While Article 14 forbids class legislation, it does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of achieving specific ends. But classification must not be "arbitrary, artificial or evasive". It must always rest upon some real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved by the legislature. Classification to be reasonable must fulfil the following two conditions:-
1. the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and
2. the differentia must have a rational relation to the object sought to be achieved by the Act.
The differential which is the basis of the classification and the object of the Act are two distinct things. What is necessary is that there must be a nexus between the basis of classification and the object of the Act which makes the classification. It is only when there is no reasonable basis for a classification that legislation making such classification may be declared discriminatory. Thus, the Legislature may fix the age at which persons shall be deemed competent to contract between themselves but no one will claim that competency. No contract can be made to depend upon the statute or colour of the hair. Such a classification will be arbitrary.
The true meaning and scope of Article 14 have been explained in a number of cases by the Supreme Court. In re Special Court Bill case, Chandrachud, J., reformulated new propositions to be followed regarding the applicability of Article 14. This has been rightly critisized by Mr. Seervai as making the well-settled principles unsettled and creating confusion and uncertainty and encouraging litigation. The principles laid down by Das, J., in Dalmia's case has not been disputed by Chandrachud, J., and therefore there was no need to reformulate the same unless it was necessary to add something to the existing principles. In view of this, the propositions laid down in Dalmis's case still holds good governing a valid classification and are as follows:-
1. A law may be constitutional even though it relates to a single individual if on account of some special circumstances or reasons applicable to him and not aplicable to others, that single individual may be treated as a class by itself.
2. There is always presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of constitutional principles.
3. The presumption may be rebutted in a certain cases by showing that on the fact of the statute, there is no classification at all and no difference peculiar to any individual or class and not applicable to any other individual or class, and yet the law hits only a particular individual or class.
4. It must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by exprience and that its discriminations are based on adequate grounds.
5. In order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of report, the history of the times and may assume every state of facts which can be conceived existing at the time of the legislations.
6. The Legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest.
7. While good faith and Knowledge of the existing conditions on the part of a Legislature are to be presumed. If there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to be hostile or discriminating legislation.
8. The classification may be made on different basis, e.g. geographical or according to object or occupations or the like.
9. The classification made by a legislature need not be scientifically perfect or legically complete. Mathematical nicety and perfect equality are not required. Equality before the law does not require mathematical equality of all persons in all circumstances. Equal treatment does not mean identical treatment. Similarity, not identity, of treatment is enough.
10. There can be no discrimination both in the substantive as well as the procedural law. Article 14 applied to both.
If the classification satisfied the test laid down in the above propositions, the law will be declared constitutional. The question whether a classification is reasonable, and proper or not, must, however, be judged more on commonsense that on legal subtleties.
In S.T Sadiq v. State of Kerala, under Section 3 of the Keral Cashew Factories (Acquisition) Act, 1974, the State Government acquired 46 factories in the public interest to prevent unemployment due to closure of the factories and loss to the Government. The writ petitions filed by ten factories in the High Court were dismissed by the common judgment and the writ petitions by 36 factories were filed directly in the Supreme Court. The Supreme Court disposed of these writ petitions by ordering the possession of the factories to be handed over to the respective owners on the ground of some procedural flaws. The order of acquisition was therefore quashed. However, the Court made it clear that it would be oipen to the Government to exercise the power of acquisition on being satisfied the basis of relevant material as specified by the Court which was as per procedure laid down by the statute. In appeal by ten factory owners, the Supreme Court gave a similar judgment in their favour. As per the mandamus of the Court, 36 cashew factories were handed back to the respective owners but the same was not done regarding 10 cashew factories for which contempt proceedings were filed but due to the apology tendered by the respondents, the contempt proceedings were filed but due to the apology tendered by the respondents, the contempt proceedings were terminated. In the contempt proceedings, the respondents had taken shelter under an ordinance which latter on became the Kerala Cashew Factories (Amendment) Act, 1995 which was brought into force retrospectively.
The Act had the effect of acquiring only 10 factories as aforesaid which were mentioned in the scedule of the Act. The Supreme Court set aside the judgement of the High Court and ordered the cashew factories to be handed over back. The Court inter alia held - There was no intelligivle differentia between the 36 factories which were functioning under their respective owners for the last 20 years and 10 factories taken over having any rational relation with the object sought to be achieved. Section 6 of the Amendment Act regarding the acquisition of certain cashew factories was struck down for violating Article 14 of the Constitution.
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