July 23, 2021
Uniformity vs Autonomy
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Good morning. If you want to hold your position in your company, you might have to work hard and prove your worth. So, what do companies do to prove their worth to you?
HCL has proposed to bring back its decade old practice of gifting Mercedes Benz cars to top performers. The company has come up with this plan to retain crucial performers and to stop spending money on replacements.
Work hard in silence, if not success, your Mercedes Benz will make some noise!
📰 FEATURE STORY
Co-operative Societies: Who gets to manage them?
Every organization has a rulebook that its members must follow. These rules tell us about our responsibilities and boundaries. If someone steps into another person’s duties, they will obviously be reprimanded. This is what the Supreme Court judgement did earlier this week.
The Indian Constitution is the supreme law of our nation. As per the Constitution, important functions of the country are divided between the Centre and State. For example, functions like defense, foreign trade, census, etc. would come under the responsibility of the Centre. Functions like police, agriculture and cooperative societies will be governed by the State. But in a Constitutional Amendment in 2011, several regulations for cooperative societies were laid down by the Parliament.
Now, as we know, cooperative societies are State responsibilities but the Parliament did not receive formal consent of the States. By doing so, the SC noted that the Parliament had not followed a legally important procedure for the amendment. But the Union claimed the amendment was to establish uniformity and to ensure the smooth running of the societies. They also argued that there was no objection from the States.
The amendment which was brought into the spotlight was the 97th Constitutional Amendment. It gave out rules on how cooperative societies should function. Guidelines were also clearly specified for cooperatives within a State and for those that operated in multiple states.
Before the amendment, cooperative societies lacked active participation and there was a lack of professional management. To ensure democratic and accountable management, the 97th Constitutional Amendment Act 2011 was passed. This provided certain rules like fixing the number of directors in a cooperative, determining the terms of board members and office bearers, etc.
In 2012, the amendment came into force. While the motive was of best interest, the way it was executed violated the powers vested with State legislatures. So understandably, a petition was filed in the Gujarat High Court that the Parliament could not take over the State power of cooperative societies. After hearing the case, the HC ruled that the amendment was against the Constitution because it did not receive ratification (that is formal consent) by the majority of the States.
Later, the Centre moved to the Supreme Court appealing that the amendment did not intend to strip the power of the States. However, the bench of three judges thought otherwise and decided to strike down a part of the amendment (Part IX B). In a 2:1 ratio, the judges concluded that the Union could regulate rules for the multi-state cooperatives but not for single state cooperatives.
The amendment does not affect States
Before we dismiss that the Centre was wrong, we need to see what valid arguments were put forward by the Centre. Firstly, they claimed that the amendment was crucial to enhance the social and economic objectives of the cooperative societies. They argued that their aim was to bring uniformity to cooperatives and was not to take away the State powers.
The Centre then emphasized that no state government had challenged Part IX B. In fact, 17 out of 28 states had implemented laws that were in accordance with the amendment. Therefore, it can easily be said that more than half of the states had accepted the amendment and incorporated provisions for it.
Their next claim was that the powers of the States were not affected at all. They asserted that anyone who read Part IX B would know that no additional power was given to the Union. All matters of the cooperative societies were solely within the State power.
Moreover, it was said that the Parliament had the constituent power to deal with State subjects. As per law, Parliament has the power to add, modify or annul any provision if done through procedure. In this case, the amendment was first passed by both Lok Sabha and Rajya Sabha and was also given assent by the President. Therefore, they claimed that it was valid and was only in the interest of the cooperative societies.
H Amin, former Chairman of National Cooperative Union of India said that the amendment was important to bring in more transparency among the cooperatives. He claimed that the draft amendment was duly consulted with the top cooperators in the country. He also mentioned that the Centre had taken consent from the States but it was not officially passed by the State Legislative Assemblies.
Legislative power of States has been affected
Yes, the Centre says it had taken consent from the states. But no, there is a difference between consent and formal consent. A consent received without following the legal procedure is as good as not getting the consent.
Opposing the Centre’s views, the Supreme Court held that by introducing the Amendment, the Parliament had affected the legislative powers of the States. Clearly, cooperative societies were matters of the State, which the Centre had unnecessarily intruded. It was observed that this amendment reduced the exclusive powers of the State.
Legally, the amendment should have been ratified by half of the States. By Article 368 (2), the Bill should have initially been consented to by the States before going to the President for assent. However, no such event took place. Such a direct approval by the Parliament was unconstitutional.
To better understand the implications of the amendment, let’s take a look at how Part IX B restricted the scope of State legislatures. While one of the regulations said the State legislature could provide the number of directors, another provision restricted the State government by asking it to not appoint more than twenty-one directors. Don’t you think it is contradictory? The SC did. Further, Centre did not just restrict, but also infringed the State’s powers and took the decision when it wasn’t even it’s place to decide.
Finally, the SC clarified that if uniformity was the reason for the amendment, the Centre should act by Article 252. According to this article, if the Parliament wants to make laws beyond its legislative powers, the amendment must be officially passed by two or more State Legislatures to be considered valid. Once this is done, other States can adopt the amendment if they wish to do so. But without ratification, the Amendment will remain unconstitutional.
The judgement to strike down Part IX B could play a pivotal role in empowering the States. This is especially true since the States had earlier expressed their concerns that the new Ministry of Cooperation could limit their powers. The SC also observed that the striking down was not applicable to multi-state cooperatives. This was because they do not belong to any single State.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
The Lack Of Public Outrage On Pegasus Says A Lot About India Right Now
For the Left:
Pegasus – “Why I am hesitant to defend the government but must”
🏴 STATE OF THE STATES
Camera Cameo (Haryana) – Gurugram Metropolitan Development Authority (GMDA) has started using CCTV cameras across the city to detect waterlogging spots. Once they identify an affected area, the information is shared in the WhatsApp group consisting of GMDA and Municipal corporation officials. These 1100 cameras set up under the smart city project are also used to identify potholes and broken roads. Maybe this is how smart ideas make a smart city!
Transgenders Triumph (Karnataka) – Karnataka is going to reserve jobs for transgender persons. In India’s first, the state has specified to the High Court that it is going to provide a 1% reservation for transgenders within both general and other reserved categories. This way, transgenders belonging to any community can avail equal benefit through this provision. Well, actions speak louder than words.
Pass Problem (West Bengal) – If students fail, it is of huge concern. In contrast, the Kolkata teacher’s organisation’s concern over the high pass percentage will baffle you. But not after you hear their tale. Madhyamik exams were not held due to the pandemic. Instead, every student’s Class 9 performance and internal assessment of class 10 were evaluated in a 50:50 ratio. With over 90% of students securing first division marks, teachers organisations believe many schools weren’t strict with the correction. They say their fear of each candidate not being awarded according to their ability came true. They have also asked for schools to conduct an entrance exam. As shocking as it might sound to you, one of their primary concerns is that with a 100% pass percentage, there are now more pass-outs than available Class 11 seats. We wonder what the students have to say!
The Third Eye (Maharashtra) – Do you evade traffic rules but still manage to escape from the eyes of the police? Then maybe you might escape the bear but fall to the lion. So far, the Pune traffic police have received 4,566 complaints from the citizens just via social media this year. Earlier this year, the traffic police resumed their special drive ‘Click and Send’. Citizens were asked to send in pictures or videos of traffic offenders through their Twitter platforms, Maharashtra traffic app or specified WhatsApp numbers. The police have also sent e-challans for all these complaint violations. So next time, don’t forget, the third eye is watching you.
Youth Policy (Meghalaya) – You might remember Dr Abdul Kalam’s saying ‘Youths are the pillars of the country’. As if to reiterate, the Meghalaya state cabinet has approved Meghalaya Youth Policy 2021. The policy will focus on nine key areas including education, counselling and entrepreneurship of youths. The National Youth Awardees Federation of India (NYAFI) are very happy with this decision and have appreciated Chief Minister Conrad Sangma.
🔢 KEY NUMBER
$500 million – Indian Ed-tech startup Byju’s acquired US-based online reading application ‘Epic’ for 500 million dollars.