1). The StateLegislature has exclusive power to make laws for such State orany part thereof with respect to any of the matters enumerated inEList II in the Seventh Schedule and it also has the power to makelaws with respect to any matters enumerated in List III(Concurrent List). The exclusive power of the State Legislatureto legislate with respect to any of the matters enumerated in ListII has to be exercised subject to clause (1) i.e. the exclusive powerFof Parliament to legislate with respect to matters enumerated inList I. As consequence, if there is conflict between an entry inList I and an entry in List II, which is not capable of reconciliation,the power of Parliament to legislate with respect to matterenumerated in List II must supersede pro tanto the exercise ofpower of the State Legislature.

26. Both Parliament and the State Legislature have concurrentpowers of legislation with respect to any of the matters enumeratedin List III. The words “notwithstanding anything contained inclauses (2) and (3)” in Article 246(1) and the words “subject toclauses (1) and (2)” in Article 246(3) lay down the principle of

federal supremacy viz. that in case of inevitable conflict betweenthe Union and State powers, the Union power as enumerated inList I shall prevail over the State power as enumerated in Lists IIand III and in case of an overlapping between Lists II and III, thelatter shall prevail.

27. Though, undoubtedly, the Constitution exhibits supremacy ofParliament over the State Legislatures, yet the principle of federalsupremacy laid down in Article 246 of the Constitution cannot beresorted to unless there is an irreconcilable direct conflict betweenthe entries in the Union and the State Lists. Thus, there is noquarrel with the broad proposition that under the Constitution thereis clear demarcation of legislative powers between the Unionand the States and they have to confine themselves within thefield entrusted to them. It may also be borne in mind that thefunction of the lists is not to confer powers; they merely demarcatethe legislative field. But the issue we are called upon to determineis that when the scheme of the Constitution prohibits encroachmentby the Union upon matter which exclusively falls within thedomain of the State Legislature, like public order, police, etc., canthe third organ of the State viz. the judiciary, direct CBI, an agencyestablished by the Union to do something in respect of Statesubject, without the consent of the State Government concerned?

23. So far as co-operative societies are concerned, it can be seenthat it is entirely matter for the States to legislate upon, being the lastsubject matter mentioned in Entry 32 List II. At this stage, it is importantto note that Entry 43 of List I, which deals with incorporation, regulationand winding up of trading corporations including banking, insurance andfinancial corporations expressly excludes co-operative societies from itsambit. Entry 44 List I, which is wider than Entry 43 in that it is not limitedto trading corporations, speaks of corporations with objects not confinedto one State. This Court has therefore held, on reading of these entries,that when it comes to Multi State Co-operative Societies with objectsnot confined to one state, the legislative power would be that of theUnion of India which is contained in Entry 44 List I. Thus, in DamanSingh v. State of Punjab, (1985) 2 SCC 670, this Court laid down: -

7. …. … According to Mr Ramamurthi the express exclusion ofcooperative societies in Entry 43 of List I and the express inclusionof cooperative societies in Entry 32 of List II separately and apart

Afrom but along with corporations other than those specified in ListI and universities, clearly indicated that the constitutional schemewas designed to treat cooperative societies as institutions distinctfrom corporations. On the other hand one would think that thevery mention of cooperative societies both in Entry 43 of List Iand Entry 32 of List II along with other corporations gave anBindication that the Constitution makers were of the view thatcooperative societies were of the same genus as other corporationsand all were corporations. In fact the ve1ry express exclusion ofcooperative societies from Entry 43 of List I is indicative of theview that but for such exclusion, cooperative societies would beCcomprehended within the meaning of expression “corporations”.

24. Likewise, in Apex Cooperative Bank of Urban Bank ofMaharashtra & Goa Ltd. v. Maharashtra State Cooperative BankLtd., (2003) 11 SCC 66, this Court delineated the two separate spheresrelating to multi-State co-operative societies and co-operative societiesDas follows: -

25. Another aspect which must be noticed is that in the Constitutionof India, the subject pertaining to cooperative societies is in theState List i.e. Entry 32 of List II of Schedule VII. The Union Listhas Entry 44 of List I of Schedule VII which deals withEcorporations. In this case we are not concerned with the validityof Central legislation and thus do not deal with that aspect. Forpurpose of the judgment we will take it that cooperative societywith objects not confined to one State would fall within the termcorporation, and thus Central legislation may be saved. However,from the constitutional provisions it is clear that matters pertainingFto cooperative societies are in the State List. Thus many Stateshave enacted laws relating to cooperative societies. We have notseen other Acts. However, as this case concerns society inMaharashtra, the Maharashtra Cooperative Societies Act wasshown to us. Significantly, this law does not define cooperativeGsociety. It did not need to, as society registered under it wouldbe automatically covered. The need to define cooperative societyarises only in Central legislation which does not cover allcooperative societies and thus needs to indicate to which societyit applies.

25. Likewise, in Thalappalam Service Coop. Bank Ltd. v. Stateof Kerala, (2013) 16 SCC 82, this Court held:

26. The cooperative society is State subject under ScheduleVII List II Entry 32 to the Constitution of India. Most of the Statesin India enacted their own Cooperative Societies Act with viewto provide for the orderly development of the cooperative sectorin the State to achieve the objects of equity, social justice andeconomic development, as envisaged in the directive principles ofState policy, enunciated in the Constitution of India. For cooperativesocieties working in more than one State, the Multi-StateCooperative Societies Act, 1984 was enacted by Parliament underSchedule VII List I Entry 44 of the Constitution. The cooperativesociety is essentially an association or an association of personswho have come together for common purpose of economicdevelopment or for mutual help.

26. It may thus be seen that there is no overlap whatsoever so faras the subject ‘co-operative societies’ is concerned. Co-operativesocieties as subject matter belongs wholly and exclusively to the Statelegislatures to legislate upon, whereas multi-State co-operative societiesi.e., co-operative societies having objects not confined to one state alone,is exclusively within the ken of Parliament. This being the case, it maysafely be concluded, on the facts of this case, that there is no overlapand hence, no need to apply the federal supremacy principle as laiddown by the judgments of this court. What we are therefore left with isthe exclusivepower to make laws, so far as co-operative societies areconcerned, with the State Legislatures, which is contained in Article246(3) read with Entry 32 of List II. In fact, in K. DamodarasamyNaidu & Bros. v. State of T.N., (2000) 1 SCC 521, this court held:

“21. Parliament, when exercising the powers to amend theConstitution under Article 368, cannot and does not amend StateActs. There is no other provision in the Constitution which sopermits and there is no judgment of this Court that so holds. Thepower to make laws for the States in respect of matters listed inList II in the Seventh Schedule is exclusively that of the StateLegislatures.…..”

(emphasis supplied)

27. At this stage it is important to refer to the power of amendmentof the Constitution contained in Article 368 of the Constitution of India.Article 368 reads as follows: -

PART XX

AMENDMENT OF THE CONSTITUTION

368. Power of Parliament to amend the Constitution andprocedure therefor. —

(1) Notwithstanding anything in this Constitution, Parliament mayin exercise of its constituent power amend by way of addition,variation or repeal any provision of this Constitution in accordancewith the procedure laid down in this article.

(2) An amendment of this Constitution may be initiated only bythe introduction of Bill for the purpose in either House ofParliament, and when the Bill is passed in each House by majorityof the total membership of that House and by majority of notless than two-thirds of the members of that House present andvoting, it shall be presented to the President who shall give hisassent to the Bill and thereupon the Constitution shall standamended in accordance with the terms of the Bill:

Provided that if such amendment seeks to make any change in—

(a) article 54, article 55, article 73, article 162, article 241 or article279A or

(b) Chapter IV of Part V, Chapter V of Part VI, or Chapter I ofPart XI, or

(c) any of the Lists in the Seventh Schedule, or

(d) the representation of States in Parliament, or

(e) the provisions of this article,

the amendment shall also require to be ratified by the Legislaturesof not less than one-half of the States by resolutions to that effectpassed by those Legislatures before the Bill making provision forsuch amendment is presented to the President for assent.

xxx xxx xxx

28. It may be seen that Article 368(1) refers to Parliament, whichmay exercise its “constituent power” to amend the constitution by wayof addition, variation or repeal of any provision of the Constitution. Thishowever has to be in accordance with the mandatory procedure laiddown in the Article.

29. So far as amendments that are made to any of the provisionsof the Constitution, save and except Articles like Article 4 which expresslystate that though the Constitution may be amended, no such amendmentshall be deemed to be an amendment of the Constitution for the purposeof Article 368, all other articles of the Constitution may be amended butonly in accordance with the procedure laid down in Sub-Article (2). Sofar so good. However, we are concerned with the procedure when itcomes to amending certain specified articles/provisions in the proviso toArticle 368(2). Sub-clause (a) of the proviso refers to Articles 54 and 55which deal with the President of India, Articles 73 and 162 which dealwith the executive power of the Union and the State Governments, Article241 which deals with High Courts for Union territories, and Article 279Awhich deals with the Goods and Services Tax Council. In this case, weare not directly concerned with Sub-clause (a) of the proviso.

30. Sub-clause (b) of the proviso is important and speaks of ChapterIV of Part V which deals with the Union Judiciary consisting of theSupreme Court of India, Chapter V of Part VI which deals with theHigh Courts in the States, and Chapter I of Part XI which deals withlegislative relations between the Union and the States. We are directlyconcerned with sub-clause (b) insofar as the impact of constitutionalamendment on Article 246, which is part of Chapter I of Part XI, isconcerned.

31. Sub-clause (c) of the proviso then speaks of any change beingmade in any of the lists in the 7[th] Schedule, which would certainly includeEntry 32 List 2 of the 7[th] Schedule, with which we are directly concerned.Sub-clauses (d) and (e) refer to the representation of the States inParliament and change to be made in the provisions of Article 368itself respectively, with which we are not directly concerned.

32. If the subject matter of an amendment falls within the proviso,then the additional procedural requirement is that such amendment shallalso be required to be ratified by the legislatures of not less than one halfof the States by resolution to that effect passed by those legislaturesbefore the bill making provision for such amendment is presented to the

APresident for assent. Unlike the 73[rd] and 74[th] Constitution AmendmentsActs, which inserted Part IX dealing with Panchayats and Part IXAdealing with Municipalities, which amendments were also ratified by notless than one half of the States, the 97th Amendment which inserts thechapter dealing with co-operative societies has not been so ratified. Thequestion which arises in this appeal is whether the addition of this chapterBcan be said to be void or non est for want of such ratification.

33. At this point, it is important to first deal with the ambit ofParliament’s ‘constituent power’ referred to in Article 368(1). Severaljudgments of this Court have held that though an amendment of theConstitution is the exercise of constituent power which differs fromCordinary legislative power, such constituent power does not convertParliament into an original constituent assembly. Parliament being thedonee of limited power may only exercise such power in accordancewith both the procedural and substantive limitations contained in theConstitution of India. The procedural limitations are contained in Sub-DArticle 2 of Article 368. The substantive limitation has been laid downby the celebrated decision of this Court in Kesavananda Bharati v.State of Kerala, (1973) 4 SCC 225, by which constitutionalamendment can only pass muster if it does not damage the basic structureor essential features of the Constitution.

E34. Thus, in M. Nagaraj v. Union of India, (2006) 8 SCC 212,this Court held:

103. The criterion for determining the validity of law is thecompetence of the law-making authority. The competence of thelaw-making authority would depend on the ambit of the legislativeFpower, and the limitations imposed thereon as also the limitationson the mode of exercise of the power. Though the amending powerin the Constitution is in the nature of constituent power anddiffers in content from the legislative power, the limitations imposedon the constituent power may be substantive as well as procedural.Substantive limitations are those which restrict the field of theGexercise of the amending power. Procedural limitations on theother hand are those which impose restrictions with regard to themode of exercise of the amending power. Both these limitationstouch and affect the constituent power itself, disregard of whichinvalidates its exercise. (See Kihoto Hollohan v. Zachillhu [1992HSupp (2) SCC 651].)

35. In I.R. Coelho v. State of T.N., (2007) 2 SCC 1, this Courtheld:

122. The scope and content of the words “constituent power”expressly stated in the amended Article 368 came up forconsideration in Indira Gandhi case [1975 Supp SCC 1]. Article329-A(4) was struck down because it crossed the implied limitationof amending power, that it made the controlled Constitutionuncontrolled, that it removed all limitations on the power to amendand that it sought to eliminate the golden triangle of Article 21read with Articles 14 and 19. (See also Minerva Mills case [(1980)3 SCC 625].)123. It is Kesavananda Bharati case [(1973) 4 SCC 225] readwith clarification of Khanna, J. in Indira Gandhi case [1975Supp SCC 1] which takes us one step forward, namely, thatfundamental rights are interconnected and some of them formpart of the basic structure as reflected in Article 15, Article 21read with Article 14, Article 14 read with Articles 16(4), (4-A),(4-B), etc. Bharati [(1973) 4 SCC 225] and Indira Gandhi [1975Supp SCC 1] cases have to be read together and if so read theposition in law is that the basic structure as reflected in the abovearticles provide test to judge the validity of the amendment bywhich laws are included in the Ninth Schedule.

124. Since power to amend the Constitution is not unlimited, ifchanges brought about by amendments destroy the identity of theConstitution, such amendments would be void. That is why whenentire Part III is sought to be taken away by constitutionalamendment by the exercise of constituent power under Article368 by adding the legislation in the Ninth Schedule, the questionarises as to the extent of judicial scrutiny available to determinewhether it alters the fundamentals of the Constitution. Secularismis one such fundamental, equality is the other, to give fewexamples to illustrate the point. It would show that it isimpermissible to destroy Articles 14 and 15 or abrogate or en bloceliminate these fundamental rights. To further illustrate the point,it may be noted that Parliament can make additions in the threelegislative lists, but cannot abrogate all the lists as it would abrogatethe federal structure.

A125. The question can be looked at from yet another angle also.Can Parliament increase the amending power by amendment ofArticle 368 to confer on itself the unlimited power of amendmentand destroy and damage the fundamentals of the Constitution?The answer is obvious. Article 368 does not vest such power inParliament. It cannot lift all restrictions placed on the amendingBpower or free the amending power from all its restrictions. This isthe effect of the decision in Kesavananda Bharati case [(1973)4 SCC 225] as result of which secularism, separation of power,equality, etc., to cite few examples, would fall beyond theconstituent power in the sense that the constituent power cannotCabrogate these fundamentals of the Constitution. Without equalitythe rule of law, secularism, etc. would fail. That is why Khanna,J. held that some of the fundamental rights like Article 15 formpart of the basic structure.

xxxxxx xxx

D137. In Kesavananda Bharati case [(1973) 4 SCC 225] thediscussion was on the amending power conferred by unamendedArticle 368 which did not use the words “constituent power”. Wehave already noted the difference between original power offraming the Constitution known as constituent power and the natureof constituent power vested in Parliament under Article 368. ByEaddition of the words “constituent power” in Article 368, theamending body, namely, Parliament does not become the originalConstituent Assembly. It remains Parliament under controlledConstitution. Even after the words “constituent power” are insertedin Article 368, the limitations of doctrine of basic structure wouldcontinue to apply to Parliament. It is on this premise that clausesF(4) and (5) inserted in Article 368 by the 42nd Amendment werestruck down in Minerva Mills case [(1980) 3 SCC 625].

36. challenge to constitutional amendment may, therefore, beon procedural or substantive grounds as stated hereinabove. The presentcase concerns itself with the procedural ground contained in Article 368(2)Gproviso.

37. For Article 368(2) proviso to apply, various tests have beenlaid down by this Court in some of its judgments. Since the tests laiddown in Sankari Prasad Singh (supra) and Sajjan Singh (supra) arereferred to in Kihoto Hollohan’s case (supra), we can refer to thisHjudgment in some detail.

38. The majority judgment of three learned Judges byVenkatachaliah, J. sets out Paragraph 7 of the 10[th] Schedule of theConstitution of India, which deals with disqualification on the ground ofdefection. The Court was concerned with the constitutional validity ofthe 10[th] Schedule on both substantive and procedural grounds. So far asthe procedural ground is concerned, Paragraph 7, which barred thejurisdiction of all courts, was said to have required ratification by theStates and the 10[th] Schedule, not having been ratified by the States, itwas urged that the entire amendment would be infirm on this count.Paragraph 7 of the 10[th] Schedule is set out in para 16 of the judgment asfollows: -

“7. Bar of jurisdiction of courts. — Notwithstanding anything inthis Constitution, no court shall have any jurisdiction in respect ofany matter connected with the disqualification of member of aHouse under this Schedule.”

39. In para 24, several questions were set out which were requiredto be answered by the Constitution Bench in that case. We are directlyconcerned with questions (B) to (D) which read as follows: -

24. On the contentions raised and urged at the hearing the questionsthat fall for consideration are the following:

xxx xxx xxx

(B) Having regard to the legislative history and evolution of theprinciples underlying the Tenth Schedule, Paragraph 7 thereof interms and in effect, brings about change in the operation andeffect of Articles 136, 226 and 227 of the Constitution of Indiaand, therefore, the Bill introducing the amendment attracts theproviso to Article 368(2) of the Constitution and would require tobe ratified by the Legislature of the States before the Bill ispresented for Presidential assent.

(C) In view of the admitted non-compliance with the proviso toArticle 368(2) not only Paragraph 7 of the Tenth Schedule, butalso the entire Bill resulting in the Constitution (Fifty-secondAmendment) Act, 1985, stands vitiated and the purportedamendment is abortive and does not in law bring about validamendment.

Or whether, the effect of such non-compliance invalidatesParagraph 7 alone and the other provisions which, by themselves,do not attract the proviso do not become invalid.

(D) That even if the effect of non-ratification by the Legislatureof the States is to invalidate Paragraph 7 alone, the whole of theBTenth Schedule fails for non-severability. Doctrine of severability,as applied to ordinary statutes to promote their constitutionality, isinapplicable to constitutional amendments. Even otherwise, havingregard to legislative intent and scheme of the Tenth Schedule, theother provisions of the Tenth Schedule, after the severance andexcision of Paragraph 7, become truncated, and unworkable andCcannot stand and operate independently. The Legislature wouldnot have enacted the Tenth Schedule without Paragraph 7 whichforms its heart and core.

xxx xxx xxx

D40. In dealing with whether Paragraph 7 would require ratificationby the States, this Court dealt with Sankari Prasad Singh (supra) andSajjan Singh (supra) as follows: -

58. In Sankari Prasad case [1952 SCR 89], the question waswhether the amendment introducing Articles 31-A and 31-B inEthe Constitution required ratification under the said proviso.Repelling this contention it was observed: (SCR p. 108)

“It will be seen that these articles do not either in terms or ineffect seek to make any change in Article 226 or in Articles132 and 136. Article 31-A aims at saving laws providing forFthe compulsory acquisition by the State of certain kind ofproperty from the operation of Article 13 read with otherrelevant articles in Part III, while Article 31-B purports tovalidate certain specified Acts and Regulations already passed,which, but for such provision, would be liable to be impugnedunder Article 13. It is not correct to say that the powers of theGHigh Court under Article 226 to issue writs ‘for the enforcementof any of the rights conferred by Part III’ or of this Courtunder Articles 132 and 136 to entertain appeals from ordersissuing or refusing such writs are in any way affected. Theyremain just the same as they were before: only certain classHof case has been excluded from the purview of Part III and

the courts could no longer interfere, not because their powerswere curtailed in any manner or to any extent, but becausethere would be no occasion hereafter for the exercise of theirpower in such cases.”

59. In Sajjan Singh case [(1965) 1 SCR 933] similar contentionwas raised against the validity of the Constitution (SeventeenthAmendment) Act, 1964 by which Article 31-A was again amendedand 44 statutes were added to the Ninth Schedule to theConstitution. The question again was whether the amendmentrequired ratification under the proviso to Article 368. This Courtnoticed the question thus: (SCR p. 940)

“The question which calls for our decision is: what would bethe requirement about making an amendment in constitutionalprovision contained in Part III, if as result of the saidamendment, the powers conferred on the High Courts underArticle 226 are likely to be affected?”

60. Negativing the challenge to the amendment on the ground ofnon-ratification, it was held: (SCR p. 944)

“… Thus, if the pith and substance test is applied to theamendment made by the impugned Act, it would be clear thatParliament is seeking to amend fundamental rights solely withthe object of removing any possible obstacle in the fulfilmentof the socio-economic policy in which the party in powerbelieves. If that be so, the effect of the amendment on thearea over which the High Courts’ powers prescribed by Article226 operate, is incidental and in the present case can bedescribed as of an insignificant order. The impugned Act doesnot purport to change the provisions of Article 226 and it cannotbe said even to have that effect directly or in any appreciablemeasure. That is why we think that the argument that theimpugned Act falls under the proviso, cannot be sustained.”

61. The propositions that fell for consideration in Sankari PrasadSingh [1952 SCR 89] and Sajjan Singh cases [(1965) 1 SCR933] are indeed different. There the jurisdiction and power of thecourts under Articles 136 and 226 were not sought to be takenaway nor was there any change brought about in those provisionseither “in terms or in effect”, since the very rights which could be

Aadjudicated under and enforced by the courts were themselvestaken away by the Constitution. The result was that there was noarea for the jurisdiction of the courts to operate upon. Matters areentirely different in the context of Paragraph 7. Indeed the aforesaidcases, by necessary implication support the point urged for thepetitioners. The changes in Chapter IV of Part V and Chapter VBof Part VI envisaged by the proviso need not be direct. The changecould be either “in terms of or in effect”. It is not necessary tochange the language of Articles 136 and 226 of the Constitutionto attract the proviso. If in effect these articles are renderedineffective and made inapplicable where these articles couldCotherwise have been invoked or would, but for Paragraph 7, haveoperated there is ‘in effect’ change in those provisions attractingthe proviso. Indeed this position was recognised in Sajjan Singhcase [(1965) 1 SCR 933] where it was observed: (SCR p. 944)

“If the effect of the amendment made in the fundamental rightsDon Article 226 is direct and not incidental and is of very

significant order, different considerations may perhaps arise.”

62. In the present case, though the amendment does not bring inany change directly in the language of Articles 136, 226 and 227of the Constitution, however, in effect paragraph 7 curtails theEoperation of those articles respecting matters falling under theTenth Schedule. There is change in the effect in Articles 136,226 and 227 within the meaning of clause (b) of the proviso toArticle 368(2). Paragraph 7, therefore, attracts the proviso andratification was necessary. Accordingly, on Point (B), we hold:

F“That having regard to the background and evolution of theprinciples underlying the Constitution (Fifty-second Amendment)Act, 1985, insofar as it seeks to introduce the Tenth Schedule inthe Constitution of India, the provisions of Paragraph 7 of theTenth Schedule of the Constitution in terms and in effect bringabout change in the operation and effect of Articles 136, 226Gand 227 of the Constitution of India and, therefore, the amendmentwould require to be ratified in accordance with the proviso to sub-article (2) of Article 368 of the Constitution of India.”

41. Even the minority judgments of two learned Judges by Verma,J. and Sharma, J., declared Paragraph 7 and indeed the entire 10[th]HSchedule to be constitutionally infirm as follows: -

156. Prima facie it would appear that Paragraph 7 does seek tomake change in Articles 136, 226 and 227 of the Constitutioninasmuch as without Paragraph 7 in the Tenth Schedule decisionof the Speaker/Chairman would be amenable to the jurisdiction ofthe Supreme Court under Article 136 and of the High Courts underArticles 226 and 227 as in the case of decisions as to otherdisqualifications provided in clause (1) of Article 102 or 191 bythe President/Governor under Article 103 or 192 in accordancewith the opinion of the Election Commission which was the schemeunder the two earlier Bills which lapsed. However, some learnedcounsel contended placing reliance on Sankari Prasad SinghDeo v. Union of India [1952 SCR 89] and Sajjan Singh v.State of Rajasthan [(1965) 1 SCR 933] that the effect of suchtotal exclusion of the jurisdiction of the Supreme Court and theHigh Courts does not make change in Articles 136, 226 and227. close reading of these decisions indicates that instead ofsupporting this contention, they do in fact negative it.157. In Sankari Prasad [1952 SCR 89] the challenge was toArticles 31-A and 31 2DB inserted in the Constitution by theConstitution (First Amendment) Act, 1951. One of the objectionswas based on absence of ratification under Article 368. Whilerejecting this argument, the Constitution Bench held as under:(SCR p. 108)

“It will be seen that these articles do not either in terms or ineffect seek to make any change in Article 226 or in Articles132 and 136. Article 31-A aims at saving laws providing forthe compulsory acquisition by the State of certain kind ofproperty from the operation of Article 13 read with otherrelevant articles in Part III, while Article 31-B purports tovalidate certain specified Acts and Regulations already passed,which, but for such provision, would be liable to be impugnedunder Article 13. It is not correct to say that the powers of theHigh Court under Article 226 to issue writs ‘for the enforcementof any of the rights conferred by Part III’ or of this Courtunder Articles 132 and 136 to entertain appeals from ordersissuing or refusing such writs are in any way affected. Theyremain just the same as they were before: only certain classof case has been excluded from the purview of Part III and

the courts could no longer interfere, not because their powerswere curtailed in any manner or to any extent, but becausethere would be no occasion hereafter for the exercise of theirpowers in such cases.”

158. The test applied was whether the impugned provisionsinserted by the constitutional amendment did ‘either in terms or ineffect seek to make any change in Article 226 or in Articles 132and 136’. Thus the change may be either in terms i.e. explicit orin effect in these articles to require ratification. The ground forrejection of the argument therein was that the remedy in the courtsremained unimpaired and unaffected by the change and the changewas really by extinction of the right to seek the remedy. In otherwords, the change was in the right and not the remedy ofapproaching the court since there was no occasion to invoke theremedy, the right itself being taken away. To the same effect isthe decision in Sajjan Singh [(1965) 1 SCR 933], wherein SankariPrasad [1952 SCR 89] was followed stating clearly that therewas no justification for reconsidering Sankari Prasad [1952 SCR89].

159. Distinction has to be drawn between the abridgement orextinction of right and restriction of the remedy for enforcementof the right. If there is an abridgement or extinction of the rightwhich results in the disappearance of the cause of action whichenables invoking the remedy and in the absence of which there isno occasion to make grievance and invoke the subsisting remedy,then the change brought about is in the right and not the remedy.To this situation, Sankari Prasad [1952 SCR 89] and SajjanSingh [(1965) 1 SCR 933] apply. On the other hand, if the rightremains untouched so that grievance based thereon can ariseand, therefore, the cause of action subsists, but the remedy iscurtailed or extinguished so that the cause of action cannot beenforced for want of that remedy, then the change made is in theremedy and not in the subsisting right. To this latter category,Sankari Prasad [1952 SCR 89] and Sajjan Singh [(1965) 1SCR 933] have no application. This is clear from the above quotedpassage in Sankari Prasad [1952 SCR 89] which clearly bringsout this distinction between change in the right and change inthe remedy.160. The present case, in unequivocal terms, is that of destroyingthe remedy by enacting Paragraph 7 in the Tenth Schedule makinga total exclusion of judicial review including that by the SupremeCourt under Article 136 and the High Courts under Articles 226and 227 of the Constitution. But for Paragraph 7 which deals withthe remedy and not the right, the jurisdiction of the Supreme Courtunder Article 136 and that of the High Courts under Articles 226and 227 would remain unimpaired to challenge the decision underParagraph 6, as in the case of decisions relating to otherdisqualifications specified in clause (1) of Articles 102 and 191,which remedy continues to subsist. Thus, this extinction of theremedy alone without curtailing the right, since the question ofdisqualification of Member on the ground of defection under theTenth Schedule does require adjudication on enacted principles,results in making change in Article 136 in Chapter IV in Part Vand Articles 226 and 227 in Chapter V in Part VI of theConstitution.

161. On this conclusion, it is undisputed that the proviso to clause(2) of Article 368 is attracted requiring ratification by the specifiednumber of State Legislatures before presentation of the Bill seekingto make the constitutional amendment to the President for hisassent.

42. In recent decision, namely, Dr. Jaishri Laxmanrao Patilv. Chief Minister and Ors., 2021 SCC OnLine SC 362, this courtconsidered the validity of the Constitution (102[nd] Amendment) Act, 2018which, inter alia, inserted Articles 366(26C) and 342A. As result ofthis amendment, the President alone, to the exclusion of all otherauthorities, is empowered to identify Socially and Economically BackwardClasses (SEBCs) and include them in list to be published under Article342A(1), which shall be deemed to include SEBCs in relation to eachState and Union territory for the purposes of the Constitution.

43. This 102[nd] Amendment Act was challenged, inter alia, on theground that not being ratified by at least half of the States, theConstitutional Amendment was infirm. Six questions were framed beforea Constitution Bench of this Court. We are concerned here with questions4 to 6 insofar as the 102[nd] Amendment Act is concerned, which are setout in paragraph 10 of Justice Ashok Bhushan’s judgment as follows:

512SUPREME COURT REPORTS

A4. Whether the Constitution One Hundred and Second Amendmentdeprives the State Legislature of its power to enact legislationdetermining the socially and economically backward classes andconferring the benefits on the said community under its enablingpower?

B5. Whether, States’ power to legislate in relation to “any backwardclass” under Articles 15(4) and 16(4) is anyway abridged byArticle 342(A) read with Article 366(26c) of the Constitution ofIndia?

6. Whether, Article 342A of the Constitution abrogates States’Cpower to legislate or classify in respect of “any backward classof citizens” and thereby affects the federal policy/structure of theConstitution of India?”

44. Justice Bhushan dismissed the challenge to the Constitution102[nd] Amendment Act as follows:D448. We do not find any merit in the challenge to the Constitution102nd Amendment. The Constitution 102nd Amendment does notviolate any basic feature of the Constitution. The argument of thelearned counsel for the petitioner is that Article 368 has not beenfollowed since the Constitution 102nd Amendment was not ratifiedEby the necessary majority of the State. The Parliament neverintended to take the rights of the State regarding identification ofbackward classes, the Constitution 102nd Amendment was notcovered by Proviso to Article 368 sub-clause (2), hence, the samedid not require any ratification. The argument of proceduralviolation in passing the 102nd Constitutional Amendment cannotFalso be accepted. We uphold the Constitution 102nd Amendmentinterpreted in the manner as above.

45. This was re-stated in conclusions 27 and 32 found in paragraph450 by Bhushan, J., and concurred with by Nazeer, J., as follows: -

450. From our foregoing discussion and finding we arrive atGfollowing conclusions:

xxx xxx xxx

(27) It is, thus, clear as sun light that Parliamentary intentiondiscernible from Select Committee report and statement of MinisterHof Social Justice and Empowerment is that the intention of the

Parliament for bringing Constitutional amendment was not to takeaway the power of the State to identify backward class in theState.

xxx xxx xxx

(32) The Constitution 102nd Amendment Act, 2018 does notviolate any basic feature of the Constitution. We uphold theconstitutional validity of Constitution (One Hundred and secondAmendment) Act, 2018.

46. However, Justice Ravindra Bhat differed from JusticesBhushan and Nazeer and was joined by Justice L. Nageswara Rao andJustice Hemant Gupta (see paras 455 and 481 of the judgment).

47. After setting out the amendments made to the Constitution bythe 102[nd] Amendment Act, Justice Bhat held:

669. This Court is also of the opinion that the change broughtabout by the 102nd Amendment, especially Article 342A is onlywith respect to the process of identification of SEBCs and theirlist. Necessarily, the power to frame policies and legislation withregard to all other matters, i.e. the welfare schemes for SEBCs,setting up of institutions, grants, scholarships, extent of reservationsand special provisions under Article 15(4), 15(5) and 16(4) areentirely with by the State Government in relation to its institutionsand its public services (including services under agencies andcorporations and companies controlled by the State Government).In other words, the extent of reservations, the kind of benefits,the quantum of scholarships, the number of schools which are tobe specially provided under Article 15(4) or any other beneficialor welfare scheme which is conceivable under Article 15(4) canall be achieved by the State through its legislative and executivepowers. This power would include making suggestions andcollecting data - if necessary, through statutory commissions, formaking recommendations towards inclusion or exclusion of castesand communities to the President on the aid and advice of theUnion Council of Ministers under Article 342A. This will accordwith the spirit of the Constitution under Article 338B and theprinciple of cooperative federalism which guides the interpretationof this Constitution.

A48. After setting out extracts from the judgments in Sajjan Singh(supra) and Kihoto Hollohan (supra), the learned Judge concluded asfollows:

682. By these parameters, the alteration of the content of statelegislative power in an oblique and peripheral manner would notBconstitute violation of the concept of federalism. It is only if theamendment takes away the very essence of federalism oreffectively divests the federal content of the constitution, anddenudes the states of their effective power to legislate or frame-executive policies (coextensive with legislative power) that theamendment would take away an essential feature or violate theCbasic structure of the Constitution.Applying such benchmark,this court is of the opinion that the power of identification of SEBCshitherto exercised by the states and now shifted to the domain ofthe President (and for its modification, to Parliament) by virtue ofArticle 342A does not in any manner violate the essential featuresDor basic structure of the Constitution. The 102nd Amendment isalso not contrary to or violative of proviso to Article 368(2) of theConstitution of India. As result, it is held that the writ petition iswithout merit; it is dismissed.

(emphasis in original)

E49. And under the heading “conclusions”, it was held:

188.xxxxxxxxx

(5) Re. Point No. 5 - Whether, States’ power to legislate in relationto “any backward class” under Articles 15(4) and 16(4) is anywayFabridged by Article 342(A) read with Article 366(26c) of theConstitution of India. On these two interrelated points of reference,my conclusions are as follows:

xxx xxxxxx

(v) The states’ power to make reservations, in favour of particularcommunities or castes, the quantum of reservations, the nature ofbenefits and the kind of reservations, and all other matters fallingwithin the ambit of Articles 15 and 16 - except with respect toidentification of SEBCs, remains undisturbed.

xxx xxxxxx

(6) Re Point No. 6: Article 342A of the Constitution by denudingStates power to legislate or classify in respect of “any backwardclass of citizens” does not affect or damagethe federal polity anddoes not violate the basic structure of the Constitution of India.

50. However, Shri Venugopal, learned Attorney General, stronglyrelied upon the judgments of Wanchoo, J. Ramaswamy, J. and Bachawat,J. in Golak Nath (supra). Though these judgments are minority judgmentsin that case, Shri Venugopal argued that there is nothing in the majorityjudgments against what is stated in these judgments insofar as ratificationis concerned, and that therefore these judgments would have considerablepersuasive value in determining whether ratification is or is not requiredunder Article 368(2) proviso.

51. Wanchoo, J. in Golak Nath (supra) deals with this subject atsome length. He states: -

“If there is no actual change directly in the entrenched provision,no ratification is required, even if any amendment of any otherprovision of the Constitution may have some effect indirectly onthe entrenched provisions mentioned in the proviso.”(at page 843)

52. He goes on to discuss what was decided in Sajjan Singh’scase (supra) and then goes on to give two examples of alterations madein what he describes as “an unentrenched Article” which wouldnecessitate amendment of an entrenched Article and that it is only if“Parliament takes the incredible course of amending only theunentrenched Article and not amending the entrenched Article, courtscan say that ratification is necessary even for amending the unentrenchedArticle, for it directly necessitates change in an entrenched Article.But short of that we are of opinion that merely because there is someeffect indirectly on an entrenched Article by amendment of anunentrenched Article it is not necessary that there should be ratificationin such circumstances also”.(see pages 844-845)

53. If by this, the learned Judge intended to constrict the test laiddown in Sajjan Singh’s case (supra) by introducing further test, namely,necessitating amendment of “an entrenched Article”, it is clear that thisjudgment cannot be considered to be good law especially after thejudgments of both the majority and minority in Kihoto Hollohan (supra).The same goes for Bachawat, J’s minority judgment in Golak Nath(supra) in which the learned Judge held:

AThe contention that the constitutional amendments of Part III hadthe effect of changing Articles 226 and 245 and could not bepassed without complying with the proviso to Article 368 is nottenable. constitutional amendment which does not profess toamend Article 226 directly or by inserting or striking words thereincannot be regarded as seeking to make any change in it and thusBfalling within the constitutional inhibition of the proviso. Article226 gives power to the High Court throughout the territories inrelation to which it exercises jurisdiction to issue to any person orauthority within those territories directions, orders and writs forthe enforcement of any of the rights conferred by Part III and forCany other purpose. The Seventeenth Amendment made no directchange in Article 226. It made changes in Part III and abridged ortook away some of the rights conferred by that Part. As resultof the changes, some of those rights no longer exist and as theHigh Court cannot issue writs for the enforcement of those rightsits power under Article 226 is affected incidentally. But an alterationDin the area of its territories or in the number of persons or authoritieswithin those territories or in the number of enforceable rights underPart III or other rights incidentally affecting the power of theHigh Court under Article 226 cannot be regarded as an amendmentof that article.(at page 919)

(at page 919)

54. This passage again is at variance with the test laid down inSankari Prasad Singh Deo (supra) and the judgment in KihotoHollohan (supra)which make it clear that any impact on “an entrenchedArticle” would require ratification if such impact is not insignificant –i.e., that in effect, there is change in an “entrenched Article” whichFsignificantly impacts the content of the said Article including constitutionalprinciples contained therein.

55. Likewise, Ramaswamy, J’s minority judgment at pages 943 to945 expressing similar views again cannot hold water in view of whathas been stated in Sajjan Singh (supra) and both the majority and minorityGjudgments in Kihoto Hollohan (supra).

56. reading of the aforesaid judgments would indicate that the“change” spoken about by Article 368 (2) proviso in any provision of theConstitution need not be direct in the sense of adding, subtracting, ormodifying the language of the particular Article or provision spoken of inHthe proviso. The judgments above referred to speak of ‘change-in

effect’ which would mean change which, though not in the languageof any provision of the Constitution, would yet be change which wouldimpact particular article and the principle contained therein in somesignificant way.

57. There can be no doubt that our Constitution has been describedas quasi-federal in that, so far as legislative powers are concerned, thoughthere is tilt in favour of the Centre vis-à-vis the States given the federalsupremacy principle outlined hereinabove, yet within their own sphere,the States have exclusivepower to legislate on topics reserved exclusivelyto them (see Bhim Singh v. Union of India, (2010) 5 SCC 538 atparas 45, 46 and 48; B.P. Singhal v. Union of India, (2010) 6 SCC331 at paras 40-42).58. There can be no doubt whatsoever that Article 246(3) readwith List II of the 7[th] Schedule of the Constitution of India reflects animportant constitutional principle that can be said to form part of thebasic structure of the Constitution, namely, the fact that the Constitutionis not unitary but quasi-federal in character. The question that arisesbefore us is as to whether this principle can be said to have been infractedby inserting Part IXB into the Constitution of India so that the States’legislative powers contained in Article 246(3) read with Entry 32 List IIof the 7[th] Schedule can be said to have been affected in significantmanner. At this juncture, it is also important to have look at the judgmentof this Court in Builders’ Assn. of India v. Union of India (supra). Inthis judgment, apart from challenge made on substantive grounds, theConstitution (46[th] Amendment Act), 1982 was challenged on the groundthat the proviso to Article 368(2) had not been followed inasmuch as theambit of Entry 54 List II dealing with tax on sale of goods had beenexpanded by inserting definition contained in Article 366 (29A), inwhich the concept of sale of goods contained in Entry 54 was greatlyenlarged. To be noted, Entry 54 List II itself was not the subject matterof amendment. The question was as to the effect of the Constitution46[th] Amendment Act on Entry 54 List II in introducing Sub-Article 29Aby way of definition clause contained in Article 366, thus expandingthe scope of Entry 54 List II. This Court repelled the aforesaid contentionholding that, in point of fact, ratification had been obtained, as follows:

28. The first contention raised before us regarding theconstitutionality of the 46th Amendment need not detain us long.This contention was based on the assumption that the legislatures

Aof not less than one-half of the States which were in existenceduring the relevant period had not ratified the Bill which ultimatelybecame the 46th Amendment before the President gave his assent.It was argued that such ratification was necessary since theprovisions contained in the 46th Amendment had the effect ofenlarging the scope of Entry 54 of List II of the Seventh ScheduleBto the Constitution by empowering the legislatures of States tolevy sales tax on the turnover relating to the transactions referredto in sub-clauses (a) to (f) of clause (29-A) of Article 366 of theConstitution which they could not have done before the 46thAmendment. It was contended that irrespective of the factCwhether the amendment of an entry in any of the lists of theSeventh Schedule to the Constitution had the effect of eithercurtailing or enlarging the powers of Parliament or the legislaturesof States, Bill making provision for such amendment had to beratified by legislatures of not less than one-half of the States byresolutions passed to that effect before such Bill was presentedDto the President for assent in view of the express provisionscontained in clause (c) of the proviso to Article 368(2) of theConstitution.

29. At the hearing of the above case the learned Attorney Generalfor India produced before us the Memorandum dated 31-1-1982Esigned by the Secretary General of the Rajya Sabha which readsthus:

“RAJYA SABHA SECRETARIAT PARLIAMENT HOUSE,NEW DELHI

No. Rs. 1/21/S1-B

Dated: 31-1-1982

Memorandum

In pursuance of Article 368 of the Constitution of India, the assentcopy of the Constitution (Forty-sixth Amendment) Bill, is presentedGto the President. This Bill has been passed by the Houses ofParliament and has been also ratified by the legislatures of notless than one-half of the States in accordance with the provisionof the proviso to clause (2) of Article 368 of the Constitution.Legislatures of the following States have passed resolutionsHratifying the amendments:

(1) Haryana

(2) Himachal Pradesh

(3) Karnataka

(4) Madhya Pradesh

(5) Maharashtra

(6) Manipur

(7) Meghalaya

(8) Orissa

(9) Punjab

(10) Rajasthan

(11) Sikkim

(12) Tamil Nadu

copy each of the letters received from these legislatures isplaced below.

(Sudarshan Agarwal)ESecretary General

The Secretary to the President,

(Through the Secretary, Ministry of Law)”

The Attorney General has also produced before us the filecontaining the resolutions passed by the legislatures of the 12 Statesreferred to in the Memorandum, set out above. We are satisfiedthat there has been due compliance of the provisions contained inthe proviso to Article 368(2) of the Constitution. We, therefore,reject the first contention. Before proceeding further, we shouldobserve that there would have been no occasion for an argumentof this type being urged in court if at the commencement of theAct, it had been stated that the Bill in question had been presentedto the President for his assent after it had been duly ratified by therequired number of legislatures of States. We hope that this

Asuggestion will be followed by the Central Secretariat hereaftersince we found that even the Attorney General was not quite suretill the case was taken up for hearing that the Bill which hadbecome the 46th Amendment had been duly ratified by the requirednumber of States.

B59. Indeed, H.M. Seervai, in his celebrated commentary‘Constitutional Law of India’ (4th Edition) at page 3156, has this to

say:

“Articles 245 and 246 are in Chapter1, Part XI of the Constitution,which is one of the matters mentioned in cl. (b) of the proviso,Cand the legislative lists are mentioned in cl. (c) of the proviso.Changes can be made in the legislative lists by addition, variation,or repeal of an entry, or by transposing an entry from one list toanother, but the lists themselves cannot be repealed.”

(Emphasis supplied)

60. reading of Builders’ Assn. of India v. Union of India(supra) and the aforesaid extract from Seervai’s commentary wouldshow that any significant addition or curtailment of field of legislationwhich is contained in an Entry in List II of the 7[th] Schedule of theConstitution would also amount to ‘change’ so as to attract the provisoEto Article 368(2). It is not necessary, as has been contended by thelearned Attorney General, that change referred to in the proviso toArticle 368(2) would only be if some part of subject matter given tothe States were transferred to Parliament or vice versa. Even withoutsuch transfer, if there is enlargement or curtailment of the subject mattercontained in field of legislation exclusively reserved to the States, thenFin effect change has been made to an entry in legislative list, whichchange, if significant, would attract the proviso to Article 368(2) andtherefore require ratification.

61. It is always important to remember that in matters affectingthe Constitution of India, form always gives way to substance. ThereGcan be no manner of doubt that had exceptions been provided in Entry32 List II itself, such amendment to Entry 32 List II would requireratification. There can also be no doubt that in effect if the subject matter“co-operative societies” had been either expanded or curtailed by addinga definition clause in Article 366 of the Constitution of India, suchexpansion or curtailment would also require ratification as significantHchanges have been made in effectin Entry 32 List II of the Constitutionof India. Likewise, if separate part is added in the Constitution ofIndia, the direct effect of adding such part being to curtail the width ofEntry 32 List II in significant manner, again, in effect Entry 32 List IIis directly impacted, again requiring ratification. It is of no moment thatone method is chosen or preferred to another so long as Entry 32 List IIis curtailed either by adding or deleting words in Entry 32 itself or bydoing so through an indirect methodology, namely, adding new definitionclause in Article 366 or adding new part to the Constitution of India.

62. Judged by these principles, it is now necessary to analysePart IXB of the Constitution of India, as inserted by the Constitution 97[th]Amendment Act. As the Statement of Objects and Reasons of theConstitution 97[th] Amendment Act shows, it is acknowledged that thesubject ‘co-operative societies’ is exclusively allotted to the Statelegislature under Entry 32 of the State List, as result of which,considering the need for reform in the Co-operative Societies Acts ofthe States, consultations with the State governments have been held.After this it is stated that the Central government is committed to ensurethat co-operative societies in the country function in democratic,professional, autonomous and economically sound manner. It is then statedthat the new part to be inserted in the Constitution would containprovisions which would drastically curtail the powers of the Statelegislatures in that such legislations by the States would now have toconform to the newly inserted part.

63. Part IX of the Constitution consists of Articles 243ZH to243ZT.

64. Article 243ZH is the definition Article which defines co-operative societies in sub-clause (c) as meaning society registered ordeemed to be registered under State law, as opposed to multi-Stateco-operative society defined in sub-clause (d), which is society withobjects not confined to one State and registered under law for the timebeing in force relating to such co-operatives. By Article 243ZI, it is madeclear that the legislature of State may only make law insofar as itapplies to incorporation, regulation and winding up of co-operativesociety, subject to the provisions of Part IXB. The restrictions containedin Part IXB may now be set out seriatim.

I.Under Article 243ZI, the legislature of State may makelaws affecting co-operative societies only if such laws

522SUPREME COURT REPORTS

Afollow the principles of voluntary formation, democraticmember control, member economic participation andautonomous functioning.

II.Under Article 243ZJ(1), the maximum number of directorsof co-operative society cannot exceed twenty one.BFurther, the State law must compulsorily provide forreservation of one seat for scheduled castes or scheduledtribes and two seats for women on the board of every co-operative society which consists of individuals as members.

III.Under Article 243ZJ(2), the term of office of electedCmembers shall be five years from the date of election.

IV.The State Legislature under Article 243ZJ(3) is bound tomake provisions for co-option of members to the boardhaving experience in the field of banking, management,finance or specialization in any other field relating to theDobjects and activities undertaken by the co-operative society,the number of such co-opted members being restricted totwo, as also the fact that such co-opted members shall nothave the right to vote.

V.Under Article 243ZK(1), the non-obstante clause containedEtherein makes it clear that the State legislature has to laydown that the election of board shall be conducted beforethe expiry of the term of the board.

VI.Under Article 243ZL, State legislature can only supersedea board for period not exceeding 6 months, if certainenumerated conditions alone are satisfied.F

VII.Under Article 243ZM, minimum qualifications andexperience of auditors and auditing firms have to be laiddown by State Legislature, and co-operatives societieshave to be audited only by such persons or firms.

GVIII. Under Article 243ZN, the Legislature of State mustprovide that the annual general body meeting of every co-operative society shall be convened within period of sixmonths of the close of the financial year.

IX.Under Article 243ZP, every co-operative society is to fileHreturns within the specified period of six months of the close

of every financial year, indicating the list of matters set outin the said provision.

X.Under Article 243ZQ, the Legislature of State may makeprovisions for offences relating to co-operative societiesand penalties for such offences, provided that under sub-clause (2), in respect of five separate subject matters, theLegislature of State must mandatorily include such subjectmatters.

65. From all the above, it is clear that the exclusive legislativepower that is contained in Entry 32 List II has been significantly andsubstantially impacted in that such exclusive power is now subjected toa large number of curtailments. Indeed, Article 243ZI specificallymandates that the exclusive legislative power contained in Entry 32 ListII of the State Legislature is now severely curtailed as it can only beexercised subject to the provisions of Part IXB; and further, Article 243ZTmakes it clear that all State laws which do not conform to the restrictionsmentioned in Part IXB automatically come to an end on the expiration ofone year from the commencement of the Constitution 97[th] AmendmentAct.

66. Indeed, this Court in Vipulbhai M. Chaudhary v. GujaratCoop. Milk Mktg. Federation Ltd.(supra), referred to the effect ofArticle 243ZT as follows:

27. Article 243-ZT of the Constitution requires the laws relatingto cooperative societies in force in the States prior to thecommencement of the Amendment Act to be in tune with and interms of the constitutional concept and set-up of cooperativesocieties. In fact, period of one year has been provided in theConstitution from the commencement of the Amendment for therequired amendment or repeal by the competent legislature or bythe competent authority, of laws which are inconsistent with PartIX-B. As corollary, the Constitution enables the competentlegislature or authority to suitably amend the existing provisions intheir laws in tune with the constitutional mandate. Thereafter, incase there continues to be silence in the Act or bye-laws, thecourt will have to read the constitutional requirements into theexisting provisions. It is essentially process of purposiveconstruction of the available provisions as held by this Court inPratap Chandra Mehta case [(2011) 9 SCC 573].

A67. The aforesaid analysis of Part IXB of the Constitution leadsto the result that though Article 246(3) and Entry 32, List II of the 7[th]Schedule have not been ‘changed’ in letter, yet the impact upon theaforesaid articles cannot be said to be insignificant. On the contrary, it isclear that by curtailing the width of Entry 32, List II of the 7[th] Schedule,Part IXB seeks to effect significant change in Article 246(3) read withBEntry 32 List II of the 7[th] Schedule inasmuch as the State’s exclusivepower to make laws with regard to the subject of co-operative societiesis significantly curtailed thereby directly impacting the quasi-federalprinciple contained therein. Quite clearly, therefore, Part IXB, insofar asit applies to co-operative societies which operate within State, wouldCtherefore require ratification under both sub-clauses (b) and (c) of theproviso to Article 368(2) of the Constitution of India.

68. It is interesting to note that Part IX of the Constitution of Indiawhich was inserted into the Constitution by the Constitution (73[rd]Amendment) Act, 1992 and Part IXA inserted into the Constitution byDthe Constitution (74[th] Amendment) Act, 1992 made similar provisionsqua Panchayats and Municipalities. Entry 5 of List II, 7[th] Schedule whichdeals with the subject matter of legislation so far as Panchayats andMunicipalities are concerned, is set out as follows: -

List II—State List

E5. Local government, that is to say, the constitution and powers ofmunicipal corporations, improvement trusts, districts boards, miningsettlement authorities and other local authorities for the purposeof local self-government or village administration.

69. Both the Constitution 73[rd] and 74[th] Amendments were sentFfor ratification and were ratified by Legislatures of more than half theStates. The reason is not far to see – like Part IXB, several restrictionsare laid down before the States can legislate on Panchayats andMunicipalities. Like Part IXB, such legislation is subject to Parts IX andIXA – see Article 243C and Article 243R. Again, like Article 243ZT inGPart IXB, Articles 243N and 243ZF provide that State laws which areinconsistent with the provisions of Parts IX and IXA respectively willautomatically cease after the expiration of one year from thecommencement of the two Constitutional Amendments. In addition tothese provisions, Parts IX and IXA also contain Article 243O and Article243ZG ousting the jurisdiction of the courts and thereby, in effect, curtailingH

the provisions of Articles 136, 226 and 227 of the Constitution of India.Ratification of the Constitution 72[nd] and 73[rd] Amendments was thereforenecessary both under clauses (b) and (c) of the proviso to Article 368(2)in that Article 136 was in effect curtailed (Article 136 occurring in ChapterIV of Part V of the Constitution of India); Articles 226 and 227 were ineffect curtailed (which occur in Chapter V of Part VI of the Constitutionof India); Article 246(3) was in effect curtailed (which forms part of theChapter I of Part XI of the Constitution of India); and Entry 5 List 2, 7[th]Schedule was also in effect curtailed, which is referrable to sub-clause(c) of the proviso to Article 368(2) of the Constitution of India. It is cleartherefore that even previous constitutional practice of Parliament actingin its constituent capacity qua similar subject matters reinforces thesubmission of the respondent that, like the 73[rd] and 74[th] Amendments,the Constitution 97[th] Amendment Act also required ratification.70. Shri Jani, however, argued that the constituent power that isexercised in enacting the 97[th] Amendment cannot be assimilated withlegislative power, and that once the Constitution stands amended byinsertion of Part IXB, Article 245 mandates that all legislation madeunder Article 246 read with Lists in the 7[th] Schedule to the Constitutionof India is subject to the provisions of the Constitution, so that legislationmade under Article 246(3) read with Entry 32 List II becomes subject tothe provisions of Part IXB which is now part of the Constitution ofIndia.

71. This argument is classic instance of putting the cart beforethe horse. Nobody doubts that had the amendment been ratified underArticle 368(2) proviso as held by us above, it would then operate, as aresult of which legislation under Article 246(3) read with Entry 32 List IIof the 7[th] Schedule would then become subject to Part IXB. In the presentcase, ratification not having been effected, the Amendment is non est.This argument is therefore rejected.

72. Shri Venugopal then argued that 17 out of 28 States had enactedlegislations incorporating provisions of Part IXB, and that, therefore,they had impliedly accepted the restrictions laid down in the said Part.This argument need not detain us inasmuch as the procedure laid downin Article 368(2) proviso requires ratification of legislatures of one halfof the States by resolutions to that effect. This has admittedly not beendone in the present case. Also, the argument that no State has comeforward to challenge the 97[th] Constitution Amendment does not take the

Amatter any further. When citizen of India challenges constitutionalamendment as being procedurally infirm, it is the duty of the court toexamine such challenge on merits as the Constitution of India is nationalcharter of governance affecting persons, citizens and institutions alike.

73. It was then argued by Shri Venugopal, learned Attorney GeneralBfor India, that the impugned judgment’s finding that one of the basicfeatures of the Constitution, the principle of federalism has been affectedwas finding that was unnecessary once it was found that theAmendment fell foul of Article 368(2) proviso. Shri Venugopal is rightthat there was no argument made that even de hors ratification, PartIXB otherwise falls foul of the basic structure doctrine as laid down inCKesavananda Bharati’s case (supra). We reiterate that our judgmentis confined to the procedural aspect of Article 368(2) proviso, there beingno substantive challenge to Part IXB on the ground that it violates thebasic structure doctrine as laid down in Kesavananda Bharati’s case(supra).D

74. We now come to an important argument made by ShriVenugopal that even if it be held that Part IXB is constitutionally infirmqua co-operative societies operating within State, it would yet operatequa multi-State co-operative societies and in Union territories which arenot States.E

75. This necessarily brings us to whether the part dealing withmulti-State co-operative societies in Part IXB can be severed from thepart dealing with co-operative societies operating only within State.Reverting to Kihoto Hollohan’s case (supra), it may be noted that themajority and minority judgments therein were sharply divided on whetherFParagraph 7 of the 10th Schedule could be said to be severable from therest of the 10[th] Schedule so that the 10[th] Schedule could operate withoutParagraph 7. The majority judgment held that it could be so severed andthat the rest of the 10[th] Schedule would therefore operate. This washeld by the majority as follows: -

G68. The doctrine of severability has been applied by this Court incases of challenge to the validity of an amendment on the groundof disregard of the substantive limitations on the amending power,namely, alteration of the basic structure. But only the offendingpart of the amendment which had the effect of altering the basicstructure was struck down while the rest of the amendment was

upheld. [See Kesavananda Bharati v. State of Kerala [(1973)4 SCC 225], Minerva Mills Ltd. v. Union of India [(1980) 3SCC 625], P. Sambamurthy v. State of A.P. [(1987) 1 SCC 362]].

69. Is there anything in the procedural limitations imposed by sub-article (2) of Article 368 which excludes the doctrine of severabilityin respect of law which violates the said limitations? Such aviolation may arise when there is composite Bill or what is instatutory context or jargon called ‘Rag-Bag’ measure seekingamendments to several statutes under one amending measurewhich seeks to amend various provisions of the Constitution someof which may attract clauses (a) to (e) of the proviso to Article368(2) and the Bill, though passed by the requisite majority in boththe Houses of Parliament has received the assent of the Presidentwithout it being sent to States for ratification or having been sosent fails to receive such ratification from not less than half theStates before the Bill is presented for assent. Such an AmendmentAct is within the competence of Parliament insofar as it relates toprovisions other than those mentioned in clauses (a) to (e) ofproviso to Article 368(2) but in respect of the amendmentsintroduced in provisions referred to in clauses (a) to (e) of provisoto Article 368(2), Parliament alone is not competent to make suchamendments on account of some constitutionally recognisedfederal principle being invoked. If the doctrine of severability canbe applied it can be upheld as valid in respect of the amendmentswithin the competence of Parliament and only the amendmentswhich Parliament alone was not competent to make could bedeclared invalid.

xxx xxx xxx

71. The proviso to Article 368(2) appears to have been introducedwith view to giving effect to the federal principle. In the matterof amendment of provisions specified in clauses (a) to (e) relatingto legislative and executive powers of the States vis-a-vis theUnion, the Judiciary, the election of the President and the amendingpower itself, which have bearing on the States, the provisoimposes an additional requirement of ratification of the amendmentwhich seeks to effect change in those provisions before the Billis presented for the assent of the President. It is salutary that the

scope of the proviso is confined to the limits prescribed thereinand is not construed so as to take away the power in the mainpart of Article 368(2). An amendment which otherwise fulfils therequirements of Article 368(2) and is outside the specified caseswhich require ratification cannot be denied legitimacy on the groundalone of the company it keeps. The main part of Article 368(2)directs that when Bill which has been passed by the requisitespecial majority by both the Houses has received the assent ofthe President “the Constitution shall stand amended in accordancewith the terms of the Bill”. The proviso cannot have the effect ofinterdicting this constitutional declaration and mandate to meanthat in case where the proviso has not been complied — eventhe amendments which do not fall within the ambit of the provisoalso become abortive. The words “the amendmentshall also require to be ratified by the legislature” indicate thatwhat is required to be ratified by the legislatures of the States isthe amendment seeking to make the change in the provisionsreferred to in clauses (a) to (e) of the proviso. The need for andthe requirement of the ratification is confined to that particularamendment alone and not in respect of amendments outside theambit of the proviso. The proviso can have, therefore, no bearingon the validity of the amendments which do not fall within itsambit. Indeed the following observations of this Court in SajjanSingh case [(1965) 1 SCR 933 : AIR 1965 SC 845] are apposite:(SCR p. 940)

“In our opinion, the two parts of Article 368 must on reasonableconstruction be harmonised with each other in the sense thatthe scope and effect of either of them should not be allowed tobe unduly reduced or enlarged.”

72. During the arguments reliance was placed on the words“before the Bill making provision for such amendment is presentedto the President for assent” to sustain the argument that thesewords imply that the ratification of the Bill by not less than one-half of the States is condition precedent for the presentation ofthe Bill for the assent of the President. It is further argued that aBill which seeks to make change in the provisions referred to inclauses (a) to (e) of the proviso cannot be presented before thePresident for his assent without such ratification and if assent is

given by the President in the absence of such ratification, theamending Act would be void and ineffective in its entirety.

73. similar situation can arise in the context of the main part ofArticle 368(2) which provides: “when the Bill is passed in eachHouse by majority of the total membership of that House andby majority of not less than two-thirds of the Members of thatHouse present and voting, it shall be presented to the President”.Here also condition is imposed that the Bill shall be presented tothe President for his assent only after it has been passed in eachHouse by the prescribed special majority. An amendment in theFirst and Fourth Schedules referable to Article 4 can be introducedby Parliament by an ordinary law passed by simple majority. Theremay be Bill which may contain amendments made in the Firstand Fourth Schedules as well as amendments in other provisionsof the Constitution excluding those referred to in the proviso whichcan be amended only by special majority under Article 368(2)and the Bill after having been passed only by an ordinary majorityinstead of special majority has received the assent of thePresident. The amendments which are made in the First and FourthSchedules by the said Amendment Act were validly made in viewof Article 4 but the amendments in other provisions were indisregard to Article 368(2) which requires special majority. Isnot the doctrine of severability applicable to such an amendmentso that amendments made in the First and Fourth Schedules maybe upheld while declaring the amendments in the other provisionsas ineffective? contrary view excluding the doctrine ofseverability would result in elevating procedural limitation onthe amending power to level higher than the substantivelimitations.

xxx xxx xxx

75. ….The same principle would, therefore, apply whileconsidering the validity of composite amendment which makesalterations in the First and Fourth Schedules as well as in otherprovisions of the Constitution requiring special majority underArticle 368(2) and such law, even though passed by the simplemajority and not by special majority, may be upheld in respect ofthe amendments made in the First and Fourth Schedules. There isreally no difference in principle between the condition requiring

Apassing of the Bill by special majority before its presentation tothe President for assent contained in Article 368(2) and thecondition for ratification of the amendment by the legislatures ofnot less than one-half of the States before the Bill is presented tothe President for assent contained in the proviso. The principle ofseverability can be equally applied to composite amendmentBwhich contains amendments in provisions which do not requireratification by States as well as amendment in provisions whichrequire such ratification and by application of the doctrine ofseverability, the amendment can be upheld in respect of theamendments which do not require ratification and which are withinCthe competence of Parliament alone. Only these amendments inprovisions which require ratification under the proviso need to bestruck down or declared invalid.

76. The test of severability requires the Court to ascertain whetherthe legislature would at all have enacted the law if the severedDpart was not the part of the law and whether after severancewhat survives can stand independently and is workable. If theprovisions of the Tenth Schedule are considered in the backgroundof the legislative history, namely, the report of the ‘Committee onDefections’ as well as the earlier Bills which were moved to curbthe evil of defection it would be evident that the main purposeEunderlying the constitutional amendment and introduction of theTenth Schedule is to curb the evil of defection which was causingimmense mischief in our body politic. The ouster of jurisdiction ofcourts under Paragraph 7 was incidental to and to lend strength tothe main purpose which was to curb the evil of defection. It cannot

Fbe said that the constituent body would not have enacted the otherprovisions in the Tenth Schedule if it had known that Paragraph 7was not valid. Nor can it be said that the rest of the provisions ofthe Tenth Schedule cannot stand on their own even if Paragraph7 is found to be unconstitutional. The provisions of Paragraph 7can, therefore, be held to be severable from the rest of theGprovisions.

77. We accordingly hold on contentions (C) and (D):

That there is nothing in the said proviso to Article 368(2) whichdetracts from the severability of provision on account of theinclusion of which the Bill containing the amendment requires

ratification from the rest of the provisions of such Bill which donot attract and require such ratification. Having regard to themandatory language of Article 368(2) that ‘thereupon theConstitution shall stand amended’ the operation of the provisoshould not be extended to constitutional amendments in Bill whichcan stand by themselves without such ratification.

That accordingly, the Constitution (Fifty-second Amendment) Act,1985, insofar as it seeks to introduce the Tenth Schedule in theConstitution of India, to the extent of its provisions which areamenable to the legal-sovereign of the amending process of theUnion Parliament cannot be overborne by the proviso which cannotoperate in that area. There is no justification for the view thateven the rest of the provisions of the Constitution (Fifty-secondAmendment) Act, 1985, excluding Paragraph 7 of the TenthSchedule become constitutionally infirm by reason alone of thefact that one of its severable provisions which attracted andrequired ratification under the proviso to Article 368(2) was notso ratified.

That Paragraph 7 of the Tenth Schedule contains provision whichis independent of, and stands apart from, the main provisions ofthe Tenth Schedule which are intended to provide remedy forthe evil of unprincipled and unethical political defections and,therefore, is severable part. The remaining provisions of theTenth Schedule can and do stand independently of Paragraph 7and are complete in themselves workable and are not truncatedby the excision of Paragraph 7.

76. Article 243ZR of Part IXB makes it clear that all the provisionsof this Part which apply to multi-State co-operative societies would applysubject to the modification that any reference to “Legislature of aState, State Act or State Government” shall be construed as referenceto “Parliament, Central Act or the Central Government” respectively.The learned Attorney General therefore argued that instead of havingtwo separate parts within Part IXB, one dealing with State co-operativesocieties and one dealing with multi-State co-operative societies, thewell-known legislative device of “reference” to existing provisions wasinstead utilised by Article 243ZR and that therefore we should view thematter as if separate part within Part IXB has been enacted insofar asmulti-State co-operative societies are concerned.

A77. There is substance in this argument. In Kihoto Hollohan(supra), it was held that composite amendment that was presented tothe President for his assent, one part of the amendment requiringratification from the States and the other not requiring ratification, wasseverable, as result of which Paragraph 7 alone of the 10[th] Scheduleof the Constitution was struck down for want of ratification by the States.BThere can be no doubt that in its application to multi-State co-operativesocieties, neither Article 246(3) nor Entry 32 List II of the 7[th] Schedulewould be attracted. Equally, the test of severability laid down in KihotoHollohan (supra) which required the court in that case to ascertainwhether the legislature would at all have enacted the law if the severedCpart was not part of the law cannot be said to apply in case like thepresent where, had the amendment dealing with multi-State co-operativesocieties been in separate part of Part IXB, such test would beinapplicable. The Statement of Objects and Reasons for the Constitution97[th] Amendment Act makes this clear. It states:

D“The proposed new Part in the Constitution, inter alia, seeks toempower the Parliament in respect of multi-State cooperativesocieties andthe State Legislatures in cases of other co-operativesocieties to make appropriate law, laying down the followingmatters, namely:-”

(Emphasis supplied)

It is clear, therefore, that the Scheme qua multi-State cooperativesocieties is separate from the Scheme dealing with “other cooperativesocieties”, Parliament being empowered, so far as multi-State cooperativesocieties are concerned, and the State legislatures having to makeFappropriate laws laying down certain matters so far as “other cooperativesocieties” are concerned. The effect of Article 246ZR is as if multi-State co-operative societies are separately dealt with in separate sub-chapter contained within Part IXB, as is correctly contended by thelearned Attorney General. Also, there is no doubt that after severancewhat survives can and does stand independently and is workable. It wasGfaintly suggested by learned counsel for the Respondents that theconsequence of this Court holding that the Constitution 97[th] AmendmentAct is void for want of ratification would render the entire amendmentstill-born, as result of which no part of the amendment can survive.We reject this argument for two reasons. If the doctrine of severabilityHwere not to apply for the afore-stated reason, then the majority judgment

in Kihoto Hollohan(supra) would be incorrect. This very reasoningwould then render the entire Constitution 52[nd] Amendment, which insertedthe Tenth Schedule to the Constitution of India, constitutionally infirm asthen the entirety of the amendment would have to be declared void forwant of ratification, which would be in the teeth of the majority judgmentin Kihoto Hollohan(supra). Further, on this reasoning, the amendmentsmade in Article 19 and the addition of Article 43B would also have to bestruck down, which was not pleaded or argued before either the HighCourt or before us. This being the case, we declare that Part IXB of theConstitution of India is operative insofar as multi-State co-operativesocieties are concerned.

78. The other argument of the learned Attorney General that underArticle 243ZS in its application to Union territories the same situationwould prevail as the application of Article 243ZR is not quite correct.There can be no doubt that Article 246(3) does not apply to Unionterritories. Instead, Article 246(4) applies to Union territories, by meansof which Parliament can use the State List also to legislate insofar as theUnion territories are concerned. However, given the truncation of Entry32 List II of the 7[th] Schedule by Part IXB, what would operate in Unionterritories is Part IXB only insofar as it applies to multi-State co-operativesocieties. So far as co-operative societies within Union territory areconcerned, the same infirmity as is found in the main part of the judgmentcontinues insofar as the legislative subject “co-operative societies” isconcerned under Entry 32 List II. Therefore, for co-operative societieswhich have no ramifications outside the Union territory itself, Part IXBwill have no application.

79. We now come to the argument of Shri Shah that even so faras multi-State co-operative societies are concerned, since Entry 44 ListI gets truncated in the same manner as Entry 32 List II, the ConstitutionalAmendment would require ratification so far as multi-State co-operativesocieties are concerned since change in effect is made in List I, whichwould be covered by clause (c) of the proviso to Article 368 of theConstitution. On reading of the writ petition filed before the High Court,no such ground has been raised. On the contrary, all the grounds raisedhave reference to infraction of the federal principle and the fact that thesubject “co-operative societies” is affected by the amendment needingratification. Though the prayer to the writ petition may be to strike downthe entirety of Part IXB, no ground having been raised and no argument

Aeither having been raised on this score before the High Court, we neednot deal with this argument of Shri Shah.

80. The judgment of the High Court is upheld except to the extentthat it strikes down the entirety of Part IXB of the Constitution of India.As held by us above, it is declared that Part IXB of the Constitution ofBIndia is operative only insofar as it concerns multi-State co-operativesocieties both within the various States and in the Union territories ofIndia. The appeals are accordingly disposed of.

K. M. JOSEPH, J.

1. I have gone through the draft Judgment authored by my learnedCand esteemed Brother Justice Rohinton Fali Nariman.

2. I am in complete agreement with the reasoning and conclusionin regard to the provisions relating to Article 240ZI to Article 243ZQ andArticle 243ZT, being unconstitutional for non-compliance, with themandate of the proviso to Article 368(2) of the Constitution of India.DHowever, I regret my inability to concur with the view taken that theDoctrine of Severability will apply to sustain Article 243ZR and Article243ZS to the multistate cooperative societies operating in the UnionTerritories, and that, it would not apply to cooperative societies confinedto the territories of the Union Territories.

E3. Part IXB of the Constitution of India came to be inserted bythe Ninety-Seventh Amendment to the Constitution.

4. The High Court has found the Articles 243ZH to 243ZTunconstitutional. The other parts of the Ninety-Seventh Amendment werefound not to be affected. The ground was essentially that there was noFratification as required under the proviso to Article 368(2). It is alsofound to be in breach of the basic structure of the Constitution. In threeof the Appeals, the writ petitioners challenged Show Cause Notices andsubsequent decision based on the same and the Writ Petitions were filedbased on the Ninety-Seventh Amendment. It is necessary to refer toPart IXB:G

“PART IXB

THE CO-OPERATIVE SOCIETIES

243ZH. Definitions.—In this Part, unless the context otherwiserequires,—

(a) “authorised person” means person referred to as such inarticle 243ZQ;

(b) “board” means the board of directors or the governing bodyof co-operative society, by whatever name called, to whichthe direction and control of the management of the affairs of asociety is entrusted to;

(c) “co-operative society” means society registered ordeemed to be registered under any law relating to co-operativesocieties for the time being in force in any State;

(d) “multi-State co-operative society” means society withobjects not confined to one State and registered or deemed tobe registered under any law for the time being in force relatingto such cooperatives;

(e) “Office bearer” means President, Vice-President,Chairperson, Vice-Chairperson, Secretary or Treasurer, of aco-operative society and includes any other person to be electedby the board of any cooperative society;

(f) “Registrar” means the Central Registrar appointed by theCentral Government in relation to the multi-State co-operativesocieties and the Registrar for co-operative societies appointedby the State Government under the law made by the Legislatureof State in relation to co-operative societies;

(g) “State Act” means any law made by the Legislature of aState;

(h) “State level co-operative society” means co-operativesociety having its area of operation extending to the whole of aState and defined as such in any law made by the Legislatureof State.

243ZI. Incorporation of co-operative societies.—Subject to theprovisions of this Part, the Legislature of State may, by law,make provisions with respect to the incorporation, regulation andwinding up of co-operative societies based on the principles ofvoluntary formation, democratic member-control, member-economic participation and autonomous functioning.

243ZJ. Number and term of members of board and its officebearers.—(1) The board shall consist of such number of directorsas may be provided by the Legislature of State, by law:

Provided that the maximum number of directors of co-operativesociety shall not exceed twenty-one:

Provided further that the Legislature of State shall, by law, providefor the reservation of one seat for the Scheduled Castes or theScheduled Tribes and two seats for women on board of every co-operative society consisting of individuals as members and havingmembers from such class of category of persons.

(2) The term of office of elected members of the board and itsoffice bearers shall be five years from the date of election andthe term of office bearers shall be coterminous with the term ofthe board:

Provided that the board may fill casual vacancy on the board bynomination out of the same class of members in respect of whichthe casual vacancy has arisen, if the term of office of the board isless than half of its original term.

(3) The Legislature of State shall, by law, make provisions forco-option of persons to be members of the board having experienceEin the field of banking, management, finance or specialisation inany other field relating to the objects and activities undertaken bythe co-operative society, as members of the board of such society:

Provided that the number of such co-opted members shallnot exceed two in addition to twenty-one directors specified inFthe first proviso to clause (1):

Provided further that such co-opted members shall not havethe right to vote in any election of the cooperative society in theircapacity as such member or to be eligible to be elected as officebearers of the board:

Provided also that the functional directors of co-operativesociety shall also be the members of the board and such membersshall be excluded for the purpose of counting the total number ofdirectors specified in the first proviso to clause (1).

243ZK. Election of members of board.—(1)Notwithstanding anything contained in any law made by the

Legislature of State, the election of board shall be conductedbefore the expiry of the term of the board so as to ensure that thenewly elected members of the board assume office immediatelyon the expiry of the term of the office of members of the outgoingboard.

(2) The superintendence, direction and control of thepreparation of electoral rolls for, and the conduct of, all electionsto co-operative society shall vest in such an authority or body,as may be provided by the Legislature of State, by law: Providedthat the Legislature of State may, by law, provide for theprocedure and guidelines for the conduct of such elections.

243ZL. Supersession and suspension of board and interimmanagement.—(1) Notwithstanding anything contained in any lawfor the time being in force, no board shall be superseded or keptunder supersession for period exceeding six months:

Provided that the board may be superseded or kept undersuspension in case—

(i)of its persistent default; or

(ii)of negligence in the performance of its duties; or

(iii)the board has committed any act prejudicial to theEinterests of the co-operative society or its members; or

(iv)there is stalemate in the constitution or functions of theboard; or

(iv)the authority or body as provided by the Legislature of aState, by law, under clause (2) of article 243ZK, hasfailed to conduct elections in accordance with theprovisions of the State Act:

Provided further that the board of any such co-operativesociety shall not be superseded or kept under suspension wherethere is no Government shareholding or loan or financial assistanceor any guarantee by the Government:

Provided also that in case of co-operative society carryingon the business of banking, the provisions of the BankingRegulation Act, 1949 shall also apply:

Provided also that in case of co-operative society, otherthan multi- State co-operative society, carrying on the businessof banking, the provisions of this clause shall have the effect as iffor the words “six months”, the words “one year” had beensubstituted.

(2) In case of supersession of board, the administratorappointed to manage the affairs of such cooperative society shallarrange for conduct of elections within the period specified inclause (1) and hand over the management to the elected board.

(3) The Legislature of State may, by law, make provisionsfor the conditions of service of the administrator.

243ZM. Audit of accounts of co-operative societies.—(1)The Legislature of State may, by law, make provisions withrespect to the maintenance of accounts by the co-operativesocieties and the auditing of such accounts at least once in eachfinancial year.

(2) The Legislature of State shall, by law, lay down theminimum qualifications and experience of auditors and auditingfirms that shall be eligible for auditing accounts of the co-operativesocieties.

(3) Every co-operative society shall cause to be audited byan auditor or auditing firms referred to in clause (2) appointed bythe general body of the co-operative society: Provided that suchauditors or auditing firms shall be appointed from panel approvedby State Government or an authority authorised by the StateGovernment in this behalf.

(4) The accounts of every co-operative society shall beaudited within six months of the close of the financial year towhich such accounts relate.

(5) The audit report of the accounts of an apex co-operativesociety, as may be defined by the State Act, shall be laid beforethe State Legislature in the manner, as may be provided by theState Legislature, by law.

243ZN. Convening of general body meetings.—TheLegislature of State may, by law, make provisions that the annualgeneral body meeting of every co-operative society shall be

convened within period of six months of close of the financialyear to transact the business as may be provided in such law.

243ZO. Right of member to get information.—(1) TheLegislature of State may, by law, provide for access to everymember of co-operative society to the books, information andaccounts of the cooperative society kept in regular transaction ofits business with such members.

(2) The Legislature of State may, by law, make provisionsto ensure the participation of members of the management of theco-operative society providing minimum requirement of attendingmeetings by the members and utilising the minimum level ofservices as may be provided in such law.

(3) The Legislature of State may, by law, provide for co-operative education and training for its members.

243ZP. Returns.—(1) Every co-operative society shall filereturns, within six months of the close of every financial year, tothe authority designated by the State Government including thefollowing matters, namely:—

(a) annual report of its activities;

(b) its audited statement of accounts;

(c) plan for surplus disposal as approved by the general bodyof the co-operative society;

(d) list of amendments to the bye-laws of the co-operativesociety, if any;

(e) declaration regarding date of holding of its general bodymeeting and conduct of elections when due; and

(f) any other information required by the Registrar in pursuanceof any of the provisions of the State Act.

243ZQ. Offences and penalties.—(1) The Legislature of Statemay, by law, make provisions for the offences relating to theco-operative societies and penalties for such offences.

(2) law made by the Legislature of State under clause (1)shall include the commission of the following act or omissionas offences, namely:—

(a) co-operative society or an officer or member thereofwilfully makes false return or furnishes false information, orany person wilfully not furnishes any information required fromhim by person authorised in this behalf under the provisionsof the State Act;

(b) any person wilfully or without any reasonable excusedisobeys any summons, requisition or lawful written order issuedunder the provisions of the State Act;

(c) any employer who, without sufficient cause, fails to pay toa co-operative society amount deducted by him from itsemployee within period of fourteen days from the date onwhich such deduction is made;

(d) any officer or custodian who wilfully fails to handovercustody of books, accounts, documents, records, cash, securityand other property belonging to co-operative society of whichhe is an officer or custodian, to an authorised person; and

(e) whoever, before, during or after the election of membersof the board or office bearers, adopts any corrupt practice.

243ZR. Application to multi-State co-operative societies.—Theprovisions of this Part shall apply to the multi-State co-operativesocieties subject to the modification that any reference to“Legislature of State”, “State Act or State Government” shallbe construed as reference to “Parliament”, “Central Act” or“the Central Government” respectively.

243ZS. Application to Union territories.—The provisions ofthis Part shall apply to the Union territories and shall, in theirapplication to Union territory, having no Legislative Assemblyas if the references to the Legislature of State were areference to the administrator thereof appointed under article239 and, in relation to Union territory having LegislativeAssembly, to that Legislative Assembly:

Provided that the President may, by notification in the OfficialGazette, direct that the provisions of this Part shall not apply toany Union territory or part thereof as he may specify in thenotification.

243ZT. Continuance of existing laws.— Notwithstandinganything in this Part, any provision of any law relating to co-

operative societies in force in State immediately before thecommencement of the Constitution (Ninety-seventhAmendment) Act, 2011, which is inconsistent with the provisionsof this Part, shall continue to be in force until amended orrepealed by competent Legislature or other competentauthority or until the expiration of one year from suchcommencement, whichever is less.”

5. Article 243ZH is the definition clause. It is clear that theprovisions contained in Articles 243ZI to 243ZQ and Article 243ZT areall meant to apply in regard to cooperative societies, which are bornunder laws made by the State Legislature. It is beyond the pale of doubtthat the legislative powers of the State Legislature, in regard to“cooperative societies”, falling in Entry 32 of List II of the SeventhSchedule, has been conditioned, cribbed and confined, though no change,as such, is made in the Entry 32. It is clear that what is relevant is,whether by direct or indirect means, there is substantive impact on theprovisions covered by the proviso to Article 368(2). There is also aclear impact on Article 246(3), which deals with the exclusive powers ofthe State Legislature and, therefore, there is change brought about inregard to the provisions contained in Chapter I of Part XI of theConstitution, which is contained in clause (b) to the proviso of Article368(2).

6. Having found that these provisions cannot survive, the questionarises whether Article 243ZR and 243ZS, can continue to exist. What ispressed into service, however, in this regard, by learned Attorney General,is that the Doctrine of Severability would apply.

7. The learned Attorney General has contended that Parliament,vide Article 243ZR, has dealt with multistate cooperative societies, inregard to which, it has exclusive legislative competence and, instead ofduplicating the provisions, the device of reference is utilised and Article243ZR really manifests Parliaments resolve to apply the very sameprovisions as was intended for cooperative societies covered by Entry32 of List II, viz., cooperative societies made under law passed by theState Legislature. It would be no different, if, instead of words used inArticle 243ZR and 243ZS, the entire provisions, were repeated all overagain. The Principle of Legislation by Adoption is pressed into serviceby the learned Attorney General.

A8. The learned Counsel appearing on behalf of the RespondentNo. 1, Shri Massoom K. Shah, and also, Ms. Ritika Sinha, for theIntervenors, would point out, having regard to the arrangement of theprovisions and the wording used in Article 243ZR and Article 243ZS,there can be no scope for applying the Doctrine of Severability.B9. It is the case of Shri P.K. Jani, learned Senior Counsel for theappellant in one of the cases that the amendment was preceded by avery elaborate exercise, which is that, there was meet of Ministers ofCooperation of various States and resolutions were passed [TheseResolutions are not to be mistaken for the Resolutions to be passed bythe State Legislatures, as contemplated in the proviso to Article 368(2)].CIt is contended on behalf of the Respondent No. 1 and the learned Counselfor the Intervenors that it may have been different, if the substantialprovisions, as contained in Article 243ZI to 243ZQ, which related tocooperative societies, embraced by Entry 32 of List II, were expresslyenacted to apply to multistate cooperative societies and to the cooperativeDsocieties operating in the Union Territory, and thereafter, such provisionswere also made to apply to cooperative societies operating under lawsmade by the State Legislatures but this is not the position.

10. The Doctrine of Severability came up for consideration inR.M.D. Chamarbaugwalla and another v. Union of India andEanother1. Therein, this Court has laid down certain Rules in this regard.They read as follows:

“22. That being the position in law, it is now necessary to considerwhether the impugned provisions are severable in their applicationto competitions of gambling character, assuming of course thatFthe definition of “prize competition” in Section 2(d) is wide enoughto include also competitions involving skill to substantial degree.It will be useful for the determination of this question to refer tocertain rules of construction laid down by the American courts,where the question of severability has been the subject ofconsideration in numerous authorities. They may be summarisedGas follows:

1.In determining whether the valid parts of statute areseparable from the invalid parts thereof, it is the intentionof the legislature that is the determining factor. The test

H1 AIR 1957 SC 628

to be applied is whether the legislature would haveenacted the valid part if it had known that the rest ofthe statute was invalid. Vide Corpus Juris Secundum,Vol. 82, p. 156; Sutherland on Statutory Construction,Vol. 2 pp. 176-177.

2.If the valid and invalid provisions are so inextricablymixed up that they cannot be separated from one another,then the invalidity of portion must result in the invalidityof the Act in its entirety. On the other hand, if they areso distinct and separate that after striking out what isinvalid, what remains is in itself complete codeindependent of the rest, then it will be upheldnotwithstanding that the rest has become unenforceable.Vide Cooley’s Constitutional Limitations, Vol. I at pp.360-361; Crawford on Statutory Construction, pp.217-218.

3.Even when the provisions which are valid are distinctand separate from those which are invalid, if they allform part of single scheme which is intended to beoperative as whole, then also the invalidity of partwill result in the failure of the whole. Vide Crawfordon Statutory Construction, pp. 218-219.

4.Likewise, when the valid and invalid parts of statuteare independent and do not form part of scheme butwhat is left after omitting the invalid portion is so thinand truncated as to be in substance different from whatit was when it emerged out of the legislature, then alsoit will be rejected in its entirety.

5.The separability of the valid and invalid provisions of astatute does not depend on whether the law is enactedin the same section or different sections; (Vide Cooley’sConstitutional Limitations, Vol. I, pp. 361-362); it isnot the form, but the substance of the matter that ismaterial, and that has to be ascertained on anexamination of the Act as whole and of the setting ofthe relevant provision therein.

A6.If after the invalid portion is expunged from the statutewhat remains cannot be enforced without makingalterations and modifications therein, then the whole ofit must be struck down as void, as otherwise it willamount to judicial legislation. Vide Sutherland onStatutory Construction, Vol. 2, p. 194.B

7.In determining the legislative intent on the question ofseparability, it will be legitimate to take into account thehistory of the legislation, its object, the title and thepreamble to it. Vide Sutherland on StatutoryConstruction, Vol. 2, pp. 177-178.”C

11. We are, in this case, concerned with case of an amendmentto the Constitution, which has been carried out under Article 368. Article368 reads as follows:

“368. Power of Parliament to amend the Constitution and proceduretherefor.—D

(1) Notwithstanding anything in this Constitution, Parliament mayin exercise of its constituent power amend by way of addition,variation or repeal any provision of this Constitution in accordancewith the procedure laid down in this article.

E(2) An amendment of this Constitution may be initiated only bythe introduction of Bill for the purpose in either House ofParliament, and when the Bill is passed in each House by majorityof the total membership of that House and by majority of notless than two-thirds of the members of that House present andFvoting, it shall be presented to the President who shall give hisassent to the Bill and thereupon the Constitution shall standamended in accordance with the terms of the Bill:

Provided that if such amendment seeks to make any change in—

(a)article 54, article 55, article 73, article 162, article 241 orGarticle 279A or

(b)Chapter IV of Part V, Chapter V of Part VI, or Chapter Iof Part XI, or

(c)any of the Lists in the Seventh Schedule, or

H(d)the representation of States in Parliament, or

(e)the provisions of this article, the amendment shall alsorequire to be ratified by the Legislatures of not less thanone-half of the States by resolutions to that effect passedby those Legislatures before the Bill making provision forsuch amendment is presented to the President for assent.

(3) Nothing in article 13 shall apply to any amendment made underthis article.

(4) No amendment of this Constitution (including the provisionsof Part III) made or purporting to have been made under thisarticle whether before or after the commencement of section 55of the Constitution (Forty-second Amendment) Act, 1976] shallbe called in question in any court on any ground.

(5) For the removal of doubts, it is hereby declared that thereshall be no limitation whatever on the constituent power ofParliament to amend by way of addition, variation or repeal theprovisions of this Constitution under this article.”

12. Article 368 has provided for the procedure to be followed byParliament, when it purports to amend the Constitution. There are twolimitations broadly on the power of Parliament to amend the Constitution:

(i)Parliament must scrupulously follow the procedure providedin Article 368;

(ii)There is also the substantive limitation on power of theParliament to amend the Constitution, which is far too wellestablished to require support from case law, viz., thatParliament cannot amend the Constitution by breaching itsbasic features.

13. In this case, the provisions of Article 243ZI to 243ZQ andArticle 243ZT are undoubtedly afflicted with the vice of non-compliancewith the procedure, which is mandatory. Resultantly, the said provisionsmust be treated as still born. These provisions are void in law. Thedefinition clause Article 243ZH clearly would have no meaning and wouldcease to be workable. The only question, which, therefore, arises iswhen provisions of the amendment to the Constitution are found to bevoid, for the reason that the mandate of the proviso to Article 368(2)has not been complied with, whether the Doctrine of Severability couldbe applied to sustain the other provisions, which may not requireParliament to follow the procedure under the proviso to Article 368(2).

A14. This question is not res integra as it has been considered bythe Constitution Bench of this Court in Kihoto Hollohan v. Zachillhuand others2. The Court in the said case, was dealing with challenge tothe Tenth Schedule to the Constitution. Parliament, by virtue of the TenthSchedule purported to deal with the evil of defection. After providing forvarious aspects, it also purported to oust the jurisdiction of all courts byBvirtue of paragraph-7, which reads as follow:

“7. Bar of jurisdiction of courts: Notwithstanding anything in thisConstitution, no court shall have any jurisdiction in respect of anymatter connected with the disqualification of the Member of aHouse under this Schedule.”C

15. The Court proceeded to uphold the provisions of the TenthSchedule except paragraph-7. In doing so, this Court invoked the theoryof Severability. It is, in this context, necessary to notice the followingdiscussion:

D“66. While examining the constitutional validity of laws theprinciple that is applied is that if it is possible to construe statuteso that its validity can be sustained against constitutional attackit should be so construed and that when part of statute is validand part is void, the valid part must be separated from the invalidpart. This is done by applying the doctrine of severability. TheErationale of this doctrine has been explained by Cooley in thefollowing words: [ Cooley: Constitutional Limitations, (8th edn.)Vol. I pp. 359-60.]

“It will sometimes be found that an act of the legislature isopposed in some of its provisions to the Constitution, while others,Fstanding by themselves, would be unobjectionable. So the formsobserved in passing it may be sufficient for some of the purposessought to be accomplished by it, but insufficient for others. In anysuch case the portion which conflicts with the Constitution, or inregard to which the necessary conditions have not been observed,Gmust be treated as nullity. Whether the other parts of the statutemust also be adjudged void because of the association must dependupon consideration of the object of the law, and in what mannerand to what extent the unconstitutional portion affects theremainder. statute, it has been said, is judicially held to be

unconstitutional, because it is not within the scope of legislativeauthority; it may either propose to accomplish something prohibitedby the Constitution, or to accomplish some lawful, and evenlaudable object, by means repugnant to the Constitution of theUnited States or of the State. statute may contain some suchprovisions, and yet the same act, having received the sanction ofall branches of the legislature, and being in the form of law, maycontain other useful and salutary provisions, not obnoxious to anyjust constitutional exception. It would be inconsistent with all justprinciples of constitutional law to adjudge these enactments voidbecause they are associated in the same act, but not connectedwith or dependent on others which are unconstitutional.”

68. The doctrine of severability has been applied by thisCourt in cases of challenge to the validity of an amendment onthe ground of disregard of the substantive limitations on theamending power, namely, alteration of the basic structure. Butonly the offending part of the amendment which had the effect ofaltering the basic structure was struck down while the rest of theamendment was upheld. [See Kesavananda Bharati v. State ofKerala [(1973) 4 SCC 225 : 1973 Supp SCR 1] , Minerva MillsLtd. v. Union of India [(1980) 3 SCC 625 : (1981) 1 SCR 206], P. Sambamurthy v. State of A.P. [(1987) 1 SCC 362 : (1987) 2ATC 502 : (1987) 1 SCR 879] ].69. Is there anything in the procedural limitations imposedby sub-article (2) of Article 368 which excludes the doctrine ofseverability in respect of law which violates the said limitations?Such violation may arise when there is composite Bill or whatis in statutory context or jargon called ‘Rag-Bag’ measureseeking amendments to several statutes under one amendingmeasure which seeks to amend various provisions of theConstitution some of which may attract clauses (a) to (e) of theproviso to Article 368(2) and the Bill, though passed by the requisitemajority in both the Houses of Parliament has received the assentof the President without it being sent to States for ratification orhaving been so sent fails to receive such ratification from not lessthan half the States before the Bill is presented for assent. Suchan Amendment Act is within the competence of Parliament insofar

as it relates to provisions other than those mentioned in clauses(a) to (e) of proviso to Article 368(2) but in respect of theamendments introduced in provisions referred to in clauses (a) to(e) of proviso to Article 368(2), Parliament alone is not competentto make such amendments on account of some constitutionallyrecognised federal principle being invoked. If the doctrine ofseverability can be applied it can be upheld as valid in respect ofthe amendments within the competence of Parliament and onlythe amendments which Parliament alone was not competent tomake could be declared invalid.

70. Is there anything compelling in the proviso to Article368(2) requiring it to be construed as excluding the doctrine ofseverability to such an amendment? It is settled rule of statutoryconstruction that “the proper function of proviso is to exceptand deal with case which would otherwise fall within the generallanguage of the main enactment, and its effect is confined to thatcase” and that where “the language of the main enactment isclear and unambiguous, proviso can have no repercussion onthe interpretation of the main enactment, so as to exclude from itby implication what clearly falls within its express terms”.[See: Madras & Southern Mahratta Railway CompanyLtd. v. Bezwada Municipality [(1944) 71 IA 113, 122 : AIR 1944PC 71 : 48 CWN 618] , CIT v. Indo-Mercantile Bank Ltd. [1959Supp 2 SCR 256, 266 : AIR 1959 SC 713 : (1959) 36 ITR 1]

71. The proviso to Article 368(2) appears to have beenintroduced with view to giving effect to the federal principle. Inthe matter of amendment of provisions specified in clauses (a) to(e) relating to legislative and executive powers of the States vis-a-vis the Union, the Judiciary, the election of the President andthe amending power itself, which have bearing on the States,the proviso imposes an additional requirement of ratification ofthe amendment which seeks to effect change in those provisionsbefore the Bill is presented for the assent of the President. It issalutary that the scope of the proviso is confined to the limitsprescribed therein and is not construed so as to take away thepower in the main part of Article 368(2). An amendment whichotherwise fulfils the requirements of Article 368(2) and is outsidethe specified cases which require ratification cannot be deniedlegitimacy on the ground alone of the company it keeps. The mainpart of Article 368(2) directs that when Bill which has beenpassed by the requisite special majority by both the Houses hasreceived the assent of the President “the Constitution shall standamended in accordance with the terms of the Bill”. The provisocannot have the effect of interdicting this constitutional declarationand mandate to mean that in case where the proviso has notbeen complied — even the amendments which do not fall withinthe ambit of the proviso also become abortive. The words “theamendment shall also require to be ratified by the legislature”indicate that what is required to be ratified by the legislatures ofthe States is the amendment seeking to make the change in theprovisions referred to in clauses (a) to (e) of the proviso. Theneed for and the requirement of the ratification is confined to thatparticular amendment alone and not in respect of amendmentsoutside the ambit of the proviso. The proviso can have, therefore,no bearing on the validity of the amendments which do not fallwithin its ambit. Indeed the following observations of this Courtin Sajjan Singh case [(1965) 1 SCR 933 : AIR 1965 SC 845]are apposite: (SCR p. 940)

“In our opinion, the two parts of Article 368 must on areasonable construction be harmonised with each other in the sensethat the scope and effect of either of them should not be allowedto be unduly reduced or enlarged.”

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73. similar situation can arise in the context of the mainpart of Article 368(2) which provides: “when the Bill is passed ineach House by majority of the total membership of that Houseand by majority of not less than two-thirds of the Members ofthat House present and voting, it shall be presented to thePresident”. Here also condition is imposed that the Bill shall bepresented to the President for his assent only after it has beenpassed in each House by the prescribed special majority. Anamendment in the First and Fourth Schedules referable to Article4 can be introduced by Parliament by an ordinary law passed bysimple majority. There may be Bill which may containamendments made in the First and Fourth Schedules as well asamendments in other provisions of the Constitution excluding those

Areferred to in the proviso which can be amended only by specialmajority under Article 368(2) and the Bill after having been passedonly by an ordinary majority instead of special majority hasreceived the assent of the President. The amendments which aremade in the First and Fourth Schedules by the said AmendmentAct were validly made in view of Article 4 but the amendments inBother provisions were in disregard to Article 368(2) which requiresa special majority. Is not the doctrine of severability applicable tosuch an amendment so that amendments made in the First andFourth Schedules may be upheld while declaring the amendmentsin the other provisions as ineffective? contrary view excludingCthe doctrine of severability would result in elevating procedurallimitation on the amending power to level higher than thesubstantive limitations.

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75. In that case, it was found that Section 41 of the BriberyDAmendment Act, 1958 made provision for appointment of apanel by the Governor-General on the advice of the Minister ofJustice for selecting members of the Bribery Tribunal while Section55 of the Constitution vested the appointment, transfer, dismissaland disciplinary control of judicial officers in the Judicial ServiceECommission. It was held that the legislature had purported to passa law which, being in conflict with Section 55 of the Order inCouncil, must be treated, if it is to be valid, as an implied alterationof the constitutional provisions about the appointment of judicialofficers and could only be made by laws which comply with thespecial legislative procedure laid down in Section 29(4). SinceFthere was nothing to show that the Bribery Amendment Act, 1951was passed by the necessary two-thirds majority, it was held that“any Bill which does not comply with the condition precedent ofthe proviso, is and remains, even though it receives the RoyalAssent, invalid and ultra vires”. Applying the doctrine of severabilityGthe Judicial Committee, however, struck down the offendingprovision, i.e. Section 41 alone. In other words passing of the Billby special majority was the condition precedent for presentationof the Bill for the assent. Disregard of such condition precedentfor presenting Bill for assent did not result in the entire enactmentbeing vitiated and the law being declared invalid in its entirety but

it only had the effect of invalidation of particular provision whichoffended against the limitation on the amending power. Acomparison of the language used in clause (4) of Section 29 withthat of Article 368(2) would show that both the provisions bear ageneral similarity of purpose and both the provisions require thepassing of the Bill by special majority before it was presented forassent. The same principle would, therefore, apply whileconsidering the validity of composite amendment which makesalterations in the First and Fourth Schedules as well as in otherprovisions of the Constitution requiring special majority underArticle 368(2) and such law, even though passed by the simplemajority and not by special majority, may be upheld in respect ofthe amendments made in the First and Fourth Schedules. There isreally no difference in principle between the condition requiringpassing of the Bill by special majority before its presentation tothe President for assent contained in Article 368(2) and thecondition for ratification of the amendment by the legislatures ofnot less than one-half of the States before the Bill is presented tothe President for assent contained in the proviso. The principle ofseverability can be equally applied to composite amendmentwhich contains amendments in provisions which do not requireratification by States as well as amendment in provisions whichrequire such ratification and by application of the doctrine ofseverability, the amendment can be upheld in respect of theamendments which do not require ratification and which are withinthe competence of Parliament alone. Only these amendments inprovisions which require ratification under the proviso need to bestruck down or declared invalid.

76. The test of severability requires the Court to ascertainwhether the legislature would at all have enacted the law if thesevered part was not the part of the law and whether afterseverance what survives can stand independently and is workable.If the provisions of the Tenth Schedule are considered in thebackground of the legislative history, namely, the report of the‘Committee on Defections’ as well as the earlier Bills which weremoved to curb the evil of defection it would be evident that themain purpose underlying the constitutional amendment andintroduction of the Tenth Schedule is to curb the evil of defectionwhich was causing immense mischief in our body politic. The

ABC

DEF

Aouster of jurisdiction of courts under Paragraph 7 was incidentalto and to lend strength to the main purpose which was to curb theevil of defection. It cannot be said that the constituent body wouldnot have enacted the other provisions in the Tenth Schedule if ithad known that Paragraph 7 was not valid. Nor can it be said thatthe rest of the provisions of the Tenth Schedule cannot stand onBtheir own even if Paragraph 7 is found to be unconstitutional. Theprovisions of Paragraph 7 can, therefore, be held to be severablefrom the rest of the provisions.”

(Emphasis supplied)

C16. The first Rule laid down inR.M.D. Chamarbaugwalla (supra)is that, it is the intention of the Legislature, that is the determining factor.The test is also laid down that the question to be asked is, whether theLegislature would have enacted the valid Part, if it had known that therest of the Statute was invalid. It is apposite to read another Rule, whichis laid down, which is Rule No.7. In determining the legislative intent, itDwill be legitimate to take into account, the history of the legislation andits objects, inter-alia. The Statement of Objects and Reasons for theNinety-Seventh Amendment, reads as follows:

“STATEMENT OF OBJECTS AND REASONS

EThe co-operative sector, over the years, has made significantcontribution to various sectors of national economy and hasachieved voluminous growth. However, it has shown weaknessesin safeguarding the interests of the members and fulfilment ofobjects for which these institutions were organised. There havebeen instances where elections have been postponed indefinitelyFand nominated office bearers or administrators remaining in-chargeof these institutions for long time. This reduces the accountabilityof the management of co-operative societies to their members.Inadequate professionalism in management in many of the co-operative institutions has led to poor services and low productivity.GCo-operatives need to run on well-established democratic principlesand elections held on time and in free and fair manner. Therefore,there is need to initiate fundamental reforms to revitalize theseinstitutions in order to ensure their contribution in the economicdevelopment of the country and to serve the interests of membersand public at large and also to ensure their autonomy, democraticHfunctioning and professional management.

2. The “co-operative societies” is subject enumerated in Entry32 of the State List of the Seventh Schedule of the Constitutionand the State Legislatures have accordingly enacted legislationson co-operative societies. Within the framework of State Acts,-growth of cooperatives on large scale was envisaged as part ofthe efforts for securing social and economic justice and equitabledistribution of the fruits of development. It has, however, been-experienced that in spite of considerable expansion of cooperatives, their performance in qualitative terms has not been up-to the desired level. Considering the need for reforms in the Cooperative Societies Acts of the States, consultations with the StateGovernments have been held at several occasions and in theconferences of State Co-operative Ministers. strong need has-been felt for amending the Constitution so as to keep the cooperatives free from unnecessary outside interferences and alsoto ensure, their autonomous organisational set up and theirdemocratic functioning.3. The Central Government is committed to ensure that the co-operative societies in the country function in democratic,professional, autonomous and economically sound manner. Witha view to bring the necessary reforms, it is proposed to incorporatea new Part in the Constitution so as to provide for certain provisionscovering the vital. aspects of working of co-operative societieslike democratic, autonomous and professional functioning. newarticle is also proposed to be inserted in Part IV of the Constitution(Directive Principles of State Policy) for the States to endeavourto promote voluntary formation, autonomous functioning,democratic control and professional management of cooperativesocieties. The proposed new Part in the Constitution, inter alia,seeks to empower the Parliament in respect of multi-State co--operative societies and the State Legislatures in case of other cooperative societies to make appropriate law, laying down thefollowing matters, namely:-

(a) provisions for incorporation, regulation arid winding up of co-operative societies based on the principles of democratic member-control, member-economic participation and autonomousfunctioning;

A(b) specifying the maximum number of directors of co-operativesociety to be not exceeding twenty-one members;

(c) providing for fixed term of five years from the date of electionin respect of the elected members of the board and its officebearers;

B(d) providing for maximum time limit of six months during whicha board of directors of co-operative society could be kept undersupersession or suspension;

(e) providing for independent professional audit;

C(f) providing for right of information to the members of the co-operative societies;

(g) empowering the State Governments to obtain periodic reportsof activities and accounts of co-operative societies;

(h) providing for the reservation of one seat for the ScheduledDCastes or the Scheduled Tribes and two seats for women on theboard of every co-operative society, which have individuals asmembers from such categories; (i) providing for offences relatingto co-operative societies and penalties in respect of such offences.

4. It is expected that these provisions will not only ensure theEautonomous and democratic functioning of co-operatives, but alsoensure the accountability of management to the members andother stakeholders and shall provide for deterrence for violationof the provisions of the law.

5. The Bill seeks to achieve the above objectives.”

(Emphasis supplied)

17. From the Statement Objects and Reasons, the following isdiscernible.

18. There were weaknesses found in safeguarding the interestsGof the members of the cooperative societies. Elections were beingpostponed indefinitely. There was inadequate professionalism inmanagement. It was found that cooperatives needed to be run on well-established democratic principles and elections had to be held on timeand in free and fair manner. It was further noted that “cooperativesocieties” is subject enumerated in Entry 32 of the State List of theH

Seventh Schedule. That laws were made by the State Legislatures, werenoticed. Reforms, were in short, found necessary in the CooperativeSociety Acts of the States. Consultation with the State Governmentswere held several times. The Central Government was committed, it isstated to ensure that the cooperative societies, in the country, were tofunction in democratic, professional, autonomous and economicallysound manner. It is in this connection that Part IXB was inserted toempower Parliament in respect of multistate cooperative societies, andState Legislatures, in case of other cooperative societies, to makeappropriate law.19. The intention, therefore, discernible was that Parliamentintended to provide uniform set of legislative norms and create rights,liabilities and powers across the board through the length and breadth ofthe country. In fact, it was to inform all cooperative societies, whetherthey were governed by laws made by the State Legislatures, fallingunder Entry 32 of List II of Seventh Schedule, or the appropriate Entryunder List I.

20. In other words, homogeneity was sought to be introducedwithout any discrimination between cooperative societies falling withinthe legislative domain of State Legislatures and of Parliament. The settingand the manner, in which the Articles have been ordered in Part IXB,would go to show that the substantive provisions, which actuallyconditioned the legislative power, among other things, was directed againstthe State Legislatures.

21. The second Rule laid down in R.M.D. Chamarbaugwalla(supra) is to enquire whether the valid and invalid provisions are soinextricably mixed up that they cannot be separated from one another. Itis further declared that if the seemingly valid provisions are so distinctand separate, that after declaring the other set of provisions as invalid,the remaining provisions would remain complete Code, independent ofthe rest, then, the distinct and separate provisions, which manifests acomplete Code, can become enforceable.

22. The third Rule provides that even if they (the provisions) aredistinct and separate, if they all form part of single scheme, which isintended to be operative as whole, then, also the invalidity of part,will result in failure of whole. InKihoto Hollohan (supra), this Court,after bearing in mind the Rules, apparently laid down in R.M.D.

AChamarbaugwalla(supra), has proceeded to clearly articulate (inparagraph-76) the test, inter-alia, viz., as to whether, after severance,what survives, can stand independently and is workable.

23. In this regard, it is plain from the Statement of Objects andReasons, that Parliament was fully aware that Entry 32 clothed theBLegislatures of the State with exclusive legislative power to make lawsin regard to cooperative societies, which were not multistate cooperativesocieties. Parliament was fully aware that laws had already been madeby State Legislatures, but yet, the object was to usher in reforms by thelegislative route, and what is more, Constitutional Amendment, whichclearly involved, change in regard to the entrenched provisions. TheCNinety-Seventh Amendment was passed in 2012, several years afterthe decision in Kihoto Hollohan(supra). It is clear that the law waslaid down by the Constitution Bench of this Court in Kihoto Hollohan(supra), that having regard to the sublime purpose behind the proviso toArticle 368(2), which was to foster and secure the federal nature of theDConstitution, what mattered was the substance and not the form. Itappears to be further clear that an effort was made to take the States onboard by holding several meetings between the States, and what is more,Resolutions were passed apparently at the meet of State CooperativeMinisters. All of this appears to point out that, having regard to the lawholding the field and the relevant principles in question, it appears thatEParliament would not have made the amendment, had it known that theprovisions contained in Articles 243ZI to 243ZQ would not pass muster.The object was clearly to have identical provisions in place to governcooperative societies. Uniformity and, in fact, identical treatment for allcooperative societies whether they are created under State Law or byFParliament, was the goal.

24. It is true that what the proviso to Article 368(2) contemplatesis, that the ratification by the requisite number of States is done beforethe Bill is presented to the President of India for assent.

25. It is the duty of the Court to strive to uphold the law made byGthe Legislature. When it comes to an amendment to the Constitution,this presumption of constitutionality, and also the duty of the Court,becomes even more pronounced. If, indeed, on the Doctrine ofSeverability, the provisions contained in Article 243QR and Article 243QS,can be sustained, I would agree that the law must survive rather thanHperish. The question, however, is on the terms of the provisions in question

(Articles 243QR and 243QS), and bearing in mind the principles, canthey survive on their own, after the invalidation of Article 243ZH toArticle 243ZQ and Article 243ZT.

26. In Kihoto Hollohan(supra), it must be noticed that the courtin the said case came to the rescue of Parliament by applying the Doctrineof Severability and found no difficulty in sustaining the provisions of theTenth Schedule, even after jettisoning the provisions of paragraph-7. Itwas found that pronouncing the said provision as infirm had no impacton the workability of the other provisions which related to and providedfor remedies against the evil of defection.

27. The question boils down to this. Are the provisions of Article243ZR and 243ZS independent provisions and workable? For the sakeof clarity, the provisions are referred in question namely Article 243ZRand 243ZS.

“243ZR. Application to multi-State co-operative societies. – Theprovisions of this Part shall apply to the multi-State co-operativesocieties subject to the modification that any reference to“Legislature of State”, “State Act” or “State Government” shallbe construed as reference to “Parliament”, “Central Act” or“the Central Government” respectively.

243ZS. Application to Union territories. – The provisions of thisPart shall apply to the Union territories and shall, in their applicationto Union territory, having no Legislative Assembly as if thereferences to the Legislature of State were reference to theadministrator thereof appointed under article 239 and in, relationto Union territory having Legislative Assembly, to thatLegislative Assembly:

Provided that the President may, by notification in the OfficialGazette, direct that the provisions of this Part shall not apply toany Union territory or part thereof as he may specify in thenotification.”

28. Both these provisions are entirely dependent upon the provisionscontained in Article 243ZI to 243ZQ. This is for the reason that boththese provisions expressly provide that the ‘provisions of this part’, whichclearly means the foregoing provisions, which are contained in Article243ZI to 243ZQ, are to apply in regard to multistate cooperative societiesand to Union Territories with the modifications, which are indicated therein.

AThere can be application and modifications of something which exists.There cannot be either, when the elaborate provisions are to be treatedas not born.

29. Are these provisions independent and workable? I will proceedon the basis that Parliament intended to produce homogeneity in regardBto certain legislative value judgments which would be cast in stone in amanner of speaking by having those values declared in the grundnormitself. It would appear to be that these values were to apply, across theboard, to cooperative societies born under laws made by the StateLegislatures, as also, to those made by Parliament.

C30. More importantly, once the Court has painted the relevantprovisions, which are the substantial provisions (Article 243ZI to 243ZQ),with the brush of unconstitutionality, rendering those provisions, still born,it would appear that the provisions contained in Article 243ZR and Article243ZS would not have the crutches without which these provisions ceaseto be workable and are impossible to sustain. The unconstitutional part,Dwhich is to be an integral part of Article 243ZR and Article 243ZS, mustcontinue to exist, if the provisions’, in question, are to bear life. In otherwords, to sustain these provisions the court would have to resurrect thedead provisions contained in Article 243ZI to 243ZQ and Article 243ZT.The Doctrine of Severability must apply on surer foundations. It is myEview that unless the provisions, which have been found unconstitutional,are kept alive, Articles 243R and 243ZQ are plainly unworkable.

31. In this view of the matter, I respectfully disagree with theview taken by my learned and esteemed Brother in regard to theapplication of the Doctrine of Severability.F

32. In this view of the matter, the Appeals are dismissed.

Devika Gujral

Appeals disposed of.