PETITIONER: M. R. BALAJI AND OTHERS Vs. RESPONDENT: STATE OF MYSORE DATE OF JUDGMENT: 28/09/1962 BENCH: <NAME>, P.B. BENCH: <NAME>, P.B. SINHA, <NAME> P.(CJ) WANCHOO, K.N. GUPTA, K.C. DAS SHAH, J.C. CITATION: 1963 AIR 649 1962 SCR Supl. (1) 439 CITATOR INFO : D 1964 SC 179 (13,14,17,18,30) R 1964 SC1823 (14) R 1967 SC1283 (6) F 1968 SC 507 (6) R 1968 SC1012 (7) F 1968 SC1379 (316) MV 1971 SC 530 (271) R 1971 SC1762 (24) RF 1971 SC2206 (4) R 1971 SC2303 (21,22,23) E 1972 SC1375 (63,75,80,83,86,88,98,101) F 1973 SC 930 (22,23,24,32) R 1974 SC 532 (14) RF 1975 SC 563 (14,16,23,28,34) D 1976 SC 490 (26,68,126,184) R 1981 SC 298 (28,88,89,110,131,132) R 1981 SC 588 (13) O 1985 SC1495 (9,10,13,24,51,59,63,64,95,99, RF 1988 SC 959 (2,8,10) F 1989 SC 903 (26) RF 1992 SC 1 (91) ACT: Admission into Colleges-Reservation of seats for socially and educationally backward classes and Scheduled Castes and Scheduled Tribes-Scope of-Directive Principles-Supreme <ORG> not to fix percentage-Constitution of India, Arts. 15 (4), 16 (4), 29 (2), 46, 340. HEADNOTE: On July 26, 1958, the <ORG> of Mysore issued an order that all the communities excepting the Brahmin community, fell within the definition of educationally and socially backward classes and Scheduled Castes and Scheduled Tribes and 75% of seats in educational institutions were reserved for them. Similar orders reserving seats were issued on May 14, 1959, July 22, 440 1959, June 9, 1960 and July 10, 196 1. The percentage of seats reversed varied in various orders, but all of them. were set aside when challenged. On July 31, 1962, the <ORG> of Mysore passed another order which superseded all previous orders made by the <ORG> under Art. 15 (4) for reservation of seats. Under that order, the backward classes were divided into two categories, backward classes and more backward classes. The order reserved 68% of the scats in the engineering and medical colleges and other technical institutions for the educationally and socially backward classes and Scheduled Castes and Scheduled Tribes, and left only 32 per cent seats for the merit pool. The order was challenged by 23 petitioners by a writ petition under Art. 32. The petitioners contended that but for the reservations made by the impugned order, they would have been entitled to admission in the respective colleges for which they had applied. They contended that the classification made under the order was irrational and the reservation of 68% scats made by the order was a fraud on Art. 15 (4) of the Constitution. Held, that the impugned order was a fraud on the consti- tutional power conferred on the <ORG> by Art. 15(4) and the same be quashed. The impugned order categorises the backward classes on the sole basis of caste which is not permitted by Art. 15 (4). The reservation of 68% scats is inconsistent with the concept of the special provision authorised by Art. 15 (4). However, this <ORG> would not attempt to lay down definitely and in an inflexible manner as to what should be the proper percentage for reservation. Reservation should and must be adopted to advance the prospects of weaker sections of society, but while doing so, care should be taken not to exclude admission to higher educational centres of deserving and qualified candidates of other communities. Reservations under Arts. 15 (4) and 16 (4) must be within reasonable limits. The interests of weaker sections of society, which are a first charge on the <ORG>s and the <ORG>, have to be adjusted with the interests of the community as a whole. Speaking generally and in a broad way, a special provision should be less than 50%. The actual percentage must depend upon the relevant prevailing circumstances in each case. The object of Art. 15 (4) is to advance the interests of the society as a whole by looking after the interests of the weaker elements in society. If a provision under Art. 15 (4) ignores the interests of society, that is clearly outside the scope of 441 Art. 15 (4). it is extremely unreasonable to assume that in enacting Art. 15 (4 ), <ORG> intended to provide that where the advancement of the backward classes or the Scheduled Castes and Tribes were concerned, the fundamental right.% of the citizens constituting the rest of the society were to be completely and absolutely ignored. Considerations of national interest and the interests of the community and the society as a whole have already to be kept in mind. Article 15 was amended and Art. 15 (4) was added in view of the judgment of this <ORG> in the <CITATION> and <CITATION>  S. C. R. 525. Article 15 (4) is a proviso or an exception to Arts. 15 (1) and 29 (2). If an order is justified by the provisions of Art. 15 (4 ), its validity cannot be questioned on the ground that it violates Art. 15 (4) or Art. 29 (2). It is true that the Constitution contemplates the appoint- ment of a commission whose report and recommendations can be of assistance to the authorities concerned for taking adequate steps for the advancement of backward classes, but this does not mean that the appointment of the commission and the subsequent steps that would follow it are a condition precedent to any action being taken under Art. 15 (4). The special provisions contemplated under Art. 15 (4) can be made by the <ORG> or the <ORG>s by an executive order. It cannot be said that the President alone can make special provision for the advancement of the backward classes. Article 15 (4) authorises the <ORG> to make special pro- vision for the advancement of socially and educationally backward classes of citizens as distinguished from the Scheduled Castes and Scheduled Tribes. Some backward classes may, by presidential order, be included in Scheduled Castes and Tribes, and in that sense the backward classes for whose improvement provision is made in Art. 15 (4) are comparable to Scheduled Castes and Scheduled Tribes. The backwardness under Art. 15 (4) must be social and educational. It is not either social or educational, but it is both social and educational. Though caste in relation to Hindus may be a relevant factor to consider in determining the social backwardness of groups or classes of citizens, it cannot be made the sole or dominant test. There are certain sections of Indian society such as Christians, Jains, Muslims, etc., who do not believe in caste system, and the test of caste does not apply to them. Moreover, social backwardness is in the Ultimate analysis the result of poverty to a very large extent. 442 The classes of citizens who are deplorably poor automatically socially backward. Moreover, the occupation of citizens and the place of their habitation also result in social backwardness. The problem of determining who are socially backward classes, is undoubtedly very complex, but the classification of socially backward citizens on the basis of their castes alone is not permissible under Art. 15 (4). In determining the educational backwardness of a class of citizens, the literacy test supplied by <ORG> is not adequate. It is doubtful if the test of the average of the student population in the last three high school classes is appropriate in determining educational backwardness. Io any case, the <ORG> is not justified in including, in the list of backward classes castes or communities whose average of student population per thousand is slightly above or very near or just below the <ORG> average. The legitimate view to take is that the classes of citizens whose average is well or substantially below the <ORG> average can be treated as educationally backward. It is not for this <ORG> to lay down any hard and fast rule in this matter. It is the duty of the <ORG> to decide the matter in a manner which is consistent with the requirements of Art. 15 (4). The division of backward classes into two categories of backward classes and more backward classes is not warranted by Art. 15 (4).  Art. 15 (4) authorises special provision being made for the really backward classes but by introducing two categories, what is intended is to devise measures for all classes of citizens who are less advanced as compared to the most advanced classes in the <ORG>. That is not the scope of Art. 15 (4). The object of making a special provision for the advancement of castes or communities is to carry out the Directive Principle enshrined in Art- 46. Unless the educational and economic interests of the weaker sections of the people are promoted quickly and liberally, the ideal of establishing social and economic equality cannot be attained. Article 15 (4) authorises the <ORG> to take adequate steps to achieve the object. While making adequate reservation under Art. 16 (4 ), care should be taken not to provide for unreasonable, excessive or extravagant reservation because that would by eliminating general competition in a large field and by creating widespread dissatisfaction among the employees, materially affect their efficiency. Like the special provision improperly made under Art. 15 (4 ), reservation made under Art. 16 (4) beyond the permissible and legitimate limits is a fraud on the Constitution. 443 <CITATION> A. I. R. 1960 Mysore 338, <CITATION> . 1. R. 1961 Mysore 220, <CITATION> ,  S. C. R. 525 and <CITATION> ,  2 S. C. R. 586, referred to JUDGMENT:

ORIGINAL JURISDICTION Writ Petitions Nos. 90 to 11 2 of 1962.

Petition under Art. 32 of the Constitution of India for the enforcement of Fundamental Rights.

<NAME> and <NAME>, for the petitioners.

<NAME>, Advocate General of the State of Mysore, <NAME>, <NAME> and <NAME>, for the Respondent No. 1.

<NAME>, for the Interveners.

1962. September 28. 'The judgment of the Court was delivered by GAJENDRAGADKAR, J.-Since 1958 <ORG> has been endeavouring to make a special provision for the advancement of the socially and educationally backward classes of citizens in the <ORG> of Mysore under Article 15 (4) of the Constitution, and every time when an order is passed in that behalf, its validity has been challenged by writ proceedings. Four previous orders passed in that behalf were challenged by writ proceedings taken against the <ORG> under Art. 226 in <ORG>. The present petitions filed by the respective petitioners under Art. 32 dispute the validity of the last order passed by the <ORG> of Mysore on the July 31, 1962, under Art. 15 (4). Out of the twenty-three petitioners, six had applied for admission to the Pre-professional Class in Medicine in <ORG> affiliated either to <ORG> or to <ORG>, and seventeen had applied for admission to the First Year of the 5 Year integrated course leading to the Degree of B. E. in <ORG>. According to the petitioners, but for the reservation made by the impugned order, they would have been entitled to the admission in the respective colleges for which they had applied. As a result of the reservation made by the said order, students who have secured less percentage of marks have been admitted, but not the petitioners. That, in brief, is the petitioners' grievance and they urge that the impugned order which has denied them the facility of admission in the respective colleges is void under Arts. 15 (1) and 29 (2) and should not be enforced against them. Accordingly, the petitioners pray that a writ of mandamus and/or any suitable writ or direction should be issued against respondent No. 1, the <ORG> of Mysore (hereinafter called the <ORG>), and the two Selection Committees which have been impleaded as respondents 2 & 3. The petitioners' case is that the impugned order which has been passed under Art. 15 (4) is not valid because the basis adopted by the order in specifying and enumerating the socially and educationally backward classes of citizens in the <ORG> is unintelligible and irrational, and the classification made on the said basis is in consistent with and outside the provisions of Art. 15 (4). It is also urged by them that the extent of reservation prescribed by the said order is so unreasonable and extravagant that the order, in law, is not justified by Art. 15 (4) and, in substance, is a fraud on the power conferred by the said Article on the <ORG>.

These allegations are denied by the <ORG> and it is urged on its behalf that the classification made is both rational and intelligible and the reservation prescribed by the order is fully justified by Art. 15 (4). The contention that the order is a colourable exercise of the <ORG>'s power and amounts to a fraud on the Constitution is disputed.

As we have just indicated, the impugned order was preceded by four other orders and so, it is necessary to refer to the said orders in their sequence to understand the background of the dispute between the parties. On the 26th,July 1958, the <ORG> issued an order that all the communities, excepting the Brahmin community, fell within the definition of educationally and socially Backward Classes and Scheduled Castes and Tribes, and provided for the said communities and tribes reservation of 75% of seats in educational institutions. For the Scheduled Castes and the Scheduled Tribes, the percentage of reservation was 15% and 3% respectively. This percentage for the Scheduled Castes & Tribes has been maintained in all the subsequent orders. The order issued by the <ORG> on the 26th July, 1958, was challenged before <ORG> and it appears that the <ORG> conceded before <ORG> that there was a drafting error in the Government Order and so, it did not press its case that the said order was valid. In the result, the writ petitions filed to challenge the validity of the order succeeded and the impugned order was quashed. In 1959, two separate orders were passed by the <ORG> on the 14th May and 22nd July respectively. By the first order, all communities, excepting Brahmins, Baniyas and Kayasts among the Hindus and Muslims, Christians and Jains, were classified as socially and educationally Backward Classes. It appears that 65% of the seats were reserved for these socially and educationally Backward Classes and Scheduled Castes and Tribes. These orders were challenged before <ORG> in the case of <CITATION> (1). <ORG> upheld the pleas raised by the petitioners and quashed the impugned (1) A.I.R. 1960 Mysore 338.

(1) A.I.R. 1960 Mysore 338.

orders. In the result, <ORG> directed that the applications made by the petitioners for admission to the respective colleges should be considered without reference to the said orders, but subject to the reservation for Scheduled Castes and Scheduled Tribes made therein. The <ORG> then appointed a <ORG> called <ORG> with Dr. <NAME> as its Chairman, to investigate the problem and advise the <ORG> as to the criteria which should be adopted in determining the educationally and socially Backward Classes, and the special provisions which should be made for their advancement. The <ORG> made an interim report, and in- the light of the said report, the <ORG> passed an order on the 9th June, 1960 regulating admissions for that year into the professional and technical colleges. Broadly stated, the effect of this order was that 60% of the seats were left open for what may be conveniently described as the 'merit pool' available to candidates according to their merits. 40% were reserved for the 'reservation pool', 22% of which were reserved for the Backward Classes, 15% for the Scheduled Castes and 3% for the Scheduled Tribes. This order was also challenged before <ORG> in <CITATION> (1). It appears that, on the whole, <ORG> did not feel satisfied that the scheme of the special provision made by the impugned order was invalid, but it thought that the allotment of seats under the provisions of the said order in favour of the other Backward Classes in excess of 22% reserved for them otherwise than by open competition amounted to an unreasonable restraint on the fundamental right of other citizens and, therefore, was invalid. Having reached this decision, <ORG> indi- cated the manner in which the reservation in favour of the Scheduled Castes and Scheduled Tribes and other Backward Classes should be worked out so as to (1) A.I.R. 1961 Mysore 220, avoid a successful challenge under Arts. 15 (1) and 29 (2). Thereafter, <ORG> made its report in 1961 and in the light of the said report and the recommendations made therein, the <ORG> proceeded to make an order under Art. 15 (4) on July 10, 1961. This Order begins with the observation that <ORG> has come to the conclusion that in the present circumstances, the only practicable method of classifying the Backward Classes in the <ORG> is on the basis of castes and communities, and it has specified the criteria which should be adopted for determining the educational and social backwardness of the communities. The two criteria specified in the report at,(, then set out. The order then expresses the <ORG>s's concurrence with the proposal made by the <ORG> that the Backward Classes should be Sub divided into two cate- gories--Backward and the More Backward, and it adopts the test laid down by the report in that behalf. This approach, according to the order, is realistic and practicable. On the question is to the communities which should be treated as backward, the <ORG> made some variations in the recommendations made by the <ORG>. It held that Lingayats and Bhunts who formed part of Vokkaligas, should be treated as backward. In that connection, the <ORG> noticed the fact that the recommendation of the <ORG> in respect of the said two communities was not unanimous, and it observed that a large percentage of Lingayat population lives in rural areas and most of them are engaged in agriculture and mannual labour and suffer from all the consequences of illiteracy and poverty. In regard to the Bhunts, the <ORG> thought that they could not be distinguished from the rest of the Vokkaligas. The order then adds that Satanis, Nayars and Zoreastrians whose average according to the educational test prescribed by the <ORG> was as per thousand of population (whereas that of Lingayats is

7. 1) need not be treated as backward. The order then examines the question as to the percentage which should be reserved, and it rejects the <ORG>'s recommendation of reservation of 68% all-told on the ground that such a large percentage of reservation would not be in the larger interests of the <ORG>. That is why, according to the order, 48% was fixed as the total reservation in favour of the Backward Classes, the Scheduled Castes and Scheduled Tribes together; that means, 30% was reserved for the Backward Classes. Annexure I to this order gives a list of 81 Classes and 135 More Backward Classes.

On July 31, 1962, the <ORG> passed the impugned order which supersedes all previous orders made by the <ORG> under Art. 15(4) for reservation of the seats in favour of the Scheduled Castes and Scheduled Tribes as well as the Backward Classes. Under this order, the Backward Classes are divided into two categories (1) Backward Classes and (2) More Backward Classes. The' effect of this order is that it has fixed 50% as the quota for the reservation of seats for Other Backward Classes; 28% out of this is reserved for Backward Classes so-called and 22% for More Backward Classes. The reservation of 15% and 3% for the Scheduled Castes and Scheduled Tribes respectively continues to be the same. The result of this order is that 68% of the seats available for admission to <ORG> and to other technical institutions specified in the order passed on July 10, 1961 is reserved, and only 32% is available to the merit pool. In other words, the percen- tage of reservation to the extent of 68%, which, according to the order of July 10, 1961, would have been against the larger interests of the <ORG>, has, by the impugned order, been accepted. The petitioners contend that the classification made by this order is irrational and the reservation of 68% made by it is a fraud on Article 15 (4).

<NAME>

The problem raised for our decision by the present petitions involves the consideration of sociological, social and economic factors, and so, before dealing with the contentions raised by the parties before us, it is necessary to set out briefly the material which has been adduced before us. On January 29, 1953, the President appointed <ORG> by virtue of the power conferred on him under Art. 340 (1) of the Constitution. This <ORG> made its report on March 30, 1955. The <ORG> was required "to investigate the conditions of socially and educationally backward classes within the territory of India and the difficulties under which they labour, and to make recommendations as to the steps that should be taken by the <ORG> or any <ORG> to remove such difficulties and to improve their condition." Art. 340 (1)]. According to the <ORG>, the relevant factors to consider in classifying Backward Classes would be their traditional occupation or profession; the percentage of literacy or the general educational advancement made by them; the estimated population of the community, and the distribution of the various communities throughout the <ORG> or their concentration in certain areas. The <ORG> also thought that the social position which a community occupies in the caste hierarchy would also have to be considered, as well as its representation in <ORG> service or in the industrial sphere. (p. 47). According to the <ORG>., the causes of educational backwardness amongst the educationally and socially backward communities were:-

1. Traditional apathy for education on account of social and environmental conditions or occupational handicaps.

2. Poverty and lack of educational institutions in rural areas.

3. Living in inaccessible areas.

4. Lack of adequate educational aids, such as free studentships, scholarships and monetary grants.

5. Lack of residential hostel facilities.

6. Unemployment among the educated which acts as a damper on the desire of the members to educate their- children; and

7. Defective educational system which does not train students for appropriate occupations and professions. (p.- 107).

The <ORG> realised that, in substance, the problem of the Backward Classes is really the problem of Rural India (p. 55). It appears that having considered several criteria which may be relevant in determining which classes are backward, the <ORG> ultimately decided to treat the status of caste as an important factor in that behalf, and it is on that basis that it proceeded to make a list of Backward Communities which were specified in Volume 11 of the Report.

Dealing with the problem of university education, the Committee observed that the present rush of students to the <ORG> should be prevented in the larger interests of the country and that could be done only by training students in various occupations and professions at the secondary stage itself. But the Committee noticed that so long as University Degree qualification continues to be a pre- requisite to Government service, it was not easy to prevent the rush at the doors of the <ORG>, and so, the Committee proceeded to recommend that in all Science, Engineering, Medicine, Agriculture, Veterinary and other technical institutions, a reservation of 70% of the seats should be made for qualified students of Backward Classes till such time as accommodation can be provided for all students eligible for admission. (pp. 119 & 125).

That, in brief, is the nature of the material available from the <ORG>'s Report.

It is, however, significant that the Chairman of the <ORG> who signed the Report confestet to a feeling of grave dissatisfaction with the approach adopted in the Report in determining the question as to which communities could be regarded as backward under Art. 15(4). "My eyes were however opened," says the Chairman in his covering letter to the President, "to the dangers of suggesting remedies on caste basis when I discovered that it is going to have a most unhealthy effect on the Muslim and Christian sections of the nation," and he added that the said consciousness gave him a rude shock and drove him to the conclusion that the remedies suggested by the <ORG> were worse than the evil it was out to combat. According to the Chairman, "if we eschew the principle of caste, it would be possible to help the extremely poor and deserving from all communities. Care, however, being taken to give preference to those who come from the traditionally neglected social classes." Even though the Chairman thus expressed his distress in very strong language over the basis adopted by the <ORG>, he ultimately agreed to the proposal of the <ORG> for the reservation of seats. for Backward Classes to the extent of 70 percent. The Report made by the Backward Classes <ORG> along with the Chairman's covering letter was considered by <ORG> in due course. <ORG> apparently did not feel satisfied about the approach adopted by the <ORG> in determining as to who should be treated as Backward Classes under Article 15(4). The Memorandum issued by <ORG> on the Report of the <ORG> points out that it cannot be denied that the caste system is the greatest hindrance in the way of our progress towards an egalitarian society, and the recognition of' the specified castes as backward may serve to maintain and even perpetuate the existing distinctions on the basis of castes. Besides, the memorandum goes on to add that some of the tests applied by the <ORG> were more or less of an individual character, and even if they were accepted, they would encompass a large majority of the country's population. If the entire community, says the memorandum, barring a few exceptions, has thus to be regarded as backward, the really needy would be swamped by the multitude and hardly receive any special attention or adequate assistance, nor would such dispensation fulfill the conditions laid down in Art. 340 of the Constitution. The memorandum, therefore, emphasised that action on a systematic and elaborate basis can be proceeded with only after the necessary positive tests and criteria have been laid down for determining which classes or sections are really entitled to get special relief and assistance. To that end, further investigation was obviously indicated. Even so, instructions were issued by <ORG> to the State Governments requesting them to render every possible assistance and to give all reasonable facilities to the people who come within the category of Backward Classes in accordance with their existing lists and also to such others who in their opinion deserve to be considered as socially and educationally backward in the existing circumstances.

On April 24, 1962, <ORG> wrote to the Secretary of <ORG> of <ORG> on the subject of reservation of seats under Article 15(4). In this communication it was observed that <ORG> had considered the said question and was of opinion that a uniform policy should be followed all over the country at least in <ORG> institutions. It was then added that <ORG> had recommended that the reservation for Scheduled Castes and Scheduled Tribes and other backward communities may be up to 25 % with marginal adjustments not exceeding 10% in exceptional cases. <ORG>, therefore, suggested that in all <ORG> in the State, the reservations under Art. 15 (4) should not in any case exceed 35%. In this connection, it would be interesting to refer to the report made by the Commissioner for Scheduled Castes and Scheduled Tribes in 1959. In this Report, the Commissioner refers to the pilot survey made by the Dy. Registrar General of India at the request of <ORG>. This survey was made with the help of material collected at the time of 1951 Census with a view to find out whether occupations could be adopted as suitable basis for deter- mining social and educational backwardness. A preliminary analysis of the data collected indicated that it would be possible to draw up a list of socially and educationally backward occupations on the basis of:--

(a) any non-agricultural occupations in any State in India in which 500% or more of the persons belong to the Scheduled Castes or the Scheduled Tribes; or

(b) any non-agricultural occupations in which literacy percentage of the persons depending thereon Is less than 500% of the general literacy in the State.

In his Report, the Commissioner has adversely commented on the classification made by the <ORG> in the impugned order. It now remains to consider the report made by <ORG> appointed by the <ORG>. This Report proceeds on the basis that higher social status has generally been accorded on the basis of caste for centuries; and so, it takes the view that the low social position of any community is, therefore, mainly due to the caste system. According to the Report, there are ample reasons to conclude that social backwardness is based mainly on racial, tribal, caste and denominational differences, even though economic backwardness might have contributed to social backwardness. It would thus be clear that the <ORG> approached its problem of enumerating and classifying the socially and educationally backward communities on the basis that the social backwardness depends substantially on. the caste to which the community belongs, though it recognised that economic condition may be a contributory factor. The classification made by the <ORG> and the enumeration of the backward communities which it adopted shows that the <ORG> virtually equated the classes with the castes. According 'to the <ORG>, the entire Lingayat community was socially forward, and that all sections of Vokkaligas,'excluding Bhunts, were socially backward. With regard to the Muslims, the majority of the <ORG> agreed that the Muslim community as a whole should be classified as socially backward. The <ORG> further decided that amongst the backward communities two divisions should be made (i) the Backward and (ii) the More Backward. In making this distinction, the <ORG> applied one test. It enquired: "Was the standard of education in the community in question less than 500% of the <ORG> average? -If it was, the community should be regarded as more backward; if it was not, the community should be regarded as backward." As to the extent of reservation in educational institutions, the <ORG>'s recommendation was that 28% should be reserved for backward and 22% for more backward. In other words, 50% should be reserved for the whole group of backward communities besides 150% and 3% which had already been reserved for the Scheduled Castes and Scheduled Tribes respectively. That is how according to the <ORG>, 68% was carved out by reservation for the betterment of the Backward Classes and the Scheduled Castes an Tribes' It is on the basis of these recommendations that the Government proceeded to make its impugned order. Article 15(4) provides that nothing in this Article or in clause (2) of Article 29 shall prevent the <ORG> from making any special provision for the advancement of any socially and educationally backward Classes of citizens or for the Scheduled Castes and the Scheduled Tribes. This Article was added by the Constitution (First Amendment) Act '1951. The object of this amendment was to bring Articles 15 and 29 in line with Art. 16(4). It will be recalled that in the case of <CITATION> (1) the validity of the Government order issued by <ORG> fixing certain proportions in which students seeking for admissions to the <ORG> in the <ORG> should be admitted, was challenged. The said Government Order was on the face of it a communal order fixing the admissions in the <ORG>d proportion by reference to the communities of. the candidates. This order was struck down by <ORG> and the decision of <ORG> was confirmed by this Court in appeal, on the ground that the fundamental rights guaranteed by Articles 15(1) and 29(2) were not controlled by any exception, and that since there was no provision under Art. 15 corresponding to Art. 16(4 ), the impugned order could not be sustained. It was directly as a result of this decision that Art. 15 was amended and Art. 15(4) was added. Thus, there is no doubt that Art. 15(4) has to be read as a proviso or an exception to Articles 15(1) and 29(2). In other words, if the impugned order is justified by the provisions of Art. 15(4 ), its validity cannot be impeached on the ground that it violates Art. 15(1) or Art. 29(2). The fundamental rights guaranteed by the said two provisions do not affect the validity of the special provision which it is permissible to 'make under Art. 15(4).

(1) [1951] S.C.R. 525.

This position is not and cannot be in dispute. The petitioners contend that the impugned order is invalid because it is not justified by Art. 15(4).

The first argument which has been urged by Mr. <NAME> on behalf of the petitioners is that it is not competent to the <ORG> to make an order under Art. 15(4) unless a <ORG> has been appointed under Art. 340 (1) and a copy of the report of the said <ORG> is laid before <ORG> under Art. 340(3). The argument is that Art. 340 provides for the appointment of a <ORG> to investigate the conditions of Backward Classes. The <ORG> so appointed is required to make a report recommending what steps should be taken to improve the conditions of the Backward Classes [ Art. 340(2). When the Report is received by the President, the President is required to cause a copy-of the Report together with the memorandum explaining the action taken thereon to be laid before <ORG> [ Art. 340(3)]. It is the President who is to take action on the Report and then lay it before <ORG> and it is only the President who can, therefore, make special provision for the advancement of the Backward Classes. That is the effect of reading Articles 340 and 15(4) together. In our opinion, this contention is misconceived. It is true that the Constitution contemplated the appointment of a <ORG> whose report and recommendations, it was thought, would 'Be of assistance to the authorities concerned to take adequate steps for the advancement of Backward Classes; but it would be erroneous to assume that the appointment of the <ORG> and the subsequent steps that were to follow it constituted a condition precedent to any action being taken under Art. 15(4). Besides, it would be noticed that Art. 340(1) provides that recommendations had to be made by the <ORG> as to the steps that should be taken by the union or any <ORG>, inter alia, to improve the condition of the Backward Classes ; and that means that the recommendations were to be made which would be implemented in their discretion by the <ORG> and the <ORG> Government and not by the President. Thus Art. 340(1) itself shows that it is the <ORG> or the <ORG> that has to take action in pursuance of the recommendations made, and so, the argument that the President alone has to act in this matter cannot be accepted.

Then it is urged that even if special provision can be made by the <ORG> under Art. 15(4 ), the said provision must be made not by an executive order but. by legislation. This argument. is equally misconceived. Under Art. 12 , the <ORG> includes the <ORG> and the <ORG> of each of the <ORG>s, and so, it would be unreasonable to suggest that the <ORG> must necessarily mean the <ORG> and not the <ORG>. Besides, where the Constitution intended that a certain action should be taken by legislation and not by executive action, it has adopted suitable phraseology in that behalf. Article 16(3) and (5) are illustrations in point. Both the said subclauses of Art. 16 , in terms, refer to the making of the law by the <ORG> in respect of the matters covered by them. Similarly, Articles 341 (2) and 342 (2) expressly refer to a law being made by <ORG> as therein contemplated. Therefore, when Art. 15(4) contemplates that the <ORG> can make the special provision in question, it is clear that the said provision can be made by an executive order.

Art. 15(4) authorises the <ORG> to make a special provision for the advancement of any socially and educationally backward classes of citizens, as distinguished from the Scheduled Castes and Scheduled Tribes. No doubt, special provision can be made for both categories of citizens, but in specifying the categories, the first category is distinguished from the second. Sub-clauses (24) and (25) of Art. 366 define Scheduled Castes and Scheduled Tribes respectively, but there is no clause defining socially and educationally, backward classes of citizens, and so, in determining the question as to whether a particular provision has been validly made under Art. 15 (4 ),or not, the first, question which falls to be determined is whether the <ORG> has validly, determined who should .be included in those Backward Classes. It seems fairly clear that the back and classes of citizens,, for whom special provision is authorised to be made are, by Art. 15(4) itself, treated as being similar to the Scheduled Castes and Scheduled Tribes. Scheduled Castes and Scheduled Tribes which have been defined were known to be backward and the Constitution- makers felt no doubt that special provision had to be made for their advancement. It was realised that in the Indian society there were other classes of citizens who were equally, or may be somewhat less, backward than the Scheduled Castes and Tribes and it was thought that some special provision ought to be made even for them. Article 341 provides for the issue of public notification specifying the castes, races or tribes which shall, for the purposes of this Constitution, be deemed to be Scheduled Castes either in the <ORG> or the <ORG> territory as the case may be. Similarly,' Art. 342 makes a provision for the issue of public notification in respect of Scheduled Tribes. Under Article 338 (3 ), it' is provided that references to the Scheduled Castes and Scheduled Tribes shall be construed as including references to such other Backward Classes as the President may, on receipt of the report of a <ORG> appointed under Art. 340(1 ), by order, specify and also to the Anglo Indian community. It would thus be seen that This provision contemplates that some Backward Classes may by the Presidential order be included in Scheduled castes and Tribes. That helps to bring, out the point that the Backward Classes for whose improvement special provision is contemplated, by Art. 15 (4) are in the matter of their,, backwardness comparable to Scheduled Castes and Scheduled Tribe In considering the scope and extent of the expression "'backward classes' under Art. 15(4 ), it is necessary to remember that the concept of backwardness is not intended to be relative in the sense that any classes who arc backward in relation to the most advanced classes of the society should be included in it. If such relative tests were to be applied by reason of the most advanced classes, there would he several layers or strata of backward classes and each one of them may claim to be included under Art. 15(4). This position is not disputed before us by the learned Advocate- General for the <ORG>. The backwardness under Art. 15(4) must be social and educational. It is not either social or educational but it is both social and educational; and that takes us to the question as to how social and educational backwardness has to be determined.

Let us take the question of social backwardness first. By what test should it be decided whether a particular class is socially backward or not ? The group of citizens to whom Article 15(4) applies -ire described as 'classes of citizens', not as castes of citizens.A class, according to the dictionary meaning, shows division of society according to status, rank or caste. I In the Hindu social structure, caste unfortunately plays an important part in determining the status of the citizen. Though according to sociologists and Vedic scholars, the caste system may have originally begun on occupational or functional basis, in course of time, it became rigid and inflexible. The history of the growth of caste system shows that its original functional and occupational basis was later over-burdened with considerations of purity based on ritual concepts, and that led to its ramifications which introduced inflexibility and rigidify. This artificial growth inevitably tended to create a feeling of superiority and inferiority and to foster narrow caste loyalties. Therefore, in dealing with the question as to whether any class of citizens is socially backward or not, it may not be irrelevant to consider the caste of the said group of citizens. In this connection, it is, however, necessary to bear in mind that the special provision is contemplated for classes of citizens and not for individual citizens as such, and so, though the caste of the group of citizens may be relevant, its importance should not be exaggerates. If the classification of backward classes of citizens was based solely on the caste of the citizen, it may not always be logical and may perhaps contain the vice of perpetuating the caste themselves. Besides, if the caste of the group of citizens was made the sole basis for determining the social backwardness of the said group, that test would inevitably break down in relation to many sections of Indian society which do not recognise castes In the conventional sense known to Hindu society. How is one going to decide whether Muslims, Christians or jains, or even Lingayats are socially backward or not ? The test of castes would be inapplicable to those groups, but that would hardly justify the exclusion of these groups in toto from the operation of Art. 15(4). It is not unlikely that in some States some Muslims or Christians or jains forming groups may be socially backward. That is why we think that though castes in relation to Hindus may be a relevant factor to consider in determining the social backwardness of groups or classes of citizens, it cannot be made the sole or the dominant test in that behalf. Social backwardness is on the ultimate analysis the result of poverty, to a very large extent. The classes of citizens who are deplorably poor automatically become socially backward. They do not enjoy a status in society and have, therefore, to be content to take a backward seat. It is true that social backwardness which results from poverty is likely to be aggravated by considerations of caste to which the poor citizens may belong, but that only shows The relevance of both caste and poverty in determining the backwardness of citizens.

The occupations of citizens may also contribute to make classes of citizens socially backward. There are some occupations which are treated as inferior according to conventional beliefs and classes of citizens who follow these occupations are apt to become socially backward. The place of habitation also plays not a minor part in determining the backwardness of a community of persons. In a sense, the problem of social. backwardness is the problem of Rural India and in that behalf, classes of citizens occupying a socially backward position in rural area fall within the purview of Art. 15(4). The problem of determin- ing who are socially backward classes is undoubtedly very complex. Sociological, social and economic considerations come into play in solving the problem and evolving proper criteria for determining which classes are socially backward is obviously a very difficult task; it will need an elaborate investigation and collection of data and examining the said data in a rational and scientific way. That is the function of the <ORG> which purports to act under Art. 15(4). All that this <ORG> is called upon to do in dealing with the present petitions is to decide whether the tests applied by the impugned order are valid under Art. 15(4). If it appears that the test applied by the order in that behalf is improper and invalid, then the classification of socially backward classes based on that test will have to be held to be inconsistent with the requirements of Art. 15(4). What then is the test applied by the <ORG> in passing the impugned order ? We have already seen that <ORG> appointed by the <ORG> was inclined to treat the caste as almost the sole basis in determining the question about the social backwardness of any community. The <ORG> has no doubt incidentally referred to the general economic condition of the community as a contributory factor; but the manner in which it has enumerated the backward any more backward classes leaves no room for doubt that the predominant, if not the sole, test that weighed in their minds was the test of caste. When we consider the impugned order itself. the position becomes absolutely clear. The impugned order has adopted the earlier order of July 10, 1961, with some changes as to the quantum of reservation, and so, it is necessary to examine the earlier order in order to see what test was applied by the <ORG> in classifying the backward Classes. In its preamble, the order of July 10, 1961, clearly and unambiguously states that the <ORG> had come to the conclusion that in the present circumstances, the only practicable method of classifying the Backward Classes in the <ORG> is on the basis of castes and communities and the <ORG> Government accepts this test. In. other words, on the order as it stands there can be no room for doubt that the classification of backward and more backward classes was made by the <ORG> Government only on the basis of their castes which basis was regarded as a practicable method. It is true that in support of the inclusion of the Lingayats amongst the Backward Classes the order refers to some other factors, but neither the Report of <ORG>s, nor the orders passed by the <ORG> Government on July 10, 1961, and July 31, 1962, afford any indication as to how any test other than that of the caste was applied in deciding the question. The learned Advocate-General has contended that the statement in the preamble of' the order of July 10, 1961 should not be literally construed and he has argued that the words used in the relevant portion are inartistic and he has suggested that the order is not based on the sole basis of castes. We are not impressed by this argument. We have considered both the orders in the light of the Report' and the recommendations made by <ORG> and we are satisfied that the classification of the socially backward classes of citizens made by the <ORG> proceeds on the only consideration of their castes without regard to the other factors which are undoubtedly relevant. If that be so, the social backwardness of the communities to whom the impugned order applies has been determined in a manner which is not permissible under Art. 15(4) and that itself would introduce an infirmity which is fatal to the validity of the said classification. The next question to consider is in regard to the educational backwardness of the classes of citizens. The Nagan Gowda Report and the impugned order proceed to deal with this question on the basis of the average of student population in the last the <ORG> classes of all <ORG>s in the <ORG> in relation to a thousand citizens of that community. On the figures supplied to the <ORG> which admittedly are approximate and not fully accurate, the <ORG> came to the conclusion that the <ORG> average of student population in the last three <ORG> classes of all <ORG>s in the <ORG> was 69 per thousand. The <ORG> decided that all Castes whose average was less than the <ORG> average of 6.9 per thousand should be regarded as backward communities, and it further held that if the average of any community was less than 50% of the <ORG> average, it should be regarded as constituting the more backward classes. It may be conceded that in determin- ing the educational backwardness of a class of citizens, the literacy test supplied by <ORG> may not be adequate; but it is doubtful if the test of the average of student population in the last three <ORG> classes is appropriate in determining the educational backwardness. Having regard to the fact that the test is intended to determine who are educationally backward classes, it may not be necessary or proper to put the test as high as has been done by the <ORG>. But even assuming that the test applied is rational and permissible under Art. 15(4 ), the question still remains as to whether it would be legitimate to treat castes or communities which are just below the <ORG> average as educationally backward classes. If the <ORG> average is 6.9 per thousand, a community which satisfies the said test or is just below the said test cannot be regarded as backward. It is only communities which are well below the <ORG> average that can properly be regarded as educationally backward classes of citizens. Classes of citizens whose average of student population works below 50% of the <ORG> average are obviously educa- tionally back-ward classes of citizens. Therefore, in our opinion, the <ORG> was not justified in including in the list of Backward Classes, castes or communities whose average of student population per thousand was slightly above, or very near, or just below the <ORG> average. It will be recalled that <ORG> had recommended that the Lingayats should not be treated as Backward Classes. The <ORG> has decided otherwise, and in doing so, the <ORG> has taken the view that the figures arrived at by the <ORG> should be corrected to the nearest integer as, in the nature of things, says the order of July 10, 1960, it is not possible to attain absolute mathematical precision in making such assessments. That is how the <ORG> average was raised from (6.9 to 7 per thousand. Even after increasing the <ORG> average to 7, the position with regard to Lingayat community was that its average of student, population was 7.1 per thousand according to the <ORG>'s calculations and according to the decision of the <ORG> 7, and yet the Lingayats as a community have been held to be an educationally backward class of citizens under the <ORG> order. This result has been achieved by adding,1 to the <ORG> average and deducting ,1 from the Lingayats' average. The Ganigas whose average of student population is 7 per thousand are likewise included in the list of Backward Classes. If the <ORG> average is 6.9 or 7, it would, we think, be manifestly erroneous to regard those communities as educationally backward whole student population ratio works at the same level as the <ORG> average.

In regard to the Muslims, the majority view in the <ORG> was that the Muslim community as a whole should be treated as socially backward. This conclusion is stated merely as a conclusion and no data or reasons are cited in support of it. The average of student population in respect of this community works at 5 per thousand and that, in our opinion, is not so below the <ORG> average that the community could be treated as educationally backward in the <ORG> of Mysore. Therefore, we are not satisfied that the <ORG> was justified in taking the view that communities or castes whose average of student population was the same as, or just below, the <ORG> average, should be treated as educationally backward classes of citizens. If the test has to be applied by a reference to the <ORG> average of student population, the legitimate view to take would be that the classes of citizens whose average is well or substantially below the <ORG> average can be treated as educationally backward. On this point again, we do not propose to lay down any hard and fast, rule; it is for the <ORG> to consider the matter and decide it in a manner which is consistent with the requirements of Art. 15 (4).

In this connection, it is necessary to add that the sub- classification made by the order- between Backward Classes and More Backward Classes does not appear to be justified under Art. 15(4).  Art. 15(4) authorises special provision being made for the really backward classes. In introducing two categories of Backward Classes, what the impugned order, in substance, purports to do is to devise measures for the benefit- of all the classes of citizens who are less advanced, compared to the most advanced classes in the <ORG>, and that, in our opinion, is not the scope of Art. 15(4). The result of the method adopted by the impugned order is that nearly 90% of the population of the <ORG> is treated as backward, and that illustrates how the order in fact divides the population of the <ORG> into most advanced and the rest, and puts the latter into two categories of Backward and More Backward. The classification of the two categories, therefore, is not warranted by Art. 15(4).

That takes us to the question about the extent of the special provision which it would be competent to the <ORG> to make under Art. 15(4).  Article 15(4) authorises the <ORG> to make any special provision for the advancement of the Backward Classes of citizens or for the Scheduled Castes and Scheduled Tribes. The learned Advocate-General contends. that this Article must be read in the light of Art. 46 , and he argues that Art. 15(4) has deliberately and wisely placed no limitation on the <ORG> in respect of the extent of special provision that it should make. Art. 46 which contains a directive principle, provides that the <ORG> shall promote with special care the educational and economic interests of the weaker sections of the people, and in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all form,% of exploitation. There can be no doubt that the object of making a special provision for the advancement of the castes or communities, there specified, is to carry out the directive principle enshrined in Art. 46. It is obvious that unless the educational and economic interests of the weaker sections of the people are promoted quickly and. liberally, the ideal of establishing social and economic equality will not be attained, and so, there can be no doubt that Art. 15(4) , authorises the <ORG> to take adequate steps to achieve the object which it has in view. No one can dispute the proposition that political freedom and even fundamental rights can have very little meaning or significance for the Backward Classes and the Scheduled Castes Scheduled Tribes unless the backwardness and inequality from which they suffer are immediately redressed. The teamed Advocate-General, however, suggests that the absence of any limitation on the <ORG>'s power to make an adequate special provision indicates that if the problem of backward classes of citizens and Schedule a Caste and Tribes in any given <ORG> is of such a magnitude that it requires the reservation of all seats in higher educational institutions, it would be open to the <ORG> to take that course. His argument is that the only test which can be applied is whether or not having regard to the problem which the <ORG> is called upon to meet, the provision made is reasonably adequate or not. Thus presented, the argument is, no doubt, prima facie attractive, and so, it must be carefully examined.

When Art. 15(4) refers to the special provision for the advancement of certain classes or scheduled castes or scheduled tribes, it must not be ignored that the provision which is authorised to be made is a special provision ; it is not a provision which is exclusive in character, so that in looking after the advancement of those classes, the <ORG> would be justified in ignoring altogether the advancement of the rest of the society. It is because the interests of the society at large would be served by promoting the advancement of the weaker elements in the society that Art. 15(4) authorises special provision to be made. But if a provision which is in the nature of an exception completely excludes the rest of the society, that clearly is outside the scope of Art. 15(4). It would be extremely unreasonable to assume that in enacting Art. 15(4) the <ORG> intended to provide that where the advancement of the Backward Classes or the Scheduled Castes , and Tribes was concerned, the fundamental rights of the citizens constituting the rest of the society were to be completely and absolutely ignored, In this connection, it is necessary to remember that the reservation made by the impugned order is in regard to admission in the seats of higher education in the <ORG>. It is well-known that as a result of the awakening caused by political freedom, all classes of citizens are showing a growing desire to give their children higher university education and so, the <ORG> are called upon to face the challenge of this growing demand. While it is necessary that the demand for higher education which is thus increasing from year to year must be adequately met and properly channelised, we cannot overlook the fact that in meeting that demand standards of higher education in <ORG> must not be lowered. The large demand for education maybe met by starting larger number of educational institutions, vocational schools and polytechnics. But it would be against the national interest to exclude from the portals of our <ORG> qualified and competent students on the ground that all the seats in the <ORG> are reserved for weaker elements in society. As has been observed by <ORG>, "he indeed must be blind who does not see that mighty as are the political changes, far deeper are the fundamental questions which will be decided by what happens in the universities" (p. 32). Therefore, in considering the question about the propriety of the reservation made by the impugned order, we cannot lose sight of the fact that the reservation is made in respect of higher university education. The demand for technicians scientists, doctors, economists, engineers a experts for the further economic advancement of the country is so great that it would cause grave prejudice to national interests if considerations of merit are completely excluded by whole-sale reservation of seats in all <ORG> Medical or Engineering colleges or institutions of that kind. Therefore, considerations of national interest and the interests of the community or society as a whole cannot be ignored in determining the question as to whether the special provision contemplated by Art. 15(4) can be special provision which excludes the rest of the society altogether. In this connection, it would be relevant to mention that <ORG> which considered the problem of the assistance to backward communities, has observed that the percentage of reservation shall not exceed a third of the total number of seats, and it has added that the principle of reservation may be adopted for a period often years. (p. 53).

We have already noticed that <ORG> in its communication to the State has suggested that reservation for backward classes, Scheduled Castes and Scheduled Tribes may be up to 25% with marginal adjustments not exceeding 10% in exceptional cases.

The learned Advocate-General has suggested that reservation of a large number of seats for the weaker sections of the society should not affect either the depth or efficiency of scholarship at all, and in support of this argument, he has relied on the observations made by <ORG> that it found no complaint in the States- of Madras, Andhra, Travancore-Cochin and Mysore where the system of recruiting candidates from other Backward Classes to the reserve quota has been in vogue for several decades. The Committee further observed that the representatives of the upper classes did not complain about any lack of efficiency i n the offices recruited by reservation (p.

135). This opinion, however, is plainly inconsistent with what is bound to be the inevitable consequence of reservation in higher university education. If admission to professional and technical colleges is unduly liberalised it would be idle to contend that the quality of our graduates will not suffer. That is not to say that reservation should not be adopted; reservation should and must be adopted to advance the prospects of the weaker section's of society, but in providing for special measures in that behalf care should be taken not to exclude admission to higher educational centres to deserving and qualified candidates of other communities. A special provision contemplated by Art. 15(4) like reservation of posts and appointments contemplated by Art. 16(4 must be within reasonable limits. The interests of weaker sections of society which are, a first charge on the states and the <ORG> have to be adjusted with the interests of the community as a whole. The adjustment of these competing claims is undoubtedly a difficult matter, but if under the guise of making a special provision, a <ORG> reserves practically all the seats available in all the colleges, that clearly would be subverting the object of Art. 15 (4). In this matter again.. we arc reluctant to say definitely what would be a proper provision to make. Speaking generally and in a ];road way, a special provision should be less than 50%; how much less than 50% would depend upon the relevant prevailing circumstances in each case. In this particular case it is remarkable that when the <ORG> issued its order on July 10, 1961, it emphatically expressed its opinion that the reservation of 68% recommended by <ORG> would not be in the larger interests of the <ORG>. What happened between July 10, 1961, and July 31, 1962, does not appear on the record. But the <ORG> changed its mind and adopted the recommendation of the <ORG> ignoring its earlier decision that the said recommendation was contrary to the larger interests of the <ORG>. In our opinion, when the <ORG> makes a special provision for the advancement of the weaker sections of society specified in Art. 15(4 ), it has to approach its task objectively and in a rational manner. Undoubtedly, it has to take reasonable and even generous steps to help the advancement of weaker elements; the extent of the problem must be weighed, the requirements of the community at large must be borne in mind and a formula must be evolved which would strike a reasonable balance between the several relevant considerations. Therefore, we are satisfied that the reservation of 68% directed by the impugned order is plainly inconsistent with Art. 15 (4). The petitioners contend that having regard to the infirmities in the impugned order, action of the <ORG> in issuing the said order amounts to a fraud on the Constitutional power conferred on the <ORG> by Art. 15(4). This argument is well-founded, and must be upheld. When it is said about an executive action that it is a fraud on the Constitution, it does not necessarily mean that the action is actuated by mala fides. An executive action which is patently and plainly outside the limits of the constitutional authority conferred on the <ORG> in that behalf is struck down as being ultra, vires the <ORG>'s authority. If, on the other hand, the executive action does not patently or overtly transgress the authority conferred oil it by the Constitution, but the transgression is covert or latent, the said action is struck down as being a fraud on the relevant constitutional power. It is in this connection that courts often consider the substance of the matter and not its form and in ascertaining the substance of the matter, the appearance or the cloak, or the veil of the executive action is carefully scrutinized and if it appears that notwithstanding the appearance, the cloak or the veil of the executive action, in substance and in truth the constitutional power has been transgressed, the impugned action is struck down as a fraud on the Constitution. We have already noticed that the impugned order in the present case has categorised the Backward Classes on the sole basis of caste which, in our opinion, is not 'permitted by Art. 15(4); and we have also held that the reservation of 68% made by the impugned order is plainly inconsistent with the concept of the special provision authorised by Art. 15(4). Therefore, it follows that the impugned order is a fraud on the Constitutional power conferred on the <ORG> by Art. 15(4). The learned Advocatc-General has made an earnest and strong plea before us that we should not strike.down the order, but should strike down only such portions of the order which appear to us to be unconstitutional on the doctrine of severability. He has urged that since 1938, the <ORG> has had to make five orders to deal with the problem of advancing.the lot of the Backward Classes and the <ORG> is anxious that the implementation of the impugned order should not be completely prohibited or stopped. We do not see how it would be possible to sever the invalid provisions of the impugned order. If the categorisation of the Backward Classes is invalid, this <ORG> cannot and would not attempt the task of enumerating the said categories; and if the percentage of reservation is improper and outside Art. 15(4 ), this <ORG> would not attempt to lay down definitely and in an inflexible manner as to what would be the proper percentage to reserve. In this connection, it may be relevant to refer to one fact on which the petitioners have strongly relied. It is urged for them that the method adopted by <ORG> in exercising its powers under Art. 15(4) is a proper method to adopt. It appears that <ORG> has decided to afford financial assistance, and make monetary grants to students seeking- higher education where it is shown that the annual income of their families is below a prescribed minimum. The said scheme is not before us and We are not called upon to express any opinion on it. However, we may observe that if any <ORG> adopts such a measure, it may afford relief to and assist the advancement- of the Backward Classes in the <ORG>, because backwardness, social and educational, is ultimately and primarily due to poverty. An attempt can also be made to start newer and more educational institutions, polytechnics, vocational institutions and even rural Universities and thereby create more opportunities for higher education. This dual attack on the problem posted by the weakness of backward communities can claim to proceed on a rational, broad and scientific approach which is consistent with, and true to, the noble ideal of a secular welfare democratic <ORG> set up, by the Constitution of this country. Such an approach can be supplemented, if necessary by providing special provision by way of reservation to aid, the Backward classes and Scheduled castes and Tribes. It may well be that there may be other ways and means of achieving the same result. In our country where social and economic conditions differ from <ORG> to <ORG>, it would be idle to expect absolute uniformity of approach; but in taking executive action to implement the policy of Art. 15(4). It necessary for the <ORG>s to remember that the policy which is intended to be implemented is the policy which has been declared by Art. 46 and the preamble of the Constitution. It is for the attainment of social and economic justice that Art. 15(4) authorises the making of special provisions for the advancement of the communities there contemplated even if such provisions may be inconsistent with the fundamental; rights, guaranteed tinder Art. 15 or 29(2). The context, therefore, requires that the executive action taken by the <ORG> must be based on an objective approach, free from all extraneous pressures. The said action is intended to do social and economic justice and must be taken in a manner that justice is and should be done.

Whilst we are dealing with this question, it would be relevant to add that the provisions of Art. 15(4) are similar to those of Art. 16(4) which fell to be considered in the case of <NAME>, <ORG> v. <NAME>). In that case, the majority decision of this Court held that the power of reservation which is conferred on the <ORG> under Art. 16(4) can be exercised by the <ORG>, in a proper (1) (1962) 2 S. C. R. 586, case not only by providing for reservation of appointments, but also by providing for reservation of selection posts. This conclusion was reached on the basis that it served to give effect to the intention of the Constitution-makers to make adequate safeguards for the advancement of Backward Classes and to secure their adequate representation in the <ORG>. The judgment shows that the only point which was raised for the decision of this Court in that case was whether the reservation made was outside Art. 16(4) and that posed the bare question about the construction of Art. 16(4). The- propriety, the reasonableness or the wisdom of the impugned order was not questioned because it was not the respondents case that if the order was justified under Art. 16(4 ), it was a fraud on the Constitution. Even so, it was pointed out in the judgment that the efficiency of administration is of such a paramount importance that it would be unwise and impermissible to make any reservation at the cost of efficiency of administration; that, it was stated, was undoubtedly the effect of Art. 335. Therefore, what is true in regard to Art. 15(4) is equally true in regard to Art. 16(4). There can be no doubt that the Constitution-makers assumed, as they were entitled to, that while adequate reservation under Art. 16(4 ), care would be taken not to provide for unreasonable, excessive or extravagant reservation, for that would, by eliminating general competition in a large field and by creating wide- spread dissatisfaction amongst the employees, materially affect efficiency. Therefore, like the special provision improperly made under Art. 15(4 ), reservation made under Art: 16(4) beyond the permissible and legitimate limits would be liable to be challenged as a fraud on the Constitution. In this connect ion it is necessary to emphasis that Art. 15 (4) is an enabling provision; it does not impose an obligation, but merely leaves it to the discretion of the appropriate government to take suitable action, if necessary.

In the result, we allow the writ petitions and direct, that an appropriate writ or order or direction should, be issued restraining the three respondents from giving effect to the impugned order in terms of the prayer made in clauses (i) and (ii) of paragraph 38 of the petitions. The petitioners would be entitled to their costs, one set of hearing fees. Petitions allowed.


<NAME>, J.

1. This case is really the aftermath of a previous suit which ended in an abortive attempt at arbitration. The original action (O.S. No. 59 of 1926, on the file of the District Munsif of Ongole) was brought by presumptive reversioners for a declaration of their rights in properties in the possession of a widow and a minor. One of the questions arising in that suit was the genuineness of a will. The decision of that question apparently involved certain disclosures which are alleged to have been likely to embarrass the karnam of the village. As a result of this anticipated embarrassment, the village officers engineered a compromise. It is found as a fact by the lower <ORG> that there was a definite agreement as to the terms of this compromise, and that the parties decided that it would be best to have this compromise embodied in the award of an arbitrator on a reference by the <ORG>. Consequently, an application for reference to arbitration, which is Ex. A in the present proceedings, was drafted and signed by both the parties and filed in <ORG>. Apparently both the parties and the learned District Munsif overlooked the, fact that according to the terms of Ex. A, questions of possession and pecuniary compensation, which were not in issue in the suit, were to be referred to the arbitrator. The <ORG> referred the suit and the arbitrator made the award. Objections were raised to the award on the grounds (a) that it was procured by fraud and (b) that it went outside the subject-matter of the suit. No decision was given on the fraud question, and the <ORG> decided that the award went beyond the scope of the suit and could not therefore form the basis of a decree. The suit, O.S. No. 59 of 1926, was then decided on the merits and resulted in a decree and an appeal. While that suit was pending, the present suit was filed, wherein the plaintiff seeks possession of properties allotted to them by the decision of the arbitrator, or in the alternative a declaration that they have a reversionary right therein. The suit is in fact based on the abortive reference to arbitration as evidence of an agreement between the parties capable of separate enforcement by suit.

2. There are two questions now before me in this second appeal. One is whether the plaintiffs are entitled to enforce as an extra judicial agreement between the parties, for allotment of properties by the arbitrator, what was in form and fact an agreement to refer matters through <ORG> to an arbitrator with a view to the termination of the suit, which scheme has become abortive. The other question is whether there was fraud as alleged so as to vitiate the agreement. I will deal first with the purely legal question, as to the possibility of making an abortive reference to arbitration through <ORG> the foundation of a separate suit as on a private agreement. The plaintiffs who are the appellants base their arguments mainly on the decision reported in <CITATION> 1926 Mad. 366, where it was held that when there was a reference to arbitration through <ORG> and a separate agreement by the parties that the arbitrators should deal with matters not within the scope of the suit, though the award is invalid under para. 15 read in the light of para. 3, Schedule 2, Civil P.C., yet the agreement between the parties, that these matters outside the suit should be settled by the arbitrator is binding upon them and it may form the subject of a separate suit. With reverence to that ruling, it must be observed that in the present case there is really no-agreement subsequent to the agreement to refer matters to arbitration. The agreement embodied in Ex. A is essentially an agreement by the party to get both the matter in suit and some matters out of suit decided by the arbitrator through the <ORG>, with a view to put an end to the pending litigation.

3. I have heard the arguments of both sides at considerable length, and after careful consideration, I am definitely of opinion that this agreement does not provide for any settlement of matters by the arbitrator, apart from the pending suit. The essence of the agreement is that both the plaintiffs and the defendant were anxious to determine the litigation without further expense, and on that consideration, they agreed that the arbitrator on reference through <ORG> should decide the question of the rights of parties including the rights to possession and pecuniary compensation. Apart from this reference through <ORG>, there was no agreement at all, and if the reference through <ORG> broke down, the prospect of putting an end to the litigation ceased, and the whole foundation of the agreement goes, and there is nothing loft which can be enforced, I take it that this is the line of thought which must have formed the basis for the decision in <CITATION> 1921 Mad. 709, wherein a Bench of this <ORG>, in a similar case found that an award under an invalid reference being itself invalid gives no rights either as an award or as a compromise.

4. It has been argued that the authority of this case is taken by a <ORG> decision, <NAME> v. <NAME> 1928 Mad. 1025, wherein it is held that Section 89, Civil P.C., is not a bar to a decree in terms of an award based on an extra judicial reference to arbitration being passed in a pending suit. It is true that their Lordships consider <CITATION> 1921 Mad. 709 and dissent from it so far as it relates to the applicability of a bar under Section 89 of the Civil Procedure Code to the recording of a compromise as a result of an extra judicial reference to arbitration, but there is no dissent from the decision in the previous paragraph of the judgment in <CITATION> 1921 Mad. 709, to the effect that the award under an invalid reference being itself invalid, gives no rights either as an award or as a compromise. It seems to me that the decision in <CITATION> 1921 Mad. 709 must rest on the logical conclusion that though an agreement to compromise a suit may be enforced in separate proceedings, there can be no such agreement, for a private compromise when the whole tenor of the agreement in question contemplates an award through the intervention of the <ORG>. The position is, of course, quite different) when, as in <CITATION> 1926 Mad. 366 referred to above, there is a separate private agreement for the decision of additional questions by the arbitrator. In this view I must hold that the view taken by the <ORG>s below that the reference to arbitration was vitiated by illegality at its inception and that the award based solely on such an illegal reference cannot be enforced by a suit is correct.

5. It is unnecessary therefore to go into the further question of the correctness of the decision based on fraud, but I must observe that the finding of the lower <ORG> in the matter of fraud seems to be based on allegations quite different from those which we find in defendant 1's written statement. The plea of defendant 1 expressly was that there was a conspiracy between the arbitrator and the village officers to pass an award different from that which the parties themselves had agreed upon at the time when this more or less formal application for reference to arbitration was made in <ORG>. The case of fraud as presented actually in the lower <ORG>s, seems to have been a conspiracy by the plaintiffs to induce the defendants to sign a reference to arbitration with the idea of getting an award different from that which had been agreed upon. The evidence before the lower <ORG> seems to me to contain very little to justify m finding that the arbitrator himself had fraudulently conspired to give an unjust award, and I am of opinion that the <ORG>s below should not have found fraud based on allegations different from those which were pleaded. In the view however which I have taken on the first point the appeal fails and is dismissed with costs.


ORDER Per <NAME> - This appeal by the assessee for assessment year 1985-86 is directed against the order dated 16-9-1992 passed under section 263 of the Income-tax Act, 1961 by <ORG>, Patiala.

2. Brief facts of the case are these : The assessee is an individual who had income for two months from 1-4-1984 to 31-5-1984 as proprietor of <ORG> dealing in manufacture and sale of poultry feeds. The assessee also started a proprietary business in the name of <ORG>, Jagraon, which ran for two months for February and March 1985. The accounting period of the assessee ended on 31-3-1985. There was an income-tax search at the premises of the assessee on 14-10-1986 when certain books of accounts and documents were taken into possession by the <ORG>. The Assessing Officer made an assessment on 27-7-1990 under section 143(3) of the Act. Though the order is not very exhaustive, it is clear from the order that the incriminating material seized by the income-tax authorities was looked into by the Assessing Officer before framing the assessment. In fact, the Assessing Officer had issued three enquiry letters dated 6-2-1987, 10-2-1987 and 29-1-1988, copies of which are placed at pages 9 to 14 of the <ORG> compilation.

3. The <ORG>, however examined the record of the assessee and noticed that the document seized during the income-tax search had not been considered by the Assessing Officer. He also noticed that some of the investments had not been looked into and on some, enquiries had not been made. The ld. Commissioner accordingly issued a show-cause notice dated 4-2-1992 listing as many as nine items which were not considered by the Assessing Officer at the time of original assessment. The Assessee furnished a detailed reply dated 15-9-1992 which is placed at pages 4 to 8 of the assessees compilation.

4. The <NAME>. Commissioner, after enumerating the nine items mentioned the show-cause notice in the body of the order passed under section 263 of the Act, took cognizance of the reply submitted by the assessee but he<NAME> that it was neither proper nor possible for him to verify the explanation furnished by the assessees learned counsel. Since, according to him, the Assessing Officer while passing the original assessment order had failed to consider the incriminating evidence in some seized papers and also did not look into certain investments, he he<NAME> that the assessment order dated 27-7-1990 was erroneous insofar as it was prejudicial to the interests of the revenue. He accordingly set aside the assessment order in question and directed the Assessing Officer to make a de novo assessment considering all the seized papers not considered earlier and also other important aspects of the case as mentioned in the impugned order. It is against this order that the assessee has come up in appeal before us.

5. <NAME>, Advocate, the ld. counsel for the assessee, very ably presented the case of the assessee. It was submitted by him that though the assessment order passed by the Assessing Officer may not be exhaustive and may be cryptic, that would not mean that the Assessing Officer had not made the necessary enquiries before completing the assessment. The ld. counsel, in fact, drew our attention to the various notices issued by the Assessing Officer before completing the assessment to which a reference had been made above. It was also submitted that the order under section 263 was a quasi-judicial order and it was necessary for assuming jurisdiction that there should be a proper and valid reason for doing so and the conclusion of the ld. Commissioner should also be based on facts. It was submitted that in the instant case, the ld. Commissioner had not gone into the explanation furnished by the assessee nor had he come to a definite conclusion that the order passed by the <ORG> was erroneous and prejudicial to the interests of the revenue. It was vehemently argued that the entire approach of the ld. Commissioner was faulty and on that basis, no order under section 263 could have been passed.

6. The ld. counsel with the help of a chart filed before us explained as to how item Nos. (i) to (vi) in the impugned order had been gone into by the Assessing Officer as would be clear from the various query letters issued by him before completing the assessment. As regards item No. (vii), it was submitted that the assessee in his detailed reply before the Commissioner had pointed out that <ORG> was incorporated on 5-5-1984 and that no income was earned up to 29-9-1984 when the assessee resigned from directorship. The assessee had explained that shares worth Rs. 10,000 of this company had been purchased after earned the same in the books of accounts since no income had been earned, nothing was to be shown in the return. As regards item No. (viii), it was submitted that business in the style of <ORG> was being run by <NAME> w/o Dr. <NAME>, sister-in-law of the assessee, as a proprietary concern. It was pointed out that in the reply submitted, it had been explained that the proprietary concern was proposed to be converted into a partnership concern for which purpose a partnership deed dated 17-10-1984 was also executed but this remained a paper transaction only and no activity was done by the partnership concern. It was also pointed out that neither any investment was made nor did the firm actually come into existence. It was also submitted that <NAME> was assessed in her proprietary capacity for the said business for assessment year 1985-86.

7. As regard item No. (ix), it was submitted that all the incriminating documents had been gone into by the ITO and that the search took place as a result of the machination of a disgruntled and dismissed employee of the assessee, <NAME>. The ld. counsel for the assessee, therefore, vehemently argued that there was absolutely no justification for assuming jurisdiction under section 263 by the ld. CIT nor for passing the order setting aside the assessment to be made afresh.

8. The ld. counsel relied on the Patna High court decision in <CITATION>  142 ITR 778 for the proposition that the Commissioner has to point out as to how order sought to be cancelled is prejudicial to the interest of the revenue. Moreover, his satisfaction has to be not subjective but objective. Reliance was also placed on the <ORG> decision in the <CITATION> .  170 ITR 28 for the proposition that the power of revision by the Commissioner under section 263 of the Act is quasi-judicial in character and he must give reasons in support of his conclusion that the assessment order is erroneous insofar as it is prejudicial to the interests of the revenue. If he does not give reasons, the order would stand vitiated. The ld. counsel also relied on the Punjab and Haryana High Court decision in <CITATION>  112 ITR 445 for the proposition that in passing an order of revision under section 263 of the Act, it is necessary for the Commissioner to state in what manner he considered that the order of the Assessing Officer was erroneous and prejudicial to the interests of the revenue and that the basis was for such a conclusion. Relying on the Punjab and Haryana High Court decision in <CITATION>  178 ITR 446, it was submitted that the Commissioner had come to a firm decision that the order of the Assessing Office was erroneous and was prejudicial to the interests of the revenue. The ld. counsel also relied on <ORG> decision in <CITATION>  171 ITR 698 at 701 for the proposition that the orders of the <ORG> may be brief and cryptic, but that by itself is not sufficient to brand the assessment orders as erroneous and prejudicial to the interests of the revenue. Writing an order in detail may be legal requirement, but the order not fulfilling this requirement, cannot be said to be erroneous and prejudicial to the interests of the revenue. Relying on the Rajasthan High Court decision in <CITATION>  167 ITR 129, it was submitted that the error envisaged by section 263 was not on which depended on possibility or guesswork, but it should be actually an either of fact or of law. The learned counsel for the assessee, therefore, forcefully submitted that all the necessary enquiries had been made by the <ORG> and the ld. Commissioner had failed to point out any error in the assessment order. It was, therefore, pleaded that the impugned order may be vacated.

9. The <ORG> Representative submitted that in the show-cause notice, 9 reasons were given by the ld. Commissioner for invoking his jurisdiction under section 263 . According to the <ORG> Representative, these very reasons were incorporated in the impugned order. It was submitted that these were valid reasons which could justify the intervention by the learned Commissioner. It was submitted that the Assessing Officer had failed to consider the entire evidence and hence the setting aside of assessment order became a necessity. The <ORG>al Representative strongly superheated the impugned order.

10. We have carefully considered the submission of both the sides. We find considerable merit in the arguments of <NAME> which have been put forth in a very clear-cut manner. We find that the assessment order framed by the Assessing Officer was passed under section 143(3) after making all the necessary enquiries. The income-tax search and taken place on 14-10-1986. The Assessing Officer issued three query letters to which a reference has been made above. The assessment was completed on 27-7-1990 which was almost four years after the seizure of documents and records by the income-tax authorities. All these clearly show that the <ORG> had made the necessary enquiries before completing the assessment. The <ORG> counsel for the assessee has demonstrated with reference to a chart that items at Sl. Nos. (i) to (vi) mentioned in the impugned order were covered by one other query letter issued by the Assessing Officer. As regards items at Sl Nos. (vii) to (ix), it was submitted that a proper and exhaustive reply had been filed before the CIT which was, however, not considered by that authority. Various High Courts have he<ORG> that the power by the Commissioner under section 263 is quasi-judicial in character. The Commissioner, therefore, has not to record his subjective satisfaction but to a conclusion in an objective manner. The <ORG> Commissioner has also to come to a firm conclusion that the order passed by the Assessing Officer was erroneous and prejudicial to the interests of revenue. The learned Commissioner cannot sit in judgment over the discretion exercised by the Assessing Officer. He can legally interfere with the assessment order only if he finds that the order is both erroneous and prejudicial to the interests of the revenue. In the instant case, what we find is that the <ORG> Commissioner has neither looked into the submissions made on behalf of the assessee nor came to a firm conclusion that the assessment order was erroneous and prejudicial to the interests of the revenue. He has also not demonstrated as to how the incriminating evidence seized by the revenue had not been utilised by the <ORG>. On the contrary, the <ORG> for the assessee has demonstrated before us as to how the Assessing Officer had issued detailed query letters for eliciting necessary information from the assessee. The case law cited by the assessee and referred to above makes it abundantly clear that the <ORG> Commissioner must state the reasons for intervention before assuming jurisdiction under section 263 and while passing the order under section 263 must come to a conclusion that the order passed by the Assessing Officer was not only erroneous but also prejudicial to the interests of the revenue. In the case of <ORG> (supra) the facts were more or less similar to what we find in the instant case. In that case for assessment year 1979-80, the Assessing Officer completed the assessment. The <ORG> Commissioner intervened under section 263 of the Act and set aside the order of assessment with a direction to make fresh assessment on the ground that business loss of the assessee amounting to Rs. 30,000 was determined after adjusting deductions under section 80J and was allowed to be carried forward and also due to certain other infirmities. The <ORG> found that no firm conclusions were arrived at by the Commissioner in his revisional jurisdiction, and therefore, it cou<ORG> not be said that the assessment made by the Assessing Officer was erroneous, which was one of the prerequisites for the exercise of revisional jurisdiction by the Commissioner and hence set aside the order of the Commissioner. <ORG> he<ORG> that the Commissioner did not furnish his opinion or consider the cited cases or the arguments raised and merely observed that these were the points which deserved consideration and after setting aside the order of the <ORG> Assessing Officer, issued a direction for making assessment afresh, which was not permissible under the provisions contained in section 263 of the Act. <ORG> further he<ORG> that the Commissioner had to come to a firm decision that the order of the <ORG> was erroneous and prejudicial to the interests of the revenue and since no decision about the erroneous nature of the order was firmly taken. The <ORG> was he<ORG> to be right in vacating the order of the Commissioner under section 263 . In our opinion, the fact in the case of <ORG> (supra), as discussed above, are akin to the in the instant case. In the present case also, the Commissioner has not come to a firm conclusion as to how the order passed by the Assessing Officer was erroneous. All the necessary enquiries as noted above already been made by the Assessing officer. The assessee had all furnished a cogent reply before the <ORG> Commissioner when a show-cause notice issued under section 263(1) was issued. In the face of this evidence, the <ORG> Commissioner cou<ORG> not pass an order under section 263 by remarking that it was neither proper nor possible for him to verify the explanation furnished by the assessees counsel. In fact, it was the duty of the <ORG> Commissioner to took the explanation of the <ORG> counsel for the assessee and come to a firm conclusion as to whether the Assessing Officer had committed an error framing the assessment. Setting aside an assessment is no ordinary matter. In fact, in tax laws as in other laws, certainly and finality are the prerequisites of a good tax administration. The orders of the subordinate authority shou<ORG>, therefore, not be cancelled or set aside on mere whims and fancies; there must be very compelling reasons for interference by the <ORG> Commissioner under section 263 . In the instant case, however, the <ORG> Commissioner has left the enquiries to be made to the Assessing Officer without reaching a firm conclusion that the order passed was, in fact, erroneous. We have therefore, no hesitation to say that the impugned orders stands vitiated for the reasons mentioned above and is hereby vacated.

11. In the result, the appeal is allowed.