It is definitely in the fitness of things that the Jharkhand High Court at Ranchi in a most progressive, pertinent, pragmatic and persuasive oral judgment titled Jharkhand Small Industries Association & Ors vs State of Jharkhand & Ors in W.P. (C) No. 5688 of 2024 that was pronounced just recently on 11.12.2024 has stayed the implementation of a State law reserving 75% of private jobs for local candidates. It must be laid bare that the Jharkhand State Employment of Local Candidates in Private Sector Act, 2021 requires private employers in the State with 10 or more persons in their workforce to reserve at least 75 percent of jobs - those with monthly salaries below Rs 40,000 for local candidates. It must be mentioned here that a Division Bench comprising of Hon'ble The Chief Justice Mr MS Ramachandra Rao and so also Hon'ble Mr Justice Deepak Roshan said most explicitly that the 2021 Act prima facie is unjust and discriminatory and violates Part III of the Constitution of India, which guarantees fundamental rights to citizens. It must be also added that the Jharkhand High Court also said that the 2021 law's implementation is not in public interest! This definitely cannot be glossed over as there can be just no gainsaying that Judges definitely have first hand experience on all such intricacies pertaining to law and its validity!
At the very outset, this learned, laudable, landmark, logical and latest judgment authored by Hon'ble The Chief Justice Mr MS Ramachandra Rao for a Division Bench of the Ranchi High Court comprising of himself and Hon'ble Mr Justice Deepak Roshan sets the ball in motion by first and foremost putting forth in para 1 that, "In this Writ Petition, the constitutional validity of "The Jharkhand State Employment of Local Candidates in Private Sector Act, 2021" (for short "the Act") is challenged."
To put things in perspective, the Division Bench envisages in para 2 that, "This Act applies to every such establishment in the State of Jharkhand where 10 or more workforce is employed. Every such establishment has to register itself on a portal (Section 3); every such employer, if there are vacancies for recruitment for the manpower having monthly salary upto Rs.40,000 p.m shall have to ensure that 75% recruitment is made of local candidates against total vacancies notified (Section 4(1)); the local candidates who wish to benefited from the Act shall have to register themselves on Rojgar Portal (www.jharniyojan.jharkhand.gov.in) (Section 4(iii)). The Act also provides for hefty financial penalties in case of violations (Sections 9 to 12)."
While elaborating on purpose for the enacting of this law, the Division Bench lays bare in para 3 that, "The ostensible purpose for enacting this law is that people of Jharkhand are not getting employment opportunities within the State and so they are migrating to other States because many employers of Jharkhand employ workforce from outside the State. The Act was passed to provide job opportunities to local people locally."
As we see, the Division Bench enunciates in para 4 that, "This Writ Petition had been filed on 19.9.2024. On 23.10.2024 notice was issued to the State of Jharkhand (respondent no.1) and notice was accepted by Mr. Sahbaj Akhtar, learned AAC to AAG-III for the State of Jharkhand. The case was adjourned to today for filing of counter affidavit . But no counter affidavit was filed and again time was sought to file it."
Simply put, the Division Bench while dwelling on the cause of petition discloses in para 5 that, "Petitioners, who are Associations of Small and Micro Industries, contend that this Act is manifestly unjust, glaringly unconstitutional and arbitrary; that the State authorities had issued notices to certain members of petitioner Associations on 3.12.2024 demanding filing of reports under Section 6 of the Act for the quarter July to September and threatening coercive action on failure to do so; and also another notice dt.10.12.2024 demanding details of local persons employed and threatening to initiate penal action if details are not furnished; and therefore, it is just and necessary to stay the implementation of the Act. Copies of the said notices issued to members of petitioner association have been produced by counsel for petitioners and also furnished to counsel for the State."
Do note, the Division Bench notes in para 6 that, "Though there is undoubtedly a presumption of constitutionality of legislation and normally Courts should be reluctant to stay it's operation, the Supreme Court in Health for Millions v. Union of India [(2014) 14 SCC 496 at page 499] held that only in a situation where the court is fully convinced that the particular enactment or the rules are ex facie unconstitutional and the factors, like balance of convenience, irreparable injury and public interest are in favour of passing an interim order, there should be granted a stay of the impugned legislation."
Do also note, the Bench notes in para 8 while dealing with provisions of Constitution mentioning that, "Art.16(1) of the Constitution guarantees to all citizens equality of opportunity in matters relating to employment or appointment to any office under the State. In matters of public employment, Art.16(2) prohibits the State from discriminating on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them. Under Art.16(3) only Parliament is empowered to make a law prescribing any requirement as to residence within the State in regard to a class of employment under the Government of a State. Art.35 of the Constitution prohibits the State Government from making a law with respect to a matter under Clause (3) of Art.16."
Do further note, the Division Bench stipulates in para 9 quipping that, "The question to be considered is: 'when the State Government is prohibited by Art.35 to discriminate in public employment on the ground of residence /descent/place of birth, and when only Parliament is empowered to legislate on that matter, can the State of Jharkhand compel private employers in its territorial jurisdiction to employ only local people in 75% of jobs of remuneration below Rs.40,000/- p.m?'"
While reiterating the supremacy of Constitution, the Division Bench propounds in para 10 that, "Prima facie, we are of the opinion that the State of Jharkhand could not have enacted the impugned law and restrict the right of a private employer to recruit from the open market employees who would receive less than Rs.40,000/- pm. This is because a private employer cannot be compelled to do by the State what the State itself is forbidden to do by the Constitution."
Needless to say, the Division Bench states in para 11 that, "Admittedly, Art.19(1)(d) of the Constitution of India confers a fundamental right to move freely throughout the territory of India ; Art.19(1)(e) of the Constitution of India confers a fundamental right on Indian citizens to reside and settle in any part of the territory of India.; and Art.19(1)(g) of the Constitution of India confers a fundamental right on Indian citizens to practice any profession, or to carry on any occupation, trade or business. No doubt reasonable restrictions can be imposed on exercise of these rights by Art.19(5) and (6)."
Most rationally, the Division Bench expounds in para 12 stating that, "The State of Jharkhand cannot be permitted to virtually build a wall around it's territory of this nature and prevent private employers who have a fundamental right to carry on business anywhere in the territory of India to take into their employment persons of their choice skilled to do a particular work, and which workers also have a fundamental right to reside or settle anywhere and carry on their trade and occupation. The effect of allowing the Act's implementation is that the employer's discretion to choose his work force gets severely hampered. Thus the right guaranteed by Art.19(1)(g) of the Constitution on private employers would get grossly impaired."
Most laudably, the Division Bench postulates in para 13 that, "If the impugned law is implemented, prima facie, the concept of one citizenship for all citizens who have a domicile in the territory of India envisaged by Art.5 of the Constitution and concept of 'Fraternity' (common brotherhood) mentioned in the Preamble to the Constitution of India would be defeated. Citizens residing in other States of the country cannot prima facie be treated as inferior to the local people of Jharkhand and discriminated against."
More to the point, the Division Bench then points out in para 14 that what will culminate as a palpable fallout would be that, "Other States also would be encouraged to enact similar laws to protect their local residents and the unity and integrity of the country will be seriously jeopardised."
Briefly stated, while citing a recent and relevant case law, the Division Bench mentions in para 16 that, "In State of Telangana v. Subba Rayudu (2022) 16 SCC 37 at page 56, the Supreme Court held :
"59. Under the Constitution, India is a Union of States. Every part of every State is an integral and inseverable part of India. Admittedly, the respondent was born in India. He has his domicile in the territory of India. As held by this Court in Pradeep Jain v. Union of India, under the Indian Constitution, there is only one domicile i.e. domicile of the country and there is no separate domicile for a State.
63. It is not in dispute that the respondent has his domicile in the territory of India and was born in the territory of India. Admittedly, he is a citizen of this country. As a citizen of India, the respondent has a fundamental right under Article 19(1)(e) to reside and settle in any part of the territory of India.
64. Under Article 13(2) of the Constitution of India prohibits the State from making any law which takes away or infringes the rights conferred by Part III of the Constitution of India and any law made in contravention of Article 13(2), to the extent of the contravention would be void.
65. All statutes and all rules, regulations and bye-laws framed by the Government, which constitute law have to be construed harmoniously with the fundamental rights guaranteed under Part III of the Constitution of India.
66. The Andhra Pradesh Reorganisation Act, 2014 or any other guidelines framed thereunder, including the Guidelines circulated on 30-10-2014 cannot take away from citizens, the right to reside and settle in any part of the country."
While citing yet another recent and relevant case law, the Division Bench observes in para 17 that, "The High Court of Punjab and Haryana in IMT Industrial Association and another v. State of Haryana 2023 SCC Online P&H 2867 (DB) held that the State of Haryana could not have passed the Haryana State Employment of Local Candidates Act, 2020 containing provisions similar the Jharkhand State Employment of Local Candidates in Private Sector Act, 2021 and that it is unconstitutional and violated Part III of the Constitution of India."
As a corollary, the Division Bench then observes in para 18 that, "For all the aforesaid reasons, it appears that the Act is prima facie manifestly unjust and discriminatory, violates Part III of the Constitution of India and its implementation is not in public interest."
Most significantly, most forthrightly and so also most remarkably, the Division Bench minces absolutely just no words to hold in para 19 that, "If the implementation of the Act is not stayed, undoubtedly the State authorities would start penalising the private employers by levying hefty financial penalties mentioned in Sections 9 to 12 of the Act. The notices dt. 03.12.2024 and 10.12.2024 filed by counsel for petitioners corroborate the serious apprehensions they entertain about the intention of the respondents to levy such penalties since they mention of such penal action. Balance of convenience is therefore in favour of members of petitioner Associations and irreparable injury would be caused to them if the implementation of the Act is not stayed."
Resultantly, the Division Bench then directs in para 20 holding that, "Therefore, there shall be interim stay of implementation of the Act by the respondents until further orders."
Further, the Division Bench directs in para 21 that, "List on 31.1.2025."
Finally, the Division Bench then directs in para 22 holding that, "Counter affidavits shall be filed by respondents without fail in the meantime and furnish copies of the same to the counsel for petitioners."
In a nutshell, it is high time and all the High Courts must similarly emulate what the Jharkhand High Court has held so explicitly, elegantly, eloquently and effectively in this leading case in similar such cases! This is most imperative to ensure that the spirit of the Constitution is maintained as envisaged and is not violated with impunity! Let me now conclude by quoting para 15 of this notable judgment wherein it is stated most explicitly that, "In Pradeep Jain v. Union of India (1984) 3 SCC 654 at page 671, in the context of reservation for local students in admission to MBBS/BDS courses, the Supreme Court's observations are apt to be noted here. Justice Bhagwati held:
"10….. Now, the primary imperative of Article 14 is equal opportunity for all across the nation for education and advancement and, as pointed out by Krishna Iyer, J., in Jagdish Saran v. Union of India (1980) 2 SCC 768 "this has burning relevance to our times when the country is gradually being 'broken up into fragments by narrow domestic walls' by surrender to narrow parochial loyalties". What is fundamental, as an enduring value of our polity, is guarantee to each of equal opportunity to unfold the full potential of his personality. Anyone anywhere, humble or high, agrestic or urban, man or woman, whatever be his language or religion, place of birth or residence, is entitled to be afforded equal chance for admission to any secular educational course for cultural growth, training facility, speciality or employment. It would run counter to the basic principle of equality before the law and equal protection of the law if a citizen by reason of his residence in State A, which ordinarily in the commonality of cases, would be the result of his birth in a place situate within that State, should have opportunity for education or advancement which is denied to another citizen because he happens to be resident in State B. It is axiomatic that talent is not the monopoly of the residents of any particular State; it is more or less evenly distributed and given proper opportunity and environment, everyone has a prospect of rising to the peak. What is necessary is equality of opportunity and that cannot be made dependent upon where a citizen resides. If every citizen is afforded equal opportunity, genetically and environmentally, to develop his potential, he will be able in his own way to manifest his faculties fully leading to all round improvement in excellence. The philosophy and pragmatism of universal excellence through equality of opportunity for education and advancement across the nation is part of our founding faith and constitutional creed. The effort must, therefore, always be to select the best and most meritorious students for admission to technical institutions and medical colleges by providing equal opportunity to all citizens in the country and no citizen can legitimately, without serious detriment to the unity and integrity of the nation, be regarded as an outsider in our constitutional set-up. Moreover, it would be against national interest to admit in medical colleges or other institutions giving instruction in specialities, less meritorious students when more meritorious students are available, simply because the former are permanent residents or residents for a certain number of years in the State while the latter are not, though both categories are citizens of India. Exclusion of more meritorious students on the ground that they are not resident within the State would be likely to promote substandard candidates and bring about fall in medical competence, injurious in the long run to the very region. "It is no blessing to inflict quacks and medical midgets on people by wholesale sacrifice of talent at the threshold. Nor can the very best be rejected from admission because that will be a national loss and the interests of no region can be higher than those of the nation." The primary consideration in selection of candidates for admission to the medical colleges must, therefore, be merit. The object of any rules which may be made for regulating admissions to the medical colleges must be to secure the best and most meritorious students." (emphasis supplied)."
