17. The counsel for the respondent had contended that the constitutional intention behind Article 243-D is not that of 100 per cent reservation but only proportionate reservation and it speaks of rotation of the reserved seats. However, we must emphasize that Article 243-M(4)(b) permits `exceptions and modifications' in the application of Part IX to Scheduled Areas. The respondents have also argued that the maximum reservation which is legally permissible is only up to 50 per cent and reliance was placed on the decisions of this Court in Indra Sawhney v. Union of India, (1992) Suppl. (3) SCC 217 and M.R. Balaji v. State of Mysore, (1963) 1 SCC 439. However, it should be kept in mind that both of these decisions were given in respect of reservation measures enabled by Article 16 (4) of the Constitution.
18. At the outset, we are of the view that the principles of reservation which are applicable for public employment and for admission to educational institutions cannot be readily applied in respect of a reservation policy made by the legislature to protect the interests of the Scheduled Tribes by assuring them of majority reservation as well as the occupancy of Chairperson positions in Panchayats located in Scheduled Areas. This policy broadly corresponds with the past practice wherein the Scheduled Areas were administered as per the provisions of the Fifth Schedule to the Constitution and the same was expected to adhere to the advice of the Tribes Advisory Councils, which were predominantly controlled by Scheduled Tribes. By extending the Panchayati Raj system to these areas, Scheduled Tribes should not be put in a relatively disadvantageous position. In the Panchayati Raj system contemplated by Part IX, the Scheduled Tribes should have an effective say in the administration. That is why the Bhuria Committee recommended that all Chairperson positions should be reserved in favour of Scheduled Tribes.
19. The Counsel for the respondents also contended that the exclusive reservation in favour of Scheduled Tribes unfairly limits the scope of political participation for others and since all the offices of Chairpersons are reserved, there is no scope for rotation of seats as contemplated by the third proviso to Article 243-D(4) of the Constitution. It was also pointed out that in some of the Districts notified as Scheduled Areas, the Scheduled Tribes are not in a majority. First of all, it is to be remembered that the impugned reservation policy is applicable only to Scheduled Areas which were hitherto covered by the Fifth Schedule to the Constitution. We must make it abundantly clear that this pattern of reservation has been designed only for Scheduled Areas which merit such exceptional treatment. In the present case, it should be noted that the Scheduled Areas under consideration are restricted only to certain Districts in the State of Jharkhand. In some Districts where STs are not predominantly in occupation, only certain blocks have been notified as Scheduled Areas by themselves. On account of migration of non-tribal people in some areas, there may be a relatively lesser proportion of tribal population but historically these areas were occupied almost exclusively by Tribal people. ...
28. It is a well-accepted premise in our legal system that ideas such as `substantive equality' and `distributive justice' are at the heart of our understanding of the guarantee of `equal protection before the law'. The State can treat unequals differently with the objective of creating a level-playing field in the social, economic and political spheres. The question is whether `reasonable classification' has been made on the basis of intelligible differentia and whether the same criteria bears a direct nexus with a legitimate governmental objective. When examining the validity of affirmative action measures, the enquiry should be governed by the standard of proportionality rather than the standard of `strict scrutiny'. Of course, these affirmative action measures should be periodically reviewed and various measures are modified or adapted from time to time in keeping with the changing social and economic conditions. Reservation of seats in Panchayats is one such affirmative action measure enabled by Part IX of the Constitution. ...
30. Article 243D of the Constitution, as stated earlier, clearly identifies the intended beneficiaries in the form of persons belonging to scheduled castes, scheduled tribes, women and other backward class of citizens. While introducing the 73rd Amendment Act, the Statement of Objects and Reasons clearly contemplated democratic decentralization to pursue the legitimate governmental objective of ensuring that the traditionally marginalized groups should progressively gain a foothold in local self government. It is in this background that `reasonable classification' is to be viewed.
31. 50% of reservation in favour of the STs in Panchayats at all the three tiers is clearly an example of `compensatory discrimination' especially in view of the fact that the scheduled areas under consideration were completely under a separate administrative scheme as per the Fifth Schedule to the Constitution. In fact, 50% of reservation in favour of the scheduled tribes by itself was not challenged before the High Court. Therefore, the question that now remains is whether reservation should be made in favour of the scheduled castes and backward class for the purpose of scheduled areas. The Constitutional mandate is that the scheduled castes should be given reservation at all the three tiers of Panchayats, with regard to the principle of proportionate representation. ...
34. We believe that the case of Panchayats in Scheduled Areas is a fit case that warrants exceptional treatment with regard to reservations. The rationale behind imposing an upper ceiling of 50% in reservations for higher education and public employment cannot be readily extended to the domain of political representation at the Panchayat-level in Scheduled Areas. With respect to education and employment, parity is maintained between the total number of reserved and unreserved seats in order to maintain a pragmatic balance between the affirmative action measures and considerations of merit. Under Article 15(4) and 16(4) the reservation of seats in favour of socially and educationally backward classes (SEBC) is ordinarily done on the basis of proportionate representation and an upper ceiling of 50% allows for considerable flexibility in distributing the benefits of higher education and public employment among a wide range of intended beneficiaries such as the Scheduled Castes (SC), Scheduled Tribes (ST), Women and Other Backward Classes (OBC). However, the same approach of providing proportionate representation is likely to be less effective in the context of reservations for panchayats in scheduled areas. One reason for this is the inherent difference between the nature of benefits that accrue from access to education and employment on one hand and political participation on the other hand. While access to higher education and public employment increases the likelihood of gradual socio-economic empowerment of the individual beneficiaries, involvement in local-self government is intended as a more immediate measure of protection for the individual as well as the community that he/she belongs to. Especially in the context of Scheduled Areas, there is a compelling need to safeguard the interests of tribal communities with immediate effect by giving them an effective voice in local self-government. The Bhuria Committee Report had clearly outlined the problems faced by Scheduled Tribes and urged the importance of democratic decentralisation which would empower them to protect their own interests.
35. By reserving at least half of the seats in panchayats located in Scheduled Areas in favour of STs, the legislature has adopted a standard of compensatory discrimination which goes beyond the ordinary standards of `adequate representation' and `proportionate representation'. The standard of `adequate representation' comes into play when it is found that a particular community is under-represented in a certain domain and a specific threshold is provided in order to ensure that the beneficiary group comes to be adequately represented with the passage of time. For instance in Part IX of the Constitution, the reservation in favour of women which amounts to one-third of all the seats in Panchayats is an embodiment of the `adequate representation' standard.
36. However, in instances where the Constitution does not specify the quantum of reservations, the idea of `proportionate representation' is the rule of thumb. As mentioned earlier, proportionate representation has been the controlling idea behind reservations in the context of education and employment which have a basis in Article 15(4) and 16(4) respectively. Even in the context of Panchayati Raj Institutions, Article 243-M(1) and Article 243-M(6) explicitly refer to `proportionate representation' as the controlling idea behind reservations in favour of SCs, STs and Backward Classes respectively. With respect to the panchayats located in Scheduled Areas, the flexibility provided by Article 243-M(4)(b) has led to the enactment of the PESA which specifies `proportional representation' as the norm for reservations in favour of the intended beneficiaries, but makes a departure from this standard in order to protect the interests of Scheduled Tribes in particular.
37. There is of course a rational basis for departing from the norms of `adequate representation' as well as `proportionate representation' in the present case. This was necessary because it was found that even in the areas where Scheduled Tribes are in a relative majority, they are under-represented in the government machinery and hence vulnerable to exploitation. Even in areas where persons belonging to Scheduled Tribes held public positions, it is a distinct possibility that the non-tribal population will come to dominate the affairs. The relatively weaker position of the Scheduled Tribes is also manifested through problems such as land-grabbing by non-tribals, displacement on account of private as well as governmental developmental activities and the destruction of environmental resources. In order to tackle such social realities, the legislature thought it fit to depart from the norm of `proportional representation'. In this sense, it is not our job to second-guess such policy-choices.