State of Haryana vs. Faridabad Industries Association and anr


With effect from January 15, 2022, Haryana enacted the Haryana State Employment of Local Candidates Act, 2020, in an effort to combat the rising unemployment rates. This law, which aimed to give Haryana citizens 75% of jobs in the private sector, came under judicial examination. As a result, the Punjab and Haryana High Courts hosted a legal conflict that ultimately involved the Supreme Court. The case’s nuances are thoroughly examined, including its timing, legal difficulties, arguments made, and rulings that followed.

Case Overview

The Haryana State Employment of Local Candidates Act, 2020, is being challenged in a petition (CWP No. 24967/2021) filed by the Faridabad Industries Association & ANR before the Punjab and Haryana High Court, raising constitutional issues. Adopted on January 15, 2022, the law required a 75% local candidate preference for positions in the private sector. Without giving a clear explanation, the High Court suspended the law’s execution with an interim ruling on February 3, 2022. The State of Haryana contested the High Court’s stay order by submitting a special leave petition (Petition(s) for Special Leave to Appeal (C) No(s).1917/2022) to the Supreme Court.

The High Court’s stay was overturned by the Supreme Court on February 17, 2022, and an expedited decision on the Writ Petition was ordered. Stressing that there are insufficient justifications for the stay, the Supreme Court sent the case back to the High Court, instructing a prompt resolution not later than four weeks from February 17, 2022. The State of Haryana was barred from taking coercive measures against employers during this interim period. The legal battle unfolded under the case name IMT Industrial Association v. State of Haryana, with the final judgement delivered on November 17, 2023.


  • The Haryana State Employment of Local Candidates Act, 2020, takes effect on January 15, 2022.
  • On February 3, 2022, the Punjab and Haryana High Court imposed a temporary injunction to halt the Act’s execution.
  • February 17, 2022: The Supreme Court orders an expedited decision on the Writ Petition, overturning the stay order issued by the High Court.
  • The parties are ordered to appear before the High Court on February 22, 2022, in order to arrange the hearing.
  • Final Judgement: November 17, 2023.

Legal Issues

  1. Constitutionality of Domicile-Based Reservation: The main question is whether the Haryana State Employment of Local Applicants Act, 2020, which mandates a 75% reservation for local applicants in private sector positions, is constitutionally viable.
  2. The legitimacy and rationale of the Punjab and Haryana High Court’s interim ruling, which halted the Act’s execution without providing clear explanations, are under close examination.

Arguments: Arguments in Punjab and Haryana High Court

  • Petitioner (Faridabad Industries Association & ANR.): Contended that the statute violated the rights of enterprises to employ people from outside the state, adversely impacting more than 48,000 Haryana-registered companies.
  • State of Haryana, the respondent, defended the statute, claiming it was an essential step in addressing unemployment and giving locals preference in the labour market.

Arguments in the Supreme Court

  • State of Haryana: The Attorney General argued that the High Court’s stay decision went against accepted legal doctrine, emphasising that laws shouldn’t be halted unless they are obviously unlawful or fundamentally unconstitutional.
  • Faridabad Industries Association: Senior attorney Dushyant Dave defended the High Court’s ruling, arguing that the Act was unconstitutional and that the High Court ought to be ordered to reach a final decision in the event that the Supreme Court overturned the ruling.

Legal Analysis

The interpretation of Article 16(2) is at the heart of the constitutional argument, and the Court’s decision in Govt. of A.P. vs. P.B. Vijayakumar (1995) serves as a keystone. The petitioners contested the Act under Article 15, arguing that the grounds of “place of birth” and “place of residence” are violated by domicile-based reservation.

Article 14

The crux of the constitutional dispute is the right to equality. In order to attain true equality, the Court disregarded merit-based selection and acknowledged the state’s entitlement to compensatory action. The goal of the domicile-based reservation, which was to provide job opportunities for locals and alleviate regional imbalances, was accepted as valid. The Court argued that Article 15(1) and (2) cannot invalidate residence requirements that discriminate based on place of birth, not residence, extensively citing the precedent set by D.P. Joshi v. State of Maharashtra (1955).

Article 19(1)(g) and Reasonable Restrictions

With reference to Bannari Amman Sugars Ltd. v. Commercial Tax Officer (2005), the Court expanded the scope of the constitutional canvas to include Article 19(1)(g). It underlined that reasonableness is assessed impartially while taking the interests of the broader public into account. The Court accepted the amount of money the state spent on incentives and the logic of pressuring companies to help its citizens.

Supreme Court’s Directive

The Supreme Court’s directive on February 17, 2022, urging an expeditious decision, underscores the case’s national significance. This intervention set the tone for an in-depth exploration of constitutional nuances at the High Court level.

Unity in Diversity

The Court recognised that not all forms of discrimination are against the fundamental concept of equality, taking into account India’s unity in variety. A genuine goal was the promotion of equality through the reduction of crime, maintenance of public health, and fight against poverty through the implementation of domicile-based reservation. The Court emphasised that, given the issues falling under the state’s jurisdiction, the classification based on residence was acceptable.

Supreme Court’s Precedents

The High Court supported its position by citing the precedents of Kesavananda Bharati v. State of Kerala (1973), Maneka Gandhi v. Union of India (1978), and Minerva Mills Ltd. v. Union of India (1980). The basis for deeming the Act’s limitations on the freedom to travel, live anywhere, and engage in any kind of commerce, industry, or service as unreasonable was established by these seminal rulings.

High Court’s Landmark Pronouncement

The Punjab and Haryana High Court’s landmark decision declared the Haryana State Employment of Local Candidates Act, 2020 to be unconstitutional. Using the precedents of Maneka Gandhi v. Union of India (1978), Kesavananda Bharati v. State of Kerala (1973), and Minerva Mills Ltd. v. Union of India (1980), the Court ruled that the Act unreasonably restricted the freedom to travel, live, and engage in trade, business, industry, or service.


The legal drama surrounding the Haryana State Employment of Local Candidates Act, 2020 offers a sophisticated examination of the precarious equilibrium that exists within the constitutional framework between the rights of the person and the state. The November 17, 2023, High Court ruling highlights the need for rationality in legislative measures and sets important precedents for Indian constitutional jurisprudence.

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