About the Author:
Shraddha Jain is a student of Institute of Law, Nirma University.
WHAT IS 97TH CONSTITUTIONAL AMENDMENT?
The 97th constitutional amendment deals with concerns connected to the nation’s efficient implementation of cooperative organizations, it was ratified by Government in December 2011 and took effect from February 15, 2012.
WHY IT’S IN THE NEWS:
The Supreme Court of India has recently affirmed a 2013 decision of the High Court Of Gujarat, which demolished various provisions of the Constitution (97th Amendment) Act, 2011, to the extent that it inserted part IX B to the constitution to cope with cooperative societies.
WHAT ARE THE COOPERATIVE SOCIETIES?
As per the International Labor Organization (ILO), cooperative societies are the independent group of individuals who join willingly to achieve their basic financial, political, or spiritual wants and desires via a collectively owned and state-regulated firm. Our National Government has established a distinct ‘Department of Co-operation’ that provide the cooperative sector with a new update.
CONSTITUTION PART IX B
Part IX B of the Constitution was amended, specifying the authorities of the state legislative bodies and the federal government to control cooperative sectors formation, voting, and governance.
The Legislature has the authority to make rules for interstate cooperatives or Union Territories.
The Supreme Court had to decide if the change might have been implemented without the consent of a minimum of half of the states.
Part IXB has a lot of interesting elements:
- It establishes a fundamental right to establish cooperatives sectors.
- Board’s tenure should be consistent.
- Rules for co-operative groups’ creation, administration, and ending up;
- Impartial auditor; employees’ right to information
PROVISIONS OF THE 97TH AMENDMENT:
Just after the keywords “or unions,” the term “Cooperative Societies” were inserted to Provisions Of the constitution.
Part IV was modified to include a new Article 43B, that indicates: “The government shall try to encourage the free establishment, independent operation, state regulations, and qualified staff of cooperative societies.”
Part IXB of the constitution was added following Part IXA to meet the functions of the state and the centre.
FACTORS FOR THE DOWNFALL OF THE COOPERATIVE SECTOR:
- Participation is inactive, and individuals aren’t actively involved in the coop’s administration.
- Inside a cooperative financial institution, there is a growing amount of debt that is past due.
- Internal resource mobilization is lacking, and reliance on state funding is excessive.
- Professionally management is lacking.
- Their expansion has been hampered by bureaucracy and involvement in administration, political interference, and over-polarization.
GUJARAT HIGH COURT DECISION:
In the judgment of Rajendra N. Shah vs. Union of India, the Honorable High Court of Gujarat demolished Part IX B, which contained Articles from 243ZH to 243ZT of the Indian Constitution.
ANNOUNCEMENT MADE BY THE SUPREME COURT ON JULY 20TH, 2021 REGARDING 97TH AMENDMENT:
The apex Court of India affirmed a 2013 Gujarat high court decision that pulled down parts of the constitution in the 97th amendment act 2011 that dealt with co-operative societies, to the degree that it brought Part IX B into the constitution.
The Gujarat high court’s decision was overturned by a three-judge panel consisting of Justice Rohinton Nariman, KM Joseph, and BR Gavai.
In a disagreement, Justice KM Joseph knocked down the whole modification, while the majority of Justice Nariman and BR Gavai repealed Part IXB, which was established by the 97th amendment act to handle cooperative societies.
The Gujarat High Court ruled that statutes on cooperative societies must be stricken down because they were implemented without the consent of half of the state assembly, as necessary under Article 368(2) of the constitution.
Approval is required by a special majority of the legislative branch, according to Article 368(2). As cooperative institutions were included as a state matter in state list II item 32 of the 7th schedule of the constitution, the change introducing part IXB needs the approval of one-half members under Article 368(2) of the Indian Constitution.
The central government, represented by Attorney General of India KK Venugopal, made two primary points in the Supreme Court appeal:
• The legislature’s authority to modify the constitution is not restricted to article 246 taken in combination with the seventh schedule. The jurisdiction of the legislature’s members varies from the authority of the state legislative bodies.
• Article 368 allows for amendments to the constitution, and diverging from it does not constitute a breach of the constitution’s basic structure.
THE REASONING OF THE NATIONAL GOVERNMENT:
- It signifies that thestate has introduced “professionalism” and “personal freedom” into cooperative society’s operations.
- Participants’ lack of responsibility has led to poor efficiency and low output.
- Polls aren’t always conducted on schedule. Cooperatives must follow well-established and structured democratic norms to function.
Over the decades, the cooperative companies have performed major contributions to numerous areas of the country’s economy and experienced tremendous rice. Cooperative societies offer enormous opportunities to assist India’s poorest citizens and facilitate effective industrial prosperity. However, as we have argued that there were several elements of the amendment relating to cooperative societies that breach the fundamental structure of the federation. So they need to be stuck down. Hope that cooperative societies now work effectively and efficiently.s