Context:

• The recent Supreme Court verdict striking down a part of the 97th Constitution Amendment, insofar as it dealt with cooperative societies under the domain of the States.

97th amendment:

• the Amendment proposed to create a framework for the functioning of cooperative societies. State laws on cooperatives should conform to this framework.
• It introduced Part IXB in the Constitution so that the concept of cooperative societies gains constitutional recognition.
• It was on the lines of Part IX, which deals with panchayats, and Part IXA, which deals with urban local bodies.
• The idea was to empower Parliament to frame laws for cooperative societies that function across States (multi-State cooperative societies) and State legislatures to make laws for all other cooperative societies falling under their jurisdiction.
• The Amendment added the words “or cooperative societies” to Article 19(1)(c) of the Constitution to expand the fundamental right to form associations or unions to cover cooperative societies too.
• It also added a ‘Directive Principle’ through Article 43B, which says: “The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies.” 
• The Amendment set out basic rules:
  • such as a maximum of 21 directors in a society,
  • a fixed term of five years for elected members,
  • a six-month cap on the time limit for which a society’s board of directors can be kept under supersession or suspension,
  • reservation of one seat for the Scheduled Castes or the Scheduled Tribes, and two seats for women on the board of every cooperative society.

Reasons behind 97th amendment:

• It referred to the “weaknesses” in safeguarding the interests of members of cooperatives and the fulfilment of the objectives of these institutions.
• It referred to delayed elections, nomination of office-bearers for long durations, reduced accountability in management and inadequate professionalism in many societies.
• It spoke of the need to initiate fundamental reforms to revitalise these institutions and ensure “their autonomy, democratic functioning and professional management”.

Government argument in Supreme Court:

• The Centre’s defense was that the Amendment did not alter the entry in the State List on ‘cooperative societies’.
• In fact, it specified that the State legislatures would enact the relevant laws based on a common
• There was no need for ratification by the Assemblies, as no subject was shifted from the State List to the Central or Concurrent List.

Supreme Court Verdict:

• The Amendment had the effect of limiting and circumscribing the scope and extent to which States could frame laws on cooperative societies. This impacted on their legislative power and would therefore amount to a change that would require ratification by the Assemblies.
• All judges of supreme court agreed with the Gujarat High Court that the ratification by the State legislatures was required for Part IXB, and in the absence of such ratification, the Part had to be struck down.
• The court took the example of the 73rd and 74th Amendments which introduced the chapters on panchayats and municipalities, respectively.
• Those amendments, similar in impact on the legislative power of the States, had been passed by the special procedure involving ratification by State legislatures.
• It would be valid as far as multi-State cooperative societies were concerned as Parliament had the power to regulate their functioning.

Methods of Constitutional amendment:

Simple Majority

• A large number of provisions contained in the constitution are open to change by a simple majority. These may be divided into two classes:

Where the text of the constitution is not altered but the law is changed

• Article 11 confers on the Parliament power to enact a law regarding citizenship.
• An Act made in pursuance of that power will change the law relating to citizenship without altering the text of Article 5 to 10.
• Article 124 still refers to the Supreme Court as consisting of the Chief justice and 7 judges.
• But in exercise of its power the Parliament has increased the strength of the judges from 7 to 25.

2.Where the text of the constitution is changed

• Formation of new state.
• Creation or abolition of legislative council
• Creation of council of ministers for Union territories
• Extending the period of 15 years fixed for the use of English in Article 343
• Defining Parliamentary privileges
• Salaries and allowances of President, Vice-President, Judges, etc.

Special Majority

• Except those provisions which are amendable by an ordinary majority, the rest of the provisions require a special majority for amendment.
• The Amendment Bill must be passed by a majority of two-thirds of the members of each House present and voting and such majority must exceed 50% of the total membership of the House.

Special Majority and Ratification by half of the States

• Those provisions which relate to the federal structure of the constitution require special majority in Parliament as well as ratification by at least half of the state legislatures.
• This procedure is required in the following provisions:
  • Manner of election of President
  • Executive power of the Union and the State
  • The Supreme Court and the High Courts
  • Distribution of legislative power between the Union and the States
  • Representation of states in Parliament
  • Article 368 itself

Way Forward:

• The cooperative sector has always been in the domain of the States or provinces.
• The organising principles and mechanism of these cooperatives differ from area to area and depend on the industry or crop which forms the fulcrum of the cooperative.
• Homogeneity in this area would only result in the creation of round holes in which square pegs no longer fit.
• They also would not really serve to break the control some political interests have taken over cooperatives.