Income can’t be sole basis to decide ‘creamy layer’: SC

NEW DELHI: The Supreme Court held on Tuesday that states cannot make annual income the sole yardstick to determine “creamy layer” within a backward class and exclude them from benefits of reservation.

Apart from the economic criterion, the top court said, social, educational and other factors must also be taken into account before defining a “creamy layer” among the backward classes.

The ruling by a bench of justices L Nageswara Rao and Aniruddha Bose came as it struck down a 2016 notification of the Haryana government denying benefits of reservation in government jobs and educational institutions to those among the backward classes who have an annual income of ₹6 lakh or more. The court ordered the Haryana government to come out with a new notification to determine “creamy layer” among the other backward classes (OBCs) within three months by considering social backwardness and other factors. The bench emphasised that the Supreme Court’s judgment in the Indra Sawhney case (popularly known as Mandal Commission case) in 1992 clearly underscored that social, economic and other factors have to be taken into account for the purpose of determining the “creamy layer” within a backward class and then excluding it from quota benefits.

While the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act, 2016, provided for considering social, economic as well as some other factors in defining “creamy layer”, the court noted that the notification mentioned monetary income of ₹6 lakh as the only criterion.

“Strangely, by the notification dated August 17, 2016, the identification of ‘creamy layer’ amongst backward classes was restricted only to the basis of economic criterion. In clear terms, this court held in Indra Sawhney (case) that the basis of exclusion of ‘creamy layer’ cannot be merely economic.”

The bench said that the notification is in flagrant violation of the directions issued in the Sawhney case. “The criteria mentioned for identifying such of those persons who are socially advanced have not been taken into account by the Government of Haryana while issuing the notification... the state of Haryana has sought to determine ‘creamy layer’ from backward classes solely on the basis of economic criterion and has committed a grave error in doing so. On this ground alone, the notification dated August 17, 2016 requires to be set aside,” said the bench.

It also faulted the state for clubbing income from salaries and agricultural land in determining the gross annual income for the purpose of defining the creamy layer and said it was at variance with the 1993 memorandum issued by the Union government on revision of income criteria to exclude socially advanced sections (‘creamy layer’) from the purview of reservation for OBCs. The current annual income limit for “creamy layer” under the central government rules is ₹8 lakh.

The court asked Haryana to issue a fresh notification.