OBC creamy layer status cannot be decided on parental salary alone: Supreme Court

The Supreme Court on Wednesday held that the creamy layer status among Other Backward Classes (OBCs) cannot be determined solely on the basis of parental income.

A Bench of Justices PS Narasimha and R Mahadevan made the observation while dismissing a batch of appeals filed by the Union government.

The government had challenged the rulings of the Madras, Delhi and Kerala High Courts in favour of civil services candidates who had earlier been denied OBC status on the ground that they belong to the creamy layer of the community.

After examining a 1993 Office Memorandum and a 2004 clarificatory letter, the top court said 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, it added.

"The exclusion under Categories I to III of the Schedule is status-based rather than purely income-based, reflecting the policy understanding that advancement within the governmental service hierarchy denotes social progression independent of fluctuating salary levels. Mere determination of the status of a candidate as to whether he/she falls within the creamy layer or the non-creamy layer of the OBCs cannot be decided solely on the basis of the income," the Court reasoned.

The litigation arose from disputes involving candidates who cleared the Civil Services Examination but were denied OBC reservation benefits after the Department of Personnel and Training (DoPT) counted parental salary while assessing creamy layer status.

The Central Administrative Tribunal and the three High Courts ruled in favour of the candidates. The Supreme Court on Thursday affirmed those decisions.

The 1993 memorandum issued by the Union government codifies the reservation for OBCs in civil posts and services. In 2004, a letter of clarification was issued to address practical issues that had arisen in its implementation.

On Wednesday, the top court said that the clarification preserved the primacy of status-based exclusion and confined economic exclusion to certain structured parameters.

It held that any attempt to let the 2004 letter override the core structure of the 1993 framework would be impermissible.

“Thus, determination of creamy layer status solely on the basis of income brackets, without reference to the categories of posts and status parameters enunciated in the 1993 OM is clearly unsustainable in law,” it held.

The Court also agreed with the reasoning that similarly placed employees cannot be split into unequal classes merely because one set works in government and another in PSUs or private bodies.

“Adopting an interpretation that disadvantages one segment of the same backward class without rational justification would amount to treating equals as unequals and would thus become the antithesis of equality, the cornerstone of our Republic," the top court held.

Accordingly, the Court directed accommodation of eligible candidates by creating additional posts.

The Bench stated that it finds "no difficulty in directing the appellants to create such supernumerary posts, as required, to accommodate the candidates who satisfy the non-creamy layer criteria as clarified in the present judgment, subject to their otherwise fulfilling eligibility conditions.”

[Read Judgment]