Income cannot be sole decider of OBC creamy layer: SC

NEW DELHI: The income of parents cannot be the sole criterion for exclusion of a candidate from OBC quota on the ground of being part of 'creamy layer', the Supreme Court has said, stressing that status and category of parents' jobs have to be considered, with income/wealth test as an additional criterion for exclusion. At present, the threshold income to determine 'creamy layer' is Rs 8 lakh per annum.

The court's ruling would have huge implications for wards of PSU and private sector employees as income was taken as the sole determining factor to decide on 'creamy layer' status for them, unlike in the case of wards of govt employees for whom category of job is the deciding factor. A bench of Justices P S Narasimha and R Mahadevan said children of Group A and B govt employees are barred from availing OBC reservation because of status of their job, but wards of Group C and Group D employees are eligible to get OBC reservation benefits even if their income levels surpass the limit, because of promotion and efflux of time.

The court rejected the plea of Centre which had insisted on income/wealth test criterion and accepted the contention of aggrieved children of PSU employees who fought this case through their advocate Shashank Ratnoo for over a decade.

The office memorandum issued by Centre in 1993 had said the same principle would be applied to employees of public sector undertakings, banks, insurance organisations, universities, and similar bodies holding equivalent or comparable posts. But the "equivalence of posts" as contemplated in the OM has not been done, and a clarificatory letter was issued by govt in 2004 making income/wealth test the sole criterion for PSU and private sector employees.

SC said overemphasis on the 2004 letter without regard to parental status or category of service would defeat the structural framework of exclusion envisaged under the 1993 OM.

Can’t have dual criteria for govt staff kids: SC
It is also evident from a comprehensive reading of the 1993 OM along with the clarificatory letter 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. 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. 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,” Justice Mahadevan, who penned the judgment, said. “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.”

Highlighting there cannot be different criteria for children of govt employees and the rest, the court said it would amount to discrimination which can’t be allowed.

“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... Having regard to the peculiar facts of the present cases, the reasoning adopted by HC that treating similarly placed employees of private entities and PSUs differently from govt employees and their wards, while deciding their entitlement to reservation, would amount to hostile discrimination, is certainly one that inspires the confidence of this court,” it said.

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