Before today's verdict, the apex court order revoking President's Rule in Uttarakhand in May and another judgement in October last striking down a law which sought to give executive a say in judicial appointments are the two other major legal setbacks the government has received.
On October 16 last, the apex court had struck down the National Judicial Appointments Commission Act passed by Parliament unanimously.
The law, along with a constitutional amendment, had sought to overturn the over two-decade-old collegium system of judges appointing judges.
In May, the apex court had ordered a fresh floor test in Uttarakhand Assembly that led to the return of the Congress government headed by Harish Rawat and lifting of the President's Rule imposed on March 27.
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The development had come as a major loss of face for the Modi government which had dismissed the Congress government and imposed President's Rule after nine Congress MLAs sided with the BJP on the Appropriation Bill.
The rebel MLAs were subsequently disqualified by the Speaker under the anti-defection law, a decision that was upheld by the High Court and not interfered with by the Supreme Court.
The apex court's verdict paves the way for the return of its dismissed government headed by Nabam Tuki.