Why Farm Laws Fall Afoul of the Constitution

In 2018, the Aadhaar Act was passed as a money bill, which a dissenting judgement of the Supreme Court described as a “fraud on the Constitution”. A presidential notification amended Art. 370 of the Constitution by giving an anti-democratic interpretation to Art. 367. The Citizenship Amendment Act was brought in under invalid pretexts and based on false statements. And now the National Democratic Alliance government has passed three farm acts in a way that no parliamentary democracy can accept—yet another fraud on the Constitution. These new laws are fundamentally unconstitutional as they perpetuate the erosion of state powers and the encroachment of the Union into state legislative terrain. 

Federal scheme

The Constituent Assembly thoroughly debated the distribution of sovereignty and rights between the Union and the states and envisaged a limited federal structure under Articles 1 & 246. Both state and central legislatures, strictly separated by two lists, were given plenary powers. On List III—the Concurrent List—the constitutional scheme envisages cooperative federation. That is, both of them can legislate on the entries in this list. This means Parliament, despite its power under Article 368 to amend the Constitution, cannot legislate on state subjects. The Centre also cannot take away or abridge the plenary powers of states. 

The ministers, Members of Parliament, the Speaker and Deputy Chairman of the Rajya Sabha should have either read the Constitution or consulted those who understand the law before passing the three laws. Entries 14, 18 and 24 in the State List do not allow Parliament to pass any law on the subjects listed in them. In fact, states have already legislated on these subjects, and they can still amend or legislate afresh on these entries in order to offer the protections which the NDA’s farm acts have taken away.  

When the Centre’s farm laws and the states’ APMC laws contradict each other, the Constitution ensures the validity of the state-enacted laws, even if they are repugnant to the central law. This is because the state law on subjects listed in the State List override central laws on those matters. The Constitution gives overriding powers to Parliament only if both state and Centre frame a law on a topic in the Concurrent List. 

Article 246(3) says: “Subject to clauses (1) and (2) the legislature of any State has exclusive to make laws for such State, or any part of thereof, with respect to any of the matters enumerated in List II in the Seventh Schedule in this Constitution referred to as the State List”. Hence, states cannot take executive decisions and enact laws on the subjects entered in List I. That is the exclusive domain of the Centre under the Union List in Schedule 7 of the Constitution. Similarly, Parliament cannot legislate on entries under List II—as the present Parliament has done in enacting the farm laws.

Though Art. 246(3) begins with “subject to clauses (1) and (2)”, yet there is nothing in either clause that allows Parliament to legislate on items included in the State List. Not just Parliament, even legislatures of other states are completely excluded from enacting laws for any state on any Entry in the State List. Similarly, states have no powers to make laws on Union subjects. 

Parliament has powers to legislate on state subjects only when the Rajya Sabha, by a two-thirds majority, resolves that it is necessary in the “national interest” to do so. This is provided under Art. 249(1). There are also provisions relating to proclamation of Emergency (Art. 250), or for the Union to legislate on a state matter with the consent of two or more states (Art. 252), and the Centre can give effect to treaties and international agreements (Art. 253) by legislating on entries in the State List. But the three farm bills do not fall under any of these categories. 

The Concurrent List, which is unique to India’s federal Constitution, is intended to reduce the rigidity of the exclusive powers of the Centre and the states. The Constitution 101st Amendment Act 2016, introduced Art. 246A to empower the Centre to make the GST law, which covers the states as well. This went against the fiscal federalism of the nation, and we can witness its consequences in the form of the dwindling finances and mounting dues of the states. 

To cite another instance, the Agricultural Produce Market Committee (APMC) laws were primarily enacted to support and protect farmers, realising their weaker position in the manipulative commercial markets. Section 7 of the new law enacted by the Centre, however, completely takes away the welfare umbrella over the farmers provided by the state acts. The question is, can the new farm acts, which have been enacted by invoking Entry 33 of List III, override state laws framed within their own plenary powers under the State List? 

Now, any conflict between a central and state law, both legislating within their respective fields, can be resolved only under Art. 246. This Article deals with the plenary legislative powers of Parliament and states on their respective Lists and their common powers on the Concurrent List. The conflict cannot be resolved under Article 254, which has to do with any inconsistency between laws made by Parliament and state legislatures. In addition, the judiciary has evolved several principles of interpretation to decide whether a law is repugnant or inconsistent. However, they are all irrelevant when it comes to any conflict created when Parliament passes a law on a state subject. To explain this in the context of the APMC Acts of states, recall that all aspects covered in these acts fall under Entries 14, 18 and 28 of List II, that is, the State List. 

These three entries are as follows: 

“14. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases”.

18. Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonisation.

28. Markets and fairs”.

“Agriculture” in Entry 14 has a wide scope and includes land, agricultural operations, seeds and produce. Now, the APMC Act defines “farm produce” as “produce of agriculture”. To understand the difference between manufacturing and products the expression “industry” in Entry 24 of List II is relevant. This Entry covers manufacturing but not its product. Similarly, Entries 26 and 27, dealing with trade and commerce and supply and distribution are separate entries. However, unlike “industry”, Entry 14 related to “agriculture” is comprehensive and includes agricultural produce as well. Additionally, the sale and purchase of such produce will squarely fall under Entry 28 of List II, that is, “markets and fairs”. This entry is not subject to any other entry in the Concurrent or Union lists. The conclusion is that states draw all the plenary legislative power independently of them. 

Using “foodstuffs” to harm annadata

The Centre has used the provision that Entry 26 and 27 of List I are subject to Entry 33 of List III (the Concurrent List) which contains “foodstuffs”, and on this basis claimed that the Union can also legislate on it. Here is what Entry 33 says exactly: “Trade and commerce in, and the production, supply and distribution of, — (a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products; (b) foodstuffs, including edible oilseeds and oils; (c) cattle fodder, including oil-cakes and other concentrates; (d) raw cotton, whether ginned or unginned, and cotton seed; and (e) raw jute.

To address any abnormal spikes or falls in food supplies, the Centre had, in 1950, temporarily been given powers to legislate on agricultural trade and commerce. This was through a five-year temporary provision in Article 369. In 1954, the Centre had sought to make this a permanent shift through the Constitution (Third Amendment) Act. The aim was to shift some subjects from List II to List III. However, this would have deprived the states of their exclusive powers to legislate on the items being migrated. Giving the Centre concurrent powers on agricultural trade and commerce would also mean that the Union would take over the legislative powers in this field completely. 

Prof. R Ramakumar, who teaches at the Tata Institute of Social Sciences, Mumbai, wrote in The Hindu recently about how Members of Parliament had opposed the 1954 amendment and placed their dissent in their joint committee report. They had said that placing matters listed in Art. 369 on the Concurrent List would make state autonomy “illusory” and “progressively pulverise” state powers and rights. Yet, the government had gone on with the amendment, ignoring the dissent. Now the second apprehension, that the Centre would take complete control over state legislative affairs, is coming true under the Modi regime. 

Supreme Court decision

The Supreme Court thoroughly examined the issue of the Centre passing laws on exclusively state subjects with respect to the APMC Act. In 1971, the Centre passed the Tobacco Board Act to regulate the tobacco industry and thus deprived states of this power. The Bihar Act listed tobacco as an agricultural produce and a market fees of Rs.35,87,072 was levied, which ITC Ltd had challenged. Similar challenges came from several states. The Constitution Bench of CJI GB Pattanaik, YK Sabharwal, Ruma Pal, Brijesh Kumar, held in ITC vs APMC, 2002 that state legislatures are “competent to enact legislation providing for the levy and collection of a market fee on the sale of tobacco in a market area”. Therefore, the Market Acts enacted by the states were held to be valid. The court held that the state laws and the Tobacco Board Act, 1975—“to the extent that they relate to the sale of tobacco in market areas, cannot co-exist and the former prevail over the latter.” In other words, the Tobacco Board Act, 1971, was found to be ultra vires. 

The full bench explained that while the Lists cannot be watertight compartments, yet “...the relevant heads of subject in List II, other than Entry 24, cannot be made to practically disappear from List II and assumed to have crossed over in totality to List I by virtue of declaration of tobacco [as an] industry under Entry 52 of List I, in the guise of touching or entrenching upon the subjects of the List II”.

Therefore, the expression “foodstuffs” in Entry 33 of List III also cannot include “farm produce”. Put simply, the Union regulating agricultural produce as “foodstuffs” will contradict and conflict with the legislative powers of states, which they derive from Entries 14, 18 and 28 of List II. Further, even if the Centre has the power to legislate on “foodstuffs”, still the state laws on the subject will prevail, and not the central law. This is because states also can legislate on items in the Concurrent List, and this is protected by Art. 254(2). 

The Supreme Court has said in Hoechst Pharm Ltd. v State of Bihar that the result of the President’s assent to a state act, though inconsistent with a previous Union law on a Concurrent subject, would be that the state law would prevail in that state and it would override the provisions of the central act there.

Welfare state replaced by market state

Apart from constitutional defects, the new farm laws reflect the Centre’s abdication from its duty to secure the welfare of farmers, as listed in Article 37, which lays down that it shall be the duty of the State to apply principles that are “fundamental in the governance” of India in its legislative work. Article 38(2) also says that the State “shall strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities… [not just for individuals but groups including] the small and marginal farmer, [who] with all these weakness and vulnerability stand before a rich corporate farming company like a subdued and subordinate party, where he cannot negotiate with equal status...” 

Today the government says its goal is to create “one nation, one market” and that its new laws will ensure this. What the laws really do is convert a nation of farmers into a market, leaving the fate of farmers in the hands of big business houses. 

The author is a former Central Information Commissioner and teaches Constitutional Law. The views are personal.