whether Part IXB is non est for want of ratification by half of the States under the proviso to Article 368(2). The impugned judgment of the High Court has declared that the said constitutional amendment inserting Part IXB is ultra vires the Constitution of India for want of the requisite ratification under Article 368(2) proviso, which however will not impact amendments that have been made in Article 19(1)(c) and in inserting Article 43B in the Constitution of India

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.9108-9109 of 2014

UNION OF INDIA …APPELLANT

VERSUS

RAJENDRA N SHAH & ANR. …RESPONDENTS

WITH

CIVIL APPEAL NO. 2826 OF 2021

(@ SPECIAL LEAVE PETITION (CIVIL) NO.13329 OF 2018)

CIVIL APPEAL NO. 2825 OF 2021

(@ SPECIAL LEAVE PETITION (CIVIL) NO.13215 OF 2018)

CIVIL APPEAL NO.282 OF 2020

CIVIL APPEAL NO.281 OF 2020

CIVIL APPEAL NO. 2827 OF 2021

(@ SPECIAL LEAVE PETITION (CIVIL) NO.14227 OF 2020)

J U D G M E N T

R.F. Nariman, J.

1. Applications for intervention are allowed. Leave granted.

2. These appeals raise an important question as to the vires of the

Constitution (Ninety Seventh Amendment) Act, 2011 [the

“Constitution 97th Amendment Act”] which inter alia introduced

1

Part IXB under the chapter heading ‘The Co-operative Societies’.

The Constitution 97th Amendment Act was passed by the requisite

majority of the Lok Sabha on 27.12.2011 and the Rajya Sabha on

28.12.2011. The Presidential assent to the aforesaid Amendment

followed on 12.01.2012 and the said Amendment was published in

the Official Gazette of India on 13.01.2012, coming into force with

effect from 15.02.2012. The important question raised in these

petitions and decided by a division bench of the Gujarat High Court

by the impugned judgment dated 22.04.2013 is whether Part IXB is

non est for want of ratification by half of the States under the proviso

to Article 368(2). The impugned judgment of the High Court has

declared that the said constitutional amendment inserting Part IXB

is ultra vires the Constitution of India for want of the requisite

ratification under Article 368(2) proviso, which however will not

impact amendments that have been made in Article 19(1)(c) and in

inserting Article 43B in the Constitution of India.

3. The co-operatives movement in India can be legislatively traced to

two British Acts, namely, the Cooperative Societies Act, 1904 and

the Co-operative Societies Act, 1912. Under the Government of

India Act, 1919, the subject ‘co-operative societies’ was contained in

2

entry 13 of the Provincial list. This was continued by the

Government of India Act, 1935, ‘co-operative societies’ being

contained in entry 33 of the Provincial list. This was then further

continued by the Constitution of India, this time the same entry

falling within Schedule VII List II, i.e., the State List as a part of entry

32 thereof. It is therefore important at this stage to set out the

constitutional scheme insofar as it applies to co-operative societies

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

professional management of co-operative societies.

SEVENTH SCHEDULE

(Article 246)

List I—Union List

xxx xxx xxx

3

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, but not including universities.

xxx xxx xxx

List II—State List

xxx xxx xxx

32. Incorporation, regulation and winding up of corporations,

other than those specified in List I, and universities;

unincorporated trading, literary, scientific, religious and other

societies and associations; cooperative societies.

xxx xxx xxx

4. On 07.12.2004, a conference of ministers dealing with co-operatives

in the various states resolved to amend the Constitution to ensure

democratic, autonomous and professional functioning of cooperatives; to address key issues of empowerment of co-operatives

through voluntary formation, autonomous functioning, democratic

control and professional management; for regular and timely

conduct of elections, general body meetings and professional audit.

The meeting ended stating:

4

“The conference also noted that the central government has

taken a laudable step by enacting the Multi-State Cooperative Societies Act, 2002, conforming to the thrust areas

of reforms in co-operative legislation and has been widely

appreciated. The conference while appreciating the

initiative taken by the central government resolved that this

subject too should be considered by the high power

committee.

It was, therefore, resolved a high power committee would be

constituted by the Central Government consisting of

representatives of the State governments, concerned

Ministries of the central government, eminent cooperators

and other public officials to review the achievements during

the last 100 years and challenges before it and to suggest

ways and means to face them and to give a new direction to

movement. The constitution of the Committee and terms of

reference are to be decided by the Central Government.”

5. Pursuant to these minutes, and after various consultations by the

Centre with the State Governments, the Constitution (Ninety

Seventh Amendment) Act, 2011 was passed. The Statement of

Objects and Reasons for the aforesaid Constitution Amendment is

important and is set out hereunder:

“STATEMENT OF OBJECTS AND REASONS

The co-operative sector, over the years, has made

significant contribution to various sectors of national

economy and has achieved voluminous growth. However, it

has shown weaknesses in safeguarding the interests of the

members and fulfillment of objects for which these

institutions were organised. There have been instances

where elections have been postponed indefinitely and

nominated office bearers or administrators remaining in5

charge of these institutions for a long time. This reduces the

accountability of 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 principles and elections

held on time and in a free and fair manner. Therefore, there

is a need to initiate fundamental reforms to revitalize these

institutions in order to ensure their contribution in the

economic development of the country and to serve the

interests of members and public at large and also to ensure

their autonomy, democratic functioning and professional

management.

2. The "co-operative societies" is a subject enumerated in

Entry 32 of the State List of the Seventh Schedule of the

Constitution and the State Legislatures have accordingly

enacted legislations on co-operative societies. Within the

framework of State Acts, growth of co-operatives on large

scale was envisaged as part of the efforts for securing social

and economic justice and equitable distribution of the fruits

of development. It has, however, been experienced that in

spite of considerable expansion of co-operatives, 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

State Governments have been held at several occasions

and in the conferences of State Co-operative Ministers. A

strong need has been felt for amending the Constitution so

as to keep the co-operatives free from unnecessary outside

interferences and also to ensure, their autonomous

organisational set up and their democratic functioning.

3. The Central Government is committed to ensure that the

co-operative societies in the country function in a

democratic, professional, autonomous and economically

sound manner. With a view to bring the necessary reforms,

it is proposed to incorporate a new Part in the Constitution

6

so- as to provide for certain provisions covering the vital.

aspects of working of co-operative societies like democratic,

autonomous and professional functioning. A new article is

also proposed to be inserted in Part IV of the Constitution

(Directive Principles of State Policy) for the States to

endeavor to promote voluntary formation, autonomous

functioning, democratic control and professional

management of cooperative 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 of other co-operative

societies to make appropriate law, laying down the following

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 autonomous functioning;

(b) specifying the maximum number of directors of a cooperative society to be not exceeding twenty-one

members;

(c) providing for a fixed term of five years from the date

of election in respect of the elected members of the

board and its office bearers;

(d) providing for a maximum time limit of six months

during which a board of directors of co-operative society

could be kept 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

periodic reports of activities and accounts of cooperative societies;

7

(h) providing for the reservation of one seat for the

Scheduled Castes or the Scheduled Tribes and two

seats for women on the board of every co-operative

society, which have individuals as members from such

categories;

(i) providing for offences relating to co-operative

societies and penalties in respect of such offences.

4. It is expected that these provisions will not only ensure

the autonomous and democratic functioning of cooperatives, but also ensure the accountability of

management to the members and other stakeholders and

shall provide for deterrence for violation of the provisions of

the law.

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

(Emphasis supplied)

6. A 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 a person referred to as such

in article 243ZQ;

(b) “board” means the board of directors or the governing

body of a co-operative society, by whatever name called, to

which the direction and control of the management of the

affairs of a society is entrusted to;

8

(c) “co-operative society” means a society registered or

deemed to be registered under any law relating to cooperative societies for the time being in force in any State;

(d) “multi-State co-operative society” means a society with

objects not confined to one State and registered or deemed

to be registered under any law for the time being in force

relating to such cooperatives;

(e) “Office bearer” means a President, Vice-President,

Chairperson, Vice-Chairperson, Secretary or Treasurer, of a

co-operative society and includes any other person to be

elected by the board of any co-operative society;

(f) “Registrar” means the Central Registrar appointed by the

Central Government in relation to the multi-State cooperative societies and the Registrar for co-operative

societies appointed by the State Government under the law

made by the Legislature of a State in relation to co-operative

societies;

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

State;

(h) “State level co-operative society” means a co-operative

society having its area of operation extending to the whole

of a State and defined as such in any law made by the

Legislature of a State.

243ZI. Incorporation of co-operative societies. —

Subject to the provisions of this Part, the Legislature of a

State may, by law, make provisions with respect to the

incorporation, regulation and winding up of co-operative

societies based on the principles of voluntary formation,

democratic member-control, member-economic participation

and autonomous functioning.

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

office bearers. —

9

(1) The board shall consist of such number of directors as

may be provided by the Legislature of a State, by law:

Provided that the maximum number of directors of a cooperative society shall not exceed twenty-one:

Provided further that the Legislature of a State shall, by law,

provide for the reservation of one seat for the Scheduled

Castes or the Scheduled Tribes and two seats for women on

board of every co-operative society consisting of individuals

as members and having members from such class of

category of persons.

(2) The term of office of elected members of the board and

its office bearers shall be five years from the date of election

and the term of office bearers shall be coterminous with the

term of the board:

Provided that the board may fill a casual vacancy on the

board by nomination out of the same class of members in

respect of which the casual vacancy has arisen, if the term

of office of the board is less than half of its original term.

(3) The Legislature of a State shall, by law, make provisions

for co-option of persons to be members of the board having

experience in the field of banking, management, finance or

specialisation in any other field relating to the objects and

activities undertaken by the co-operative society, as

members of the board of such society:

Provided that the number of such co-opted members shall

not exceed two in addition to twenty-one directors specified

in the first proviso to clause (1):

Provided further that such co-opted members shall not have

the right to vote in any election of the cooperative society in

their capacity as such member or to be eligible to be elected

as office bearers of the board:

10

Provided also that the functional directors of a co-operative

society shall also be the members of the board and such

members shall be excluded for the purpose of counting the

total number of directors 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 a State, the election of a board shall be

conducted before the expiry of the term of the board so as

to ensure that the newly elected members of the board

assume office immediately on the expiry of the term of the

office of members of the outgoing board. (2) The

superintendence, direction and control of the preparation of

electoral rolls for, and the conduct of, all elections to a cooperative society shall vest in such an authority or body, as

may be provided by the Legislature of a State, by law:

Provided that the Legislature of a State may, by law, provide

for the procedure 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

time being in force, no board shall be superseded or kept

under supersession for a period exceeding six months:

Provided that the board may be superseded or kept under

suspension in a 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 the

interests of the co-operative society or its members; or

11

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

the board; or

(v) the authority or body as provided by the Legislature

of a State, by law, under clause (2) of article 243ZK, has

failed to conduct elections in accordance with the

provisions of the State Act:

Provided further that the board of any such co-operative

society shall not be superseded or kept under suspension

where there is no Government shareholding or loan or

financial assistance or any guarantee by the Government:

Provided also that in case of a co-operative society carrying

on the business of banking, the provisions of the Banking

Regulation Act, 1949 shall also apply:

Provided also that in case of a co-operative society, other

than a multi- State co-operative society, carrying on the

business of banking, the provisions of this clause shall have

the effect as if for the words “six months”, the words “one

year” had been substituted.

(2) In case of supersession of a board, the administrator

appointed to manage the affairs of such cooperative society

shall arrange for conduct of elections within the period

specified in clause (1) and hand over the management to

the elected board.

(3) The Legislature of a State may, by law, make provisions

for the conditions of service of the administrator.

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

(1) The Legislature of a State may, by law, make provisions

with respect to the maintenance of accounts by the cooperative societies and the auditing of such accounts at

least once in each financial year.

12

(2) The Legislature of a State shall, by law, lay down the

minimum qualifications and experience of auditors and

auditing firms that shall be eligible for auditing accounts of

the co-operative societies.

(3) Every co-operative society shall cause to be audited by

an auditor or auditing firms referred to in clause (2)

appointed by the general body of the co-operative society:

Provided that such auditors or auditing firms shall be

appointed from a panel approved by a State Government or

an authority authorised by the State Government in this

behalf.

(4) The accounts of every co-operative society shall be

audited within six months of the close of the financial year to

which such accounts relate.

(5) The audit report of the accounts of an apex co-operative

society, as may be defined by the State Act, shall be laid

before the State Legislature in the manner, as may be

provided by the State Legislature, by law.

243ZN. Convening of general body meetings. —

The Legislature of a State may, by law, make provisions that

the annual general body meeting of every co-operative

society shall be convened within a period of six months of

close of the financial year to transact the business as may

be provided in such law.

243ZO. Right of a member to get information. —

(1) The Legislature of a State may, by law, provide for

access to every member of a co-operative society to the

books, information and accounts of the cooperative society

kept in regular transaction of its business with such

members.

13

(2) The Legislature of a State may, by law, make provisions

to ensure the participation of members of the management

of the co-operative society providing minimum requirement

of attending meetings by the members and utilising the

minimum level of services as may be provided in such law.

(3) The Legislature of a State may, by law, provide for cooperative education and training for its members.

243ZP. Returns. —

(1) Every co-operative society shall file returns, within six

months of the close of every financial year, to the authority

designated by the 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

body of the co-operative society;

(d) list of amendments to the bye-laws of the cooperative society, if any;

(e) declaration regarding date of holding of its general

body meeting and conduct of elections when due; and

(f) any other information required by the Registrar in

pursuance of any of the provisions of the State Act.

243ZQ. Offences and penalties. —

(1) The Legislature of a State may, by law, make provisions

for the offences relating to the co-operative societies and

penalties for such offences.

14

(2) A law made by the Legislature of a State under clause

(1) shall include the commission of the following act or

omission as offences, namely:—

(a) a co-operative society or an officer or member

thereof wilfully makes a false return or furnishes false

information, or any person wilfully not furnishes any

information required from him by a person authorised in

this behalf under the provisions of the State Act;

(b) any person wilfully or without any reasonable excuse

disobeys any summons, requisition or lawful written

order issued under the provisions of the State Act;

(c) any employer who, without sufficient cause, fails to

pay to a co-operative society amount deducted by him

from its employee within a period of fourteen days from

the date on which such deduction is made;

(d) any officer or custodian who wilfully fails to handover

custody of books, accounts, documents, records, cash,

security and other property belonging to a co-operative

society of which he is an officer or custodian, to an

authorised person; and

(e) whoever, before, during or after the election of

members of 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 cooperative societies subject to the modification that any

reference to “Legislature of a State”, “State Act” or State

Government” shall be construed as a reference to

“Parliament”, “Central Act” or “the Central Government”

respectively.

243ZS. Application to Union territories. —

15

The provisions of this Part shall apply to the Union territories

and shall, in their application to a Union territory, having no

Legislative Assembly as if the references to the Legislature

of a State were a reference to the administrator thereof

appointed under article 239 and, in relation to a Union

territory having a Legislative Assembly, to that Legislative

Assembly:

Provided that the President may, by notification in the

Official Gazette, direct that the provisions of this Part shall

not apply to any Union territory or part thereof as he may

specify in the notification.

243ZT. Continuance of existing laws.—

Notwithstanding anything in this Part, any provision of any

law relating to co-operative societies in force in a State

immediately before the commencement of the Constitution

(Ninety-seventh Amendment) Act, 2011, which is

inconsistent with the provisions of this Part, shall continue to

be in force until amended or repealed by a competent

Legislature or other competent authority or until the

expiration of one year from such commencement, whichever

is less.]

7. As stated hereinabove, in the public interest, a Writ Petition being

WP No. 166 of 2012 filed before the Gujarat High Court succeeded

vide the impugned judgment dated 22.04.2013, by which Part IXB

was declared to be ultra vires for want of ratification by the State

Legislatures under 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, that

16

the Constitution 97th Amendment Act sought to achieve vital social

and economic objectives in regard to the functioning of co-operative

societies in India, which is a sector that has made a significant

contribution to the economy of the nation. He referred to and relied

upon Article 243ZR to state that, in reality, Part IXB is in two

separate parts – one dealing with multi-State co-operative societies

which have ramifications beyond merely one State, and cooperative societies which exist and operate within a particular state.

He argued that even though there was no challenge insofar as

multi-State co-operative societies were concerned, the entirety of

Part IXB has been struck down, throwing out the baby with the bath

water. The same is true for Part IXB as applicable to Union

territories which is clear from a reading of Article 243ZS. He then

argued that as many as 17 out of 28 States have, after the 97th

Amendment, already enacted legislative measures in conformity

with Part IXB and that therefore more than half of the States had, in

effect, accepted and applied the provisions of Part IXB. What is

also of significance is that the Constitution 97th Amendment was

preceded by a detailed consultation with the State Governments as

17

a result of which no State Government has come forward to

challenge the same. The learned Attorney General, on a reading of

several judgments of this Court dealing with ratification of

constitutional amendments, argued that there is no change either

directly or in effect to Article 246(3) of the Constitution of India, from

which the legislative power of the States contained in List II of the

7th Schedule flows, or in Entry 32 of List II of the 7th Schedule. In

point of fact, a reading of Part IXB would show that no additional

legislative power 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. Union of India, 1952 SCR 89; Sajjan Singh

v. State of Rajasthan, (1965) 1 SCR 933 and Kihoto Hollohan v.

Zachillhu, 1992 Supp (2) SCC 651, the learned Attorney General

relied strongly upon observations in the dissenting judgments of

Wanchoo, J. Ramaswamy, J. and Bachawat, J. in Golak Nath v.

State of Punjab, (1967) 2 SCR 762. According to him, the

examples given by Wanchoo, J. are apposite. On the other hand,

Kihoto Hollohan’s case (supra) is distinguishable in that, para 7 of

18

the 10th Schedule of the Constitution had the direct effect of

curtailing the operation of Articles 136, 226 and 227 of the

Constitution and, by barring the jurisdiction of all courts including the

Supreme Court and the High Courts, in regard to all matters

covered by the 10th Schedule, this Court held that ratification would

be necessary. The learned Attorney General then argued that the

additional finding of the Division Bench that the Constitutional

Amendment violated the basic structure of the Constitution, in that it

tinkered with the federal structure of the Constitution, was wholly

uncalled for and unwarranted inasmuch as the real issue in this

case is one and one only, as to whether ratification is or is not

necessary. If it be held that ratification is necessary, then it is

unnecessary to fall back upon basic structure. Likewise, if it is held

that ratification would not be necessary, then the Constitutional

Amendment, which in fact strengthens the basic structure of the

Constitution in streamlining the 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

societies cannot be impacted without following ratification, multi19

State co-operative societies, which have ramifications beyond one

state can be held to be covered by Part IXB, as would Union

territories, and that on applying the aforesaid doctrine, Part IXB

ought to be upheld, at least insofar as the multi-State co-operative

societies are concerned. He has cited a number of judgments to

buttress his submissions which will be reflected in this judgment.

10. Shri Prakash Jani, learned senior advocate appearing on behalf of

the Mehsana District Co-operative Milk Producers Union in Civil

Appeal No. 282 of 2020 supported the arguments of the learned

Attorney General. In addition, he argued that it must never be

forgotten that while inserting Part IXB into the Constitution of India,

Parliament has exercised its ‘constituent’ power and not ‘legislative’

power. Read with Article 245 of the Constitution of India, it would

then be clear that since the legislative power of the States in Article

246(3) is subject to the provisions of the Constitution of India, the

legislative head ‘co-operative societies’ contained in Entry 32, List II

of the 7th Schedule is now being made subject to Part IXB which is a

part of the Constitution of India. He argued that Parliament in its

constituent capacity can deal with State subjects, and relied upon

20

the insertion of Article 21A by Constitution (Eighty Sixth

Amendment) Act, 2002. He then argued that as a matter of fact,

Part IXB read with Article 43B enhances the basic structure of the

Constitution and relied strongly upon the judgment in Vipulbhai M.

Chaudhary v. Gujarat Coop. Milk Mktg. Federation Ltd., (2015) 8

SCC 1 to demonstrate that this judgment, though not dealing with

the constitutional validity of the 97th Amendment, yet held that the

said Amendment is a great step forward in bringing uniformity and

order to the co-operatives movement in India.

11. Shri Masoom K. Shah, learned counsel appearing for the

Respondent No.1 in Civil Appeal No. 9108-9109 of 2014, has made

an impassioned plea that the donee of a limited amending power

cannot do indirectly what it is not permitted to do directly. According

to him, a coach-and-four is driven into the principle of federalism as

understood by our Constitution, by curtailing/restricting the State’s

legislative powers contained in Entry 32 List 2, 7th Schedule.

According to the learned counsel, a careful reading of Part IXB of

the Constitution would show that the unfettered power of the State

legislatures prior to the amendment has now been fettered by the

provisions of Part IXB in several material particulars; for example,

21

the fixation of the maximum number of directors of 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 exception after

exception to Entry 32 thereby carving out of Entry 32 a number of

matters which otherwise were exclusively within the domain of the

State Legislatures. He relied strongly upon Articles 243ZI & 243ZT,

making it clear that there is a direct assault on Entry 32, List II of the

7

th Schedule inasmuch as after one year, all State legislations that

are contrary to the provisions of Part IXB are of no effect, and that

an affirmative obligation is cast upon the States to enact legislation

only in accordance with the restrictions contained in Part IXB. He

also strongly relied upon the very judgments cited by the learned

Attorney General to argue that, in effect, as a direct inroad is made

into Article 246(3) and Entry 32 List 2, such amendment would have

to be struck down for want of ratification as it impacts a very

important part of the Constitution, namely, the federal structure and

the distribution of legislative powers between the Union and the

States. He also placed strong reliance on Builders' Assn. of India

22

v. Union of India, (1989) 2 SCC 645, and a passage from Seervai’s

Constitutional Law of India to argue that even if no legislative power

is transferred qua co-operative societies from the States to the

Union, yet the curtailment (or expansion) of a legislative field which

pertains exclusively to the States and which impacts federalism

would certainly amount to a “change” both in Article 246(3) and in

the legislative lists and would thus require ratification. For this

purpose, he also strongly relied upon para 21 of K.

Damodarasamy Naidu & Bros. v. State of T.N., (2000) 1 SCC

521. He then countered the learned Attorney General’s argument

with reference to Cellular Operators Assn. of India v. TRAI,

(2016) 7 SCC 703 (para 57), to argue that even if 17 States

thereafter amend their laws in furtherance of the Constitutional

Amendment, this would make no difference to the constitutional

position if in fact the requisite ratification under Article 368(2)

proviso is lacking. The validity of a constitutional amendment does

not depend upon whether a State government accepts it or whether

a State government challenges it. He then went on to make two

further arguments insofar as multi-State co-operative societies are

23

concerned. First and foremost, given the tests of severability, he

argued that multi-State co-operative societies are inextricably

entwined with co-operative societies and the 97th Constitution

Amendment would never have been enacted for multi-State cooperative societies alone. Even otherwise, the challenge made in

the Writ Petition was to the entirety of Part IXB and the part relating

to multi-State co-operative societies, not being severable, the

entirety of Part IXB has correctly been held to be unconstitutional by

the impugned judgment. He also argued that if this Constitutional

Amendment is allowed to pass constitutional muster without

ratification, there would be no end to further amendments which

would then indirectly rob the States of their legislative powers,

changing a quasi-federal state into a unitary one.

12. He then argued a point that was neither raised in the pleadings nor

in arguments in the High Court. He submitted that even qua MultiState Co-operative Societies, since a change has been made in

Entry 44 List I which contains the power to legislate qua Multi-State

Co-operative Societies, the width of the Entry is curtailed by Part

IXB of the Constitution, which would, therefore, in any case require

ratification by the States. To this contention, the learned Attorney

24

General replied by submitting that it is only those Entries such as

Entry 2A of List I (referred to in Entry 2 which is subject to Entry 2A)

that would be covered by the proviso 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-federal structure of the Constitution.

13. Smt. Ritika Sinha, learned counsel appearing for the Intervenor in

IA No. 3/2014 in CA Nos. 9108-9109/2014, stressed the language of

Article 243ZI and 243ZT. According to her, these Articles make it

clear that the States’ legislative competence has expressly been

made subject to the provisions of Part IXB, thereby engrafting an

exception, directly, to Entry 32 of List II. Also, the non-obstante

clause in Article 243ZT would make it clear that State legislation that

has been enacted under a plenary power has now been edged out

to make way for the provisions of Part IXB, which have to be

compulsorily enacted by State legislatures in the place of earlier

State legislations to the contrary. For this purpose, she relied upon

paras 26 and 27 of Vipulbhai M. Chaudhary v. Gujarat Coop.

Milk Mktg. Federation Ltd. (supra). She then relied upon

passages in Sajjan Singh (supra) and Wanchoo, J’s judgment in

Golak Nath (supra) to argue that even if the stringent tests laid

25

down therein are to be applied, they would apply on the facts of this

case, inasmuch as a direct and substantial inroad has been made

into Entry 32 List II of the 7th Schedule. She concluded by relying

upon D.C. Wadhwa v. State of Bihar, (1987) 1 SCC 378 (para 7),

by submitting that what cannot be achieved directly cannot now be

achieved indirectly by means of inserting Part IXB to the

Constitution of India. Shri Maruthi Rao, learned counsel for the

Intervenor in IA No. 4/2014 CA Nos. 9108-9109/2014, broadly

supported the submissions made by Shri Shah and Ms. Sinha.

14. Having heard learned counsel for all the parties, it is first important

to advert to the constitutional scheme of legislative relations

between the Union of India and the States. This is laid down in Part

IXB, Chapter I in Articles 245 and 246 as follows: -

PART XI

RELATIONS BETWEEN THE UNION AND THE STATES

CHAPTER I.—LEGISLATIVE RELATIONS

Distribution of Legislative Powers

245. Extent of laws made by Parliament and by the

Legislatures of States. —

26

(1) Subject to the provisions of this Constitution, Parliament

may make laws for the whole or any part of the territory of

India, and the Legislature of a State may make laws for the

whole or any part of the State.

(2) No law made by Parliament shall be deemed to be

invalid on the ground that it would have extraterritorial

operation.

246. Subject-matter of laws made by Parliament and by

the Legislatures of States. —

(1) Notwithstanding anything in clauses (2) and (3),

Parliament has exclusive power to make laws with respect

to any of the matters enumerated in List I in the Seventh

Schedule (in this Constitution referred to as the “Union

List”).

(2) Notwithstanding anything in clause (3), Parliament, and,

subject to clause (1), the Legislature of any State 1*** also,

have power to make laws with respect to any of the matters

enumerated in List III in the Seventh Schedule (in this

Constitution referred to as the “Concurrent List”).

(3) Subject to clauses (1) and (2), the Legislature of any

State has exclusive power to make laws for such State or

any part thereof with respect to any of the matters

enumerated in List II in the Seventh Schedule (in this

Constitution referred to as the “State List”).

(4) Parliament has power to make laws with respect to any

matter for any part of the territory of India not included 2 [in

a State] notwithstanding that such matter is a matter

enumerated in the State List.

15. A cursory reading of these Articles would show that whereas

Parliament may make laws for the whole or any part of the territory

27

of India, the legislation of a State may make laws for the whole or

any part of the State. Article 246 then goes on to refer to laws with

respect to any of the matters enumerated in 3 Lists contained in the

7th schedule to the Constitution of India. List I contains subjects or

topics on which Parliament has exclusive power to make laws; List

III in the Concurrent List contains topics on which both Legislatures

may make laws; and List II, with which we are directly concerned,

gives the States exclusive power to make laws for such State or

part thereof with respect to any of the matters contained therein. So

far as Union territories are concerned, Parliament is given power

under Article 246(4) without constraint as to subject matter as it may

also legislate with respect to topics covered by List II.

16. In a catena of judgments of this Court, it has been declared that

whereas Article 246 contains the power to legislate, the topics of

legislation contained in the three Lists are described as ‘fields of

legislation’. 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

Lists are not ‘powers’ of legislation, but ‘fields’ of legislation.

The power to legislate is given by Article 246 and other

Articles of the Constitution” (at pg. 184)

28

17. Dealing with the non-obstante clause contained in Articles 246(1)

and 246(2) and the ‘subject to’ clause contained in Article 246(3),

this Court, following Federal Court and Privy Council judgments,

has held that these non-obstante and ‘subject to’ clauses lay down

the doctrine of federal supremacy, which can be stated thus: topics

in the State List have to give way to topics contained in the Union or

Concurrent List in the event of an overlap between entries in these

lists. Such overlap is not to be easily found – on the contrary, it is

only in the case of an inevitable and irreconcilable conflict that the

width of an entry in the State List can be curtailed by an overlap with

an entry in either List 1 or List 3. Thus, in Kerala SEB v. Indian

Aluminium Co. Ltd., (1976) 1 SCC 466, this Court held: -

“5. In view of the provisions of Article 254, the power of

Parliament to legislate in regard to matters in List III, which

are dealt with by clause (2), is supreme the Parliament has

exclusive power to legislate with respect to matters in List 1.

The State Legislature has exclusive power to legislate with

respect to matters in List II. But this is subject to the

provisions of clause (1) [leaving out for the moment the

reference to clause (2)]. The power of Parliament to

legislate with respect to matters included in List I is supreme

notwithstanding anything contained in clause (3) [again

leaving out of consideration the provisions of clause (2)].

Now what is the meaning of the words “notwithstanding” in

clause (1) and “subject to” in clause (3)? They mean that

where an entry is in general terms in List II and part of that

29

entry is in specific terms in List I, the entry in List I takes

effect notwithstanding the entry in List II. This is also on the

principle that the “special” excludes the “general” and the

general entry in List II is subject to the special entry in List 1.

For instance, though house accommodation and rent control

might fall within either the State list or the concurrent list,

Entry 3 in List I of Seventh Schedule carves out the subject

of rent control and house accommodation in Cantonments

from the general subject of house accommodation and rent

control (see Indu Bhusan v. Sundari Devi [(1969) 2 SCC

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 should be made to decide in which list a particular

legislation falls. For deciding under which entry a particular

legislation falls the theory of “pith and substance” has been

evolved by the courts. If in pith and substance a legislation

falls within one list or the other but some portion of the

subject-matter of that legislation incidentally trenches upon

and might come to fall under another list, the Act as a whole

would be valid notwithstanding such incidental trenching.

These principles have been laid down in a number of

decisions.”

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 supremacy viz. that in case of inevitable conflict

between Union and State powers, the Union power as

enumerated in List I shall prevail over the State power as

enumerated in Lists II and III, and in case of overlapping

between Lists II and III, the former shall prevail. But the

principle of federal supremacy laid down in Article 246 of the

Constitution cannot be resorted to unless there is an

“irreconcilable” conflict between the entries in the Union and

30

State Lists. In the case of a seeming conflict between the

entries in the two Lists, the entries should be read together

without giving a narrow and restricted sense to either of

them. Secondly, an attempt should be made to see whether

the two entries cannot be reconciled so as to avoid a conflict

of jurisdiction. It should be considered whether a fair

reconciliation can be achieved by giving to the language of

the Union Legislative List a meaning which, if less wide than

it might in another context bear, is yet one that can properly

be given to it and equally giving to the language of the State

Legislative List a meaning which it can properly bear. The

non obstante clause in Article 246(1) must operate only if

such reconciliation should prove impossible. Thirdly, no

question of conflict between the two Lists will arise if the

impugned legislation, by the application of the doctrine of

‘pith and substance’ appears to fall exclusively under one

list, and the encroachment upon another list is only

incidental.

(at page 165)

19. Likewise, in Goodricke Group Ltd. v. State of W.B., 1995 Supp

(1) SCC 707, this Court reiterated this constitutional scheme as

follows:

12. The scheme of the entries in the three lists in the

Seventh Schedule is set out in the decision of this Court in

M.P.V. Sundararamier & Co. v. State of A.P. [1958 SCR

1422] and needs no reiteration. Similarly, the proposition

that the several entries are legislative heads and must be

construed liberally is too well-settled to require any

elaboration. It is equally well-recognised that where there

are three lists containing a large number of entries, there is

bound to be some overlapping among them. In such a

situation, the rule of pith and substance has to be applied to

determine to which entry does a given piece of legislation

relate. Once it is so determined, any incidental trenching on

31

the field reserved to the other legislature is of no

consequence. Of course, the extent of encroachment may

be an element in determining whether the Act is a

colourable piece of legislation. Yet another relevant principle

is the one enunciated in Union of India v. H.S. Dhillon

[(1971) 2 SCC 779] where the legislative competence of

Parliament to enact a law is questioned, all that one has to

ask is whether it relates to any of the entries in List II and if it

does not, no further question need be asked and

Parliament's legislative competence must be upheld. This

decision also explains why did the Founding Fathers find it

necessary to have three lists. In International Tourist Corpn.

v. State of Haryana [(1981) 2 SCC 318] however, a caution

has been administered that before exclusive legislative

competence can be claimed for Parliament, the legislative

incompetence of the State Legislature must be clearly

established. In S.R. Bommai v. Union of India [(1994) 3 SCC

1] one of us (B.P. Jeevan Reddy, J.) cautioned that in our

constitutional system, where all important legislative heads

are assigned to Centre, the courts should be slow to adopt

any interpretation which tends to deprive the States of the

few powers assigned to them under the Constitution.

20. In Govt. of A.P. v. J.B. Educational Society, (2005) 3 SCC 212,

the aforesaid was reiterated as follows:

9. Parliament has exclusive power to legislate with respect

to any of the matters enumerated in List I, notwithstanding

anything contained in clauses (2) and (3) of Article 246. The

non obstante clause under Article 246(1) indicates the

predominance or supremacy of the law made by the Union

Legislature in the event of an overlap of the law made by

Parliament with respect to a matter enumerated in List I and

a law made by the State Legislature with respect to a matter

enumerated in List II of the Seventh Schedule.

32

10. There is no doubt that both Parliament and the State

Legislature are supreme in their respective assigned fields.

It is the duty of the court to interpret the legislations made by

Parliament and the State Legislature in such a manner as to

avoid any conflict. However, if the conflict is unavoidable,

and the two enactments are irreconcilable, then by the force

of the non obstante clause in clause (1) of Article 246, the

parliamentary legislation would prevail notwithstanding the

exclusive power of the State Legislature to make a law with

respect to a 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

relate to the demarcation of legislative powers between

Parliament and the State Legislatures. Under clause (1),

notwithstanding anything contained in clauses (2) and (3),

Parliament has been given the exclusive power to make

laws with respect to any of the matters enumerated in List I

or the Union List in the Seventh Schedule. Clause (2)

empowers Parliament and the State Legislatures subject to

the power of Parliament under sub-clause (1), to make laws

with respect to any of the matters enumerated in List III in

the Seventh Schedule described in the Constitution as the

“Concurrent List” notwithstanding anything contained in subclause (3). Under clause (3) the State Legislatures have

been given exclusive powers to make laws in respect of

matters enumerated in List II in the Seventh Schedule

described as the “State List” but subject to clauses (1) and

(2). The three lists while enumerating in detail the legislative

subjects carefully distribute the areas of legislative authority

between Parliament (List I) and the State (List II). The

supremacy of Parliament has been provided for by the non

obstante clause in Article 246(1) and the words “subject to”

in Articles 246(2) and (3). Therefore, under Article 246(1) if

any of the entries in the three lists overlap, the entry in List I

33

will prevail. Additionally, some of the entries in the State List

have been made expressly subject to the power of

Parliament to legislate either under List I or under List III.

Entries in the lists of the Seventh Schedule have been

liberally interpreted; nevertheless courts have been wary of

upsetting this balance by a process of interpretation so as to

deprive any entry of its content and reduce it to “useless

lumber”. The use of the word “exclusive” in clause (3)

denotes that within the legislative fields contained in List II,

the State Legislatures exercise authority as plenary and

ample as Parliament's.

(Emphasis supplied)

22. In State of W.B. v. Committee for Protection of Democratic

Rights, (2010) 3 SCC 571, this Court held:

25. The non obstante clause in Article 246(1) contemplates

the predominance or supremacy of the Union Legislature.

This power is not encumbered by anything contained in

clauses (2) and (3) for these clauses themselves are

expressly limited and made subject to the non obstante

clause in Article 246(1). The State Legislature has exclusive

power to make laws for such State or any part thereof with

respect to any of the matters enumerated in List II in the

Seventh Schedule and it also has the power to make laws

with respect to any matters enumerated in List III

(Concurrent List). The exclusive power of the State

Legislature to legislate with respect to any of the matters

enumerated in List II has to be exercised subject to clause

(1) i.e. the exclusive power of Parliament to legislate with

respect to matters enumerated in List I. As a consequence,

if there is a conflict between an entry in List I and an entry in

List II, which is not capable of reconciliation, the power of

Parliament to legislate with respect to a matter enumerated

in List II must supersede pro tanto the exercise of power of

the State Legislature.

34

26. Both Parliament and the State Legislature have

concurrent powers of legislation with respect to any of the

matters enumerated in List III. 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 supremacy viz. that

in case of inevitable conflict between the Union and State

powers, the Union power as enumerated in List I shall

prevail over the State power as enumerated in Lists II and III

and in case of an overlapping between Lists II and III, the

latter shall prevail.

27. Though, undoubtedly, the Constitution exhibits

supremacy of Parliament over the State Legislatures, yet

the principle of federal supremacy laid down in Article 246 of

the Constitution cannot be resorted to unless there is an

irreconcilable direct conflict between the entries in the Union

and the State Lists. Thus, there is no quarrel with the broad

proposition that under the Constitution there is a clear

demarcation of legislative powers between the Union and

the States and they have to confine themselves within the

field entrusted to them. It may also be borne in mind that the

function of the lists is not to confer powers; they merely

demarcate the legislative field. But the issue we are called

upon to determine is that when the scheme of the

Constitution prohibits encroachment by the Union upon a

matter which exclusively falls within the domain of the State

Legislature, like public order, police, etc., can the third organ

of the State viz. the judiciary, direct CBI, an agency

established by the Union to do something in respect of a

State subject, without the consent of the State Government

concerned?

23. So far as co-operative societies are concerned, it can be seen that

it is entirely a matter for the States to legislate upon, being the last

subject matter mentioned in Entry 32 List II. At this stage, it is

35

important to note that Entry 43 of List I, which deals with

incorporation, regulation and winding up of trading corporations

including banking, insurance and financial corporations expressly

excludes co-operative societies from its ambit. Entry 44 List I,

which is wider than Entry 43 in that it is not limited to trading

corporations, speaks of corporations with objects not confined to

one State. This Court has therefore held, on a reading of these

entries, that when it comes to Multi State Co-operative Societies

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.

Thus, in Daman Singh v. State of Punjab, (1985) 2 SCC 670, this

Court laid down: -

7. …. … According to Mr Ramamurthi the express exclusion

of cooperative societies in Entry 43 of List I and the express

inclusion of cooperative societies in Entry 32 of List II

separately and apart from but along with corporations other

than those specified in List I and universities, clearly

indicated that the constitutional scheme was designed to

treat cooperative societies as institutions distinct from

corporations. On the other hand one would think that the

very mention of cooperative societies both in Entry 43 of List

I and Entry 32 of List II along with other corporations gave

an indication that the Constitution makers were of the view

that cooperative societies were of the same genus as other

corporations and all were corporations. In fact the very

express exclusion of cooperative societies from Entry 43 of

36

List I is indicative of the view that but for such exclusion,

cooperative societies would be comprehended within the

meaning of expression “corporations”.

24. Likewise, in Apex Cooperative Bank of Urban Bank of

Maharashtra & Goa Ltd. v. Maharashtra State Cooperative Bank

Ltd., (2003) 11 SCC 66, this Court delineated the two separate

spheres relating to multi-State co-operative societies and cooperative societies as follows: -

25. Another aspect which must be noticed is that in the

Constitution of India, the subject pertaining to cooperative

societies is in the State List i.e. Entry 32 of List II of

Schedule VII. The Union List has Entry 44 of List I of

Schedule VII which deals with corporations. In this case we

are not concerned with the validity of a Central legislation

and thus do not deal with that aspect. For purpose of the

judgment we will take it that a cooperative society with

objects not confined to one State would fall within the term

corporation, and thus a Central legislation may be saved.

However, from the constitutional provisions it is clear that

matters pertaining to cooperative societies are in the State

List. Thus many States have enacted laws relating to

cooperative societies. We have not seen other Acts.

However, as this case concerns a society in Maharashtra,

the Maharashtra Cooperative Societies Act was shown to

us. Significantly, this law does not define a cooperative

society. It did not need to, as a society registered under it

would be automatically covered. The need to define a

cooperative society arises only in a Central legislation which

does not cover all cooperative societies and thus needs to

indicate to which society it applies.

25. Likewise, in Thalappalam Service Coop. Bank Ltd. v. State of

37

Kerala, (2013) 16 SCC 82, this Court held:

26. The cooperative society is a State subject under

Schedule VII List II Entry 32 to the Constitution of India.

Most of the States in India enacted their own Cooperative

Societies Act with a view to provide for the orderly

development of the cooperative sector in the State to

achieve the objects of equity, social justice and economic

development, as envisaged in the directive principles of

State policy, enunciated in the Constitution of India. For

cooperative societies working in more than one State, the

Multi-State Cooperative Societies Act, 1984 was enacted by

Parliament under Schedule VII List I Entry 44 of the

Constitution. The cooperative society is essentially an

association or an association of persons who have come

together for a common purpose of economic development

or for mutual help.

26. It may thus be seen that there is no overlap whatsoever so far as

the subject ‘co-operative societies’ is concerned. Co-operative

societies as a subject matter belongs wholly 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, is exclusively within the ken of

Parliament. This being the case, it may safely be concluded, on the

facts of this case, that there is no overlap and hence, no need to

apply the federal supremacy principle as laid down by the

judgments of this court. What we are therefore left with is the

38

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. In fact, in K. Damodarasamy

Naidu & Bros. v. State of T.N., (2000) 1 SCC 521, this court held:

“21. Parliament, when exercising the powers to amend the

Constitution under Article 368, cannot and does not amend

State Acts. There is no other provision in the Constitution

which so permits and there is no judgment of this Court that

so holds. The power to make laws for the States in respect

of matters listed in List II in the Seventh Schedule is

exclusively that of the State Legislatures. …..”

(emphasis supplied)

27. At this stage it is important to refer to the power of amendment of

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 and

procedure therefor. —

(1) Notwithstanding anything in this Constitution, Parliament

may in exercise of its constituent power amend by way of

addition, variation or repeal any provision of this Constitution

in accordance with the procedure laid down in this article.

(2) An amendment of this Constitution may be initiated only

by the introduction of a Bill for the purpose in either House

of Parliament, and when the Bill is passed in each House by

a majority of the total membership of that House and by a

39

majority of not less than two-thirds of the members of that

House present and voting, it shall be presented to the

President who shall give his assent to the Bill and thereupon

the Constitution shall stand amended 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

article 279A or

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

of Part 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

Legislatures of not less than one-half of the States by

resolutions to that effect passed by those Legislatures

before the Bill making provision for such amendment is

presented to the President for assent.

xxx xxx xxx

28. It may be seen that Article 368(1) refers to Parliament, which may

exercise its “constituent power” to amend the constitution by way of

addition, variation or repeal of any provision of the Constitution. This

however has to be in accordance with the mandatory procedure laid

down in the Article.

40

29. So far as amendments that are made to any of the provisions of

the Constitution, save and except Articles like Article 4 which

expressly state that though the Constitution may be amended, no

such amendment shall be deemed to be an amendment of the

Constitution for the purpose of Article 368, all other articles of the

Constitution may be amended but only in accordance with the

procedure laid down in Sub-Article (2). So far so good. However, we

are concerned with the procedure when it comes to amending

certain specified articles/provisions in the proviso to Article 368(2).

Sub-clause (a) of the proviso refers to Articles 54 and 55 which deal

with the President of India, Articles 73 and 162 which deal with the

executive power of the Union and the State Governments, Article

241 which deals with High Courts for Union territories, and Article

279A which deals with the Goods and Services Tax Council. In this

case, we are not directly concerned with Sub-clause (a) of the

proviso.

30. Sub-clause (b) of the proviso is important and speaks of Chapter IV

of Part V which deals with the Union Judiciary consisting of the

Supreme Court of India, Chapter V of Part VI which deals with the

High Courts in the States, and Chapter I of Part XI which deals with

41

legislative relations between the Union and the States. We are

directly concerned with sub-clause (b) insofar as the impact of a

constitutional amendment on Article 246, which is part of Chapter I

of Part XI, is concerned.

31. Sub-clause (c) of the proviso then speaks of any change being

made in any of the lists in the 7th Schedule, which would certainly

include Entry 32 List 2 of the 7th Schedule, with which we are

directly concerned. Sub-clauses (d) and (e) refer to the

representation of the States in Parliament and a change to be made

in the provisions of Article 368 itself 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 shall

also be required to be ratified by the legislatures of not less than

one half of the States by resolution to that effect passed by those

legislatures before the bill making provision for such amendment is

presented to the President for assent. Unlike the 73rd and 74th

Constitution Amendments Acts, which inserted Part IX dealing with

Panchayats and Part IXA dealing with Municipalities, which

amendments were also ratified by not less than one half of the

42

States, the 97th Amendment which inserts the chapter dealing with

co-operative societies has not been so ratified. The question which

arises in this appeal is whether the addition of this chapter can 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 of

Parliament’s ‘constituent power’ referred to in Article 368(1). Several

judgments of this Court have held that though an amendment of the

Constitution is the exercise of constituent power which differs from

ordinary legislative power, such constituent power does not convert

Parliament into an original constituent assembly. Parliament being

the donee of a limited power may only exercise such power in

accordance with both the procedural and substantive limitations

contained in the Constitution of India. The procedural limitations are

contained in Sub-Article 2 of Article 368. The substantive limitation

has been laid down by the celebrated decision of this Court in

Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225, by

which a constitutional amendment can only pass muster if it does

not damage the basic structure or essential features of the

Constitution.

34. Thus, in M. Nagaraj v. Union of India, (2006) 8 SCC 212, this

43

Court held:

103. The criterion for determining the validity of a law is the

competence of the law-making authority. The competence of

the law-making authority would depend on the ambit of the

legislative power, and the limitations imposed thereon as

also the limitations on the mode of exercise of the power.

Though the amending power in the Constitution is in the

nature of a constituent power and differs in content from the

legislative power, the limitations imposed on the constituent

power may be substantive as well as procedural.

Substantive limitations are those which restrict the field of

the exercise of the amending power. Procedural limitations

on the other hand are those which impose restrictions with

regard to the mode of exercise of the amending power. Both

these limitations touch and affect the constituent power

itself, disregard of which invalidates its exercise. (See

Kihoto Hollohan v. Zachillhu [1992 Supp (2) SCC 651].)

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

122. The scope and content of the words “constituent

power” expressly stated in the amended Article 368 came

up for consideration in Indira Gandhi case [1975 Supp SCC

1]. Article 329-A(4) was struck down because it crossed the

implied limitation of amending power, that it made the

controlled Constitution uncontrolled, that it removed all

limitations on the power to amend and that it sought to

eliminate the golden triangle of Article 21 read with Articles

14 and 19. (See also Minerva Mills case [(1980) 3 SCC

625].)

123. It is Kesavananda Bharati case [(1973) 4 SCC 225]

read with clarification of Khanna, J. in Indira Gandhi case

[1975 Supp SCC 1] which takes us one step forward,

namely, that fundamental rights are interconnected and

some of them form part of the basic structure as reflected in

Article 15, Article 21 read with Article 14, Article 14 read with

44

Articles 16(4), (4-A), (4-B), etc. Bharati [(1973) 4 SCC 225]

and Indira Gandhi [1975 Supp SCC 1] cases have to be

read together and if so read the position in law is that the

basic structure as reflected in the above articles provide a

test to judge the validity of the amendment by which laws

are included in the Ninth Schedule.

124. Since power to amend the Constitution is not unlimited,

if changes brought about by amendments destroy the

identity of the Constitution, such amendments would be

void. That is why when entire Part III is sought to be taken

away by a constitutional amendment by the exercise of

constituent power under Article 368 by adding the legislation

in the Ninth Schedule, the question arises as to the extent of

judicial scrutiny available to determine whether it alters the

fundamentals of the Constitution. Secularism is one such

fundamental, equality is the other, to give a few examples to

illustrate the point. It would show that it is impermissible to

destroy Articles 14 and 15 or abrogate or en bloc eliminate

these fundamental rights. To further illustrate the point, it

may be noted that Parliament can make additions in the

three legislative lists, but cannot abrogate all the lists as it

would abrogate the federal structure.

125. The question can be looked at from yet another angle

also. Can Parliament increase the amending power by

amendment of Article 368 to confer on itself the unlimited

power of amendment and destroy and damage the

fundamentals of the Constitution? The answer is obvious.

Article 368 does not vest such a power in Parliament. It

cannot lift all restrictions placed on the amending power or

free the amending power from all its restrictions. This is the

effect of the decision in Kesavananda Bharati case [(1973) 4

SCC 225] as a result of which secularism, separation of

power, equality, etc., to cite a few examples, would fall

beyond the constituent power in the sense that the

constituent power cannot abrogate these fundamentals of

the Constitution. Without equality the rule of law, secularism,

45

etc. would fail. That is why Khanna, J. held that some of the

fundamental rights like Article 15 form part of the basic

structure.

xxx xxx xxx

137. In Kesavananda Bharati case [(1973) 4 SCC 225] the

discussion was on the amending power conferred by

unamended Article 368 which did not use the words

“constituent power”. We have already noted the difference

between original power of framing the Constitution known as

constituent power and the nature of constituent power

vested in Parliament under Article 368. By addition of the

words “constituent power” in Article 368, the amending body,

namely, Parliament does not become the original

Constituent Assembly. It remains a Parliament under a

controlled Constitution. Even after the words “constituent

power” are inserted in Article 368, the limitations of doctrine

of basic structure would continue to apply to Parliament. It is

on this premise that clauses (4) and (5) inserted in Article

368 by the 42nd Amendment were struck down in Minerva

Mills case [(1980) 3 SCC 625].

36. A challenge to a constitutional amendment may, therefore, be on

procedural or substantive grounds as stated hereinabove. The

present case concerns itself with the procedural ground contained in

Article 368(2) proviso.

37. For Article 368(2) proviso to apply, various tests have been laid

down by this Court in some of its judgments. Since the tests laid

down in Sankari Prasad Singh (supra) and Sajjan Singh (supra)

are referred to in Kihoto Hollohan’s case (supra), we can refer to

this judgment in some detail.

46

38. The majority judgment of three learned Judges by Venkatachaliah,

J. sets out Paragraph 7 of the 10th Schedule of the Constitution of

India, which deals with disqualification on the ground of defection.

The Court was concerned with the constitutional validity of the 10th

Schedule on both substantive and procedural grounds. So far as the

procedural ground is concerned, Paragraph 7, which barred the

jurisdiction of all courts, was said to have required ratification by the

States and the 10th Schedule, not having been ratified by the States,

it was urged that the entire amendment would be infirm on this

count. Paragraph 7 of the 10th Schedule is set out in para 16 of the

judgment as follows: -

“7. Bar of jurisdiction of courts. — Notwithstanding

anything in this Constitution, no court shall have any

jurisdiction in respect of any matter connected with the

disqualification of a member of a House under this

Schedule.”

39. In para 24, several questions were set out which were required to

be answered by the Constitution Bench in that case. We are directly

concerned with questions (B) to (D) which read as follows: -

24. On the contentions raised and urged at the hearing the

questions that fall for consideration are the following:

xxx xxx xxx

47

(B) Having regard to the legislative history and evolution of

the principles underlying the Tenth Schedule, Paragraph 7

thereof in terms and in effect, brings about a change in the

operation and effect of Articles 136, 226 and 227 of the

Constitution of India and, therefore, the Bill introducing the

amendment attracts the proviso to Article 368(2) of the

Constitution and would require to be ratified by the

Legislature of the States before the Bill is presented for

Presidential assent.

(C) In view of the admitted non-compliance with the proviso

to Article 368(2) not only Paragraph 7 of the Tenth

Schedule, but also the entire Bill resulting in the Constitution

(Fifty-second Amendment) Act, 1985, stands vitiated and the

purported amendment is abortive and does not in law bring

about a valid amendment.

Or whether, the effect of such non-compliance invalidates

Paragraph 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

Legislature of the States is to invalidate Paragraph 7 alone,

the whole of the Tenth Schedule fails for non-severability.

Doctrine of severability, as applied to ordinary statutes to

promote their constitutionality, is inapplicable to

constitutional amendments. Even otherwise, having regard

to legislative intent and scheme of the Tenth Schedule, the

other provisions of the Tenth Schedule, after the severance

and excision of Paragraph 7, become truncated, and

unworkable and cannot stand and operate independently.

The Legislature would not have enacted the Tenth Schedule

without Paragraph 7 which forms its heart and core.

xxx xxx xxx

40. In dealing with whether Paragraph 7 would require ratification by

the States, this Court dealt with Sankari Prasad Singh (supra) and

48

Sajjan Singh (supra) as follows: -

58. In Sankari Prasad case [1952 SCR 89], the question

was whether the amendment introducing Articles 31-A and

31-B in the 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 in effect seek to make any change in Article 226 or in

Articles 132 and 136. Article 31-A aims at saving laws

providing for the compulsory acquisition by the State of

a certain kind of property from the operation of Article 13

read with other relevant articles in Part III, while Article

31-B purports to validate certain specified Acts and

Regulations already passed, which, but for such a

provision, would be liable to be impugned under Article

13. It is not correct to say that the powers of the High

Court under Article 226 to issue writs ‘for the

enforcement of any of the rights conferred by Part III’ or

of this Court under Articles 132 and 136 to entertain

appeals from orders issuing or refusing such writs are in

any way affected. They remain just the same as they

were before: only a certain class of case has been

excluded from the purview of Part III and the courts

could no longer interfere, not because their powers were

curtailed in any manner or to any extent, but because

there would be no occasion hereafter for the exercise of

their power in such cases.”

59. In Sajjan Singh case [(1965) 1 SCR 933] a similar

contention was raised against the validity of the Constitution

(Seventeenth Amendment) Act, 1964 by which Article 31-A

was again amended and 44 statutes were added to the

Ninth Schedule to the Constitution. The question again was

whether the amendment required ratification under the

proviso to Article 368. This Court noticed the question thus:

(SCR p. 940)

49

“The question which calls for our decision is: what would

be the requirement about making an amendment in a

constitutional provision contained in Part III, if as a result

of the said amendment, the powers conferred on the

High Courts under Article 226 are likely to be affected?”

60. Negativing the challenge to the amendment on the

ground of non-ratification, it was held: (SCR p. 944)

“… Thus, if the pith and substance test is applied to the

amendment made by the impugned Act, it would be

clear that Parliament is seeking to amend fundamental

rights solely with the object of removing any possible

obstacle in the fulfilment of the socio-economic policy in

which the party in power believes. If that be so, the

effect of the amendment on the area over which the

High Courts' powers prescribed by Article 226 operate,

is incidental and in the present case can be described

as of an insignificant order. The impugned Act does not

purport to change the provisions of Article 226 and it

cannot be said even to have that effect directly or in any

appreciable measure. That is why we think that the

argument that the impugned Act falls under the proviso,

cannot be sustained.”

61. The propositions that fell for consideration in Sankari

Prasad Singh [1952 SCR 89] and Sajjan Singh

cases [(1965) 1 SCR 933] are indeed different. There the

jurisdiction and power of the courts under Articles 136 and

226 were not sought to be taken away nor was there any

change brought about in those provisions either “in terms or

in effect”, since the very rights which could be adjudicated

under and enforced by the courts were themselves taken

away by the Constitution. The result was that there was no

area for the jurisdiction of the courts to operate upon.

Matters are entirely different in the context of Paragraph 7.

Indeed the aforesaid cases, by necessary implication

support the point urged for the petitioners. The changes in

Chapter IV of Part V and Chapter V of Part VI envisaged by

50

the proviso need not be direct. The change could be either

“in terms of or in effect”. It is not necessary to change the

language of Articles 136 and 226 of the Constitution to

attract the proviso. If in effect these articles are rendered

ineffective and made inapplicable where these articles could

otherwise have been invoked or would, but for Paragraph 7,

have operated there is ‘in effect’ a change in those

provisions attracting the proviso. Indeed this position was

recognised in Sajjan Singh case [(1965) 1 SCR 933] where

it was observed: (SCR p. 944)

“If the effect of the amendment made in the fundamental

rights on Article 226 is direct and not incidental and is of

a very significant order, different considerations may

perhaps arise.”

62. In the present case, though the amendment does not

bring in any change directly in the language of Articles 136,

226 and 227 of the Constitution, however, in effect

paragraph 7 curtails the operation of those articles

respecting matters falling under the Tenth Schedule. There

is a change in the effect in Articles 136, 226 and 227 within

the meaning of clause (b) of the proviso to Article 368(2).

Paragraph 7, therefore, attracts the proviso and ratification

was necessary. Accordingly, on Point (B), we hold:

“That having regard to the background and evolution of the

principles underlying the Constitution (Fifty-second

Amendment) Act, 1985, insofar as it seeks to introduce the

Tenth Schedule in the Constitution of India, the provisions of

Paragraph 7 of the Tenth Schedule of the Constitution in

terms and in effect bring about a change in the operation

and effect of Articles 136, 226 and 227 of the Constitution of

India and, therefore, the amendment would 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.

51

and Sharma,J., declared Paragraph 7 and indeed the entire 10th

Schedule to be constitutionally infirm as follows: -

156. Prima facie it would appear that Paragraph 7 does

seek to make a change in Articles 136, 226 and 227 of the

Constitution inasmuch as without Paragraph 7 in the Tenth

Schedule a decision of the Speaker/Chairman would be

amenable to the jurisdiction of the Supreme Court under

Article 136 and of the High Courts under Articles 226 and

227 as in the case of decisions as to other disqualifications

provided in clause (1) of Article 102 or 191 by the

President/Governor under Article 103 or 192 in accordance

with the opinion of the Election Commission which was the

scheme under the two earlier Bills which lapsed. However,

some learned counsel contended placing reliance on

Sankari Prasad Singh Deo v. Union of India [1952 SCR 89]

and Sajjan Singh v. State of Rajasthan [(1965) 1 SCR 933]

that the effect of such total exclusion of the jurisdiction of the

Supreme Court and the High Courts does not make a

change in Articles 136, 226 and 227. A close reading of

these decisions indicates that instead of supporting this

contention, they do in fact negative it.

157. In Sankari Prasad [1952 SCR 89] the challenge was to

Articles 31-A and 31 2DB inserted in the Constitution by the

Constitution (First Amendment) Act, 1951. One of the

objections was based on absence of ratification under

Article 368. While rejecting this argument, the Constitution

Bench held as under: (SCR p. 108)

“It will be seen that these articles do not either in terms

or in effect seek to make any change in Article 226 or in

Articles 132 and 136. Article 31-A aims at saving laws

providing for the compulsory acquisition by the State of

a certain kind of property from the operation of Article 13

read with other relevant articles in Part III, while Article

31-B purports to validate certain specified Acts and

52

Regulations already passed, which, but for such a

provision, would be liable to be impugned under Article

13. It is not correct to say that the powers of the High

Court under Article 226 to issue writs ‘for the

enforcement of any of the rights conferred by Part III’ or

of this Court under Articles 132 and 136 to entertain

appeals from orders issuing or refusing such writs are in

any way affected. They remain just the same as they

were before: only a certain class of case has been

excluded from the purview of Part III and the courts

could no longer interfere, not because their powers were

curtailed in any manner or to any extent, but because

there would be no occasion hereafter for the exercise of

their powers in such cases.”

158. The test applied was whether the impugned provisions

inserted by the constitutional amendment did ‘either in terms

or in effect seek to make any change in Article 226 or in

Articles 132 and 136’. Thus the change may be either in

terms i.e. explicit or in effect in these articles to require

ratification. The ground for rejection of the argument therein

was that the remedy in the courts remained unimpaired and

unaffected by the change and the change was really by

extinction of the right to seek the remedy. In other words,

the change was in the right and not the remedy of

approaching the court since there was no occasion to

invoke the remedy, the right itself being taken away. To the

same effect is the decision in Sajjan Singh [(1965) 1 SCR

933], wherein Sankari Prasad [1952 SCR 89] was followed

stating clearly that there was no justification for

reconsidering Sankari Prasad [1952 SCR 89].

159. Distinction has to be drawn between the abridgement

or extinction of a right and restriction of the remedy for

enforcement of the right. If there is an abridgement or

extinction of the right which results in the disappearance of

the cause of action which enables invoking the remedy and

in the absence of which there is no occasion to make a

53

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 Sajjan

Singh [(1965) 1 SCR 933] apply. On the other hand, if the

right remains untouched so that a grievance based thereon

can arise and, therefore, the cause of action subsists, but

the remedy is curtailed or extinguished so that the cause of

action cannot be enforced for want of that remedy, then the

change made is in the remedy and not in the subsisting

right. To this latter category, Sankari Prasad [1952 SCR 89]

and Sajjan Singh [(1965) 1 SCR 933] have no application.

This is clear from the above quoted passage in Sankari

Prasad [1952 SCR 89] which clearly brings out this

distinction between a change in the right and a change in

the remedy.

160. The present case, in unequivocal terms, is that of

destroying the remedy by enacting Paragraph 7 in the Tenth

Schedule making a total exclusion of judicial review

including that by the Supreme Court under Article 136 and

the High Courts under Articles 226 and 227 of the

Constitution. But for Paragraph 7 which deals with the

remedy and not the right, the jurisdiction of the Supreme

Court under Article 136 and that of the High Courts under

Articles 226 and 227 would remain unimpaired to challenge

the decision under Paragraph 6, as in the case of decisions

relating to other disqualifications specified in clause (1) of

Articles 102 and 191, which remedy continues to subsist.

Thus, this extinction of the remedy alone without curtailing

the right, since the question of disqualification of a Member

on the ground of defection under the Tenth Schedule does

require adjudication on enacted principles, results in making

a change in Article 136 in Chapter IV in Part V and Articles

226 and 227 in Chapter V in Part VI of the Constitution.

161. On this conclusion, it is undisputed that the proviso to

clause (2) of Article 368 is attracted requiring ratification by

the specified number of State Legislatures before

54

presentation of the Bill seeking to make the constitutional

amendment to the President for his assent.

42. In a recent decision, namely, Dr. Jaishri Laxmanrao Patil v. Chief

Minister and Ors., 2021 SCC OnLine SC 362, this court

considered the validity of the Constitution (102nd Amendment) Act,

2018 which, inter alia, inserted Articles 366(26C) and 342A. As a

result of this amendment, the President alone, to the exclusion of all

other authorities, is empowered to identify Socially and

Economically Backward Classes (SEBCs) and include them in a list

to be published under Article 342A(1), which shall be deemed to

include SEBCs in relation to each State and Union territory for the

purposes of the Constitution.

43. This 102nd Amendment Act was challenged, inter alia, on the

ground that not being ratified by at least half of the States, the

Constitutional Amendment was infirm. Six questions were framed

before a Constitution Bench of this Court. We are concerned here

with questions 4 to 6 insofar as the 102nd Amendment Act is

concerned, which are set out in paragraph 10 of Justice Ashok

Bhushan’s judgment as follows:

4. Whether the Constitution One Hundred and Second

Amendment deprives the State Legislature of its power to

55

enact a legislation determining the socially and economically

backward classes and conferring the benefits on the said

community under its enabling power?

5. Whether, States’ power to legislate in relation to “any

backward class” under Articles 15(4) and 16(4) is anyway

abridged by Article 342(A) read with Article 366(26c) of the

Constitution of India?

6. Whether, Article 342A of the Constitution abrogates

States’ power to legislate or classify in respect of “any

backward class of citizens” and thereby affects the federal

policy/structure of the Constitution of India?”

44. Justice Bhushan dismissed the challenge to the Constitution 102nd

Amendment Act as follows:

448. We do not find any merit in the challenge to the

Constitution 102nd Amendment. The Constitution 102nd

Amendment does not violate any basic feature of the

Constitution. The argument of the learned counsel for the

petitioner is that Article 368 has not been followed since the

Constitution 102nd Amendment was not ratified by the

necessary majority of the State. The Parliament never

intended to take the rights of the State regarding

identification of backward classes, the Constitution 102nd

Amendment was not covered by Proviso to Article 368 subclause (2), hence, the same did not require any ratification.

The argument of procedural violation in passing the 102nd

Constitutional Amendment cannot also be accepted. We

uphold the Constitution 102nd Amendment interpreted in the

manner as above.

45. This was re-stated in conclusions 27 and 32 found in paragraph

450 by Bhushan, J., and concurred with by Nazeer, J., as follows: -

56

450. From our foregoing discussion and finding we arrive at

following conclusions:

xxx xxx xxx

(27) It is, thus, clear as sun light that Parliamentary intention

discernible from Select Committee report and statement of

Minister of Social Justice and Empowerment is that the

intention of the Parliament for bringing Constitutional

amendment was not to take away the power of the State to

identify backward class in the State.

xxx xxx xxx

(32) The Constitution 102nd Amendment Act, 2018 does not

violate any basic feature of the Constitution. We uphold the

constitutional validity of Constitution (One Hundred and

second Amendment) Act, 2018.

46. However, Justice Ravindra Bhat differed from Justices Bhushan

and Nazeer and was joined by Justice L. Nageswara Rao and

Justice Hemant Gupta (see paras 455 and 481 of the judgment).

47. After setting out the amendments made to the Constitution by the

102nd Amendment Act, Justice Bhat held:

669. This Court is also of the opinion that the change

brought about by the 102nd Amendment, especially Article

342A is only with respect to the process of identification of

SEBCs and their list. Necessarily, the power to frame

policies and legislation with regard to all other matters, i.e.

the welfare schemes for SEBCs, setting up of institutions,

grants, scholarships, extent of reservations and special

provisions under Article 15(4), 15(5) and 16(4) are entirely

with by the State Government in relation to its institutions

and its public services (including services under agencies

57

and corporations 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 to be specially provided under Article

15(4) or any other beneficial or welfare scheme which is

conceivable under Article 15(4) can all be achieved by the

State through its legislative and executive powers. This

power would include making suggestions and collecting

data - if necessary, through statutory commissions, for

making recommendations towards inclusion or exclusion of

castes and communities to the President on the aid and

advice of the Union Council of Ministers under Article 342A.

This will accord with the spirit of the Constitution under

Article 338B and the principle of cooperative federalism

which guides the interpretation of this Constitution.

48. After setting out extracts from the judgments in Sajjan Singh

(supra) and Kihoto Hollohan (supra), the learned Judge concluded

as follows:

682. By these parameters, the alteration of the content of

state legislative power in an oblique and peripheral manner

would not constitute a violation of the concept of federalism.

It is only if the amendment takes away the very essence of

federalism or effectively divests the federal content of the

constitution, and denudes the states of their effective power

to legislate or frame executive policies (co-extensive with

legislative power) that the amendment would take away an

essential feature or violate the basic structure of the

Constitution. Applying such a benchmark, this court is of the

opinion that the power of identification of SEBCs hitherto

exercised by the states and now shifted to the domain of the

President (and for its modification, to Parliament) by virtue

of Article 342A does not in any manner violate the essential

features or basic structure of the Constitution. The 102nd

58

Amendment is also not contrary to or violative of proviso to

Article 368(2) of the Constitution of India. As a result, it is

held that the writ petition is without merit; it is dismissed.

(emphasis in original)

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

188. xxx xxx xxx

(5) Re. Point No. 5 - Whether, States' power to legislate in

relation to “any backward class” under Articles 15(4) and

16(4) is anyway abridged by Article 342(A) read with Article

366(26c) of the Constitution of India. On these two

interrelated points of reference, my conclusions are as

follows:

xxx xxx xxx

(v) The states' power to make reservations, in favour of

particular communities or castes, the quantum of

reservations, the nature of benefits and the kind of

reservations, and all other matters falling within the ambit of

Articles 15 and 16 - except with respect to identification of

SEBCs, remains undisturbed.

xxx xxx xxx

(6) Re Point No. 6: Article 342A of the Constitution by

denuding States power to legislate or classify in respect of

“any backward class of citizens” does not affect or damage

the federal polity and does not violate the basic structure of

the Constitution of India.

50. However, Shri Venugopal, learned Attorney General, strongly relied

upon the judgments of Wanchoo, J. Ramaswamy, J. and Bachawat,

59

J. in Golak Nath (supra). Though these judgments are minority

judgments in that case, Shri Venugopal argued that there is nothing

in the majority judgments against what is stated in these judgments

insofar as ratification is concerned, and that therefore these

judgments would have considerable persuasive value in

determining whether ratification is or is not required under Article

368(2) proviso.

51. Wanchoo, J. in Golak Nath (supra) deals with this subject at some

length. He states: -

“If there is no actual change directly in the entrenched

provision, no ratification is required, even if any amendment

of any other provision of the Constitution may have some

effect indirectly on the entrenched provisions mentioned in

the proviso.” (at page 843)

52. He goes on to discuss what was decided in Sajjan Singh’s case

(supra) and then goes on to give two examples of alterations made

in what he describes as “an unentrenched Article” which would

necessitate amendment of an entrenched Article and that it is only if

“Parliament takes the incredible course of amending only the

unentrenched Article and not amending the entrenched Article,

courts can say that ratification is necessary even for amending the

unentrenched Article, for it directly necessitates a change in an

60

entrenched Article. But short of that we are of opinion that merely

because there is some effect indirectly on an entrenched Article by

amendment of an unentrenched Article it is not necessary that there

should be ratification in such circumstances also”. (see pages 844-

845)

53. If by this, the learned Judge intended to constrict the test laid down

in Sajjan Singh’s case (supra) by introducing a further test, namely,

necessitating amendment of “an entrenched Article”, it is clear that

this judgment cannot be considered to be good law especially after

the judgments 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:

The contention that the constitutional amendments of Part III

had the effect of changing Articles 226 and 245 and could

not be passed without complying with the proviso to Article

368 is not tenable. A constitutional amendment which does

not profess to amend Article 226 directly or by inserting or

striking words therein cannot be regarded as seeking to

make any change in it and thus falling within the

constitutional inhibition of the proviso. Article 226 gives

power to the High Court throughout the territories in relation

to which it exercises jurisdiction to issue to any person or

authority within those territories directions, orders and writs

for the enforcement of any of the rights conferred by Part III

and for any other purpose. The Seventeenth Amendment

made no direct change in Article 226. It made changes in

Part III and abridged or took away some of the rights

61

conferred by that Part. As a result of the changes, some of

those rights no longer exist and as the High Court cannot

issue writs for the enforcement of those rights its power

under Article 226 is affected incidentally. But an alteration in

the area of its territories or in the number of persons or

authorities within those territories or in the number of

enforceable rights under Part III or other rights incidentally

affecting the power of the High Court under Article 226

cannot be regarded as an amendment of that article.

(at page 919)

54. This passage again is at variance with the test laid down in

Sankari Prasad Singh Deo (supra) and the judgment in Kihoto

Hollohan (supra) which make it clear that any impact on “an

entrenched Article” would require ratification if such impact is not

insignificant – i.e., that in effect, there is a change in an “entrenched

Article” which significantly impacts the content of the said Article

including constitutional principles contained therein.

55. Likewise, Ramaswamy, J’s minority judgment at pages 943 to 945

expressing similar views again cannot hold water in view of what

has been stated in Sajjan Singh (supra) and both the majority and

minority judgments in Kihoto Hollohan (supra).

56. A reading of the aforesaid judgments would indicate that the

“change” spoken about by Article 368 (2) proviso in any provision of

the Constitution need not be direct in the sense of adding,

subtracting, or modifying the language of the particular Article or

62

provision spoken of in the proviso. The judgments above referred to

speak of a ‘change-in effect’ which would mean a change which,

though not in the language of any provision of the Constitution,

would yet be a change which would impact a particular article and

the principle contained therein in some significant way.

57. There can be no doubt that our Constitution has been described as

quasi-federal in that, so far as legislative powers are concerned,

though there is a tilt in favour of the Centre vis-à-vis the States

given the federal supremacy principle outlined hereinabove, yet

within their own sphere, the States have exclusive power to legislate

on topics reserved exclusively to them (see Bhim Singh v. Union

of India, (2010) 5 SCC 538 at paras 45, 46 and 48; B.P. Singhal v.

Union of India, (2010) 6 SCC 331 at paras 40-42).

58. There can be no doubt whatsoever that Article 246(3) read with List

II of the 7th Schedule of the Constitution of India reflects an

important constitutional principle that can be said to form part of the

basic structure of the Constitution, namely, the fact that the

Constitution is not unitary but quasi-federal in character. The

question that arises before us is as to whether this principle can be

said to have been infracted by inserting Part IXB into the

63

Constitution of India so that the States’ legislative powers contained

in Article 246(3) read with Entry 32 List II of the 7th Schedule can be

said to have been affected in a significant manner. At this juncture,

it is also important to have a look at the judgment of this Court in

Builders' Assn. of India v. Union of India (supra). In this

judgment, apart from a challenge made on substantive grounds, the

Constitution (46th Amendment Act), 1982 was challenged on the

ground that the proviso to Article 368(2) had not been followed

inasmuch as the ambit of Entry 54 List II dealing with a tax on sale

of goods had been expanded by inserting a definition contained in

Article 366 (29A), in which the concept of sale of goods contained in

Entry 54 was greatly enlarged. To be noted, Entry 54 List II itself

was not the subject matter of amendment. The question was as to

the effect of the Constitution 46th Amendment Act on Entry 54 List II

in introducing Sub-Article 29A by way of a definition clause

contained in Article 366, thus expanding the scope of Entry 54 List

II. This Court repelled the aforesaid contention holding that, in point

of fact, ratification had been obtained, as follows:

28. The first contention raised before us regarding the

constitutionality of the 46th Amendment need not detain us

64

long. This contention was based on the assumption that the

legislatures of not less than one-half of the States which

were in existence during the relevant period had not ratified

the Bill which ultimately became the 46th Amendment

before the President gave his assent. It was argued that

such ratification was necessary since the provisions

contained in the 46th Amendment had the effect of enlarging

the scope of Entry 54 of List II of the Seventh Schedule to

the Constitution by empowering the legislatures of States to

levy sales tax on the turnover relating to the transactions

referred to in sub-clauses (a) to (f) of clause (29-A) of Article

366 of the Constitution which they could not have done

before the 46th Amendment. It was contended that

irrespective of the fact whether the amendment of an entry

in any of the lists of the Seventh Schedule to the

Constitution had the effect of either curtailing or enlarging

the powers of Parliament or the legislatures of States, a Bill

making provision for such amendment had to be ratified by

legislatures of not less than one-half of the States by

resolutions passed to that effect before such a Bill was

presented to the President for assent in view of the express

provisions contained in clause (c) of the proviso to Article

368(2) of the Constitution.

29. At the hearing of the above case the learned Attorney

General for India produced before us the Memorandum

dated 31-1-1982 signed by the Secretary General of the

Rajya Sabha which reads thus:

“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 assent copy of the Constitution (Forty-sixth

Amendment) Bill, is presented to the President. This Bill

has been passed by the Houses of Parliament and has

65

been also ratified by the legislatures of not less than

one-half of the States in accordance with the provision

of the proviso to clause (2) of Article 368 of the

Constitution. Legislatures of the following States have

passed resolutions ratifying 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

A copy each of the letters received from these

legislatures is placed below.

sd/-

(Sudarshan Agarwal)

Secretary General

To

The Secretary to the President,

(Through the Secretary, Ministry of Law)”

The Attorney General has also produced before us the file

containing the resolutions passed by the legislatures of the

12 States referred to in the Memorandum, set out above.

We are satisfied that there has been due compliance of the

provisions contained in the proviso to Article 368(2) of the

Constitution. We, therefore, reject the first contention.

Before proceeding further, we should observe that there

would have been no occasion for an argument of this type

being urged in court if at the commencement of the Act, it

66

had been stated that the Bill in question had been presented

to the President for his assent after it had been duly ratified

by the required number of legislatures of States. We hope

that this suggestion will be followed by the Central

Secretariat hereafter since we found that even the Attorney

General was not quite sure till the case was taken up for

hearing that the Bill which had become the 46th Amendment

had been duly ratified by the required number of States.

59. 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, and 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 to another, but the lists

themselves cannot be repealed.”

(Emphasis supplied)

60. A reading of Builders' Assn. of India v. Union of India (supra)

and the aforesaid extract from Seervai’s commentary would show

that any significant addition or curtailment of a field of legislation

which is contained in an Entry in List II of the 7th Schedule of the

Constitution would also amount to a ‘change’ so as to attract the

proviso to Article 368(2). It is not necessary, as has been contended

by the learned Attorney General, that a change referred to in the

proviso to Article 368(2) would only be if some part of a subject

67

matter given to the States were transferred to Parliament or vice

versa. Even without such transfer, if there is enlargement or

curtailment of the subject matter contained in a field of legislation

exclusively reserved to the States, then in effect a change has been

made to an entry in a legislative list, which change, if significant,

would attract the proviso to Article 368(2) and therefore require

ratification.

61. It is always important to remember that in matters affecting the

Constitution of India, form always gives way to substance. There

can be no manner of doubt that had exceptions been provided in

Entry 32 List II itself, such amendment to Entry 32 List II would

require ratification. There can also be no doubt that in effect if the

subject matter “co-operative societies” had been either expanded or

curtailed by adding a definition clause in Article 366 of the

Constitution of India, such expansion or curtailment would also

require ratification as significant changes have been made in effect

in Entry 32 List II of the Constitution of India. Likewise, if a separate

part is added in the Constitution of India, the direct effect of adding

such part being to curtail the width of Entry 32 List II in a significant

manner, again, in effect Entry 32 List II is directly impacted, again

68

requiring ratification. It is of no moment that one method is chosen

or preferred to another so long as Entry 32 List II is curtailed either

by adding or deleting words in Entry 32 itself or by doing so through

an indirect methodology, namely, adding a new definition clause in

Article 366 or adding a new part to the Constitution of India.

62. Judged by these principles, it is now necessary to analyse Part IXB

of the Constitution of India, as inserted by the Constitution 97th

Amendment Act. As the Statement of Objects and Reasons of the

Constitution 97th Amendment Act shows, it is acknowledged that the

subject ‘co-operative societies’ is exclusively allotted to the State

legislature under Entry 32 of the State List, as a result of which,

considering the need for reform in the Co-operative Societies Acts

of the States, consultations with the State governments have been

held. After this it is stated that the Central government is committed

to ensure that co-operative societies in the country function in a

democratic, professional, autonomous and economically sound

manner. It is then stated that the new part to be inserted in the

Constitution would contain provisions which would drastically curtail

the powers of the State legislatures in that such legislations by the

States would now have to conform to the newly inserted part.

69

63. Part IX B of the Constitution consists of Articles 243ZH to 243ZT.

64. Article 243ZH is the definition Article which defines co-operative

societies in sub-clause (c) as meaning society registered or deemed

to be registered under a State law, as opposed to a multi-State cooperative society defined in sub-clause (d), which is a society with

objects not confined to one State and registered under a law for the

time being in force relating to such co-operatives. By Article 243ZI, it

is made clear that the legislature of a State may only make law

insofar as it applies to incorporation, regulation and winding up of a

co-operative society, subject to the provisions of Part IXB. The

restrictions contained in Part IXB may now be set out seriatim.

I. Under Article 243ZI, the legislature of a State may make laws

affecting co-operative societies only if such laws follow the

principles of voluntary formation, democratic member control,

member economic participation and autonomous functioning.

II. Under Article 243ZJ(1), the maximum number of directors of a

co-operative society cannot exceed twenty one. Further, the

State law must compulsorily provide for reservation of one

seat for scheduled castes or scheduled tribes and two seats

for women on the board of every co-operative society which

consists of individuals as members.

70

III. Under Article 243ZJ(2), the term of office of elected members

shall be five years from the date of election.

IV. The State Legislature under Article 243ZJ(3) is bound to make

provisions for co-option of members to the board having

experience in the field of banking, management, finance or

specialization in any other field relating to the objects and

activities undertaken by the co-operative society, the number

of such co-opted members being restricted to two, as also the

fact that such co-opted members shall not have the right to

vote.

V. Under Article 243ZK(1), the non-obstante clause contained

therein makes it clear that the State legislature has to lay

down that the election of a board shall be conducted before

the expiry of the term of the board.

VI. Under Article 243ZL, a State legislature can only supersede a

board for a period not exceeding 6 months, if certain

enumerated conditions alone are satisfied.

VII. Under Article 243ZM, minimum qualifications and experience

of auditors and auditing firms have to be laid down by a State

Legislature, and co-operatives societies have to be audited

only by such persons or firms.

VIII. Under Article 243ZN, the Legislature of a State must provide

71

that the annual general body meeting of every co-operative

society shall be convened within a period of six months of the

close of the financial year.

IX. Under Article 243ZP, every co-operative society is to file

returns within the specified period of six months of the close of

every financial year, indicating the list of matters set out in the

said provision.

X. Under Article 243ZQ, the Legislature of a State may make

provisions for offences relating to co-operative societies and

penalties for such offences, provided that under sub-clause

(2), in respect of five separate subject matters, the Legislature

of a State must mandatorily include such subject matters.

65. From all the above, it is clear that the exclusive legislative power

that is contained in Entry 32 List II has been significantly and

substantially impacted in that such exclusive power is now

subjected to a large number of curtailments. Indeed, Article 243ZI

specifically mandates that the exclusive legislative power contained

in Entry 32 List II of the State Legislature is now severely curtailed

as it can only be exercised subject to the provisions of Part IXB; and

further, Article 243ZT makes it clear that all State laws which do not

conform to the restrictions mentioned in Part IXB automatically

72

come to an end on the expiration of one year from the

commencement of the Constitution 97th Amendment Act.

66. Indeed, this Court in Vipulbhai M. Chaudhary v. Gujarat Coop.

Milk Mktg. Federation Ltd. (supra), referred to the effect of Article

243ZT as follows:

27. Article 243-ZT of the Constitution requires the laws

relating to cooperative societies in force in the States prior

to the commencement of the Amendment Act to be in tune

with and in terms of the constitutional concept and set-up of

cooperative societies. In fact, a period of one year has been

provided in the Constitution from the commencement of the

Amendment for the required amendment or repeal by the

competent legislature or by the competent authority, of laws

which are inconsistent with Part IX-B. As a corollary, the

Constitution enables the competent legislature or authority

to suitably amend the existing provisions in their laws in

tune with the constitutional mandate. Thereafter, in case

there continues to be silence in the Act or bye-laws, the

court will have to read the constitutional requirements into

the existing provisions. It is essentially a process of

purposive construction of the available provisions as held by

this Court in Pratap Chandra Mehta case [(2011) 9 SCC

573].

67. The aforesaid analysis of Part IXB of the Constitution leads to the

result that though Article 246(3) and Entry 32, List II of the 7th

Schedule have not been ‘changed’ in letter, yet the impact upon the

aforesaid articles cannot be said to be insignificant. On the contrary,

73

it is clear that by curtailing the width of Entry 32, List II of the 7th

Schedule, Part IXB seeks to effect a significant change in Article

246(3) read with Entry 32 List II of the 7th Schedule inasmuch as the

State’s exclusive power to make laws with regard to the subject of

co-operative societies is significantly curtailed thereby directly

impacting the quasi-federal principle contained therein. Quite

clearly, therefore, Part IXB, insofar as it applies to co-operative

societies which operate within a State, would therefore require

ratification under both sub-clauses (b) and (c) of the proviso to

Article 368(2) of the Constitution of India.

68. It is interesting to note that Part IX of the Constitution of India which

was inserted into the Constitution by the Constitution (73rd

Amendment) Act, 1992 and Part IXA inserted into the Constitution

by the Constitution (74th Amendment) Act, 1992 made similar

provisions qua Panchayats and Municipalities. Entry 5 of List II, 7th

Schedule which deals with the subject matter of legislation so far as

Panchayats and Municipalities are concerned, is set out as follows:

-

List II—State List

74

5. Local government, that is to say, the constitution and

powers of municipal corporations, improvement trusts,

districts boards, mining settlement authorities and other

local authorities for the purpose of local self-government or

village administration.

69. Both the Constitution 73rd and 74th Amendments were sent for

ratification and were ratified by Legislatures of more than half the

States. The reason is not far to see – like Part IXB, several

restrictions are laid down before the States can legislate on

Panchayats and Municipalities. Like Part IXB, such legislation is

subject to Parts IX and IXA – see Article 243C and Article 243R.

Again, like Article 243ZT in Part IXB, Articles 243N and 243ZF

provide that State laws which are inconsistent with the provisions of

Parts IX and IXA respectively will automatically cease after the

expiration of one year from the commencement of the two

Constitutional Amendments. In addition to these provisions, Parts IX

and IXA also contain Article 243O and Article 243ZG ousting the

jurisdiction of the courts and thereby, in effect, curtailing the

provisions of Articles 136, 226 and 227 of the Constitution of India.

Ratification of the Constitution 72nd and 73rd Amendments was

75

therefore necessary 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 Chapter IV of Part V of the Constitution of India);

Articles 226 and 227 were in effect curtailed (which occur in Chapter

V of Part VI of the Constitution of India); Article 246(3) was in effect

curtailed (which forms part of the Chapter I of Part XI of the

Constitution of India); and Entry 5 List 2, 7th 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 clear therefore that

even previous constitutional practice of Parliament acting in its

constituent capacity qua similar subject matters reinforces the

submission of the respondent that, like the 73rd and 74th

Amendments, the Constitution 97th Amendment Act also required

ratification.

70. Shri Jani, however, argued that the constituent power that is

exercised in enacting the 97th Amendment cannot be assimilated

with legislative power, and that once the Constitution stands

amended by insertion of Part IXB, Article 245 mandates that all

legislation made under Article 246 read with Lists in the 7th

Schedule to the Constitution of India is subject to the provisions of

76

the Constitution, so that legislation made under Article 246(3) read

with Entry 32 List II becomes subject to the provisions of Part IXB

which is now a part of the Constitution of India.

71. This argument is a classic instance of putting the cart before the

horse. Nobody doubts that had the amendment been ratified under

Article 368(2) proviso as held by us above, it would then operate, as

a result of which legislation under Article 246(3) read with Entry 32

List II of the 7th Schedule would then become subject to Part IXB. In

the present case, 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 enacted

legislations 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 down in Article 368(2) proviso requires ratification of legislatures

of one half of the States by resolutions to that effect. This has

admittedly not been done in the present case. Also, the argument

that no State has come forward to challenge the 97th Constitution

Amendment does not take the matter any further. When a citizen of

India challenges a constitutional amendment as being procedurally

77

infirm, it is the duty of the court to examine such challenge on merits

as the Constitution of India is a national charter of governance

affecting persons, citizens and institutions alike.

73. It was then argued by Shri Venugopal, learned Attorney General for

India, that the impugned judgment’s finding that one of the basic

features of the Constitution, the principle of federalism has been

affected was a finding that was unnecessary once it was found that

the Amendment fell foul of Article 368(2) proviso. Shri Venugopal is

right that there was no argument made that even de hors

ratification, Part IXB otherwise falls foul of the basic structure

doctrine as laid down in Kesavananda Bharati’s case (supra). We

reiterate that our judgment is confined to the procedural aspect of

Article 368(2) proviso, there being no substantive challenge to Part

IXB on the ground that it violates the basic structure doctrine as laid

down in Kesavananda Bharati’s case (supra).

74. We now come to an important argument made by Shri Venugopal

that even if it be held that Part IXB is constitutionally infirm qua cooperative societies operating within a State, it would yet operate qua

multi-State co-operative societies and in Union territories which are

not States.

75. This necessarily brings us to whether the part dealing with multi78

State co-operative societies in Part IXB can be severed from the

part dealing with co-operative societies operating only within a

State. Reverting to Kihoto Hollohan’s case (supra), it may be

noted that the majority and minority judgments therein were sharply

divided on whether Paragraph 7 of the 10th Schedule could be said

to be severable from the rest of the 10th Schedule so that the 10th

Schedule could operate without Paragraph 7. The majority

judgment held that it could be so severed and that the rest of the

10th Schedule would therefore operate. This was held by the

majority as follows: -

68. The doctrine of severability has been applied by this

Court in cases of challenge to the validity of an amendment

on the ground of disregard of the substantive limitations on

the amending power, namely, alteration of the basic

structure. But only the offending part of the amendment

which had the effect of altering the basic structure 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) 3 SCC

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 severability in respect of a law which violates the said

limitations? Such a violation may arise when there is a

composite Bill or what is in statutory context or jargon called

a ‘Rag-Bag’ measure seeking amendments to several

statutes under one amending measure which seeks to

79

amend various provisions of the Constitution some of which

may attract clauses (a) to (e) of the proviso to Article 368(2)

and the Bill, though passed by the requisite majority in both

the Houses of Parliament has received the assent of the

President without it being sent to States for ratification or

having been so sent fails to receive such ratification from

not less than half the States before the Bill is presented for

assent. Such an 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 the amendments introduced in

provisions referred to in clauses (a) to (e) of proviso to

Article 368(2), Parliament alone is not competent to make

such amendments on account of some constitutionally

recognised federal principle being invoked. If the doctrine of

severability can be applied it can be upheld as valid in

respect of the amendments within the competence of

Parliament and only the amendments which Parliament

alone was not competent to make could be declared invalid.

xxx xxx xxx

71. The proviso to Article 368(2) appears to have been

introduced with a view to giving effect to the federal

principle. In the 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 and the amending power itself,

which have a bearing on the States, the proviso imposes an

additional requirement of ratification of the amendment

which seeks to effect a change in those provisions before

the Bill is presented for the assent of the President. It is

salutary that the scope of the proviso is confined to the limits

prescribed therein and is not construed so as to take away

the power in the main part of Article 368(2). An amendment

which otherwise fulfils the requirements of Article 368(2) and

is outside the specified cases which require ratification

cannot be denied legitimacy on the ground alone of the

80

company it keeps. The main part of Article 368(2) directs

that when a Bill which has been passed by the requisite

special majority by both the Houses has received the assent

of the President “the Constitution shall stand amended in

accordance with the terms of the Bill”. The proviso cannot

have the effect of interdicting this constitutional declaration

and mandate to mean that in a case where the proviso has

not been complied — even the amendments which do not

fall within the ambit of the proviso also become abortive.

The words “the amendment shall also require to be ratified

by the legislature” indicate that what is required to be ratified

by the legislatures of the States is the amendment seeking

to make the change in the provisions referred to in clauses

(a) to (e) of the proviso. The need for and the requirement of

the ratification is confined to that particular amendment

alone and not in respect of amendments outside the ambit

of the proviso. The proviso can have, therefore, no bearing

on the validity of the amendments which do not fall within its

ambit. Indeed the following observations of this Court

in 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 a

reasonable construction be harmonised with each other

in the sense that the scope and effect of either of them

should not be allowed to be unduly reduced or

enlarged.”

72. During the arguments reliance was placed on the words

“before the Bill making provision for such amendment is

presented to the President for assent” to sustain the

argument that these words imply that the ratification of the

Bill by not less than one-half of the States is a condition

precedent for the presentation of the Bill for the assent of

the President. It is further argued that a Bill which seeks to

make a change in the provisions referred to in clauses (a) to

(e) of the proviso cannot be presented before the President

for his assent without such ratification and if assent is given

81

by the President in the absence of such ratification, the

amending Act would be void and ineffective in its entirety.

73. A similar situation can arise in the context of the main

part of Article 368(2) which provides: “when the Bill is

passed in each House by a majority of the total membership

of that House and by a majority of not less than two-thirds of

the Members of that House present and voting, it shall be

presented to the President”. Here also a condition is

imposed that the Bill shall be presented to the President for

his assent only after it has been passed in each House by

the prescribed special majority. An amendment in the First

and Fourth Schedules referable to Article 4 can be

introduced by Parliament by an ordinary law passed by

simple majority. There may be a Bill which may contain

amendments made in the First and Fourth Schedules as

well as amendments in other provisions of the Constitution

excluding those referred to in the proviso which can be

amended only by a special majority under Article 368(2) and

the Bill after having been passed only by an ordinary

majority instead of a special majority has received the

assent of the President. The amendments which are made

in the First and Fourth Schedules by the said Amendment

Act were validly made in view of Article 4 but the

amendments in other provisions were in disregard to Article

368(2) which requires a special majority. Is not the doctrine

of severability applicable to such an amendment so that

amendments made in the First and Fourth Schedules may

be upheld while declaring the amendments in the other

provisions as ineffective? A contrary view excluding the

doctrine of severability would result in elevating a procedural

limitation on the amending power to a level higher than the

substantive limitations.

xxx xxx xxx

75. ….The same principle would, therefore, apply while

considering the validity of a composite amendment which

makes alterations in the First and Fourth Schedules as well

82

as in other provisions of the Constitution requiring special

majority under Article 368(2) and such a law, even though

passed by the simple majority and not by special majority,

may be upheld in respect of the amendments made in the

First and Fourth Schedules. There is really no difference in

principle between the condition requiring passing of the Bill

by a special majority before its presentation to the President

for assent contained in Article 368(2) and the condition for

ratification of the amendment by the legislatures of not less

than one-half of the States before the Bill is presented to the

President for assent contained in the proviso. The principle

of severability can be equally applied to a composite

amendment which contains amendments in provisions

which do not require ratification by States as well as

amendment in provisions which require such ratification and

by application of the doctrine of severability, the amendment

can be upheld in respect of the amendments which do not

require ratification and which are within the competence of

Parliament alone. Only these amendments in provisions

which require ratification under the proviso need to be struck

down or declared invalid.

76. The test of severability requires the Court to ascertain

whether the legislature would at all have enacted the law if

the severed part was not the part of the law and whether

after severance what survives can stand independently and

is workable. If the provisions of the Tenth Schedule are

considered in the background of the legislative history,

namely, the report of the ‘Committee on Defections’ as well

as the earlier Bills which were moved to curb the evil of

defection it would be evident that the main purpose

underlying the constitutional amendment and introduction of

the Tenth Schedule is to curb the evil of defection which was

causing immense mischief in our body politic. The ouster of

jurisdiction of courts under Paragraph 7 was incidental to

and to lend strength to the main purpose which was to curb

the evil of defection. It cannot be said that the constituent

body would not have enacted the other provisions in the

83

Tenth Schedule if it had known that Paragraph 7 was not

valid. Nor can it be said that the rest of the provisions of the

Tenth Schedule cannot stand on their own even if

Paragraph 7 is found to be unconstitutional. The provisions

of Paragraph 7 can, therefore, be held to be severable from

the rest of the provisions.

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

That there is nothing in the said proviso to Article 368(2)

which detracts from the severability of a provision on

account of the inclusion of which the Bill containing the

amendment requires ratification from the rest of the

provisions of such Bill which do not attract and require such

ratification. Having regard to the mandatory language of

Article 368(2) that ‘thereupon the Constitution shall stand

amended’ the operation of the proviso should not be

extended to constitutional amendments in a Bill which can

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 the Constitution of India, to the extent of

its provisions which are amenable to the legal-sovereign of

the amending process of the Union Parliament cannot be

overborne by the proviso which cannot operate in that area.

There is no justification for the view that even the rest of the

provisions of the Constitution (Fifty-second Amendment)

Act, 1985, excluding Paragraph 7 of the Tenth Schedule

become constitutionally infirm by reason alone of the fact

that one of its severable provisions which attracted and

required ratification under the proviso to Article 368(2) was

not so ratified.

That Paragraph 7 of the Tenth Schedule contains a

provision which is independent of, and stands apart from,

the main provisions of the Tenth Schedule which are

intended to provide a remedy for the evil of unprincipled and

unethical political defections and, therefore, is a severable

84

part. The remaining provisions of the Tenth Schedule can

and do stand independently of Paragraph 7 and are

complete in themselves workable and are not truncated by

the excision of Paragraph 7.

76. Article 243ZR of Part IXB makes it clear that all the provisions of

this Part which apply to multi-State co-operative societies would

apply subject to the modification that any reference to a “Legislature

of a State, State Act or State Government” shall be construed as a

reference to “Parliament, Central Act or the Central Government”

respectively. The learned Attorney General therefore argued that

instead of having two separate parts within Part IXB, one dealing

with State co-operative societies and one dealing with multi-State

co-operative societies, the well-known legislative device of

“reference” to existing provisions was instead utilised by Article

243ZR and that therefore we should view the matter as if a separate

part within Part IXB has been enacted insofar as multi-State cooperative societies are concerned.

77. There is substance in this argument. In Kihoto Hollohan (supra), it

was held that a composite amendment that was presented to the

President for his assent, one part of the amendment requiring

ratification from the States and the other not requiring ratification,

85

was severable, as a result of which Paragraph 7 alone of the 10th

Schedule of the Constitution was struck down for want of ratification

by the States. There can be no doubt that in its application to multiState co-operative societies, neither Article 246(3) nor Entry 32 List

II of the 7th Schedule would be attracted. Equally, the test of

severability laid down in Kihoto Hollohan (supra) which required

the court in that case to ascertain whether the legislature would at

all have enacted the law if the severed part was not part of the law

cannot be said to apply in a case like the present where, had the

amendment dealing with multi-State co-operative societies been in

a separate part of Part IXB, such test would be inapplicable. The

Statement of Objects and Reasons for the Constitution 97th

Amendment Act makes this clear. It states:

“The proposed new Part in the Constitution, inter alia,

seeks to empower the Parliament in respect of multi-State

cooperative societies and the State Legislatures in cases of

other co-operative societies to make appropriate law, laying

down the following matters, namely:-“

(Emphasis supplied)

It is clear, therefore, that the Scheme qua multi-State cooperative

societies is separate from the Scheme dealing with “other cooperative

societies”, Parliament being empowered, so far as multi-State

86

cooperative societies are concerned, and the State legislatures having

to make appropriate laws laying down certain matters so far as “other

cooperative societies” are concerned. The effect of Article 246ZR is as

if multi-State co-operative societies are separately dealt with in a

separate sub-chapter contained within Part IXB, as is correctly

contended by the learned Attorney General. Also, there is no doubt

that after severance what survives can and does stand independently

and is workable. It was faintly suggested by learned counsel for the

Respondents that the consequence of this Court holding that the

Constitution 97th Amendment Act is void for want of ratification would

render the entire amendment still-born, as a result of which no part of

the amendment can survive. We reject this argument for two reasons.

If the doctrine of severability were not to apply for the afore-stated

reason, then the majority judgment in Kihoto Hollohan (supra) would

be incorrect. This very reasoning would then render the entire

Constitution 52nd Amendment, which inserted the Tenth Schedule to the

Constitution of India, constitutionally infirm as then the entirety of the

amendment would have to be declared void for want of ratification,

which would be in the teeth of the majority judgment in Kihoto

87

Hollohan (supra). Further, on this reasoning, the amendments made

in Article 19 and the addition of Article 43B would also have to be

struck down, which was not pleaded or argued before either the High

Court or before us. This being the case, we declare that Part IXB of the

Constitution of India is operative insofar as multi-State co-operative

societies are concerned.

78. The other argument of the learned Attorney General that under

Article 243ZS in its application to Union territories the same

situation would prevail as the application of Article 243ZR is not

quite correct. There can be no doubt that Article 246(3) does not

apply to Union territories. Instead, Article 246(4) applies to Union

territories, by means of which Parliament can use the State List also

to legislate insofar as the Union territories are concerned. However,

given the truncation of Entry 32 List II of the 7th Schedule by Part

IXB, what would operate in Union territories is Part IXB only insofar

as it applies to multi-State co-operative societies. So far as cooperative societies within a Union territory are concerned, the same

infirmity as is found in the main part of the judgment continues

insofar as the legislative subject “co-operative societies” is

concerned under Entry 32 List II. Therefore, for co-operative

88

societies which have no ramifications outside the Union territory

itself, Part IXB will have no application.

79. We now come to the argument of Shri Shah that even so far as

multi-State co-operative societies are concerned, since Entry 44 List

I gets truncated in the same manner as Entry 32 List II, the

Constitutional Amendment would require ratification so far as multiState co-operative societies are concerned since a change in effect

is made in List I, which would be covered by clause (c) of the

proviso to Article 368 of the Constitution. On a reading of the writ

petition filed before the High Court, no such ground has been

raised. On the contrary, all the grounds raised have reference to

infraction of the federal principle and the fact that the subject “cooperative societies” is affected by the amendment needing

ratification. Though the prayer to the writ petition may be to strike

down the entirety of Part IXB, no ground having been raised and no

argument either having been raised on this score before the High

Court, we need not deal with this argument of Shri Shah.

80. The judgment of the High Court is upheld except to the extent that

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

89

of India is operative only insofar as it concerns multi-State cooperative societies both within the various States and in the Union

territories of India. The appeals are accordingly disposed of.

…………………..………………J.

(R. F. Nariman)

……………..……………………J.

(B.R. Gavai)

New Delhi,

July 20, 2021.

90

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 9108-9109 OF 2014

UNION OF INDIA ... APPELLANT(S)

VERSUS

RAJENDRA N. SHAH AND ANOTHER ... RESPONDENT(S)

WITH

CIVIL APPEAL NO(S). 281 OF 2020

CIVIL APPEAL NO(S). 282 OF 2020

CIVIL APPEAL NO. 2826 OF 2021

SPECIAL LEAVE PETITION (CIVIL) NO(S). 13329 OF 2018

CIVIL APPEAL NO. 2825 OF 2021

SPECIAL LEAVE PETITION (CIVIL) NO(S). 13215 OF 2018

CIVIL APPEAL NO. 2827 OF 2021

SPECIAL LEAVE PETITION (CIVIL) NO(S). 14227 OF 2020

J U D G M E N T

K.M. JOSEPH, J.

1. I have gone through the draft Judgment authored

by my learned and esteemed Brother Justice Rohinton

Fali Nariman.

1

2. I am in complete agreement with the reasoning and

conclusion in regard to the provisions relating to

Article 240ZI to Article 243ZQ and Article 243ZT,

being unconstitutional for non-compliance, with the

mandate of the proviso to Article 368(2) of the

Constitution of India. However, I regret my inability

to concur with the view taken that the Doctrine of

Severability will apply to sustain Article 243ZR and

Article 243ZS to the multistate cooperative societies

operating in the Union Territories, and that, it

would not apply to cooperative societies confined to

the territories of the Union Territories.

3. Part IXB of the Constitution of India came to be

inserted by the Ninety-Seventh Amendment to the

Constitution.

4. The High Court has found the Articles 243ZH to

243ZT unconstitutional. The other parts of the

Ninety-Seventh Amendment were found not to be

affected. The ground was essentially that there was

no ratification as required under the proviso to

Article 368(2). It is also found to be in breach of

the basic structure of the Constitution. In three of

2

the Appeals, the writ petitioners challenged Show

Cause Notices and subsequent decision based on the

same and the Writ Petitions were filed based on the

Ninety-Seventh Amendment. It is necessary to refer to

Part IXB:

“PART IXB

THE CO-OPERATIVE SOCIETIES

243ZH. Definitions.—In this Part, unless

the context otherwise requires,—

 (a) “authorised person” means a person

referred to as such in article 243ZQ;

 (b) “board” means the board of directors

or the governing body of a co-operative

society, by whatever name called, to which

the direction and control of the

management of the affairs of a society is

entrusted to;

(c) “co-operative society” means a society

registered or deemed to be registered

under any law relating to co-operative

societies for the time being in force in

any State;

 (d) “multi-State co-operative society”

means a society with objects not confined

to one State and registered or deemed to

be registered under any law for the time

being in force relating to such

cooperatives;

 (e) “Office bearer” means a President,

Vice-President, Chairperson, ViceChairperson, Secretary or Treasurer, of a

co-operative society and includes any

other person to be elected by the board of

any cooperative society;

 (f) “Registrar” means the Central

Registrar appointed by the Central

Government in relation to the multi-State

co-operative societies and the Registrar

3

for co-operative societies appointed by

the State Government under the law made by

the Legislature of a State in relation to

co-operative societies;

 (g) “State Act” means any law made by the

Legislature of a State;

 (h) “State level co-operative society”

means a co-operative society having its

area of operation extending to the whole

of a State and defined as such in any law

made by the Legislature of a State.

243ZI. Incorporation of co-operative

societies.—Subject to the provisions of

this Part, the Legislature of a State may,

by law, make provisions with respect to

the incorporation, regulation and winding

up of co-operative societies based on the

principles of voluntary formation,

democratic member-control, member-economic

participation and autonomous functioning.

243ZJ. Number and term of members of board

and its office bearers.—(1) The board

shall consist of such number of directors

as may be provided by the Legislature of a

State, by law:

Provided that the maximum number of

directors of a co-operative society shall

not exceed twenty-one:

Provided further that the Legislature of a

State shall, by law, provide for the

reservation of one seat for the Scheduled

Castes or the Scheduled Tribes and two

seats for women on board of every cooperative society consisting of

individuals as members and having members

from such class of category of persons.

(2) The term of office of elected members

of the board and its office bearers shall

be five years from the date of election

4

and the term of office bearers shall be

coterminous with the term of the board:

Provided that the board may fill a

casual vacancy on the board by nomination

out of the same class of members in

respect of which the casual vacancy has

arisen, if the term of office of the board

is less than half of its original term.

(3) The Legislature of a State shall,

by law, make provisions for co-option of

persons to be members of the board having

experience in the field of banking,

management, finance or specialisation in

any other field relating to the objects

and activities undertaken by the cooperative society, as members of the board

of such society:

Provided that the number of such coopted members shall not exceed two in

addition to twenty-one directors specified

in the first proviso to clause (1):

Provided further that such co-opted

members shall not have the right to vote

in any election of the cooperative society

in their capacity as such member or to be

eligible to be elected as office bearers

of the board:

Provided also that the functional

directors of a co-operative society shall

also be the members of the board and such

members shall be excluded for the purpose

of counting the total number of directors

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 a

State, the election of a board shall be

conducted before the expiry of the term of

the board so as to ensure that the newly

5

elected members of the board assume office

immediately on the expiry of the term of

the office of members of the outgoing

board.

 (2) The superintendence, direction

and control of the preparation of

electoral rolls for, and the conduct of,

all elections to a co-operative society

shall vest in such an authority or body,

as may be provided by the Legislature of a

State, by law: Provided that the

Legislature of a State may, by law,

provide for the procedure 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 time being in force, no board

shall be superseded or kept under

supersession for a period exceeding six

months:

Provided that the board may be

superseded or kept under suspension in a

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 the interests of

the co-operative society or its

members; or

 (iv) there is stalemate in the

constitution or functions of the

board; or

(iv) the authority or body as

provided by the Legislature of a

State, by law, under clause (2)

of article 243ZK, has failed to

conduct elections in accordance

with the provisions of the State

Act:

6

Provided further that the board of

any such co-operative society shall

not be superseded or kept under

suspension where there is no

Government shareholding or loan or

financial assistance or any guarantee

by the Government:

Provided also that in case of a

co-operative society carrying on the

business of banking, the provisions of

the Banking Regulation Act, 1949 shall

also apply:

Provided also that in case of a

co-operative society, other than a

multi- State co-operative society,

carrying on the business of banking,

the provisions of this clause shall

have the effect as if for the words

“six months”, the words “one year” had

been substituted.

 (2) In case of supersession of a

board, the administrator appointed to

manage the affairs of such cooperative

society shall arrange for conduct of

elections within the period specified

in clause (1) and hand over the

management to the elected board.

 (3) The Legislature of a State

may, by law, make provisions for the

conditions of service of the

administrator.

243ZM. Audit of accounts of cooperative societies.—(1) The

Legislature of a State may, by law,

make provisions with respect to the

maintenance of accounts by the cooperative societies and the auditing

of such accounts at least once in each

financial year.

7

(2) The Legislature of a State

shall, by law, lay down the minimum

qualifications and experience of

auditors and auditing firms that shall

be eligible for auditing accounts of

the co-operative societies.

(3) Every co-operative society

shall cause to be audited by an

auditor or auditing firms referred to

in clause (2) appointed by the general

body of the co-operative society:

Provided that such auditors or

auditing firms shall be appointed from

a panel approved by a State Government

or an authority authorised by the

State Government in this behalf.

(4) The accounts of every cooperative society shall be audited

within six months of the close of the

financial year to which such accounts

relate.

 (5) The audit report of the

accounts of an apex co-operative

society, as may be defined by the

State Act, shall be laid before the

State Legislature in the manner, as

may be provided by the State

Legislature, by law.

243ZN. Convening of general body

meetings.—The Legislature of a State

may, by law, make provisions that the

annual general body meeting of every

co-operative society shall be convened

within a period of six months of close

of the financial year to transact the

business as may be provided in such

law.

243ZO. Right of a member to get

information.—(1) The Legislature of a

State may, by law, provide for access

8

to every member of a co-operative

society to the books, information and

accounts of the cooperative society

kept in regular transaction of its

business with such members.

(2) The Legislature of a State may, by

law, make provisions to ensure the

participation of members of the

management of the co-operative society

providing minimum requirement of

attending meetings by the members and

utilising the minimum level of

services as may be provided in such

law.

(3) The Legislature of a State may, by

law, provide for co-operative

education and training for its

members.

243ZP. Returns.—(1) Every co-operative

society shall file returns, within six

months of the close of every financial

year, to the authority designated by

the 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 body of the

co-operative society;

 (d) list of amendments to the byelaws of the co-operative society, if

any;

(e) declaration regarding date of

holding of its general body meeting

and conduct of elections when due; and

9

(f) any other information required by

the Registrar in pursuance of any of

the provisions of the State Act.

243ZQ. Offences and penalties.—(1) The

Legislature of a State may, by law,

make provisions for the offences

relating to the co-operative societies

and penalties for such offences.

(2) A law made by the Legislature of a

State under clause (1) shall include

the commission of the following act or

omission as offences, namely:—

(a) a co-operative society or an

officer or member thereof wilfully

makes a false return or furnishes

false information, or any person

wilfully not furnishes any information

required from him by a person

authorised in this behalf under the

provisions of the State Act;

(b) any person wilfully or without any

reasonable excuse disobeys any

summons, requisition or lawful written

order issued under the provisions of

the State Act;

(c) any employer who, without

sufficient cause, fails to pay to a

co-operative society amount deducted

by him from its employee within a

period of fourteen days from the date

on which such deduction is made;

(d) any officer or custodian who

wilfully fails to handover custody of

books, accounts, documents, records,

cash, security and other property

belonging to a co-operative society of

which he is an officer or custodian,

to an authorised person; and

(e) whoever, before, during or after

the election of members of the board

10

or office bearers, adopts any corrupt

practice.

243ZR. Application to multi-State cooperative societies.—The provisions of

this Part shall apply to the multiState co-operative societies subject

to the modification that any reference

to “Legislature of a State”, “State

Act or State Government” shall be

construed as a 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 and shall, in their

application to a Union territory,

having no Legislative Assembly as if

the references to the Legislature of a

State were a reference to the

administrator thereof appointed under

article 239 and, in relation to a

Union territory having a Legislative

Assembly, to that Legislative

Assembly:

Provided that the President may, by

notification in the Official Gazette,

direct that the provisions of this

Part shall not apply to any Union

territory or part thereof as he may

specify in the notification.

243ZT. Continuance of existing laws.—

Notwithstanding anything in this Part,

any provision of any law relating to

co-operative societies in force in a

State immediately before the

commencement of the Constitution

(Ninety-seventh Amendment) Act, 2011,

which is inconsistent with the

provisions of this Part, shall

11

continue to be in force until amended

or repealed by a competent Legislature

or other competent authority or until

the expiration of one year from such

commencement, whichever is less.”

5. Article 243ZH is the definition clause. It is

clear that the provisions contained in Articles 243ZI

to 243ZQ and Article 243ZT are all meant to apply in

regard to cooperative societies, which are born under

laws made by the State Legislature. It is beyond the

pale of doubt that the legislative powers of the

State Legislature, in regard to “cooperative

societies”, falling in Entry 32 of List II of the

Seventh Schedule, 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 a

substantive impact on the provisions covered by the

proviso to Article 368(2). There is also a clear

impact on Article 246(3), which deals with the

exclusive powers of the State Legislature and,

therefore, there is a change brought about in regard

to the provisions contained in Chapter I of Part XI

12

of the Constitution, which is contained in clause (b)

to the proviso of Article 368(2).

6. Having found that these provisions cannot

survive, the question arises whether Article 243ZR

and 243ZS, can continue to exist. What is pressed

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, in regard to which,

it has exclusive legislative competence and, instead

of duplicating the provisions, the device of

reference is utilised and Article 243ZR really

manifests Parliaments resolve to apply the very same

provisions as was intended for cooperative societies

covered by Entry 32 of List II, viz., cooperative

societies made under a law passed by the State

Legislature. It would be no different, if, instead of

words used in Article 243ZR and 243ZS, the entire

provisions, were repeated all over again. The

Principle of Legislation by Adoption is pressed into

service by the learned Attorney General.

13

8. The learned Counsel appearing on behalf of the

Respondent No. 1, Shri Massoom K. Shah, and also, Ms.

Ritika Sinha, for the Intervenors, would point out,

having regard to the arrangement of the provisions

and the wording used in Article 243ZR and Article

243ZS, there can be no scope for applying the

Doctrine of Severability.

9. It is the case of Shri P.K. Jani, learned Senior

Counsel for the appellant in one of the cases that

the amendment was preceded by a very elaborate

exercise, which is that, there was a meet of

Ministers of Cooperation of various States and

resolutions were passed [These Resolutions are not to

be mistaken for the Resolutions to be passed by the

State Legislatures, as contemplated in the proviso to

Article 368(2)]. It is contended on behalf of the

Respondent No. 1 and the learned Counsel for the

Intervenors that it may have been different, if the

substantial provisions, as contained in Article 243ZI

to 243ZQ, which related to cooperative societies,

embraced by Entry 32 of List II, were expressly

enacted to apply to multistate cooperative societies

and to the cooperative societies operating in the

14

Union Territory, and thereafter, such provisions were

also made to apply to cooperative societies operating

under laws made by the State Legislatures but this is

not the position.

10. The Doctrine of Severability came up for

consideration in R.M.D. Chamarbaugwalla and another

 v. Union of India and another1. 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 consider whether the

impugned provisions are severable in their

application to competitions of a gambling

character, assuming of course that the

definition of “prize competition” in Section

2(d) is wide enough to include also

competitions involving skill to a substantial

degree. It will be useful for the

determination of this question to refer to

certain rules of construction laid down by

the American courts, where the question of

severability has been the subject of

consideration in numerous authorities. They

may be summarised as follows:

1. In determining whether the valid

parts of a statute are separable from the

invalid parts thereof, it is the intention

of the legislature that is the determining

factor. The test to be applied is whether

the legislature would have enacted the

valid part if it had known that the rest

1 AIR 1957 SC 628

15

of the 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 inextricably mixed up that they

cannot be separated from one another, then

the invalidity of a portion must result in

the invalidity of the Act in its entirety.

On the other hand, if they are so distinct

and separate that after striking out what

is invalid, what remains is in itself a

complete code independent of the rest,

then it will be upheld notwithstanding

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 distinct and separate from those

which are invalid, if they all form part

of a single scheme which is intended to be

operative as a whole, then also the

invalidity of a part will result in the

failure of the whole. Vide Crawford on

Statutory Construction, pp. 218-219.

4. Likewise, when the valid and invalid

parts of a statute are independent and do

not form part of a scheme but what is left

after omitting the invalid portion is so

thin and truncated as to be in substance

different from what it was when it emerged

out of the legislature, then also it will

be rejected in its entirety.

5. The separability of the valid and

invalid provisions of a statute does not

depend on whether the law is enacted in

the same section or different sections;

16

(Vide Cooley's Constitutional Limitations,

Vol. I, pp. 361-362); it is not the form,

but the substance of the matter that is

material, and that has to be ascertained

on an examination of the Act as a whole

and of the setting of the relevant

provision therein.

6. If after the invalid portion is

expunged from the statute what remains

cannot be enforced without making

alterations and modifications therein,

then the whole of it must be struck down

as void, as otherwise it will amount to

judicial legislation. Vide Sutherland on

Statutory Construction, Vol. 2, p. 194.

7. In determining the legislative intent

on the question of separability, it will

be legitimate to take into account the

history of the legislation, its object,

the title and the preamble to it.

Vide Sutherland on Statutory Construction,

Vol. 2, pp. 177-178.”

11. We are, in this case, concerned with a case of an

amendment to the Constitution, which has been carried

out under Article 368. Article 368 reads as follows:

“368. Power of Parliament to amend the

Constitution and procedure therefor.—

(1) Notwithstanding anything in this

Constitution, Parliament may in exercise

of its constituent power amend by way of

addition, variation or repeal any

provision of this Constitution in

accordance with the procedure laid down in

this article.

(2) An amendment of this Constitution may

be initiated only by the introduction of a

17

Bill for the purpose in either House of

Parliament, and when the Bill is passed in

each House by a majority of the total

membership of that House and by a majority

of not less than two-thirds of the members

of that House present and voting, it shall

be presented to the President who shall

give his assent to the Bill and thereupon

the Constitution shall stand amended 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 article

279A or

(b) Chapter IV of Part V, Chapter V of

Part VI, or Chapter I of Part 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 Legislatures of not less

than one-half of the States by resolutions

to that effect passed by those

Legislatures before the Bill making

provision for such amendment is presented

to the President for assent.

(3) Nothing in article 13 shall apply

to any amendment made under this article.

(4) No amendment of this Constitution

(including the provisions of Part III)

made or purporting to have been made under

this article whether before or after the

commencement of section 55 of the

Constitution (Forty-second Amendment) Act,

1976] shall be called in question in any

court on any ground.

 (5) For the removal of doubts, it is

hereby declared that there shall be no

limitation whatever on the constituent

18

power of Parliament to amend by way of

addition, variation or repeal the

provisions of this Constitution under this

article.”

12. Article 368 has provided for the procedure to be

followed by Parliament, when it purports to amend the

Constitution. There are two limitations broadly on

the power of Parliament to amend the Constitution:

(i) Parliament must scrupulously follow the

procedure provided in Article 368;

(ii) There is also the substantive limitation on

power of the Parliament to amend the

Constitution, which is far too well

established to require support from case law,

viz., that Parliament cannot amend the

Constitution by breaching its basic features.

13. In this case, the provisions of Article 243ZI to

243ZQ and Article 243ZT are undoubtedly afflicted

with the vice of non-compliance with the procedure,

which is mandatory. Resultantly, the said provisions

must be treated as still born. These provisions are

void in law. The definition clause Article 243ZH

clearly would have no meaning and would cease to be

workable. The only question, which, therefore, arises

is when provisions of the amendment to the

19

Constitution are found to be void, for the reason

that the mandate of the proviso to Article 368(2) has

not been complied with, whether the Doctrine of

Severability could be applied to sustain the other

provisions, which may not require Parliament to

follow the procedure under the proviso to Article

368(2).

14. This question is not res integra as it has been

considered by the Constitution Bench of this Court in

 Kihoto Hollohan v. Zachillhu and others2. The Court in

the said case, was dealing with a challenge to the

Tenth Schedule to the Constitution. Parliament, by

virtue of the Tenth Schedule purported to deal with

the evil of defection. After providing for various

aspects, it also purported to oust the jurisdiction

of all courts by virtue of paragraph-7, which reads

as follow:

“7. Bar of jurisdiction of courts:

Notwithstanding anything in this

Constitution, no court shall have any

jurisdiction in respect of any matter

connected with the disqualification of the

Member of a House under this Schedule.”

2 (1992) Suppl.2 SCC 651

20

15. The Court proceeded to uphold the provisions of

the Tenth Schedule except paragraph-7. In doing so,

this Court invoked the theory of Severability. It is,

in this context, necessary to notice the following

discussion:

“66. While examining the constitutional

validity of laws the principle that is

applied is that if it is possible to

construe a statute so that its validity

can be sustained against a constitutional

attack it should be so construed and that

when part of a statute is valid and part

is void, the valid part must be separated

from the invalid part. This is done by

applying the doctrine of severability. The

rationale of this doctrine has been

explained by Cooley in the following

words: [ Cooley: Constitutional

Limitations, (8th edn.) Vol. I pp. 359-

60.]

“It will sometimes be found that an act

of the legislature is opposed in some of

its provisions to the Constitution, while

others, standing by themselves, would be

unobjectionable. So the forms observed in

passing it may be sufficient for some of

the purposes sought to be accomplished by

it, but insufficient for others. In any

such case the portion which conflicts with

the Constitution, or in regard to which

the necessary conditions have not been

observed, must be treated as a nullity.

Whether the other parts of the statute

21

must also be adjudged void because of the

association must depend upon a

consideration of the object of the law,

and in what manner and to what extent the

unconstitutional portion affects the

remainder. A statute, it has been said, is

judicially held to be unconstitutional,

because it is not within the scope of

legislative authority; it may either

propose to accomplish something prohibited

by the Constitution, or to accomplish some

lawful, and even laudable object, by means

repugnant to the Constitution of the

United States or of the State. A statute

may contain some such provisions, and yet

the same act, having received the sanction

of all branches of the legislature, and

being in the form of law, may contain

other useful and salutary provisions, not

obnoxious to any just constitutional

exception. It would be inconsistent with

all just principles of constitutional law

to adjudge these enactments void because

they are associated in the same act, but

not connected with or dependent on others

which are unconstitutional.”

xxx xxx xxx

68. The doctrine of severability has

been applied by this Court in cases of

challenge to the validity of an amendment

on the ground of disregard of the

substantive limitations on the amending

power, namely, alteration of the basic

structure. But only the offending part of

the amendment which had the effect of

altering the basic structure was struck

down while the rest of the amendment was

upheld. [See Kesavananda Bharati v. State

22

of Kerala [(1973) 4 SCC 225 : 1973 Supp

SCR 1] , Minerva Mills Ltd. v. Union of

India [(1980) 3 SCC 625 : (1981) 1 SCR

206] , P. Sambamurthy v. State of

A.P. [(1987) 1 SCC 362 : (1987) 2 ATC

502 : (1987) 1 SCR 879] ].

69. Is there anything in the procedural

limitations imposed by sub-article (2) of

Article 368 which excludes the doctrine of

severability in respect of a law which

violates the said limitations? Such a

violation may arise when there is a

composite Bill or what is in statutory

context or jargon called a ‘Rag-Bag’

measure seeking amendments to several

statutes under one amending measure which

seeks to amend various provisions of the

Constitution some of which may attract

clauses (a) to (e) of the proviso to

Article 368(2) and the Bill, though passed

by the requisite majority in both the

Houses of Parliament has received the

assent of the President without it being

sent to States for ratification or having

been so sent fails to receive such

ratification from not less than half the

States before the Bill is presented for

assent. Such an 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 the

amendments introduced in provisions

referred to in clauses (a) to (e) of

proviso to Article 368(2), Parliament

alone is not competent to make such

amendments on account of some

23

constitutionally recognised federal

principle being invoked. If the doctrine

of severability can be applied it can be

upheld as valid in respect of the

amendments within the competence of

Parliament and only the amendments which

Parliament alone was not competent to make

could be declared invalid.

70. Is there anything compelling in the

proviso to Article 368(2) requiring it to

be construed as excluding the doctrine of

severability to such an amendment? It is

settled rule of statutory construction

that “the proper function of a proviso is

to except and deal with a case which would

otherwise fall within the general language

of the main enactment, and its effect is

confined to that case” and that where “the

language of the main enactment is clear

and unambiguous, a proviso can have no

repercussion on the interpretation of the

main enactment, so as to exclude from it

by implication what clearly falls within

its express terms”. [See: Madras &

Southern Mahratta Railway Company

Ltd. v. Bezwada Municipality [(1944) 71 IA

113, 122 : AIR 1944 PC 71 : 48 CWN

618] , CIT v. Indo-Mercantile Bank

Ltd. [1959 Supp 2 SCR 256, 266 : AIR 1959

SC 713 : (1959) 36 ITR 1]

71. The proviso to Article 368(2)

appears to have been introduced with a

view to giving effect to the federal

principle. In the matter of amendment of

provisions specified in clauses (a) to (e)

relating to legislative and executive

24

powers of the States vis-a-vis the Union,

the Judiciary, the election of the

President and the amending power itself,

which have a bearing on the States, the

proviso imposes an additional requirement

of ratification of the amendment which

seeks to effect a change in those

provisions before the Bill is presented

for the assent of the President. It is

salutary that the scope of the proviso is

confined to the limits prescribed therein

and is not construed so as to take away

the power in the main part of Article

368(2). An amendment which otherwise

fulfils the requirements of Article 368(2)

and is outside the specified cases which

require ratification cannot be denied

legitimacy on the ground alone of the

company it keeps. The main part of Article

368(2) directs that when a Bill which has

been passed by the requisite special

majority by both the Houses has received

the assent of the President “the

Constitution shall stand amended in

accordance with the terms of the Bill”.

The proviso cannot have the effect of

interdicting this constitutional

declaration and mandate to mean that in a

case where the proviso has not been

complied — even the amendments which do

not fall within the ambit of the proviso

also become abortive. The words “the

amendment shall also require to be

ratified by the legislature” indicate that

what is required to be ratified by the

legislatures of the States is the

amendment seeking to make the change in

the provisions referred to in clauses (a)

25

to (e) of the proviso. The need for and

the requirement of the ratification is

confined to that particular amendment

alone and not in respect of amendments

outside the ambit of the proviso. The

proviso can have, therefore, no bearing on

the validity of the amendments which do

not fall within its ambit. Indeed the

following observations of this Court

in 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 a reasonable

construction be harmonised with each other

in the sense that the scope and effect of

either of them should not be allowed to be

unduly reduced or enlarged.”

xxx xxx xxx

73. A similar situation can arise in the

context of the main part of Article 368(2)

which provides: “when the Bill is passed

in each House by a majority of the total

membership of that House and by a majority

of not less than two-thirds of the Members

of that House present and voting, it shall

be presented to the President”. Here also

a condition is imposed that the Bill shall

be presented to the President for his

assent only after it has been passed in

each House by the prescribed special

majority. An amendment in the First and

Fourth Schedules referable to Article 4

can be introduced by Parliament by an

ordinary law passed by simple majority.

There may be a Bill which may contain

amendments made in the First and Fourth

Schedules as well as amendments in other

26

provisions of the Constitution excluding

those referred to in the proviso which can

be amended only by a special majority

under Article 368(2) and the Bill after

having been passed only by an ordinary

majority instead of a special majority has

received the assent of the President. The

amendments which are made in the First and

Fourth Schedules by the said Amendment Act

were validly made in view of Article 4 but

the amendments in other provisions were in

disregard to Article 368(2) which requires

a special majority. Is not the doctrine of

severability applicable to such an

amendment so that amendments made in the

First and Fourth Schedules may be upheld

while declaring the amendments in the

other provisions as ineffective? A

contrary view excluding the doctrine of

severability would result in elevating a

procedural limitation on the amending

power to a level higher than the

substantive limitations.

xxx xxx xxx

75. In that case, it was found that

Section 41 of the Bribery Amendment Act,

1958 made a provision for appointment of a

panel by the Governor-General on the

advice of the Minister of Justice for

selecting members of the Bribery Tribunal

while Section 55 of the Constitution

vested the appointment, transfer,

dismissal and disciplinary control of

judicial officers in the Judicial Service

Commission. It was held that the

legislature had purported to pass a law

which, being in conflict with Section 55

27

of the Order in Council, must be treated,

if it is to be valid, as an implied

alteration of the constitutional

provisions about the appointment of

judicial officers and could only be made

by laws which comply with the special

legislative procedure laid down in Section

29(4). Since there was nothing to show

that the Bribery Amendment Act, 1951 was

passed by the necessary two-thirds

majority, it was held that “any Bill which

does not comply with the condition

precedent of the proviso, is and remains,

even though it receives the Royal Assent,

invalid and ultra vires”. Applying the

doctrine of severability the Judicial

Committee, however, struck down the

offending provision, i.e. Section 41

alone. In other words passing of the Bill

by a special majority was the condition

precedent for presentation of the Bill for

the assent. Disregard of such a condition

precedent for presenting a Bill for assent

did not result in the entire enactment

being vitiated and the law being declared

invalid in its entirety but it only had

the effect of invalidation of a particular

provision which offended against the

limitation on the amending power. A

comparison of the language used in clause

(4) of Section 29 with that of Article

368(2) would show that both the provisions

bear a general similarity of purpose and

both the provisions require the passing of

the Bill by special majority before it was

presented for assent. The same principle

would, therefore, apply while considering

the validity of a composite amendment

28

which makes alterations in the First and

Fourth Schedules as well as in other

provisions of the Constitution requiring

special majority under Article 368(2) and

such a law, even though passed by the

simple majority and not by special

majority, may be upheld in respect of the

amendments made in the First and Fourth

Schedules. There is really no difference

in principle between the condition

requiring passing of the Bill by a special

majority before its presentation to the

President for assent contained in Article

368(2) and the condition for ratification

of the amendment by the legislatures of

not less than one-half of the States

before the Bill is presented to the

President for assent contained in the

proviso. The principle of severability can

be equally applied to a composite

amendment which contains amendments in

provisions which do not require

ratification by States as well as

amendment in provisions which require such

ratification and by application of the

doctrine of severability, the amendment

can be upheld in respect of the amendments

which do not require ratification and

which are within the competence of

Parliament alone. Only these amendments in

provisions which require ratification

under the proviso need to be struck down

or declared invalid.

76. The test of severability requires

the Court to ascertain whether the

legislature would at all have enacted the

law if the severed part was not the part

29

of the law and whether after severance

what survives can stand independently and

is workable. If the provisions of the

Tenth Schedule are considered in the

background of the legislative history,

namely, the report of the ‘Committee on

Defections’ as well as the earlier Bills

which were moved to curb the evil of

defection it would be evident that the

main purpose underlying the constitutional

amendment and introduction of the Tenth

Schedule is to curb the evil of defection

which was causing immense mischief in our

body politic. The ouster of jurisdiction

of courts under Paragraph 7 was incidental

to and to lend strength to the main

purpose which was to curb the evil of

defection. It cannot be said that the

constituent body would not have enacted

the other provisions in the Tenth Schedule

if it had known that Paragraph 7 was not

valid. Nor can it be said that the rest of

the provisions of the Tenth Schedule

cannot stand on their own even if

Paragraph 7 is found to be

unconstitutional. The provisions of

Paragraph 7 can, therefore, be held to be

severable from the rest of the

provisions.”

(Emphasis supplied)

16. The first Rule laid down in R.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

30

asked is, whether the Legislature would have enacted

the valid Part, if it had known that the rest of the

Statute was invalid. It is apposite to read another

Rule, which is laid down, which is Rule No.7. In

determining the legislative intent, it will be

legitimate to take into account, the history of the

legislation and its objects, inter-alia. The

Statement of Objects and Reasons for the NinetySeventh Amendment, reads as follows:

“STATEMENT OF OBJECTS AND REASONS

The co-operative sector, over the years,

has made significant contribution to

various sectors of national economy and

has achieved voluminous growth. However,

it has shown weaknesses in safeguarding

the interests of the members and

fulfilment of objects for which these

institutions were organised. There have

been instances where elections have been

postponed indefinitely and nominated

office bearers or administrators remaining

in-charge of these institutions for a long

time. This reduces the accountability of

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. Cooperatives need to run on well-established

democratic principles and elections held

on time and in a free and fair manner.

31

Therefore, there is a need to initiate

fundamental reforms to revitalize these

institutions in order to ensure their

contribution in the economic development

of the country and to serve the interests

of members and public at large and also to

ensure their autonomy, democratic

functioning and professional management.

2. The "co-operative societies" is a

subject enumerated in Entry 32 of the

State List of the Seventh Schedule of the

Constitution and the State Legislatures

have accordingly enacted legislations on

co-operative societies. Within the

framework of State Acts, growth of cooperatives on large scale was envisaged as

part of the efforts for securing social

and economic justice and equitable

distribution 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 Co-operative Societies Acts

of the States, consultations with the

State Governments have been held at

several occasions and in the conferences

of State Co-operative Ministers. A strong

need has been felt for amending the

Constitution so as to keep the cooperatives free from unnecessary outside

interferences and also to ensure, their

autonomous organisational set up and their

democratic functioning.

32

3. The Central Government is committed to

ensure that the co-operative societies in

the country function in a democratic,

professional, autonomous and economically

sound manner. With a view to bring the

necessary reforms, it is proposed to

incorporate a new Part in the Constitution

so as to provide for certain provisions

covering the vital. aspects of working of

co-operative societies like democratic,

autonomous and professional functioning. A

new article is also proposed to be

inserted in Part IV of the Constitution

(Directive Principles of State Policy) for

the States to endeavour to promote

voluntary formation, autonomous

functioning, democratic control and

professional management of cooperative

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 of other co-operative

societies to make appropriate law, laying

down the following 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 autonomous functioning;

(b) specifying the maximum number of

directors of a co-operative society to be

not exceeding twenty-one members;

(c) providing for a fixed term of five

years from the date of election in respect

of the elected members of the board and

its office bearers;

33

(d) providing for a maximum time limit of

six months during which a board of

directors of co-operative society could be

kept 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 periodic reports of activities and

accounts of co-operative societies;

(h) providing for the reservation of one

seat for the Scheduled Castes or the

Scheduled Tribes and two seats for women

on the board of every co-operative

society, which have individuals as members

from such categories; (i) providing for

offences relating to co-operative

societies and penalties in respect of such

offences.

4. It is expected that these provisions

will not only ensure the autonomous and

democratic functioning of co-operatives,

but also ensure the accountability of

management to the members and other

stakeholders and shall provide for

deterrence for violation of 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 is discernible.

18. There were weaknesses found in safeguarding the

interests of the members of the cooperative

34

societies. Elections were being postponed

indefinitely. There was inadequate professionalism in

management. It was found that cooperatives needed to

be run on well-established democratic principles and

elections had to be held on time and in a free and

fair manner. It was further noted that “cooperative

societies” is a subject enumerated in Entry 32 of the

State List of the Seventh Schedule. That laws were

made by 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 several times.

The Central Government was committed, it is stated to

ensure that the cooperative societies, in the

country, were to function in a democratic,

professional, autonomous and economically sound

manner. It is in this connection that Part IXB was

inserted to empower Parliament in respect of

multistate cooperative societies, and State

Legislatures, in case of other cooperative societies,

to make appropriate law.

19. The intention, therefore, discernible was that

Parliament intended to provide a uniform set of

35

legislative norms and create rights, liabilities and

powers across the board through the length and

breadth of the country. In fact, it was to inform all

cooperative societies, whether they were governed by

laws made by the State Legislatures, falling under

Entry 32 of List II of Seventh Schedule, or the

appropriate Entry under List I.

20. In other words, homogeneity was sought to be

introduced without any discrimination between

cooperative societies falling within the legislative

domain of State Legislatures and of Parliament. The

setting and the manner, in which the Articles have

been ordered in Part IXB, would go to show that the

substantive provisions, which actually conditioned

the legislative power, among other things, was

directed against the State Legislatures.

21. The second Rule laid down in R.M.D.

Chamarbaugwalla (supra) is to enquire whether the

valid and invalid provisions are so inextricably

mixed up that they cannot be separated from one

another. It is further declared that if the seemingly

valid provisions are so distinct and separate, that

after declaring the other set of provisions as

36

invalid, the remaining provisions would remain a

complete Code, independent of the rest, then, the

distinct and separate provisions, which manifests a

complete Code, can become enforceable.

22. The third Rule provides that even if they (the

provisions) are distinct and separate, if they all

form part of a single scheme, which is intended to be

operative as a whole, then, also the invalidity of a

part, will result in failure of a whole. In Kihoto

Hollohan (supra), this Court, after bearing in mind

the Rules, apparently laid down in R.M.D.

Chamarbaugwalla (supra), has proceeded to clearly

articulate (in paragraph-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 and Reasons, that Parliament was fully aware

that Entry 32 clothed the Legislatures of the State

with exclusive legislative power to make laws in

regard to cooperative societies, which were not

multistate cooperative societies. Parliament was

fully aware that laws had already been made by State

Legislatures, but yet, the object was to usher in

37

reforms by the legislative route, and what is more, a

Constitutional Amendment, which clearly involved, a

change in regard to the entrenched provisions. The

Ninety-Seventh Amendment was passed in 2012, several

years after the decision in Kihoto Hollohan (supra).

It is clear that the law was laid down by the

Constitution Bench of this Court in Kihoto Hollohan

(supra), that having regard to the sublime purpose

behind the proviso to Article 368(2), which was to

foster and secure the federal nature of the

Constitution, what mattered was the substance and not

the form. It appears to be further clear that an

effort was made to take the States on board by

holding several meetings between the States, and what

is more, Resolutions were passed apparently at the

meet of State Cooperative Ministers. All of this

appears to point out that, having regard to the law

holding the field and the relevant principles in

question, it appears that Parliament would not have

made the amendment, had it known that the provisions

contained in Articles 243ZI to 243ZQ would not pass

muster. The object was clearly to have identical

38

provisions in place to govern cooperative societies.

Uniformity and, in fact, identical treatment for all

cooperative societies whether they are created under

State Law or by Parliament, was the goal.

24. It is true that what the proviso to Article

368(2) contemplates is, that the ratification by the

requisite number of States is done before the 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 by the 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 of Severability, the provisions contained in

Article 243QR and Article 243QS, can be sustained, I

would agree that the law must survive rather than

perish. The question, however, is on the terms of the

provisions in question (Articles 243QR and 243QS),

and bearing in mind the principles, can they survive

on their own, after the invalidation of Article 243ZH

to Article 243ZQ and Article 243ZT.

26. In Kihoto Hollohan (supra), it must be noticed

that the court in the said case came to the rescue of

Parliament by applying the Doctrine of Severability

39

and found no difficulty in sustaining the provisions

of the Tenth Schedule, even after jettisoning the

provisions of paragraph-7. It was found that

pronouncing the said provision as infirm had no

impact on the workability of the other provisions

which related to and provided for remedies against

the evil of defection.

27. The question boils down to this. Are the

provisions of Article 243ZR and 243ZS independent

provisions and workable? For the sake of clarity, the

provisions are referred in question namely Article

243ZR and 243ZS.

“243ZR. Application to multi-State cooperative societies. – The provisions of

this Part shall apply to the multi-State

co-operative societies subject to the

modification that any reference to

“Legislature of a State”, “State Act” or

“State Government” shall be construed as a

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 and shall, in their

application to a Union territory, having

no Legislative Assembly as if the

references to the Legislature of a State

were a reference to the administrator

thereof appointed under article 239 and

40

in, relation to a Union territory having a

Legislative Assembly, to that Legislative

Assembly:

Provided that the President may, by

notification in the Official Gazette,

direct that the provisions of this Part

shall not apply to any Union territory or

part thereof as he may specify in the

notification.”

28. Both these provisions are entirely dependent upon

the provisions contained in Article 243ZI to 243ZQ.

This is for the reason that both these provisions

expressly provide that the ‘provisions of this part’,

which clearly means the foregoing provisions, which

are contained in Article 243ZI to 243ZQ, are to apply

in regard to multistate cooperative societies and to

Union Territories with the modifications, which are

indicated therein. There can be application and

modifications of something which exists. There cannot

be either, when the elaborate provisions are to be

treated as not born.

29. Are these provisions independent and workable? I

will proceed on the basis that Parliament intended to

produce homogeneity in regard to certain legislative

value judgments which would be cast in stone in a

41

manner of speaking by having those values declared in

the grundnorm itself. It would appear to be that

these values were to apply, across the board, to

cooperative societies born under laws made by the

State Legislatures, as also, to those made by

Parliament.

30. More importantly, once the Court has painted the

relevant provisions, 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 Article 243ZS would

not have the crutches without which these provisions

cease to be workable and are impossible to sustain.

The unconstitutional part, which is to be an integral

part of Article 243ZR and Article 243ZS, must

continue to exist, if the provisions’, in question,

are to bear life. In other words, to sustain these

provisions the court would have to resurrect the dead

provisions contained in Article 243ZI to 243ZQ and

Article 243ZT. The Doctrine of Severability must

apply on surer foundations. It is my view that unless

the provisions, which have been found

42

unconstitutional, are kept alive, Articles 243R and

243ZQ are plainly unworkable.

31. In this view of the matter, I respectfully

disagree with the view taken by my learned and

esteemed Brother in regard to the application of the

Doctrine of Severability.

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

dismissed.

………………………………………………J.

[K.M. JOSEPH]

NEW DELHI;

DATED: JULY 20, 2021.

43

“that a criminal prosecution, if otherwise justifiable and based upon adequate evidence, does not become vitiated on account of malafides or political vendetta of the first informant or complainant.”

“that   a   criminal prosecution,   if   otherwise   justifiable   and   based   upon   adequate evidence,   does   not   become   vitiated   on   account   of   malafides   or political vendetta of the first informant or complainant.” granting   stay   of   all further proceedings including the arrest of the Respondents 1 to 3 herein   (petitioners   before   the   High   Court),   pending   two   main petitions for quashing the criminal complaints in Crime Nos. 218 and 222 of 2021 of Banajara Hills Police Station, Hyderabad, the de facto complainant, has come up with these Special Leave Petitions.

Briefly and broadly, the reasons provided by the learned Judge of the High Court for granting stay of further proceedings in the complaints are as follows:­ (i) That while one of the two complaints relates to ‘loan fraud’, the other relates to ‘voter fraud’; (ii) That the term of office of the Board of Directors of the Cooperative Bank expired in April, 2020 and the election process that was set in motion in March, 2020   culminated   in   the   holding   of   elections   on 20.12.2020; (iii) That there was a huge acrimony surrounding the elections, leading to the filing of a batch of writ petitions   both   before   and   after   the   conduct   of elections; (iv) That there was an over­lapping of the allegations relating to ‘loan fraud’ and ‘voter fraud’ in the writ petitions also, challenging or supporting the election process; 5 (v) That in the said batch of writ petitions, another learned Judge of the same High Court had passed a common order on 08.01.2021, directing the results of the election to be declared and the newly elected Board to take charge but directing the newly elected Directors not to take policy decisions until further orders; (vi) That   even   before   the   registration   of   the   FIRs   in March,   2021   the   police   issued   a   notice   under Section 91 Cr.PC to the Manager of the Bank asking him to preserve the CCTV footage of a particular period,   which   was   clearly   in   violation   of   the mandate of law; and (vii) That the allegations of ‘voter fraud’ and ‘loan fraud’ are  inter­related  to  the   issues  raised  in  the   writ petitions and that therefore further proceedings in the criminal complaints are liable to be stayed.

held that 

Therefore,   it   was   patently   an   election   dispute   which   was sought to be converted to a criminal case. More often than not 21 election   disputes   are   fought   on   different   turfs,   such   as   polling booths, police stations and court rooms. Sometimes, persons who raise these disputes manage to camouflage their real motive by words clothed in high moral fiber and strong legal content. But unfortunately, the petitioner could not do it successfully in this case, as the election disputes came to the court first before the petitioner   could   fall   back   upon   allegations   of   loan   fraud. Fortunately, the High Court saw through the game. This is why the High Court in its impugned order, granted the extraordinary relief of stay of further proceedings including the arrest of Respondents 1 to 3 herein. The facts are so glaring and the background setting so shocking, that the High Court correctly found it to be a fit and proper case to grant interim reliefs to Respondents 1­3 herein. 21. Having seen the factual aspects, let us now deal with the three questions of law on which the learned counsel for the petitioner sought to raise a high pitch

It is completely wrong on the part of the petitioner to contend that   the   High   Court   was   swayed   by   the   pendency   of   civil   writ proceedings. The High Court actually took note of the manner in which the color of the entire proceedings changed from February 2020   to   February   2021   and   it   is   in   that   background   that   the learned Judge took note of the pendency of civil proceedings and the overlapping of allegations. Therefore, the petitioner cannot press into service the ratio in  Mohd.   Allauddin  Khan  (supra) and  K. Jagdish (supra). 26. Even the decision in N.N. Global Mercantile Pvt. Ltd. (supra) will not go the rescue of the petitioner since the reference in the impugned   order   to   Section   84   of   the   Multi­state   cooperative Societies Act, 2002 is only for the limited purpose of dealing with the allegations relating to admission of members. 27. Therefore, we are of the considered view that the High Court was   perfectly   justified   in   granting   interim   protection   to   the Respondents 1 to 3 herein and in ensuring that the supremacy of the ballot is not sabotaged by the authority of the police.

1

REPORTABLE

IN THE SUPEME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CRIMINAL) NO.3869 OF 2021

A P MAHESH COOPERATIVE URBAN

BANK SHAREHOLDERS WELFARE 

ASSOCIATION                                                      … PETITIONER(S)

VERSUS

RAMESH KUMAR BUNG AND ORS.                    …RESPONDENT(S)

WITH

SPECIAL LEAVE (CRIMINAL) NO. 3875 OF 2021

J U D G M E N T

V. Ramasubramanian, J.

1. Challenging an order passed by the High Court for the State of

Telangana   in   two   interlocutory   applications   granting   stay   of   all

further proceedings including the arrest of the Respondents 1 to 3

herein   (petitioners   before   the   High   Court),   pending   two   main

2

petitions for quashing the criminal complaints in Crime Nos. 218

and 222 of 2021 of Banajara Hills Police Station, Hyderabad, the de

facto complainant, has come up with these Special Leave Petitions.

2. We have heard Shri Dil Jit Singh Ahluwalia, learned counsel

for   the   petitioner   and   Mr.   Siddharth   Luthra   and   Mr.   Niranjan

Reddy, learned senior counsel appearing for the Respondent Nos. 1

to 3 herein.

3. The petitioner herein filed two complaints on the file of the III

Additional Chief Metropolitan Magistrate at Hyderabad against the

Respondents 1 to 3 herein on 19.02.2021. The learned Magistrate

passed   an   order   under   Section   156(3)   of   the   Code   of   Criminal

Procedure,   directing   the   police   to   register   cases   and   take   up

investigation, pursuant to which, the Police registered two First

Information Reports (FIR for short) in Crime Nos. 218 and 222 of

2021 respectively on 12.03.2021 and 13.03.2021.

4. The Respondents 1 to 3 herein who were the accused in those

two complaints were described in those two complaints respectively

as (i) Presently   Chairman   and   erstwhile   Senior   Vice   Chairman;

(ii) Managing Director and CEO; and (iii) Presently Vice Chairman

3

and erstwhile Chairman of A.P. Mahesh Cooperative Urban Bank.

The   offences   complained   of   by   the   petitioner   against   the

Respondents 1 to 3 herein were under Sections 409, 420, 467, 468,

471 and 477A read with 120B IPC. It is necessary to take note at

this stage that the Cooperative Bank involved is actually a multistate cooperative society governed by the Multi­State Cooperative

Societies Act, 2002.

5. Immediately   after   the   registration   of   the   complaints,   the

Respondent   Nos.   1   to   3   herein   filed   two   petitions   in   Criminal

Petition Nos. 2370 and 2371 of 2021 under Section 482 of the Code

seeking to quash the criminal complaints. Pending disposal of the

criminal complaints, the Respondents 1 to 3 herein sought interim

stay of all further proceedings including their arrest, in FIR Nos.

218 and 222 of 2021.

6. The applications for stay in I.A. Nos. 1 and 1 of 2021 were

hotly   contested   by   the   petitioner   herein,   as   the   petitioner   was

arrayed as the second respondent in the quash petitions.

7. After hearing the Respondents 1 to 3 herein (persons accused)

and the petitioner herein (de facto  complainant), the High Court

4

passed a reasoned order on 27.04.2021 granting stay of all further

proceedings in both the complaints. It is against the said order that

the petitioner has come up with the above SLPs.

8. Briefly and broadly, the reasons provided by the learned Judge

of the High Court for granting stay of further proceedings in the

complaints are as follows:­

(i) That while one of the two complaints relates to ‘loan

fraud’, the other relates to ‘voter fraud’;

(ii) That the term of office of the Board of Directors of

the Cooperative Bank expired in April, 2020 and the

election process that was set in motion in March,

2020   culminated   in   the   holding   of   elections   on

20.12.2020;

(iii) That there was a huge acrimony surrounding the

elections, leading to the filing of a batch of writ

petitions   both   before   and   after   the   conduct   of

elections;

(iv) That there was an over­lapping of the allegations

relating to ‘loan fraud’ and ‘voter fraud’ in the writ

petitions also, challenging or supporting the election

process;

5

(v) That in the said batch of writ petitions, another

learned Judge of the same High Court had passed a

common order on 08.01.2021, directing the results

of the election to be declared and the newly elected

Board to take charge but directing the newly elected

Directors not to take policy decisions until further

orders;

(vi) That   even   before   the   registration   of   the   FIRs   in

March,   2021   the   police   issued   a   notice   under

Section 91 Cr.PC to the Manager of the Bank asking

him to preserve the CCTV footage of a particular

period,   which   was   clearly   in   violation   of   the

mandate of law; and

(vii) That the allegations of ‘voter fraud’ and ‘loan fraud’

are  inter­related  to  the   issues  raised  in  the   writ

petitions and that therefore further proceedings in

the criminal complaints are liable to be stayed.

9. Assailing the said order of the learned Judge, it was contended

by Mr. Ahluwalia, learned counsel for petitioner:­

(i) That the High Court should not have stayed further

proceedings,   when   on   a   plain   reading   of   the

complaints,   cognizable   offences   are  prima   facie

made out, especially in the teeth of the law laid

down by this Court in  Neeharika   Infrastructure

6

Pvt. Ltd. vs. State of Maharashtra & Others1

 and

Skoda   Auto   Volkswagon   India   Pvt.   Ltd.   vs.

State of U.P.

2

;  

(ii) That the impugned order is clearly contrary to the

decisions of this Court in  Mohd. Allauddin Khan

vs.   State of  Bihar  & Ors.

3

  and  K.  Jagdish   vs.

Udaya   Kumar   GS4

in   as   much   as   it   holds   the

pendency   of   civil   writ   petitions   relating   to   voter

fraud,   as   having   any   bearing   upon   the   criminal

complaints; and

(iii) That the High Court was in error in thinking that

some   of   the   allegations   pertained   to   disputes

arbitrable   under   Section   84   of   Multi­State

Cooperative  Societies  Act,  2002  and  that  such  a

view is in the teeth of the decision of this Court in

N.N. Global Mercantile Pvt. Ltd. vs. Indo Unique

Flame Ltd.

5

10. Mr.   Ahluwalia,   learned   counsel   for   the   petitioner   took   us

through   all   the   documents   including   the   pleadings   in   the   writ

petitions, the interim order passed in the writ petitions, the various

complaints made to the police as well as the Reserve Bank of India

1 (2021) SCC Online SC 315

2 (2020) SCC Online SC 988

3 (2019) 6 SCC 107

4 (2020) 14 SCC 552

5 (2021) SCC Online SC 13

7

and the way the State treated those complaints. He also drew our

attention   to   various   passages   in   the   decisions   of   this   Court   in

Neeharika (supra) and made a passionate appeal that heavens will

certainly fall if the stay granted by the High Court is not vacated.

11.  In response, Messrs. Siddharth Luthra and Niranjan Reddy,

learned senior counsel appearing for respondents 1 to 3 argued:­

(i) That normally this Court would not interfere with

an interim order passed by the High Court when the

main matter is pending adjudication before the High

Court;

(ii) That   what   is   taken   exception   to   in  Neeharika

(supra) is the tendency of courts to pass innocuous

orders,   not   to   take   coercive   steps   and   that   too

without assigning any reasons; and

(iii) That in the case on hand the High Court had more

justifiable reasons than one  to  grant  a stay and

such   reasons   are   also   recorded   by   the   learned

Judge   and   that   the   tendency   to   foist   criminal

complaints at the time of elections can be taken

note of by courts whenever a challenge is made to

the initiation of the prosecution.

12. We   have   considered   the   rival   submissions   and   also   gone

through pleadings and documents. Before we proceed to consider

8

the rival contentions, it is necessary to take note of the sequence of

events that preceded the lodging of the FIRs, as they throw some

light on the first principle of Criminal Law  that  “witnesses may lie,

9

but circumstances may not”.  The sequence is as follows:­

(i) The term of office of the erstwhile Board of Directors

of the Cooperative Bank was to expire in April, 2020

and   hence   a   Returning   Officer   was   appointed   in

February, 2020. An election notification was issued

on 18.03.2020 but it was withdrawn after COVID19 struck;

(ii) A final voters list was issued on 17.11.2020 followed

by a fresh election notification on 24.11.2020;

(iii) The   1st  respondent   herein   was   the   Senior   Vice

Chairman and the 3rd  respondent herein was the

Chairman in the erstwhile Board of Directors. The

2

nd  respondent   was   the   Managing   Director   and

CEO;

(iv) Immediately   after   the   election   notification   dated

24.11.2020 was issued, the petitioner herein filed a

writ petition on 30.11.2020 in W.P. No. 21795 of

2020, praying for a declaration that the proposed

conduct of elections based on a bogus voters list

dated 17.11.2020 was illegal and contrary to the

provisions of the Multi­State Cooperative Societies

Act,   2002,   as   well   as   certain   provisions   of   the

Banking   Regulation   Act,   on   account   of   the

illegalities   committed   by   the   then   Board   of

Directors. Pending their Writ Petition No. 21795 of

10

2020,   the   petitioner   herein   sought   two   interim

reliefs in I.A. Nos. 1 and 2 of 2020, respectively for

(i) the conduct of a thorough investigation with the

help of police/investigation agencies and to bring

the culprits before law; and (ii) stay of operation of

the bogus voters list.

(v) Though   the   aforesaid   writ   petition   was   filed   on

30.11.2020, the elections were held as scheduled on

20.12.2020.   The   counting   of   votes   began   on

21.12.2020,   but   half­way  through,   the   Returning

Officer decided to stop the counting of votes, for

reasons not decipherable now and in any case not

necessary for the present dispute;

(vi) Therefore, few more writ petitions came to be filed

by certain individuals including the 1st Respondent

herein. The details of those writ petitions are as

follows:­

W.P.No. Filed By Prayer Made

23849/202

0

Srinivas Asawa Challenging the action of the

Returning Officer in stopping

the   process   of   counting   of

votes and seeking a direction

to declare the results

23853/202

0

Ramesh Kumar 

Bung (1st RR)

­do ­

23869/202

0

Shrikant Inani ­do23976/202

0

Shaligram Dhoot 

and Mala Dhoot

Challenging the action of the

Returning   Officer   in

conducting the elections in an

arbitrary manner and seeking

11

fresh elections 

(vii) The applications praying for interim relief in all the

aforesaid writ petitions were taken up together by

another   learned   Judge   of   the   High   Court.   After

hearing   elaborate   arguments,   the   learned   Judge

passed a common order dated 08.01.2021 in all the

Interim   Applications   in   those   writ   petitions.   The

operative portion of the said order reads as follows:­

“(i) I.A. No. 1 of 2020 in W.P.No. 23853, I.A. No. 1 of

2020 in W.P. No. 23869 and I.A. No. 1 of 2020 in W.P.

No. 23849 of 2020 are ordered and the Returning

Officer   is   directed   to   announce   the   result   of   the

election held on 20.12.2020;

ii) in I.A. No. 1 of 2020 in W.P. No. 21795 of 2020,

issue notice, returnable by 02.02.2020;

iii) I.A. No. 2 of 2020 in W.P. No. 21795 of 2020 is

filed praying to stay the operation of bogus voters list

dated   17.11.2020.   for   the   reasons   stated   above,

petitioner is not entitled to the relief sought in the

interlocutory Application I.A. No. 2 of 2020 in W.P.

No. 21795 of 2020 is dismissed;

iv) In I.A. No. 1 of 2020 in W.P.No. 23976 of 2020

petitioners are praying to suspend the declaration of

results of the election. For the reasons stated above,

petitioners are not entitled to the relief sought in the

Interlocutory Application. I.A.No.1 of 2020 in W.P. No.

23976 of 2020 is dismissed;

v)   I.A. No. 2 of 2020 in W.P. No. 23976 of 2020 is

filed to direct the 4th respondent Bank to conduct reelection to the posts of Directors. Unless the Court

holds   that  the  election  process   undertaken  by  the

Returning Officer is vitiated, Court cannot direct reelection. Therefore, prayer sought in this Interlocutory

Application cannot be granted at this stage. I.A. No. 2

of 2020 in W.P. No. 21976 of 2020 is dismissed;

12

vi) Until further orders, the newly elected Directors

are directed not to take policy decisions affecting the

affairs of the society and the bank, including dealing

with the funds of the society except for attending to

day to day needs of the Society and the Bank and

payment of salaries and allowances of the staff.”

(viii) Challenging one portion of the common order dated

08.01.2021 forbidding the newly elected directors

from taking any policy decisions, the Management

of the Bank filed two writ appeals in W.A. No. 21

and 22 of 2021. Upon being informed that the writ

petitions were listed for hearing on 09.02.2021, the

Division bench disposed of the writ appeals by an

order dated 21.01.2021, granting opportunity to the

Management of the Bank to move an appropriate

application   before   the   learned   Judge   seeking

necessary clarification;

(ix) Pursuant   to   the   aforesaid   order   of   the   Division

Bench, the 2nd  Respondent moved applications for

clarification, but later chose to withdraw the same;

(x) On 02.01.2021 and 03.01.2021, (a few days before

the learned Judge passed the common interim order

in   the   writ   petitions),   the   petitioner   Association

claims to  have  sent  by post, a  complaint  to the

police;

(xi) Thereafter, on 22.01.2021, the petitioner admittedly

moved   the   Hon’ble   Minister   for   Agriculture,

Marketing   and   Cooperation,   Government   of

13

Telangana, with a petition regarding the inaction on

the part of the police on the complaints allegedly

sent by post on 02.01.2021 and 03.01.2021. On the

petition   so   given   by   the   petitioner   herein,   the

Hon’ble   Minister   issued   a   direction   to   the

Commissioner   of   Police   on   22.01.2021   to   the

following effect:­

“Enclosed   are   the   complaints   wherein   serious

allegations   are   made   of   commission   of   cognizable

offences.   Kindly get both the FIRs registered and

investigation be carried out immediately.   Copies of

FIRs be forwarded to Government within two days.”

(xii) On 03.02.2021, the petitioner herein filed a fresh

writ  petition   in  W.P.  No. 2724  of  2021  with  the

following main and interim prayers:­

“MAIN PRAYER:

In light of the extraordinary facts and circumstances

above, this Hon’ble Court may graciously be pleased

to   pass   a   writ   of   mandamus   or   an   order(s)/

direction(s) of the nature of mandamus:

(i)  Directing Respondent No. 2 to suspend the

Board   of   Directors   of   Respondent   5   Bank   and

appoint   an   administrator   (as   has   also   been

recommended by Respondent No. 4 to Respondent

No.   2  vide   letter No.   6392/Coop­I/A2/2020  dated

23.12.20) in view of the serious allegations of inter

alia large­scale money siphoning, fraud, falsification

of   documents   and   forging   of   records   done   by

Respondent   No.   7   and   Respondent   No.   8,   in

conspiracy with Respondent No. 6, which acts are

gravely prejudicial to the interest of both the Society

as well as its members, contrary to the Multi State

Cooperative   Societies   Act,   2002   and   Bye   laws   of

Respondent   No.   5,   for   which   cognizable   offences

Respondent   No.   4   has   directed   Commissioner   of

Police, Hyderabad to register two FIRs and carry out

investigation immediately;

14

(ii)  Directing   Respondent   No.   3   to   carry   out   a

forensic   audit   of   the   bank   as   recommended   vide

letter No. 6392/Coop­I/A2/2020 dated 23.12.20 of

Respondent No. 4 to Respondent No. 2, which has

informedly   been   recommended   onward   by

Respondent No. 2 to Respondent No. 3;

(iii) Directing   Respondent   No.   3   for   removal   of

Respondent No. 6 as the MD & CEO of Respondent

No. 5 Bank in view of the serious allegations against

him of inter alia large­scale money siphoning, frauds,

falsification   of   documents,   forging   of   records   of

Respondent   No.   5   Bank,   done   in   conspiracy   with

Respondent Nos. 7 and 8;

(iv) pass any other orders/directions deemed just

and reasonable to protect the interests of thousands

of   small   investors   of   the   Bank   in   the   facts   and

circumstances of the case. 

INTERIM   PRAYERS:  For   the   reasons   stated

hereinabove, pending disposal of the writ petition,

the Petitioner herein prays that this Hon’ble Court,

in light of the extra­ordinary facts and circumstances

above, may graciously be pleased to:

(i) ad interim suspend the Boards of Directors of

Respondent No. 5 bank, appoint a Retired Supreme

Court/High   Court   Judge   as   an   administrator   of

Respondent No. 5, during the pendency of the writ

petition   or   Respondent   No.   2   acting   upon

representation   No.   6392/Coop­I/A2/2020   dated

23.12.20   forwarded   by   Respondent   No.   4   to

Respondent   No.   2   or   representation   of   Petitioner

dated 17.01.21 to Respondent No. 3, whichever is

earlier, so as to secure the proper management of the

Bank and to prevent causing irreparable harm to the

interest   of   the   small   depositors   of   the   Petitionerassociation,   in   view   of   the   serious   allegations   of

large­scale money siphoning, fraud, falsification of

documents, forging of records of Respondent No. 5,

by Respondent No. 6 in conspiracy with Respondent

No. 7 and Respondent No. 8, which criminal offences

of serious fraud are under police investigation; or in

the   alternative,   suspend   Respondent   No.   6   and

appoint a retired Managing Director of any Public

Sector Undertaking Bank as an ad interim MD and

CEO   of   the   Respondents   No.   5   bank,   until

Respondent No. 2 has acted upon the Petitioner’s

15

representation   dated   17.01.21   or   during   the

pendency of this petition, whichever is earlier; and 

(ii) until   further   orders   direct   that   the   newly

elected Directors to not to take any policy decisions

affecting   the   affairs   of   the   society   and   the   bank,

including dealing with the funds of the society except

for attending to the day to day needs of the Society

and   the   Bank   and   payment   of   salaries   and

allowances to the staff, as already directed by this

Hon’ble Court vide order dated 08.01.21 in CWP No.

21795/2020   filed   by   the   Petitioner,   which   is   sub

judice; and pass any other orders/directions deemed

just   and   reasonable   to   protect   the   interests   of

thousands of small investors of the Bank in the facts

and circumstances of the case.”

(xiii) On 05.02.2021 the High Court ordered notice before

admission in W.P. No. 2724 of 2021 but did not

grant any interim order;

(xiv) By coincidence or otherwise, the Deputy Registrar of

Cooperative Societies, who was nominated to be the

Returning Officer for the conduct of the elections,

was also issued with a charge memo on the very

same day namely 03.02.2021, the date on which the

petitioner filed their second writ petition in W.P. No.

2725 of 2021. Contending that the charge memo

was   the   product   of   the   handiwork   of   certain

disgruntled elements, the Returning Officer filed a

writ   petition   in   W.P.   No.   3679   of   2021.   On

22.02.2021, the High Court granted interim stay of

further proceedings pursuant to the charge memo;

(xv) In   the   meantime,   the   petitioner   lodged   two

complaints  on  the  file  of the  III Additional  Chief

16

Metropolitan Magistrate on 19.02.2021, one of them

revolving   around   allegations   about   the   grant   of

loans   and   the   other   revolving   around   allegations

relating to voter fraud.

(xvi) The   learned   Magistrate   passed   an   order   under

Section 156(3) of the Code, pursuant to which, the

police registered an FIR bearing No.218 of 2021 on

12.03.2021 and an FIR bearing No.222 of 2021 on

13.03.2021;

(xvii) Praying for quashing of these two complaints, the

Respondents 1 to 3 herein filed Criminal Petition

Nos. 2370 and 2371 of 2021. The Respondents 1 to

3 impleaded the petitioner herein as 2nd Respondent

in   those   quash   petitions.   According   to   the

petitioner, the learned Judge heard arguments in

the   petitions   for  interim  stay  pending  the  quash

petitions and reserved orders on 23.03.2021. It is

claimed by the petitioner that thereafter they filed

counter   affidavits   to   the   criminal   petitions   on

01.04.2021. It is further claimed by the petitioner

that   thereafter   they   also   filed   a   memo   on

15.04.2021 enclosing a copy of the judgment of this

Court   in  Neeharika  (supra)   dated   13.04.2021.

However, the learned Judge passed a common order

granting   stay   of   further   proceedings   in   both   the

17

quash   petitions,   on   27.04.2021.   Therefore,   the

petitioner has come up with the above SLPs.

13. The above sequence of events would show that the petitioner

herein who was admittedly registered as an Association only in the

year 2019 (as per the averments in Para 2 of W.P.No.21795 of

2020), fired their first salvo, only against the proposed elections, by

filing a writ petition on 30.11.2020. After failing to get any interim

order preventing the Returning Officer from proceeding with the

election,   the   petitioner   indulged   in   a   multipronged   attack,   by

sending police complaints by post on 02.01.2021 and 03.01.2021,

then moving the Hon’ble Minister and getting a direction from him

to the Commissioner of Police on 22.01.2021, thereafter moving a

post­election   writ   petition   in   Writ   petition   No.2724   of   2021   to

prevent the newly elected Board from taking charge and then filing

private complaints before the III Additional Metropolitan Magistrate

on 19.02.2021 and getting an order under Section 156(3) of the

Code leading to the registration of the FIRs. The complaints lodged

by the petitioner Association, contained allegations relating to the

period   2016­2019   and   2020,   though   the   association   itself   was

registered only in 2019.

18

14. It is of interest to note that the petitioner Association which

lawfully came into existence by registering itself as an Association

under   the   relevant   law   only   in   2019,   started   off   only   with   a

grievance relating to the elections and the creation of the post of

Chairman Emeritus, at the beginning. It appears that the petitioner

Association moved a writ petition way back in February, 2020 in

W.P. No. 3687 of 2020 expressing an apprehension that elections

will not be conducted fairly. But a learned Judge of the High Court

dismissed   the   writ   petition   by   an   order   dated   20.02.2020.   As

against the said order, the petitioner filed a writ appeal in W.A. No.

154 of 2020 which is stated to be pending.

15. The petitioner has made a passing reference in Paragraph 3 of

their writ petition W.P. No. 21795 of 2020, to the above writ appeal

W.A. No.153 of 2020, which even according to them, related only to

an election dispute.

16. Similarly,   the   petitioner   has   made   a   passing   reference   to

another writ appeal in W.A.No.141 of 2020 in Para 3 of their writ

petition in W.P.No.21795 of 2020. This, according to the petitioner

Association   related   to   the   conferment   of   the   title   of   Chairman

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Emeritus   on   the   1st  Respondent   herein.   The   background   facts

relating to this writ appeal, are not disclosed by the petitioner fully

in their writ petition.

17. Therefore, it is obvious that the petitioner started a dispute

first against the conferment of the title of Chairman Emeritus on

the 1st Respondent and then they raised issues with regard to the

proposed elections, first in a writ petition filed in February, 2020

and then in a writ petition filed in November, 2020. It is only

thereafter that the allegations relating to loan fraud were raised by

the   petitioner   Association.   Apparently,   the   petitioner   had   the

blessings of the powers that be, which is why a direction was issued

on 22.01.2021 by the Hon’ble Minister, to the Commissioner of

Police to register the complaints and report to the Government.

18. What is important to note, is the fact that in I.A.No.1 of 2020

in W.P.No.21975 of 2020 the petitioner had prayed for a direction to

Respondents 1 to 4 therein (namely the State of Telangana, Central

Registrar, the Returning Officer and the Management of the Bank)

to   conduct   a   thorough   investigation   with   the   help   of   the

police/investigation agencies.   The learned Judge who heard this

20

I.A. along with other applications in the connected writ petitions,

merely ordered (on 08.01.2021), notice returnable by 02.02.2021 in

the said application.

19. In the next writ petition W.P.No.2724 of 2021 filed by the

petitioner on 03.02.2021 (after the declaration of results pursuant

to the order of the High Court dated 08.01.2021), the petitioner

again made a prayer for interim relief to suspend the elected Board

on the ground that allegations of large scale money siphoning, fraud

and   falsification   and   forging   of   documents   are   under   police

investigation. On the date on which W.P.No.2724 of 2021 was filed

namely 03.02.2021, no FIR was pending, but the petitioner was

emboldened to make such a statement in their writ petition, on

account of the endorsement that they were able to secure from the

Hon’ble Minister on 22.01.2021. It is only after failing to secure any

interim   order   even   in   the   second   writ   petition   that   the   private

complaints were filed by the petitioner before the Magistrate on

19.02.2021.

20. Therefore,   it   was   patently   an   election   dispute   which   was

sought to be converted to a criminal case. More often than not

21

election   disputes   are   fought   on   different   turfs,   such   as   polling

booths, police stations and court rooms. Sometimes, persons who

raise these disputes manage to camouflage their real motive by

words clothed in high moral fiber and strong legal content. But

unfortunately, the petitioner could not do it successfully in this

case, as the election disputes came to the court first before the

petitioner   could   fall   back   upon   allegations   of   loan   fraud.

Fortunately, the High Court saw through the game. This is why the

High Court in its impugned order, granted the extraordinary relief

of stay of further proceedings including the arrest of Respondents 1

to 3 herein. The facts are so glaring and the background setting so

shocking, that the High Court correctly found it to be a fit and

proper case to grant interim reliefs to Respondents 1­3 herein.

21. Having seen the factual aspects, let us now deal with the three

questions of law on which the learned counsel for the petitioner

sought to raise a high pitch.

22. As rightly pointed out by the learned senior counsel appearing

for Respondents 1 to 3, Neeharika (supra) certainly allowed space

for the High Court to pass an interim order of the nature impugned

22

herein, “in exceptional cases with caution and circumspection,

giving brief reasons”. What is frowned upon in Neeharika (supra)

is the tendency of the courts to pass blanket, cryptic, laconic, nonspeaking orders reading  “no coercive steps shall be adopted”.    In

Paragraph   60   of   the   Report   in  Neeharika  (supra),   this   Court

recognized that there may be allegations of abuse of process of law,

converting a civil dispute into a criminal dispute, with a view to

pressurize the accused. In the order impugned in these petitions,

the   High   Court   has   given   elaborate   reasons   as   to   how   the

allegations of bank fraud were developed during the proceedings

concerning allegations of election fraud. Therefore, the impugned

order cannot be said to be bad in the light of Neeharika  principles.

23. In fact, Neeharika  reiterates the parameters laid down in the

celebrated decision in State of Haryana  vs. Bhajan Lal6

. One of

the   cardinal  principles  evolved   in  Bhajan   Lal (supra)   found   in

paragraph 102 (7) reads as follows:

“where a criminal proceeding is manifestly attended with mala

fide and/or where the proceeding is maliciously instituted with an

ulterior motive for wreaking vengeance on the accused and with a

view to spite him due to private and personal grudge”   

6  1992 Supp (1) SCC 335 

23

In   paragraph   37   of   the   decision   in  Neeharika,   the   above

passage from Bhajan Lal is extracted.  In fact Bhajan Lal (supra)

took note of the view expressed by Bhagwati, C.J. in Sheonandan

Paswan  vs.  State   of   Bihar7

  to   the   effect  “that   a   criminal

prosecution,   if   otherwise   justifiable   and   based   upon   adequate

evidence,   does   not   become   vitiated   on   account   of   malafides   or

political vendetta of the first informant or complainant.” Yet Bhajan

Lal  (supra) laid down seven principles in paragraph 102, the last

which  we   extracted  above.    The  seven   principles   enunciated   in

paragraph 102 of  Bhajan Lal  (a two­member Bench) are actually

quoted with approval in Neeharika (a three­member Bench).

24. In fact, one of the interim prayers sought by the petitioner in

the civil writ proceedings is for the conduct of a forensic audit. The

said   prayer   is   pending   consideration.   Allegations   of   the   nature

projected by the petitioner cannot be taken for their face value

without a forensic audit and the court cannot go by the ipse dixit of

the petitioner. 

7  (1987) 1 SCC 288

24

25. It is completely wrong on the part of the petitioner to contend

that   the   High   Court   was   swayed   by   the   pendency   of   civil   writ

proceedings. The High Court actually took note of the manner in

which the color of the entire proceedings changed from February

2020   to   February   2021   and   it   is   in   that   background   that   the

learned Judge took note of the pendency of civil proceedings and

the overlapping of allegations. Therefore, the petitioner cannot press

into service the ratio in  Mohd.   Allauddin  Khan  (supra) and  K.

Jagdish (supra).

26. Even the decision in N.N. Global Mercantile Pvt. Ltd. (supra)

will not go the rescue of the petitioner since the reference in the

impugned   order   to   Section   84   of   the   Multi­state   cooperative

Societies Act, 2002 is only for the limited purpose of dealing with

the allegations relating to admission of members.

27. Therefore, we are of the considered view that the High Court

was   perfectly   justified   in   granting   interim   protection   to   the

Respondents 1 to 3 herein and in ensuring that the supremacy of

the ballot is not sabotaged by the authority of the police. Hence the

SLPs   are   dismissed.   Consequently   the   applications   for   stay   are

25

dismissed and the stay earlier granted is vacated. The vacate stay

petitions are closed in view of the dismissal of the stay applications.

………………………………..J. 

(INDIRA BANERJEE)

………………………………..J.

(V. RAMASUBRAMANIAN)

New Delhi

July 20, 2021

whetherthe exparte decree was a nullity, as it waspassed against a minor without the minor being represented by aguardian duly appointed in terms of the procedure contemplatedunder Order XXXII, Rule 3 of the Code

whetherthe exparte decree was a nullity, as it waspassed against a minor without the minor being represented by aguardian duly appointed in terms of the procedure contemplatedunder Order XXXII,  Rule 3 of the Code

REPORTABLE

IN THE SUPEME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) NO.2492 OF 2021

K.P. NATARAJAN & ANR.                                  … PETITIONER(S)

VERSUS

MUTHALAMMAL & ORS.             …RESPONDENT(S)

J U D G M E N T

V. Ramasubramanian, J.

1. In a Civil Revision Petition filed under Section 115 of the Code

of Civil Procedure, 1908 (for short “the Code”), challenging an order

of the trial Court refusing to condone the delay of 862 days in

seeking to set aside an ex­parte decree for specific performance, the

High Court found that the ex­parte decree was a nullity, as it was

passed against a minor without the minor being represented by a

guardian duly appointed in terms of the procedure contemplated

1

under Order XXXII,  Rule 3 of the Code.  Therefore, the High Court,

exercising its power of superintendence under Article 227 of the

Constitution, set aside the ex­parte decree itself on condition that

the petitioners before the High Court/defendants pay a sum of

Rs.2,50,000/­, representing the amount already spent by the decree

holders in purchasing stamp paper etc.  Aggrieved by the said order

of the High Court, the decree holders are before us in this special

leave petition.

2. We have heard Mr. S. Nagamuthu, learned senior Counsel

appearing   for   the   petitioners/plaintiffs   and   Mr.   R.

Balasubramanian,   learned   senior   counsel   appearing   for   the

respondents/defendants.

3. In a suit O.S. No.264 of 2013 filed by the petitioners­herein for

specific performance of an agreement of sale dated 25.04.2011, the

respondents   were   duly   served   with   summons,   but   after   having

entered appearance through counsel they remained ex­parte. The

trial Court decreed the suit ex­parte on 08.04.2015.

4. At  this  stage  it  may  be  relevant  to  take  note  of  one  fact,

namely, that the petitioners sought, as an alternate relief, a decree

2

for refund of the money paid with interest at 18% per annum in the

event of the Court not granting the relief of specific performance.

But the trial Court held albeit without reasons, that the petitioners

are entitled, for the primary relief of specific performance.

5. In the plaint as it was filed by the petitioners­herein, the third

defendant was described as “minor S Aravindarajan, aged about 16

years, son of Sampathkumar represented by the next friend father M.

Sampathkumar”.  Therefore, the petitioners had filed, along with the

plaint, an application in I.A No.981 of 2013 under Order XXXII,

Rule 3 of the Code for appointing the second respondent­herein (his

father and the second defendant) as the guardian of the minor. As

noted by the High Court, the trial Court, after serving notice on the

second   defendant,   passed   an   Order   in   I.A.No.   981   of   2013   on

23.03.2014 to the following effect:­ 

“Batta served. Vakalat by guardian to minor

filed. Hence this petition is closed.”

6. Seeking execution of the decree, the petitioners filed E.P No.33

of   2015.   Notices   were   served   on   all   the   respondents   in   the

Execution Petition and the Execution Petition is said to have come

3

up for hearing on two dates in December­2015 and on several dates

in the year 2016. Eventually the respondents were set ex­parte in

the Execution Petition on 18.10.2016 and the petition was allowed. 

7. Thereafter the respondents filed an application in November2016 for setting aside the ex­parte order in the Execution Petition.

It was numbered only in the year 2017 as E.A. No.40 of 2017.

8. But   in   the   meantime   the   petitioners   were   called   upon   to

deposit non­judicial stamp papers of the value of Rs.1,98,000/­ for

the execution of the sale deed. They did so and a sale deed was in

fact executed by the Court on 04.01.2017.  

9. It is only thereafter that the respondents filed an application in

I.A No.142 of 2017 for condonation of the delay of 862 days in

seeking to set aside the ex­parte decree. This application filed on

19.09.2017 was dismissed by the trial Court by an order dated

28.11.2017, primarily on three grounds namely: (i) that there was

no   proper   explanation   for   the   delay;  (ii)  that   even   the   written

statement was not filed within the time stipulated in Order VIII,

Rule   7;   and  (iii)  and   that   after   allowing   even   the   execution   to

proceed   ex­parte   and   after   having   allowed   the   sale   deed   to   be

4

executed   by   the   Executing   Court,   the   respondents   cannot   seek

condonation of the huge delay.

10. Aggrieved by the dismissal of the petition to condone the delay

in seeking to set aside the ex­parte decree, the respondents filed a

revision petition under Section 115 of the Code before the High

Court. Entertaining a doubt about the appointment of a guardian

for the third defendant, the learned Judge summoned the original

records in the suit from the trial Court. Finding that I.A No.981 of

2013 filed along with the plaint for the appointment of a guardian

for the third defendant, was not properly dealt with and that there

was no appointment of a guardian for the minor as required under

Order XXXII, Rule 3, the learned Judge invoked the general power

of superintendence under Article 227 of the Constitution and set

aside the ex­parte decree itself, without going into the question of

delay and without examining whether there was sufficient cause for

condonation of delay.  In order to ensure that the petitioners/decree

holders are not poorer after a decree (or because of the decree), the

learned Judge put the respondents on condition that they should

pay of Rs.2,50,000/­ as cost to the petitioners­herein on or before

5

16.10.2020,   as   the   petitioners/decree   holders   had   already

deposited stamp papers of the value of Rs.1,98,000/­ and got the

sale deed executed.

11. It appears that pursuant to the aforesaid order of the High

Court,   the   respondents   deposited   the   cost   of   Rs.2,50,000/­   on

12.10.2020. As a consequence, the trial Court appears to have

taken up the suit for trial after framing issues. It is stated by Mr. R.

Balasubramanian, learned senior counsel for the respondents that

the suit now stands posted for examination of PW­1.  

12. The main grounds of attack, to the impugned order of the High

Court, as articulated by Mr. S. Nagamuthu, learned senior counsel

for the petitioners are :­ (i) that the High Court ought not to have

set aside an ex­parte decree, in a revision petition arising out of an

application under Section 5 of the Limitation Act, 1963; (ii) that the

Court   was   not   even   entitled   to   invoke   equity   in   favour   of   the

respondents who were grossly negligent, first in defending the suit,

next in defending the executing proceedings and then in seeking to

set aside the ex­parte decree after nearly a year of seeking to set

aside the ex­parte  order passed in the Execution Petition; and (iii)

6

that it was not even one of the grounds raised or points argued by

the respondents­herein  in their revision petition before the High

Court either that the procedure prescribed under Order XXXII, Rule

3 of the Code was not followed or that a grave prejudice or injustice

has been caused to the defendant/minor, on account of the failure,

if any, on the part of the trial Court.

13. Mr. R. Balasubramanian, learned senior counsel appearing for

the   respondents   contended   in   response,   that   the   revisional

jurisdiction of the High Court under Article 227 are wider in nature

and that when the High Court finds that the trial Court has not

taken care of the interest of the minor who was a party to the

proceeding, by following the procedure prescribed by law, the High

Court cannot shut its eyes on the basis of technicalities. 

14. We have carefully considered the rival contentions.  There is

no dispute on facts and there is no escape from the conclusion that

the respondents have been grossly negligent in defending the suit

as well as the execution proceedings. But the fact remains that

while the parties can afford to remain negligent, the Court cannot.

The High Court has found, after summoning the records from the

7

trial Court that as a matter of fact, the trial Court failed to appoint

a guardian for the third respondent/minor in a manner prescribed

by law. As pointed out earlier, an application was in fact filed by the

petitioners­herein/plaintiffs under Order XXXII, Rule 3 of the Code

in I.A No.981 of 2013. The said application was closed by the trial

Court by an Order passed on 23.03.2014, which we have extracted

elsewhere. The manner in which the trial Court disposed of the

application under Order XXXII, Rule 3, is without doubt, improper

and cannot at all be sustained, especially in the teeth of the Madras

Amendment.   

15. Order XXXII, Rule 3, is found in the First Schedule to the

Code.   Under   Section   121   of   the   Code,   the   Rules   in   the   First

Schedule shall have effect as if enacted in the body of the Code

until   annulled   or   altered   in   accordance   with   the   provisions   of

Part­X, which comprises of Sections 121 to 131. The High Courts

are empowered under Section 122 of the Code to annul/alter or add

to all or any of the Rules in the First Schedule, for regulating the

procedure of the civil courts subject to their superintendence.

8

16. In exercise of such a power, the High Court of Judicature at

Madras has made Rule 3 of Order XXXII of the Code, much more

elaborate than how the Rule was originally framed.

17. In the impugned order, the learned Judge has extracted Order

XXXII, Rule 3 of the Code in its original form. But in its application

to civil courts subject to the superintendence of the Madras High

Court Order XXXII, Rule 31

 actually reads as follows:­

`”3.  Qualifications   to   be   a   next   friend   or

guardian. – (1) Any person who is of sound mind and

has attained majority may act as next friend of a minor

or as his guardian for the suit:

Provided   that   the   interest   of   that   person   is   not

adverse to that of the minor and that he is not in the

case of a next friend, defendant, or in the case of a

guardian for the suit, a plaintiff.

(2) Appointed or declared guardians to be preferred

and   to   be   superseded   only   for   reasons   recorded.   –

Where a minor has a guardian appointed or declared

by   competent   authority   no   person   other   than   the

guardian shall act as the next friend of the minor or be

appointed his guardian for the suit unless the Court

considers, for reasons to be recorded, that it is for the

minor’s welfare that another person be permitted to act

or be appointed, as the case may be.

(3) Guardians to be appointed by Court.­ Where the

defendant is a minor, the Court, on being satisfied of

the fact of his minority, shall appoint a proper person to

be guardian for the suit for the minor.

1    The amendment was made by a Notification in P. Dis. No.256 of 1938 Vide St. George Gazette, dated

13­3­1938.  Unfortunately most of the Bare Acts published in recent times and even the 19th Edition of Mulla

on the Code of Civil Procedure does not make a mention of the Notification number and date in so far as the

Madras Amendment is concerned.

9

(3A) A person appointed under sub­rule (3) to be

guardian   for   the   suit   for   a   minor   shall   unless   his

appointment is terminated by retirement, removal   or

death   continue   as   such   throughout   all   proceedings

arising   out   of   the   suit   including   proceedings   in   any

appellate   or   revisional   Court   and   any   proceeding   in

execution of a decree.

(4) Appointment   to   be   on   application   and   where

necessary after notice to proposed guardian.­ An order

for the appointment of a guardian for the suit may be

obtained upon application in the name and on behalf of

the minor or by the Plaintiff. The application, where it is

by the  plaintiff, shall  set forth, in the order of their

suitability, a list of persons (with their full addresses for

service of notice in Form No. 11A set forth in Appendix

H. Hereto) who are competent and qualified to act as

guardian for the suit for the minor defendant. The Court

may, for reasons to be recorded in any particular case,

exempt the applicant from furnishing the list referred to

above.

(5) Contents of affidavit in support of the application

for appointment of guardian.­ The application referred

to in the above sub­rule whether made by the plaintiff

or on behalf of the minor defendant shall be supported

by   an   affidavit   verifying   the   fact   that   the   proposed

guardian   has   not   or   that   no   one   of   the   proposed

guardians   has   any   interest   in   the   matters   in

controversy in the suit adverse to that of the minor and

that the proposed guardian or guardians are fit persons

to be so appointed.   The affidavit shall further state

according   to   the   circumstances   of   each   case   (a)

particulars   of   any   existing   guardian   appointed   or

declared   by   competent   authority,   (b)   the   name   and

address   of   the   person,   if   any,   who   is   the   de   facto

guardian of the minor, (c) the names and addresses of

persons, if any, who in the event of either the natural or

the   de   facto   guardian   or   the   guardian   appointed   or

declared by competent authority, not being permitted to

act,   are   by   reason   of   relationship   or   interest   or

otherwise, suitable persons to act as guardians for the

minor for the suit.

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(6) Application   for   appointment   of   guardian   to   be

separate   from   application   for   bringing   on   record   the

legal   representatives   of   a   deceased   party.   –   An

Application for the appointment of a guardian for the

suit   of   a   minor   shall   not   be   combined   with   an

application   for   bringing   on   record   the   legal

representatives   of   a  deceased  plaintiff   or defendant.

The applications shall be by separate petitions.

(7) Notice   of   application   to   be   given   to   persons

interested   in   the   minor   defendant   other   than   the

proposed guardian.– No order shall be made on any

application under sub­rule (4) above except upon notice

to any guardian of the minor appointed or declared by

an authority competent in that behalf or where there is

no guardian, upon notice to the father or other natural

guardian of the minor, or where there is no father or

other natural guardian, to the person in whose care the

minor is, and after hearing any objection which may be

urged on behalf of any person served with notice under

this sub­rule. The notice required by this sub­rule shall

be served six clear days before the day named in the

notice for the hearing of the application and may be in

Form No. 11 set forth in Appendix H hereto.

(8)  Special  provision to  shorten  delay  in getting a

guardian   appointed.­Where   the   application   is   by   the

plaintiff,   he   shall,   along   with   his   application   and

affidavit   referred   to   in   sub­rules   (4)   and   (5)   above,

produce the necessary forms in duplicate filled in to the

extent   that   is   possible   at   that   stage,   for   the   issue

simultaneous of notices to two at least of the proposed

guardians for the suit to be selected by the Court from

the list referred to in sub­rule (4) above together with a

duly   stamped   voucher   indicating   that   the   fees

prescribed for service have been paid. 

If one or more of the proposed guardians signify his

or their consent to act, the Court shall appoint one of

them and intimate the fact of such appointment to the

person appointed by registered post. If no one of the

persons served signifies his consent to act, the Court

shall proceed to serve simultaneously another selected

two, if so many there be, of the persons named in the

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list   referred   to   in   sub­rule   (4)   above   but   no   fresh

application   under   sub­rule   (4)   shall   be   deemed

necessary.   The applicant shall within three days of

intimation of unwillingness by the first set of proposed

guardians,   pay   the   prescribed   fee   for   service   and

produce the necessary forms duly filled in.

(9) No personal shall be appointed guardian without

his consent.­ No person shall without his consent, be

appointed   guardian   for   the   suit.     Whenever   an

application is made proposing the name of a person as

guardian for the suit a notice in Form No.11 A set forth

in Appendix H hereto shall be served on the proposed

guardian, unless the applicant himself be the proposed

guardian or the proposed guardian consents.

(10) Court guardian.­ When to be appointed­How he

is to be placed in funds.­ Where the  Court finds no

person fit and willing to act as guardian for the suit, the

Court may appoint any of its officers or a pleader of the

Court to be the guardian and may direct that the costs

to be incurred by that officer in the performance of the

duties as guardian shall be borne either by the parties

or by any one or more of the parties to the suit or out of

any fund in Court in which the minor is interested, and

may give directions for the repayment or allowance of

the costs as justice and the circumstances of the case

may require.

(11) Funds for a guardian other than Court guardian

to defend.­ When a guardian for the suit of a minor

defendant is appointed and it is made to appear to the

Court that the guardian is not in possession of any or

sufficient funds for the conduct of the suit on behalf of

the defendant and that the defendant will be prejudiced

in his defence thereby, the Court may, from time to

time,   order   the   plaintiff   to   advance   monies   to   the

guardian for purpose of his defence and all monies so

advanced shall form part of the costs of the plaintiff in

the suit.  The order shall direct that the guardians, as

and when directed, shall file in Court an account of the

monies so received by him.”

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18. There   is   a   great   deal   of   difference   between   the   Rules   of

Procedure laid down in Rule 3 of Order XXXII by the Central Act

and   Rule   3   as   applicable   to   civil   courts   subject   to   the

superintendence of Madras High Court. Order XXXII, Rule 3 in its

original form reads as follows:­

“3. Guardian for the suit to be appointed by court

for  minor  defendant.­ (1) Where the defendant is a

minor, the court, on being satisfied of the fact of his

minority, shall appoint a proper person to be guardian

for the suit for such minor.

(2) An order for the appointment of a guardian for the

suit may be obtained upon application in the name and

on behalf of the minor or by the plaintiff.

(3) Such application shall be supported by an affidavit

verifying the fact that the proposed guardian has no

interest in the matters in controversy in the suit adverse

to that of the minor and that he is a fit person to be so

appointed.

(4) No order shall be made on any application under

this   rule   except   upon   notice   to   any   guardian   of   the

minor appointed or declared by an authority competent

in that behalf, or, where there is no such guardian,

upon notice to the father, or where there is no father, to

the mother, or where there is no father or mother, to

other natural guardian of the minor, or, where there is

no   father,   mother,   or   other   natural   guardian,   to   the

person in whose care the minor is, and after hearing

any objection which may be urged on behalf of any

person served with notice under this sub­rule.

(4A) The Court may, in any case, if it thinks fit, issue

notice under sub­rule (4) to the minor also.

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(5)   A   person   appointed   under   sub­rule   (1)   to   be

guardian   for   the   suit   for   a   minor   shall,   unless   his

appointment   is   terminated   by   retirement,   removal   or

death,   continue   as   such   throughout   all   proceedings

arising   out   of   the   suit   including   proceedings   in   any

Appellate or Revisional Court and any proceedings in

the execution of a decree.”

19. A comparison of the two sets of Rules show that the rules

applicable to Courts subject to the superintendence of the Madras

High   Court   are   more   elaborate   and   also   rigorous.   We   may

immediately note (i) that sub­rules (1) and (2) of Rule 3 of the Rules

applicable to Courts subject to the superintendence of the Madras

High   Court   (hereinafter   referred   to   as   “applicable   rules”  for   the

purpose of convenience), are additional requirements; (ii) that subrule (3) of Rule 3 of the ‘applicable rules’ is a reproduction of subrule (1) of Rule 3 of the original Code;  (iii)  that sub­rule (3­A) of

Rule 3 of the ‘applicable rules’ is a reproduction of sub­rule (5) of

the Central Act; (iv) sub­rule (7) of Rule 3 of the ‘applicable rules’ is

an improved version of sub­rule (4) of Rule 3 of the Central Act.

20. More importantly sub­rules (4), (5), (6) and a part of sub­rule

(7) of Rule 3 of Order XXXII of the ‘applicable rules’ prescribe certain

additional   requirements   which   are   as   follows:­  (i)  when   an

14

application for the appointment of a guardian is by the plaintiff, it

shall set forth in the order of their suitability, a list of persons with

their full addresses for service of notice in Form No.11­A set forth in

Appendix H, who are competent and qualified to act as guardian for

the   minor   defendant;  (ii)  the   application   for   appointment   of   a

guardian should be supported by an affidavit, not merely verifying

(as in the Central Act) the fact that the proposed guardian has no

interest in the matters in controversy adverse to that of the minor,

but   also   stating   additional   particulars   including   the   name   and

address of the de­facto guardian and the names and addresses of

other suitable persons, whenever a natural or de­facto guardian is

not permitted to act.

21. Admittedly, the learned Judge summoned the records from the

trial Court after entertaining a doubt about the procedure followed

by the trial Court in this case and found as a matter of fact that the

trial Court failed to appoint a guardian for the third defendant as

required by Order XXXII, Rule 3. The power of the learned Judge to

call for the records and examine the same, in a revision under

Section   115(1)   of   the   Code   is   not   and   cannot   be   doubted   or

15

questioned by the petitioners. It is true that the learned Judge was

dealing   only   with   a   revision   petition   arising   out   of   an   Order

dismissing a petition under Section 5 of the Limitation Act, 1963.

But it does not take away or curtail the jurisdiction of the High

Court   to   look   into   the   records   with   particular   reference   to   an

important rule of procedure, especially when the same relates to

something concerning persons under disability. The rigorous nature

of the Madras amendment to Rule 3 of Order XXXII, is perhaps to

be attributed to the wider jurisdiction that the High Court exercised

on its original side, under Clause­17 of the Letters Patent and the

parens patriae  jurisdiction that a Court normally exercises while

dealing with cases of minors. Therefore, we find no illegality in the

action of the High Court in summoning the original records in the

suit and finding out whether or not a guardian of a minor defendant

was   appointed   properly   in   accordance   with   the   procedure

prescribed in Order XXXII, Rule 3, even in the absence of a specific

contention being raised by the petitioners.  

22. The contention that in a revision arising out of the dismissal of

a petition under Section 5 of the Limitation Act, 1963, the High

16

Court cannot set aside the ex­parte decree itself, by invoking the

power under Article 227, does not appeal to us. It is too well settled

that the powers of the High Court under Article 227 are in addition

to and wider than the powers under Section 115 of the Code. In

Surya  Dev  Rai   vs.  Ram  Chander  Rai  and  Others2

, this Court

went as far as to hold that even certiorari under Article 226 can be

issued for correcting gross errors of jurisdiction of a subordinate

Court.  But the correctness of the said view in so far as it related to

Article 226, was doubted by another Bench, which resulted in a

reference to a three member Bench. In Radhey Shyam & Anr. vs.

Chhabi   Nath  &   Others3

, the three member Bench, even while

overruling  Surya  Dev  Rai  (supra) on the question of jurisdiction

under Article 226, pointed out that the jurisdiction under Article

227   is   distinguishable.   Therefore,   we   do   not   agree   with   the

contention that the High Court committed an error of jurisdiction in

invoking Article 227 and setting aside the ex­parte decree. 

23. In fact the learned Judge also went into the question whether

a decree passed against a minor without proper appointment of a

2 (2003) 6 SCC 675

3 (2015) 5 SCC 423

17

guardian, is a nullity ipso facto or whether the same would depend

upon prejudice against the minor being established. The learned

Judge found that in this case, the minor was prejudiced.

24. It may be of interest to note that Rule 3­A was inserted in

Order XXXII by CPC Amendment Act 104 of 1976. It is this Rule

that introduced for the first time into the Code, the question of

prejudice to the minor. But this Rule 3­A applies only to cases

where the next friend or guardian for the suit of the minor had an

interest in the subject matter of the suit adverse to that of the

minor. This amendment was a sequel to certain conflicting opinions

on the question as to whether a decree passed in cases where the

minor was represented by a guardian who had an interest in the

subject matter of the suit adverse to that of the minor, was void or

voidable.

25. In other words the Parliament chose to introduce the element

of prejudice, specifically in relation to one category of cases under

Order XXXII, Rule 3A. The case on hand does not fall under that

category. In any case, we need not go into that question in this

case, as the learned Judge found that the minor was prejudiced.

18

26. A valiant attempt was made during the hearing, to show that

the   3rd  Respondent/defendant   was   not   a   minor   at   all.   Such   a

contention was sought to be raised on the basis of the long cause

title in the execution application E.A.No.65 of 2017 where the 3rd

Respondent was described as a person aged about 24 years in the

year 2017. Therefore, it was sought to be contended that he should

have attained majority long before the ex parte decree and that

therefore the question of appointment of a guardian and the decree

becoming a nullity did not arise.

27. The said contention is to be stated only to be rejected. It was

the petitioners herein who filed the suit in the year 2013 describing

the 3rd  defendant as a minor and seeking the appointment of a

guardian. Therefore, there is no place for any innovative arguments

contrary to one’s own pleadings.

28. Another contention was raised that in any event, the decree

could have been set aside only as against the 3rd Respondent and

not against all the others. But the said logic does not apply to

something that is a nullity in law.

19

29. The reliance placed by the learned counsel for the petitioners

upon the judgment of a Division Bench of the Madras High Court in

Lanka   Sanyasi  vs.  Lanka   Yerran   Naidu4

is   misplaced.   The

question in Lanka Sanyasi (supra) was whether a person who had

become a major on the date on which a compromise decree was

passed in a suit, was entitled to challenge the compromise decree in

a subsequent suit. The subsequent suit was decreed by the First

Appellate Court and while dealing with the Second Appeal, the High

Court held in  Lanka   Sanyasi  that a mere circumstance that a

minor defendant had attained majority during the pendency of the

suit, but not elected to continue the defence himself and to have his

guardian ad litem discharged, is not sufficient to enable him to have

the judgment passed in the suit declared as not binding on him.

Nothing turned on the provisions of Order XXXII, Rule 3 in the said

case.

30. The decision of the Travancore Cochin High Court in Ouseph

Joseph  vs.  Thoma   Eathamma5

,  relied upon by the petitioners,

4 1929 Law Weekly 455

5 AIR 1956 TC 26

20

more than helping the petitioners, confirms that the view taken in

the impugned order is correct.

31. The   decision   in  Divya   Dip   Singh   and   others  vs.  Ram

Bachan Mishra and others6

, concerned the question whether the

appointment of a guardian for a minor under Order XXXII, Rule 3

will take away the right of the natural guardian. The answer was

too obvious and the same has nothing to do with the issue on hand.

32. The decision of the Rajasthan High Court in Anandram and

another vs. Madholal and others7

relied upon by the petitioners,

dealt with the question of prejudice to the minor, specially in the

context of the father filing a written statement on behalf of the

minors and admitting receipt of part consideration. In Rangammal

vs. Minor Appasami8

there was a finding on fact that the minor’s

interests were sufficiently safeguarded in the suit. Therefore, none

of these decisions relied upon by the petitioners, advance their

cause.

6 (1997) 1 SCC 504

7 AIR 1960 Raj 189

8 85 Law Weekly 574

21

33. Therefore, we find no illegality in the order of the High Court

warranting our interference under Article 136. Hence, this Special

Leave Petition is dismissed.

……………………………..J.

(INDIRA BANERJEE)

………………………………..J.

(V. RAMASUBRAMANIAN)

New Delhi

July 16, 2021

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