Reservation In Promotion- Supreme Court Declares That Its Judgment In M. Nagaraj Shall Have Only Prospective Effect

The Supreme Court declared that its 2006 judgment in M. Nagaraj & Ors. v. Union of India & Ors. (2006) 8 SCC 212, will have only prospective effect.

This is to avoid chaos and confusion that would ensue from its retrospective operation, the court said. Making the principles laid down in M. Nagaraj (supra) effective from the year 1995 would be detrimental to the interests of a number of civil servants and would have an effect of unsettling the seniority of individuals over a long period of time, the bench comprising Justices L. Nageswara Rao, Sanjiv Khanna and BR Gavai observed.

In Indra Sawhney  v. Union of India & Ors. 1992 Supp (3) SCC 217, the Supreme Court had held that Article 16(4) of the Constitution of India does not provide for reservation in the matter of promotions. It was clarified that the judgment shall have prospective operation and shall not affect the promotions already made, whether made on regular or on any other basis.

By the Constitution (Seventy-seventh Amendment) Act, 1995, which came into force on 17.06.1995, Article 16 of the Constitution was amended by insertion of Article 16(4-A), which then read as below:- "Nothing in this article shall prevent the State from making any provision for reservation in matters of promotion to any class or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State".

In the 2006 judgment in M. Nagaraj & Ors. v. Union of India & Ors.  (2006) 8 SCC 212 which upheld the constitutional amendments which inserted Articles 16(4A) and 16(4B), the Court had held that it is not mandatory for the State to make reservations for SC/ST in matter of promotions. However, if the State did wish to exercise its discretion, it is supposed to gather quantifiable data showing backwardness of the class and inadequacy of representation of that class in public employment, in addition to compliance with the requirement of maintaining administrative efficiency as per Article 335.  However, the judgment did not state that it would be only prospective in operation.

In 2018, the Constitution Bench in Jarnail Singh & Ors. v. Lachhmi Narain Gupta & Ors (2018) 10 SCC 396 held that the 2006 Judgment in Nagaraj Case need not be referred for consideration of larger Bench and clarified that there is no requirement to collect quantifiable data of backwardness of SC/STs to provide reservation in promotions. The dictum in Nagaraj was held contrary to Indra Sawhney decision to the extent it prescribed collection of quantifiable data of backwardness of SC-STs as a prerequisite for providing reservation in promotions. 

In this case, the court was considering the request made by Attorney General for India to declare the law laid down by M. Nagaraj (supra) as having prospective operation. So the issue that was considered by the bench was whether a judgment can be made prospectively applicable subsequently by a different bench ?

The court noted that in M.A. Murthy v. State of Karnataka (2003) 7 SCC 517, it was held that prospective overruling can be done only by the Court which has rendered the decision,. The bench also noted that, in  Ashok Kumar Gupta & Anr. v. State of U.P. (1997) 5 SCC 201, it was observed that there is no prohibition to postpone the operation of the judgment in Indra Sawhney (supra) or to prospectively overrule the ratio in General Manager, Southern Railway v. Rangachari (1962) 2 SCR 586.

The court therefore held that the observation made in M.A. Murthy (supra) that there shall be no prospective overruling unless indicated in the particular decision is obiter. The court said:

42. This Court in Golak Nath (supra) and Ashok Kumar Gupta (supra), referred to above, has laid down that Article 142 empowers this Court to mould the relief to do complete justice. To conclude this point, the purpose of holding that M. Nagaraj (supra) would have prospective effect is only to avoid chaos and confusion that would ensue from its retrospective operation, as it would have a debilitating effect on a very large number of employees, who may have availed of reservation in promotions without there being strict compliance of the conditions prescribed in M. Nagaraj (supra). Most of them would have already retired from service on attaining the age of superannuation. The judgment of M. Nagaraj (supra) was delivered in 2006, interpreting Article 16(4-A) of the Constitution which came into force in 1995. As making the principles laid down in M. Nagaraj (supra) effective from the year 1995 would be detrimental to the interests of a number of civil servants and would have an effect of unsettling the seniority of individuals over a long period of time, it is necessary that the judgment of M. Nagaraj (supra) should be declared to have prospective effect."

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