Issue 1: - Whether the declaration sought by the Magrathea in respect of the 14th Finance

Commission can and should be granted?

It is humbly submitted before the Honourable Supreme Court of Vyalikaval that the
“Tadri Formula” which was recommended by the 14th finance commission in exercise
of its authority under Article 2801and the subsequent acceptance of the same by the
union government of Vyalikaval is unconstitutional as it falls against the basic structure
of the constitution of Vyalikaval.

1.1 Doctrine of ‘basic structure’ is applicable to the constitution of Vyalikaval.

The constitution of Vyalikaval is more or less in pari materia with the Constitution of India2.
Etymologically it means “in the same matter”. It is a canon of construction that statutes that
are in pari materia may be construed together, so that the inconsistencies in one statute may be
resolved by looking at another statute on the same subject.3

In the instant case, since the constitution of Vyalikaval is very much in pari materia to the
Indian constitution and doctrine of basic structure has been used by Indian supreme court to
limit the powers of the legislature so it can be said that the Indian concept of ‘basic structure’
can very well be used to sort out the inconsistencies the Vyalikaval constitution.

1.2 “Tadri Formula is in violation of the ‘basic structure’ of the constitution of

Vyalikaval.

In the parlance of Indian constitutional law, the concept of basic structure holds a resounding
authority regarding the powers of legislature to amend the constitution, it limits the power of
legislature in such a manner that they cannot encroach upon the ethos on which it was

1
Finance Commission
(1) The President shall, within two years from the commencement of this Constitution and thereafter at the
expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a
Finance Commission which shall consist of a Chairman and four other members to be appointed by the President
(2) It shall be the duty of the Commission to make recommendations to the President as to
(a) the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be,
divided between them under this Chapter and the allocation between the States of the respective shares of such
proceeds;
(b) the principles which should govern the grants in aid of the revenues of the States out of the Consolidated Fund
of India;
(c) any other matter referred to the Commission by the President in the interests of sound finance
(4) The Commission shall determine their procedure and shall have such powers in the performance of their
functions as Parliament may by law confer on them
2
Paragraph 1, moot proposition
3
BRYAN A. GARDNER, BLACK ‘S LAW DICTIONARY 2316 (8th ed. 2004).
constructed i.e. basic structure. The concept was devised by the Supreme Court of India in the
landmark Keshvananda Bharti v State of Kerala4. The ‘basic structure’ doctrine is a judicial
innovation whereby certain features of the Constitution of India are beyond the limits of the
powers of amendment of the Parliament of India.5 The concept can be summarised as,

“amend as you may even the solemn document which the founding fathers have
committed to your care, for you know best the needs of your generation. But, the
Constitution is a precious heritage; therefore, you cannot destroy it.”6

14th Finance Commission constituted under the chairmanship of Ms. Anushka Tadri published
the “Tadri Formula” for the distribution of revenue among the states.7

These recommendations were accepted by the union government in toto by an executive order.8
It is humbly submitted before the honourable court that executive orders of the union are
subjected to the ‘basic structure’ test, as this position was iterated by the Honourable Supreme
Court in the famous SR Bommai v Union of India9 case.

In Keshvananda Bharti case10, Justice Sehlat and Justice Grover were of the view that the
mandate to build a welfare state contained in directive principles of state policy11 and unity
and integrity of the nation constituted basic structure. Justice Hegde and Justice Mukherjea
were in consonance of this view and held that mandate to build the welfare state constitutes
the basic structure. In Bommai case12 it was held that Preamble of the constitution also
constitutes the basic structure. The “Tadri Formula” in the instant case goes against the ethos
of Article 38 and the Preamble of the constitution of Vyalikaval.

1.2.1 “Tadri Formula” is against the ideals of Preamble and subsequently against Article
38 of the Constitution.

In the instant case, Tadri Formula is recommended by the 14th Finance Commission for the
purpose of distribution of union taxes among the states, the weights of which are as follows: -

4
A.I.R. 1976 S.C. 1461. {hereinafter Keshvananda Bharti case}.
5
Ibid.
6
Minerva Mills Ltd v Union of India, A.I.R 1980 S.C. 1789.
7
Paragraph 9.
8
Paragraph 20.
9
1994 A.I.R. 1998. {hereinafter Bommai}
10
supra 4.
11
INDIA CONST. art 38.
12
supra 10.
 a) Ratio of Population of the state in the 2011 census to the 1991 census (30%). Higher
the number will lead to higher share.
b) Reduction in Total Fertility Rate of the state between the 1961 census and 2021 census
(30%). Higher reduction will lead to a higher share.
c) Average per capita income growth in the state between 1961 and 2021 (30%). Higher
the growth number will lead to a higher share.
d) Annual increase in forest cover as a percentage of state area between 1961 and 2021
(10%). Higher number will lead to a higher share.13

And the reasoning for the same is as follows: -

a. Population growth is a terrible problem for Vyalikaval and we wish to incentivise states
to reduce their population growth and reward those states which have reduced
population growth.
b. Total fertility rate is largely the result of increased levels of education of women and
for this purpose, and we want to incentivise states to increase female literacy and reward
those states which already have.
c. Economic growth in a state is a function of how well the state has spent money on
improving the infrastructure and increasing state capacity, and we therefore wish for
states to take this path in future, apart from rewarding the states which already have
done so.
d. Instead of simply giving states money for having retained forest cover, we want to
reward states which have taken active measures to increase forest cover and
incentivising states to do the same.14

It is humbly submitted that the weights provided are flawed and the reasoning given for the
same is superfluous, as the commission has not considered the socio-economics of the country
and subsequent acceptance of the same from the part of union amounts to grave injustice to the
millions of citizens who reside in Magrathea. It is akin to the colonial handling of finances and
takes us back to the time of colonials. In the words of MK Gandhi: -

independence did not mean mere freedom from British Rule by breaking the bonds of
slavery, but it meant more than that. It meant justice to all citizens of India, irrespective
of religion, caste, creed or language, each getting his legitimate due.”

13
Paragraph 9 & 12.
14
Paragaph 17.
Further, this formula goes against the spirit of Preamble and Article 38 as well. The Preamble
which has been described by Chief Justice Dyer as “key to open the minds of the makers of the
Act”.15 The Supreme Court’s opinion has been in sync with this opinion of great jurist in many
cases.16

The objective of the expression “Socialism” in Preamble is to alienate inequalities in income

and status and standard of life17 and especially provide security to people from cradle to grave.18
After the addition of this word, greater concern must be shown to improve the condition of
poor in the country19 to clearly set up a “vibrant, throbbing welfare society”.20 This idea is
further resonated in Article 3821 (Directive Principles) of the Constitution of Vyalikaval, which
calls for the mandate to build a welfare state.

A welfare state denotes a concept of government, in which the State plays a key role in the
protection and promotion of the economic and social well-being of all of its citizens, which
may include equitable distribution of wealth and equal opportunities and public responsibilities
for all those, who are unable to avail for themselves, minimal provisions for a decent life.22

In the light of the facts of the instant case it is submitted that Tadri formula enunciated a formula
of tax distribution which goes against these above-mentioned values. Magrathea is a one of the
least developed states in the country, it is one of the largest in size and hugely populated. It
used to get largest share (correctly) in the union taxes, as per the “Deekayshi Formula”, but
after the Tadri Formula got implemented its position tumbled to the bottom of the table.23

Now the tax is not being divided according to the population but according to the ratio of
population in 2011 census to 1991 census. This is so egregious, suppose two states A & B had
a population of 4 and 100 respectively in 1991 census and the population doubles to 8 and 200
respectively in the 2011 census, on calculation we’ll get the ratio as 2, same for both the states.
Tadri Formula will distribute the same tax to both the states and that too 30% of total tax. A

15
Susssex Peerage case, (1844) 11 Cl & F 85.
16
Union of India v Elphinstone Spinning & Weaving Co. Ltd, A.I.R 2001 S.C. 724. (Constitutional bench)
17
Kerala Hotel and Restaurant Association v State of Kerala, A.I.R 1990 S.C. 913.
18
Nakara D.S v Union of India, A.I.R 1983 S.C. 130.
19
Sodhan Singh v New Delhi Municipal Committee, A.I.R. 1989 S.C. 1988.
20
Atam Prakash v State of Haryana, A.I.R. 1986 S.C. 859.
21
State to secure a social order for the promotion of welfare of the people
1. The State shall strive to promote the welfare of the people by securing and protecting as effectively as it
may a social order in which justice, social, economic and political, shall inform all the institutions of the
national life
22
Lala Ram v Union of India, (2016) 5 S.C.C. 813.
23
Table at paragraph 14.
state having population of 8 and 200 are getting the same amount, how is this equitable and
just.

The second criteria used in the Tadri formula is Total Fertility Rate, it is defined as the average
number of children born to women during their reproductive years.24 The state having a lower
total fertility rate gets the higher share, the reason given being that, they want to reward those
states who have increased female literacy, because low fertility rate is connected to higher
education levels among the women. Indeed, the analogy cited by the centre is correct, but what
is the point of putting 30% weight on this criterion. It seems as if that the intention of the “Tadri
Formula” is to enrich the enriched. The third and fourth criteria also fall within this bracket of
enriching the enriched. It is to be noted that this policy is depriving a large portion of country’s
population.

The states who need maximum protection are not getting their due. It appears that the centre is
only concerned about the happiness of the few while our constitutional ideals of welfare state
are polar opposite. Supreme Court while describing the obligations of welfare state said that it
refers to "Greatest good of greatest number and the benefit of all and the happiness of all". It
is important that public weal be the commitment of the State, where the state is a welfare state.
A welfare state is under an obligation to prepare plans and devise beneficial schemes for the
good of the common people.25

To summarize the union is giving larger share of taxes to those states who have comparatively
less population, have developed infrastructure, high levels of education among the women, etc.
It is submitted that this formula is short-sighted and fails to see bigger picture, how can the
state with a dense population survive; how will it ensure welfare of the people; how will it build
the infrastructure necessary to sustain a dignified life to the citizens of their state.26

Hence, this formula is in violation of the principles of Socialism, equality, justice enshrined in
the Preamble of the constitution. It also violates Article 38 of the constitution, i.e. mandate to
build a welfare state. Both of which constitute basic structure of the constitution. It is submitted
henceforth that the Tadri formula is unconstitutional as it is in violation of the basic structure
of the constitution.

24
Fertility Rate 2018, BRITANNICA ACADEMIC (Sept. 10, 2018, 12:55 PM),
https://academic.eb.com/levels/collegiate/article/fertility-rate/607831.
25
supra 22.
26
See M Nagraj v Union of India, (2006) 8 S.C.C. 212.