New Delhi: Five months after the Supreme Court ruled that the creamy layer status of Other Backward Classes (OBC) candidates can’t be decided on parental salary alone, the Modi government has said that the judgement may have broader policy implications and is inconsistent with the concept of creamy layer envisaged in various top court decisions.
In its modification application filed Monday before the top court, the Centre has said that the 11 March judgement “can have wide-ranging ramifications as it will result in candidates, whose parents have high income, being considered as belonging to non-creamy layer”.
The apex court had in March ruled that children of Public Sector Undertaking (PSU) and private sector employees cannot be denied OBC reservation benefits simply because of their parents’ salary. The bench had affirmed that social status must be the primary measure for identifying the “creamy layer”. The legal battle had pitted the Centre against successful civil services candidates who were denied their preferred service allocations because their parents worked in PSUs or private firms.
The Centre’s application talked about discrimination arising from differential criteria applied to government officers, PSU employees and private sector workers in determining OBC creamy layer status.
To correct this “hostile discrimination”, which was also discussed in the Supreme Court’s March judgement, the Centre said it will formulate an appropriate and uniform policy/mechanism for determination of OBC creamy layer status. For this, the Centre would have to establish equivalence of posts in PSUs and identify similar posts in private sectors. To complete this task and establish a level-playing field, the Centre said it needs two years, since the process would involve consulting stakeholders including all states and Union territories.
Though the Centre has not formally sought a review or recall of the March judgement, it has through the modification application made a prayer to the top court to allow it to undertake this policy exercise.
In its 11 March order, a bench of Justices PS Narasimha and R Mahadevan had held that the Department of Personnel and Training’s (DoPT’s) 2004 clarificatory letter—which included PSU salaries in the income computation—could not override the Centre’s 1993 office memorandum that excluded salary from the creamy layer “income test”. The 1993 OM required the government to establish equivalence of posts in PSUs as well as private sector vis-a-vis posts in the government.
The bench had ruled that the salary of a parent employed in a PSU or private company could not by itself determine whether a candidate belonged to the creamy layer.
The judgement had put an end to what the petitioners said was a discriminatory practice. It was their contention that while PSU and private sector salary incomes were considered for determining creamy layer status, the same was not consistent for wards whose parents were in government sectors.
The SC had said that according to the 1993 memorandum, the parent’s post and employment category must also be examined alongwith the prescribed income and wealth criteria.
It upheld the reasoning that was adopted by several High Courts—that the DoPT’s letter treated similarly placed employees of private entities and PSUs differently from government employees, while entitling reservation to their wards. The SC said this differential treatment would amount to “hostile discrimination”, as it dismissed the Centre’s appeal filed in 2017.
The bench’s judgement was rooted in the concept of a creamy layer and the objective behind OBC reservation. This benefit, it added, was not merely administrative policy, but was a constitutional mandate.
As the court established a clear parameter for determining creamy layer status, excluding parental income, the landmark judgement resolved the long-standing ambiguities regarding treatment of PSU/private sector employees vis-à-vis government servants.
‘May adversely affect spirit & intention of reservation policy’
In its modification application, the Centre has emphasised on the possible implications the judgement can have on its policy governing exclusion of creamy layer among OBCs, particularly in the context of changing employment, considering a significant proportion of the work force is engaged in the private sector.
“It may adversely affect the spirit and intention of the reservation policy as it can potentially impact the interests and prospects of those candidates who actually belong to lower income group of OBC NCL (non-creamy layer) vis-à-vis those who are economically well off and having greater exposure to better facilities by virtue of their financial positions,” the application stated.
“…. the current basket of OBC candidates has great diversity as the candidates getting selected are from very divergent economic/social strata,” it added.
Implementation of the judgement, the Centre further said, “would deprive the candidates who have limited access to resources vis-à-vis those candidates with similar social background but with economically well-off parents earning higher salary income in private sector (where equivalence of posts in government posts has not been established)”.
If it is implemented, candidates whose parents are earning even more than Rs 1 crore annually would benefit and be considered as OBC NCL category, the application said.
As the judgement “enunciates important aspects concerning interpretation of creamy layer criteria”, there is a requirement to lay down such criteria for identification of creamy layer for private sector employees, it added. Hence, if the judgement is implemented without “guardrails”, there would be no “criteria to identify creamy layer in respect of OBC candidates, whose parents are employed in other than government sectors and constitutional posts”.
In the same modification application, the Centre has also raised its apprehensions about the retrospective implementation of the judgment and has sought a specific prayer to disallow it.
“Its implementation, particularly with retrospective effect, may nevertheless have significant consequences for recruitment, service allocation, cadre allocation, seniority, admissions and administration of OBC reservation generally,” the application submitted.
It wants SC to clarify that the judgement shall not apply to recruitments, admissions in higher educational institutions or academic sessions where degrees have already been conferred or rights settled or where the process has started.
A separate application has been filed in connection with civil services exams.
In both applications, the Centre outlined challenges it may face if the judgement is implemented retrospectively. This, it said, will open a floodgate of litigation, forcing candidates whose appointment or admission may be adversely affected by consequential implementation of the judgement.
On account of serious challenges and implications with regard to implementation of its directions, the Centre has asked the top court to grant it an opportunity for a detailed physical hearing in the matter.
On Tuesday, Solicitor General Tushar Mehta requested a Chief Justice of India Surya Kant-led bench to hear Centre’s modification applications, including the one that specifically asks it to allow the government to proceed with cadre-allocation to successful civil services candidates who cleared the exams in 2025 dehors the March 2026 judgement.
This plea was strongly opposed by advocate Varun Thakur, representing the beneficiaries of the judgement. Thakur questioned the Centre’s approach, and said legally, only a review petition can be filed and that the government in the garb of a modification application wanted the court to have a relook at the entire verdict.
The bench, however, listed the application for hearing on 31 August and indicated that the same bench, which delivered the March verdict, will take it up.
(Edited by Gitanjali Das)