Co-operative Federalism and the Inter-state Council- how Article 263 may contribute significantly to India’s federal fabric

Whilst law seeks to provide a just denouement to any conflict, it must not be forgotten that it must also provide the most efficient judgment as well. Therein lies the advantage of any alternate dispute resolution system-it permits the parties an adequate opportunity to reach a solution that will serve the most number of persons. The importance of such a mechanism in a modern legal society cannot be emphasized enough. In the field of Constitutional Law and inter-state disputes, such a forum where states can proceed to discuss and attempt to negotiate their aspirations so as to arrive at an efficient and just answer owes its basis to Article 263 of the Indian Constitution which provides for the establishment of an inter-state council.

The research question this paper seeks to explore is whether the present inter-governmental organization in extant suffices the needs of the modern Indian state and its federal fabric. What is contemplated in this question is whether such an organization which is provided for in the Constitution is effective to the extent that co-ordination between states is well supplied for.

A scrutiny of the constitutional and legal provisions of the present day Council, set up in 1990, will be conducted as well as a comparative study between other similar organizations in other federal countries such as Australia and Canada will be mentioned.

Since the Council is much indebted to Justice Sarkaria’s Commission on Centre-State Relations, extensive reference has been made to its recommendations. Finally, a short conclusion on what may be done to better the present impotence of the Council has been provided.

ESTABLISHMENT AND FUNCTIONS OF THE INTER STATE COUNCIL

Constitutional Basis

The establishment of the inter-state council owes its origin the Indian Constitution itself vide Article 263. This Article is juxtaposed as the final Article in the Chapter entitled “Administrative Relations”. The details of the aforesaid article may be appositely summarized as follows:

(i) The President is vested with the duty of establishing an Inter-state Council, if he feels it necessary and justifiable in the interest of the public;

(ii) The Constitutional guidelines as regards the functions of such a Council reads as follows:

(a) Inquiring into and advising upon disputes which may have arisen between States;

(b) Investigating and discussing subjects in which some or all of the States or the Union and one or more of the States, have a common interest; or

(c) Making recommendations upon any such subject and in particular,  recommendations for the better co-ordination of policy and action with respect to that subject.

Co-ordinate Federalism in India

It is of paramount importance at this juncture to mention the various ways in which the Constitution-makers envisaged the federal disputes of this country to be resolved: thus, we have the traditional adjudication system positioned to pass judgment on any dispute and in an alternate dispute resolution mechanism, arbitration or negotiation is encouraged. The Supreme Court decision making it mandatory for the Central Government to constitute a Tribunal and refer to it any federal dispute for which an application has been made to the Centre by a State Government upon failure of negotiations may be construed as an instance of the former while Article 263, allowing for the resolution, and not adjudication, of disputes may be viewed as a Constitutional device for the settlement of such dispute so that the party states receive the most efficient denouement. The latter in fact, testifies to the kind of federal system the Constitution desired to have positioned in India-one that features co-ordination rather than rigid Constitutionally binding provisions that delineate limits on State and Central bureaucratic powers at the very outset.

In a renowned work, K.C. Wheare maintained that federalism involves dual sovereignties, which include the continuation both provincial (or Central) and State Governments existing as parallel bodies and almost completely independent in their Constitutionally-defined ambits. An offspring of the Second World War is the gradual replacement of this dual system with “co-ordinate federalism”. This can be attributed to the traditional dual system concept of federalism’s failure to take into account the changes of modern society and the intricacies involved with regard to inter-governmental overlaps of power and some major questions of competencies becoming apparent-involving vertical and horizontal imbalances of power.

The Sarkaria Commission Recommendations

While examining the background of the establishment of the Inter-state Council, the Recommendations of the Sarkaria Commission acquires significance. In its expository paragraphs itself, the Commission emphasizes the pertinence of such a Council in the following lines:

“In a dual polity, coordination of policies and their implementation become extremely important, specially in view of large areas of common interest and shared action. This can only be done through a sustained process of contact, consultation and interaction, for which a proper forum is necessary.”

The Commission also lays down the intentions of Article 263. Its corresponding Section 135 of the Government of India Act, 1935, was inserted as it was felt that “departments of co-ordination and research” in extant at the Centre must be provided with a machinery for voicing issues concerning the allocation of public funds that these institutions depend on. Yet, upon perusal of the Article and the Order for establishment in 1990, certainproblems emerge, that conflict directly with these aforementioned intentions and the efficiency of such a Council in acquiring its objectives. These are:

(i) The Inter-State Council is, by Constitutional dicta, a product of time and circumstances and only when the President is satisfied that its establishment will serve public interests, can it be set up. In fact, it was not before 1990, on the basis of the Sarkaria Commission’s Report, was such a body set up.

(ii) The Inter-State is, as noted by the Commission, only provided with powers of inquiry and tendering advice vide clauses (a) and (b) of Article 263. Adjudication, as we have seen, is not a function deemed competent of this Council. While this serves to an alternate dispute mechanism, the implementation of recommendations mady by such a body, empowered to do so by Article 263 (c) will rely on the actions of the litigant State or Central bodies.

(iii) The Presidential Order that established the inter-state Council included certain restrictions in the process of selection of issues itself. Paragraph 2 and the clauses falling within its rubric include appraisal of any effort to enforce the Directive Principles of State Policy,examination of common interest arising out of the Lists of the Seventh Schedule, any effort to augment uniform legislative or executive action, the evaluation of proposals for legislations made under List III-Concurrent List-and finally, the co-operation of States in implementing laws passed by Parliament.

(iv) Those measures that cannot be brought up for discussion before the Council are specified in Paragraph 3 of the Order and include (in keppeing with the Sarkaria Commission’s Recommendations) those issues that may be resolved at the official level, those issues that can be dealt with by such Commissions set up to look into matters pertaining to other aspects of the Centre-State disputes;such as the Finance Commissions, the Planning Commission and the National Development Council. Also included are any matters that are sub-judice or that can be adequately dealt with under proper authorities such as the Election Commission or those issues that may be held by the Chairman likely to cause discord between the States.

(v) It may be noted that the Chairman’s word is the final decision of such selection of issues, who will consider the merits of hearing an issue that seems to be of particular importance or interests.

(vi) The Composition of the Council is to position the Prime Minister as its Chairman, the Chief Ministers of all the States and Union Territories as members and six nominated members of Ministers enjoying Cabinet rank in the Union Council of Ministers. In light of the importance of this composition and the Chairman’s power elaborated in clause (v), the fact that minority parties in states may not be given an adequate voice is a possibility that cannot be ignored in the face of a majoritarian Prime-Minister and six of his nominated members forming a part of this Council.

Comparitive Study with the Australian and Canadian Institutions

These complexities can assume greater clarity if a comparison is drawn between the Indian contrivance at an Inter-State Council and other similar labours by different countries. In furtherance of this, reference may be made to the Canadian and Australian efforts- Canada’s pertinence lies in the fact that India’s federalism model bears great semblance to it but the Inter-State Council is tilted more towards the Australian organization.

The Australian Model

Section 101 of the Australian Constitution provides for the establishment of an Inter-State Commission, which would be equipped with such powers as the Australian Parliament deems necessary “to administer and adjudicate” any matters relating to the Constitutional provisions that are germane to disputes arising out of interstate trade and laws falling within its fabric. This function of adjudication is, however, not final as Section 73 provides for the state’s right to appeal to the High Court on any of these decisions tendered by the Commission. Section 103 further provides that members will be appointed by the Governor-General for a period of seven years.

There are some notable differences between the Australian model and Indian Inter-State Council’s powers and functions. Foremost, is the power of the Australian Inter-State Commission’s to adjudicate disputes. The Sarkaria Commission took note of this feature too and advocated against adjudication functions this would extend the scope of Article 263. It further proceeded to eliminate the Council’s scope for appointment of such authorities as the Election Commissioner or the Comptroller and Auditor General of India, providing the reason that this move would “politicize the elections”, based on the composition of the Council. Furthermore, it maintained the Council could not be rendered ineffective as it was Constitutionally charged with powers to investigate and inquire into matters arising before it. The scope of the Council’s authority however, gets diminished by the fact that it is deterred from discussing matters to be dealt with by other such bodies as the Zonal Councils and National Development Council. While, the Australian Inter-State Commission is specifically apportioned the responsibility to adjudicate disputes relating to interstate trade, the focal point of most disputes occurring between States, as per the Presidential Order’s effect and the Sarkaria Commission’s observations, trade and business were calculated to fall beyond the purview of such Council. This would be deemed as a controversial subject or one that causes discord between the States, prohibited for selection as per Paragraph 3 clause (v) of the Order . One last distinction lay in the fact that Presidential discretion is not necessary to constitute this Commission and neither is its life-span as is the case in India.

Useful Lessons from Canada

The British North America Act,1897, which is loosely what the Government of India Act, 1935, was based in as much as Indian federalism was concerned the legislative powers of the dual tiers of Government are enumerated in the form of Lists, as is the case in India, too. It is noteworthy that in Canada, there exists no dual system of courts to adjudicate disputes. The highest Court of appeal in Canada is the country’s Supreme Court which exercises original jurisdiction in matters relating to disputes arising between the federation and provinces or between two or more provinces. While nowhere, in the Constitution may the establishment of an Interstate Council be found, the Dominion-Provincial Conferences in place since the 1970s have made contributory efforts as far as interstate trade is concerned as well as the drawing up of various trade agreements . Again, the Indian inter-state Council is impaired from taking such an initiative since trade directly conflicts with the subject-matter of the NDC and Planning Commissions. As of 2003, a recent development in Canada has occurred-the erstwhile Premier Jean Charest announced at the Annual Premier’s Conference that the architecture for devolving a new inter-provincial Council of the Federation to renew and facilitate inter-provincial co-ordination was in place. This organization was vested with the objective of enhancing horizontal and vertical co-ordination between provinces and the federation. Such standing items as health, trade, justice and economy were to be included in the agenda of this body. While the Council is ambiguous as to its scope, in as much as whether Centre-State or Inter-State disputes is its primary focus, the Council can serve to compensate as a powerful tool or a quasi-judicial body enjoying the power of an alternate court of original jurisdiction.

CASE STUDY-THE COUNCIL’S ACTIONS IN SRINAGAR

Much optimism has been raised about the Sarkaria Commission’s mandate and the strengthening on Centre-State relations on the discussion of the retention of Article 365 in Jammu and Kashmir. The state which has been embroiled in a contracted struggle for autonomy, lent its capital as the backdrop for a two day Inter-state Council on the pertinence of Article 365 of the Indian Constitution which provides for the “effect of failure to comply with, or give effect to directions, given by the Union.” Many states were of the view that it has outlived its purpose and it ought to be made redundant. With the aid of the Jammu and Kashmir Muzzaffar Hussein Beig, a consensus emerged on the functions and usefulness of the said Article and safeguards to prevent its complementary Article 356 unlawful abuse. A further discussion ensued between members of the Council on the controversial Article 356 of the Constitution. The representatives of Punjab felt particularly strongly about this point and it was left to dependence of the S.R.Bommaicase as providing adequate restrictions on this Article. The optimism stemmed from the fact that now the Council could engage in the discussion of such vital constitutional issues that have a wider impact on the federal structure of this country. Also discussed were provisions to hasten economic reforms in pursuit of liberalization measures, and also to include the “hire and fire” employment system in place. Since the shift of labour from the Concurrent List states like Tamil Nadu, Andhra Pradesh and Maharashtra, awaiting a Central nod in respect of this issue. Another notable feature of the meeting was that it considered a draft ‘Action Plan on Good Governance’ having certain broad parameters, including the issue of Multi-purpose National Identity Card (MNIC). The real test however lay in the quickness of the Council to effect these discussions.

Conclusion

The importance of inter-state co-ordination between states in a country like India cannot be undermined. The present scenario of the inter-state council is such that Out of 247 recommendations, 179have been implemented, 65 have not been acceptedby the Inter-State Council/Administrative Ministries/Departments concerned, and only 03ecommendations are still at different stages of implementation.While the Council Secretariat functions as a watchdog that closely monitors the implemention of the Council’s recommendations and submits an Action Taken Report, procedure for non-compliance has not been included. While a great number of studies and research commissions have been set up under the umbrella of the Inter-State Council, the problems discussed in this paper, serve as limitations upon the Council’s scope-in terms of selection of issues as well as enforcement of its recommendations. It is crucial to remember that while bodies such as the NDC and other Trade Commissions, deal with aspects of federal co-ordination, the Inter-state council is vested with the duty of the larger effort to consolidate federalism in the country. Ideally, the Council should have been set up much earlier or at least prior to the establishment of these other bodies, so that the Council could serve at the acme of the authoritative hierarchy and issues dealing with material aspects of federalism could be reported at the annual meetings. The untapped potential of Article 263 must now be accorded due importance by the legislature in order to tighten the federal structure, a basic feature of the Indian Constitution.

BIBLIOGRAPHY

Primary Sources:

S.R. Bommai vs. Union of India 1994 3 SCC 1

T.N. Cauvery Sangam vs. Union of India (1990) 3 SCC 440

Sarkaria, Justice, Centre-State Relations, Government of India Report, 1990.

Presidential Order dated 28-05-1990, “Inter-State Council Order”.

Composition of inter-state Council, available at www.interstatecoincil.in/interstate council/composition

Guidelines of interstate Council, available at www.interstatecoincil.in/interstate council/secretariat/guidelines

The Constitution of India, 1950.

The Constitution of Canada,

The Constitution of Australia,

The Government of India Act,1935.

Paul Craig, “Competence: Clarity, Conferral, Containment and Consideration”, (2004) 29 European Law Review 323.

Mehra, Satish, A move towards Co-operative Federalism:The Srinagar Meeting strengthens Inter-State Relations, The Tribune 23^rd August 2003, available at http://www.tribuneindia.com/2003/10030906

Basu, D.D., Comparitive Constitutional Law, Lexis Nexis Butterworths, Wadhwa Nagpur, 2007.