A substantive review of classification should involve scrutiny of the object of law or State action based on the proportionality test. If the object is illegitimate or opposed to constitutional morality, it shouldn't find judicial acceptance.
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EQUALITY is a standard or moral principle to protect individuality of an individual against discriminatory and indiscriminate State action. Articles 14 to 16 of the Constitution of India guarantee equality; this guarantee against unjustified discrimination has been examined on the touchstones of the classification test and the non-arbitrariness test. However, Justice D.Y. Chandrachud, on behalf of a two-judge division bench (comprising Justices Chandrachud and A.S. Bopanna) of the Supreme Court, in his judgment in the case of State of Tamil Nadu versus National South Indian River Interlinking Agriculture Association (2021) [Tamil Nadu case], while referring to his earlier concurring opinion in the Supreme Court's landmark Navtej Singh Johar judgment of 2018, resurrected jurisprudential interest by his explicit observations that – "The traditional two-pronged classification test needs to be expanded for the Courts to undertake a substantive review of Article 14 violations, away from the formalistic tendency that the twin test leans towards".
The constitutional mandate on equality is platformed in Article 14, which is declarative in nature, declaring the rights of the individual and the duty of the State. An individual is granted a right to be treated equally or on par with others, and a duty is cast on the State to desist from treating individuals unequally. However, our Constitution makers had the experience of the working of the equality provision incorporated by the 14th amendment of the Constitution of the United States of America. They realized that absolute equality is unworkable.
“The classification and segregation of individuals becomes necessary in the dynamic discharge of varied functions of the State, whether in exercise of police and regulatory powers, eminent domain powers, taxation powers, judicial powers or in the distribution of the largesse by way of grants.
If equality is applied literally, the State is rendered dysfunctional. The State defines wrongs and punishes the wrongdoers. When all are equal, alas, the offenders cannot be punished! If all are equal, the welfare schemes cannot be made only for poor or economically marginal sections of the society. The classification and segregation of individuals becomes necessary in the dynamic discharge of varied functions of the State, whether in exercise of police and regulatory powers, eminent domain powers, taxation powers, judicial powers or in the distribution of the largesse by way of grants.
The United States' Supreme Court initially held that the equality provision found in the 14th amendment is a guarantee only against racial discrimination. The amendment was introduced in response to the U.S. civil war in 1867, and in this historical context, the provision was understood accordingly. After three decades, when the courts revisited the issue, it opened up the mandate of equality to test the discriminations in non-racial cases of individuals which concerned restrictions on the liberty and distribution of privileges.
While Article 14 is declarative on equality, Article 15(1) lays down a specific command or rule of conduct that – the State shall not classify or discriminate "only" on the ground of sex, religion, race, race, caste or place of birth. It follows that a State may justify discrimination on any non-prohibited grounds -if such classification or discrimination is based on an intelligible differentia, and it bears a nexus to the object sought to be achieved by the State.
Philosophically, the concept of equality is a postulate of justice and justice is the "first virtue of social institutions". If the legal system has a purpose, this purposive enterprise is to ensure justice. The justice of a legal system may differ. However, the modern legal system based on rule of law ought to claim equality as its goal.
Elaborating on the concept of distributive justice, Greek philosopher Aristotle said in his classic work 'The Nicomachen Ethics' that "[i]njustice arises when equals are treated unequally, and also when unequals are treated equally". Equality a fortiorari is a moral standard to guide the actions of a State based on rule of law. Equality is also said to be part of the principle of republicanism. The U.S. Supreme Court has said, "Indeed the very idea of classification is that of inequality…" Our Supreme Court, in the Special Courts Bill case of 1979 said: "Classification necessarily implies the making of a distinction or discrimination between the persons classified and those who are not members of that class". On a reduction, the right to equality should be read as right against unjustified discrimination.
To illustrate, the equality of rights signifies that –
(I) If X and Y are similar, the State must treat X and Y similarly, except when the State thinks that there are good reasons to classify and discriminate between X and Y.
(II) However, if X and Y are not similar, then State shall treat X and Y dissimilarly, unless the State thinks that a similar treatment to X and Y is justified for good reasons.
(III) If X and Y are similar, excluding X from the benefit or grant of privilege is discrimination against X, except for good reasons. If X and Y are dissimilar, treating both similarly without recognising dissimilarity of X, is discrimination against X, unless there are good reasons.
(IV) If X and Y are similar, burdening, restricting or depriving the liberty or right only of X amounts to discrimination against X, unless there are good reasons to cause discrimination.
On the crucial question of how to test justified discrimination, the classification test has been the norm since the beginning in 1950. However, the test against arbitrariness was introduced by the Supreme Court in the E.P. Royappa case of 1973, which supposes that arbitrary decisions or actions by the State necessarily lead to unjustified discrimination. Now, after three decades, in the Tamil Nadu case, the tests of "effect" and proportionality have been proposed.
“On a reduction, the right to equality should be read as right against unjustified discrimination.
In the Anwar Ali Sarkar case of 1952, Justice M.P. Sastri, on behalf of a Constitution bench of five judges, observed that "The state in the exercise of its Governmental power must of necessity make laws operating differently on different groups or classes of persons within its territory to attended particular and in giving effect to its policies, and it must possess for that propose large power of distinguishing and classifying persons or things to be subjected to such laws". On this premise, the classification test was laid down.
In the Budhan Choudhry case of 1954, the classification test was exposited as – "It is now well established that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes person or things that are grouped together from others left out of the group, and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases; namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure."
The classification test was revisited by Justice Chandrachud in the Tamil Nadu case. The precursor to the revisitation is the following passage of the concurring opinion of Justice Chandrachud in Navtej Singh Johar:
"Equating the content of equality with the reasonableness of a classification on which a law is based advances the cause of legal formalism. The problem with the classification test is that what constitutes a reasonable classification is reduced to a mere formula: the quest for an intelligible differentia and the rational nexus to the object sought to be achieved. In doing so, the test of classification risks elevating form over substance. The danger inherent in legal formalism lies in its inability to lay threadbare the values which guide the process of judging constitutional rights. Legal formalism buries the life-giving forces of the Constitution under a mere mantra. What it ignores is that Article 14 contains a powerful statement of values – of the substance of equality before the law and the equal protection of laws. To reduce it to a formal exercise of classification may miss the true value of equality as a safeguard against arbitrariness in state action. As our constitutional jurisprudence has evolved towards recognizing the substantive content of liberty and equality, the core of Article 14 has emerged out of the shadows of classification. Article 14 has a substantive content on which, together with liberty and dignity, the edifice of the Constitution is built."
“Articulating the theme further that the classification test promotes "legal formalism", Justice Chandrachud has found fault with the classification test in the Tamil Nadu case.
Articulating the theme further that the classification test promotes "legal formalism", Justice Chandrachud has found fault with the classification test in the Tamil Nadu case. He says that "over-emphasis on the 'objective' of the law, instead of its 'effect' – particularly when the objective is ostensible – was observed not to further the true meaning of the equality clauses".
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The classification test of intelligible differentia and the rational nexus to the object sought to be achieved does not touch the question whether the purpose or object of the law is just or legitimate. The legitimacy and genuineness of the object is not tested.
If courts begin substantive inquiry on this question, departing from legal formalism, as Justice Chandrachud advocates in the Tamil Nadu case, unjustified discrimination can be checked more meaningfully. The object which is not legitimate or which is opposed to constitutional morality cannot be upheld. The doctrine of proportionality advocated by Justice Chandrachud in the Tamil Nadu case indeed involves the scrutiny of the object of law or State action.
In a research paper, Singaporean legal academic Jaclyn L. Neo, analysing cases on Article 12 of the Constitution of Singapore on equality, writes, "Proportionality is regarded as a more stringent test as it requires the court to examine not only the suitability of the law (there being a rational relation between the law and the differentia), but also the legitimacy of the object and necessity of the law." However, if the scrutiny into correctness of the object of law or State action is undertaken, unless it is discernible on the face of it, courts may face the charge of trenching into policy matters. This is a sensitive area, particularly when impugned State action is a legislative action.
What is the effect of the 'effect test' enunciated in the Tamil Nadu case to checkmate unjustified discrimination? The "effect" implies existence of a pre-existing right as a common law right, constitutional right or fundamental right in the targeted person which is sought to be restricted or deprived. However, it is necessary to know that the State actions which are questioned on the ground of discrimination under Article 14 involve two types of cases: (i) cases where the effect or harm on pre-existing rights is complained of, and (ii) cases where non-rights like the privileges or benefits distributed by the State are involved.
“However, if the scrutiny into correctness of the object of law or State action is undertaken, unless it is discernible on the face of it, courts may face the charge of trenching into policy matters. This is a sensitive area, particularly when impugned State action is a legislative action.
In the Tamil Nadu case, Justice Chandrachud has referred to the Supreme Court judgments in the Indian Hotel Association case of 2007, and the Modern Dental College Research case of 2016. However, if we look at the facts of these cases, the Supreme Court, while testing the effect or injury in the Indian Hotel Association case was concerned with pre-existing rights of dancing girls viz the right to occupation claimed under Article 19(1)(g) of the Constitution. Similarly, in the Modern Dental College Research case, what was involved was the fundamental right to occupation of the management guaranteed under Article 19(1)(g). In fact, in the latter case, there was no issue on Article 14 which was involved.
What happens when the targeted individual has no pre-existing right? In matters of distribution of State largesse like, for instance, waiver of loans, which was the issue in the Tamil Nadu case, there is no question of fundamental rights involved. Neither small and medium farmers nor large farmers have any fundamental right to the grant of loans or waiver of loans by public authorities. State largesse is a privilege, to which individuals have no pre-existing rights as the law stands. Similarly, in employment matters, there is no fundamental right. In fact, Article 16 speaks of only equality of "opportunity".
The test against arbitrariness laid down by Justice P.N. Bhagwati in E.P. Royappa to overcome the rigours of the classification test may appear nearer to the test of "effect". However, there is vital difference. The test of arbitrariness can be applied to both rights and non-rights cases. The test is directed against the State action, not on the rights of targeted individuals.
Justice Chandrachud, referring to a writing by legal scholar Tarunabh Khaitan, observes in his judgment in the Tamil Nadu case that "the equality doctrine as envisaged in the Constitution not only guarantees against comparative unreasonableness but also non-comparative unreasonableness". However, in the same writing, Khaitan has distinguished between cases engaging "fundamental value or right" and cases which engaged in the "allocation of natural resources". He then buttresses his point by referring to Article 14 of the European Convention on Human Rights. The said Article states, "The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination", which has been amended by Protocol 12 to the Convention in 2000 to extend equality guarantee to the cases where fundamental rights are not engaged.
A substantive review of classification should involve scrutiny of the object of law or State action based on the proportionality test. If the object is illegitimate or opposed to constitutional morality, it shouldn't find judicial acceptance.
“The test of arbitrariness can be applied to both rights and non-rights cases. The test is directed against the State action, not on the rights of targeted individuals.
With regard to the "effect" test, the ratio in the Tamil Nadu case cannot be interpreted to have laid down an unqualified principle. The test of "effect" may not apply to the cases which are concerned with non-rights or the distribution of privileges and benefits. It applies to the cases where there is a pre-existing right as a constitutional right, fundamental right or even a common law right. Even in employment matters (except cases touching the right to property under Article 300A of the Constitution), the "effect" test doesn't apply. Nobody has a right against taxation and to employment.