The Supreme Court on Tuesday in a 2:1 majority verdict upheld the validity of the 97th Constitutional amendment that deals with issues related to effective management of cooperative societies but struck down a part related to their setting up and functioning.
A Bench of Justices R F Nariman, K M Joseph and B R Gavai said, “We have struck down part IX B of the Constitution related to cooperative societies but we have saved the amendment”.
Justice Nariman said, “Justice Joseph has given a partly dissenting verdict and has struck down the entire 97th constitutional amendment”.
The 97th constitutional amendment, which dealt with issues related to effective management of co-operative societies in the country was passed by Parliament in December 2011 and had come into effect from February 15, 2012.
The change in the Constitution has amended Article 19(1)(c) to give protection to the cooperatives and inserted Article 43 B and Part IX B, relating to them.
While Article 19(1)(c) guarantees freedom to form association or unions or cooperative societies subject to certain restrictions, Article 43 B says that States shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies.
The Part IX B of the Constitution inserted by 97th amendment deals with incorporation, terms of members of board and its office bearers and effective management of cooperative societies.
The Centre has contended that the provision does not denude states of their power to enact laws with regard to cooperatives.
The apex court’s verdict came on the Centre’’s plea challenging the Gujarat High Court’’s 2013 decision striking down certain provisions of the 97th constitutional amendment while holding that Parliament cannot enact laws with regard to cooperative societies as it is a state subject.
The top court also examined a question whether the provision denuded states of their exclusive power to enact laws to deal with management of cooperative societies.