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16. The Parliament having taken into consideration such report, enacted an Act, extending the provisions of Part IX of the Constitution, relating to Panchayats to the scheduled areas, known as The Provisions of Panchayats (Extension of Scheduled Areas) Act, 1996' (Act No. 40 of 1996) hereinafter to be referred as 'PESA Act, 1996', published in Extraordinary Gazettee of India on 24th December, 1996.

17. The combined State of Bihar was re-organized in pursuance of Bihar Re-organization Act, 2000 and successor Stats of Bihar and Jharkhand were created since 15th November, 2000. After creation, the scheduled areas of the then combined State of Bihar fell within the territory of successor State of Jharkhand, Part IX of the Constitution, relating to Panchayats had already been extended to the scheduled areas by Parliament vide PESA Act, 1996. With a view to set up democratic institutions at grass-roots level, Government of Jharkhand enacted Jharkhand Panchayat Raj Act, 2001 (Act No. 6 of 2001) for both scheduled and non-scheduled areas, which was published in the Extraordinary Gazette on 10th May, 2001, as amended from time to time.

64. So far as 2nd proviso to clause (g) of Section 4 of PESA Act, 1996 is concerned, by such provision of the seats of Chairpersons of Panchayats at all levels in the scheduled areas have been reserved for the Scheduled Tribes. In view of the aforesaid proviso to clause (g) of Section 4 of PESA Act, 1996, the State Government while enacted Jharkhand Panchayat Raj Act, 2001 in regard to the scheduled areas, all seats of Chairpersons of Panchayats at all levels have been reserved for Scheduled Tribes vide Section 21(B), Section 40(B) and Section 55(B) of the Act, 2001. It has already been held that cent-percent reservation of the offices and seats of Chairpersons can not be made, being excessive, unreasonable and against the principles of equality i.e., violative of Article 14 of the Constitution of India. By the aforesaid provisions cent-percent reservation of seats of Chairpersons of Panchayats at all levels in scheduled areas having been made, they can not be upheld, being unconstitutional. Accordingly, the 2nd proviso to clause (g) of Section 4 of PESA Act, 1996, Section 21(B), Section 40(B) and Section 55(B) of Jharkhand Panchayat Raj Act, 2001 so far cent- percent reservation of seats of Chairpersons of Panchayats at all levels in favour of Scheduled Tribes is concerned, are hereby declared unconstitutional and ultra vires.

66. After re-organization of the States and creation of State of Jharkhand, when The Scheduled Areas (Stats of Chhatisgarh, Jharkhand and Madhya Pradesh) Order, 2003' has been issued, blocks of different districts have been declared as scheduled areas. No individual district has been declared or shown as Scheduled (District) Area. It has not been made clear either by the counsel for the Union of India or the State of Jharkhand as to how the seats and offices of Chairpersons at district level, such as, Adhyaksh and Upadhyaksh in an area can be reserved for Scheduled Tribes, if the district, in particular, has not been declared as scheduled area. For example, one block of the district of Garhwa, two blocks of Godda, four blocks of Jamtara and six blocks each of Dumka and Pakur districts have been declared as scheduled areas. But those district in general have not been declared as Scheduled (District) Areas. If the 2nd proviso to clause (g) of Section 4 of PESA Act, 1996 is applied, the seat and office of Chairperson of Adhyaksh and Upadhyaksh of Zila Parishad of a district like Garhwa has to be reserved for Scheduled Tribes, if the district in whole is treated as scheduled area. On the other hand most of the blocks of such district like Garhwa being non-scheduled areas, if the provisions of Article 243-D(4) is applied, the seats of Chairpersons, such as, Adhyaksh and Upadhyaksh of Zila Parishad Garhwa can not be reserved only for Scheduled Tribes. Viewed with this angle, it can also be held that the 2nd proviso to clause (g) of Section 4 of the PESA Act, 1996 in regard to one or other district, which consists of both non-scheduled and scheduled area, can not be given effect to for the seats and offices of Adhyaksh and Upadhyaksh of Zila Parishad, as it will be indirect conflict with Article 243-D(4) of the Constitution of India.

Applicability of Jharkhand Panchayat Raj Act, 2001 in 'Kolhan Area' :

75. Learned counsel for the petitioner of WP(C) No. 5939 of 2001 while relied on clause (a) to Section 4 of PESA Act, 1996, submitted that Jharkhand Panchayat Raj Act, 2001, being contrary to the customary law of 'Kolhan Area', can not be made applicable. The relevant clause (a) to Section 4 of PESA Act, 1996 reads as follows :

"4. Exceptions and modifications to Part IX of the Constitution.
(a) A State legislation on the Panchayats that may be made shall be in consonance with the customary law, social and religious practices and traditional management practices of community resources."