Punjab and Haryana High Court: In a bunch of petitions challenging the vires and constitutionality of ‘The Haryana State Employment of Local Candidates Act, 2020’ (‘2020 Act’) claimed to be in violation of part III of the Constitution of India, the Division Bench of G.S. Sandhawalia* and Harpreet Kaur Jeewan, JJ. held that the 2020 Act providing 75% quota for Haryana residents in private sector jobs was ultra vires of the Constitution of India.
Factual Background
The petitioners’ Association was stated to be duly registered under the Haryana Registration & Regulation of Societies Act, 2012 comprising of allottees of industrial plots/sites at Industrial Model Township, Tehsil Manesar, District Gurugram who were carrying on their industrial and business activities in Haryana. They claimed that the 2020 Act provides reservation in private employment and creates an unprecedented intrusion by the State Government into the fundamental rights of the private employers to carry on their business and trade as provided under Article 19 of Constitution of India. The said restrictions were alleged to be unreasonable, manifestly arbitrary, capricious, excessive, uncalled for and in violation of principles of natural justice, equality, liberty and fraternity laid down under the preamble to Constitution, infringing Article 14 of the Constitution as against the citizens’ right to equal employment, to reside and to settle in the State of Haryana.
It was further alleged that ‘a fundamental wedge is sought to be created between persons domiciled in different States by the Statue in question which is contrary to the concept of common citizenship provided in the Constitution of India.’ It was further alleged that the State lacked the legislative competence to pass the same since the same was in the central legislature’s domain, fell foul of Article 246 of the Constitution.
Haryana’s 75% Domicile Quota Law
The said Act was stayed by the High Court vide order dated 3-02-2022 keeping note of the issue that whether any State could restrict employment, even in the private sector, based on domicile. When the matter was taken to the Supreme Court, on 17-02-2022, it was directed to expeditiously decide the matter stating that the legislation being under challenge without any reasons, the stay could not have been granted. The State of Haryana was restricted from taking any coercive steps against the employers respecting the argument that they would face immense hardship for not being able to employ anybody outside the State from the date of commencement of the 2020 Act.
Court’s Consideration of Haryana 75% Reservation in Private Sector Jobs
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Maintainability of Writ Petition for the Act particularly challenged by an association of persons claiming violation of fundamental rights under Part-III of Constitution.
The Court pointed out that not only association of persons but an individual running a small business also challenged the vires of the Act amongst the bunch of petitions followed by another individual and clarified its bounden duty to decide the constitutionality of the provisions of 2020 Act on merits. The Court cited 11-Judge Bench decision in Rustom Cavasjee Cooper (Banks Nationalisation) v. Union of India, (1970) 1 SCC 248, Bennett Coleman & Co. v. Union of India, (1972) 2 SCC 788 and D.C.M. v. Union of India, (1983) 4 SCC 166 to press upon maintainability of writ petitions when individual’s and rights of a company were on stake. The Court viewed that it was not for the State to raise objection that the association of persons could not claim violation of the fundamental rights. The Court also disregarded the argument regarding already existing conditions in the allotment of industrial plots to the extent of 75% to local persons since violation of terms and conditions of allotment letters was not the issue of concern in the instant matter and did not bar the Court from examining validity of the statute surrounding fundamental rights of citizens. Therefore, the Court decided the issue of maintainability in favour of the petitioners.
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State’s power to legislate on the matter in view of specific bar under Article 35 of Constitution of India and its scope under Entry 81 of the Union List.
Regarding argument surrounding use of the word ‘migrant’ in the Statement of Objects and Reasons, the Court went on to peruse Article 35 of the Constitution reflecting specific bar on State to legislate on matters under Article 16(3), batting for equality under public employment, only allowing Parliament to legislate. While acknowledging the same to be concerned with public employment, the Court highlighted the bar mandated under the Constitution as against discriminating citizens for employment based on their places of birth and residence, making them ineligible or discriminated against in respect of State employments. The Court supported reliance on A.V.S. Narasimha Rao v. State of A.P., (1969) 1 SCC 839 holding Section 3 of the Public Employment (Requirement as to Residence) Act, 1957 to be ultra vires the Constitution of India. It went on to refer to K.S. Puttaswamy (Privacy-9J.) v. Union of India, (2017) 10 SCC 1 regarding a person’s freedom to choose place of residence and right to locomotion.
The Court supported the argument that “India is one integral whole and it is an indestructible unit but had only been divided into different States for the convenience of administration and it was embodied as a country of one purpose and of people living under single imperium without any dual citizenship like in the United States of America. The single imperium was derived from a single source which was keeping the nation together and the Constitution alive. If the territory was divided, the people would be divided, the States would start to draft their own constitutions.” The Court accepted petitioners’ contention that the underlying object of the 2020 Act was to create an artificial gap and a discrimination qua the citizens of India., stemmed on the fact that there was a large number of migrants taking up jobs of local candidates, attempting to justify 75% reservation. The Court observed that “the powers of the State legislature cannot be to the detriment to the national interest, and they cannot be directly encroaching upon the power of the Union. The invasion into the territory of another is to be determined by the pith and substance of the legislation.”
While dealing with the concept of residence and domicile, the Court relied on Saurabh Chaudri v. Union of India, (2003) 11 SCC 146 and commented that “It can, thus, be called a manifestation of the discriminatory policy that you are not one of us and, therefore, not eligible for employment.” It further referred to Tata Power Co. Ltd. v. Reliance Energy Ltd., (2009) 16 SCC 659 and State of T.N. v. K. Shyam Sunder, (2011) 8 SCC 737 to justify Court’s power to look into objects and reasons of an enactment to infer the intent of the legislature. The Court decided the issue in petitioners’ favour and opined that it was beyond the purview of the State legislature to legislate on the said issue and restrict private employers from recruiting from the open market.
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State’s power to provide legislation for private employers to do something forbidden under the Constitution.
The Court perused Articles 19(1)(d), 19(1)(e) and 19(1)(g) of the Constitution and went on to refer to M. Nagaraj v. Union of India, (2006) 8 SCC 212 regarding standards of judicial review of constitutional amendments to make it flexible. It went on to express that “The Constitution itself could not be used legally to destroy itself as the State was attempting to destroy the precious heritage of this nation and the identity of the Constitution of India has to be protected. The consequences of its denial on the integrity had to be kept in mind while applying the principles of constitutional morality.” It refuted a legislative mandamus as being sought through the 2020 Act against the foundational promises of the Constitution turning a blind eye to non-residents of Haryana, who could not be treated as secondary citizens and highlighted the act of State directing private parties to do what itself was barred from doing as per the Constitution.
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Whether the legislation provides reasonable restrictions in the public interest and gives the State any right under Article 19(5) and 19(6) of the Constitution to justify the same?
While following the decision in Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225, Maneka Gandhi v. Union of India, (1978) 1 SCC 248 and Minerva Mills Ltd. v. Union of India, (1980) 3 SCC 625 to hold that the structure of the 2020 Act would be violative of Article 19 imposing unreasonable restrictions on right to move freely throughout the territory of India or to reside and settle in any part, and even the right to carry on trade, business, industry or service. Therefore, the Court opined that the restrictions imposed through the 2020 Act have far reaching effect and cannot be held to be reasonable in any manner, thereby deciding the issue in petitioners’ favour.
Conclusion
The Court allowed the instant writ petitions and concluded that “The Haryana State Employment of Local Candidates Act, 2020 is held to be unconstitutional and violative of Part III of the Constitution of India and is accordingly held ultravires the same and is ineffective from the date it came into force.”
[IMT Industrial Association v. State of Haryana, 2023 SCC OnLine P&H 2867, decided on 17-11-2023]
Judgment by: Justice G.S. Sandhawalia
Advocates who appeared in this case :
For Petitioners: Senior Advocate Anupam Gupta, Advocate Bhavnik Mehta, Advocate Gautam Pathania, Advocate Sukhpal Singh, Advocate Tushar Sharma, Senior Advocate Akshay Bhan, Advocate Amandeep Singh Talwar, Advocate Hiresh Choudhary, Advocate Surbhi Sharma, Advocate Ivan Khosa, Advocate Shivam Grover, Advocate Harsh Vasu Gupta, Advocate Siddharth Dias, Advocate Gursher Bhandel
For Respondents: Senior Advocate Puneet Bali, Additional AG of Haryana Jagbir Malik, Advocate Shivam Sharma, Advocate Uday Agnihotri, Additional Solicitor General of India Satya Pal Jain, Advocate Dheeraj Jain, Senior Panel Counsel for Union of India Gurmeet Kaur Gill
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