7.3] Center-State Disputes

India’s federal structure is designed to balance power between the central government and the states, promoting cooperation and addressing regional diversity. However, this division of power often leads to disputes and tensions. Center-state disputes in India arise due to differences in powers granted to union and states in political, administrative, and fiscal domains. These conflicts can hamper governance and affect the socio-economic development of states.

1. Disputes in Legislative Field

In legislative sphere, the distribution of powers is tilted toward center. The 42nd constitutional amendment further increase the powers of union and decreased the subjects in the state list.

Beside emergencies, even in normal situations union Government gets power to legislate on state subjects.

Under article 249 of constitution, Rajyasabha can pass a resolution to given power to parliament to make laws on a subject in state list.

Art 252 – With the consent of at least two states, parliament can create law on state list subject. While article 249 is temporary arrangement, under Article 252, it is permanent transfer of power.

Art 253 – Parliament also has an upper hand in case of making laws to implement international agreements.

In addition to above powers of parliament, Art 201 gives discretionary powers of governor to reserve the bill for president’s consideration.

1.1 Concerns

Discretionary power of Governor is used in absolutely arbitrary manner. Whie a bill in one state gets passed, a similar bill is reserved in another state. For example, Maharashtra Control of Organised Crime Act (MCOCA) was enacted in 1999 to combat organized crime and terrorism in the state. On similar lines, Gujarat Control of Organised Crime Act (GUJCOCA) was enacted. However, the Gujarat bill faced delays in getting presidential assent. Finally, with change of government at centre, the bill received presidential assent in 2019.

There is also no time limit within which president have to take the decision on a bill reserved for his assent. Sometimes, a bill remains pending for decades. Thus, union executive acting in an arbitrary manner undermines the parliamentary democracy at the state.

Thus, in legislative sphere, the situation of states is too weak.

2. Disputes in Administrative Sphere

Constitutionally India is executive federation. However, same constitution provides huge bargaining powers to the union government. Some of the controversial issues in administrative sphere are:

1. As per Article 365, the state has to comply with the executive order of the union government. And a failure to do so can be interpreted as ‘government of the state cannot run according to the constitution’. And can become a ground to impose president’s rule
2. Art 356 of constitution which allows imposition of president’s rule in state. This has remained most controversial. This is a unique provision of Indian constitution borrowed from a colonial 1935 act.

2.1 Art 356

Art 356 is one of the major reasons behind the rise of secessionist trend in states like Jammu and Kashmir, Punjab.

The members of constituent assembly raised the objections but Ambedkar assured that the provision is included only as a precaution. He assured assembly that it will remain ‘dead letter’.

2.2 Actual Practice

In actual practice, it has been used frequently. In less than 70 years of the republic, the provision has been used around 115 times. The more frequent use was till 80s. In 90s the misuse has declined because of 1) coalition governments at union and 2) judicial activism. The main credit goes to judiciary.

Example of arbitrary use of Art 356: In 1977 when Janata Party came to power, it dissolved the governments in 9 states. (ruled by Congress). What was the ground? Since Congress lost elections for Lok Sabha, it can be taken for granted that people would not prefer the Congress governments in the states.  In 1980, when Indira Gandhi came to power, she repeated the act. Dissolving governments in 9 states on similar grounds.

Supreme Court, in S R Bommai case 1994 established that federalism is a basic structure of the constitution. Judiciary has issued guidelines with respect to the use of Art 356.

As per constitution, courts cannot inquire what advice council of ministers have given, on the basis of which President has taken decision to impose Art 356 in a state. However, in S R Bommai case Supreme Court held that, judiciary can ask for ‘material evidence’ on the basis of which any rational person will take the decision to impose Art 356. Material evidence has to be ‘speaking document’, self-evident. Judiciary further clarified that as the use of Art 356 should be the last option, only when it becomes absolutely necessary.

Further, no automatic dissolution of the state assembly till parliament approves. Tille then, assembly will be kept suspended. And even after parliament approves, it is open to judicial review. Court can restore the suspended assembly including the government, if court finds, it is done with mala-fide intentions.

Arunachal Pradesh (2016) became the first case where Supreme Court restored the dissolved assembly.

2.3 Role of All India Services

All India services is a colonial legacy. It is a unique feature of India. However, it undermines parliamentary democracy.

The members of All India Services are appointed by union and can be removed only by union. Chief Minister of a state can only suspend them. Since ultimate disciplinary powers are with union, the members of the services act as ‘agent of union’. There are instances where suspended official has been restored to the same post in the same department by union government.

Not only it weakens the position of Chief Minister, it also leads to ‘politicization’ of civil services. Supreme Court had directed the center to constitute civil services board. However, no such step has been taken. If constituted, such board can take decisions on promotions, transfers and other disciplinary matters.

2.4 Deployment of Union’s Armed Forces and Para-military Forces

Law and Order is a state subject. 42nd Amendment Act introduced that Union government can deploy its forces in aid of the civilian authorities of the state governments. The constitutional basis for this changes was article 355, which suggested that, it is the duty of the Union to protect each state from internal disturbance.

The concerns of the state have been

1. Suo moto deployment. Supreme Court held that such deployment is not the violation of federalism. 
2. State governments also have a concern because the powers, privileges, immunities of the members of these forces are decided exclusively by Union. Their demand is that union should involve states in consultation.

3. Inter-state Water Disputes

3.1 Significance of the Issue

It has been predicted that future wars are going to be ‘water wars’. Water is now treated as new oil. South Asia is heavily dependent on water because of agrarian nature of economy and it is one of the most stressed regions in terms of water. In fact, the per capita availability of water is lowest in the world.

India has water disputes with almost all neighbors. Within the country majority of major rivers are intra-state. Water dispute is a special category of dispute for which constitution has special provision (Art 262). This is the only dispute which excludes the jurisdiction of Supreme Court.

Water is a state subject under entry 17.

Entry 56 of union list covers Regulation and development of inter-State rivers and river valleys.

Thus, constitution clearly makes it responsibility of union to deal with inter-state rivers. However, since water is a matter of politics, union has preferred to treat inter-state rivers and river valleys as a state subject. According to the experts like Nirvikar Singh, the biggest responsibility for the continuation of disputes lies with union government. Central government has not utilized its powers in the matter given by the constitution. This approach has led to the politicization of inter-state water disputes.

3.2 Mechanisms and Constitutional Provisions

Following articles/institution regulate the manner in which inter-state river disputes can be settled.

Article 131

Article 131 of the Indian Constitution grants the Supreme Court original jurisdiction in disputes between states or between states and the central government. This jurisdiction enables the Supreme Court to act as an arbiter in inter-state disputes, including those related to river waters, providing a legal platform for states to resolve their conflicts directly.

Article 136

Article 136 gives the Supreme Court the power to grant special leave to appeal against any judgment or order from any court or tribunal in the country. In the context of inter-state river disputes, this article allows states or parties to appeal against decisions made by tribunals or lower courts, ensuring a higher level of judicial scrutiny and fairness in the resolution process.

Article 262

Article 262 empowers Parliament to enact laws for the adjudication of disputes relating to waters of inter-state rivers or river valleys. The Inter-State Water Disputes Act, 1956, enacted under this article, provides for the establishment of tribunals to resolve such disputes. The decisions of these tribunals are binding, and Article 262 explicitly bars the jurisdiction of the Supreme Court and other courts over such disputes, emphasizing specialized adjudication.

Article 263

Article 263 provides for the establishment of an Inter-State Council to investigate and discuss subjects of common interest between the Union and states or among states, which includes inter-state river disputes. The council, which can be set up by the President, serves as a forum for dialogue and cooperative resolution, facilitating negotiations and recommendations for settling disputes amicably.

Zonal Councils

Zonal Councils are statutory bodies established under the States Reorganization Act, 1956, to promote interstate cooperation and coordination. They provide a platform for discussions on various issues, including inter-state river disputes, enabling states within a zone to address and resolve their differences through dialogue and mutual agreement, under the guidance of the central government.

3.3 Analysis of the Mechanisms

1. If we talk from the perspective of constituent assembly, it would have preferred the route of inter-state council. (Art 263). Because of the ease with which these councils can be created – by president’s resolution. Unfortunately, the facility was never used. Since water disputes cannot be solved through legal routes, this platform should have been utilized.
2. Zonal Councils – This extra constitutional mechanism created by state reorganization Act 1956. One of the major purposes behind this was to offset the negative consequences of state reorganization, specifically in case of water disputes. The then home minister, G V Pant mentioned that ‘rivers know, no linguistic boundaries.’. Unfortunately, not a single dispute was ever referred to these councils.
3. Art 131 – Original jurisdiction of Supreme Court. This had been the prime option till 1956. In 1956,  the Interstate Water Dispute Act (ISWD Act) excluded water disputes from the jurisdiction of Supreme Court. However, Supreme Court continues to play the role of arbiter in such disputes under Art 136 – special leave petition.

3.4 Analysis of the role of the Supreme Court

1. States approach to the Supreme Court against the judgement of tribunals. Thus, the entire exercise of the tribunal becomes waste. It also includes huge wastage of public funds.
2. Supreme Court also does activism at the cost of its routine work. There is already a huge pendency of appeals in Supreme Court.
3. It should also be noted that special leave petition is special. It is to be used rarely. However, it has become so routine that it is hardly special. More than 30,000 special leave petitions are pending in Supreme Court.

According to Pratap Bhanu Mehta, Indian judiciary is ‘self-perpetuating institution’. It means, it does not leave the opportunity to improve its image and increase its powers.

Water-disputes was the only category of dispute where the jurisdiction of Supreme Court was excluded. Hence Supreme Court should have acted with restrain.

Comparison with USA

In USA, these disputes come under the original jurisdiction but Supreme Court of USA does not entertain the appeals. Thus, it compels the states to resolve the problem by consultation.

According to Fali S Nariman, it is better if we restore pre 1956 status. Means abolish tribunal system and restore the original jurisdiction.

3.5 Provisions under Art 262

The constitution provides that parliament, if thinks so can exclude the jurisdiction of supreme court in inter-state river disputes. And parliament may, by law provide for the resolution of the dispute. Accordingly, after state reorganization in 1956, parliament has brought

1. River boards act 1956
2. Interstate water dispute Act 1956 

River Board Act 1956

This was a proactive approach so that the dispute does not arise at all. The act provided for the establishment of River Boards. These boards were intended to advise on the integrated and efficient development of inter-state rivers and river valleys. It was expected that the river boards will develop the habit of cooperation among co-riparian states. They will go for joint planning, development, execution, monitoring. Unfortunately, no such board has been constituted so far.

Interstate Water Dispute Act 1956

The act contains many loopholes, somewhere plugged by the amendment in 2002. The 17^th Lok Sabha passed an amendment bill to plug further loopholes. However, following the dissolution of 17th Lok Sabha in 2024, the bill has lapsed under clause (5) of Article 107 of the Constitution.

Understanding the loopholes in the act on the basis of the case study of Kaveri.

1. The act lists certain category /types of disputes as water disputes, primarily related to the use of water. Disputes related to the other matter e.g. height of a dam (Mula-Periyar dam) can go directly to the Supreme Court under Art 131.
2. In case any dispute arises, the interested states can approach to central Government Central Government would first try to resolve the dispute by mediation, in case that does not work, it will constitute the tribunal.

3.6 Working of Permanent Tribunal.

Tribunal consists of at least one judge of SC and two other judges either of SC or HC. It is to be noted that tribunals in India, do not differ from courts. Punchhi commission had recommended the interdisciplinary tribunal, including the members from other fields. Such suggestion is not introduced.

Award of the Tribunal

1. Earlier there was no fixed time frame, so tribunals took extraordinary time. e.g. Kaveri tribunal gave award after 17 years. It gave award in 2007, that too when Tamil Nadu approached Supreme Court. In 2002 the act was amended which made it mandatory that tribunal will give award in 3 years and in exceptional situations, two more years. This is also one of the reasons, the Kaveri award came in year 2007.

Implementation of the Award

This has been the biggest challenge. Act provides that the award of a tribunal will be treated at par with the decree or order of Supreme Court, and it is the responsibility of the Union Government to implement it. However, neither union nor state governments implement the award.

Even after the award of Kaveri tribunal, it has not been implemented, Tamil Nadu approached Supreme Court, Supreme Court directed Manmohan Singh Government to constitute the authority. Authority was constituted under the leadership of Prime Minister. Even then nothing was implemented on ground.

What is the Present Status?

Intervention by SC. An example of judicial activism. Up till now, supreme court restrained itself from changing the award of the tribunal. It used to entertain special leave petitions with respect to the irregularity in the functioning of the tribunal. However, in Feb 2018, for the first time SC changed the award itself.

Highlights of the Judgement

1. It has decreased the share of Tamil Nadu. Increased the share of Karnataka to meet the drinking water requirement of the global city Bangalore. 
2. It has directed that the availability of groundwater will also be taken into account. 
3. It declared inter-state rivers as national assets. 
4. The court suggested that priority to be given to the needs of drinking water.
5. It rejected the doctrine of historical rights.
6. It has directed the Government to implement the decision within 6 weeks.

However, the union government kept on delaying because of Karnataka elections. With the direction of Supreme Court, union Government has brought the notification to constitute the Kaveri management authority. It will be a two-tier body. The first tier will be the management body. Second will be the regulatory committee which will keep watch on ground level situation.

Above situation shows that even after Supreme Court’s intervention, it is not necessary that state governments will implement the award or union government will show the political will.

3.7 Case study of Kaveri.

The agreement between the state of Madras and State of Karnataka (Mysore) entered into 1924 was to expire in 1974. Hence Government of Tamil Nadu proactively approached to the union Government in 1970 to constitute the tribunal. It took 20 years for union government to constitute the tribunal in 1990, that too when Tamil Nadu government approached Supreme Court.

Since tribunal was constituted with lot of delay, Tamil Nadu demanded that tribunal gives interim award. Tribunal denied. Tamil Nadu approached Supreme Court after which tribunal gave interim award.

Karnataka held that it is not under obligation to implement interim award. Tamil Nadu approached to the Supreme Court once again. The court directed Karnataka to implement the award.

Karnataka held that it is under no obligation till award is not published in Gazette. The Tamil Nadu government once again approached court. Only then union government published the award in the Gazette.

Following this, the chief minister of Karnataka called for Bandh. Chief minister of Tamil Nadu Jayalalitha sat on fast. There was local violence, while some farmers committed suicide.

IN 2007 the tribunal gave its final award. It was later challenged in Supreme Court, which gave its final verdict in 2018.

3.8 Case study from North Indian states. (Sutlej Yamuna Link Canal)

In 1960, Indus water treaty with Pakistan adversely impacted Punjab, an agrarian state.

1966, Haryana was carved out. The new state demanded share in water of Sutlej. Punjab denied because Sutlej does not go through Haryana.

Water became one of the issues in Khalistan movement. Union government intervened and proposed to link Sutlej and Yamuna through a canal. It also made two more states party to the project i.e. Delhi and Rajasthan.

Rajiv Longowal agreement 1985 led to the establishment of a tribunal. Tribunal reduced the share of Punjab. It became so controversial that award has not been published in the gazette till date.

In 2004, unprecedented step was taken by Punjab assembly, terminating all agreements with all states.

Union Government referred the matter to Supreme Court under Advisory Jurisdiction to examine the constitutional validity. In 2016, SC gave its advisory opinion. The act is unconstitutional.

Since elections were due in 2017, the then Government of Punjab took another unprecedented step – it de-notified the acquired land for the construction of the link in Punjab. It started returning the acquired land. Haryana approached SC. Haryana had completed its side of the link. It had given advanced cheque to the Punjab government. The Punjab government has returned the cheque.