TMI Blog1999 (12) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... s guilty of contempt but gave a further opportunity to the state to purge the contempt and adjourned the matter to 11.9.1995. It was made clear that if the directions of this Court were not complied with, the Chief Secretary would 'run the risk of being sentenced'. Having sought time for years to appoint a Commission, the Kerala Legislature then suddenly came forward with the Kerala State Backward Classes (Reservation of Appointments or Posts in the Services under the State) Act, 1995 which, in Section 3 declared that having regard to known facts in existence in the State of Kerala, that there are no socially advanced sections in any Backward Classes who have acquired capacity to compete with forward classes and that the Backward classes in the State were not adequately represented in the services under the State and they would continue to be entitled to reservation under Clause (4) of Article 16 of the Constitution. The provisions of Section 4 continued the existing system of reservation which was in force as per Rules made in 1958 and Section 6 was incorporated as a validating section with retrospective effect. On the ground that the provisions of this Act of 1995 wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this Court by various parties to the said report and that is how the matter has come before us. 4. We do not propose just now to decide the further course of action in the suo motu contempt proceedings in which the State of Kerala represented by its Chief Secretary was held guilty of contempt and was given time to purge the contempt. We make it clear that that issue is kept pending and matter will be processed later, on the basis of the judgment in this case and the directions which we propose to issue at the end of this judgment. 5 . We have heard arguments of Sri Gopal Subramaniam, learned senior counsel as Amicus Curiae and of Sri K.K. Venugopal, learned senior counsel who contended that the Kerala Act 16/95 was unconstitutional and violative of Articles 14 and 16(1) and 16(4). We heard Sri P.Krishna Moorthi, learned senior counsel for the State of Kerala and Sri Rajeev Dhawan, learned senior counsel for the SNDP Yogam, Sri A.N. Rajan Babu, Sri EMS Anam, Ms. Lilly Thomas and Sri V.J. Francis and others who contended that the Act was a valid piece of legislation. Sri K.N. Raval, Additional Solicitor General stated that the Central Government stood by the O.M. already i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be for a backward class citizen of a particular caste. Therefore, from that caste, creamy layer and nonbackward class of citizens are to be excluded. If the caste is to be taken into consideration then for finding out socially and economically backward class, creamy layer of the caste is to be eliminated for granting benefit of reservation, because that creamy layer cannot be termed as socially and economically backward. These questions are exhaustively dealt with by a nine Judge Bench of this Court in Indira Sawhney v. Union of India [1992] Suppl. 3 SCC 217, and it has been specially held that 'only caste' cannot be the basis for reservation. 9 . Inclusion of castes in the list of Backward classes cannot be mechanical and cannot be done without adequate relevant data. Nor can it be done for extraneous reasons. Care should be taken that the forward castes do not get included in the backward castes list. In Indira Sawhney, Pandian, J. observed (para 174 SCC) that before a conclusion is drawn that a caste is backward or is inadequately represented in the services, the existence of circumstances relevant to the formation of opinions is a sine qua non. If the opinion suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to castes among, and alongwith, other groups, classes and sections of people. One can start process with the castes, wherever they are found, apply the criteria (evolved for determining backwardness) and find out whether it satisfies the criteria. If it does what emerges is a backward class of citizens within the meaning of and for the purposes of Article 16(4). Similar process can be adopted in the case of other occupational groups, communities and classes, so as to cover the entire populace. The central idea and overall objective should be to consider all available groups, sections and classes in society. Since caste represents an existing, identifiable social group class encompassing an overwhelming majority of the country's population, one can well begin with it and then go to other groups, sections and classes. 12. Court further considered in Paragraph 800 and held as under: ...while answering Question 3(b), we said that identification of backward classes can be done with reference to castes along with g other occupational groups, communities and classes. We did not say that that is the only permissible method. Indeed, there may be some groups or cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s among the backward classes who are highly advanced, socially and educationally and they constitute the forward section of that community. These advanced sections do not belong to the true backward class. They are as forward as any other forward class member (para 790). 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 (para 792). The learned Judge said: After excluding them alone, would the class be a compact class. In fact, such exclusion benefits the truly backward. 19 . A line has to be drawn, said the learned Judge, between the forward in the backward and the rest of the backward but it is to be ensured that what is given with one hand is not taken away by the other. The basis of exclusion of the creamy layer must not be merely economic, unless economic advancement is so high that it necessarily means social advancement, such as where a member becomes owner of a factory and is himself able to give employment to others. In such a case, his income is a measure of his soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. (Para 860, sub para 5). The socially advanced persons must be excluded, (para 861 (b)). That is how Jeevan Reddy, J. summarised the position. 20. Sawant, J. too accepted (para 553 of SCC) that at least some individuals E and families in the backward classes, however small in number gain sufficient means to develop capacities to compete' with others in every field. That is an undeniable fact. Social advancement is to be judged by the 'capacity to compete' with forward castes, achieved by the members or sections of the backward classes. Legally, therefore, these persons or sections who reached that level are not entitled any longer to be called as part of the backward class whatever their original birthmark. Taking out these forwards from the backwards is 'obligatory' as these persons have crossed the Rubicon (para 553-554). On the crucial question as to what is meant by capacity to compete , the learned Judge explained (para 522) that if a person moves from Class IV service to Class III, that is no indication that he has reached such a stage of social advancement but if the person has successfully competed for higher level posts or at least ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons 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 land holdings 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. 25. The submission of Sri Rajeev Dhawan for the S.N.D.P. Yogam that the above separate judgments contain mere illustrations and do not contain any declaration of law cannot, in our opinion, be accepted. Counsel also relied upon observations in the judgment of Jeevan Reddy, J. to the effect that in such a big country as ours, norms may differ from State to State or from region to region. In our view, those observations do not detract from the declaration of law that the above sections belong to the creamy layer and hence are to be kept outside the backward class. We may add that some more categories of persons who c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and exclusion of creamy layer. 27 . So far as the directions in Indira Sawhney are concerned, they are that the Central and State Governments are obliged to create separate bodies which will identify the creamy layer in the backward classes within a time frame. Point 1 is decided accordingly. POINT 2 and 3: These two points are crucial to the case. Under these points, we shall now deal with the validity of the Kerala Act (Act 16/95). (i) Equals and unequals, twin aspects: As the 'creamy layer' in the backward class is to be treated on par with the forward classes and is not entitled to benefits of reservation, it is obvious that if the 'creamy layer' is not excluded, there will be discrimination and violation of Articles 14 and 16(1) inasmuch as equals (forwards and creamy layer of backward classes) cannot be treated unequally. Again, non-exclusion of creamy layer will also be violative of Articles 14, 16(1) and 16(4) of the Constitution of India since unequals (the creamy layer) cannot be treated as equals that is to say, equal to the rest of the backward class. These twin aspects of discrimination are specifically elucidated in the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll necessarily strike down such a law as violative of principle of separation of powers and of Articles 14, 16(1) and Article 16(4). (iii) Ashok Kumar Thakur a case of unrealistic elimination but Central Government's O.M, dated 8.9.93 approved: 30. Such a case of unrealistic elimination of creamy layer came up before this Court from Bihar and Uttar Pradesh and we shall refer to the same. This happened in Ashok Kumar Thakur v. State of Bihar and Ors. AIR1996SC75 , already referred to. There the position was that unrealistically high levels of income or holding or other conditions were prescribed by the Legislatures of Bihar and Uttar Pradesh under the Bihar Reservation of vacancies in Posts and Services (Amendment) Ordinance, 1995 (5 of 1995) and Schedule II read with Section 3(b) of the U.P. Public Services Reservation for Schedules Castes and Scheduled Tribes and other Backward Classes Act, 1994 (Act 4 of 1994) G respectively. In that case, so far as Bihar was concerned, Schedule III (except Clause I), of the Bihar Ordinance and so far as UP was concerned, Schedule II read with Section 3(b) of the U.P. Act were therefore quashed by this Court, on the ground of discrimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonably high limits or other norms fixed by the Bihar and U.P. Legislatures were contrary to the guidelines laid down by this Court in Mandal Case as they would not result in the elimination of the creamy layer. It was pointed out that the conditions laid down by the States of Bihar and U.P. had no nexus with the object sought to be achieved. Since the conditions were not severable, the criteria laid down in each of the legislations as a whole were struck down. The Court held: (see para 17) 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. The Court observed that the States of Bihar and Uttar Pradesh had acted in a wholly arbitrary fashion and in utter violation of the law laid down in Mandal case. However, the principle of prospective overruling was invoked. The States were directed to lay down fresh criteria and till then it was dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any court or other authority having regard to the social and educational backwardness of the Backward Classes of citizens, the system of reservations as in force on the date of commencement of this Act, as laid down in Rules 14 to 17 of Part II of the Kerala State and Subordinate Services Rules, 1958, in appointments and posts in the services under the State for the Backward Classes of citizens shall continue as such, for the present. (5) Additional function of the Commission : The Commission shall, in addition to the functions already conferred under the Kerala State Commission for Backward Classes Act, 1993 (11 of 1993) evaluate from time to time the degree of backwardness of the Backward Classes, and shall submit periodical reports to the Legislative Assembly of the State. (6) Validation-Notwithstanding anything contained in any judgment, decree or order of any court or other authority the reservation of appointments or posts in the services under the State for the Backward Classes of citizens made, on the basis of the system of reservation as laid down in Rules 14 to 17 of Part II of the Kerala State and Subordinate Services Rules, 1958, shall, for all purpose, be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinue with full force. In effect no creamy layer was identified. As per Sub-clause (a) of Section 3 of the Act it was declared that in view of known facts , the Legislature was of the view that no section of any backward class in the State of Kerala who had acquired capacity to compete with forward classes . As per Clause (b), it was stated that Backward Classes were not still adequately represented in the public services of the State. Section 4, therefore, continued the 1958 scenario of Backward Classes without excluding the creamy layer and Section 6 spoke of retrospective validation. (vi) Legislative declaration of facts is amenable to scrutiny by Court: 35 . Before we go into the validity of Sub-clause (a) and (b) of Section 3, it is necessary to find out if the legislative declaration of known facts in Section 3 of the Act is amenable to judicial scrutiny. 36. It is now fairly well settled, that legislative declarations of facts are not beyond judicial scrutiny in the Constitutional context of Articles 14 and 16. In Keshavananda Bharati v. State of Kerala AIR1973SC1461 , the question arose - in the context of legislative declarations made for purposes of Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Kerala State. 39. But Aldous Huxley said: Facts do not cease to exist because they are ignored. (A Note on Dogmas) The words in Sub-clause (a) of Section 3 are obviously drawn from the judgment of Sawant, J. in Indira Sawhney which refers to capacity to compete with forward classes . 40 . We shall, therefore, have to examine whether the legislative declaration in Section 3 of the Act that there is, in effect, no creamy layer in the State of Kerala is one made by ignoring facts which do exist. We shall now refer to various facts and circumstances as they exist to disprove the statement made in Section 3 of the Act: (a) The Kerala State initially requested this Court for extension of time to appoint a Commission to identify the creamy layer. It, in fact, created a statutory Commission by Kerala Act 11 of 1993 and asked the said Commission constituted under that Act to go into the above question. The Commission, it is true, refused to go into this question stating that it had no jurisdiction to go into the said question under that Act. (b) Again, even as late as 8.7.95, the State of Kerala did feel the need to identify the 'creamy layer' and it appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and, in fact, to have reached such a level of social advancement that they cease to belong to the backward class. The judgment also refers to a classification of affluent sections identified by way of income or property holding. (f) Further, in Ashok Kumar Thakur it was held as a matter of law that certain broad categories mentioned in the O.M. of the Central Govt. dated 8.9.93 belong to the creamy layer. There was no answer from the State of Kerala as to why the same categories as mentioned in Indira Sawhney or those mentioned in the O.M., as approved in Ashok Kumar Thakur could not be declared as creamy layer, subject to any realistic modification of the income or holding levels, if need be. It was not the case of the State before us that these categories, which form the vertical divisions of the backward classes, (as pointed out under point 1) were non-existent so far as Kerala State was concerned. It was not also its case that such a class of persons would not be existent in future in the Backward Classes of the State. 42. If the Kerala Government and the Kerala Legislature meant in their declaration in Sub-clause (a) of Section 3 that there was, in effect, no 'cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and in Ashok Kumar Thakur. It is, therefore, violative of Articles 14 and 16(1) of the Constitution of India. Sub-clause (a) of Section 3 is, therefore, declared unconstitutional. (viii) Sub-clause (b) of Section 3: Inadequate representation: Section 3(b) mixes up two different concepts: 46. Sub-clause (b) of Section 3 states that there is no adequate representation of the backward classes in the services of the State of Kerala. This is given as a reason for not excluding the creamy layer. 47. In our view, the Kerala Act has mixed up two different concepts in this E Subclause (b) of Section 3. Article 16(4), it will be seen, is an enabling provision which permits the State to provide reservation for Backward Classes if, in the opinion of the State, such reservation is felt necessary and if there is inadequate representation. Ajit Singh II v. State of Punjab AIR1999SC3471 . Lack of adequate representation of a particular backward class may be a factor for consideration by the State for providing reservation. But, the said factor cannot be the sole ground for continuance of the creamy layer in that backward class. The first step no doubt is the identification of the backwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific constitutional provision in relation to the need for maintenance of 'efficiency of administration' so far as backward classes are concerned (such as the special provision in Article 335 in the case of Schedule castes and Schedule Tribes). But such a principle of efficiency of administration is, in our opinion, equally paramount and is implied in Articles 14 and 16 of the Constitution even so far as backward classes are concerned. In Indira Sawhney, Sawant pointed out (para 434 of SCC) that while Article 16(4) is an enabling provision, Article 335 is in mandatory language. Further though there is no specific provision in regard to Backward Classes, the same principle underlying Article 335 is applicable to Backward Classes. Sawant, J. stated (para 434 of SCC): It cannot, however, be doubted that the same considerations will have to prevail while making provisions for reservations in favour of backward classes under Article 16(4). To hold otherwise would not only be irrational but discriminatory between two classes of backward citizens. i.e., Scheduled Castes/Scheduled Tribes and other Backward Classes. The mere inadequate representation of a particular backward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The crucial words of the section are: having regard to the social and educational backwardness of the backward classes in the State of Kerala - as in force on the date of the commencement of the Act (i.e. 2.10.1992). 59. Now, backward classes have been defined in the Act as those referred to in Section 2(b) of the Act. That definition in its turn takes us to the enumeration of Backward Classes made in 1958 in List III of Schedule to part I of the Kerala State and Subordinate Services Rules, 1958 framed under the proviso to Article 309 of the Constitution. In other words, Section 4 provides for the continuance of reservation for the Backward Classes as they stood in 1958 ignoring the directives of this Court in 1992 in Indira Sawhney for exclusion of creamy layer'. 60. If indeed such continuance, as specified in Section 4, of these Backward Classes together with the creamy layer as was in existence in 1958 is based upon the Legislative declaration in Section 3, - then once Section 3 is declared unconstitutional, Section 4 too falls to the ground. If, on the other hand, we assume that Section 3 is not the basis of Section 4, then the continuance of the 1958 scenario or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut with a view to relieve any hardship, we propose to issue certain directions under Point 4 and 5. Our decision on points 2 and 3 will be subject to what we propose to direct under point 5 and 6. 65. Points 2 and 3 are decided accordingly. 66. Point 4: 67. Article 14: (and Article 16 which is a facet of it) is part of the basic structure of the Constitution of India: 68. The preamble to the Constitution of India emphasises the principle of equality as basic to our constitution. In Keshavananda Bharati v. State of Kerala AIR1973SC1461 , it was ruled that even constitutional amendments which offended the basic structure of the Constitution would be ultra vires the basic structure. Sikri, CJ. laid stress on the basic features enumerated in the preamble to the Constitution and said that there were other basic features too which could be gathered from the Constitutional scheme (para 506 A of SCC). Equality was one of the basic features referred to in the Preamble to our Constitution. Shelat and Grover, JJ. also referred to the basic rights referred to in the Preamble. They specifically referred to equality (paras 520 and 535A of SCC). Hegde Shelat, JJ. also referred to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved 596 representations/suggestions till 15.1.97 by the due date and 177 representations after the due date. Most of the parties before us had represented before the said Committee. The State of Kerala did not file any representation before the High Level Committee, though a request was made on 13.1.97 to permit it to give suggestions. The State Government placed the report of the subject's Committee before the High Level Committee and the said Committee went into the provisions of the Bill which led to the 1995 Act. The Subjects-Committee of the Legislature and other Committees and the organisations which contended that there was no creamy layer in the Backward Classes in the State relied mostly upon Section 3 of the 1995 Act. Organisations which contended that there was a creamy layer pointed out that the declaration made in Section 3 of the Act was contrary to existing facts and that the Government and the Legislature had no material before them to declare that there was no creamy layer in the State of Kerala nor to say that no section of any Backward Classes reached a successful level of competition with forward classes . 72. We shall initially refer to part I of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Level Committee all these groups in schools and colleges contained backward classes candidates. Statistics in Engineering and Medical Colleges and Nursing were also given. 76 . Thereafter, the Committee referred to the Central Government's O.M. dated 8.9.93 in para 22F (i) and to Ashok Kumar Thakur. In para 22F (v), it was said that as in the said O.M, so in Kerala, the rule of exclusion of creamy layer was not to be applied to Artisans or those engaged in hereditary occupations, callings like potters, washermen, barbers etc. The list of such occupations prepared by the Kerala Artisans Development Corporation Ltd. was accepted. Persons traditionally engaged in fishing operations were also excluded in para 22F (vii). The Committee referred in para 28 to various principles settled in Indira Sawhney. 77. The Committee considered the O.M. dated 8.9.93 as directed by this Court in its order. The Committee held that increase in cost of living index between 1992 when Indira Sawhney was decided and the position in 1996 was to be kept in mind. There was an increase of 39.06% in the index it was stated. The increase in consumer price index was also considered and it was held in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Former Chief Ministers and former Council of Ministers as well. These in all, are in 19 categories. Then conies the Service category, and the Central pattern is followed, referring to Parents both or either being in Group I and Group B posts; reference is made to those in Armed forces and Para Military forces at various higher levels; Professional Classes and Trade and Industry were then referred to as follows: persons coming within wealth/means/income group prescribed in category VI, apart from their social status as prescribed in the respective professions. and contain sub-categories in paras (i) to (vi). Income level is fixed at ₹ 1.50 lakhs gross for individuals and ₹ 20 lakhs for company and trusts in an year. Societies and Chief Executives/Chair persons of Cooperative Societies are also included, income of society fixed at ₹ 20 lakhs per annum. Category 5 deals with property owners -(A) Agriculture holding of 5 hectares or more for cardamom or coconut plantation/cultivation and 4 hectares for persons/ family having rubber or coffee plantation (B) refer to vacant land as in category VI. 'Family' includes husband and wife and minor children. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t we have said under Points 1, 2 and 3. In fact, we may make it very clear that no objection of any substance was placed before us by any counsel to contend that the guidelines or norms fixed by the High Level Committee were wrong. Arguments of a very general nature saying that creamy layer ought not be excluded, were advanced. We, therefore, hold that there is nothing in the objections filed by the parties which requires to be specifically dealt with. 83. In the result, we accept the Justice Joseph Committee's Report in toto subject to the addition of communities and sub-castes as pointed out in the affidavit of the State dated 16.1.98, referred to above. 84. The next question is as to the further directions that we have to give: 85. When the State was found guilty of deliberately violating orders of this Court and the order was kept in abeyance and subsequently, legislation was passed by-passing all norms of reasonableness, should we allow the State to go scot-free or should we punish the perhaps innocent candidates who between the date of judgment in Indira Sawhney and today had got appointments even though they belonged to the creamy layer? Is there no way of punis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligatory to implement the Report, as so modified, in the Government Departments of Kerala / Organisations/ Institutions/Public Sector Undertakings/Government owned Companies/Co-operative Societies/ Autonomous Bodies , as stated in the Report, wherever the principles of reservation embodied in Article 16(4) or Rules 14 to 17 of Part II of the Kerala State and subordinate Service Rules, 1958 are applicable. It shall be necessary for the candidates belonging to the Backward Classes to file the certificates as envisaged in the Report and satisfy the employer that he or she does not belong to the creamy layer. The income limits and property holdings as mentioned in the Schedule to the said Report will be applicable from today. The exclusion of certain occupations/communities etc., shall however be as specified in the Report. Any violation of this direction will make the appointment or selection made on or after this day, unconstitutional. 89. It is made clear that any infraction of this direction will be treated seriously and this Court will also not hesitate to take further fresh action for contempt of Court, if need be. (2) We are of the view that it will be appropriate to al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt is that the really backward among the backward classes have been deliberately deprived by the State, - of their legitimate right to these posts which would have otherwise obviously gone to them. To us it appears to be rather anomalous that while the Governments declare endlessly that they will see to it that benefits of reservations really reach the needy among the backwards-the very action of the Governments both on the executive side and on the legislative side, deliberately refusing to exclude the creamy layer and in indiscriminately including more castes in the backward classes list are leading to a serious erosion of the reservation programme. The sudden Cabinet decision of the State of Kerala not to appoint a Commission to identify the creamy layer as promised but to pass the impugned law was nothing but an attempt to perpetuate the creamy layer and allow it to knock away the benefits of reservation. Such a decision appears to us to have been taken because the real backwards obviously have no voice in that decision making process. 93. Unfortunately today, as a matter of political expediency, Governments tend to knowingly violate the Rule of law and the Constitution and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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