Petitioner

How can State Government force private companies to adopt its reservation policy in jobs?

How can such discriminatory, regressive and reprehensible law be thrust forcefully on all the employers in the
private establishment?

Whether the laws passed by state governments reserving the jobs in favour of domiciles
in the private sector are just, fair, and reasonable. 

Whether the classification of domiciles is based on intelligible differentia and whether there is a rational
nexus between the classification and the object of the law.

in 1957, the Public Employment (Requirement as to Residence) Act 1957 was passed to repeal all existing
laws prescribing any requirement of residence within a state for public employment. Further, we ought not to be
oblivious of the glaring fact that Article 16(2) of the Constitution in particular specifically prohibits any
discrimination based on place of birth or residence in matters of public employment.

the Supreme Court has held convincingly that reservation in employment based solely on domicile is violative
of Article 14 (equality before law) and Article 16(2) of the Constitution. The Apex Court had rightly held that
domicile in itself does not provide any valid or reasonable classification for providing reservation.

As for instance, we saw how in Kailash Chand Sharma vs. State of Rajasthan (2002), AIR 2002 SC 2877,
the Supreme Court declared the appointment of government teachers in Rajasthan where the state gave
preference to applicants belonging to a particular region, as unconstitutional. It held that geographical
classification can be used for categorisation of socio-economic backwardness. However, residence by itself in
a state cannot be a ground for reservation, except as provided in Article 16(3). Note that the power under
Article 16(3) to make a law providing for residence as a ground for reservation (in public employment) is vested
only with the Parliament.

Similarly, in 1995, the Supreme Court in Sunanda Reddy vs State of Andhra Pradesh (1995), AIR 1995 SC
914 struck down rules by the Andhra Pradesh government providing preference for candidates with Telugu
medium in public services. It is being widely anticipated that this new law of Haryana too will likely be struck
down whenever it is challenged in the court. But on this we have to keep our fingers crossed until and unless it
happens actually as we cannot second guess what the Court rules on it

This new law is basically an exclusion policy, which aims to exclude people of other states , having the tendency to
create social tension and disharmony which could be dangerous to the unity of a country and could lead to
fragmentation of the society.

It is against the spirit of competition as the industries would hinder choosing the meritorious candidates, irrespective
of the linguistic background or domicile of the person, to comply with the rule, which would impact the
competitiveness of the state as they have to lower their hiring standards. This would spell disaster for the state's
economic growth by affecting the ease of doing business, as ease of recruiting talent influences the index, which
would further lead to capital flight from the state and disrupt post Covid-19 recovery of the private sector.

To see this from the prism of constitutional mandate, such law based on residence, cannot stand the legal scrutiny as
it violates article 14 which speaks of equality of all citizens, article 15(1) and (2) which prohibits the state from
discriminating against any citizen on the grounds of religion, race, place of birth etc, article 16(2) which prohibits
discrimination on the grounds of place of residence in respect of employment or office under the state, article 19(1)(e)
which grants every citizen the right to reside and work or settle in any part of the country and article 21 of the
constitution which gives right to life to every citizen of the state.
It is article 16(3) which empowers the parliament to provide domicile based reservation in public employment and
jobs with local or any other authority under a state but state governments don't have any such powers to pass laws
directly on domicile-based reservation. Under Article 19(1)(g), all citizens have a fundamental right to practice any
profession or to carry on any occupation, trade or business and by mandating private institutions to employ a certain
set of candidates , this policy constricts their right to carry on their occupation freely, which will be a major leg of
challenge to the law.

Supreme Court (SC) in a catena of judgements have decried this practice of localised protectionism. In Dr.Pradeep
Jain vs Union of India (1984) case, SC noted that to regard the individual from one state as an outsider in other
state would be to deny him his constitutional right and to de-recognise the essential unity and integrity of the country
by treating it as if it were a mere conglomeration of independent states.

Further in Kailash Chand Sharma vs. State of Rajasthan (2002), SC has held that sweeping measures taken by
the state on the considerations of localism is not sanctioned by the constitutional mandate of equality and liable to be
rejected on the plain terms of Article 16(2) and in the light of Article 16(3). Also, in both the judgements of Indira
Sawhney vs. Union of India (1992) and M.Nagaraj vs. Union of India (2006), SC haveunderscored that
reservation cannot exceed beyond 50% unless there are extraordinary reasons to justify why this ceiling has to be
breached.

Incentivising the industry by giving lower electricity charges, offering land use charges and in turn asking them to
invest in skill development policies for the locals might be a better approach. States must create an ecosystem where
more investment comes and hinder creating such provision which is conceptually flawed, having little practical value
beyond political jingoism and have the tendency of fostering and strengthening narrow parochial loyalties based on
language and residence within a state.

State can't enforce quota in private

institutes
in unaided private institutions, including engineering and medical colleges, the state can neither impose the
reservation policy nor carve out its quota from the total number of seats.
Abolishing the state quota and reservations in private colleges, justice Lahoti said, "The state cannot insist on
private education institutions, which receive no aid from the state to implement state's policy on reservation for
granting admissions on lesser percentage of marks that is on any criterion except merit".

the chief justice, writing the unanimous judgment, said unaided institutions, whether minority or non-minority,
"have unfettered fundamental right to choose the students and the procedure" as long as it was fair,
transparent and non-exploitative.
"Unaided institutions, as they are not deriving any aid from the state funds, can have their own admissions, if
fair, transparent, non-exploitative and based on merit,"

Constitutional validity of  reservations in private sector

The legislative exercise by the states in favour of reservation for the domiciles is vulnerable on two major
grounds.  First, there are provisions enshrined under Articles 15(4), 15(5), 15(6), 16(4) and 16(6) of the
Constitution for reservations in admission to educational institutions, and jobs in public employment, to
ensure advancement of backward classes.  But, there is no provision in the Constitution which enables
the Union or the States to enforce reservations in jobs in the private sector.  Secondly, case law in the
Supreme Court militates against reservation of jobs in the private sector in favour of any category of
citizens, domiciles included.
Article 16(3) enables Parliament to make provisions for domicile-based appointments in regard to a class
or classes of employment or appointment to an office under the Government of, or any local or other
authority within, a State or Union territory.

This means that domicile-based reservations are Constitutional in a limited sense, that is, only for certain
classes of employment and appointments. Furthermore,  the power to make such laws is vested only with
the Parliament, and not the State legislatures. Most importantly, this Article pertains only to public
employment only and does not enable even Parliament to apply it to the private sector. Therefore, any
law made by the State in this regard is to be tested against the provisions of the Constitution.

It is important to mention here that Article 19(1)(g) guarantees all citizens (regardless of domicile) the right
to freedom “to practise any profession, or to carry on any occupation, trade or business,.” Though this is
not an unqualified right and is curtailed by reasonable restrictions as envisaged under Article 19(6), it is to
be seen how the state governments extrapolate the “reasonable restrictions” “in the interest of the general
public” in the Constitutional Courts.

There is no provision in the Constitution which enables the

Union or the States to enforce reservations in jobs in the
private sector.
In addition, the state governments’ laws mandating reservations in the private sector are prima
facie repugnant to Article 14, which confers a right to equality on all “persons” and is a thread that runs
through all the provisions of the Constitution, casting a “Constitutional Duty” on the State to make laws
which are “just, fair and reasonable” as recognized and ennobled by the Supreme Court’s Maneka
Gandhi case judgement of 1978.

The Statement of Objects and Reasons of the Haryana Bill (now Act) is a reminder  of the complexities of
social dynamics connected to migration,

Employment is the principal factor behind migration and shutting the doors on employment to non-
domiciles would be a gross violation of not just the Fundamental Rights of citizens, as mentioned above,
but  would also cause hostility among states. Such laws will result in nothing but the balkanisation of
Indian states on the basis of domicile.

Regarding the issue related to the extent of reservation , the Court in M.Nagraj and others v. UOI said
that the State will have to show in each case the existence of the compelling reasons. In this case there
are no any compelling reasons.

the need and viability of collection of quantifiable data

the constitutional validity of including the locals/ local candidates within the SEBCs has been
questioned

- (i) SEBCs includes classes of individuals that are socially and educationally backward and
locals cannot fall within the category of “class” on the basis of residence, because “class” reflects
the economic state of groups in a society
 The right to form association includes the right to form companies, societies partnerships, trade
unions and political parties. ( Article 19 clause C).

The focus of Article 16(4) is backwardness of an entire class of citizens and not the status of a
particular individual.44 Hence, the socio-economic advancement of a few members of a caste or
class should not be generalised or equated with the entire class/caste. Thus, even members of this
group should be entitled to benefits. It was argued that even if some people have progressed
economically, social discrimination persists.45 Therefore, once a caste is identified as backward,
it should not be further sub-divided into two sub-categories based on economic criteria.

 In Uttar Pradesh vs Pradip Tandon (1974), the top court held that “no reservation can be made
on the basis of place of birth as that would offend Article 15”, which prohibits the state from
discriminating against any citizen on grounds of religion, race, caste, sex, or place of birth.
 In Dr Pradeep Jain vs Union of India, 1984, the top court dealt specifically with the issue of
domicile-based reservation, underscoring that to regard an individual from one state as an
outsider in another state “would be to deny him his constitutional rights and to derecognise the
essential unity and integrity of the country...”

Indian Constitution & Migration:

 The Constitution of India guarantees ‘freedom of movement’ and consequently employment

within India through several provisions.
 Article 19 ensures that citizens can “move freely throughout the territory of India".
 Article 16 guarantees no birthplace-based discrimination in public employment.
 Article 15 guards against discrimination based on place of birth and Article 14 provides for
equality before law irrespective of place of birth.
 Some of these Articles were invoked in a landmark 2014 case—
Charu Khurana vs. Union of India—when a trade union had declined membership to a make-
up artist because she had not lived in Maharashtra for at least five years, as per the union’s rules.
The trade union lost the case.
https://censusindia.gov.in/2011census/d-series/d-3.html - Migration census 2011

https://iasscore.in/current-affairs/mains/karntaka-government-seeks-quota-for-locals

https://iasscore.in/topical-analysis/sons-of-soil-concept - Reservation in private