At a time when many state chief ministers are raising the federalism bogey to stall “arbitrary” Central action on several issues, the Supreme Court has in a major verdict on the Union’s executive powers on trade, business, and the acquisition and disposal of properties across the country, held on Friday that it did not always require legislative endorsement by Parliament on these matters.
“Under Article 298 of the Constitution the executive power of the Union shall extend to carrying on of any trade and to the acquisition, holding and disposal of property and making contracts for any purpose. The State can carry on executive functions by making a law or without making a law,” a bench of Justices Altamas Kabir and J. Chelamesar ruled.
The only restriction on using its Article 298 powers is that its actions should not “violate” citizens’ fundamental rights, the court held, noting that “Article 14 speaks of equality before the law and equal protection of the law”.
It said while the Centre could enter into contracts under Article 298, this was subject to the principle that equality of opportunity should prevail.