The Supreme Court on Thursday dismissed a plea challenging a Telangana High Court order that stayed the State government’s decision to raise Other Backward Classes (OBC) reservation in municipalities and panchayats to 42 per cent  [The State of Telangana vs Buttemgari Madhava Reddy].

The State's move, made ahead of elections to such local bodies, effectively took total reservations (OBC, SC, ST etc.) to 67 per cent.

On October 9, a Division Bench of the Telangana High Court stayed this reservation hike while considering a batch of petitions filed on the issue.

A Supreme Court Bench of Justice Vikram Nath and Justice Sandeep Mehta today refused to interfere with the High Court's interim order, adding that the local elections can continue without any the proposed hike in OBC reservations.

"You may continue with your elections… (State's appeal) dismissed ... The order shall not affect the High Court in deciding the case on its own merits," the top court said.

The case concerns three government orders (GOs) passed by the Telangana government on September 26 this year.

One of the GOs ordered the provision of 42 per cent reservation to OBC individuals in local bodies. Two other consequential GOs laid down guidelines for the fixation of such reservations in respect of elections to Mandal Praja Parishads, Zilla Praja Parishads and Gram Panchayats under the Telangana Panchayat Raj Act, 2018.

A number of petitions were eventually filed challenging these GOs.

On October 9, a High Court Bench of Chief Justice Aparesh Kumar Singh and Justice GM Mohiuddin opined that such an increase in the OBC quota appeared to violate the 50 per cent limit set for such reservation by the Supreme Court in various case laws. It, therefore, stayed the GOs while clarifying that the local body elections can proceed without implementing the proposed OBC quota hike.

This interim order was challenged by the State government before the Supreme Court.

During today's hearing, Senior Advocate AM Singhvi appeared for the Telangana government and argued that there is no rigid 50 per cent rule set by the Supreme Court when it comes to reservations, as cited by the High Court in its interim order.

He contended that there is a misconception that the Supreme Court’s ruling in the Indra Sawhney case (1992) established a rigid 50 per cent cap on reservations for backward classes in all cases. He highlighted that the judgment allows this ceiling to be breached in exceptional circumstances.

"This is a policy decision of the government.... a unanimous resolution of all parties supports it. How can it be stayed without pleadings? Barring the first few pages, no reasons have been given for the stay ... An important point—they haven't challenged the Act, but the consequence ... There is no challenge to legislation. Challenge is to the action. Is there an absolute limit of 50 per cent? ... If you hold that there is an absolute 50 per cent cap on reservation. What is to be done in a state where the OBC population exceeds 70 per cent?" he added.

Senior Advocate Gopal Sankaranarayanan appeared for one of the petitioners before the High Court, who had challenged the reservation hike. Opposing the State's appeal, he argued,

"The government order that we challenged is one that increased reservation to 42 per cent for OBCs, taking everything to well more than 60 per cent. The Krishnamurthi judgment, which is a Constitution Bench judgment, that interpreted these provisions of the Constitution, specifically says 50 per cent (is the limit). There is no room beyond 50 per cent. Indra Sawhney has been cited (but) it deals with socially and educationally backward classes... there you can go beyond 50 per cent."

Singhvi, however, urged the Court to examine whether it would be right to insist on an inflexible 50 per cent limit when it comes to reservations generally.

"I would request, My Lords, that you entertain the larger issue of whether the 50 per cent ceiling can be exceeded. Otherwise, your Lordships may be laying down an inflexible rule of 50 per cent for the entire country," Singhvi said.

The Court, however, was not persuaded to interfere with the High Court's stay order and dismissed the State's plea.

The High Court, meanwhile, is scheduled to hear the case next in December.