SC: Income not sole factor in creamy layer

The Supreme Court on Thursday ruled that creamy layer status for reservation of OBCs cannot be decided solely based on parental income and treating similarly placed employees of private entities and PSUs differently from Government employees, for deciding reservation, would amount to hostile discrimination.

A bench of justices PS Narasimha and R Mahadevan dismissed appeals filed by the Union of India while upholding the decisions of the high courts of Delhi, Madras and Kerala, which dealt with eligibility of candidates claiming OBC (Non-Creamy Layer) benefit for civil services examinations. The SC said mere determination of the status of a candidate as to whether they falls within the creamy layer or the non-creamy layer of the OBCs cannot be decided solely on income. The court said that while caste may be an indicator of historical disadvantage, it cannot be treated as the sole determinant of backwardness.

“The exclusion of the creamy layer among the backward classes is not a matter of mere policy preference but a constitutional imperative intended to ensure that the benefits of reservation reach those who are socially and educationally backward in the true sense of the phrase,” the

bench said.  

The bench added, “The principle seeks to prevent relatively advanced segments within the backward classes from siphoning off the advantages of affirmative action, so that the objective and purpose of the constitutional scheme of affirmative action, of which reservation is a reflection, are adhered to.”

Several civil services examination candidates who claimed reservation under the OBC Non-Creamy Layer category had moved the Central Administrative Tribunal. The tribunal had directed the Centre to reallocate the service of the applicants on the basis of their OBC status.

The Centre had issued Office Memorandum on September 8, 1993, specifying who shall be creamy layer among OBCs and the clarificatory letter issued in this regard on October 14, 2004.

The SC noted that while the Office Memorandum excluded income from salary and agricultural income from the Income/ wealth test for determination of creamy layer status, the letter dated October 14, 2004 directed inclusion of salary income of PSU and private sector employees .

“It is evident from a comprehensive reading of the 1993 OM along with the clarificatory letter dated October 14, 2004 that income from salaries alone cannot be the sole criterion to decide whether a candidate falls within the creamy layer.

“The status as well as the category of post to which a candidate’s parent or parents belong is essential. Mere determination of the status of a candidate as to whether he/she falls within the creamy or the non-creamy layer of the OBCs cannot be decided solely on the basis of the income,” the bench said.