Guest Post: The Supreme Court’s Article 370 Judgment – V: On the Extinction of Statehood

[This is a guest post by Kieran Correia. Following previous posts on the President’s power to abrogate Article 370, and the scope of Article 356, this piece discusses the Court’s non-decision on the conversion of the state of Jammu and Kashmir into two union territories.]

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Article 370, to Sheikh Abdullah, was a repository of the particularity of Kashmiri autonomy, of ambitions to protect their distinct ethnolinguistic and religious identities and to embark on large-scale land reform. As he remarked in the Jammu and Kashmir Constituent Assembly, on 25 March 1952, there was no doubt that there was “no other State which enjoy[ed] similar constitutional status.” The premise of this, however, was full-fledged statehood – the promise that Jammu and Kashmir would be an equal part of the Union with a distinct status to respond to its demands.

The Union, after decades of chipping away at Jammu and Kashmir’s distinct status, eventually extended the entire Constitution to Jammu and Kashmir. The constitutional saga was not to end there, however. The Jammu and Kashmir Reorganisation Bill 2019 was introduced on the same day, carving out two Union Territories (UTs) – Jammu and Kashmir, and Ladakh – from the existing State. The idea of “no other State” was buried; now, it appears, Parliament wanted no state at all.

The Reorganisation Act, it bears no reminder, was unprecedented in Indian constitutional history. At no time, with any of the multiple Reorganisation Acts that have been passed in our history, has Parliament demoted a state – in its entirety – to a UT, or UTs in this case. In my third and final post on In Re: Article 370, I attempt to dissect the Court’s treatment of Parliament’s exercise of power under article 3.

Interpretive evasion and the Executive(’s) Court

Petitioners impugned the Reorganisation Act on the grounds that it was ultra vires the Constitution, as the power of degrading the status of a state to a union territory is not provided to Parliament or, at least, not provided to Parliament in article 3. Petitioners conceded that in the process of redrawing state lines, a state may be extinguished: take, for example, the State of Bombay being reorganized into the States of Maharashtra and Gujarat. However, what is distinct in the reorganization of the State of Jammu and Kashmir is that the status of the state as a whole was downgraded, and its statehood extinguished.

Chandrachud CJ agreed with the distinction between “extinguishing a State and extinguishing the character of a constituent unit as a State” (para 499) (emphasis in original). The latter is when a state is “converted into a Union territory in full, with no part of it retaining statehood,” a scenario clearly different from, for example, the reorganization of the State of Bombay.

However, in a bizarre move, the Court chose to abdicate its responsibility of pronouncing on the issue entirely, invoking a submission from the Solicitor General that “statehood will be restored to Jammu and Kashmir and that its status as a Union territory is temporary” (para 503). This is – with due respect – absurd for a constitutional court. The judicial function, in its most conservative sense, is to frame issues, hear both sides, and subsequently pronounce on those issues, with adequate reasons. Relying on assurances from one side – assurances made in the air, with no fixed timeline or enforcing mechanism – is out of the ordinary.

Of course, this is far from new for the Court. This judgement is of a piece with a subtle, but noticeable, shift in the Court, as it resembles, more and more, an “Executive(’s) Court.” Sealed cover jurisprudence (fortunately no longer in vogue), judicial evasion, judicial vagueness, and so on marked the culmination of a scepticism towards procedure and a fascination with rhetoric. The manner in which the Court deals with the issue of the extinction of statehood here is best described as interpretive evasion – a practice of avoiding deciding on an issue or supplying any reasoning, preferring, instead, an ad-hoc style of adjudication characteristic of informal adjudication.

The Court thus kicks the can down the road, leaving the question of whether the “character of statehood” can be extinguished for another Court to rule on – despite its centrality to the present case. The underlying basis of the Reorganisation Act, as one set of Petitioners submitted, is one that “place[s] the very concept of statehood at the mercy of the Union Parliament” (Mr CU Singh’s Written Submissions, para 73) (emphasis in original) – a constitutional question which goes unaddressed in the judgement. The assurances of the Solicitor General, unfortunately, cannot resolve constitutional issues.

Dispensing with procedure as constitutional practice

The other question before the Court was whether Parliament could have substituted its views for those of the state legislature under the first proviso to article 3, which allows for the alteration of areas and boundaries of existing states. The Court, however, could only have proceeded to this question if it found that article 3 confers the power of extinction of statehood in the first place. If this power did not exist – or, at least, article 3 did not grant such power – the question of requiring the views of the state becomes moot.

Because the Court elected to cop out, its discussion of the first proviso to article 3 has no actual bearing on the case. Nonetheless, the Court’s analysis of the interface between article 356 and article 3 is important to understand – if only as a portent of things to come.

While the first proviso to article 3 requires only the views, and not concurrence, of the state legislature – as confirmed by Babulal Parate – the Court held even this requirement to be dispensable. Parliament could thus substitute its own views for those of the state legislature. However, the Court failed to consider the dialogic value of the state legislature submitting its views: that of creating the conditions for a more considered decision, informed by the views of a body bent slightly closer to the ground, by the President when she recommends a reorganization bill to Parliament for its consideration (or, as it works out in practice, allowing for a more considered decision by Parliament).

Parliament supplying its own views in place of the legislature’s defeats this purpose. While the power of the veto was – with good reason – withheld from the states at the time, lest dominant groups sabotage minorities within a state, the requirement of eliciting the views of the state legislature cannot be held to be meaningless. Indeed, if the Court’s reasoning is applied in practice, the Union can simply impose President’s Rule on a state and consult with itself before reorganizing a state; much like self-concurrence, self-consultation is a contradiction in terms. The Court thus greenlit a clear-cut case of abusive constitutionalism.

Before I conclude, the Court also briefly discussed the second proviso to article 3, added by Constitution Order 48 in 1952. The proviso stated: “Provided further that no Bill providing for increasing or diminishing the area of the State of Jammu and Kashmir or altering the name or boundary of that State shall be introduced in Parliament without the consent of the Legislature of that State” (emphasis added).

The second proviso was suspended with the Presidential Proclamation that imposed President’s Rule in Jammu and Kashmir. However, temporally, CO 272, which extended the entire Constitution to Jammu and Kashmir and did away with any exceptions and modifications to the provisions of the Constitution, preceded the Reorganisation Act. Since the Court held that aspect of CO 272 to be valid, the second proviso ceased to exist. Therefore, ruling on the validity of the suspension of the second proviso to article 3 would be redundant and the Court does not address this issue substantively.

Tying the threads

In my first post, I had cautioned against seeing In Re: Article 370 as an aberration, a manifestly unconstitutional judgement that flies in the face of decades of settled constitutional jurisprudence. The Constitution, despite its pretensions to federalism, has placed the Union in a position of structural dominance over states – a position the Court has, as a rule, chosen to take interpretive inspiration from rather than mitigate in some way.

As we acknowledge its continuity with a longer strand of jurisprudence, however, the specificity of this verdict should not be lost on us. The Court here engages in what I call interpretive evasion with a perfection that only comes with practice. It makes a mess of interpreting the Constitution, emphasizing the text where convenient – even to the exclusion of other factors – and ignoring it where not. A pro-Union and pro-Executive bias congeals into a judgement that engages in an interpretation of the Constitution that sanctions blatantly abusive constitutionalism. Considering the entire abrogation exercise and the subsequent reorganization collapsed pivotal contradictions that are central to federal jurisprudence in India, the immediate task must be to limit the verdict to its facts.

There is no doubt that In Re: Article 370 represents a crisis in Indian constitutional law. As Gautam notes at this juncture, “[T]ext, structure, precedent, and the canons of constitutional interpretation have become negotiable materials in constitutional adjudication, especially when the constitutionality of acts of State is under challenge.” This, however, is no reason to be despondent. As a famous thinker once quipped: “Everything under heaven is in utter chaos; the situation is excellent.”

Guest Post: In Re Article 370 and Problems of Federalism

[This is a guest post by Jai Brunner.]

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[Editorial Note: The present editor represents some of the petitioners in the In Re: Article 370 case, which is set down for hearing from August 2, 2023.]

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In In Re: Article 370, the Supreme Court will have the opportunity to not only rule on the amendments to Article 370, but also determine the constitutionality of the Jammu and Kashmir Reorganisation Act, 2019. Much has already been written about whether the Centre’s indirect abrogation of Article 370 is constitutional (see the excellent pieces on this blog here, here, here and here). Less attention has been paid to the Reorganisation Act. Whether the Union Parliament has the power to abolish a State and divide it into two Union Territories, has crucial implications for India’s federal arrangement. Article 1(1) of the Constitution states that “India, that is Bharat, shall be a Union of States”. If Parliament has the unrestricted power to destroy any State, then we might ask, can it simply convert India into a unitary state (i.e., on the lines of this case, a “union of union territories”)?

In this brief blogpost, I would like to tackle this issue by asking: is there any implied restriction in Article 3 on the Union Parliament’s power to alter the boundaries of existing States? Does this power extend to abolishing States entirely? The plain text of Article 3 never expressly uses words such as abolish, destroy, or extinguish. Article 3(a) does say that Parliament “may by law…form a new State by…uniting two or more States”, which implies that these two former States would be destroyed. Thus, a literal reading of Article 3 suggests that Parliament is vested with some power to enact laws that abolish States. Whether this power is unfettered is the contentious question. If there are no restrictions, then the Union Parliament could simply abolish India’s federal structure without even passing a constitutional amendment. Parliament could pass a law under Article 3 abolishing all States and, as per Article 4(2), this would not amount to a constitutional amendment. Surely this is impermissible, given that the Supreme Court has held that federalism is a basic feature of our Constitution (e.g. see SR Bommai), implying Parliament can never reduce India to a unitary state, not even via a constitutional amendment.

It is highly unlikely that the Supreme Court would uphold a law passed under Article 3 that abolishes all States. However, we are still left with the question of whether Parliament can destroy a single State, such as Jammu and Kashmir (“J&K”). In what follows I will examine the landmark case West Bengal v. Union of India (1963), which appears to advance a case for upholding the 2019 Reorganisation Act. I will attempt to show that West Bengal has, in truth, very little bearing on the present controversy. Turning to the Supreme Court’s jurisprudence on federalism, I will show how the petitioners in In Re: Article 370 could challenge the constitutionality of the 2019 Act.

Contextualising West Bengal v. Union of India

In the landmark judgment on Union-State relations in West Bengal v. Union of India (1963), the Supreme Court observed that Parliament has “wide power” to “alter the boundaries of States, and even to extinguish the existence of a State”. Authoring the majority opinion, Chief Justice BP Sinha observed that Parliament has the power under Article 3 to “alter the boundaries of any State”, including diminishing “its area so even to destroy [it]”.  Nevertheless, writing in 2016, eminent jurist MP Singh concluded that “it does not even seem to be a theoretical possibility” that Parliament could “put out of existence” a State (Mahendra Pal Singh, “The Federal Scheme” in The Oxford Handbook of the Indian Constitution [OUP 2016]). So, why does West Bengal set such a weak precedent for arguing that Parliament can freely abolish States?

Firstly, it is crucial to recognize that CJI BP Sinha did not make these observations while ruling on the correct interpretation of Article 3. The controversy in West Bengal had nothing to do with diminishing West Bengal’s boundaries. The Court was deciding if the Union could unilaterally acquire coal bearing areas owned by West Bengal. CJI BP Sinha made his observation that Parliament may “extinguish the existence of a State” in the context of rejecting West Bengal’s argument that it enjoyed absolute sovereignty over its property. Thus, we should view CJI BP Singh’s observations on Article 3 as obiter, i.e. non-binding (as Jahnavi Sindhu and Vikram Aditya Narayan have argued here).

Furthermore, a careful reading of Chief Justice BP Sinha’s observations, reveals that he never expressly states that there cannot be implied restrictions on Parliament’s power to destroy states. He merely observes that States enjoy “no constitutional guarantee against alteration of the boundaries of States”. He never goes on to say that this lack of constitutional guarantee extends to instances where a State is abolished.

Finally, one cannot apply West Bengal to the context of J&K, without acknowledging the (former) special status of the State. In his majority opinion, CJI BP Sinha largely ignores the asymmetric features of Indian federalism. CJI Sinha generalizes that India lacks the features of a “truly federal form of Government”. To demonstrate this, he says that the Indian Constitution is not an “agreement between independent and sovereign units to surrender partially their authority in their common interest and vesting it in a Union” – instead, the Indian Union was formed when sub-units “constituting a unitary State [in British India] which were non-sovereign were transformed by abdication of power into a Union”. To buttress this further, he says that in a truly federal arrangement “each constituent unit [ordinarily] has its separate Constitution by which it is governed in all matters except those surrendered to the Union” – Indian States of course do not have their own constitutions. While CJI Sinha is broadly correct, he ignores the exception created by the former State of Jammu & Kashmir. Not only did it have its own Constitution, but it was also a sovereign and independent State that partially surrendered its authority to join the Union, as is evidenced by the Instrument of Accession. Article 370 of the Indian Constitution expressly recognized this special status of J&K. What CJI Sinha ignores is that Indian federalism is asymmetric. The “Indian Constitution grants differential rights to certain States” (Louise Tillin, “Asymmetric Federalism” in The Oxford Handbook of the Indian Constitution [OUP 2016] chpt. 30). Thus, we cannot blindly apply CJI Sinha’s observations in West Bengal to J&K, given that J&K enjoyed special federal status.

Federalism restricts Parliament?

As is well-known, Parliament cannot enact any law that abrogates the basic structure of the Constitution (see Kesavananda Bharati). The Supreme Court has repeatedly recognized that federalism is a basic feature of the Indian Constitution, most famously in SR Bommai. Federalism necessarily requires that sovereign powers be distributed between the Union and the States. What this implies is that Parliament cannot enact laws that entirely abolish the sovereignty of States. Let us examine whether it follows that there ought to be an implied restriction on Parliament’s powers under Article 3.

Recently, in Gov’t of NCT Delhi v. Union of India, the Supreme Court clarified the nature of Indian federalism, while holding that the NCT Government has control over Delhi’s civil servants, rather than the Union. Authoring the judgment, Chief Justice DY Chandrachud observed that “any federal Constitution, at a minimum”, requires “two sets of government operate”. Such a model vests a minimum amount of sovereignty in the States. This is reflected in Dr. B.R. Ambedkar’s observations in the Constituent Assembly Debates, cited by CJI Chandrachud: “…Dual Polity under the proposed Constitution will consist of the Union at the Centre and the States at the periphery each endowed with sovereign powers…” (CAD 4 Nov 1948, 7.48.202). Inherently, if States enjoy sovereignty vested in them by the People, then the Union cannot have absolute power to extinguish them.

The State of J&K enjoyed even more autonomy than other States. The Instrument of Accession, whereby J&K acceded to the Union of India, specifies that J&K does not accept to be entirely subject to the Constitution of India. Further, the Schedule to the Instrument clearly delineates the limited domains in which the Union Parliament is competent to make laws for J&K – defence, external affairs, communications, and certain ancillary matters – which is further cemented by (unamended) Article 370(1)(b). Since the State of J&K entered the Union on the condition that it retain a minimum amount of sovereign autonomy, it follows that the Union Parliament cannot enact an ordinary law under Article 3 that entirely strips J&K of this sovereign autonomy.

Canvassing other case-law

In my view, the petitioners in In Re: Article 370 have a strong case to argue that federalism imposes an implied restriction on Parliament’s power to alter States under Article 3, preventing Parliament from destroying States entirely. However, they may have to work hard to convince the Court, as the existing case-law on Article 3 grants very expansive powers to the Union Parliament under Article 3. They will have to show that while Parliament may have expansive powers, these powers are nevertheless not absolute.

I have already addressed the six-judge bench ruling in West Bengal. While the Court did observe that Parliament may abolish States, this observation was arguably obiter. Further, the observation does not necessarily commit CJI BP Sinha to the view that there are no restrictions on Parliament’s power to abolish. Lastly, West Bengal cannot be blindly applied to J&K, given its (former) special constitutional status.

The other landmark judgment on Article 3 is Babulal Parate v. State of Bombay, delivered by  a three-judge bench of the Supreme Court. Babulal Parate merely confirms the vast power of the Union Parliament under Article 3 and offers no specific ruling on the abolishment of States. The Bench clarified the meaning of the Proviso to Article 3. While the Union must give the State Legislature an opportunity for “expressing its views” on any alteration to the area/boundary/name of the State, the Parliament is not legally bound by this advice. The Court has re-affirmed this position in Pradeep Choudhary. Hence, we may conclude that merely because a State objects to being abolished, this objection will not restrict Parliament’s law-making powers. However, it does not follow that there are no other restrictions on Parliament’s powers under Article 3 – and, as I have argued above, the basic feature of federalism ought to impose one such restriction.

Finally, the petitioner may have to address the precedent set by Mullaperiyar Environmental Protection Forum. In Mullaperiyar, a three-judge Supreme Court bench held that “law-making power under Articles 3 and 4…is not subjected to or fettered by Article 246 and Lists II and III of the Seventh Schedule”. In short, one cannot challenge the legislative competence of Parliament to enact a law under Article 3 with reference to the Seventh Schedule. The respondents in In Re: Article 370 may seek to use this precedent to buttress the view that other provisions of the Constitution cannot restrict Parliament’s power under Article 3. It should be relatively easy for the petitioners to counter. Firstly, the argument that the basic feature of federalism restricts Parliament’s power under Article 3, does not stem from any specific constitutional provision, but rather emerges from the structure of the Constitution as a whole. Parliament cannot enact any law that abrogates this basic structure of the Constitution. Secondly, Mullaperiyar is a weak precedent, which may need to be revisited – it has been contradicted by the two-judge bench judgment in Himachal Pradesh v. Union of India (2011): “under Article 3, Parliament cannot take away the powers of the State…in respect of matters enumerated in List II”.

The Supreme Court will hopefully resolve many of these issues when it delivers its judgment In Re: Article 370. It will have the opportunity to delineate the boundaries of Parliament’s powers under Article 3 and, in doing so, would clarify the nature of Indian federalism. This would have far reaching consequences not only for J&K, but also for the future of Centre-State relations for years to come.

The Unconstitutionality of the 2023 Delhi Services Ordinance – II

In a previous guest post, Ashwin Vardrajan has argued that the 2023 Delhi Services Ordinance [“the Ordinance”] – which effectively denudes the Delhi government (and the Delhi Legislative Assembly) from exercising control over services within the National Capital Territory – amounts to an “atypical constitutional amendment”, and should therefore be subject to basic structure scrutiny. While I do not disagree with this argument, in my view, one does not need to travel as far as the basic structure in order to challenge the Ordinance. I believe the Ordinance is unconstitutional on two grounds: implied limitations, and manifest arbitrariness.

Implied Limitations

Recall that the the Ordinance was enacted as a response to the Supreme Court’s May 2023 judgment (discussed here), which had held that Entry 41 of List II of the Seventh Schedule [“Services”] did apply to the NCT of Delhi. In other words, the Delhi legislative assembly had the competence to legislate on services (and, by extension, the Delhi government had executive power over services). The Ordinance seeks to undo this position by stating that the ‘Legislative Assembly [of NCTD] shall have the power to make laws as per Article 239AA except with respect to any matter enumerated in Entry 41.’

Now, one line of argument – advanced by Manu Sebastian, among others – has been that the Ordinance is unconstitutional because it directly overrules the Supreme Court’s judgment, and thus violates the separation of powers. Sebastian’s piece sets out the argument in its most comprehensive form, and I do not intend to traverse that territory again. Let us assume for the purposes of argument, however, that that argument fails, on the basis that – as the Supreme Court itself held – under Article 239AA, Parliament does have the competence to legislate under Entry 41 of List II, and parliamentary legislation will override any law that the Delhi legislative assembly might pass, to the extent of inconsistency. On this argument – which is likely to be the Union’s main argument when – inevitably – this Ordinance is challenged – Parliament has simply exercised its parallel – and superior – legislative competence under Entry 41 of List II, to validly exclude the Delhi assembly and government from control over services.

In my opinion, the reason why this argument fails is because of a subtle – but crucial – distinction between a law that Parliament might make with respect to matters under Entry 41 in exercise of its own competence (the language of Article 239AA), and a law that takes away wholesale the Delhi legislative assembly’s competence under Entry 41. To understand why, consider the design of Article 239AA: it explicitly takes away three fields of legislation from Delhi under List II: public order, land, and police. For these three entries, Parliament has exclusive competence to legislate. With respect to matters under other entries under List II, both Delhi and the union have power to legislate. Now what the Ordinance does – in effect – is that, through legislation, it adds a whole other field to the three (public order, land, and police) that have been explicitly excluded – that is, Entry 41 of List II. In other words, the Ordinance tries to accomplish through ordinary law-making what was explicitly denied to it by Article 239AA. To repeat: the Ordinance is not a law passed “with respect to any matter under Entry 41″ (the wording of Article 239AA). The Ordinance is a law that takes away the Delhi Assembly’s competence to legislate under Entry 41.

It is at this point that the Supreme Court’s rationale underlying its May 2023 judgment becomes important. Recall that the Court based its interpretation of Articles 239AA and Entry 41 on the constitutional principles of asymmetric federalism and the “triple chain of accountability” within representative democracy (civil servants — cabinet —- legislature — electorate). Insofar as the Delhi assembly’s competence to legislate under Entry 41 flows from these constitutional principles, it places an implied limitation upon Parliament’s competence to legislate under the same Entry. Of course, Parliament’s power also flows from a constitutional principle – in this case, the principle of preserving national interests in the national capital. The question then arises: how are the two to be balanced? An answer was provided in the landmark UK Supreme Court case of R vs Miller: namely, when two or more constitutional principles are in conflict, the Court must interpret their operation so as to ensure that neither destroys the other. In the specific case before us, if Parliament’s powers to legislate with respect to Entry 41 were held to extend to denuding the Delhi assembly altogether, then it would violate the constitutional principles of asymmetric federalism and sever the triple chain of accountability that is integral to representative governance. If, on the other hand – as Vardrajan suggests in his blog post – if Parliament’s power was to be limited to passing specific laws dealing with specific situations under Entry 41 (which, in turn, could be traced back to the reason why Parliament is granted this power in the first place – i.e., preserving the national interest within the capital) – then this reading would reconcile both constitutional principles, without destroying either.

Manifest Arbitrariness

This leads me to the second argument. If you read through the Ordinance, there is only one stated rationale for its passage: the need to “balance” the interests of the elected government of Delhi with national interests in the national capital. What this justification misses, however, is that this balance has been expressly encoded into the design of Article 239AA. Article 239AA recognises the need for this balancing. To achieve this – in the legislative domain – it does two things. With respect to three fields – public order, land, and police – it takes the fields away from the Delhi assembly wholesale. For all other fields (and this has now been formally upheld by the Supreme Court), it preserves the competence of the Delhi Assembly, while also authorising Parliament to pass legislation under those entries. The rationale for this is obvious: Parliament’s competence is retained because it may not be possible to foresee all possible situations that might arise under any of the other entries that might – in concrete terms – implicate national interests in the national capital.

The Ordinance, however, eviscerates this balance by – as noted above – adding a fourth field to the three already excluded. Now, whatever the justification for this might be, what it cannot be is “balancing the interests of the elected government and national interests in the national capital.” This is because those particular interests have already been balanced in the constitutional provision itself, by the two-pronged device of excluding three named fields (and services is not one of them), and preserving parallel competence in all other unnamed fields. Thus, the exclusion of one of the unnamed fields (services) is not in aid of the constitutional balance, but rather, undermines it.

One of the circumstances under which a law can be struck down on grounds of manifest arbitrariness is if it lacks a “determining principle.” The above discussion should make clear that the Ordinance suffers from precisely this defect. For reasons already discussed, the determining principle cannot be “balancing of interests.” However, what is the determining principle then? The Ordinance makes no mention of any other possible alternative. Indeed, it is quite difficult to see what principle would justify such a wholesale transfer of power from Delhi to the Union: what national interest is served by taking control of services wholesale in the national capital? It is submitted that in the absence of any other possible alternative, the Ordinance must therefore be struck down on grounds of manifest arbitrariness.

Conclusion

While at first glance the Ordinance seems to trace its legality to Article 239AA, Entry 41 of List II, and the Supreme Court’s 2023 judgment, once you scratch the surface, its unconstitutionality is evidence. First, the Ordinance is unconstitutional as it traverses beyond the implied limitations upon the scope of Parliament’s powers under Article 239AA read with Entry 41 of List II, relative to the NCT of Delhi: while Parliament is competent to pass specific legislation dealing with matters arising out of Entry 41 (which must, in turn, be traceable to the purpose of preserving national interests in the national capital, as in doing so, Parliament is overriding the principle of asymmetric federalism and the triple chain of accountability), it cannot pass a law effectively denuding the Delhi assembly of its competence to legislate under Entry 41. And secondly, the Ordinance is manifestly arbitrary: it lacks a determining principle, and the principle it does invoke – that of balancing interests under Article 239AA – is self-evidently flawed, as the balancing it seeks to achieve already exists internal to Article 239AA. It ought to be struck down.

Guest Post: The 2023 Delhi Ordinance, Services, and the Basic Structure – I

[This is a guest post by Ashwin Vardrajan.]

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Introduction

On May 11, 2023, the Supreme Court (“SC”) released its decision in Government of NCT of Delhi v. Union of India [Civil Appeal No. 2357 of 2017] (“May 11 Judgment”). In this judgment, the SC effectively struck down a notification from 2015 of the Union Government, which barred the Legislative Assembly and Government of the National Capital Territory of Delhi (“NCTD”) from exercising control over ‘[state] public services’ under Entry 41, List II of Schedule VII (“Entry 41”) of the Constitution. As summarised elsewhere, the SC did so because Article 239AA(3)(a) of the Constitution, through its wording, by default granted the Legislative Assembly and Government of the NCTD to exercise control over administrative services in its jurisdiction. Additionally, the SC also justified its reasoning for why Part XIV of the Constitution – dealing with administrative and civil services in the Union, States and Union Territories (“UTs”) – should apply to the NCTD by relying on the ‘intrinsic link between government accountability and the principle of collective responsibility.’ Simply put, civil servants are accountable to the NCTD Government Ministers, who are in-turn responsible to the NCTD Assembly, and the Assembly is responsible to the electorate. This chain of accountability is necessary for the effective operation of the principle of representative democracy manifested in Article 239AA.

Soon after the May 11 Judgment was pronounced, the Union Government promulgated the Government of National Capital Territory of Delhi (Amendment) Ordinance, 2023 (“Ordinance”), amending the Government of NCTD Act, 1991 (“Act”), on May 19, 2023. Among other things, the Ordinance has added Section 3A to the Act (“Section 3A”), which states that the ‘Legislative Assembly [of NCTD] shall have the power to make laws as per Article 239AA except with respect to any matter enumerated in Entry 41’. As has been argued on several fora, the Ordinance seemingly countermands the May 11 Judgment, and is constitutionally impeachable for that reason (here, here, here and here) – there exist opposing views as well (here and here).

Broadly, the arguments against the Ordinance are that it overrules the May 11 Judgment, which is otherwise not permissible in our constitutional scheme. But the defect with this argument is that the SC was only able to allow the NCTD to exercise authority over Entry 41 because ‘“services” (that is, Entry 41) is not expressly excluded in Article 239AA(3)(a).’ Moreover, the SC also noted that the ‘intent and purpose of Article 239AA(3)(b) and Article 239AA(7) is to confer an expanded legislative competence upon Parliament, when it comes to [Government of NCTD] clearly since it is the capital of the country and therefore, must be dealt with different considerations.’

To simply argue the unconstitutionality of Section 3A on the grounds that it countermands the May 11 Judgment fails to sufficiently address the unique constitutional problem it poses. To this end, this essay demonstrates that Section 3A is actually an amendment to Article 239AA, and makes a case for why it must be assessed in accordance with the basic structure doctrine (“BSD”). A caveat here is that this essay is limited only to the assessment of Section 3A, and no other parts of the Ordinance.

Amendments other than Article 368 and the BSD

Article 368 is not the only provision dealing with the power and process for amending the Constitution. Other provisions – such as Articles 4(2), 169(3), 243M(2)(b), 312(4) etc. – state that a law passed by the Parliament to amend such parts of the Constitution shall not ‘be deemed to be an amendment under Article 368.’ In this essay, we shall call them ‘Atypical Amendments’.

The most obvious consequence of stipulations allowing Atypical Amendments is that the process under Article 368 need not be followed for amending parts of the Constitution exempted thus. Parliament can pass Atypical Amendments through a simple majority in both Houses. However, it is not immediately clear whether Atypical Amendments can be equated with ‘amendments’ under Article 368, as the BSD is otherwise applicable to ‘amendments’ passed under Article 368.

Mangal Singh v. UOI [(1967) 2 SCR 109] is perhaps the first case to opine on this point. Here, the issue was whether the Punjab Reorganisation Act, 1996 – enacted in accordance with Articles 2-4 – violated the Constitution for bypassing requirements in Article 170. In this regard, the SC observed in passing that a law enacted under Article 4(2) ‘is undoubtedly an amendment of the Constitution, [although] no such law which amends the First and the Fourth Schedule or which makes supplemental, incidental and consequential provisions is to be deemed an amendment of the Constitution for the purposes of Article 368.’

However, in Kesavananda Bharati v. State of Kerala [(1973) 4 SCC 225], several judges arrived at differing opinions on whether Atypical Amendments are substantively the same as ‘amendments’ under Article 368, thereby being subject to the BSD. The issues before the SC did not directly deal with whether Atypical Amendments are subject to the BSD. However, while reasoning what constitutes an ‘amendment’ to the Constitution, at least eight justices spoke on the nature of Atypical Amendments vis-à-vis Article 368. Justices Beg (para. 1830), Mathew (paras. 1565-70), Shelat and Grover (paras. 498, 500(v), 502, 628), Khanna (para. 1439), and Ray (paras. 790, 793 and 842) opined that the difference between ‘amendments’ under Article 368 and Atypical Amendments is simply one of form and not substance – i.e., all are constitutional amendments, and only the method of enacting them is different.

On the other hand, Justices Hegde and Mukherjea (paras. 627-28) opined that Atypical Amendments are passed like any other ordinary law (i.e., with a simple majority in the Parliament), and that they have been consciously distinguished from ‘amendments’ under Article 368. Therefore, ‘[once] this position is accepted, any law made under those provisions takes the character of an ordinary law and that law becomes subject to the other provisions of the Constitution including Article 13(2).’ In other words, for them, Atypical Amendments are not subject to the BSD, and must be treated like ordinary laws subject to the provisions of the Constitution.

While Kesavananda suffers from the confusions caused by polyvocality of opinions, clarity was brought on this point by the Patna High Court (“HC”) in Amendra Nath v. State of Bihar [AIR 1983 Pat 151]. Among other things, it was argued before the HC that the Fifth Schedule to the Constitution (Amendment) Act, 1976 – enacted under Paragraph 7 of the Fifth Schedule (comprising an Atypical Amendment clause) – violated Article 14 of the Constitution. Rejecting this argument, the HC relied on this opinion of Shelat and Grover JJ. in Kesavananda:

It appears that the statement in the articles and provisions containing the amending power other than Article 368 that any amendment made under those articles would not amount to an amendment under Article 368 merely embodied the distinction emphasised by Dr B.R. Ambedkar that one category could be amended by the Parliament by a bare majority and all the other articles could be amended by the said body but only by following the form and manner prescribed by Article 368.

According to the HC, these were ‘not […] mere incidental and casual observations which are not binding.’ Moreover, the HC pointed out that notwithstanding Kesavananda, the observations in Mangal Singh still hold good. The HC eventually ruled that an Atypical Amendment is substantively the same as ‘amendments’ under Article 368, and proceeded to decide on merits whether the 1976 Amendment violated the BSD.

A combined reading of Mangal Singh, Kesavananda and Amendra Nath leads to the conclusion that Atypical Amendments can be equated to ‘amendments’ under Article 368, and, thus, are subject to the BSD.

Section 3A as an Atypical Amendment

Under Article 239AA(7) the Parliament is empowered to amend any part of Article 239AA. Such a law, as per Article 239A(7)(a), must be of a nature ‘giving effect to, or supplementing the provisions contained [Article 239AA] and for all matters incidental or consequential thereto’. Article 239AA(7)(b) deems any law passed under Article 239AA(7)(a) as an Atypical Amendment.

To this end, one of the recitals of the Ordinance reads as follows:

AND WHEREAS for the purpose giving effect to Article 239(1) read with Article 239AA and in exercise of powers of Article 239(1), Article 239AA[3][b] and Article 239AA[7] of the Constitution of India, which includes the power to supplementing the provisions under Article 239AA including the power to make suitable amendments thereof, an Ordinance namely the Government of National Capital Territory of Delhi (Amendment) Ordinance, 2023 is proposed…

A ‘supplement’ may be defined as ‘a thing added to something else to…complete it’, or which supplies ‘something additional’.* Article 239AA(3)(a) defines the legislative competence of the NCTD Assembly, and explicitly excludes, inter alia, Entries 1, 2 and 18 of List II thereof. What Section 3A also does is change the scope of the NCTD Assembly’s competence by further excluding Entry 41 from its fold, as opposed to simply overriding existing laws application in the region (in which case, the rule of repugnancy under Article 239AA(3)(c) would apply). Thus, Section 3A acts as a ‘supplementing’ provision to the authority (i.e., legislative competence) of the NCTD Assembly defined under Article 239AA(3)(a), albeit in a negative sense.

At this juncture we must note that the Ordinance is an ordinary law, and not a constitutional amendment passed like an ordinary law. Article 239AA(7)(b), however, includes within its fold Atypical Amendments which have the ‘effect of amending’ Article 239AA. To buttress how Section 3A has the ‘effect of amending’ Section 239AA, the SC’s decision in UOI v. Rajendra Shah [2021 SCC OnLine SC 474] is useful. Here, the SC decided on whether Part IX-B of Constitution violated the mandatory process of ratification enumerated in the proviso to Article 368(2). Interpreting the term ‘change’ appearing in the said proviso, the SC opined that sometimes amendments to one part of the Constitution have a colourable effect on other parts. Such ‘changes’ were termed as ‘changes-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…in some significant way.’ As opposed to an explicit alteration, any law which has the ‘effect of amending’ Article 239AA too must be construed as an Atypical Amendment under Article 239AA(7)(b). In any case, Atypical Amendments can be passed as ordinary laws (such as laws to reorganise Indian States under Article 4). Given that the competence of the NCTD Assembly should ordinarily be altered via an actual constitutional amendment to Article 239AA(3)(a), the Ordinance uses Article 239AA(7) by inserting Section 3A into the Act to cause the ‘effect of amending’ Article 239AA(3)(a) (as shown above).

For such reasons, Section 3A is an Atypical Amendment under Article 239AA(7). As opposed to an ordinary law, thus, it can only be challenged for being in violation of the BSD.

Conclusion

What, then, would be the most appropriate grounds for challenging Section 3A? Recall that in the May 11 Judgment, the SC had used the principle of ‘triple chain of accountability’ to justify why the Government of NCTD be allowed to exercise control over ‘services’ in accordance with Part XIV of the Constitution. According to the SC, ‘[in] order to ensure that the functioning of the government reflects the preferences of the elected ministers, and through them the will of the people, it is essential to scrutinize the link of accountability between the civil service professionals and the elected ministers who oversee them.’ In the absence of a link between the two, there arises a ‘possibility that the permanent executive, consisting of unelected civil service officers, who play a decisive role in the implementation of government policy, may act in ways that disregard the will of the electorate’.

Moreover, Article 239AA(2) states that there ‘shall’ be a Legislative Assembly in the NCTD, as opposed to other UTs which ‘may’ or may not have Assemblies (see, Articles 239 and 239A). This makes NCTD a sui generis federal unit, similar to Indian States, whereby the Government of NCTD is to be treated ‘as a representative form of Government.’ By completely discounting the need of the Government and Assembly of NCTD for possessing control over Entry 41, the principle of ‘republican and democratic form of Government’, which forms a part of the BSD, stands prima facie violated.

But by way of this conclusion, does it mean the Union Government and Parliament – which at any rate possess constitutional authority to override the Government of NCTD under Article 239AA – are completely barred from exercising control over Entry 41? Any blanket restriction on either the Union or the NCTD (as Section 3A does) is going to help neither. The most appropriate way, therefore, will be that the Government and Assembly of NCTD exercise control over Entry 41 by default, and the Union utilise Articles 239AA(3)(b)-(c) (which govern repugnancy between Union and NCTD laws) to override NCTD laws in such matters in appropriate cases. That way, the interests of the Union in the national capital, and that of the Government of NCTD as a ‘representative form of Government’, will be balanced and safeguarded.

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* Black’s Law Dictionary (Bryan Garner Ed., 2009), p. 1577; Pocket Oxford English Dictionary (2013), p. 922.

At the Third Time of Asking: Federalism, the Centralising Drift, and the Supreme Court’s Judgment in NCT of Delhi vs Union of India (2023)

In 2015, a notification issued by the Union Government sparked an eight-year-long legal battle between the national capital territory of Delhi and the Union of India. Through this notification, the union government sought to take control over the question of ‘services’ (i.e., the administrative and civil services) with respect to the governance of Delhi. The basic rationale of this notification was that Article 239AA of the Constitution granted to the legislative assembly of Delhi the power to make laws with respect to the legislative fields under Lists II and III of the Seventh Schedule “in so far as any such matter is applicable to Union territories“, and specifically excluding entries 1, 2, and 18 of the State List (i.e., public order, police, and land). Entry 41 of List II (“the State List”) refers to “State public services” and “State public service commission.” The Notification argued, however, that Entry 41 was inapplicable to Delhi, as there was no such thing as a Delhi Public Services Commission, and that in any event, service cadres for union territories were under the control of the central government. On this basis, it justified explicitly placing Delhi’s administrative and civil service officers under the control of the union government.

The Delhi government challenged this – and another notification – before the Delhi High Court, and lost. It went up in appeal to the Supreme Court, where a two-judge bench – while hearing the case – decided that a larger bench was required to lay down the constitutional principles with respect to the relationship between the NCT of Delhi and the Union of India (for an analysis of the issues, see this three-part series by Vasudev Devadasan, here, here, and here). A five-judge bench was constituted, and delivered judgment (in 2018), effectively holding that Article 239AA of the Constitution guaranteed legislative and executive power to the NCT of Delhi in certain specified domains, and with respect to those domains, the Lieutenant-Governor (i.e., the centre’s appointee) was ordinarily bound by the “aid and advice” of the Delhi cabinet (for an analysis of the judgment, see here and here). However, in a bizarre turn of events, when the matter was sent back to the two-judge bench to decide the concrete issues (such as control over services), the two judges – who had been part of the five-judge bench – split, and delivered conflicting judgments on the issue of services (in 2019). This was then sent to a three-judge bench to resolve. Before the three-judge bench, the Union of India argued – among other things – that the 2018 five-judge bench had not interpreted the meaning of the phrase “in so far as any such matter is applicable to Union Territories”, when specifying the legislative competence of Delhi with respect to fields under List II of the Seventh Schedule. The resolution of this question then led to the constitution of another five-judge bench which – finally – heard the case in late 2022, and delivered its judgment today. In a unanimous opinion – authored by Chief Justice Chandrachud – the Constitution Bench decided in favour of the NCT of Delhi, holding – quite categorically – that the Delhi government did have the competence to legislate on “services” under Entry 41 of List II, and therefore – by extension – executive control over services.

Before we examine the Constitution Bench’s judgment, it is worth noting one thing: the Constitution Bench observed – and in my view, correctly – that the issues agitated before it had already been settled by the 2018 judgment. This, however, raises the following question: why then did it need another Constitution Bench to reiterate what had already been decided just five years ago, in a case on the same issue between the same parties? What does this say, in particular, about the judgment of the (now-retired) Justice Ashok Bhushan, who purported to write a concurring opinion while sitting in the Constitution Bench in 2018, but then – according to today’s judgment – when sitting in a two-judge bench only a few months later, misinterpreted not only the majority 2018 opinion, but even his own concurring opinion, to deny control over services to the Delhi government? In a piece on this issue, I have pointed out (a) that what Justice Bhushan effectively did in 2018 was to write a dissent masquerading as a concurrence; (b) that the majority opinion – authored by the-then Chief Justice Dipak Misra – was written in such a fuzzy way, that it left open wide gaps that allowed Justice Bhushan to effectively further entrench his disguised dissent and write his split 2019 opinion, all the while appearing to only “interpret” the 2018 judgment; and (c) that the effective result of all of this was five years of limbo that benefited one party – the union government – who was able to continue effectively controlling the services while the case rumbled on in court (see “Judicial Evasion, Judicial Vagueness, and Judicial Revisionism: A Study of the NCT of Delhi vs Union of India Judgment(s)“). Understandably, today’s judgment does not dwell on Justice Bhushan’s 2019 opinion; and – to its credit – today’s judgment is written clearly and categorically enough to preclude further litigation, at least on this point. The 2018-2023 period now belongs to the history books, but it is still worth asking how the union government was able to drag on a case in the Supreme Court for five long years, even after it had – evidently – “lost” the first time around.

Be that as it may, today’s judgment repays close study. At the heart of the dispute lay a set of constitutional silences and ambiguities. Textually, there are two ways to understand the phrase “in so far as any such matter is applicable to Union Territories” that is found in Article 239AA(3). The first is that Lists II and III have certain matters that are applicable to Union Territories, and certain matters that are not. Whether a particular entry applies to a UT or not depends on a case-by-case analysis, looking at factors such as the union government’s interest, and so on (the “exclusionary reading”). But the second reading – the “inclusionary reading” – is that the phrase presumptively makes available to the Union Territory all the entries in the Lists (other than those expressly excluded – public order, police, land, and parts of certain related entries), and is needed in order to avoid the cumbersome exercise of amending all the entries in the Lists that presently use the word “state”, in order to make them apply to the NCT of Delhi.

It will be seen that purely textually, the phrase is open to both readings. Which reading is to be preferred, therefore, depends on the interpretive principles brought to bear by the Court. Chandrachud CJI articulates two such principles: asymmetric federalism (para 40) and representative democracy (para 63). Asymmetric federalism refers to the principle that in a diverse and heterogenous country, different federal units can have different forms of relationship with the centre. Chandrachud CJI invokes the principle of asymmetric federalism for two purposes: first, to clarify that not all union territories are the same, and to justify Delhi’s sui generis status; and secondly, to nest this within the broader idea of federalism, where – despite the Indian Constitution’s “centralising drift“, the sovereign powers of the states in their own domains are to be respected. Representative democracy refers, of course, to the principle that legislators ought to be (effectively) accountable to their electors, and – correspondingly – that electors ought to have an (effective) say in who governs them. Chandrachud CJI thus holds that where there is a constitutional silence or ambiguity – where, in other words, a provision (such as Entry 41) can have two possible interpretations – the reading that advances the principles of federalism and representative democracy is to be preferred. In the case of the phrase “in so far as any such matter is applicable to Union Territories”, this is clearly served by the inclusionary reading over the exclusionary reading.

An important corollary follows. The union argued that the exclusionary reading was to be preferred as the central governments had vital interests in the national capital. The use of the interpretive principles referred to above allows the Court to hold, however, that that balancing of interests has already been provided for under Article 239AA, and does not further require the Court to interpret a constitutional silence in favour of the union government. Some of the elements of this balance include, for example, that in the case of Delhi, the Parliament has overriding powers to legislate with respect to both Lists II and Lists III; the power of the LG to refer disagreements to the President, and so on. In other words, the Court holds that the carefully-crafted scheme of Article 239AA already reflects a balance of interests, and that therefore, when interpreting the text, the centre’s interests do not need to be – in a sense – “double-counted”. Rather, the constitutional values of federalism and representative democracy drive at the opposite reading.

This interpretive approach then returns in the second, crucial part of the judgment. Services under the Constitution are dealt with under Part XIV. Part XIV refers to “services under the Union and the states”, and once again, the union government jumped upon the linguistic ambiguity to argue that, in the context of Part XIV, ‘states’ did not include ‘union territories.’

Chandrachud CJI resolves this ambiguity by referring to another constitutional principle: the ‘triple chain of accountability’, and the role of civil servants in a cabinet form of government. This triple-chain goes: civil servants are accountable to the cabinet, the cabinet is accountable to the legislature, and the legislature is accountable to the electorate (paragraph 106). An interpretation of the Constitution that severs this chain is to be rejected: and indeed, depriving the elected Delhi government of control over the services would amount to exactly such a severance – because – to come back to the principles of federalism and representative democracy – the NCT of Delhi is a federal unit within the whole (paragraph 108). The severance, thus, flows from the fact that granting the union government control over Delhi’s service cadres would be granting control at the wrong level of authority (central, not federal), and therefore distorting the flow of accountability (paragraph 111). What we have, therefore, is a seamless a analytical web, where the strands of federalism, asymmetric federalism, representative government, and chains of accountability mutually reinforce each other, and constitute the interpretive framework within which the Court provides concrete readings of constitutional provisions such as Part XIV and Entry 41 of List II (in particular, granting an inclusive meaning to “state”, based on the General Clauses Act) (see paras 122 – 137).

The Court therefore concludes by holding categorically that:

The legislative and executive power over services such as Indian Administrative Services, or Joint Cadre services, which are relevant for the implementation of policies and vision of NCTD in terms of day-to-day administration of the region shall lie with NCTD. Officers thereunder may be serving in NCTD, even if they were not recruited by NCTD. In such a scenario, it would be relevant to refer, as an example, to some of the Rules, which clearly demarcate the control of All India or Joint-Cadre services between the Union and the States. NCTD, similar to other States, also represents the representative form of government. The involvement of the Union of India in the administration of NCTD is limited by constitutional provisions, and any further expansion would be contrary to the constitutional scheme of governance … we accordingly hold that references to “State Government” in relevant Rules of All India Services or Joint Cadre Services, of which NCTD is a part or which are in relation to NCTD, shall mean the Government of NCTD. (paragraphs 160 – 161)

The judgment, thus, is a valuable case study of how constitutional principles can be deployed in concrete cases. It is also important for another reason: as I have argued elsewhere, cases on federalism can be grouped into two categories. Many cases espouse what a “centralising approach”, where the existence of a “skew” within the Constitution in favour of the centre is taken as justification for interpreting constitutional silences further in favour of the centre (State of West Bengal vs Union of India is a classic example of this). But there is also a line of cases that espouse a “federalising reading”, where the existence of explicit provisions favouring the centre is taken as ground for refraining to allow any further, unwritten encroachment. I have argued that the federalising approach is far more preferable, as it avoids excessive centralisation of power – the “centralising drift” (a term also used by CJI Chandrachud in the judgment) in a Constitution that is already unbalanced. Today’s well-reasoned judgment adds to that valuable tradition of Indian constitutional jurisprudence, and provides a platform to build from.

As for the long-suffering government of the NCT of Delhi: it happened at the third time of asking – but it did happen at last!

Separating Power: The Kenyan Supreme Court’s Judgment on Constituency Development Funds

The separation of powers is assumed to be an integral element of contemporary democratic constitutionalism. However, mapping the ideal of the separation of powers onto the complex reality of the modern administrative State is a challenging task. Enforce separation too rigidly, and governance will become impossible. Allow for too much leeway, and you risk a drift towards concentration and centralisation of power. How and where to draw the line has been a vexed question, which constitutional courts across the world have been forced to grapple with.

Introduction

In this context, the judgment of the Supreme Court of Kenya in The Institute for Social Accountability vs The National Assembly (8th August 2022) is a landmark judicial contribution to this global conversation. At issue before the Supreme Court was the constitutionality of the Constituency Development Fund Act of 2013 (as amended by Act No. 36 of 2013) [the “CDF Act”]. In short, the CDF Act created a fund [the “Constituency Development Fund”, or “CDF”], with money up to 2.5% of national government revenue collected in the financial year. The CDF would be used to fund various “community-based projects”, for the benefit of “a widespread cross-section of the inhabitants of a particular area” (s. 22(1)). The implementation of these projects would be monitored by the Constituency Development Fund Committee of the particular constituency (s. 31(3)). Importantly, eight out of ten members of the CDF Committee were to be appointed by the local member of parliament (who was, himself, an ex officio member of the Committee) (s. 24(3)).

The Issues

If we take a step back, therefore, we can see that in simple terms the CDF was (a) a national fund, (b) to be deployed for developmental projects on a constituency-wise basis, and (c) the implementation of the projects was under the effective control of the local MP. To Indian readers, this will be rather familiar: it is quite similar to the MPLAD scheme.

The CDF Act was challenged before the High Court of Kenya, which found it to be unconstitutional. The High Court’s judgment was partially upheld and partially reversed by the Court of Appeal. The case then traveled to the Supreme Court of Kenya, which – by its judgment on 8 August 2022 – also found the CDF Act to be unconstitutional in its entirety.

The gravamen of the substantive challenge before the Kenyan courts can be summed up through the following two propositions: first, the CDF Act undermined the devolved system of government under the Kenyan Constitution, by setting up a parallel, third level of government (at the constituency level), in addition to the national and the county levels, without constitutional sanction (this is essentially a federalism challenge, although – as we shall see – the Court did not analyse it in federal terms); and secondly, the CDF Act violated the separation of powers by granting MPs – who are part of the legislature – essentially executive powers of administration and implementation of developmental projects. There were other – procedural – challenges as well: for instance, it was argued that the CDF Act substantially affected the functioning of county governments. This required it to be scrutinised by the Kenyan Senate (the “Second Chamber”), which – under Article 96 of the Constitution – is tasked with representing the Counties, and safeguarding their interests. This, however, had not been done.

The Involvement of the Senate

On the procedural issue, the Supreme Court found that the 2013 amendment to the CDF Act had transferred the constitutional basis of the CDF from Article 202(2) of the Constitution (which authorises the national government to make “additional allocations” to county governments) to Article 206(2) of the Constitution (which authorises withdrawal of money from the Consolidated Fund). The Court found that this alteration of the constitutional basis of the CDF “had an effect on the functioning of country governments” (paragraph 64). In particular, the CDF Act contemplated that projects would pertain to infrastructural development, such as roads, health, agriculture, and trade, which were within the domain of county governments (paragraph 71). For this reason, the Senate’s involvement was a constitutional pre-requisite, before the CDF Act could have been validly passed (paragraph 72).

While this finding is logical enough, there are two interesting aspects. The first is that in this case, the Speakers of the National Assembly and of the Senate had resolved that the CDF (Amendment) Bill – as it then was – did not concern counties, and therefore, did not need to be tabled before the Senate. The Supreme Court’s response to this was straightforward: it upheld the High Court’s finding that while the decision of the Speaker(s) merited due deference, it did not oust the power of the Court to answer a “question regarding the true nature of legislation.” (paragraph 75) In other words, therefore, despite the Speaker’s position as the leader of the House, their decision on the character of legislation would be subject to judicial review. Naturally, this would apply to other situations as well, such as – for example – classification of bills as Money Bills. The importance of this finding lies in the fact that it allows the judiciary to act as a safeguard against partisan speakers, who can help the ruling party in the First Chamber circumvent the participation of the Second Chamber simply by mis-classifying bills as Money Bills (or, as in this case, as not involving county governments). This is particularly significant, as the Kenyan Constitution does not explicitly guarantee or protect the independence of Speakers. And once again, Indian readers will recall that the exact same issue has been pending before the Supreme Court of India for the last four years.

Secondly, it was argued that the CDF Act offended constitutional design by violating federal principles. The Supreme Court rejected this argument by noting that the Kenyan Constitution was not federal, but a “unitary system of government that decentralises key functions and services to the county unit.” (paragraph 80) It is submitted, with respect, that the distinction between a federal system, and a unitary system with devolution is not an iron-clad one, and there are cases where terminology might obscure more than it reveals. Indeed, if we look at the Supreme Court’s actual analysis on the devolution question (which we shall turn to in a moment), we find that is actually far more respectful of core federal principles than many other “formally” federal polities.

On Devolution

As indicated above, the first core substantive argument before the Court was whether the CDF Act offended the division of functions between national and county governments (see Article 6 of the Constitution). In simpler terms, the issue was whether the CDF Act basically undermined the decentralisation of power guaranteed under the Constitution of Kenya. The Court noted that under Article 95 of the Constitution, the powers of the National Assembly included legislation, oversight over national revenue and its expenditure, and allocation of national revenue between levels of government, but not “the power to implement projects as a service delivery unit at the county level” (paragraph 83). The service delivery mandate was essentially an executive function at the county level, and was therefore meant to be exercised by County Executive Committees which, under Article 179 of the Constitution, were meant to exercise the “executive authority of the County.” Thus, according to the Court:

…where a Member of the National Assembly is allowed to play a role related to functions vested in devolved units, then this will compromise the vertical division of powers between the national and county governments. (paragraph 85)

And in particular:

Subsidiarity is the broad presumption that sub-national governments ought to be assigned those functions and powers which vitally affect the life of the inhabitants and allow the development of the country in accordance with local conditions of sub-national units, while matters of national importance concerning the country as a whole and overarching policy formulation are assigned to the national government. (paragraph 88)

The Supreme Court thus held that the Constitution did not authorise the “national government to … usurp the mandate of the county governments.” (paragraph 90) Nor did it authorise a “third level” of governance, tied to the constituency. Crucially, the Court noted that this was because the constituency – in an electoral system – was tied to the idea of political representation, and not service delivery: in essence the constituency is an electoral unit, with its function tied to the functions vested in an MP; and that role, essentially, is a legislative role. (paragraph 92) For this reason, the CDF Act could not be saved by tying it to the unit of the constituency, as the whole purpose of having “constituencies” in the first place was entirely different. I would respectfully submit that this is a very important finding: a clear separation between the constituency as a unit for political representation, and as a unit of service delivery, provides the conceptual foundation for preventing the concentration of power at the level of the MP: it prevents a situation where MPs serve both as legislators, but also as dispensers of project-linked patronage in their constituencies, and – arguably – prevents the incumbency bias that comes along with placing MPs in charge of disbursal of funds for project development within the constituency.

On the Separation of Powers

Indeed, this last bit was an important feature of the Supreme Court’s separation of powers analysis. Arguments before the Court on this point followed a familiar theme, with the Appellants arguing that the CDF Act violated the separation of powers by vesting executive functions with legislators, and the Respondents arguing that there was no such thing as “pure separation of powers.” However, the Court’s response to this is of particular significance. The Court accepted that the Kenyan Constitution did not follow a “pure” separation of powers model, where the branches of government were hermetically sealed off from one another (indeed, which Constitution does?). However, that did not resolve the question in favour of the Respondents. The crucial question that needed to be asked was what purpose separation of powers was meant to serve in a particular constitutional system, and to derive its content from that analysis.

Here, the Court then found that the purpose of the separation of powers was essentially to prevent concentration:

Kenyans having witnessed excesses of absolute power vested in the Executive branch which operated with abandon and riding roughshod over other state institutions sought to constrain and temper the exercise of public power. Citizens during the pre-2010 dispensation chose to respond to excesses of that legacy by explicitly dividing state power into three branches of government to preclude the exercise of arbitrary power. (paragraph 116)

Keeping this in mind, the Supreme Court proposed a two-pronged test for determining when, in a given case, the separation of powers had been violated: first, ask whether a state agency was straying into the “nucleus, core functions, or pre-eminent domain” of another branch of government, from a functional point of view (as discussed in the previous paragraph); and secondly, ask whether the exercise of the impugned power would threaten the values and principles articulated in the Constitution. (paragraph 118) Applying this two-pronged test, the Supreme Court then found, first, that the Constitution was clear about what legislative power entailed: it was representation, legislation, and oversight over the government (paragraph 120). Under the CDF Act, however, through the Constituency Development Fund Committee, MPs were “in effective control [of the Committee] and that means that he/she influences the selection, prioritization of projects, allocation of funds and also monitors the implementation of the projects.” (paragraph 124) Therefore:

This means that the Fund, as conceived under the CDF Act 2013, vested in the Legislature and its personnel – being the Members of the National Assembly, functions that typically fall within the nucleus, core function, or pre-eminent domain of the Executive branch. (paragraph 124)

What of the separation of powers in terms of constitutional values and principles? Here, the Court found that a core function of the separation of powers was to bring about a system of checks and balances, leading to accountability and good governance. At the heart of this was the avoidance of conflict of interest. However, the CDF Act created an open conflict of interest by giving to MPs a personal stake in the determination and implementation of projects out of the National Assembly’s CDF fund. In other words, MPs could not effectively perform their oversight functions over the use of the Fund, if they themselves stood to benefit politically from decisions about its implementation (paragraph 127). Thus, the Court summed up by holding that:

We, therefore, find that a Fund operating outside the strictures of separation of powers and the system of checks and balances would not be constrained given the absence of legislative oversight and therefore would be prone to be abused. In effect, a Fund that allows personnel from the Legislative branch to exercise executive powers is problematic from a constitutional lens. In the context of this case, we adopt the view that the constitutional scheme on separation of powers should be upheld given its implication for underlying constitutional values; that is, the maintenance of accountability and good governance. Were we to adopt a contrary approach, as urged by the respondents, even for the best of policy reasons, these constitutional values and principles will be eroded. (paragraph 129)

Comparing Institute for Social Accountability and Bhim Singh

The rigorous and in-depth analysis of the Supreme Court of Kenya stands out particularly starkly when we compare it with the judgment of the Indian Supreme Court in Bhim Singh, where the constitutionality of the MPLAD scheme was challenged (I have briefly analysed this case here). On the issue of the separation of powers, the Supreme Court repeated the mantra of there being no “strict” separation of powers, that “each one of the arms at times perform other functions as well“, and that “it is quite logical for the Member of Parliament to carry out developmental activities to the constituencies they represent” (needless to say, there was no explanation forthcoming for why this proposition is “quite logical”, because – unlike the Supreme Court of Kenya, there was no analysis of the role played by the “constituency” in the political process).

The Supreme Court also repelled the separation of powers challenge by noting that under the scheme the power of the MP was a “recommendatory” power, with the decision about which projects to implement lying with the district authority. Once again, though, the judgment of the Kenyan Supreme Court shows us how a Court need not equate form with substance: even under the CDF Act, the relevant MP was not directly implementing projects, as though he or she was a personal administrator. Rather, what the Court found was that the scheme, as a whole, gave to an MP a measure of effective control over how projects were selected and implemented. It is abundantly clear that MPLAD – in slightly different ways – has the same effect.

The federalism challenge was dealt with by the Supreme Court in similarly superficial fashion, by noting that India is a “quasi-federation”; indeed, it is particularly ironic that the Supreme Court of India used the mantra of the “quasi-federation” to avoid any serious analysis of whether the MPLAD scheme violated the Constitution, while on the other hand, the Supreme Court of Kenya – even while insisting that the Constitution of Kenya is unitary – engaged in a much more detailed consideration of whether the CDF Fund violated the devolved scheme of powers between national and county governments set up under the Constitution of Kenya. One can only wonder what the outcome of Bhim Singh would have been, had the Indian Supreme Court taken a principled approach towards the separation of powers and federalism under the Constitution, rather than a box-checking exercise.

Conclusion

In my view, the judgment of the Supreme Court of Kenya in Institute for Social Accountability vs The National Assembly is a landmark judgment, that makes many significant contributions to the global conversation around constitutional democracy. Among the highlights are: (a) the Supreme Court’s finding that the Speaker’s classification of bills is subject to judicial review, especially in situations where the participation of the Second Chamber turns upon how a bill is classified; (b) the Supreme Court’s clear analysis of the role of the constituency as a unity of political representation, and not of service delivery – and the consequences this has for the powers of MPs; (c) the Court’s principled, two-pronged test for when functional separation of powers is violated, and – in particular – its emphasis on preventing concentration of power and enabling accountability as the basis of the doctrine; and (d) its application of the principle to the case at hand, including the articulation of the distinction between legislative functions and executive functions.

Indeed, if we read the judgment as a whole, what comes through most clearly is the Supreme Court’s pushback against a blurring of legislative and executive functions in a way that makes the constitutional terrain the site of a centralising drift. Although the Court doesn’t say so in as many words, its insistence on articulating the doctrine of separation of powers in a way that gives it “analytical bite” shows a clear preoccupation with preserving the Constitution as a check upon the centralisation of power. In this, there are lessons for all of us, around the world.

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[My thanks to Joshua Malidzo Nyawa for giving this piece a once-over.]

Guest Post: Fiscal Federalism and the Centralising Drift – The Supreme Court’s GST Judgment

[This is a guest post by Suhrith Parthasarathy.]

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In July 2017, the Government of India heralded a goods and services tax regime by bringing forth the 101st amendment to the Constitution through an unusual midnight session of Parliament. The government claimed the new tax would unify the Indian market. Any fears that the tax would disrupt Indian federalism were sought to be eased by describing the effort as an example in cooperation between the states and the Union. The then chief economic adviser to the government of India, Arvind Subramanian, described the move as a “voluntary pooling of sovereignty”.

The phrase “pooled sovereignty” owes its origins to the creation of the European Union, where member states agreed to delegate some of their decision-making powers to the council. In the case of the GST, the idea was that both Parliament and the state legislatures would delegate some of their power to a newly formed GST Council that would help make a unified law for the nation. All along, it was believed that the Council’s decision would be binding on each of the states and that any dispute that a state wanted to raise would have to be resolved within the structures built into the system. 

This idea, seen as foundational to the functioning of the GST, has come under threat from a judgment of the Supreme Court, in Union of India v. Mohit Minerals, where a 3-judge bench, presided by Justice DY Chandrachud, has held that the GST Council’s decisions are not binding on legislative bodies and that both Parliament and the state legislatures possess plenary powers to make laws as they deem fit. How states react to this finding and to what extent they choose to amend their respective GST legislations might come to have a deep bearing on the future of Indian federalism.

In framing the Constitution, the Constituent Assembly was conscious of making careful divisions of power between the Union and the state governments. Although there were certain areas in which the Union was accorded pre-eminence, when it came to taxation, the framers were keen to vest in the States substantial responsibility. The compartments that were drawn out ensured that the powers of taxation were not mutually exclusive. Income tax (excepting tax on agricultural income) was offered to the Union, along with some indirect taxes such as customs and excise duties. State governments, on the other hand, were given the exclusive authority to tax both sale of goods and the entry of goods into a state. This division was made by inserting these subjects respectively into Lists I and II of Schedule VII of the Constitution. Critically, the concurrent list, that is List III, did not contain any taxing subject. Therefore, on a reading of Articles 245 and 246 and the entries in Lists I and II of Schedule VII, a clear division of power between the Union and the states could be gleaned out.

The 101^st amendment toppled this arrangement. It removed from List II a slew of subjects over which hitherto the state government had enjoyed absolute power. These included, for example, entry 52, which was “taxes on the entry of goods into a local area for consumption, use or sale therein”; and entry 55, which dealt with taxes on advertisements. Entry 54 was substituted by a new entry, which had the effect of removing the power to tax on sale or purchase of goods excepting certain categories of products, such as fuel, natural gas, and liquor. The amendment also introduced a new provision, Article 246A, which would, as a stand-alone clause, provide a power to tax goods and services. Article 246A reads as follows:

“(1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.

(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.]”

As we can see, Article 246A begins with a non-obstante clause. It overrides the general power to legislate vested in Parliament and the state legislatures through Article 246. It also overrides Article 254, which deals with inconsistencies—including repugnancy—between laws made by Parliament and a state legislature. To give effect to the proposed exercise of unification the 101st amendment introduced a Goods and Services Tax Council through Article 279A. The GST Council comprises the Union Finance Minister (who shall act as a chairperson), the Union Minister of State in charge of Revenue or Finance and the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government.

Article 279A(4) stipulates that the GST Council “shall make recommendations to the Union and the States on (a) The taxes, cesses and surcharges levied by the Union, the states and the local bodies which may be subsumed in the Goods and Services tax; (b) The goods and services that may be subjected to, or exempted from the GST; (c) Model GST Laws, principles of levy, apportionment of Goods and Services tax levied on supplies in the course of inter-state trade or commerce under Article 269A and the principles that govern the place of supply; (d) The threshold limit of turnover below which goods and services may be exempted from GST; (e) The rates including floor rates for specified period, to raise additional resources during any natural calamities or disaster; (f) Special provision with respect to the states of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand and Himachal Pradesh (Referred as Special Category States (g) Any other matter relating to the goods and services tax, as the council may decide.” [Emphasis is mine].

Article 279A(9) states that “Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:— (a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and (b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.” [Emphasis supplied].

Article 279A(10) and (11) read as follows:

“(10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of— (a) any vacancy in, or any defect in, the constitution of the Council; or (b) any defect in the appointment of a person as a Member of the Council; or (c) any procedural irregularity of the Council not affecting the merits of the case. (11) The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute— (a) between the Government of India and one or more States; or (b) between the Government of India and any State or States on one side and one or more other States on the other side; or (c) between two or more States, arising out of the recommendations of the Council or implementation thereof.]”

The language used in Article 279A is somewhat puzzling. The provision uses the word “recommendation” to refer to the GST Council’s advice (which includes advice on a model law) but it also terms the results of the Council’s deliberations as decisions. What is more, it establishes a mechanism to adjudicate disputes that might arise between governments on any decision taken by the council. If one thinks of the GST as a unitary tax, and if the GST has to work in the manner in which it was conceived by the Union government, any advice proffered by the GST Council would necessarily have to be binding on the states—there is no question of allowing a variation in laws, as that would defeat the idea of having a single tax and a single market. This would, of course, mean that the 101^st amendment will have to be seen as dismantling the nature of fiscal federalism that the Constitution in its original form established.

But perhaps because there was no other way the government’s idea could be workable, almost right from its inception, the GST Council’s decisions were viewed as binding on the states. Even when states seriously contested a piece of advice that had been offered, they nonetheless acted on such advice. And for this reason, many states also believed that the Council and its workings impinged on powers vested in the states by the Constitution. In other words, it was thought that the 101^st amendment violated the federal arrangement in a manner that had the effect of effacing one of the basic features of the Constitution.       

The judgment now delivered in Mohit Minerals does not concern itself directly with any of these questions. The case arose out of an appeal filed by the Union government against a judgment of the Gujarat High Court. The High Court had declared a levy of Integrated Goods and Services Tax [IGST] imposed on importers, on ocean freight charges paid by foreign sellers to foreign shipping lines. The court had found that the importers were already paying a tax on the composite supply that was made and that to impose an additional levy on just the ocean freight would be tantamount to a form of double taxation. Moreover, in the case of CIF contracts (Cost, Insurance and Freight contracts), both the service provider and the service recipient were outside the territory of India, and the tax itself was being cast on an importer, who, in the first place, was not the recipient of the service.

During arguments in the Supreme Court, the Union government argued that this decision to levy tax on ocean freight had been made by the GST Council and that the government was, as such, bound by it. In examining this question, the Supreme Court considered the purport of Article 279A and made a series of findings, which could potentially dismantle the idea of GST, as understood through the 101^st amendment. The court did not explicitly premise these findings on the Constitution’s basic structure—its analysis was largely predicated on the text of the Constitution and on what it regarded as Parliament’s intention behind the 101^st amendment. But the underlying philosophy of the basic structure doctrine was nonetheless at play. The court found that to hold the GST Council’s recommendations as binding would have the effect of impinging on legislative powers granted by the Constitution, and would, in the process, alter “fiscal federalism”.

The court recognised that there were two chief arguments in favour of seeing the GST Council’s recommendations as binding. First, if one sees the recommendations as just that, the “GST will collapse as each State would then levy a conflict tax and collection mechanism”; second, if the recommendations are non-binding there would be no dispute to resolve under Article 279(11) as the States would be free to disregard the recommendations. In the same vein, the court also recognised the two chief arguments against seeing the GST Council’s recommendations as binding. First, it would violate the supremacy of Parliament and the state legislatures since both have been afforded “simultaneous” legislative power on GST; second, the virtual veto given to the Union in the GST Council would lead to a violation of fiscal federalism.

Having recognised these arguments, the court proceeded to analyse and lay down the broad contours of India’s federal structure. It cited, among others, HM Seervai who in arguing that India was a federal state, pointed to important powers that had been vested exclusively in the state governments. “The view that unimportant matters were assigned to the States cannot be sustained in face of the very important subjects assigned to the States in List II, and the same applies to taxing powers of the States which are made mutually exclusive of the taxing powers of the Union so that ordinarily the States have independent source of revenue of their own,” wrote Seervai. “The legislative entries relating to taxes in List II show that the sources of revenue available to the States are substantial and would increasingly become more substantial. In addition to the exclusive taxing powers of the States, the States become entitled either to appropriate taxes collected by the Union or to a share in the taxes collected by the Union.”

The Court then proceeded to examine the language used in Article 246A. It saw that the provision granted to both Parliament and the state legislature co-equal power. That is, the legislative bodies were given simultaneous authority to legislate on GST within their respective jurisdictions. This was, the court said, a sui generis provision, containing “unique features” of federalism. “Article 246A treats the Centre and States as equal units by conferring a simultaneous power of enacting law on GST. Article 279A in constituting the GST Council envisions that neither the Centre nor the States can act independent of the other.” The court said that it was aware that there are certain areas in the Constitution where the division of power is lopsided, where the arrangement provides for a centralising drift. But that such provisions exist cannot take away from the fact that there might be other areas where the central and state governments are given equal power. The court also noted that the Constitution, after the 101^st amendment, does not provide for a mechanism to resolve any repugnancy or inconsistency between a parliamentary and state law. This would mean that the GST Council would have to strive to work in a harmonised manner, but at the same time this cannot mean that the GST Council’s decisions will override the basic legislative power vested in the state governments.

Contrary to the much vaunted idea of cooperative federalism that was seen as underlying the GST, the court held—cited scholarship by Jessica Bulman-Pozen and Heather K. Gerken—that what the regime in fact promotes is a form of “uncooperative federalism.” This contestation, Justice Chandrachud wrote, is “valuable since ‘it is desirable to have some level of friction, some amount of state contestation, some deliberation-generating froth in our democratic system.’ Therefore, the States can use various forms of contestation if they disagree with the decision of the Centre. Such forms of contestation are also within the framework of Indian federalism. The GST Council is not merely a constitutional body restricted to the indirect tax system in India but is also an important focal point to foster federalism and democracy.” If the GST Council works not merely through cooperation but also through contestation, and arrives at decisions in a democratic manner, there will be, the court believed, no need for any fears that the taxing regime will crumble as a whole.

To augment this holding the court referred to the bare language used in Article 279A. The word “recommendation”, the judgment found, is used in an array of different constitutional provisions. And the meaning ascribed to it is invariably contextual. In this case, it was impossible to see the word “recommendation” as meaning “binding recommendation” because if that was Parliament’s intention behind the 101^st amendment, a qualification to that express account would have been included in Articles 246A or 279A. “Neither does Article 279A begin with a non-obstante clause nor does Article 246A provide that the legislative power is ‘subject to’ Article 279A,” the court held. But the Union also claimed that the legislatures, both Parliament and the states’, had effectively ceded their power. An analysis of many of the provisions of the Central Goods and Services Tax Act, and, for that matter, the state GST legislations, expressly stipulate that the rule-making power delegated to the Government will be exercised on the recommendations of the GST Council. As examples, the Supreme Court cited Section 5 of the IGST Act, which provides that the taxable event, taxable rate, and taxable value shall be notified by the government on the “recommendations of the Council”. Similarly, the power of the Central Government to exempt goods or services or both from levy of tax shall be exercised on the recommendations of the GST Council under Section 6 of the IGST Act. Section 22 provides that the Government may exercise its rule making power on the recommendations of the GST Council. The CGST Act also provides for similar provisions in Sections 9, 11 and 164. Apart from these, a look at the state GST legislations also showed that similar mandates were made by state legislatures. For instance, Section 9(1) of the Tamil Nadu GST Act reads as follows:  “Subject to the provisions of sub-section (2), there shall be levied a tax called the Tamil Nadu goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.”

A reading of this clause would indicate that the state government is bound by the advice of the Council. For that matter, this clause and each of the provisions of the State GST Act was incorporated on the basis of the model law prescribed by the Council. But what if the legislature amends Section 9(1) and allows the government to deviate from the recommendation made by the council? According to the Supreme Court, the scheme of the 101^st amendment does indeed allow for such amendments to be made, because the GST Council’s recommendations can never constrain the basic legislative power prescribed in Article 246A. A reading of Paragraph 59 of the Supreme Court’s judgment is instructive:

“59. The provisions of the IGST Act and CGST Act which provide that the Union Government is to act on the recommendations of the GST Council must be interpreted with reference to the purpose of the enactment, which is to create a uniform taxation system. The GST was introduced since different States could earlier provide different tax slabs and different exemptions. The recommendations of the GST Council are made binding on the Government when it exercises its power to notify secondary legislation to give effect to the uniform taxation system. The Council under Article 279A has wide recommendatory powers on matters related to GST where it has the power to make recommendations on subject matters that fall outside the purview of the rule-making power under the provisions of the IGST and CGST Act. Merely because a few of the recommendations of the GST Council are binding on the Government under the provisions of the CGST Act and IGST Act, it cannot be argued that all of the GST Council’s recommendations are binding. As a matter of first principle, the provisions of the Constitution, which is the grundnorm of the nation, cannot be interpreted based on the provisions of a primary legislation. It is only the provisions of a primary legislation that can be interpreted with reference to the Constitution. The legislature amends the Constitution by exercising its constituent power and legislates by exercising its legislative power. The constituent power of the legislature is of a higher constitutional order as compared to its legislative power. Even if it is Parliament that has enacted laws making the recommendations of the GST Council binding on the Central Government for the purpose of notifying secondary legislations, it would not mean that all the recommendations of the Council made by virtue of its power under Article 279A have a binding force on the legislature.”

It is my submission that this finding by the Supreme Court in paragraph 59, which has a potentially far-reaching effect, is correct and laudable. Critics of the judgment may well point to the fact that in allowing the state legislatures plenary power to legislate beyond the Council’s recommendations the court has potentially allowed a pathway for a collapse of the GST regime. But the court’s interpretation is predicated on two things: one, the bare text of the Constitution, in that Article 279A uses the word “recommendation” and in that Article 246A does not limit in any manner the equal power granted both to the Parliament and the state legislatures; two, that any other interpretation would allow the federal compact, as originally conceived by the framers, to collapse. In other words, what is at stake here is the Constitution’s basic structure. Upholding that structure requires us to see both the Union and the state governments as equal partners.

The judgment in Mohit Minerals is not a comment on fiscal policy or on the merits of a unified taxing regime. If such a regime is desirable, then it is up to the Union and the state governments to arrive at a consensus through democratic deliberation, whether within the confines of the GST Council or outside of it. But if a state government believes that it must disregard some decision or the other of the Council, its basic legislative power to do so cannot be arrogated. To ascribe any other meaning to the 101^st amendment would only render it a nullity.

Guest Post: Compulsory “Borrowing” of State Administrative Officers by the Central Government – Impact Upon the Federal Structure

[This is a guest post by Yash Sinha.]

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The central government has recently proposed amendments to the Indian Administrative Service (Cadre) Rules, 1954 (‘the 1954 Rules’). Succinctly, they enable the Central Government to compulsorily “borrow” an officer from the Indian Administrative Service (‘IAS’) serving a state government. This article argues that the probable impact will be damaging to two ideas underlying Indian federalism. Firstly, there is a breach of ‘centripetal federalism’, which is specific to the provisions on civil services. Secondly, there is an assault on the principles of quasi-federalism as found in the remaining Constitutional text.

As necessary preface to the argument advanced, Part I describes the present framework to contextualise the amendment’s implications. It maps the present degree of administrative control possessed by both the Centre and the states over such officers. It demonstrates that the framework provides for a titular inclination towards central discretion. Simultaneously, the density of the states’ weightage in power is shown to be residing in the concerned rule. Part II explains the Constitutional intent behind the distribution of such controls. It argues that the intent was to favour the states’ interests by having the centre supervise manpower. It links this to the Constitutional desire of having a centripetal force for enhanced cohesion and better functioning of the state executive. This centripetal force is shown to come from a titular, as opposed to an actual, central preponderance. Eventually, Part III discusses relevance of quasi-federalism as revealed by other parts of the Constitution. It argues that centripetal federalism fits perfectly in Ambedkar’s model of quasi-federalism, and is meant to have a cumulative effect of prioritising state interests in its IAS officers. Consequently, the amendments are shown to be (impermissibly) re-arranging Constitutional allocation of power.

The framework and the amendment

The All India Services Act, 1951 (‘AIS’) requires direct recruitment of freshly minted IAS officers to state governments. This recruitment is made in the President’s name, with the Department of Personnel and Training as its controlling authority.

The centre has conclusive discretion in more substantial aspects of the process as well. These illustratively include allocating recruits to each state cadre, determining those numbers, reserving a few for itself, imparting training to them, and exercising the power to selectively extend career-durations.

Furthermore, it has unequivocal priority in matters pertaining to suspension. The centre’s will is binding in spite of a state’s differing opinion on the same. The same arrangement governs disagreements about disciplinary proceedings, except that the state needs prior permission from the centre to initiate those. The centre also has the sole discretion in compulsorily and prematurely retiring IAS officers in state or central cadres.

The states, however, have a wide array of incentives/disincentives with which they govern the behaviour of their IAS officers. The officers’ transfers, reallocation of territorial units for administration and elevation to coveted posts, are the primary tools of control. Pertinently, the states have a sufficient deterrent in initiating an interim suspension till the centre’s final decision. To compete with the centre’s power of career-extensions, the states have devised their own workaround: the civil servant may choose to wait till the organic expiry of her tenure comes about, and subsequently function as an aide/advisory to the state government.

Regardless, it is seen that the centre has greater say till the stage of allocation to the state government, and then directly in ending the careers of IAS officers. However, the centre faced one significant handicap. The number of officers drawn by way of the present version of rule 6 was low in quanta. Therefore, it introduced the Central Staffing Scheme (‘CSS’). This ‘scheme’ was brought in through a government resolution, bypassing the All India Services Act (‘AIS’). Sec. 3 of this enactment requires that every amendatory rule be first scrutinised by the Parliament. Since the scheme was not a ‘rule’, it was considered to be an exercise of residuary executive power.

Under this scheme, the centre may choose to declare certain officers as fit to work directly under its administration. This process is referred to as ‘empanelment’, and earmarks possible candidates for future/immediate deputation. Regardless of the intent behind CSS, it serves favourably for the states. The state officers eluding empanelment are given the more strategic posts, minimising the possibility of disruption in functioning.

Simultaneously, the centre continues to face a handicap. Migration of empanelled officers is still contingent on the satisfaction of rule 6(1) of the 1954 Rules. By virtue of this, the centre cannot forcibly borrow a recruited state officer, regardless of empanelment. In 1969, a proviso was introduced to tweak this arrangement. It states that any differences regarding central deputation will see the centre’s view as binding. However, this does not denote the centre’s will as ‘overriding by default’. Rather, it was stated to be suggesting a dispute resolution mechanism, with the centre as an independent arbiter.

This proposed amendment is to negate the current rule 6(1) and forcibly recruit empanelled/non-empanelled IAS officers in states. This is ensured through two key changes. Firstly¸ the pre-requisite of the states’ consent is sought to be done away with. Secondly, the centre will have complete discretion to determine the number of such officers it may so wrest away.

Thus, this amendment effectively entitles the centre to expropriate members of the state administration. Combined with the significant power to additionally determine the numbers, the dispossessing impact renders it Constitutionally offensive.

Striking at the edifice of civil services: centripetal federalism

Given that IAS recruitment happens largely for the states, the centre’s role of a manager seems incongruous. This feature, however, is laden with Constitutional purpose.

Alongside other articles pertaining to the civil services, Art. 311 was formulated by Sardar Patel. Essentially, it compels pause and deliberation in the removal of Indian bureaucrats. Cl. 1 ensures that IAS officers are removed only by the centre. Art. 310(1) requires the centre to have strong reasons before affecting such removals. Simultaneously, Art. 311(2) mandates that the states follow a proper inquiry procedure before initiating a request for removal. Succinctly put, the design ensures that the states have the power to initiate penalties, without attaching it with any finality. It is these bounds that the statutory framework discussed in Part I are adhering to.

The underlying reasoning is present in the Constituent Assembly Debates. Few members were opposed to the state’s say in removal of officers, given certain provinces’ past loyalty to the British. Simultaneously and regardless, another set of members nurtured the very same suspicion about the bureaucracy itself. Both the groups demanded that there be no constitutional mention for the officers’ ‘removal’. By specifying a singular and tortuous procedure in the Constitution, Patel was accused of giving them a certain amount of protection. Patel refused to budge, citing the IAS’ potential to protect the Constitution. The bureaucracy, he stated, remains rooted in governance even if the political domain goes through severe flux. Officers unfailingly abiding by executive orders suggested to him institutional strength, and not moral vacuity. The bureaucracy-conduced stability during the crises thrown by the Partition and transition to independent governance were cited as footnotes to this assertion. More significantly, accession of some provinces was secured entirely on the assurance of preserving their internal freedom. Patel argued that this essentially denoted preserving their bureaucratic structure.

The grist of his argument, however, is packed in one significant portion of his rebuttal:

“This Constitution is meant to be worked by a ring of Service which will keep the country intact […] we shall have this model wherein the ring of Service will be such that will keep the country under control.”

Evidently, Patel envisaged the centre’s say on states’ officers as a source of national cohesion. This design seems further consolidated in light of another vital aspect of Indian Constitutional history. When the Government of India Act, 1935 introduced federalism to British India, it created an administrative office to singularly oversee and manage bureaucratic recruitments to the provinces. Termed as the ‘Establishment Officer’ and now within the DoPT, it is additionally tasked with handling the CSS.

Hence, Patel envisaged ‘centripetal federalism’: a counterintuitive concept wherein the centre has an overriding say, but in order to achieve effective decentralisation. The centre’s role in managing IAS officers of the states was to preserve and further federal cohesion. The limited preponderance it enjoys is only cosmetic and essentially bestows greater power on the states. But contrary to this, the amendments are aimed at creating an actual tilt towards the centre and at the states’ expense.

Quasi-federalism’s overlap with centripetal federalism

Ambedkar was distrustful of a liberal approach towards decentralisation in India. So while Patel argued for enhanced federalism, Ambedkar disagreed, and favoured a pseudo-unitary system of governance. The eventual Constitutional inclination towards the centre across different parameters has come to be identified – by the decisions in State of Karnataka, Shamsher Singh, Kuldip Nayar and Bhim Singh – as quasi-federalism.

It stands on a different footing than centripetal federalism, in the following manner. The latter weaves vertical federal units into one single thread of cohesion, whilst retaining the vital powers of the states. It brings in an effective central discretion to the fore, while still prioritising state-interests in the federal-vertical. On the other hand, the quasi-federal model is best understood as a bundle of different federal arrangements. It encompasses federal collaboration, unit-exclusive functioning, and permissible circumstances for the centre’s domination.

According to Ambedkar, this dominance denoted ‘circumscribing’ the states’ power in legislative and executive concerns. In elaboration, he asserted that the overriding power of the centre was to be kept strong in intensity, yet minimal in occurrence. Accordingly, the centre was conferred with legislative preponderance only in disagreements pertaining to concurrent and residuary subjects. However, as espoused in V. Hariharan and consolidated in GNCTD, it is the states which have executive preponderance in concurrent subjects, except where Constitutional or parliamentary law specify exceptions.

It is at this point where flanks of both the models of federalism confluence. Centripetal provisions on civil services are cocooned by Ambedkar’s exemptions from central dominance for a cumulative impact.

It is to be noted that IAS officers in a state are bound to execute and handle laws under List II. These officers, insofar as they constitute the state executive, are not tasked with implementing central laws due to Ambedkar’s ‘exclusive priority’. Art. 256 and 257 reservedly ask state officers to neither hinder such laws’ implementation, nor the centre’s functioning. This indicates mutual exclusivity between the functioning of state and central executives. Additionally, the Constitutional text also bears out his intention to minimise the hijacking of state executives. At present, only under Art. 352 and 356 can the state executive machinery be taken control over by the centre. That apart, Art. 324(6) has been judicially interpreted as the only other provision that permits a temporary and non-consensual expropriation of a state’s executive machinery.

Thus, the cumulative impact of both the models is to impart states’ executive with a high degree of exclusivity. Central preponderance therein would be a fickle proposition, except when permitted by the Constitution.  Presently, its text suggests the contrary.

Conclusion

In its present form, rule 6(1) embodies a Constitutional allocation. It encapsulates the core of decentralisation by granting states a decisive hold over their in-service civil servants. In parallel and by intelligent design, the Constitution protects these officers from politically motivated state-level reprimands.

Both the safeguards exist due to two different ideas of federalism.  The centripetal model stresses on unity to advance greater decentralisation. It exists to generate a unifying factor, but prioritises states in doing so. Contrarily, the pseudo-unitary model prioritises the centre, and goes beyond merely supplying an appellation of unity. It is best viewed as a wide spectrum of federal arrangements, with slight inclination to the centre and complete substitution of state powers as the two extreme ends. The crux of both, however, is the asymmetry in the federal-vertical. 

As far as civil services within the states is concerned, the two versions reinforce each other to have a curious constitutional impact: both cement plenary powers of the state executive. The cohesive intent ensures that no state is dispossessed of its administrative instruments. Simultaneously, the specificity in areas for central dominance makes it rare for the centre to interfere with the everyday functioning of state executives. Combined, they make states’ consent all the more indispensable.

Without rule 6(1) in its present form, the country shall move closer to a unitary operation under the facade of an operative quasi-federal system.

Land, Citizens, and Farmers: Recognising Political Constitutionalism

Indian political and legislative processes are far from perfect. Recently, this has led to arguments (on this blog, and elsewhere) exploring the possibility of increased judicial intervention in the legislative process – where the judiciary ‘examines the validity of procedures leading to enactment’. In this post, I suggest that judicial scrutiny of legislative activity should not underestimate the power of democratic processes to produce respect for the rule of law and rights. However, this approach requires us to locate the ‘constitutionality’ of legislative action in the legitimate decision-making processes of the political system (as opposed to the legal system). Through an examination of the events surrounding the Land Acquisition Bill (2015), the Citizenship Amendment Act (2019), and the three agricultural laws (2020), I highlight how actors beyond courts may impact the constitutionality of legislation.

I briefly outline the two approaches to ‘constitutionality’ under the rubrics of legal and political constitutionalism and then analyse the three legislative events from the lens of political constitutionalism. I do not suggest a wholesale bar on judicial interventions in the legislative process (nor do authors who advocate judicial interventions suggest abandoning other means to improve the legislative process). I also do not delve into how political or legislative reforms may be achieved. The purpose of this post is merely to highlight how democratic processes can also be an avenue to achieve constitutional goods.

Legal and Political Constitutionalism

Legal constitutionalism suggests that because citizens and legislators may not always embrace the values necessary for constitutional democracy, the respect for these values needs to be protected by judges. Therefore, judges serve as a key restraint on legislative power – evaluating whether legislation satisfies constitutional values. (E.g., the Supreme Court invalidating legislation that violates the freedom of speech.) Stepping outside the grammar of rights, such exercises of legislative power typically involve substantive and fundamental competing interests (e.g., public order v free speech), and legal constitutionalism suggests that judges are best situated to settle these crucial issues. However, dissenting opinions and overruled judgements indicate that judges themselves disagree over which outcomes uphold constitutional values. Therefore, the ‘correctness’ of these outcomes largely stems from legal structures that confer jurisdiction on courts to settle these disputes and confer finality on judicial determinations on competing societal interests.

Political constitutionalism argues that ‘the democratic process is equally, if not more legitimate and capable than courts at resolving these substantive and fundamental disagreements.’ Rather that suggesting judicial oversight, it focuses inter alia on: (i) improving the democratic process through improving electoral and parliamentary systems (e.g., proportional representation and parliamentary scrutiny); (ii) creating multiple inflection points where power is balanced (federalism, off-set election cycles, and independent bodies); and (iii) political parties competing for the support of diverse interest groups who themselves have cross-cutting interests, compelling political parties to listen varied viewpoints and often compromise. Crucially, it ‘locates the ‘constitutionality’ of legislation within the political and not the legal system’ by focusing on how decision making procedures can be made legitimate through balancing institutions and ensuring transparent participation. Where legal constitutionalism may emphasise judicially policed rights as central to constitutional culture, political constitutionalism sees democratic participation as causing citizens to identify with a constitutional system.

This may sound idyllic, and caveats must be made in the Indian context. India’s political and legislative structures contain several democratic weaknesses (role of the governor, ordinance powers, anti-defection, partisan speakers, lack of intra-party democracy, imbalanced federalism). As a result, the efficacy and visibility of constraints on power envisioned by political constitutionalism may vary or be entirely absent. In all the three legislative instances discussed below, there was immense public pressure in the form of demonstrations, speeches, strikes, and vigils despite fragile protections for civil liberties. The need for such resistance to hold power accountable does not undermine the argument for political constitutionalism (such actions are firmly within the democratic process envisioned by political constitutionalism) but rather points to the urgent need to reform our political structures to allow for public opinion, contestation, and compromise through elected officials without blood having to be shed.

Readers will forgive my painfully brief explanation of three complex legal issues. The goal here is merely to identify when the structures of political constitutionalism are at play (I tag them in italics for brevity).

Land Acquisition Bill

On 24 February 2015, the Government introduced a bill (Land Acquisition Bill) to replace an ordinance which amended the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Land Acquisition Bill identified certain situations when the government did not need to obtain landowners’ consent or conduct a social impact assessment before acquiring land. The Land Acquisition Bill passed the Lok Sabha on 10 March but the government did not advance the Bill in the Rajya Sabha because it lacked a majority in the upper house (bi-cameralism and federalism). The existing ordinance was due to expire on April 5, but the Rajya Sabha session continued till 8 May. As ordinances cannot be passed when Parliament is in session, the ordinance looked certain to expire until, on 28 March, the President prorogued (terminated the session of) the Rajya Sabha, allowing the government to re-issue the ordinance on April 3, effectively circumventing Parliamentary approval. These actions were challenged in the Supreme Court as an ‘abuse of the President’s ordinance powers’.  

The Land Acquisition Bill was referred to a Joint Parliamentary Committee. In the BJP chaired committee, it was reported that all eleven BJP MPs moved amendments reinstating the need to acquire landowners consent and conduct social impact assessments (parliamentary scrutiny and intra-party contestation). However, the Land Acquisition Bill never passed the Rajya Sabha, and in August 2015 the ordinance was allowed to lapse two months before the 2015 Bihar elections (staggered electoral cycles). The Supreme Court would eventually dismiss the court challenge as infructuous.

Citizenship Amendment Act

The Citizenship Amendment Act, 2019 (CAA) allows illegal migrant to apply for citizenship if: (i) they entered India before 31 December 2014; (ii) they receive exemptions under the Passports and Foreigners Acts; (iii) they are from Afghanistan, Bangladesh, or Pakistan; and (iv) they are Hindu, Sikh, Christian, Parsi, Jain, or Buddhist. The Government claimed the intention of the law was to protect religious minorities in Afghanistan, Bangladesh, and Pakistan from persecution, and the exclusion of Muslim migrants was a ‘reasonable classification’ within the legislature’s discretion given that Muslims constituted a majority in these three countries.

However, critics of the CAA argued that for the Act to be constitutional, the classification must be connected to the purpose of the legislation. If the goal of the CAA was to protect individuals from religious persecution, then the test under the Act must be – is the individual being persecuted? In other words, the law cannot (without basis) presume that Muslims are not persecuted in Afghanistan, Pakistan, and Bangladesh. The exclusion of Muslims was thus disconnected from the goal of protecting individuals from persecution, and hence violated Article 14 (equality before law). It was also pointed out that the exclusion of Rohingya Muslims from Myanmar suggested an unprincipled (and potentially discriminatory) use of legislative power.

The adoption of the CAA led to sustained nationwide protests. The CAA was also opposed by several states and the Union Government received resolutions the legislatures of Meghalaya, West Bengal, Tamil Nadu, Kerala, and Punjab denouncing the CAA (federalism). Kerala and Rajasthan would go on to sue the Union Government under Article 131 of the Constitution over the CAA. The Government has not repealed the CAA. However, despite Parliamentary manuals requiring that subordinate legislation (rules) for the legislation be adopted within six months of a law passing, two years later, the Union Government is yet to adopt any rules for the CAA (as of writing, the Home Ministry has requested time till January 2022). In the two years since the passage of CAA, 140 petitions have been instituted challenging the constitutionality of the legislation, but the Supreme Court has yet to render a verdict.

Agricultural Laws

In 2020, the Government introduced three laws aimed at reforming the agricultural sector (Farm Laws), discussed in detail here. The laws were passed in the Rajya Sabha using a voice vote instead of a division vote. A voice vote is where the chairperson places the issue before the house and decides the vote based on whether the yes’s or no’s are louder. This may be fine to quickly dispose of issues on which there is significant consensus. However, for more closely contested votes, the process of a division vote exists (where MPs vote electronically). It stands to reason that any vote that is won during a voice vote should also be able to pass in a division vote (otherwise the vote is wholly illegitimate as the chairperson has usurped the collective decision-making of the house and replaced it with their own singular discretion). To guard against this risk, the Rajya Sabha Rules expressly provide that if the outcome of a voice vote is challenged, there must be a division vote (r. 253).

The Farm Laws were passed amongst pandemonium in the Rajya Sabha, and the Chairperson contended that opposition MPs were not in their seats when they challenged the voice vote (a claim contradicted by video footage of the day but an issue also not helped by the fact that the audio feed from the Rajya Sabha was cut for half an hour). After the Farm Laws were passed, the leader of the opposition met the President who protested the breaches of parliamentary procedure and requested the President to refuse assent (another structural inflection point). Soon after, the NDA Government lost its oldest coalition partner (the SAD) (coalitions as a restraint on power). The yearlong protests by farmers and the incident at Lakhimpur Kheri have sufficiently entered the popular consciousness that they need not be repeated here. Towards the end of this stalemate, an MP from the ruling party introduced a private members bill to secure some of the protections sought by protesting farmers (intra-party contestation). Eventually, in December 2021 the Farm Laws were repealed in the lead-up to state elections in Uttar Pradesh and Punjab (staggered electoral cycles).

Conclusion

This piece began by noting that the shortfalls in our political and legislative system to meet our needs for legitimate government can be addressed both through judicial interventions and through political structures. The goal of the above examples is to highlight how political structures such as bi-cameralism, federalism, staggered elections, coalition politics, intra-party democracy, and public protests can restrain power, arrive at decisions about contentious issues in legitimate ways, and respond to breaches of the rule of law. These structures are by no stretch perfect. However, reform of political structures must begin from an understanding that they are worth reforming. At a bare minimum, this requires a discourse which situates the constitution in the political system beyond courts. It also requires us to be able to look past political double-speak and understand when political structures are at play.

There is also reason to be cautious of increased judicial intervention. It is notable than in all three of the above examples, constitutional courts have been conspicuous in their inability or unwillingness to intervene. It is always possible to examine individual situations and argue that a court acting as it is supposed to, could have done better. But this ignores the reality that just as political actors do not always act in conformity with their roles, courts are also not perfect functionaries. Arguments for increased judicial intervention must address the reality that constitutional courts in India have their own structural and behavioural weakness. Lastly, where judicial interventions may vest more power in judges, a focus on reforming electoral systems and structuring institutions so that governmental power is constantly subject to meaningful competition and accountable to cross-cutting interests creates space for a broader set of actors to engage in constitutional authorship.

Guest Post: A Critique of the Supreme Court’s Maratha Reservation Judgment – III: The Constitutionality of the 102nd Amendment

[This is a guest post by Vrishank Singhania.]

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In the previous two posts (Part I and Part II), Bhatia discussed the Supreme Court’s holding on the 50% cap and the interpretation of the 102^nd Amendment, in the Maratha Reservation judgement. With regard the interpretation of clause 4 of the 102^nd Amendment, the Supreme Court held that the power to identify socially and educationally backward classes [“SEBCs”] vested solely with the centre, to the exclusion of the states. While Bhatia argues this is an incorrect interpretation, Bhardwaj in response argues that it is correct. In this post, I take as a given the Majority’s interpretation. The next issue that the Supreme Court (specifically the majority) then had to decide was whether, on this interpretation, the 102^nd Amendment was constitutional or not.  

There were two arguments advanced on the issue of the constitutionality of the Amendment. First, given that the Amendment takes away the power of the states to identify SEBCs, it should have been passed in accordance with the proviso to Article 368(2) i.e. it should have been ratified by at least one half of the legislative assemblies of all states. Since this procedure was not followed, the Amendment is unconstitutional. Second, that the Amendment is contrary to the basic feature of federalism. Justice Bhat rejected both of these arguments and upheld the constitutionality of the Amendment. I agree that the Amendment does not fall foul of the Constitution’s basic structure. However, I argue that the Supreme Court erred in its decision on Article 368(2). Assuming the Supreme Court’s interpretation of the 102^nd Amendment is correct, the Amendment is unconstitutional qua Article 368(2). 

This essay has five sections. In the first section, I look at J. Bhat’s reasoning on the applicability of the proviso to Article 368(2). In the second and third sections, I draw out the test for the applicability of the proviso from its purpose and past Supreme Court precedent. In the fourth section, I apply the test determined in the previous sections to the 102^nd Amendment. In the fifth section, I provide a brief analysis of J. Bhat’s reasoning on the basic structure argument. 

I. Bhat J.’s interpretation of Article 368(2)

The power of the Parliament to amend the Constitution is derived from Article 368. Article 368(2) states that –

(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 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.

Article 368(2) thus provides for two different types of amendments –

1. Amendments to the Constitution pertaining to the parts specified in Article 368(2) sub-sections (a) to (e); and 
2. Amendments to all other parts of the Constitution. 

The second type of amendment has to be passed by a majority in each House of the Parliament. However, the first type of amendment, in addition, also needs to be ratified by the legislatures of not less than one half of the states [as per the Proviso to Article 368(2)]. Thus, Article 368(2) limits the powers of the Parliament to bring about certain types of amendments, and if such procedure is not followed, then the amendment would be unconstitutional. 

As mentioned above, the proviso to Article 368(2) [hereinafter referred to as “the proviso”] applies only when any of the parts or provisions specified in sub-sections (a) to (e) [hereinafter referred to as “specified provisions”] are amended. In the present case, the 102^nd Amendment had not directly amended any of the specified provisions. There are two questions that then arise. First, whether the applicability of the proviso, requires a direct amendment to the specified provisions, or would an indirect amendment, that in effect amends the specified provisions also qualify. Second, if an indirect amendment qualifies, would an incidental effect on the specified provisions also suffice to trigger the proviso.  

J. Bhat does not consider this complexity, and consequently his decision on Article 368(2) is lacking in its reasoning. It is unclear as to what the test for the applicability of the proviso is according to him. However, from my reading of his judgement, the following paragraphs indicate his holding on this issue – 

181. In this regard what is noticeable is that direct amendments to any of the legislative entries in the three lists of the Seventh Schedule to the Constitution requires ratification. Thus, the insertion of substantive provisions that might impact future legislation by the State in an indirect or oblique manner would not necessarily fall afoul of the Constitution for not complying with the procedure spelt out in the proviso to Article 368(2).

182. The majority judgment [in Sajjan Singh], therefore decisively held that an interpretation which hinges on indirect impact of a provision, the amendment of which needs ratification of the states, does not violate the Constitution and that unless the amendment actually deletes or alters any of the Entries in the three lists of the Seventh Schedule, or directly amends an Article for which ratification is necessary, recourse to the proviso to Article 368 (2) was not necessary. 

It would seem that according to J. Bhat, the proviso is triggered only when there is an actual or direct amendment to the specified provisions. However, in paragraph 181 above, he also looks at the impact (or in other words the effect) of the Amendment on the specified provisions. A harmonious reading of these would suggest that according to J. Bhat, unless there is an actual or direct amendment, the impact on the specified provisions would be considered incidental, and thus, the proviso would not apply. This formalist interpretation of Article 368(2), in my opinion, is incorrect. 

In the next two sections, I shall  look at the purpose of the proviso and Supreme Court precedent on its interpretation to argue that – first, a direct amendment is not necessary i.e. that an in effect amendment is sufficient; and second, that the effect cannot be merely incidental. I will then apply the test to the 102^nd Amendment to argue that the proviso is applicable in the present case.

II. Nature of the Amendment – Direct or In Effect?

The first question to be determined is whether the applicability of the proviso requires a direct amendment to the specified provisions, or would an indirect amendment, that in effect amends the specified provisions also suffice. I argue, that based on both the purpose of the proviso and Supreme Court precedent, an in effect amendment would also suffice to trigger the proviso. 

According to Dr. Ambedkar, the purpose of the proviso was as follows – 

If Members of the House who are interested in this matter are to examine the articles that have been put under the proviso, they will find that they refer not merely to the Centre but to the relations between the Centre and the Provinces. We cannot forget the fact that while we have in a large number of cases invaded provincial autonomy, we still intend and have as a matter of fact seen to it that the federal structure of the Constitution remains fundamentally unaltered. We have by our laws given certain rights to provinces, and reserved certain rights to the Centre. We have distributed legislative authority; we have distributed executive authority and we have distributed administrative authority. Obviously to say that even those articles of the Constitution which pertain to the administrative, legislative, financial and other powers, such as the executive powers of the provinces should be made liable to alteration by the Central Parliament…without permitting the provinces or the States to have any voice, is in my judgment altogether nullifying the fundamentals of the Constitution.

As Dr. Ambedkar mentions, the proviso includes provisions that have a bearing on the federal structure of the Constitution, such as the elections of the President, the representation of States in the Parliament, the executive and legislative powers of the States vis-à-vis the Union, and the amending power itself. The purpose of the proviso is to ensure that the Parliament cannot unilaterally amend the federal structure of the Constitution, without the consent of the States. 

A formalist interpretation, such as the one suggested by J. Bhat, would allow the Parliament to in effect alter the federal structure, without directly amending any of the specified provisions. This would defeat the purpose of the proviso. It would also negate the well-established doctrine of colourable legislation – what cannot be done directly cannot also be done indirectly. A purposive interpretation to Article 368(2) has been upheld by the Supreme Court in Sajjan Singh and Kihoto Hollohan – cases which J. Bhat incorrectly relies upon to justify his formalist interpretation. 

Sajjan Singh dealt with the validity of the 17^th Constitutional Amendment which had amended Part III of the Constitution and had taken away the Supreme Court’s and High Court’s power of judicial review with respect to legislations included in the Ninth Schedule. The petitioners argued that this amounted to modifying the High Court’s powers under Article 226 [a specified provision under Article 368(2)(b)] and thus the amendment required ratification by the states. Similar to the present case, the constitutional amendment did not directly amend any of the specified provisions. While the Supreme Court held that the proviso did not apply, it did not confine itself to looking merely at whether the specified provisions had been directly amended. Instead it formulated the test as follows – 

The proviso would apply where the amendment in question seeks to make any change, inter alia, in Article 226, and the question in such a case would be: does the amendment seek to make a change in the provisions of Article 226? The answer to this question would depend upon the effect of the amendment made in the fundamental rights. (Paragraph 8, Gajendragadkar C.J.)

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.” (Paragraph 14, Gajendragadkar C.J.)

Thus, the Supreme Court was concerned with the “effect” of the amendment and not merely the formal provision it amended. 

A similar issue was at stake in Kihoto Hollohan – the Supreme Court had to decide upon the validity of the 52^nd Constitutional Amendment, which had introduced the Tenth Schedule, and in paragraph 7, had taken away the Courts’ power of judicial review in matters of disqualification of a Member of a House. The test formulated by the Supreme Court was as follows –

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. (Paragraph 158, Verma J.).

In this case, similar to the Maratha Reservation case, Article 226 had not been directly amended by the 52^nd Amendment. Nevertheless, the Supreme Court held that paragraph 7 of the Tenth Schedule was unconstitutional because in effect it amended Article 226, but without following the procedure in the proviso. 

It is unclear then as to how J. Bhat arrived at the conclusion that Sajjan Singh and Kihoto Hollohan require a direct or actual amendment, when they clearly held to the contrary. Thus, a direct amendment is not necessary – an in effect amendment can also trigger the proviso.

III. Effect of the Amendment – Does it include incidental effects?

Having established that an in effect amendment can trigger the proviso, the next question, is whether any effect, including incidental effects, are sufficient to trigger the proviso. The Supreme Court in both Sajjan Singh and Kihoto Hollohan held that an incidental effect on a specified provision would not trigger the proviso. The Court justified this decision on the basis of the purpose and structure of Article 368(2). In Sajjan Singh, it held that – 

It is urged that any amendment of the fundamental rights contained in Part III would inevitably affect the powers of the High Court, prescribed by Article 226, and as such, the bill proposing the said amendment cannot fall under the proviso; otherwise the very object of not including Part III under the proviso would be defeated.

Given that the Constitutional provisions do not operate in silos, it is likely that an amendment to a non-specified provision will effect a specified provision, thereby triggering the proviso if every effect was considered sufficient. Thus, a harmonious interpretation of the two parts of Article 368(2) requires that amendments which in their true effect seek to amend non-specified provisions, do not trigger the proviso, merely because of an incidental effect on a specified provision.  

It was this question of incidentality, that distinguishes Sajjan Singh and Kihoto Hollohan. In the former, the Court held that the effect on Article 226 was incidental, whereas in the latter it was held that the effect was not incidental. The determination of whether an effect is incidental is based on which provision the amendment truly purports to effect a change in. As mentioned above, if its true effect is on a non-specified provision, then a mere incidental effect on a specified provision, would not trigger the proviso. 

The Court in Kihoto Hollohan used this test to draw a distinction with the facts of Sajjan Singh – 

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…in the absence of which there is no occasion to make a grievance and invoke the subsisting remedy, then the change brought about is in the right and not the remedy. To this situation, Sankari Prasad and Sajjan Singh apply. On the other hand, if the right remains untouched…and, therefore, the cause of action subsists, but the remedy is curtailed or extinguished…then the change made is in the remedy and not in the subsisting right.

According to the Court, in Sajjan Singh, the 17^th Constitutional Amendment’s objective was to amend the fundamental rights in Part III – that is where its true effect was. Its purpose was not to amend the remedy i.e. Article 226 and thus the effect on Article 226 was merely incidental. On the other hand, according to the Court, in Kihoto Hollohan, the true effect of paragraph 7 of the 52^nd Constitutional Amendment was to remove the power of judicial review, and not to change the underlying cause of action itself. The true effect was on the remedy i.e. Article 226 and the thus the effect was not incidental.

Therefore, the determination of incidental effect is not based on the degree of change to the specified provision, but rather on the true effect of the amendment. 

IV. Evaluation of the 102^nd Constitutional Amendment

As mentioned earlier, according to J. Bhat, clause 4 of the 102^nd Constitutional Amendment grants exclusive power to the Centre to identify SEBCs, taking away the power that the States have enjoyed for over seven decades. Applying the two-pronged test for the application of the proviso to Article 368(2), there are two questions that arise – first, whether the Amendment has the effect of amending any of the specified provisions; and second, if it does, is the effect merely incidental. 

In respect of the first prong, I argue that the Amendment has the effect of amending the specified provisions – specifically, the States’ legislative powers under Article 246 and the Seventh Schedule [as specified in sub-clauses (b) and (c) of the proviso] and their executive powers under Article 162 [specified in sub-clause (a) of the proviso].  

Articles 15(4) and 16(4), authorize the “State” to make reservations for SEBCs. According to the Supreme Court in Indra Sawhney, this includes both the Parliament and the State Legislature, as well as the Executive (both Centre and State). However, the question of which authority is competent to provide for reservations in a specific context, is dependent on the legislative competence of the Parliament/Legislature per Article 246. For instance, the regulation of State public services, as per Entry 41, List II, is within the State Legislature’s domain. Thus, the a provision of reservations for SEBCs in the context of State public services, would come within the competence of the State Legislature and not the Parliament. Further, according to Article 162, the State’s executive powers are co-extensive with the State Legislature’s powers. Since the power to regulate State public services belongs to the State Legislature, in the context of executive power, it belongs to the State. 

However, the Amendment takes away both the legislative and executive power of the States to provide for reservations in contexts such as State public services, which before the Amendment had been in their domain as per Article 246 and 162. Thus, even if the Amendment does not directly amend the specified provisions, it does have an effect on them. 

The second prong then is whether this effect is incidental or not. As mentioned above, this requires a determination of which provisions clause 4 of the Amendment truly seeks to effect a change in. To evaluate this, it is useful to compare the 102^nd Amendment to the 93^rd Constitutional Amendment, which inserted Article 15(5), authorizing the “State” to make reservations for SEBCs even in private educational institutions. The 93^rd amendment does have an effect on the powers of States. However, its true purpose was to effect a change in Article 15, and the effect on the states’ powers was merely incidental.  

On the other hand, according to J. Bhat, the true purpose of clause 4 of the 102^nd Amendment could not merely have been to continue status quo and grant constitutional authority to the National Commission for Backward Classes. Instead, per his interpretation the true effect and purpose of clause 4 was to shift the power that hitherto States exercised to the Centre (paragraphs 147-152). Unlike the 93^rd Amendment, the 102^nd Amendment did not seek to effect change in the right in Article 15(4) and 16(4), but sought to effect change in the distribution of powers between the Centre and the States to enforce that right. Thus, the effect on the distribution of legislative and executive powers between the Centre and the States was the main purpose of the Amendment. Therefore, it cannot be said that the Amendment’s effect on Articles 162 and 246 was merely incidental. 

Thus, both prongs of the test are satisfied, and the proviso to Article 368(2) is applicable. However, this does not make the 102^nd Constitutional Amendment unconstitutional as a whole. As was held in Kihoto Hollohan, an amendment is invalid only in so far as it would have required ratification by States under the proviso. In that case for instance, applying the doctrine of severability, the Court held that only paragraph 7 of the Tenth Schedule was unconstitutional. Similarly, in the present case, only clause 4 of the 102^nd Amendment would be unconstitutional. Alternatively, the Supreme Court could, as it does when exercising its powers of judicial review under Article 13, read-down clause 4 and interpret it in a manner that does not trigger the proviso i.e. interpret the Amendment as not taking away the powers of States to identify SEBCs. 

V. Basic Structure Argument

It was argued that the 102^nd Amendment falls foul of the basic structure of the Constitutions in so far as it seeks to change the federal division of powers. However, J. Bhat rejected this argument, holding that – 

187. …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… that the amendment would take away an essential feature or violate the basic structure of the Constitution. 

In my opinion, J. Bhat was correct to hold that the 102^nd Amendment could not have been struck down on the grounds of a basic structure challenge. As Bhatia notes, the threshold for a basic structure challenge is quite high. As held in Nagaraj, a basic structure challenge stands only when the constitutional amendment makes the Constitution unrecognizable – not merely when there has been a change in the Constitution. 

Further, the Constitution itself tolerates changes in the distribution of powers between the Centre and States. This has been explicitly provided for in Article 368(2). Thus, even if the Amendment takes away the power of the States to identify SEBCs, this would not be enough to meet the threshold of a basic structure challenge. 

Conclusion

The proviso to Article 368(2) is a fundamental protection against the unilateral usurpation of power by the Parliament. It goes to heart of the federal structure of our Constitution. It is unfortunate, then, that this issue was treated somewhat cavalierly by the Majority judgement, even though it held that a power hitherto exercised by States for seven decades, had been exclusively taken over by the Centre.  According to J. Bhat, the ratification of States per the proviso to Article 368(2) is necessary only when there is a direct amendment to the specified provisions. This is in my opinion is a dangerous precedent – it allows the Parliament to amend the federal structure of the Constitution by stealth, while seeking shelter in the fact that no direct amendments have been made to the provisions specified in the proviso.This formalist interpretation, is yet another instance of what Bhatia calls the Supreme Court’s anti-federal tradition.