P&H HC Quashes Haryana Law On 75% Quota In Pvt Jobs To Residents

We must note that while underlining most emphatically that a government just cannot arbitrarily discriminate against individuals merely because they do not belong to a particular State, the Punjab and Haryana High Court in a most learned, laudable, landmark and latest judgment titled IMT Industrial Association and another vs State of Haryana and another in CWP Nos. 26573 of 2021 in Neutral Citation No.: 2023:PHHC:145649-DB that was reserved on October 19, 2023 and then finally pronounced on November 17, 2023 has struck down the Haryana State Employment of Local Candidates Act, 2020 which provides 75% reservation for domicile of Haryana in private sector jobs having a monthly salary of less than Rs. 30,000 as "unconstitutional". It must be mentioned here that the Bench of Hon’ble Mr Justice GS Sandhawalia and Hon’ble Ms Justice Harpreet Kaur Jeewan said that the "law (the Haryana State Employment of Local Candidates Act, 2020) is unconstitutional and violative of the Part-III of the Constitution". It must be noted that the Bench which was hearing a clutch of petitions challenging the aforestated law said that the legislation will become "ineffective from the date it came into force". We thus see that the Bench quashed the complete Act itself!

Introduction

At the very outset, this brief, brilliant, bold and balanced judgment authored by Hon’ble Mr Justice GS Sandhawalia for a Division Bench of the Punjab and Haryana High Court comprising of himself and Hon’ble Ms Justice Harpreet Kaur Jeewan sets the ball in motion by first and foremost putting forth in para 1 that, "The present judgment shall dispose of 9 cases i.e. CWP Nos. 26573, 24967, 25037, 25539 and 25988 of 2021 and CWP Nos.584, 1404, 3860 and 1698 of 2022. Facts have been taken from CWP-26573-2021, IMT Industrial Association and another vs. State of Haryana and another, CWP No. 24967 of 2022, Faridabad Industries Association vs. State of Haryana and another and CWP-1698-2022, Akhilesh Leekha vs. State of Haryana and another since purely a legal question is involved in this batch of cases regarding the vires of The Haryana State Employment of Local Candidates Act, 2020 (in short ‘the 2020 Act’) and whether the same is unconstitutional and violative of Part-III of the Constitution of India."

As we see, the Division Bench then specifies in para 2 that, "The petitioners’ Association is stated to be duly registered under the provisions of Haryana Registration & Regulation of Societies Act, 2012 comprising of allottees of industrial plots/sites at Industrial Model Township, Tehsil Manesar, District Gurugram who are carrying on their industrial and business activities in the State of Haryana. The resolutions in favour of the authorized representatives have been duly appended."

Background

To put things in perspective, the Division Bench envisages in para 3 that, "The petitioners lay challenge to ‘the 2020 Act’ on account of the fact that it 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 restrictions thus placed upon the rights of the petitioners are alleged not to be reasonable and are manifestly arbitrary, capricious, excessive and uncalled for and the same being violative of the principles of natural justice, equality, liberty and fraternity laid down in the Preamble of the Constitution of India and is subject to challenge. Similarly, infringement of Article 14 of the Constitution of India is also alleged in as much as all citizens of the country would have a right to equal employment, to reside and to settle in the State of Haryana and the Act, thus, represents a serious assault on the unity and integrity of the country and the idea of a common Indian identity. It has been averred 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. The entire aim and objectives of the Act was alleged to be incorrect, misconceived, fanciful and granting overly broad discretion to the authorized officers appointed thereunder apart from the averments that the Haryana State lacked the legislative competence to pass the same and it being in the domain of the central legislative and, thus, fell foul of Article 246 of the Constitution of India."

Factual Matrix

It is worth noting that the Division Bench notes in para 15 that, "The implementation of the Act was stayed vide order dated 03.02.2022 by the co-ordinate Bench by noticing that the core issue was whether any State can restrict employment (even in the private sector) on the basis of domicile. The matter was thereafter taken to the Apex Court wherein, it was directed on 17.02.2022 that since challenge was to the Legislation and without any reasons the stay could not have been granted and resultantly, the Apex Court directed to decide the writ petition expeditiously within a period of four weeks. However, the State of Haryana was mandated not to take any coercive steps against the employers keeping in view the argument raised that they would face immense hardship as they could not employ anybody from outside the State from the date of the commencement of the Act. It was noticed on 22.02.2022 that the Union of India was not filing its reply. Vide order dated 04.03.2022, it was noticed that short reply had been filed by respondent No.1. Directions were issued to file para wise reply keeping in view the issue involved. The matter was thereafter placed before another Bench on 09.03.2022 on account of one member of the Bench recusing himself. The co-ordinate Bench had heard arguments spanning over a week in March 2022 and judgment had been reserved. The matter was thereafter listed again on 07.09.2022 as certain points were needed to be clarified. The matter could not be taken up since Special Bench had to be constituted in view of the change of the roster thereafter. Since one of the Judges has been elevated as the Chief Justice of Rajasthan High Court, the matter had been placed before this Bench and came up for the first time on 07.07.2023 on an application for early hearing and thereafter for the first time, for arguments on 31.07.2023."

Substantial Questions of Law

As things stand, the Division Bench stipulates in para 22 that, "Keeping in view the pleadings and the arguments raised, we are of the considered opinion that the following questions would arise for decision by us:-

1. Whether the writ petition would be maintainable keeping in view the fact that the Act has been challenged principally by an association of persons and whether they could claim the violations of the fundamental rights under Part-III of the Constitution of India and whether they are liable to be heard on merits?

2. Whether it was within the ambit of the State to legislate upon the issue in question in view of the specific bar provided under Article 35 of the Constitution of India and whether the legislation would be covered under Entry No.81 of the Union List?

3. If Question No.2 is answered either way, whether the State could provide for a legislation to private employers to do what was forbidden for it to do under the Constitution of India?

4. Whether the legislation provides reasonable restrictions in the interest of the general public and thus gives the right to the State under Article 19(5) and 19(6) of the Constitution of India to justify the same?"

Be it noted, the Division Bench notes in para 64 that, "The respondent-State has directed the private individual to do what itself is barred from under the Constitution. Such a brazen act of impunity, thus, cannot be swallowed by the Constitutional Courts. The sum and substance of the argument raised by counsel for the petitioners has to be accepted, without any exceptions."

Cornerstone of judgment

Most notably and most commendably, the Division Bench minces just no words whatsoever to mandate in para 65 that, "Thus, keeping in view the principles laid down by the Apex Court itself on the principles of morality, the State cannot direct the private employers to do what has been forbidden to do under the Constitution of India. It cannot as such discriminate against the individuals on account of the fact that they do not belong to a certain State and have a negative discrimination against other citizens of the country. The private employer being a builder, for example, raising a multi-storeyed complex, cannot be asked not to employ a person who is skilled in the work of installation of wood work who might come from a particular area of the country i.e. Kashmir; where this skill has been enhanced, whereas from another part of the country, labour which is more skilled in setting up the steel frames and building are found i.e. Punjab; whereas similar persons with different skills who would be more proficient in just executing the civil work i.e. Uttar Pradesh and Bihar. It is not for the State as such to direct the private employer who it has to employee keeping in view the principles of laissez faire that "the lesser it governs, the better itself". Once there is a bar under the Constitution of India, we do not see any reason how the State can force a private employer to employ a local candidate as it would lead to a large scale similar state enactments providing similar protection for their residents and putting up artificial walls throughout the country, which the framers of the Constitution had never envisaged."

Finally, the Division Bench then concludes by holding in para 76 that, "Keeping in view the above four questions being answered against the State, we are of the considered opinion that the writ petitions are liable to be allowed and 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."

Conclusion

In conclusion, we thus see that Punjab and Haryana High Court while ruling against the restrictions imposed by the State of Haryana decisively holds in para 71 that, "In such circumstances, we are of the considered opinion that the restrictions imposed in the Statute as such have far reaching effect and cannot be held to be reasonable in any manner which would warrant no interference. Resultantly, we are of the considered view that they cannot be protected under Articles 19(5) and 19(6) of the Constitution of India, as contended by counsel for the State." The Division Bench very rightly underscored that a government cannot discriminate against individuals merely because they do not belong to a particular State while quashing the law that was passed by the Haryana State Government in 2020 providing 75 percent reservation in private jobs to the residents of the State. We thus see that Punjab and Haryana High Court most commendably upheld the contention of the petitioners who averred that a deep wedge is sought to be created between persons domiciled in different States by the statute in question which is contrary to the concept of common citizenship as provided in Constitution. Very rightly so!