SC: ‘Creamy Layer’ cannot be decided only based on Income

Team SoOLEGAL 26 Aug 2021 3:28pm

SC: ‘Creamy Layer’ cannot be decided only based on Income

The top court believed that apart from the economic criterion, educational, social, and other factors should be considered before defining a “creamy layer” between the backward class. 

On Tuesday, August 24, 2021, the Supreme Court held that the State cannot make annual income the sole standard to decide the “creamy layer” among the backward class and debar them from the benefits of reservation. 

The judgment was delivered by a division bench of justices L Nageswara Rao and Aniruddha Bose knocking down a Haryana government notification of 2016. This notification denied benefits of reservation for educational institutions and government jobs to the people of the backward classes having an annual income of 6 lacs or more. 

The court ordered the government of Haryana to publish another new notification to decide the “creamy layer” between OBCs within 3 months considering additional factors of social backwardness apart from the economic criterion. This fresh notification was to be published in compliance with the principles laid down in the Indra Sawhney judgment. 

The bench reiterated the Supreme Court’s judgment in the Indra Sawhney Case from 1992 where it was clearly emphasized that economic, social, and other factors should be taken into account while determining the “creamy layer” for a backward class before excluding them from certain advantages. 

Although the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act, 2016, proclaimed consideration of all economic, social, and other factors while defining “creamy layer”, the notification only mentioned one criterion i.e., the annual pecuniary income of 6 lacs. 

The bench stated, “ 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.” 

Thus, according to the court, the notification was in clear violation of the guidelines issued by the Supreme Court in the Indra Sawhney case. The bench added that the Haryana government erred in issuing such notification while determining the “creamy layer” for the backward classes by disregarding the “socially advance” criterion, and for the same, the notification was set aside. 

The State government was also at fault because of combining salary and agricultural incomes in determining the comprehensive income to define the creamy layer. The notification conflicted with a Union government-issued memorandum of 1993 on, “revision of income criteria to exclude socially advanced sections (‘creamy layer’) from the purview of reservation for OBCs.”  According to the central government the current annual income limit for the “creamy layer” is 8 lacs. 

It was further stated that admissions to educational institutions and appointments to state services should be left uninterrupted based on the 2016 notification. 

The observations of the bench were resealed while hearing a petition filed by Pichra Warg Kalyan Mahasabha challenging the lawfulness of the 2016 notification stating it violated the principles laid down in the Indra Sawhney case by the Apex court and was discriminatory for forming sub-classifications within the same class. 

The said notification allowed children of people having an annual income of 3 lacs or less to receive the benefit of reservation and admissions primarily, the remaining quota was left for OBC citizens earning between 3-6 lacs yearly. 

The State argued defending the sub-classifying nature of the notification submitting that it was to ensure maximum advantages to people of lower-income. 

The court ceased from determining the issue about sub-classification as it held that the basis of determining “creamy layer” was wrong. 

In the Indra Sawhney case, the Supreme Court on the exclusion of creamy layer stated, “ 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? Such exclusion benefits the truly backward.”

Tagged: Creamy Layer   Supreme Court   justice L Nageswara Rao   justice Aniruddha Bose   Indra Sawhney Case   Haryana Backward Classes  
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