When Normal Rules Are Suspended: National, State, and Financial Emergencies in the Constitution

Emergency Provisions

The emergency provisions occupy Part XVIII of the Constitution, spanning Articles 352 to 360. Their core purpose is to equip the Central government with exceptional powers to deal with extraordinary situations threatening the sovereignty, unity, integrity, security, and democratic fabric of the nation.

A defining feature of these provisions is their structural flexibility: during normal times, the Constitution operates as a federal system, but during an emergency it automatically transforms into a unitary one — without any formal amendment. This dual character distinguishes India's Constitution from rigid federal models like that of the United States, where the federal form cannot be altered regardless of circumstances. Dr B R Ambedkar articulated this distinction in the Constituent Assembly, describing the Indian Constitution as uniquely capable of assuming federal or unitary character depending on the needs of the moment.

The Constitution recognises three distinct types of emergencies:

1. National Emergency (Article 352) — threat to national security by war, external aggression, or armed rebellion
2. President's Rule (Article 356) — breakdown of constitutional machinery in a state
3. Financial Emergency (Article 360) — threat to financial stability or credit of India

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Grounds of Declaration

The President may proclaim a National Emergency when the security of India or any part of its territory is threatened by:

• War
• External aggression
• Armed rebellion

Importantly, the proclamation can be issued even before the actual occurrence of any of these threats, provided the President is satisfied that an imminent danger exists. Multiple proclamations on different grounds can coexist simultaneously — a provision inserted by the 38th Amendment Act of 1975.

Classification of National Emergency:

• External Emergency: Declared on grounds of war or external aggression
• Internal Emergency: Declared on grounds of armed rebellion

Territorial scope: A National Emergency may apply to the entire country or only a specified part of it — a flexibility introduced by the 42nd Amendment Act of 1976.

Evolution of the third ground: The original Constitution used the phrase 'internal disturbance' as the third ground. This was considered excessively broad and was replaced with 'armed rebellion' by the 44th Amendment Act of 1978 — a direct response to the controversial 1975 Emergency declared by Indira Gandhi's government on the ground of 'internal disturbance.'

Cabinet recommendation mandatory: The President can proclaim a National Emergency only upon receiving a written recommendation from the Cabinet (defined as the PM and Cabinet-rank ministers under Article 352). This safeguard — also introduced by the 44th Amendment Act of 1978 — was necessitated by the 1975 episode, where Prime Minister Indira Gandhi advised the President to declare Emergency without Cabinet consultation, presenting it to the Cabinet only as a fait accompli afterward.

Parliamentary Approval and Duration

The requirement of periodic parliamentary approval (every 6 months) was also introduced by the 44th Amendment Act of 1978. Previously, once approved, an Emergency could continue as long as the Executive desired.

Revocation

• The President may revoke a proclamation at any time by a subsequent proclamation — no parliamentary approval required.
• The President must revoke the proclamation if the Lok Sabha passes a disapproval resolution (introduced by 44th Amendment, 1978).
• If one-tenth of Lok Sabha members give written notice to the Speaker (or President, if the House is not in session), a special sitting must be convened within 14 days to consider a disapproval resolution.

Key distinction between approval and disapproval resolutions:

• Disapproval: Passed by Lok Sabha alone, by simple majority
• Approval/continuation: Must be passed by both Houses, by special majority

Effects of National Emergency

A. Effect on Centre–State Relations

Executive: During a National Emergency, the Centre may issue executive directions to any state on any matter, not just the specified subjects permitted in normal times. State governments continue to exist but function under complete Central supervision.

Legislative: Parliament acquires power to legislate on State List subjects. State legislatures are not suspended but their power becomes subordinate to Parliament's overriding authority. Laws made by Parliament on State List subjects during the Emergency remain operative for 6 months after the Emergency ceases. The President may also issue ordinances on state subjects when Parliament is not in session. The 42nd Amendment Act of 1976 extended these executive and legislative consequences to all states, not just those directly affected by the Emergency.

Financial: The President may modify the constitutional distribution of revenues between Centre and states — including reduction or cancellation of transfers. Such modifications persist till the end of the financial year in which the Emergency ceases. All such orders must be laid before Parliament.

B. Effect on Life of Legislative Bodies

• Lok Sabha: Its term may be extended beyond 5 years by Parliament for 1 year at a time, but not beyond 6 months after the Emergency ceases. The Fifth Lok Sabha (1971–77) was extended twice using this provision.
• State Legislative Assemblies: Parliament may similarly extend assembly terms by 1 year at a time, subject to the same 6-month post-Emergency ceiling.

C. Effect on Fundamental Rights

Article 358 — Suspension of Article 19:

• Upon proclamation of National Emergency, the six Fundamental Rights under Article 19 are automatically suspended — no separate presidential order is needed.
• The state is freed from the restriction imposed by Article 19 and can legislate or act in ways that abridge these rights without challenge.
• When the Emergency ends, Article 19 automatically revives. Laws inconsistent with Article 19 cease to have effect — but no remedy lies for past actions taken during the Emergency.
• 44th Amendment restrictions on Article 358:
  1. Suspension of Article 19 rights applies only when Emergency is declared on grounds of war or external aggression — NOT on the ground of armed rebellion.
  2. Only laws related to the Emergency are protected from challenge, not all laws.

Article 359 — Suspension of enforcement of other Fundamental Rights:

• The President may, by order, suspend the right to move courts for enforcement of specified Fundamental Rights. The rights themselves are not abrogated — only their judicial enforceability is suspended.
• Such suspension may be for the entire Emergency period or a shorter specified period, and may cover the whole country or part of it.
• The Presidential Order must be laid before each House of Parliament.
• 44th Amendment restrictions on Article 359:
  1. The President cannot suspend enforcement of rights under Articles 20 and 21 (protection against arbitrary conviction, and right to life and personal liberty) — these remain enforceable even during Emergency.
  2. Only Emergency-related laws are shielded from challenge.

Distinction Between Articles 358 and 359

Common feature: Both Articles protect only those laws and executive actions that are related to the Emergency. Other laws remain open to challenge.

Proclamations Made So Far

The 1962 Emergency continued through the 1965 Indo-Pakistan war, so no fresh proclamation was needed then. The 1975 Emergency (internal) was the most controversial — the Shah Commission, appointed by the Janata government that came to power in 1977, found no justification for its declaration. This directly led to the extensive safeguards introduced through the 44th Amendment Act of 1978.

Judicial Review

• The 38th Amendment Act of 1975 had made the President's satisfaction in declaring a National Emergency immune from judicial review — a provision subsequently deleted by the 44th Amendment Act of 1978.
• In Minerva Mills case (1980), the Supreme Court held that a proclamation of National Emergency can be challenged in court on grounds of malafide, extraneous or irrelevant basis, or being absurd or perverse.

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Constitutional Basis

Article 355 imposes a duty on the Centre to ensure that every state government functions in accordance with the Constitution. It is in fulfillment of this duty that the Centre invokes Article 356 when constitutional machinery fails in a state. This is called President's Rule (also: State Emergency or Constitutional Emergency). Notably, the Constitution itself does not use the term 'emergency' for this situation.

President's Rule can be proclaimed on two grounds:

1. Article 356: The President is satisfied that the government of a state cannot be carried on in accordance with the Constitution — either on the basis of the Governor's report or otherwise (i.e., even without a Governor's report).
2. Article 365: When a state fails to comply with or give effect to any Central direction, the President is empowered to treat this as a situation in which constitutional government in the state has broken down.

Parliamentary Approval and Duration

The 42nd Amendment had extended the initial continuation period to 1 year; the 44th Amendment reduced it back to 6 months. An exceptional case: President's Rule in Punjab (imposed May 1987) was extended to 5 years under the 68th Amendment Act of 1991.

Revocation by the President at any time by a subsequent proclamation requires no parliamentary approval.

Consequences of President's Rule

When President's Rule is imposed:

• The state Council of Ministers (headed by the Chief Minister) is dismissed.
• The state legislative assembly is either suspended or dissolved (if dissolved, fresh elections are held).
• The Governor, on behalf of the President, administers the state with the help of the Chief Secretary or Presidential advisors.
• Parliament legislates for the state and passes the state budget.

The President acquires three categories of extraordinary powers:

1. To assume the functions of the state government and executive powers vested in the Governor
2. To declare that state legislative powers shall be exercised by Parliament
3. To take all necessary steps, including suspension of constitutional provisions relating to any state body or authority

When the state legislature is suspended or dissolved:

• Parliament may delegate law-making power for the state to the President or any other authority
• The President may authorise expenditure from the state Consolidated Fund (when Lok Sabha is not in session)
• The President may promulgate ordinances for the state (when Parliament is not in session)
• Laws made under President's Rule remain operative even after its conclusion, but can be repealed/altered by the revived state legislature

Important limitation: The President cannot assume powers vested in the High Court, nor suspend High Court-related constitutional provisions. The High Court's powers and status remain unchanged during President's Rule.

Comparison: National Emergency vs President's Rule

Use of Article 356: History and Controversy

Since 1950, President's Rule has been imposed over 100 times — averaging approximately twice a year. The first imposition was in Punjab in 1951.

The provision has been deeply controversial. Notable patterns of political misuse:

• 1977: The Janata government imposed President's Rule in nine Congress-ruled states on the ground that assemblies no longer represented the electorate's will after the Lok Sabha results.
• 1980: When Congress returned to power, it replicated this action in nine states.
• 1992: Three BJP-ruled states (MP, HP, Rajasthan) came under President's Rule on grounds of non-implementation of a Central ban on religious organisations.

Dr Ambedkar had hoped Article 356 would remain a 'dead letter' — used only as a last resort. Events proved otherwise, prompting the quip by H V Kamath: 'Dr Ambedkar is dead and the Articles are very much alive.'

Judicial Review and Bommai Case (1994)

The S R Bommai v. Union of India (1994) case is the landmark ruling on President's Rule. The Supreme Court laid down the following propositions:

1. Presidential proclamation imposing President's Rule is subject to judicial review.
2. Presidential satisfaction must be based on relevant material; action based on irrelevant, extraneous, or malafide grounds can be struck down.
3. Burden of proof lies on the Centre to justify the imposition.
4. The court cannot assess the adequacy of material, but can check its relevance.
5. If the proclamation is held unconstitutional, the court has power to restore the dismissed government and revive the legislature.
6. The state assembly should be dissolved only after parliamentary approval of the proclamation — until then, it can only be suspended. If Parliament fails to approve, the assembly is reactivated.
7. Secularism is a basic feature of the Constitution — a state government pursuing anti-secular politics is liable to action under Article 356.
8. Loss of majority must be tested on the floor of the House — the ministry should not be dismissed until then.
9. A new Central government cannot dismiss state governments formed by other parties merely by virtue of being new.
10. Article 356 power is exceptional and must be invoked only for special situations.

Proper and Improper Use of Article 356

Based on the Sarkaria Commission Report (1988) and endorsed in Bommai (1994):

Proper use:

• Hung assembly — no party commands a majority
• Party with majority declines to form government and no coalition is possible
• Ministry defeated in assembly, no alternative government possible
• State defies binding Central directions
• Internal subversion — government deliberately acting against the Constitution
• Physical breakdown — government wilfully refuses its constitutional obligations

Improper use:

• Governor recommends President's Rule without exploring alternative government possibilities
• Governor assesses majority support on his own without allowing the ministry to prove it on the floor
• Ruling party in state suffers defeat in Lok Sabha elections (as in 1977, 1980)
• Internal disturbances not amounting to subversion or physical breakdown
• Maladministration, corruption allegations, or financial distress in the state
• State not given prior warning to rectify itself (except in extreme urgency)
• Using the power for intra-party reasons or purposes extraneous to the Constitution

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Grounds and Declaration

The President may proclaim a Financial Emergency when satisfied that the financial stability or credit of India or any part thereof is threatened. The 38th Amendment Act of 1975 had made this satisfaction non-justiciable — that protection was removed by the 44th Amendment Act of 1978, restoring judicial review.

Parliamentary Approval and Duration

• Must be approved by both Houses within 2 months (by simple majority)
• Once approved, continues indefinitely — no maximum period; no periodic renewal required
• May be revoked by the President at any time without parliamentary approval

Effects of Financial Emergency

1. Centre may direct any state to observe specified canons of financial propriety.
2. Directions may include requiring:
   • Reduction of salaries and allowances of all or any class of state government employees
   • Reservation of all Money Bills passed by the state legislature for Presidential consideration
3. The President may also direct reduction of salaries and allowances of:
   • Central government employees
   • Judges of the Supreme Court and High Courts

Thus, during a Financial Emergency, the Centre acquires complete financial control over states. H N Kunzru (Constituent Assembly) warned that these provisions pose a serious threat to the financial autonomy of states. Dr Ambedkar noted their similarity to the US National Recovery Act of 1933, which granted the American President comparable powers during the Great Depression.

A Financial Emergency has never been declared — despite the financial crisis of 1991.

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Critics argued:

• These provisions would destroy the federal character of the Constitution
• Executive and legislative power would concentrate dangerously in the Union
• The President would become a de facto dictator
• Financial autonomy of states would be eliminated
• Fundamental Rights would become meaningless, destroying democratic foundations

H V Kamath warned of a 'totalitarian state'; K T Shah called the chapter one of 'reaction and retrogression'; T T Krishnamachari feared 'constitutional dictatorship'.

Defenders argued:

• Sir Alladi Krishnaswami Ayyar described the provisions as 'the very life-breath of the Constitution'
• Mahabir Tyagi saw them as a 'safety valve' for constitutional maintenance
• Dr Ambedkar acknowledged the risk of misuse but argued for their necessity, hoping they would remain a dead letter invoked only as a last resort

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• The 44th Amendment Act of 1978 is the single most important amendment for this chapter — know every change it introduced.
• Article 358 vs 359: A classic source of MCQs. Know all seven distinctions clearly.
• Bommai case (1994): Its 10 propositions are frequently tested directly and indirectly.
• Armed rebellion vs internal disturbance: Know which amendment changed the language and why.
• Special vs simple majority: National Emergency approval needs special majority; President's Rule approval needs only simple majority.
• Financial Emergency: Never declared; judicial review of Presidential satisfaction was restored by 44th Amendment.
• Judges' salaries can be reduced only during Financial Emergency — not during National Emergency or President's Rule.
• The High Court's powers cannot be assumed by the President even during President's Rule.