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CASE NO.: Appeal (civil)  3430 of 2006

PETITIONER: Atyant Pichhara Barg Chhatra Sangh & Anr

RESPONDENT: Jharkhand State Vaishya Federation & Ors

DATE OF JUDGMENT: 08/08/2006

BENCH: Dr. AR. Lakshmanan & Lokeshwar Singh Panta

JUDGMENT: J U D G M E N T (@ S.L.P.(C) No. 23559 of 2003)

Dr. AR. Lakshmanan, J.

       Leave granted.

       The above appeal is directed against the impugned  common final judgment and order dated 16.8.2003 of the  Division Bench of the High Court of Judicature at Jharkhand,  Ranchi  passed in L.P.A. No.176 of 2003, whereby the High  Court allowed the said appeal  of respondent No.1 \026  Jharkhand State Vaishya Federation and set aside the  common judgment and order dated 3.3.2003 of the learned  single Judge of the High Court and thus upheld the validity of  Resolution No. 5800 dated 10.10.2002 of the State  Government and thus affirmed the decision of the State  Government to amalgamate the two classes i.e. Extremely  Backward Class and Backward Class and the reduction of  reservation from 12% and 9% respectively to 14% only for the  purpose of admission in professional educational institutions. This appeal raises important questions of law with  respect to reservation in professional educational institutions  for the Extremely Backward Classes in the State of  Jharkhand.  The State of  Jharkhand had given 73%  reservation for appointments in Government services adopting  the Bihar (Scheduled Castes, Scheduled Tribes and Backward  Classes) Reservation Act (Bihar Act No. 3 of 1992) with certain  modifications vide Notification No. 3465 of  2001 issued on  3.10.2001.  Similarly through Notification No. 3884 of 2001  issued on 5.11.2001, there were four specific categories that  were entitled to reservation in professional/technical colleges: Scheduled Caste                 -               14% Scheduled Tribe                 -               32% Extremely Backward Classes      -               18% Backward Classes                        -               09% Total                                   -               73%       

The process of reservations to 73% was challenged before  the High Court of Jharkhand on the  ground that it was ultra  vires the Constitution in a number of writ petitions.  Keeping  in mind the fact that a similar petition was pending before this  Court (VOICE vs. State of Tamil Nadu \026 S.L.P.(C) No. 13526 of  1993), the Full Bench of the High Court deferred the hearing  to await the judgment of this Court.  But as an interim  measure, the High Court on 22.8.2002 reduced the  reservation to 50% with specific directions to be given that any

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appointment to Government service made in the open category  would be subject to the decision of this Court and also  directed that the same reservations would mutatis mutandis  apply to reservation in educational institutions as well.   The  Court clarified this order on 30.9.2002 which reads as under: "The appointments thus to be made in the said  50% categories(as would now correspondingly stand  reduced from 73% to 50%) shall, be on  proportionate basis, with due reference and regard  being had to the percentage of the categories as  constituted the sum-total of the original impugned  73%."   

Accordingly, the State of Jharkhand issued Notification  No. 5800 of 2002 on 10.10.2002 superseding  the  earlier  Notification of 5.11.2001 whereby quotas were reduced to 50%  in consonance with the High Court’s orders.   This action by the Government  through Notification No.  5800 of 2002 dated 10.10.2002 of amalgamating two classes  namely, Backward Classes and Extremely Backward Classes  was challenged by the appellants before the High Court of  Jharkhand through W.P.(C) Nos. 6220, 6332 and 6545 of  2002. The learned single Judge quashed the Notification.  On  appeal by the State, the Division Bench allowed the appeal.   In response to a number of writ petitions (W.P.Nos.  3696/2002, 4706/2001, 4637/2001 etc.) challenging the  validity of 73% reservations with respect to appointments, Full  Bench of the High Court through an interim order mandated  that the reservation should be limited to only 50% and that  the reduction should be done on a proportionate basis with  due reference and regard being had to the percentage of  categories as constituted the sum total of the impugned order.   It also noted that the observations would mutatis mutandis  apply to the admission process. This order of Full Bench ( Five  Judges) is marked as Annexure P-2.   On a petition seeking clarification of the said order at the  instance of the State of Jharkhand, the High Court made  modifications whereby it clarified that it would be open to the  State to fix appropriate percentage quotas with respect to each  individual, class and category, as it may objectively and fairly  decide, constituting the sum total of 50%  (Annexure P-3).   Resolution contained in Memo No. 5 - Reservation- 03/2001-5800/Ranchi  was  issued by the State Government  superceding the earlier Notification of 5.11.2001 whereby  quotas were reduced to 50% in consonance with the High  Court orders.  But the quotas were now fixed amalgamating  the categories of Backward Classes and Extremely Backward  Classes in the following manner: Scheduled Caste         -               10% Scheduled Tribe         -               26% Other Backward Category -               14% Total                           -               50%

Writ Petition No. 6220 of 2002 was filed by the appellant  herein in the High Court of Jharkhand at Ranchi challenging  the validity of the Government’s Resolution contained in Memo  No. 5800/2002 which did not fix the quotas in terms of the  order of the Full Bench of the High Court but amalgamated  the Backward Classes and Extremely Backward Classes  quotas and provided consolidated reservation.   The learned single Judge by his judgment and order  dated 3.3.2003 allowed the writ petitions and came to the  conclusion that the original Resolution No. 3884/Ranchi dated  5.11.2001 being still in existence so far as it relates to the  "Reserved Categories", the respondents cannot club together

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the Extremely Backward Category and Backward Category for  the purpose of interim arrangement.  Consequently, he set  aside Resolution No. 5800/Ranchi dated 10.10.2002 to the  extent it clubbed together the Extremely Backward Category  and Backward Category.  The matter was remitted to the State  to determine separately as to what will be the percentage of  Extremely Backward Category and Backward Category for the  purpose of interim arrangement and for admission in  professional/technical and equivalent training. The Court also  took note of the fact that the High Court on earlier occasion,  had merely brought down the percentage of reservation and it  did not permit the State to club together one or other category  or interfere with the reservation given in favour of the  Extremely Backward Category. Being aggrieved, the State Government filed L.P.A. No.  237 of 2003 and the Intervenor-Jharkhand State Vaishya  Federation filed L.P.A. No. 176 of 2003 with the leave of the  Court against the common judgment and order of the learned  single Judge in W.P.(C) No. 6332 & 6220 of 2002 respectively.   However, no appeal was preferred against the said judgment  and order of the learned single Judge passed in W.P.(C) No.  6545 of 2003 and the said judgment and order was allowed to  become final. The Division Bench of the High Court by its final  judgment and order allowed the appeals and set aside the  judgment and order of the learned single Judge and thus  upheld the validity of Resolution No. 5800 dated 10.10.2002 of  the State Government and thus affirmed the decision of the  State Government to amalgamate the two classes i.e.  Extremely Backward Classes and Backward Classes and the  reduction of percentage of reservation from 18% and 9%  respectively to 14% only. The Division Bench came to the conclusion that even  though, a sub-categorization of a particular category may not  be interfered with by the Court, the Court cannot direct that  the State should make a sub-categorization of a reserved  category, that was really a matter of policy.  It also came to the  conclusion that the earlier order of the Full Bench cannot be  understood as confined to altering the proportion and not the  category or as preventing it bringing together two categories  into one common category.  It further came to the conclusion  that Resolution No. 5800 dated 10.10.2002 passed by the  Government cannot be called in question either on the ground  that it is beyond the power of the Government generally or on  the ground that it is against the terms of the interim order of  the Full Bench as modified.  In view of the aforesaid  conclusion, it also set aside the direction of the learned single  Judge remitting the matter to the State Government to  determine separately the percentage of seats for the Extremely  Backward Categories and Backward Categories. Aggrieved by the said order, the above appeal is filed by  way of special leave before this Court. We heard Dr. Rajeev Dhawan, learned senior counsel  assisted by Mr. Lakshmi Raman Singh, learned counsel  appearing for the appellants and Mr. Anil K. Jha, learned  counsel appearing for the respondents. We have gone through the papers, records and  documents placed before us including the order impugned in  this appeal and also the order passed by the Full Bench of the  High Court.  Dr. Rajeev Dhawan, learned senior counsel  appearing for the appellants, submitted that the Government  was not justified in ordering amalgamation of two classes i.e.  Extremely Backward Classes and Backward Classes based on  different sets of relevant materials and also ordering  amalgamation without there being any study, data and

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materials to justify the amalgamation and, therefore, the  decision of the Government is vitiated on account of non- consideration of the relevant facts and materials and  consideration of irrelevant materials.  He further contended  that the decision of the State Government to amalgamate two  classes does suffer from the vice of discrimination as the two  unequals have been treated as equals and thus two different  classes of people have been treated as similar. Our attention was drawn to Notification No. 5800 of 2002  dated 10.10.2002 passed by the State of Jharkhand which,  according to the learned senior counsel, was not in terms of  the order of the Full Bench of the High Court dated 22.8.2002  read with the clarificatory order dated 30.9.2002 which was  passed during the pendency of the writ petitions before the  Full Bench.  It was further submitted that the Division Bench  ought to have noticed that after being given Statehood, the  State of Jharkhand had specifically adopted the Bihar Act and  also issued Notifications giving 73% reservation to four  categories, but in the gap of a year after the High Court orders,  the State had issued Notification amalgamating the categories  of Extremely Backward Classes and Backward Classes into  one without application of mind and without taking into  account all the relevant facts which have got an important  bearing on the issue.  Our attention was also drawn to the  decision of this Court in the case of Mandal Commission,  Indira Sawhney & Ors. Vs. Union of India & Ors.,  1992  Supp(3) SCC 217.  Our attention was drawn to certain  passages in the said judgment. Mr. Anil K. Jha, learned counsel appearing for the  respondents, submitted that the State Government  superseded the earlier Resolution No. 3884 dated 5.11.2001  regarding extension of reservation in admission in specified  professional and technical institutions and issued a fresh  Resolution No. 5800 dated 10.1.2002 in its place to make it  consistent with the directions of the High Court and that in  accordance with the directions of the High Court. It was  further contended that no separate percentage was fixed for  Backward Classes and Extremely Backward Classes and the  same was done after careful application of mind and due  deliberation by the highest policy making body of the  Government i.e., the Council of Ministers and that the decision  was taken in view of the fact that the categorization of other  Backward Classes between Extremely Backward Classes and  Backward Classes was done by the undivided Government of  Bihar and was not found exactly relevant in the context of the  State of Jharkhand.  It was contended that this new policy of  the State Government of allocating reservation of other  Backward Classes as one block is also similar to and  consistent with the policy of the Central Government in this  regard. We have given our thoughtful consideration to the rival  submissions made by the learned counsel appearing for either  side. In our opinion, the Division Bench did not appreciate  that the Full Bench had given the Government the limited  liberty to bring down the percentage of reservation from 73%  to 50% for an interim purpose and did not give any direction  with respect to the amalgamation of categories.  In our  opinion, the amalgamation of two classes of people for  reservation would be unreasonable as two different classes are  treated similarly which is in violation of the mandate of Article  14 of the Constitution of India which is to "treat similar  similarly and to treat different differently."   It is well settled  that to treat unequals as equals also violates Article 14 of the  Constitution.  

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The State has failed to show any new circumstances  except for a bald statement that the same was done after  careful application of mind and due deliberation by the highest  policy making body i.e., the Council of Ministers.  There are no  materials or empirical data to indicate that the circumstances  had been changed and the State has not undertaken any  study, research or work.  In such circumstances to merely  suggest that the council of Ministers had applied their minds  and had reached a decision is arbitrary and unreasonable. Mandal Commission’s decision(supra) has specifically  noted that there is no constitutional bar to a state categorizing  the backward classes as backward and more backward class.   State of Jharkhand by its actions seeks to disempower  communities that have been extended the benefits of  reservation after a conscious adoption of the Bihar Act.  What  the G.O. 5800 seeks to do by combining the Extremely  Backward Class and Backward Class into one group is to treat  unequals as equals thus violating the notion of substantive  equality and Article 14 of the Constitution of India bringing it  within the purview of judicial review by Court. It is also to be noticed that while the Bihar Act applied  only to the appointment to posts in services, it had been  extended to the admissions in educational institutions in the  State by the operation of the Court’s order dated 22.8.2002  which enabled the mutatis mutandis application of the  reservations in employment to educational institutions as well.    Mandal Commission’s case notes that the actions of the  State Government while including or excluding classes to the  List is subject to the judicial review.  Paragraphs 229 and 422  of the judgment of the Mandal Commission note that a  community that has been included in the List can be taken  out only after the State has reached a conclusion that the  community is adequately represented in the services of the  State.  Paragaphs 229 and 422 of the Mandal Commission’s  decision are as under:

"229\005\005There cannot be any controversy indeed there  is none - that the Government which is certainly interested  in the maintenance of standards of its administration,  possesses and retains its soverign authority to adopt general  regulatory measures within the constitutional framework by  reviewing any of its schemes or policies. The interval of the  period at which the review is to be held is within the  authority and discretion of the Government, but of course  subject to the constitutional parametres and well settled  principles of judicial review. Therefore, it is for the  Government to review the lists at any point of time and take  a decision for the exclusion of any pseudo community or  caste smuggled into the backward class or for inclusion of  any other community which in the opinion of the  Government suffers from social backwardness."

"422.   Under the Constitution, the reservations in  employment in favour of backward classes are not intended  either to be indiscriminate or permanent. Article 16(4) which  provides for reservations, also at the same time prescribes  their limits and conditions. In the first place, the  reservations are not to be kept in favour of every backward  class of citizens. It is only that backward class of citizens  which, in the opinion of the State, is "not adequately  represented" in the services under the State, which is  entitled to the benefit of the reservations. Secondly, and this  follows from the first, even that backward class of citizens  would cease to be the beneficiary of the reservation policy,

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the moment the State comes to the conclusion that it is  adequately represented in the services."

This apart, Mandal Commission’s case went on to note  the importance of setting up of a Backward Commission.  It  was observed by this Court in Paragraph 847 as under:

"We are of the considered view that there ought to be a  permanent body, in the nature of a Commission or Tribunal,  to which complaints of wrong inclusion or non-inclusion of  groups, classes and sections in the lists of Other Backward  Classes can be made. Such body must be empowered to  examine complaints of the said nature and pass appropriate  orders. Its advice/opinion should ordinarily be binding upon  the Government. Where, however, the Government does not  agree with its recommendation, it must record its reasons  therefor. Even if any new class/group is proposed to be  included among the other backward classes, such matter  must also be referred to the said body in the first instance  and action taken on the basis of its recommendation. The  body must be composed of experts in the field, both official  and non-official, and must be vested with the necessary  powers to make a proper and effective inquiry. It is equally  desirable that each State constitutes such a body, which  step would go a long way in redressing genuine grievances.  Such a body can be created under Clause (4) of Article 16  itself - or under Article 16(4) read with Article 340 - as a  concomitant of the power to identify and specify backward  class of citizens, in whose favour reservations are to be  provided. We direct that such a body be constituted both at  Central level and at the level of the States within four  months from today. They should become immediately  operational and be in a position to entertain and examine  forthwith complaints and matters of the nature  aforementioned, if any, received. It should be open to the  Government of India and the respective State Governments  to devise the procedure to be followed by such body. The  body or bodies so created can also be consulted in the  matter of periodic revision of lists of O.B.Cs. As suggested by  Chandrachud, CJ. in Vasant Kumar, there should be a  periodic revision of these lists to exclude those who have  ceased to be backward or for inclusion of new classes, as the  case may be."          The communities which are included in the List of  Backward Classes and most Backward Classes have been  receiving the benefit of reservation after a conscious adoption  of the Bihar legislation and categorization by the State of  Jharkhand.  To say that there has been a complete change in  their circumstances in two years so as to exclude them from  their special status without any reference to the Backward  Castes Commission or a Special Commission which has been  specifically appointed for the purpose would be in violation of  the guidelines laid down in the Mandal Commission’s case.   Such a stand has been taken by the Andhra Pradesh High  Court in a Muslim reservation’s case, T. Murlidhar Rao vs. State  of Andhra Pradesh, W.P.M.P.No. 15546 of 2004 in W.P.No.12239  of 2004  which has noted that consultation with the  Commission is a mandatory requirement.   It was argued by the learned counsel appearing for the  respondents that the Central Government is following the  policy of clubbing the Extremely Backward Classes with the  Backward Classes.  In our opinion, it does not justify  Jharkhand following the same policy.  Jharkhand Government  will look into the facts and circumstances that are peculiar to it

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by appointing an Expert Commission or a Body as has been  provided for in the Mandal Commission’s case which can  inquire into the representations/complaints made over under- inclusion and over-inclusion and make binding  recommendations.    As rightly pointed out by the learned  senior counsel appearing for the appellants, the Division Bench  failed to notice that the Government did not provide any  material on record which would have justified amalgamation of   the two classes of people nor were any documents, relevant  materials or any reports produced to show a change in  circumstances as was alleged by the Government.  Before  taking the decision to amalgamate two classes, the relevant  factors were not taken into account.  In fact, the specific  reservation for Extremely Backward Classes had been granted  on the recommendation of the Backward Commission headed  by Shri Mungeri Lal constituted for the said purpose.  The said  Committee before making recommendation to make reservation  separately for Backward Classes and Extremely Backward  Classes had kept in mind the economic and social situation as  also the necessity for separate reservation.  The  recommendation is based after a detailed survey.  On the other  hand, when the amalgamation of the categories took place,  there were no material or empirical data to indicate that the  circumstances had been changed other than a mere bald  statement to the effect.  It is settled law that even policy  matters have to be tested at the touchstone of arbitrariness  and that the present policy is discriminatory and arbitrary.  As  already noticed, the State of Jharkhand has specifically  adopted the Bihar Act and also issued Notifications giving 73%  reservation to four categories.  This apart, the Full Bench had  allowed the State Government only the liberty to reduce the  percentage of reservation and not the categories or classes to  whom the reservation could be extended to.   For the aforesaid reasons, we hold that the order dated  16.8.2003  passed by the Division Bench in L.P.A. No. 176 of  2003 is set aside and the matter is remitted to the State  Government for undertaking a deep study and research by a  special Committee of Experts constituted for the purpose or by  appointing an Expert Commission headed by a Retired High  Court Judge or body as has been provided for in the Mandal  Commission’s case to enquire into the  recommendations/complaints made over under-inclusion and  over-inclusion and make binding recommendations.  The State  Government is directed to constitute an Expert Commission of  a Body within three months from the date of the receipt of this  order. In the result, the appeal is allowed and the order dated  16.8.2003 passed in L.P.A. No.176 of 2003 is set aside.   However, there shall be no order as to costs.