A 3-judge bench of justice Rohinton Nariman, BR Gavai, and KM Joseph struck down the 97th constitutional amendment made in the year 2011. The Supreme Court upheld the Gujarat high court’s 2013 decision striking down the said amendment.
The Supreme Court observed that Since the constitutional amendment exclusively dealt with state subjects ie cooperative societies it required ratification by at least half of the state legislatures as per article 368(2) of the constitution. Since such ratification was not done the said amendment is liable to be struck down.
The 97th constitutional amendment introduced part IX B restricting the power of state legislatures in cooperative societies. The amendment laid down several mandates from which the state cannot deviate. The Gujarat High Court in its 2013 judgment ruled that the cooperative society is under entry 32 list II of the 7th schedule and in order to make changes, it requires the ratification of at least one-half of the state legislature under article 368(2) of the constitution. Not doing the same will amount to encroachment in the state legislatures and an attempt to shift the subject of cooperative societies from state list to union list.
Justice Nariman observed that this amendment violates Article 246(3) read with entry 32 list 2 of the 7th schedule. The question which arises is that whether the introduction of part IX affected in any significant manner the principle of powers of the state legislature.
After referring to the judgment of Builders Association of India vs Union of India and commentaries the court observed any significant change or curtailment In the field of Exclusively reserved for states will amount to a change as per article 368(2) of the constitution and therefore requires ratification.
The judgment clarified that the decision revolves around the procedural aspect of Article 368(2) and does not touch upon the violation of the basic structure of the. constitution as stated in the Keshavnanda Bharti case.