Case Title: Union of India v. Rajendra Shah and others
The Supreme Court upheld a 2013 Gujarat High Court decision that struck down provisions of the Constitution (97th Amendment) Act 2011 that incorporated Part IX B into the Constitution to deal with cooperative societies.
A three-judge bench comprising Justices Rohinton Nariman, KM Joseph, and BR Gavai dismissed the Union of India's petitions against the Gujarat High Court's decision. According to Article 368(2) of the Constitution, the 97th Constitutional Amendment needed ratification by at least one-half of the state legislatures because it dealt with an entry that was an exclusive state concern (cooperative societies). Because such ratification was not obtained in the instance of the 97th Constitutional Amendment, it was likely to be repealed.
The bench was divided on the issue of multi-state cooperative societies. The bench was also divided on whether Part IX B will survive concerning multi-state cooperative groups. While the majority, comprised of Justices Nariman and Gavai, affirmed the provisions of Part IX B dealing with multi-state cooperative organisations by applying the law of severability, Justice Joseph disagreed. Justice Joseph ruled that the doctrine of severability did not apply and invalidated the entire amendment.
The bench postponed its decision initially after hearing lengthy arguments from Attorney General of India KK Venugopal, Advocates Masoom K Shah, Senior Advocate Prakash Jani, and Advocate Ritika Sinha for the respondents.
In his ruling, Justice Nariman noted an important concept, citing the precedent set in Builders' Assn. of India v. Union of India and the writings of eminent constitutional lawyer HM Seervai:
"...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' 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 matter given to the States were transferred to Parliament or vice-versa. Even without such transfer, if there is an 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".