Article 354 of the Costitution of India with Case law
🇮🇳 Article 354 of the Constitution of India
Subject: Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation
🔹 Bare Text of Article 354:
(1) The President may, by order, direct that the provisions of Articles 268 to 279 shall, during the period of Emergency, have effect subject to such exceptions or modifications as he thinks fit.
(2) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
🧩 Explanation:
Article 354 empowers the President of India to alter the financial distribution between the Union and the States during a Proclamation of Emergency.
| Clause | Meaning |
|---|---|
| Clause (1) | During an emergency, the President can modify how revenues (especially taxes) are distributed between Union and States (Articles 268–279). |
| Clause (2) | Any such order must be presented to Parliament as soon as possible. |
🏛️ Context: Articles 268–279
These articles relate to:
Distribution of taxes (e.g., excise, customs, income tax)
Grants-in-aid to states
Finance Commission recommendations
During an emergency, financial arrangements under these can be modified by Presidential order.
🔍 Scope of Power under Article 354:
| Feature | Detail |
|---|---|
| Applies During | National Emergency (Article 352) or Financial Emergency (Article 360) |
| Nature of Power | Temporary, subject to parliamentary review |
| Who Exercises Power | The President of India (executive authority) |
| Effect | Central government may retain larger share of revenue or change grant mechanisms |
🧑⚖️ Important Case Law Related to Article 354:
🔸 1. State of Rajasthan v. Union of India, AIR 1977 SC 1361
Context: Challenge to the constitutional validity of central intervention in states.
Relevance: Though not directly on Article 354, the court upheld broad emergency powers of the Union, validating Presidential discretion during Emergency including financial matters.
🔸 2. S.R. Bommai v. Union of India, (1994) 3 SCC 1
While the main issue dealt with President's Rule under Article 356, the judgment highlighted that emergency provisions must be used sparingly and be subject to judicial review, which extends to financial adjustments under Article 354.
🔸 3. Minerva Mills Ltd. v. Union of India, AIR 1980 SC 1789
Although primarily about the basic structure doctrine, the Supreme Court emphasized that emergency powers (including under Article 354) must be used constitutionally and not arbitrarily.
📌 Key Points to Remember:
| Point | Explanation |
|---|---|
| Purpose | To allow flexibility in revenue sharing during national crises. |
| Checks | Any change must be laid before Parliament (accountability). |
| Limitations | Power ends with the emergency. Cannot override basic structure. |
| Enforcement | Executed via Presidential Order; does not require prior legislative approval. |
🧭 Related Articles:
| Article | Subject |
|---|---|
| Article 352 | National Emergency |
| Article 360 | Financial Emergency |
| Article 268–279 | Distribution of financial resources |
| Article 280 | Finance Commission |
| Article 275 | Grants from the Union to certain states |
✅ Conclusion:
Article 354 is a special provision activated during emergencies, giving the Union Government temporary power to restructure fiscal arrangements between Centre and States. It ensures flexibility during crises, while maintaining a check via parliamentary oversight.
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