Supreme Court rejects HC ruling: No sovereignty for J-K outside Constitution of India

Snubbing the Jammu and Kashmir High Court for asserting the state’s “sovereignty” and “sovereign powers”, the Supreme Court Friday said J&K “has no vestige of sovereignty outside the Constitution of India”. A bench of Justices Kurian Joseph and Rohinton Nariman also rejected the J&K High Court’s view that the J&K Constitution was equal to the Constitution of India.

“It is clear that the state of Jammu & Kashmir has no vestige of sovereignty outside the Constitution of India and its own Constitution, which is subordinate to the Constitution of India… they (residents of state) are governed first by the Constitution of India and also by the Constitution of Jammu & Kashmir,” the bench said, referring to the preamble of the Constitution of J&K, 1957.

The bench called it “disturbing” that various parts of a judgment in appeal by the J&K High Court spoke of the absolute sovereign power of the state. “It is necessary to reiterate that Section 3 of the Constitution of Jammu & Kashmir, which was framed by a Constituent Assembly elected on the basis of universal adult franchise, makes a ringing declaration that the State of Jammu & Kashmir is and shall be an integral part of the Union of India. And this provision is beyond the pale of amendment,” the judges said.

The bench also clarified that J&K residents are “first and foremost” Indian citizens. “It is therefore wholly incorrect to describe it as being sovereign in the sense of its residents constituting a separate and distinct class in themselves. The residents of Jammu & Kashmir, we need to remind the High Court, are first and foremost citizens of India… permanent residents of the state of J&K are citizens of India, and that there is no dual citizenship as is contemplated by some other federal Constitutions in other parts of the world,” it said.

The top court pointed out that it was constrained to observe these because in at least three places, the High Court, in its judgment, “has gone out of its way to refer to a sovereignty which does not exist”.

Underlining that the quasi-federal structure of the Constitution of India continues even with respect to J&K, the bench said: “Article 1 of the Constitution of India and Section 3 of the Jammu & Kashmir Constitution make it clear that India shall be a Union of States, and that the State of Jammu & Kashmir is and shall be an integral part of the Union of India.” It said the J&K Constitution has been made to further define the existing relationship of the state with the Union of India as an integral part thereof.

The court said this while deciding a legal question on whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) will be applicable to J&K or the law was outside the legislative competence of Parliament since its provisions would collide with Section 140 of the Transfer of Property Act of J&K.

SARFAESI Act entitles banks to enforce their security interest outside the court’s process by moving a tribunal to take possession of secured assets of the borrower and sell them outside the court process. The High Court had said that the state has absolute sovereign power to legislate in respect of laws touching the rights of its permanent residents qua their immovable properties.

After the State Bank of India appealed against the High Court order, the J&K government submitted in the Supreme Court that this law encroached upon the property rights of permanent residents of the state and must be read down so that it will not be permissible to sell property belonging to a permanent resident of the state to outsiders. It was also argued that Parliamentary legislation would need concurrence of the J&K government before it could apply to the state under Article 370.

But the Supreme Court bench shot down these arguments, saying SARFAESI Act deals with recovery of debts due to banks and financial institutions, which is relatable to a subject under the Union List and parliamentary legislation did not require concurrence of the state government since the Centre had power to make law on this subject.

“Entries 45 and 95 of List I clothe Parliament with exclusive power to make laws with respect to banking… the Act as a whole would necessarily operate in the state,” the bench said, adding that the SARFAESI Act had itself made a special provision for sale of properties in J&K.

The bench, however, made it clear that any provision of the J&K Transfer of Property Act will have to give way to the central law in case the former is found repugnant. “It is clear that anything that comes in the way of SARFAESI by way of a Jammu & Kashmir law must necessarily give way to the said law,” it said, adding that its judgement had no effect on Article 35A, which confers on permanent residents of J&K special rights and privileges regarding acquisition of immovable property in the state.