Nair
Service Society Vs. State of
Kerala [2007]
Insc 201 (23 February 2007)
S.B. Sinha & P.P. Naolekar
With Contempt Petition (Civil) No.108 of 2000 And Contempt Petition (Civil)
No.109 of 2000 With Suo Motu Contempt Petition (Civil) No. ../ 2006 In Writ
Petition (Civil) No.930 of 1990 S.B. SINHA, J :
In these petitions, interpretation of this Court's judgment as regards
identification of 'creamy layer' amongst the backward classes and their
exclusion from the purview of reservation, vis-`-vis, the report of Justice
K.K. Narendran Commission (hereinafter referred to as 'Narendran Commission')
and acceptance thereof by the State of Kerala in issuing the impugned
notification dated 27.5.2000, falls for our consideration in this writ petition
by the Nair Service Society ('the Society'), a Society which was initially
registered under Section 26 of the Travancore Companies Act, 1914 and after
coming into force the Companies Act, 1956,
it would be deemed to have been registered under Section 25 thereof. The
objects of the Society are said to be :
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to remove the difference prevailing from places to places amongst Nairs
in their social customs and usages as well as the unhealthy practices prevalent
among them;
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to participate in the efforts of other
communities for the betterment of their lot and to maintain and foster communal
amity;
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to work for the uplift of the
depressed classes;
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to start and maintain such
institutions as are found necessary to promote the objects of the society.
It is not in dispute that it had filed a writ petition before the Kerala
High Court questioning the validity of the report commonly known as Mandal
Commission Report. The writ petition was later on transferred to this Court. It
also took part in the proceedings before Narendran Commission. Mandal
Commission Report was accepted by Union of India.
A writ petition was filed before this Court, questioning the said action on
the part of the Union of India by one Indra Sawhney. This Court, in its
judgment in Indra Sawhney & Ors. vs. Union of India & Ors. [1992 Supp.
(3) SCC 217] (hereinafter referred to as 'Indra Sawhney-I'), inter alia,
directed the States to identify 'creamy layer' amongst the backward classes and
exclude them from the purview of reservation.
Indisputably, pursuant to or in furtherance of the said directions, the
Union of India appointed a Commission. It issued an Office Memorandum being
dated September 8, 1993 laying down guidelines for identifying 'creamy layer',
inter alia, stipulating that the sons and daughters of persons having gross
annual income of Rs.1 lakh or above would be excluded.
The State of Kerala, it is not in dispute, did not comply with the said
direction of this Court.
At this juncture, it may be noticed that the constitutional validity of the
criteria for determining the 'creamy layer' for the purpose of exclusion from
backward classes laid down by the States of Bihar and Uttar Pradesh came up for
consideration before this Court in Ashoka Kumar Thakur vs.
State of Bihar & Ors. [(1995) 5 SCC 403]. This Court held that having
regard to the observations made in Indra Sawhney-I, the said criteria were
ultra vires stating :
"This Court in Mandal case [Indra Sawhney v. Union of India (1992)
Supp.3 SCC 217] has clearly and authoritatively laid down that the affluent
part of a backward class called "creamy layer" has to be excluded
from the said class and the benefit of Article 16(4) can only be given to the 'class'
which remains after the exclusion of the "creamy layer". The backward
class under Article 16(4) means the class which has no element of "creamy
layer" in it. It is mandatory under Article 16(4) as interpreted by this
Court that the State must identify the "creamy layer" in a backward
class and thereafter by excluding the "creamy layer" extend the
benefit of reservation to the 'class' which remains after such exclusion. This
Court has laid down, clear and easy to follow, guidelines for the identification
of "creamy layer". The States of Bihar and Uttar Pradesh have acted
wholly arbitrary and in utter violation of the law laid down by this Court in
Mandal case"
By an order dated 10th July, 1995, this Court, while holding the State of
Kerala to be guilty of contempt of this Court, gave it two month's time to
purge the same and report its compliance. The Chief Secretary of the State,
pursuant to said order appeared before this Court.
In its order dated 10th July, 1995, this Court, in Indra Sawhney vs.
Union of India & Ors. reported in (1995) 5 SCC 429, observed :
"We are, therefore, of the opinion that this is a case for taking
action in contempt. We hold the respondent guilty of contempt. However, in
order to give the respondent an opportunity to purge the contempt before we
pass the sentence, we adjourn the matter by two months to enable the State
Government to report compliance before 11-9- 1995, failing which this Court
will proceed to pass appropriate orders in respect of the contempt. The Chief
Secretary will remain present at the next date of hearing i.e. on 11-9-1995 to inform this Court whether or not the order has been complied with. If not, he
runs the risk of being sentenced. Let the IAs Nos. 35 and 36 come up on 11-9-1995."
The legislature of the State of Kerala thereafter enacted the Kerala State
Backward Classes (Reservation of Appointments or Posts in the Services Under
the State) Act, 1995 ('the State Act'), in terms whereof it was declared that
there was no socially advanced section in the State.
Section 4 of the State Act contemplates that nothing contained in the law or
in any judgment, decree or order of any Court or any other authority, the
reservation, which had been in operation since 1958, shall continue to operate.
The Society filed a writ petition before the Kerala High Court questioning the
validity of the State Act. This Court admittedly passed an order dated
4.11.1996 requesting the Chief Justice of the Kerala High Court to appoint a
High Powered Committee to determine the criteria for identification of 'creamy
layer'.
Pursuant to the directions of the Chief Justice of Kerala High Court, a
Committee headed by Justice K.J. Joseph (hereinafter referred to as 'the Joseph
Committee') was constituted. The Committee submitted its report on 4.8.1997.
Objections to the said report were filed before this Court. By judgment and
order dated 13.12.1999 in Indra Sawhney vs. Union of India & Ors., since
reported in (2000) 1 SCC 168 (hereinafter referred to as 'Indra Sawhney-II'),
this Court, while holding the provisions of Sections 3, 4 and 6 of the State
Act to be unconstitutional, upon consideration of the objections to the report
of the Joseph Committee, accepted the same in toto, subject to certain
additions of communities and sub-castes, in the following terms:
"In the result, we accept the Justice Joseph Committee Report in toto
subject to the addition of communities and sub-castes as pointed out in the
affidavit of the State dated 16-1-1998, referred to above."
The Court furthermore noticed the contemptuous acts on the part of the
authorities of State of Kerala and held that they had deliberately been
violating the orders of this Court. Some strictures were also passed against
the State Government. It was directed that the recommendations of the Joseph
Committee should be implemented forthwith until such time the State comes up
with its own criteria for determining 'creamy layer'. It further directed that
the suo motu contempt previously initiated by the Court would be kept pending
and the State should purge its contempt only by complying with the directions
contained in Indra Sawhney-II.
The recommendations made by the Joseph Committee in its report, however,
were not implemented forthwith in terms of the directions of this Court. The
State, on the other hand, appointed another Commission headed by Justice K.K.
Narendran. The terms of reference for the said Commission were as under:
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"What should by the criteria to be adopted to exclude those belong
to the creamy layer among Other Backward Classes from the benefits of
reservation in accordance with the observations in the judgment of the Supreme
Court or what criteria should be adopted to provide maximum protection to those
belonging to such communities in accordance with the above mentioned judgment.
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Whether there is any class which may
be excluded from the creamy layer on the basis of hereditary occupation or
otherwise.
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Whether there should be different
criteria regarding income/property for different categories coming within the
creamy layer.
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If so, what should be the ceiling for
such income/property.
ii.a While
calculating the income, whether it is necessary to exclude income from any
particular source or sources.
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While making its recommendations, the
Commission will take into account the existing socio-economic conditions and the
special features of the Other Backward Classes in the State.
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The Commission should submit its
report to Government within one month.
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The Officer of the Commission will be at Thiruvananthapuram and its
Headquarters at Ernakulam.
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The Commission will have the salary,
allowances and other perquisites as admissible to a sitting Judge of the High
Court."
The Commission submitted an interim report. Its request seeking extension of
time was accepted. At the instance of the petitioner-Society the Commission,
however, in its interim report directed the State to implement the report of
the Joseph Committee. The Committee sought for certain records of 9.2.2000. On
16.2.2000 the State issued fresh guidelines for identifying creamy layer in
accordance with the Joseph Committee report.
The Commission submitted its final report on 11.4.2000. In this writ
petition filed by the Society, the validity of the said notification is in
question.
Mr. Krishan Venugopal, learned counsel appearing on behalf of the petitioner
would submit that the State in accepting the said report violated the
underlying principles contained in the judgments of this Court in Indra
Sawhney-I & II (supra) as also in Ashoka Kumar Thakur (supra).
According to the learned counsel, therein this Court emphasized the
requirements to exclude those categories, which ceased to be backward classes
so as to obtain the benefit of reservation. Attempt in the said report was to
include more and more people thereunder. It would be evident from the fact,
argued Mr. Venugopal, that even by the terms of reference alone the Commission
has been directed to give more than the maximum protection otherwise available
to them. It was furthermore submitted that whereas those who continue
hereditary occupations had been sought to be protected, the State made an
attempt to modify the same by bringing in those categories of persons whose
fore-fathers were carrying on such occupations regardless of the fact as to
what occupations they have been carrying out now.
Mr. T.L.V. Iyer, learned senior counsel appearing on behalf of the State of
Kerala, on the other hand, would submit that the Society represents the members
of the forward classes and even if the recommendations of the Narendran
Commission are set aside, the same would not make much difference as the rights
of the members of the Society would not be affected.
It was submitted that the society is not in any way concerned with the
correctness or otherwise of the report submitted by Narendran Commission or the
order issued by the State on 27.5.2000 inasmuch as it is not the case of the
petitioner-Society that their members would become entitled to the benefit of
reservation in terms of Article 16(4) of the Constitution of India.
Our attention has been drawn to the notification dated 12.6.2000 wherein
guidelines were issued, which, inter alia, are on the following terms:
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"The rule of exclusion made mention in the schedule attached to
these guidelines will not apply to persons working as artisans or engaged in
hereditary occupations, calling and included in Annexure 'B' appended herewith
and person/group of persons coming within the definition of the expression
"Fishermen Community" in Annexure C appended to these
guidelines."
It was submitted that such guidelines have been issued by the Central
Government as would appear from the office memorandum issued by the Government
of India, as was noticed in Ashoka Kumar Thakur vs. State of Bihar & Ors.
[(1995) 5 SCC 403] which is on the same terms.
Our attention was further drawn to Annexure B to the said guidelines wherein
seven categories of hereditary occupations/calling, which had been excluded
from the category of 'creamy layer', have been identified. It was urged that it
would not be correct to contend that even where the persons concerned have left
their hereditary occupation, still they would be entitled to the benefit of the
reservation inasmuch as such benefit is to be granted so long as they are
engaged in such occupations. As regards the quantum of income, it was submitted
that limit thereof is not static and even in Ashoka Kumar Thakur (supra), this
Court pointed out that the income criteria in terms of the report was required
to be modified taking into account the change of per capita annual income and
having regard to report of the Narendran Commission constituted in the year
2003. Recommendations of the Narendran Commission in regard to the annual
income being Rs. 3 lakhs, thus, Mr. Iyer submitted, should not be interfered
with. While excluding salary and agricultural income, it was contended, that
the Central Government office memorandum had been taken into consideration,
which would apply only to people falling in category VI. It was furthermore
submitted that as regards gross annual income, reasons have been assigned by
the Commission. The learned counsel would contend that this Court should not
interfere with the policy decision of the Government and it is presumed to be
aware of the requirements of the people and having regard to the change in
social and economic conditions of people in each State, no accurate assessment
is possible. It was urged that for the purpose of consideration of the criteria
in regard to the persons who should be included in the group of creamy layer,
the question which is required to be posed and answered is as to whether they
have reached the status of the people belonging to the general category. It was
argued that jurisdiction of the court in this behalf is to find out if there is
any evidence in the matter and if there is some evidence, it may not exercise
its jurisdiction. Furthermore, the State had made changes only in regard to
occupation and merely added one community in Schedule B, i.e., Kudumbi community.
Mr. L. Nageshwara Rao, learned senior counsel appearing on behalf of the
impleaded party would adopt the submissions of Mr. Iyer and furthermore submit
that the reference is not bad in law warranting interference by this Court.
It stands admitted that the income limit in terms of the Joseph Committee
Report, which was published in the year 1996, was Rs.1.5 lakhs;
whereas the same according to the Narendran Commission Report, which was
published in the year 2000, should be raised to Rs.3 lakhs. In the year 2004
the Central Government opined that the income limit should be fixed at Rs.2.5
lakhs. The Commission received a vast majority of representations, including
one from the petitioner-Society. The purport and object of the said report
sought for is stated in paragraph 10.4 thereof. According to the Commission,
the only question was as to what criteria should be adopted for identifying the
'creamy layer'. It criticized the Joseph Committee Report in paragraph 11.3 of
its Report observing that the former did not assign any reason nor was there
any justification for making the provision stricter in the matter of exclusion
from 'creamy layer' of backward classes.
It also advocated the change of age from 40 to 35. Although, it noticed that
a few representations have been submitted by the forward classes, the same have
not been dealt with at all. While identifying the backward classes in several
categories, i.e. category Nos. I, II, III, V and VA, the exclusion was recorded
only on the basis of status and not on the basis of annual income. However, in
addition to category No.VI it was stated that in calculating the annual income,
the salary income or income from agriculture would not be taken into account.
No reason, however, has been assigned as to why salary income or income from
agriculture would not be included for determining the category of 'creamy
layer'. The intention of the State Government as revealed from the terms of
reference, i.e., "giving maximum protection" has been taken note of in
paragraph 15.1 of the report. The Committee recommended:
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"Term (b) of the terms of reference:
Only persons of a backward class traditionally engaged in the hereditary
occupation of that backward class will be excluded from Creamy Layer. There
will not be any endblock exclusion of any backward class on the basis of the
hereditary occupation of that backward class.
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Terms of reference (a) & (c) of the
terms of reference :
The gross annual income for exclusion of backward classes as creamy layer is
fixed as Rs.3 lakhs or above.
The scheme of criteria for exclusion as creamy layer is that under
categories I,II,III and VA, the exclusion is on the basis of status and not in
terms of gross annual income. In the case of a category for which the gross
annual income as mentioned in category VI is the criterion income from salary
or income from agricultural holdings should not be taken into account.
On the ground of social backwardness persons traditionally engaged in the
hereditary occupation of all backward classes are excluded from Creamy layer.
On the ground of educational backwardness, all backward classes who have not
successfully completed Lower Primary education are excluded from Creamy layer.
Recruitments to all posts where the salary is paid from the consolidated
fund of the State will be governed by the Principles of reservation for
backward classes.
When there are persons, in the rank list or supplementary list waiting for
appointment nobody temporarily recruited should be allowed to continue to work.
Clear instructions regarding the criteria for exclusion of Creamy Layer
should be issued to the Revenue Authorities. At any rate a Creamy Layer
certificate will have to be issued or refused within ten days of the receipt of
application for the same."
The State, as indicated hereinbefore, by and large accepted the said report
and issued a Government order dated 27.5.2000. However, the recommendations had
not been accepted in toto, but certain modifications have been made therein. It
is in the aforementioned context the correctness of the report of the Narendran
Commission is required to be considered.
At the outset, we may mention that it is not possible for us to dismiss the
writ petition summarily on the ground of lack of locus standi on the part of
the petitioners. It is not disputed that in terms of Kerala State and
Subordinate Services Rules, 1958, although, reservation for backward classes
under the scheme is to be carried out in the following years, even if
thereafter no backward candidates are available, such posts are left unfilled.
Ultimately, the selection would be made on merit. Furthermore, the writ
petition has been filed in public interest. As noticed hereinbefore, the
petitioner-Society has raised this question again and again and had been taking
part in the proceedings before the Narendran Commission. In any view of the
matter, when the question of such grave importance has been brought to the
notice of this Court, having regard to the principle underlying the purport and
object for which the 'creamy layer' was sought to be excluded, this Court
cannot shut its eyes and refuse to determine the question.
It is not in dispute that the Central Government had issued an office
memorandum on 9.3.2004. It is furthermore not in dispute that Joseph Committee
in its report included the income from agricultural income and salary, whereas
in Narendran Commission it excluded the same. It is furthermore not in dispute
that before this Court the State of Kerala did not raise any objection thereto.
The concept of identification of 'creamy layer' came up for consideration in
Indra Sawhney-I and this Court has issued certain directions in this behalf.
Criteria were adopted by the States so as to avoid implementation of this
Court's judgments and thus in Ashoka Kumar Thakur (supra), the criteria laid
down by the State of Bihar and U.P. have been struck down by this Court being
violative of Articles 14 and 16(4) of the Constitution of India. The State of Kerala
did not follow the said direction as a result whereof it was found to be guilty
of contempt of this Court. A stern action thereupon was proposed to be taken up
against the State of Kerala in view of its contemptuous conduct, as is evident
from the order of this Court in Indra Sawhney vs. Union of India & Ors., reported
in (1995) 5 SCC 429. It was in the afore-mentioned backdrop, the legislation
passed by the legislature of Kerala was not only struck down during the
pendency of the proceedings by this Court, a Committee was also directed to be
constituted. We have noticed hereinbefore that the recommendations of the
Joseph Committee were accepted in toto. We have furthermore noticed that the
State, without any demur, accepted the recommendations thereof with
modification by addition of one caste or sub- caste. It is, therefore,
difficult for us to appreciate as to on what basis Narendran Commission was
appointed.
It is, furthermore, difficult for us to comprehend as to on what basis,
while appointing Narendran Commission, in the terms of reference, the State of Kerala
could say that the maximum benefit should be given to a particular section of
people. In view of the decision of this Court in Rama Krishna Dalmia & Ors.
vs. Shri Justice S.R. Tendolkar & Ors. [(1959) SCR 279], it is no longer
res integra that the terms of reference while appointing a commission may be
subject to judicial review. We may also notice the following observations made
in Indra Sawhney-I:
"The very concept of a class denotes a number of persons having certain
common traits which distinguish them from the others. In a backward class under
clause (4) of Article 16, if the connecting link is the social backwardness, it
should broadly be the same in a given class. If some of the members are far too
advanced socially (which in the context, necessarily means economically and,
may also mean educationally) the connecting thread between them and the
remaining class snaps. They would be misfits in the class. After excluding them
alone, would the class be a compact class..."
The observations aforementioned are not to be read in isolation. For the
purpose of construing a judgment, it is well-known that the same must be read
in its entirety. The validity of the terms of reference of the Narendran
Commission and the report submitted by it would, thus, fall for our
consideration not only on the anvil of the aforementioned observations of this
Court but also on reading the judgment in its entirety as also the criteria
laid down in the subsequent judgments. The judgment of this Court in Indra
Sawhney-I clearly lays down that what is necessary is identification of a class
which had never been backward or ceased to be backward during the passage of
time, but it would give rise to a question as to whether in making such
identification the class should be equated with other socially and economically
forward classes. The Central Government or the State Government, evidently, had
not laid down any criteria from that angle. It is, however, beyond any cavil of
doubt that Indra Sawhney-I categorically states that identification of such a
class should be done on a realistic basis.
Maximum protection to the backward classes, in our opinion, was not
contemplated in Indra Sawhney I, Only because observations to the following
effect had been made therein:
"while drawing the line, it should be ensured that it does not result
in taking away with one hand what is given by the other"
It is also relevant to notice that in Indra Sawhney-I this Court directed
both the Central Government as also the States that where reservation in favour
of all the backward classes was already in operation, they should evolve a
suitable criteria within a period of six months and apply the same to the
socially advanced persons/sections from the designated other backward classes.
This Court did not say that maximum protection was to be granted to the
backward classes.
It was expected that the endeavour of the State should have been to evolve a
criterion in tune with the underlying constitutional scheme that the protection
is required to be given only to those who remain socially and educationally
backward and not to those who have ceased to be. Those who are no longer
members of the socially and educationally backward class are not to be
permitted to obtain the benefit of the reservation. Thus, while laying down the
criteria, the State was required to give effect to the underlying principles
envisaged in the constitutional scheme as interpreted in Indra Sawhney-I.
It would be useful to notice a converse case which came up for consideration
before a Constitution Bench of this Court in E.V. Chinnaiah etc. vs. State of
A.P. & Ors. [(2005) 1 SCC 394]. The question therein was as to whether in
view of the provisions of Article 341 of the Constitution of India and the
Constitution (Scheduled Castes) Order, 1950, it was permissible in law to
identify groups amongst Scheduled Castes which itself constitutes a group
within the meaning thereof. This Court negatived such a classification holding:
"It is also difficult to agree with the High Court that for the purpose
of identifying backwardness, a further inquiry can be made by appointing a
commission as to who amongst the members of the Scheduled Castes is more
backward. If benefits of reservation are not percolating to them equitably,
measures should be taken to see that they are given such adequate or additional
training so as to enable them to compete with the others but the same would not
mean that in the process of rationalising the reservation to the Scheduled
Castes the constitutional mandate of Articles 14, 15 and 16 could be
violated."
Therein, noticing Indra Sawhney-I, it was observed:
"Jeevan Reddy, J. incidentally who wrote the majority judgment in Indra
Sawhney made a reference to his judgment in V. Narayana Rao v. State of A.P
wherein the learned Judge opined: (AIR pp.95-96, para 94) "94. ... Article
15(4) or Article 16(4) are not designed to achieve abolition of caste system
much less to remove the meanness or other evils in the society. They are
designed to provide opportunities in education, services and other fields to
raise the educational, social and economic levels of those lagging behind, and
once this is achieved, these articles must be deemed to have served their
purpose. If so, excluding those who have already attained such economic well-being
(interlinked as it is with social and educational advancement) from the special
benefits provided under these clauses cannot be called unreasonable or
discriminatory or arbitrary much less contrary to the intention of the Founding
Fathers. It can be reasonably presumed that these people have ceased to be
socially if not educationally backward and hence do not require the
preferential treatment contemplated by Articles 15(4) and 16(4).
Moreover, in the face of the repeated pronouncements of the Supreme Court
referred to above, these arguments cannot be countenanced.
Not only it does not amount to creating a class within a class, it is a
proper delineation of classes."
Those observations were confined to backward classes and not SCs and STs.
The learned Judge in Indra Sawhney also stuck to the said view.
The impugned Act as also the judgment of the High Court are premised on the
observations in Indra Sawhney that there is no constitutional or legal bar for
a State in categorising the backward classes as backward and more backward
class. This Court, however, while referring to Article 16(4) of the
Constitution stated that it recognised only one class viz. backward class of
citizens in the following terms: (SCC p. 716, para 781) "781. At the outset,
we may state that for the purpose of this discussion, we keep aside the
Scheduled Tribes and Scheduled Castes (since they are admittedly included
within the backward classes), except to remark that backward classes
contemplated by Article 16(4) do comprise some castes for it cannot be denied
that Scheduled Castes include quite a few castes."
It is trite that those, who have reached the status of general category,
cannot be permitted to defeat the purport and object of the concept of 'creamy
layer' as the idea of creamy layer was conceptualized on that philosophy. It is
also trite that the State can also lay down a legislative policy as regards the
extent of reservation to be made for different members of the backward class,
provided they remain as such.
Even legislations based on equity must answer the tests of the equality
clauses contained in Articles 14 and 16 of the Constitution of India. Article
14 of the Constitution of India enjoins upon the State not to deny to any
person 'equality before law' or 'equal protection of laws' within the territory
of India. The two expressions although do not lead to the same conclusion, we
may notice that Section 1 of the XIV Amendment to the U.S.
Constitution uses only the latter expression whereas the Irish Constitution
(1937) and the West German Constitution (1949) use the expression "equal
before law" alone. Both these expressions are used together in the
Universal Declaration of Human Rights, 1948, Article 7 whereof says "All
are equal before the law and are entitled without any discrimination to equal
protection of the law." The said expressions are of great significance.
Equality before law is a dynamic concept having many facets. Despite Article 38
of the Constitution of India, the courts are bound to interpret a law which
seeks to achieve the said purpose not only on the anvil of the Articles 14 and
16 but also having regard to the international law. We, however, do not mean to
say that international law shall ipso facto be applied for interpretation of
our domestic laws but then relevance thereof, we reiterate, in a grey area,
cannot be lost sight of.
It was, thus, imperative on the part of the State to evolve such guidelines
which would be commensurate with the following observations of this Court in
Ashoka Kumar Thakur's case (supra) :
"It is difficult to accept that in India where the per capita national
income is Rs.6929 (1993-94), a person who is a member of the IAS and a
professional who is earning less than Rs.10 lakhs per annum is socially and
educationally backward. We are of the view that the criteria laid down by the
States of Bihar and Uttar Pradesh for identifying the "creamy layer"
on the face of it is arbitrary and has to be rejected."
The terms of reference in the afore-mentioned premise, in our considered
opinion, should be held to be bad in law.
We have noticed hereinbefore that in the impugned Government Order,
categories of persons to whom the rule of inclusion would apply on the basis
that they form part of the 'creamy layer' among the backward classes, are said
to be as under:
Category I:
Constitutional Posts Sons and daughters of persons holding constitutional
posts such as President, Vice President, Judges of the Supreme Court and the
High Courts, Chairman and Members of UPSC, State Public Service Commissions,
etc.
Category II:
Service Category Sons and daughters of parents, either or both of whom are
Class I officers (e.g., IAS officers) or Class II officers or officers of
public sector undertakings subject to certain exceptions including cases where
one or both of the parents die or suffer permanent incapacity.
Category III:
Armed or Paramilitary Forces Sons and daughters of parents in the rank of
Colonel or equivalent in the Army, Navy, Air Force, Paramilitary Forces, again
subject to certain exceptions.
Category IV:
Professionals & those engaged in Trade and Industry Subject to the
income limit specified in Category VI:
Includes doctors, lawyers, chartered accountants, etc., as well as those
engaged in trade, business and industry.
Category V:
Property Owners Includes agricultural holdings, plantations and vacant land
and/or buildings in urban areas. In the case of plantations and urban areas. In
the case of plantations and urban land, the income limit specified in Category
VI will apply.
Category VI:
Income/Wealth test Sons and daughters of persons having gross annual income
over Rs.1 lakh or possessing wealth above the exemption limit as prescribed in
the Wealth Tax Act.
Categories I, II and III afore-mentioned are excluded on the basis of the
status held by the persons concerned. Category IV is subject to the income
limit specified in Category VI. We may, at this stage, however, state that we
do not find any merit in the submission of Mr. Venugopal that bringing down the
age limit from 40 to 35, vis-`-vis, the Office Memorandum issued by the Central
Government fixing age limit as 40 is bad in law in view of the fact that age of
superannuation of the employees in the State of Kerala is 55, as compared to
the age of superannuation of the Central Government employee is 60.
So far as the income/wealth test is concerned, the same has been considered
in Indra Sawhney-II. We would refer to the findings of this Court a little
later, but indisputably, it is of some importance. In the Joseph Committee
report the actual increases in the Consumer Price Index was considered in a
scientific manner and it was noticed from the "Economic Review 1996"
published by the Government that the Central Government has specified the
income limit in its Office Memorandum from Rs.1 lakh in 1993 to Rs.1.50 lakhs
in 1997. We have hereinbefore noticed how Narendran Commission sat in appeal
over the Joseph Committee report despite the fact that the same has been
accepted in toto by this Court. It did not assign any reason to justify its
stand as to on what basis the income limit of Rs.1.5 lakhs fixed by the Joseph
Committee in 1997 was doubled to Rs.3 lakhs within a period of three years;
particularly, in view of the fact that even the Central Government, having
regard to the rate of inflation prevailing throughout the country in 2004, came
to the conclusion that the income limit should be raised upto 2.5 lakhs.
In Indra Sawhney-I, while applying the "means-test" and
"creamy- layer test", it was opined:
"'Means-test' in this discussion signifies imposition of an income
limit, for the purpose of excluding persons (from the backward class) whose
income is above the said limit. This submission is very often referred to as
the "creamy layer" argument. Petitioners submit that some members of
the designated backward classes are highly advanced socially as well as
economically and educationally. It is submitted that they constitute the
forward section of that particular backward class as forward as any other
forward class member and that they are lapping up all the benefits of
reservations meant for that class, without allowing the benefits to reach the
truly backward members of that class. These persons are by no means backward
and with them a class cannot be treated as backward. It is pointed out that
since Jayasree [K.S. Jayasree vs. State of Kerala (1976) 3 SCC 730] almost
every decision has accepted the validity of this submission.
On the other hand, the learned counsel for the States of Bihar, Tamil Nadu,
Kerala and other counsel for respondents strongly oppose any such distinction.
It is submitted that once a class is identified as a backward class after
applying the relevant criteria including the economic one, it is not
permissible to apply the economic criteria once again and sub-divide a backward
class into two sub-categories. Counsel for the State of Tamil Nadu submitted
further that at one stage (in July 1979) the State of Tamil Nadu did indeed
prescribe such an income limit but had to delete it in view of the practical
difficulties encountered and also in view of the representations received. In
this behalf, the learned counsel invited our attention to Chapter 7-H (pages 60
to 62) of the Ambashankar Commission (Tamil Nadu Second Backward Classes
Commission) Report. According to the respondents the argument of 'creamy layer'
is but a mere ruse, a trick, to deprive the backward classes of the benefit of
reservations. It is submitted that no member of backward class has come forward
with this plea and that it ill becomes the members of forward classes to raise
this point."
Referring to K.C. Vasanth Kumar vs. State of Karnataka [(1985) Supp. SCC
714], it was opined :
"In our opinion, it is not a question of permissibility or desirability
of such test but one of proper and more appropriate identification of a class a
backward class. The very concept of a class denotes a number of persons having
certain common traits which distinguish them from the others. In a backward
class under clause (4) of Article 16, if the connecting link is the social
backwardness, it should broadly be the same in a given class. If some of the
members are far too advanced socially (which in the context, necessarily means
economically and, may also mean educationally) the connecting thread between
them and the remaining class snaps. They would be misfits in the class. After
excluding them alone, would the class be a compact class. In fact, such
exclusion benefits the truly backward.
Difficulty, however, really lies in drawing the line how and where to draw
the line? For, while drawing the line, it should be ensured that it does not
result in taking away with one hand what is given by the other. The basis of
exclusion should not merely be economic, unless, of course, the economic advancement
is so high that it necessarily means social advancement. Let us illustrate the
point. A member of backward class, say a member of carpenter caste, goes to
Middle East and works there as a carpenter. If you take his annual income in
rupees, it would be fairly high from the Indian standard. Is he to be excluded
from the Backward Class? Are his children in India to be deprived of the
benefit of Article 16(4)? Situation may, however, be different, if he rises so
high economically as to become say a factory owner himself. In such a
situation, his social status also rises.
He himself would be in a position to provide employment to others. In such a
case, his income is merely a measure of his social status. Even otherwise there
are several practical difficulties too in imposing an income ceiling.
For example, annual income of Rs. 36,000 may not count for much in a city
like Bombay, Delhi or Calcutta whereas it may be a handsome income in rural
India anywhere. The line to be drawn must be a realistic one.
Another question would be, should such a line be uniform for the entire
country or a given State or should it differ from rural to urban areas and so
on. Further, income from agriculture may be difficult to assess and, therefore,
in the case of agriculturists, the line may have to be drawn with reference to
the extent of holding.
While the income of a person can be taken as a measure of his social
advancement, the limit to be prescribed should not be such as to result in
taking away with one hand what is given with the other. The income limit must
be such as to mean and signify social advancement. At the same time, it must be
recognised that there are certain positions, the occupants of which can be
treated as socially advanced without any further enquiry. For example, if a
member of a designated backward class becomes a member of IAS or IPS or any
other All India Service, his status is society (social status) rises; he is no
longer socially disadvantaged. His children get full opportunity to realise
their potential. They are in no way handicapped in the race of life. His salary
is also such that he is above want. It is but logical that in such a situation,
his children are not given the benefit of reservation. For by giving them the
benefit of reservation, other disadvantaged members of that backward class may
be deprived of that benefit. It is then argued for the respondents that 'one
swallow doesn't make the summer', and that merely because a few members of a
caste or class become socially advanced, the class/caste as such does not cease
to be backward. It is pointed out that clause (4) of Article 16 aims at group
backwardness and not individual backwardness. While we agree that clause (4)
aims at group backwardness, we feel that exclusion of such socially advanced
members will make the 'class' a truly backward class and would more
appropriately serve the purpose and object of clause (4). (This discussion is
confined to Other Backward Classes only and has no relevance in the case of
Scheduled Tribes and Scheduled Castes).
Keeping in mind all these considerations, we direct the Government of India
to specify the basis of exclusion whether on the basis of income, extent of
holding or otherwise of 'creamy layer'. This shall be done as early as
possible, but not exceeding four months. On such specification persons falling
within the net of exclusionary rule shall cease to be the members of the Other
Backward Classes (covered by the expression 'backward class of citizens') for
the purpose of Article 16(4). The impugned Office Memorandums dated August 13,
1990 and September 25, 1991 shall be implemented subject only to such
specification and exclusion of socially advanced persons from the backward
classes contemplated by the said O.M. In other words, after the expiry of four
months from today, the implementation of the said O.M. shall be subject to the
exclusion of the 'creamy layer' in accordance with the criteria to be specified
by the Government of India and not otherwise."
In Indra Sawhney-II, it was further observed:
"As appears from the judgments of six out of the eight Judges, viz.
Jeevan Reddy (for himself and three others), Sawant and Sahai, JJ. (i.e. six
learned Judges out of nine), - they specifically refer to those in higher
services like IAS, IPS and All India Services or near about as persons who have
reached a higher level of social advancement and economic status and therefore
as a matter of law, such persons are declared not entitled to be treated as
backward. They are to be treated as creamy layer "without further
inquiry". Likewise, persons living in sufficient affluence who are able to
provide employment to others are to be treated as having reached a higher
social status on account of their affluence, and therefore outside the backward
class. Those holding higher levels of agricultural landholdings or getting
income from property, beyond a limit, have to be excluded from the backward
classes. This, in our opinion, is a judicial "declaration" made by
this Court."
[See also W.B. Freedom Fighters' Organisation vs. Union of India (2004) 7
SCC 716, at 721 (para 16)] In Indra Sawhney-II , "Means test" and
"creamy-layer test" were held to be beyond the domain of the State
but evidently in relation to the backward classes, the same is applicable.
Keeping in view the legal history, as also the directions made by this Court
in a series of judgments referred to hereinbefore, it was obligatory on the
part of the Narendran Commission to consider seriously that aspect of the
matter. In any event the same could not have been ignored.
While fixing the income limit, although a State is entitled to take into
consideration the level of literacy, the village income, the rise of living
index and other relevant factors into consideration, it should not have
accepted a report of the Committee which did not proceed scientifically,
particularly, having regard to the constitutional scheme as explained by the
Court in the judgments referred to hereinbefore.
We, therefore, do not find any justification for fixing the income limit at
Rs.3 lakhs. We may furthermore place on record our displeasure as to the manner
in which Joseph Committee report received severe criticism by the Narendran
Committee, most of which were wholly unwarranted. The tests adopted by the
Joseph Committee could not have been given a complete go- by the Narendran
Commission. The findings of a Commission in respect of a matter of such grave
significance and importance should have been based on scientific data as also
evidence of experts. If Government tends to consider without adequate data and
inquiry, a stage would come when the whole system of reservation will become
farcical and negation of constitutional provisions. Hence, before arriving at
the final conclusion, it should have noticed the rate of inflation and other
relevant factors.
Economic growth of a country, as a result of the village income of citizens
of India, keep on changing, although while determining an issue as to whether
persons who have attained economic sufficiency so as not to furthermore
describe them as economically backward, is required to be taken into
consideration.
So far as exclusion of salary and agricultural income is concerned, it is
true that the Central Government has accepted the same and the sanction of the
Central Government has also been accepted by this Court, but we should also
notice that the report of the Joseph Committee had also been accepted by this
Court. It is not for us, at this stage, to render our final opinion in this
matter as to whether preference should be given to Joseph Committee or
Narendran Commission, but there is no reason as to why a successor committee,
without any just and cogent reason, ignored the recommendations of the former
committee.
Equality clauses contained in Articles 14, 15 and 16 of the Constitution of
India may in certain situations constitute the heart and soul of the
Constitution of India. When a law is patently arbitrary, such infringement of
the equality clause contained in Article 14 or Article 16 would be violative of
the equality clause of the Constitution. {See Waman Rao vs. Union of India
[(1981) 2 SCC 362], Maharao Saheb Shri Bhim Singhji, etc. vs. Union of India
& Ors. [AIR 1981 SC 234] and Minerva Mills Ltd. & Ors. vs. Union of
India & Ors. [(1980) 3 SCC 625].} It is interesting to note that in Mithu
v. State of Punjab [AIR 1983 SC 473] Section 303 of the Indian Penal Code was
struck down as unconstitutional invoking the equality clause contained in
Article 14 of the Constitution of India. A statute professing division amongst
citizens, subject to Articles 15 and 16 of the Constitution of India may be
considered to be a suspect legislation. A suspect legislation must pass the
test of strict scrutiny.
Articles 15(4) and Article 16(4) profess to bring the socially and educationally
backward people to the forefront. Only for the purpose of invoking equality
clause, the makers of the Constitution thought of protective discrimination and
affirmative action. Such recourse to protective discrimination and affirmative
action had been thought of to do away with social disparities. So long as
social disparities among groups of people are patent and one class of citizens
in spite of best efforts cannot effectively avail equality of opportunity due
to social and economic handicaps, the policy of affirmative action must receive
the approval of the constitutional courts. For the said purpose, however, the
conditions precedent laid down therefor in the Constitution must be held to be
sine qua non. Thus, affirmative action in essence and spirit involves
classification of people as backward class of citizens and those who are not
backward class of citizens.
A group of persons although are not as such backward or have by passage of
time ceased to backward would come within the purview of the creamy layer
doctrine evolved by this court. The court by evolving said doctrine intended to
lay a law that in terms of our constitutional scheme no group of persons should
be held to be more equal than the other group. In relation to the minorities, a
11-Judge Bench of this Court in T.M.A. Pai Foundation vs.
State of Karnataka [(2002) 8 SCC 481] categorically held that protection is
required to be given to the minority so as to apply the equality clauses to
them vis-`-vis the majority. In Islamic Academy of Education vs. State of
Karnataka [(2003) 6 SCC 697], it was opined that the minority have more rights
than the majority. To the said extent Islamic Academy of Education (supra) was
overruled by a 7-Judge Bench of this Court in P.A. Inamdar vs.
State of Maharashtra [(2005) 6 SCC 537]. An executive action or a
legislative Act should be commensurate, in our opinion, with the aforementioned
dicta laid down by this Court in Indra Sawhney-I (supra) and followed in Ashoka
Kumar Thakur (supra) and Indra Sawhney-II (supra).
In Secretary, State of Karnataka & Ors. vs. Umadevi (3) & Ors.
[(2006) 4 SCC 1], a Constitution Bench of this Court has stated the law in
the following terms :
"11. In addition to the equality clause represented by Article 14 of
the Constitution, Article 16 has specifically provided for equality of
opportunity in matters of public employment. Buttressing these fundamental
rights, Article 309 provides that subject to the provisions of the
Constitution, Acts of the legislature may regulate the recruitment and
conditions of service of persons appointed to public services and posts in
connection with the affairs of the Union or of a State. In view of the
interpretation placed on Article 12 of the Constitution by this Court,
obviously, these principles also govern the instrumentalities that come within
the purview of Article 12 of the Constitution. With a view to make the
procedure for selection fair, the Constitution by Article 315 has also created
a Public Service Commission for the Union and the Public Service Commissions
for the States. Article 320 deals with the functions of the Public Service
Commissions and mandates consultation with the Commission on all matters
relating to methods of recruitment to civil services and for civil posts and other
related matters. As a part of the affirmative action recognised by Article 16
of the Constitution, Article 335 provides for special consideration in the
matter of claims of the members of the Scheduled Castes and Scheduled Tribes
for employment. The States have made Acts, rules or regulations for
implementing the above constitutional guarantees and any recruitment to the
service in the State or in the Union is governed by such Acts, rules and
regulations. The Constitution does not envisage any employment outside this
constitutional scheme and without following the requirements set down therein.
It was furthermore held :
-
"Thus, it is clear that adherence to the rule of equality in public
employment is a basic feature of our Constitution and since the rule of law is
the core of our Constitution, a court would certainly be disabled from passing
an order upholding a violation of Article 14 or in ordering the overlooking of
the need to comply with the requirements of Article 14 read with Article 16 of
the Constitution"
Yet again it was stated :
"The rule of law compels the State to make appointments as envisaged by
the Constitution and in the manner we have indicated earlier. In most of these
cases, no doubt, the employees had worked for some length of time but this has
also been brought about by the pendency of proceedings in tribunals and courts
initiated at the instance of the employees. Moreover, accepting an argument of
this nature would mean that the State would be permitted to perpetuate an illegality
in the matter of public employment and that would be a negation of the
constitutional scheme adopted by us, the people of India.
It is therefore not possible to accept the argument that there must be a
direction to make permanent all the persons employed on daily wages. When the
court is approached for relief by way of a writ, the court has necessarily to
ask itself whether the person before it had any legal right to be enforced.
Considered in the light of the very clear constitutional scheme, it cannot be
said that the employees have been able to establish a legal right to be made
permanent even though they have never been appointed in terms of the relevant
rules or in adherence of Articles 14 and 16 of the Constitution."
Recently, a Constitution Bench of this Court in M.Nagaraj and Ors. v.
Union of India and Ors. [(2006) 8 SCC 212] has reaffirmed the importance of
the creamy layer principle in the scheme of equality under the constitution.
This Court held that the creamy layer principle was on of the important limits
on state power under the Equality Clause enshrined under Articles 14 and 16 and
any violation or dilution of the same would render the state action invalid.
More precisely this Court held:
"As stated above, the boundaries of the width of the power, namely, the
ceiling-limit of 50% (the numerical benchmark), the principle of creamy layer,
the compelling reasons, namely, backwardness, inadequacy of representation and
the overall administrative efficiency are not obliterated by the impugned
amendments. At the appropriate time, we have to consider the law as enacted by
various States providing for reservation if challenged. At that time we have to
see whether limitations on the exercise of power are violated.
The State is free to exercise its discretion of providing for reservation
subject to limitation, namely, that there must exist compelling reasons of
backwardness, inadequacy of representation in a class of post(s) keeping in
mind the overall administrative efficiency. It is made clear that even if the
State has reasons to make reservation, as stated above, if the impugned law
violates any of the above substantive limits on the width of the power the same
would be liable to be set aside."
This Court reiterated the limit on state power imposed by the creamy layer
rule and the invalidity of any state action in violation of the same by
concluding as follows:
"We reiterate that the ceiling-limit of 50%, the concept of creamy
layer and the compelling reasons, namely, backwardness, inadequacy of
representation and overall administrative efficiency are all constitutional
requirements without which the structure of equality of opportunity in Article
16 would collapse.
However, in this case, as stated, the main issue concerns the "extent
of reservation". In this regard the concerned State will have to show in
each case the existence of the compelling reasons, namely, backwardness,
inadequacy of representation and overall administrative efficiency before
making provision for reservation. As stated above, the impugned provision is an
enabling provision. The State is not bound to make reservation for SC/ST in
matter of promotions. However if they wish to exercise their discretion and
make such provision, the State has to collect quantifiable data showing
backwardness of the class and inadequacy of representation of that class in
public employment in addition to compliance of Article 335. It is made clear
that even if the State has compelling reasons, as stated above, the State will
have to see that its reservation provision does not lead to excessiveness so as
to breach the ceiling-limit of 50% or obliterate the creamy layer or extend the
reservation indefinitely."
This Court rationalized the creamy layer rule as a necessary bargain between
the competing ends of caste based reservations and the principle of secularism.
The Court opined:
"In Indra Sawhney this Court has, therefore, accepted caste as
determinant of backwardness and yet it has struck a balance with the principle
of secularism which is the basic feature of the Constitution by bringing in the
concept of creamy layer."
This Court, thus, has categorically laid down the law that determination of
creamy layer is a part of the constitutional scheme.
Constitutional provisions are required to be construed harmoniously.
It is difficult for us to accept the submission of Mr. Iyer that this Court
should not exercise its power of judicial review. What should be the criteria
for achieving the constitutional goal set out by the founding fathers, not only
involves interpretation of constitutional provisions, but being the subject
matter of decisions by this Court, it will be improper for us to refuse to
undertake judicial exercise in such matters. The level of scrutiny would be
more intrinsic than the doctrine of Wednesbury unreasonableness. In terms of
Article 141 of the Constitution of India, the declaration of law made by this
Court is binding on all courts, a' fortiori such directions would also be
binding on all authorities. Article 142 empowers this Court to pass such order
as is necessary to do complete justice to any cause or matter pending before it
and Article 144 enjoins all authorities, civil and judicial, to act in aid of
the Supreme Court.
Interpretation and application of constitutional law particularly, in regard
to the equality clause contained in Article 14 to Article 16 of the
Constitution, have never been limited by this Court. If a measure tends to
perpetuate inequality and makes the goal of equality a mirage, such measure
should not receive the approval of the Court. {See Islamic Academy of Education
(supra)} Directions have been issued by this Court in a number of cases where
the question involves greater public interest or public good, including
enforcement of fundamental rights. The Court never hesitates to express its
opinion on the interpretation of the Constitution despite political thicket.
{See Anil Kumar Jha vs. Union of India & Ors. reported in (2005) 3 SCC 150,
Rameshwar Prasad (IV) & Ors. vs. Union of India &
Anr. reported in (2005) 7 SCC 157, W.B. Freedom Fighters' Organisation
(supra) and Bombay Dyeing & Mfg. Co. Ltd. vs. Bombay Environmental Action
Group & Ors. reported in 2006 (3) SCC 434].} This Court has repeatedly held
that under Article 144, the state was bound to act strictly in terms of the
decisions of this Court and even, it has reservation about some of its
directions, it could approach this Court and could not have acted otherwise.
However, the question, which arise for consideration is as to what relief
could be granted by this Court.
Nothing has been brought on record to show that the paragraph 2(1)(c) of
G.O. dated 27th May, 2000 had been given a go-by.
The State did not accept even the Narendran Commission report in its
entirety. Although, as noticed hereinbefore, Mr. Iyer submitted that the
benefit would be granted only to those persons who are engaged in hereditary
occupation and not to them who are not so engaged, the State, however, states
that there would be no restriction as proposed by the Commission for exclusion
from the 'creamy layer' of backward class with hereditary occupations, i.e,
black smiths and gold smiths should be engaged in such occupations. If the
State has not made any amendment, it is eminently fit and proper that an
amendment or clarification should be issued in this behalf inasmuch as even if
a person is otherwise excluded by reason of holding a constitutional post or
otherwise, he may still claim the benefit being a descendent of a person whose
predecessors, being a member of the backward class, had hereditary occupation
like black smith or gold smith etc.
Accordingly, notification dated 27th May, 2000 being merely for notification
of general public and the guidelines issued for the concerned officers, it is
necessary that the State should amend the guidelines also.
In this view of the matter, although while setting aside the report of the
Narendran Commission, we direct the State to appoint a fresh Commission who
should go into all these aspects of the matter and submit its report.
The writ petition is allowed with the aforementioned directions and
observations. We, however, for the present do not intend to pass any order on
the contempt petitions. They shall remain pending.
No costs.
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