The Supreme Court struck down certain provisions of the Constitution (97th Amendment) Act, 2011.
97th Constitutional amendment :
Made right to form cooperative societies a part of fundamental right under Article 19(1)(c).
Introduced Part IX B to the Constitution, which laid down several stipulations for the state legislations governing cooperative societies.
Government arguments:
they were injecting ‘professionalism’ and autonomy into the functioning of the societies.
Lack of accountability by the members has led to poor services and low productivity.
Even elections are not held on time. Co-operatives need to run on “well-established democratic principles”
Court Judgement
co-operative societies come under the “exclusive legislative power” of State legislatures.
Part IX B, which consists of Articles 243ZH to 243ZT, has “significantly and substantially impacted” State legislatures’ “exclusive legislative power” over its co-operative sector under Entry 32 of the State List to over the co-operative sector.
the Amendment was passed without ratification from the States.
Court Judgement on Multi state cooperative:
the court did not strike down the portions of Part IXB of the Amendment concerning ‘Multi State Cooperative Societies’ due to the lack of ratification.
“When it comes to Multi State Co-operative Societies (MSCS) with objects not confined to one State, the legislative power would be that of the Union of India which is contained in Entry 44 List I (Union List).
It is declared that Part IXB of the Constitution is operative only insofar as it concerns multi-State cooperative societies both within the various States and in the Union Territories