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Providing reservations in commerical contracts




The Government is really going the whole hog in terms of providing reservations, including in areas not mandated by the constitution. In a petition before the Supreme Court, it has hauled up the Government for mandating reservation in catering contracts allocated by Indian Railways. If you don’t really believe this, read this reference:

The Centre’s policy of providing reservation to Scheduled Castes, Scheduled Tribes, Other Backward Classes and minorities in commercial contracts has come under Supreme Court scanner. The apex court has asked the Centre to explain why preferential treatment was being accorded to such groups in awarding catering tenders of the Indian Railways. The court also directed continuation of its interim order. It had restrained the railway authorities from finalising the tenders.
“Article 16 provides for reservation in public employment. Article 15 (5) deals with policy of reservation in education. Similarly, the state is empowered to come up with special provision for the advancement for SCs, STs and OBCs,” the SC noted. “But does awarding of commercial contracts fall within any of the above-mentioned articles?” it asked. “Under which constitutional provision, you (Centre) are giving preferential treatment to minorities in commercial matters?” the court sought to know from the country’s top law official.


These are a series of cases in which the Government’s political impulses are being challenged by the top court of the country. If this case continues, doubtless there will be more politicians who will come in and either ask the court to stay off, or ask the court to stay away from operational matters. So a little background in civics. The legislature (parliament) makes laws, the executive (government) is involved in operational details and essentially running the country as per these laws, and the courts (with the Supreme Court at the head) is the decision maker in terms of whether these policies and laws meet the test of being indeed lawful. These tests are done on the basis of using the constitution as a benchmark, as the basis for decisions. So, it is absolutely not necessary that just because the government makes a policy or parliament makes a law, it is absolute. Only a just law is a correct law, and like most countries governed by the constitution, we have the courts as the final decision making body (we need to have a final decision making body).
Now, in this case, the government set out a policy where it decided that a portion of the contracts should be decided on the basis of the caste of the groups applying for catering. In commercial contracts, that too put out by the government, there needs to be absolute clarity, with all entities involved being sure that they have an equal chance as per their abilities, and the current reservation policy is a clear violation of the honesty required in such contracts.
Secondly, from time to time, the courts have always held that reservations, even where held valid, should be held valid only when the creamy layer have been excluded. The creamy layer is the section of people in the caste who are of a significant socio-economic status (such as with quality of education, income, etc) that they don’t need reservation to uplift them. Does anybody have any doubt that people applying for railways catering contracts don’t already have the required social class and money with them that they don’t need any special permission.
My guess is that in this case as well, the government will have no clear reason or statute of law that it can quote for having this policy, and eventually the policy will be declared illegal, along with some more stinging remarks at the political reasons behind such a policy. This policy, especially for something like the railways that is more prominent in smaller states and semi-urban areas, was meant more to be advertised as a political measure, notwithstanding the fact that it was actually discriminatory.




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