Full Judgment Text
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CASE NO.:
Writ Petition (civil) 598 of 2000
PETITIONER:
Nair Service Society
RESPONDENT:
State of Kerala
DATE OF JUDGMENT: 23/02/2007
BENCH:
S.B. Sinha & P.P. Naolekar
JUDGMENT:
J U D G M E N T
With
Contempt Petition (Civil) No.108 of 2000
And
Contempt Petition (Civil) No.109 of 2000
With
Suo Motu Contempt Petition (Civil) No. \005\005\005../ 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 :
(i) 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;
(ii) to participate in the efforts of other communities
for the betterment of their lot and to maintain and foster
communal amity;
(iii) to work for the uplift of the depressed classes;
(iv) 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
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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) \027 as interpreted by this Court \027 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\005"
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.
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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:
" (a) 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.
(b) Whether there is any class which may be excluded
from the creamy layer on the basis of hereditary
occupation or otherwise.
(c) (i) Whether there should be different criteria
regarding income/property for different categories
coming within the creamy layer.
(ii) If so, what should be the ceiling for such
income/property.
(iia) While calculating the income, whether it is
necessary to exclude income from any particular
source or sources.
(iii) While making its recommendations, the
Commission will take into account the existing
socio-economic conditions and the special features
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of the Other Backward Classes in the State.
(iv) The Commission should submit its report to
Government within one month.
(v) The Officer of the Commission will be at
Thiruvananthapuram and its Headquarters at
Ernakulam.
(vi) 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:
"7. 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
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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:
"1. 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
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the hereditary occupation of that backward class.
2. 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
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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:
"\005The 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 \026 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
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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:
"\005It 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).
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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 \027 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) :
"\005It 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."
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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
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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 \027 as
forward as any other forward class member \027 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
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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 \027 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 \027
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 \027 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
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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
\027 whether on the basis of income, extent of holding or
otherwise \027 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. \026 (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)]
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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
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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 :
"43. 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
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requirements of Article 14 read with Article 16 of the
Constitution\005"
Yet again it was stated :
"\005The 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
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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
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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.