Jammu and Kashmir’s new land law amendments – Are they constitutionally valid?

 

On 26^th October, the Ministry of Home Affairs notified the Jammu and Kashmir Reorganization (Adaptation of Central Laws) Third Order, 2020 (‘the Adaptation Order’). This executive order has made wide-ranging amendments to the land laws applicable in Jammu & Kashmir. These amendments are applicable only in the Union Territory of Jammu & Kashmir, and are not applicable in the Union Territory of Ladakh.

After explaining the procedure adopted for amending these land laws, we shall discuss the constitutional validity of the Adaptation Order notified by the Home Ministry.

We shall conclude our discussion by examining how the conversion of the State of Jammu & Kashmir into 2 Union Territories, along with the continued imposition of President’s Rule, has given the Central Government a justification for making legislative policy changes without any prior consultation.

The procedure adopted for notifying the Adaptation Order

Through the Adaptation Order notified by the Union Home Ministry, multiple land laws that were applicable in the erstwhile State of Jammu & Kashmir have either been repealed or amended. 12 land laws have been repealed, while 26 have been amended. After these amendments, outsiders (i.e. those who are not domicile residents of Jammu & Kashmir) can acquire both agricultural as well as non-agricultural land in the Union Territory.

This has led to an uproar, and politicians such as Omar Abdullah have contended that allowing outsiders to purchase land will further disempower the local population, and may alter the demography of Kashmir in the long run. It was also argued that such far-reaching changes to land laws were made without any prior stakeholder consultation.

It is pertinent to note here that in April, a similar ‘Adaptation Order’ was notified, to enact a new domicile policy for Jammu & Kashmir. This was done by amending the Jammu & Kashmir Civil Services (Decentralization and Recruitment) Act, 2010 – which prescribed the conditions that must be satisfied for claiming the status of a ‘domicile resident’ of Jammu & Kashmir. Just like the land law amendments, even the domicile policy was criticized on the ground that it was notified without any prior consultation or discussion.

In both of these Adaptation Orders, it has been stated that the Order derives legal force by virtue of Section 96 of the Jammu and Kashmir Reorganization Act, 2019 (‘the Reorganization Act’).

To recall, the Reorganization Act has bifurcated the erstwhile State of Jammu and Kashmir into two separate Union Territories of Jammu & Kashmir and Ladakh. This statute was introduced simultaneously with the Presidential Order and the Statutory Resolution which amended Article 370 of the Indian Constitution, on 5^th August 2019. To understand the nature and purpose of the Adaptation Order, it is instructive to refer to Section 96 of the Reorganization Act. Section 96 falls under Part XIV of the Reorganization Act, which consists of “Legal and miscellaneous provisions”. It states as follows:

"For the purpose of facilitating the application in relation to the successor Union Territories, of any law made before the appointed day, as detailed in Fifth Schedule, the Central Government may, before the expiration of one year from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or other competent authority"(emphasis supplied).

The Fifth Schedule referred to above consists of the Central and State Laws that are applicable in the newly formed Union Territories of Jammu & Kashmir and Ladakh. Section 96 confers the Central Government with the power to amend or repeal any Central or State law applicable in the Union Territories, if it considers it to be ‘necessary and expedient’.

This power is available for a period of one year from the appointed date i.e. the date on which the Reorganization Act came into force - which was 31^st October 2019. Hence, the Government can resort to Section 96 only upto 31^st October 2020. Now, such a provision enabling the adaptation and modification of existing laws by the Executive is not unique to this Reorganization Act. A similar provision is also present in Section 101 of the Andhra Pradesh Reorganization Act, 2014, which conferred the government with powers of adaptation and modification – for a period of 2 years.

An important question arises here with respect to the scope and ambit of the power of ‘adaptation and modification’ conferred by Section 96. The question that arises here is whether the power conferred by Section 96 is limited to making ‘adaptations and modifications’ solely for purposes of procedural and administrative efficiency, or whether it also extends to making policy alterations – such as allowing outsiders to purchase land, or enacting a new domicile policy.

The scope and ambit of the power of ‘adaptation and modification’

From a plain reading of Section 96, it is evident that the purpose of this provision is to adapt or modify any law for the purpose of facilitating its application to the successor Union Territories, if the Central Government feels that it is necessary and expedient to do so. This is further qualified by a one-year time limit, which means that adaptations and modifications can be made for a temporary period of one year - from the date on which the Reorganization Act has come into force.

The presence of a one-year time limit and the words “for the purpose of facilitating the application in relation to the successor Union Territories, of any law” indicates that such adaptations and modifications made through executive orders can be undertaken only for procedural and administrative matters connected with the bifurcation and the conversion of the erstwhile State into 2 Union Territories.  

This also implies that policy changes made through executive orders which are unconnected to this process of facilitating the application of existing laws shall be beyond the ambit of Section 96. This interpretation is also in line with the Supreme Court’s decision in the landmark In Re: The Delhi Laws Act (1951) case, where it was held that the Legislature cannot delegate matters of essential legislative policy to the Executive.

Keeping in mind the wording of Section 96 and the In Re: Delhi Laws Act decision, it can be argued that Section 96 cannot be used to make any substantive policy changes by amending existing laws; and it is restricted to matters of procedure and administration that are necessary for facilitating the smooth application of existing laws to the newly constituted Union Territories.

The Adaptation Orders referred to above have amended existing laws to permit outsiders to purchase land, and has also framed a new domicile policy for Jammu & Kashmir. These are clearly changes that fall within the realm of legislative policy, and are not simple modifications that have been made for procedural and administrative convenience. As they are substantive policy changes, it can be argued that they do not fall within the ambit of the power conferred by Section 96 – and should hence be struck down for going beyond what is permitted by the Reorganization Act.

There are hence strong grounds to challenge the Adaptation Orders in the Jammu & Kashmir High Court or the Supreme Court. Let us now examine certain constitutional provisions that the Central Government may invoke, in response to a possible legal challenge.

The Central Government’s possible line of defence

As per the Reorganization Act, the Union Territory of Ladakh does not have a Legislature, and is to be administered by a Lieutenant Governor, acting on behalf of the President. On the other hand, the Union Territory of Jammu & Kashmir follows a model similar to Pondicherry and Delhi. Along with a Lieutenant Governor, Jammu & Kashmir is envisaged to have a Legislature and a Council of Ministers headed by the Chief Minister.

Section 58 makes Article 239 and Article 240 of the Constitution applicable to the Union Territory of Ladakh. Article 240 states that for specified Union Territories (such as Pondicherry and now Ladakh), any Regulation made by the President which amends or repeals any applicable law shall have the same force as an Act of Parliament. Hence, with respect to the Union Territory of Ladakh, all executive orders issued by the Central Government shall be equivalent to a parliamentary law. However, the position is significantly different for the Union Territory of Jammu & Kashmir.

Unlike Ladakh, Article 240 has not been made directly applicable to the Union Territory of Jammu & Kashmir. This is by virtue of Section 13 of the Reorganization Act. Section 13 only states that the provisions contained in Article 239A of the Constitution as applicable to Pondicherry shall also be applicable to the Union Territory of J& K.

However, the Government may nevertheless invoke the proviso to Article 240(1) as a defence. The proviso to Article 240(1) states that if a body is created to function as the Legislature for the Union Territories enlisted under Article 239A (which now includes Pondicherry and Jammu & Kashmir), then until the first meeting of the Legislature, the Central Government may make Regulations that amend or repeal the existing laws that are applicable in the Union Territory. Also, as per Article 240(2), all such regulations made before the first meeting of the Legislature shall have the same force as a statute passed by Parliament.

This may be used as a justification by the Central Government in a possible constitutional challenge, as the Union Territory of Jammu and Kashmir is currently under President’s rule, and no Legislative Assembly has been created after the passage of the Reorganization Act. It may contend that even if the Adaptation Order is beyond the ambit of Section 96 of the Reorganization Act, it is saved by Article 239A and Article 240 – as Jammu & Kashmir does not have a Legislature as of now.  

Continued Imposition of President’s rule - A larger constitutional question

Keeping this possible justification aside, there is a larger constitutional question that the Court must address. As the Union Territory of Jammu and Kashmir is envisaged to have a Legislative Assembly, Article 239A read with the proviso to Article 240(1) permits the issuance of executive orders by the Central Government only until the first meeting of the Legislative Assembly, after fresh elections are held. Jammu & Kashmir was under President’s rule prior to its conversion to a Union Territory, and has continued to remain in President’s rule even after 31^st October 2019 (when the Reorganization Act came into force).

Article 356 of the Indian Constitution has continued to hold fort in Jammu & Kashmir since 19^th December 2018, and there is no specific information on any proposal to have fresh elections in the near future. The continued imposition of President’s rule and the conversion of the State into 2 Union Territories has given the Central Government a carte blanche to indiscriminately take advantage of the statutory and constitutional provisions referred to above, and rule by executive decree.

The rationale behind the Central Government wanting this unbridled power can be highlighted by referring to the Supreme Court’s decision in NCT of Delhi v. Union of India. In its decision, the Supreme Court held that although Delhi is a Union Territory and akin to a quasi-State, the actions of an elected government and an elected Legislature shall bind the Lieutenant Governor - for all matters that are within its legislative domain. Although this decision was based on an interpretation of Article 239AA of the Constitution, it applies squarely to Jammu & Kashmir – as akin to Delhi, Jammu & Kashmir is envisaged to have a Legislature despite being a Union Territory.

This implies that for all matters within its legislative domain, the Legislature of the Union Territory of Jammu & Kashmir shall stand supreme, and bind the Lieutenant Governor and the Central Government. Hence, if fresh elections had been held and a Legislative Assembly had been constituted, the Home Ministry could not have indiscriminately taken the benefit of Article 239A, Article 240, and Section 96 of the Reorganization Act - to bring about radical policy changes relating to land and domicile.  

As discussed above, the Adaptation Orders that made land and domicile-related changes were notified without any prior legislative consultation. If there was an elected Legislature in the first place, amendments to land laws, or a new domicile policy could only have been enacted through legislation, after debate and discussions involving members across party lines. The conversion to Union Territories coupled with the imposition of President’s rule has prevented any such discussion from taking place, and has granted the Central Government with unbridled power to make policy prescriptions without any pre-legislative consultation process.

While the Central Government may contend that once there is an elected legislature, the Legislature may further amend or repeal the changes after discussion, this shall only buttress my primary point – that as the presence of a Legislature is envisaged, such legislative policy prescriptions should be left solely within its domain.

This only culminates in one common end – which is the need for a greater legal and judicial conversation on whether it is within the spirit of the constitutional framework to indefinitely impose and repeatedly extend President’s rule under Article 356, and rule virtually by executive decree. Until this status quo remains, there shall only be rule by law in Jammu & Kashmir, and not rule of law.

[An earlier version of this piece was posted on the Indian Constitutional Law and Philosophy Blog in April. It is being reposted here with prior permission, after making changes based on developments that have taken place since April].

Breaking down the GST Compensation dispute

Yesterday, Thomas Issac, the Finance Minister of Kerala, stated that a bunch of State Governments were considering whether they should approach the Supreme Court – against the Central Government’s decision to deny them GST Compensation. But, within 24 hours of this development, the Centre agreed to the demand of the State Governments, and stated it would borrow funds from the RBI – to compensate the State Governments for their revenue losses.

In this post, we shall discuss what this controversy is all about. We shall also discuss the constitutional structure of the GST – which shall explain why States such as Kerala had to consider approaching the Supreme Court against the stance that was taken by the Centre.

The constitutional structure of the GST

Since the last week of August, a tussle has been brewing between the Centre and multiple State Governments, regarding the scope and extent of the Centre’s obligation to compensate the State Governments – for the revenue loss suffered by them after the implementation of the GST. Before getting into the specifics of the compensation controversy, it is important to revisit the constitutional structure of the GST, and the change it brought about in India’s indirect taxation framework.

The constitutional framework for the GST was laid down through the 101^st Constitutional Amendment (a.k.a the ‘GST Constitutional Amendment’). This Constitutional Amendment inserted Article 246A – which conferred the Central and State Governments with the power to jointly levy the GST. Prior to the GST Constitutional Amendment, the Centre and the States did not have the power to  levy the same indirect tax. They only had the legislative power to exclusively levy specific indirect taxes. For instance, while the Centre had the exclusive power to levy indirect taxes such as excise duty, the States could levy entry tax, VAT etc.

As the GST is a single tax that replaces all other indirect taxes (like excise duty, entry tax, VAT etc) – it is levied jointly by the Centre and the States, who split the revenue. After the passing of the GST Constitutional Amendment, the Centre and the States have lost the legislative power to independently levy indirect taxes. They now levy the GST jointly, as a common indirect tax.

As the Centre and the States were now going to levy the same tax, a GST Council was set-up under Article 279A of the Constitution – to facilitate collective decision-making between the Centre and the States. The GST Council is headed by the Union Finance Minister, and also consists of the Union Minister of State for Finance, and the Finance Minister of each State Government.

Article 279A of the Constitution confers the GST Council with the power to make decisions on all matters relating to GST implementation. Such decisions are taken through a voting mechanism, where the Centre effectively has a veto over any decision that the GST Council may take. To simplify – even if all State Governments agree to take a specific decision relating to the GST, it shall fail to pass muster if the Centre doesn’t agree, and exercises its veto.

On the other hand, if the Centre wishes to successfully put a proposal before the Council, it shall require the support of 21 State Finance Ministers – who represent their State Government. The decision shall be binding even on those State Governments who vote against the proposal of the Centre. The voting mechanism of the GST Council is hence designed in such a way that tax policies can be imposed even on the dissenting State Governments. Even if the voting mechanism is not resorted to, all the decisions are taken through common consensus.

This leads to a situation where the States have lost the power to independently frame their indirect tax policy, and are bound by the decisions of the GST Council. GST has hence significantly diluted the fiscal autonomy that States previously had – which they could tap in to generate additional sources of revenue. States are now also more dependent on the Centre for their revenue needs - as every decision of the GST Council can go through only with the Centre’s assent.

The obligation to compensate States for revenue shortfall

As the fiscal autonomy of the State Governments has been diluted by the GST, they now have lesser scope for raising additional sources of revenue. The State Governments have always feared that GST shall reduce their overall revenue growth. Hence, while the GST was being discussed and negotiated, the State Governments consistently demanded that the Centre should enact a mechanism to compensate the State Governments for potential revenue losses – that they may suffer after the GST is implemented.

The Centre acceded to this demand while the GST was being negotiated. As Thomas Issac, the Finance Minister of Kerala, pointed out, the State Governments assented to the GST since the Centre had agreed to enact a legal framework to compensate the State Governments for the revenue losses that they may suffer. To this end, Section 18 of the GST Constitutional Amendment states that Parliament shall enact a law to provide for compensation to the State Governments for revenue losses that arise for the first 5 years after the implementation of the GST (i.e. from July 2017 – July 2022).

(It is interesting to note here that although Section 18 is part of a Constitutional Amendment Act, it does not amend or insert any provision into the Constitution.)

In furtherance of this mandate, Parliament enacted the GST (Compensation to States) Act, 2017 (‘Compensation Act’) – which laid down a framework for compensating the States. Under the Compensation Act, if the annual revenue growth of a State is less than 14%, it shall be compensated for the shortfall in revenue. For instance, if the annual revenue growth of Maharashtra is 10%, it shall be compensated for the balance 4% - which is the shortfall. The statute also levies a GST Compensation Cess. The funds collected through this Cess are transferred to a specified fund named the GST Compensation Fund.

The proceeds of the GST Compensation Fund are then utilized for compensating the State Governments, based on their annual revenue shortfall.

The GST compensation controversy

Now, as GST collections significantly fell during the lockdown, the amount present in the GST Compensation Fund is insufficient to meet the total revenue shortfall of the State Governments. In the end of August, the Central Government contended that the Covid-19 pandemic was an ‘Act of God’, and that as the amount present in the GST Compensation Fund was insufficient, it would not be able to fully compensate the State Governments for their revenue loss. The Centre also contended that under the GST compensation framework, it had no obligation to tap funds from other resources to compensate the States – in case there was a shortfall in the GST Compensation Fund.

The Centre stated that it would not borrow any further sum of money to compensate the States – and presented the States with two options through which they could borrow the money themselves. States such as Kerala and Punjab rejected this proposal. They stated that the Centre was in a better position to borrow funds to compensate the State Governments, and the mandate to provide compensation cannot be sidestepped. After negotiations that took place in meetings of the GST Council, 21 States have accepted the terms of the Centre, and had agreed to borrow funds for financing their revenue shortfall.

But, other States such as Kerala, Punjab, West Bengal and Telangana had refused to accede to the Centre’s terms. They continued to hold the view that the Centre is breaching its legal obligation by refusing to fully compensate the States. As the Centre had repeatedly refused to accept the demands made by these States, Thomas Issac (Finance Minister of Kerala) had stated that some of these State Governments may petition the Supreme Court for a resolution of this dispute.

Within 24 hours from this announcement, the Central Government completely changed its stance. The Centre has agreed to borrow the money required to compensate the States from the RBI. The amount borrowed from the RBI will be transferred to the States in the form of back-to-back loans. Hence, the Centre shall now directly fund the States for their revenue shortfall, and the States shall not have to borrow the money from the RBI, or the open market.

The State of Kerala has already stated that it welcomes the Centre’s decision to borrow directly from the RBI. Other States are also likely to follow suit, as the Centre’s decision to borrow the money themselves is in tune with what the States had demanded. This is likely to resolve the stalemate, and State Governments may now refrain from taking this issue to the Supreme Court. A resolution of this stalemate is significant – as the promise of full compensation for revenue losses until July 2022 was one of the founding assurances which convinced State Governments to give assent to the GST Constitutional Amendment.

Multiple pitfalls

At the same time, this compensation controversy has highlighted multiple pitfalls of the GST constitutional framework, some of which are as follows:

• The GST has significantly reduced the ability of State Governments to independently raise financial resources. The States are now even more dependent on the Centre for funds, as GST has not resulted in any significant increase in revenue.

• The decision-making process of the GST Council, where the Centre has a veto power, has led to a situation where the fiscal needs of the State Governments are met only if the Centre gives its blessings. This has significantly reduced the leeway and the autonomy that States previously had in framing their own tax policies. State Governments are left helpless - if the Centre refuses to honor its obligations. For precisely this reason - States such as Kerala were considering whether to move the Supreme Court, as they were left with no tangible remedy when the Centre was refusing to honor its legal commitment.

In this situation where States have lost their fiscal autonomy and are unable to independently raise revenue - the GST scarcely looks like the landmark indirect taxation reform that it was touted to be.

The Farmers' Trade and Commerce Bill - Has the Centre encroached upon the States' legislative powers?

Over the previous two weeks, we have witnessed nationwide protests from farmers – against the three agriculture reform Bills passed by Parliament. The Bill that has led to the maximum amount of consternation is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (‘the Trade and Commerce Bill’). This Bill aims to do away with the system where farmers can sell their produce only at mandis – which are specified markets regulated by the Agricultural Produce Marketing Committee (APMC) laws of each State. The Bill removes this monopoly of the APMC-regulated mandis, and allows the farmers to sell their produce directly to private players.

Farmers fear that this Bill will result in further losses for them – as they will not receive the Minimum Support Price (MSP) guaranteed by the Government if they are forced to sell their produce to private players. In States such as Punjab and Haryana, small and marginal farmers feel that they shall lose out on the support system provided to them by the traders, who act as intermediaries. This, according to them, shall leave them in a situation where they will have no assurance of a stable selling price for their produce – and they will be forced to bargain with big corporates.

Opposition Parties demanded the incorporation of specific provisions in the Trade and Commerce Bill to address the farmers’ concerns. This request was not taken on board, as the Bill was rushed through Both Houses of Parliament. Members of the Opposition also hinted at how the Trade and Commerce Bill may go against India’s federal structure – as making laws relating to agriculture falls within the legislative power of the State Governments. We shall explore and discuss this claim below – and examine whether the Central Government has the power to regulate agricultural markets.

Legislative Powers of the Centre and the States

Under Article 246 and the Seventh Schedule of the Indian Constitution, law-making powers are divided between the Centre and the States. The Union List (List 1) consists of 97 subject matters over which the Centre has the exclusive power to frame laws. The State List (List 2) has 66 subject-matters which fall within the exclusive domain of the States. For entries in the Concurrent List (List 3) – laws can be made by both the Centre and the States. If there is a conflict between a Central and State law for subject matters that fall within the ambit of the Concurrent List, Article 254 of the Constitution steps in. Article 254(1) provides that in such a situation, the provisions of the Central law shall prevail. Under Article 254(2), a State law can prevail over a Central Law if the assent of the President (who represents the Central Government) is received.

The legislative power to regulate agricultural markets

Entry 14 of the State List deals with ‘agriculture’, and Entry 28 deals with ‘markets and fairs’. Making laws relating to agriculture and markets hence falls within the legislative powers of the State Governments. The APMC legislation made by every State falls within the ambit of these entries – as they regulate the functioning of agricultural markets, which are commonly known as mandis.

This begs the question – how did the Centre justify passing a law that also deals with the sale of agricultural produce? The Centre made reference to Entry 33(b) of the Concurrent List, which deals with – “Trade and commerce in the production, supply and distribution of foodstuffs”. As Entry 33(b) deals with foodstuffs, it overlaps and conflicts to a certain extent with Entries 14 and 28 of the State List, which deals with agriculture and markets.

While the Centre has not referred to this overlap and possible conflict of legislative powers, it has taken note of the wording of Entry 33(b) - and has cleverly worded the Bill as the Trade and Commerce (Promotion and Facilitation) Bill. However, the mere similarity between the wording of Entry 33(b) and the name of the Bill is not sufficient to bring it within the ambit of the Centre’s legislative powers. To resolve such situations where there is an overlap and conflict between the legislative powers of the Centre and the States, two principles have been laid down by the Supreme Court.

The first principle is the doctrine of harmonious construction – which states that the overlapping entries should be harmoniously construed. The second principle, which is directly applicable here, is the doctrine of ‘pith and substance’. Under this doctrine, an overlap or conflict in the legislative powers of the Centre and the States should be resolved by examining the true nature and objective of the legislation. Once this is determined, any incidental encroachment on other subject matters shall be permissible – and shall not lead to the invalidation of the statute.

This doctrine of ‘pith and substance’ can be applied to argue that the Trade and Commerce Bill infringes on the power of State Governments to regulate agricultural markets.  Using this doctrine, the State Governments can argue that the true nature of the Trade and Commerce Bill is to regulate the functioning of agricultural markets - as the Bill nullifies the exclusive powers granted to the State APMC markets. Although the Preamble of the Bill talks about giving freedom to the farmers to sell their produce, it effectively infringes on the powers of the State APMC markets. This is evident from provisions such as Section 6, which forbids the State Governments from levying market fee, cess or any other levy through their State APMC Acts.

On the other hand, if this Bill is challenged in the Supreme Court, the Centre can contend that by virtue of Entry 33(b) [that deals with trade and commerce in the production, supply and distribution of foodstuffs] of the Concurrent List, it has the legislative power to give farmers the freedom to sell their produce beyond the confines of the APMC market. The Centre can argue that the true nature of the Bill is to give farmers the flexibility in trading with their produce, and the encroachment of the State List is of an incidental nature. There are hence equally persuasive arguments from both sides, and a legal challenge before the Supreme Court can go either way.

But, the State Governments may have one more option before them – through which they could overcome those provisions of the Bill that they construe to be against the interests of the farmers. The State Governments could amend their APMC laws in a manner that would nullify the provisions of the Trade and Commerce Bill. This may be constitutionally permissible, as Entry 14 and Entry 28 of the State List grants the State Governments with the legislative power to regulate agricultural markets. The Punjab Government is already considering this option, which in its view, shall ensure that private players do not exploit farmers.

If States were to amend their APMC laws to nullify the implementation of the Trade and Commerce Bill, the Centre may also not be able to take recourse to Article 254 of the Constitution. This is because Article 254 is applicable only when the laws of both the Centre and the State deal with a subject-matter present in the Concurrent List. Hence, as long as the States are able to establish that their amendments fall within their legislative power to regulate agricultural markets – their laws shall not be struck down on the ground that they are repugnant to the Trade and Commerce Bill.

As the Constitution gives sufficient leeway to the State Governments in this situation – there is a definite possibility that State Governments may amend their APMC laws to nullify the contentious provisions of the Trade and Commerce Bill. Such a possibility could have been avoided at the outset – if the Centre had taken all stakeholders on board before framing a law that possibly infringes on the State’s legislative powers. Irrespective of which way a possible legal challenge may go, this situation highlights the perils of bypassing stakeholder consultations before law-making, through which possible conflicts may be resolved in Parliament itself, rather than leaving it to the judiciary. 

Demystifying the flawed narrative surrounding the Article 370 amendments

(In the inaugural post on this blog, we shall demystify the flawed narrative surrounding the Article 370 amendment, which was brought about on 5th August last year. We shall be critiquing multiple aspects of the constitutional changes made in Jammu & Kashmir in future posts)

Through a Presidential order and a statutory resolution introduced in Parliament on the 5^th of August, the Union Government made significant amendments to Article 370 of the Indian Constitution. Through the statutory resolution that was introduced in Parliament, the Union Government deleted clause (2) and clause (3) of Article 370, and amended clause (1) to the effect that all provisions of the Indian Constitution shall apply to the State of Jammu & Kashmir, without any ‘modification or exception’. The amendment was followed by the Jammu & Kashmir Reorganization Bill, 2019, which converts the State of Jammu & Kashmir into two Union Territories of Jammu & Kashmir (hereinafter “J & K”) & Ladakh.

These decisions have generated considerable debate on both ends of the political and legal spectrum. However, in the months that have followed this controversial decision, the narrative surrounding the Article 370 amendments has been severely flawed. This has resulted in the propagation of several myths regarding the nature and scope of Article 370, and the changes that were made on 5^th August. In this piece, I aim to bring to light certain aspects of this flawed narrative, which should be kept in mind for any future discussion surrounding this amendment.

Has the ‘abrogation’ of Article 370 led to the ‘complete integration’ of J & K?

Due to the narrative created by the Union Government, the biggest myth regarding this amendment is that the ‘scrapping’ of Article 370 has led to the complete integration of J & K with the Union of India. This is flawed for two reasons. Firstly, the statutory resolution that was passed in Parliament only deletes clause (2) and clause (3) of Article 370, and amends clause (1). The amended clause (1) of Article 370 hence continues to exist, and states that all provisions of the Indian Constitution shall apply to the State of J & K without any modification or exception.

Secondly, Article 370 has never come in way of the ‘integration’ of J & K with the Union of India. While J & K acceded to India through the Instrument of Accession signed by Maharaja Hari Singh on 26^th October 1947, the complete integration of India-occupied J & K took place through certain other constitutional provisions. This is evidenced by Article 1 of the Indian Constitution, and Article 3 of the Constitution of J & K.  Article 1 mentions that India shall be a ‘Union of States’. The list of States that form an integral part of the Union are enlisted in Schedule 1. Schedule 1 accordingly mentions that the ‘Indian State of J & K’ is one of the States that constitute the Union.

This is supplemented by Article 3 of the J & K Constitution, which mentions that the State of J & K “is and shall be an integral part of the Union of India”. This reflected that despite having a separate Constitution, J & K continues to be integrated into India. The integration of J & K was hence a product of these constitutional provisions, along with the Instrument of Accession. The mere conferring of a special status can also not be construed in a manner that implies a lack of integration of that State with the Union. Under Article 371 of the Constitution, multiple other States have also been conferred a ‘special status’. For instance, Article 371A confers a special status on Nagaland, which inter alia provides that no parliamentary law that deals with naga customary law, ownership and transfer of land etc. can be made applicable without the express consent of the Nagaland Legislative Assembly.

The presence of such a constitutional provision does not in any way imply that Nagaland is not completely integrated into India. Similarly, Article 370 has never stalled the integration of J & K, and as I shall show below, it has only determined the constitutional relationship between the Sate of J & K and the Union of India.

The application of constitutional provisions and parliamentary laws to J & K

The Union Government has on the one hand contended that the 5^th August amendment was necessary as Article 370 forbid the application of parliamentary legislations such as the RTI Act, 2005, or the Prevention of Corruption Act, 1988. On the other hand, critics have contended that the amendment to Article 370 has significantly diluted the autonomy of J & K.

Before proceeding further, it is instructive to keep note of one important condition under which Maharaja Hari Singh signed the Instrument of Accession with the Indian Republic. Under the terms of the Instrument of Accession, the Indian Republic could make laws for J & K on only three subject matters – which were defence, foreign affairs and communications. In other words, only Indian laws that dealt with defence, foreign affairs and communications would be applicable in J & K. For all other matters, it was envisaged that J & K would have complete autonomy.

Now, Article 370, which was part of the original Constitution, made a significant modification to the vision expressed in the Instrument of Accession. Under the erstwhile Article 370(1)(b) and 370(1)(d), subject matters apart from those specified in the Instrument of Accession could be made applicable by the Union Government through a Presidential Order, after obtaining the concurrence of the J & K Government. Furthermore, all other provisions of the Indian Constitution could also be made applicable to J & K (with any modification if necessary) in the same manner. Hence, although J & K had a separate Constitution, all other provisions of the Indian Constitution could be made applicable to the State through a Presidential Order.

Since 1950, a number of Presidential Orders have been issued, which have made various provisions of the Indian Constitution applicable to the State. As Professor Faizan Mustafa points out, 260 out of 395 Articles and 7 out of 12 Schedules have been made applicable to J & K. Also, as Justice Nariman noted in State Bank of India v. Santosh Gupta (2016), all entries except only 4 entries of the Union List (in the Seventh Schedule) have been made applicable to J & K. Justice Nariman also put to rest one long-pending confusion regarding the applicability of parliamentary laws to J & K.  

He interpreted Article 370 to the effect that if a particular entry in the Union List or the Concurrent List is made applicable to J & K, then all parliamentary laws that fall within the ambit of that particular entry shall also be automatically applicable in J & K. This can be illustrated by referring to the issue that fell for consideration in Santosh Gupta. This case concerned whether the SARFAESI Act, 2002 was applicable in J & K. Justice Nariman held that the SARFAESI Act, 2002 fell within Entry 45 of the Union List, which dealt with banking. As Entry 45 had been extended to J & K, the SARFAESI Act shall automatically apply to the State, without any need to obtain the concurrence of the State Government.  

It is hence fallacious to argue that Article 370 entirely forbid the applicability of parliamentary legislations to J & K. The Union Government has also contended that because of Article 370, multiple beneficial legislations like the RTI Act, 2005 or the Prevention of Corruption Act, 1988 have not been made applicable to J & K. This is not entirely correct as J & K has had its own version of many such legislations, including its own right to information statute and statute for prevention of corruption. In fact, the J & K Reorganization Act, 2019 has repealed J & K’s Prevention of Corruption Act, 2006 and the J & K Right to Information Act, 2009. These repealed State legislations have been replaced by the corresponding Central legislation i.e. the RTI Act, 2005 and the Prevention of Corruption Act, 1988. It is hence incorrect to claim that prior to 5^th August, J & K has not had the benefit of such progressive legislations.

Now, let us once again refer to the amendment made to clause (1) of Article 370. As the amendment makes the entire Indian Constitution applicable to the State, it in a way supersedes and replaces all previously issued Presidential Orders. Now, as per the amended Article 370(1), all provisions of the Indian Constitution shall apply to J & K without any modification or exception. Hence, by virtue of this amendment, the small remaining chunk of the Indian Constitution which was not made applicable to J & K shall now be applicable. As the Union List and the Concurrent List is now applicable without any exception, all parliamentary legislations shall also be automatically applicable, without the need to obtain any kind of concurrence of the J & K Government. This is the limited change that has been brought about to the constitutional relationship between the J & K and the Union of India through the statutory resolution and the presidential order.

Concluding remarks: Has there been any significant dilution of autonomy through the amendment to Article 370?  

It is significant to recall here that as per the erstwhile Article 370, any provision of the Indian Constitution could be made applicable to J & K through a Presidential order, after obtaining the concurrence of the State Government. Hence, as AG Noorani has argued, the erosion and dilution of Article 370 began in the 1950s itself, when various provisions of the Indian Constitution were made applicable to J & K through Presidential Orders. The Article 370 amendment made on 5^th August has consequentially only led to a small dilution of this existing autonomy, by making all other constitutional provisions applicable to the State.

In my view, the greater dilution in autonomy has in fact occurred through the J & K Reorganization Act, 2019, which converts the State into two Union Territories of J & K and Ladakh. While the Union Territory of J & K shall consist of a Lieutenant Governor and an elected Legislative Assembly, the Union Territory of Ladakh shall be administered solely by the Lieutenant Governor. As the tussle between the Lieutenant Governor and the Delhi Government showed us, such an arrangement severely curtails the autonomy of an elected Government. There shall hence be a significant dilution of autonomy through the conversion of the State into a Union Territory, and not solely through the Article 370 amendment.

In conclusion, I would like to submit that the issues discussed above should be kept in mind for preventing the creation of a flawed narrative, and setting a correct legal perspective to the debate surrounding the Article 370 amendment.