New Delhi, March 12 The Supreme Court has ruled that the "creamy layer" status for reservation of OBCs cannot be decided solely based on parental income, and that treating similarly placed employees of private entities and PSUs differently from government employees, when deciding on reservation, would amount to hostile discrimination.
A bench of justices P S Narasimha and R Mahadevan dismissed the appeals filed by the Union of India, while upholding the decisions of the high courts of Delhi, Madras, and Kerala, which dealt with the eligibility of candidates claiming OBC (Non-Creamy Layer) benefits for Civil Services Examinations.
"In light of the specific facts of these cases, the reasoning adopted by the High Court – that treating similarly placed employees of private entities and PSUs differently from government employees and their wards, while deciding their entitlement to reservation, would amount to hostile discrimination – is certainly one that inspires confidence in this court," the bench said.
The top court stated that merely determining 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 income.
The apex 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 merely a matter of 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 principle seeks to prevent relatively advanced segments within the backward classes from taking advantage 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," the bench said.
Several candidates who had claimed reservation under the OBC Non-Creamy Layer category had moved the Central Administrative Tribunal.
The tribunal had directed the Centre to reallocate the services of the applicants based on their OBC status.
The Centre had issued an Office Memorandum on September 8, 1993, specifying who shall be considered as the creamy layer among OBCs, and a clarification letter issued on October 14, 2004.
The top court noted that while the Office Memorandum excluded income from salary and agricultural income from the Income/wealth test for determining creamy layer status, the letter dated October 14, 2004, directed the inclusion of salary income of employees of PSUs and the private sector.
"A thorough reading of the 1993 OM along with the clarification letter dated October 14, 2004, clearly shows that income from salaries alone cannot be the sole criterion to decide whether a candidate falls within the creamy layer."
"The status and the category of post to which a candidate's parents belong are 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 income," the bench said.