State of Kerala v. NM Thomas

Facts

• The case primarily concerned reservation in public employment
• The principle of reasonable classification under Art.14 was extensively discussed
• The broader ratio applies to all regulatory classifications including banking

Issue

1. Whether regulatory classifications that treat one class differently from another violate Article 14 of the Constitution.

Held

• Article 14 permits reasonable classification. Two conditions must be met: (1) the classification must be founded on an intelligible differentia, and (2) the differentia must have a rational nexus with the object of the legislation. Banking companies are legitimately classified differently from other companies because of the unique public interest in depositor protection and monetary stability.

Ratio Decidendi

Reasonable classification satisfying the twin test (intelligible differentia + rational nexus) does not violate Art.14. Stricter regulation of banking companies is constitutionally valid given their fiduciary character and public importance.