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

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.

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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 in addition to the economic criterion.

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.

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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 court held.

The bench said that the notification is in flagrant violation of the directions issued by the apex court in the Indra 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 government 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.

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The court asked the Haryana government to issue a fresh notification under the 2016 Act within a period of three months after duly following the principles laid down in the Indra Sawhney judgment for determining the creamy layer.

It further said that admissions to educational institutions and appointments to state services based on the 2016 notification should not be disturbed.

The court was hearing a petition by an organisation called Pichra Warg Kalyan Mahasabha, which challenged the validity of the 2016 notification on the ground that it was in violation of the guidelines laid down by the top court in the Indra Sawhney case but was also discriminatory for creating a sub-classification within the same class.

As per the said notification, children of people having gross annual income up to ₹3 lakh shall first get the benefit of reservation in services and admission in educational institutions.

The remaining quota shall go to that class of backward classes of citizens who earn between ₹3 lakh and ₹6 lakh per annum.

The state government defended the notification, submitting that the sub-classification among the backward classes is to ensure that people with lower income among the backward classes get the maximum benefits of reservation.

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But the court decided not to examine the issue of sub-classification as it held that the whole basis of determining “creamy layer” was improper because it was defined only on the basis of income criterion.

In the Indra Sawhney judgment, SC said on the exclusion of creamy layer: “The connecting link is the social backwardness. It should broadly be the same in a given class. If some of the members are far too advanced socially (which in the context, necessarily means economically and, may also mean educationally) the connecting thread between them and the remaining class snaps. They would be misfits in the class. After excluding them alone, would the class be a compact class? In fact, such exclusion benefits the truly backward.”

Source: Hindustan Times

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