Day 1 Hearing: Private Sector Reservations for Local Candidates in Haryana

On February 17^th 2022, the Supreme Court set aside an Interim Order of the Punjab & Haryana High Court that stayed the implementation of a Haryana law providing 75% reservations for domiciled candidates in the private sector. Much to the relief of counsels for industries’ associations based in Haryana—Senior Advocates Dushyant Dave and Shyam Divan—the Bench said that no ‘coercive action’ would be taken against employers who failed to abide by the Act.

The hearings began with Solicitor General Tushar Mehta, appearing on behalf of the State of Haryana, producing a list of states that had similar laws before the Bench consisting of Justices L. Nageswara Rao and B.R. Gavai. Andhra Pradesh, Maharashtra, Haryana and Jharkhand were the states that had enacted laws providing domicile reservations in the private sector. Mr. Mehta requested that the State be allowed to file a transfer petition bringing all these State laws before the Supreme Court. He further requested that the Court stay the Punjab & Haryana High Court’s Interim Order. He claimed that 38,000 workers had already registered under the Act, and that the Interim Order adversely affected them. He reiterated that the Act applied only to those employees who earned less that Rs. 30,000 per month.

Rao J interjected, emphasising the enormity of the law’s consequences. This law had the ability to affect the 4 crore migrant workers in the State. Mr. Mehta responded that the law was enacted precisely to regulate migrants from settling in the area. Migrants were responsible for slums and a host of other environmental issues. Importantly, he stressed, the High Court’s Interim Order does not record any reasons.

The Court appeared to side with this argument, with Rao J saying that a law may be set aside only on grounds of patent illegality or unconstitutionality. There is a presumption of the constitutionality of a statute. The High Court Order did not appear to provide any reasons.

Mr. Dave said that the High Court was anyway due to hear the matter on April 18^th. He stated vociferously that as per Article 16(3) of the Constitution of India, 1950, only Parliament was empowered to create such a law. The Haryana Act was void ab initio.

Justice B.R. Gavai said that the larger question at stake is not Article 16(3) but Article 19(6) of the Constitution, which deals with the reasonable restrictions that may be imposed on the Right to Trade.

The Bench expressed consternation at the absence of reasoning in the High Court’s Order. Mr. Shyam Divan in response proposed three possible courses of action. First, he said that the Supreme Court could order the High Court to hear the case on a day- to-day basis. In the alternative, the Court could treat the High Court’s Order as an Ad Interim Oder, directing the High Court to provide a detailed explanation of its Order. Finally, he suggested that in the event that the Supreme Court decided to vacate the High Court’s Interim Order, the Supreme Court may direct that no coercive steps may be taken against employers who failed to follow the provisions of the Act. He grew increasingly emphatic, raising his voice perceptibly while declaring that the Act attacked the very idea of India as a Constitutional unit.

The Supreme Court adopted Mr. Divan’s third course of action. It stated that the Interim Order of the Punjab & Haryana High Court would be set aside, and in the meantime no coercive steps would be taken against employers under the Act.

The Special Leave Petition filed by the State of Haryana was dismissed, and the High Court was directed to hear the matter expeditiously.