Supreme Court of India
UNION OF INDIA AND OTHERSversusROHITH NATHAN AND ANOTHER, ETC.
- Citation
- 2026 INSC 230
- Decided
- 11 March 2026
- Disposal
- Dismissed
Holding
The 2004 clarificatory letter does not override the 1993 Office Memorandum and creamy‑layer status must be determined by both parental post status and income, and any classification that treats similarly placed OBC candidates differently on the basis of salary alone violates the constitutional equality doctrine.
Summary
The case concerned candidates who had secured ranks in the Civil Services Examination and claimed OBC (Non‑Creamy Layer) reservation, but were denied on the ground that their parents' salary income exceeded the creamy‑layer ceiling as per the Department of Personnel and Training's (DoPT) application of the 1993 Office Memorandum (OM) read with a 2004 clarificatory letter. The Union of India appealed the High Courts' orders that had upheld the candidates' claims, raising two questions: whether the 2004 letter could override the 1993 OM and whether differential treatment of children of government servants versus those of PSU or private employees amounted to hostile discrimination. The Supreme Court held that the 2004 letter is merely explanatory and cannot supersede the substantive framework of the 1993 OM, which requires consideration of parental post status as well as income; consequently, relying solely on salary income to determine creamy‑layer status is unlawful. The Court further ruled that treating similarly placed employees differently violates Articles 14, 15 and 16, constituting hostile discrimination. All civil appeals were dismissed and the DoPT was directed to implement the Court’s principles within six months.
Issues considered
- Can the clarificatory letter dated 14‑10‑2004 override or supersede the Office Memorandum dated 08‑09‑1993 regarding creamy‑layer determination for OBC reservation?
- Does differential treatment between government employees and those in public or private sector undertakings occupying the same grade constitute hostile discrimination under Articles 14, 15 and 16?
Legislation cited
- Constitution of Indias. Art.14, s. Art.15, s. Art.16, s. Art.162
Headnote
Issue for Consideration Whether the clarificatory letter dated 14.10.2004 can have any overriding or superseding effect over the Office Memorandum dated 08.09.1993, which expressly lays down the criteria for exclusion from the benefit of reservation for Other Backward Classes the creamy layer namely, the socially advanced persons of sections among the Socially and Educationally Backward Classes; whether there can be hostile discrimination between employees of the Government and those working in Public or Private Sector Undertakings, when both occupy posts of the
Subjects
ReservationOther Backward Classes (OBCs)Creamy layerOffice Memorandum 08.09.1993Clarificatory letter 14.10.2004Hostile discriminationEquality doctrineArticle 14Article 15Article 16Income/Wealth TestEquivalence of postsPublic Sector UndertakingsPrivate sector employeesCivil Services Examination
Judgment
[2026] 4 S.C.R. 1 : 2026 INSC 230
Union of India and Others
v.
Rohith Nathan and Another, Etc.
(Civil Appeal No(s). 2827-2829 of 2018)
11 March 2026
[Pamidighantam Sri Narasimha and
R. Mahadevan,* JJ.]
Issue for Consideration
Whether the clarificatory letter dated 14.10.2004 can have any
overriding or superseding effect over the Office Memorandum dated
08.09.1993, which expressly lays down the criteria for exclusion
from the benefit of reservation for Other Backward Classes (OBCs)
by identifying the creamy layer namely, the socially advanced
persons of sections among the Socially and Educationally Backward
Classes; whether there can be hostile discrimination between
employees of the Government and those working in Public or
Private Sector Undertakings, when both occupy posts of the same
grade or class.
Headnotes†
Reservation – OBC reservation – Creamy layer status –
Determination of, solely on the basis of income brackets without
reference to the categories of posts and status parameters
enunciated in 1993 Office Memorandum, unsustainable –
1993 OM laid down the criteria for exclusion from the benefit
of reservation for OBCs by identifying the creamy layer
namely, the socially advanced persons of sections among
the Socially and Educationally Backward Classes, wherein
income from salary and agricultural income stood excluded
from the Income/Wealth Test for determination of creamy layer
status – However, 2004 clarificatory letter, directed inclusion
of salary income of PSU and private sector employees under
Category II(C) – Respondents-candidates (parents of all
respondent candidates were PSU employees, bank employees
or otherwise fell under Category II(C) of the Schedule to the
Office Memorandum dated 08.09.1993) qualified the Civil
* Author
2 [2026] 4 S.C.R.
Supreme Court Reports
Services Examination however, as the equivalence of posts
in PSU, banks and other organisations vis-à-vis Government
posts had not been formally determined, the DoPT applied
the Income Wealth Test under Category VI of the 1993 OM r/w
2004 Letter and upon assessing the parental income of the
respective candidates for the preceding three financial years,
and classified them as falling within the Creamy Layer of the
OBCs, rendering them ineligible for OBC (Non-Creamy Layer)
reservation benefits – Thus, their cases were not considered
for service allocation under the reserved category – CAT
passed orders in favour of the the respondents – Challenged
by appellants, writ petitions dismissed by the High Courts of
Madras, Delhi and Kerala:
Held: No infirmity in the impugned judgments – 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 unsustainable in law – Overemphasis
on the 2004 clarificatory letter to the extent of making income
alone determinative without regard to parental status or category
of service would defeat the structural framework of exclusion
envisaged under the 1993 OM – Under the 1993 OM, salary income
and agricultural income are consciously kept outside the common
pool while determining exclusion under the Income/Wealth Test –
A mere government letter cannot have the effect of overriding,
overruling or superseding any proceeding in the nature of an
executive instruction or an Office Memorandum issued in exercise
of executive power u/Art.162 – Therefore, the clarificatory letter
must be construed strictly as one explaining or supplementing the
foundational guidelines laid down in the 1993 OM, which was issued
after due deliberation and following the requisite procedure and not
as altering its substantive framework – Salary income cannot be
mechanically aggregated in a manner that defeats the constitutional
objective articulated in Indra Sawhney – A comprehensive reading
of the 1993 OM along with the 2004 clarificatory letter shows 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 – Mere determination of 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
[2026] 4 S.C.R. 3
Union of India and Others v. Rohith Nathan and Another, Etc.
the basis of the income – Any attempt to read paragraph 9 of the
2004 Letter in isolation, so as to dilute or override the substantive
scheme of the 1993 OM would be legally untenable – Appellants to
consider the claims of the respondent candidates and intervenors in
accordance with the principles laid down in the present judgment,
and to implement the same within six months from the date of this
judgment. [Paras 21.15, 21.17, 26, 30, 31, 44]
Reservation – OBC reservation – Creamy layer status – Whether
there can be hostile discrimination between employees of the
Government and those working in Public or Private Sector
Undertakings, when both occupy posts of the same grade
or class:
Held: Treating similarly placed employees of private entities and
PSUs differently from Government employees and their wards,
while deciding their entitlement to reservation, would amount to
hostile discrimination, as rightly held by the High Court – Treating
the children of those employed in PSUs or private employment,
etc., as being excluded from the benefit of reservation only on
the basis of their income derived from salaries, and without
reference to their posts (whether Group A or B, or Group C or D)
would certainly lead to hostile discrimination between parties who
are similarly placed and would amount to equals being treated
unequally, thereby attracting the rigour of the equality doctrine under
Articles 14, 15 and 16, of which reservation is a facet – Art.16(4)
is a structural reflection and a conceptualized representation of
the principle of substantive equality embodied and envisaged
u/Art.16(1) – Therefore, any interpretation of the 1993 OM or the
2004 Letter that results in unequal treatment of similarly placed OBC
candidates would not only be legally erroneous but constitutionally
impermissible. [Paras 34, 37, 40]
Parent policy – Clarificatory instruction:
Held: A clarificatory instruction cannot introduce a substantive
condition that does not exist in the parent policy – If it travels
beyond explanation and alters rights or liabilities, it ceases to
be clarificatory and assumes the character of an amendment.
[Para 24]
Reservation – Constitutional and statutory background
of reservation in India – Reservation framework for Other
4 [2026] 4 S.C.R.
Supreme Court Reports
Backward Classes (OBCs)/Socially and Educationally
Backward Classes – Examined. [Paras 21.2-21.17]
Reservation – OBC reservation – Creamy layer status –
“equivalence of posts”, a matter of policy:
Held: The question of “equivalence of posts” as contemplated both
in the 1993 OM and in the subsequent 2004 Letter, is fundamentally
a matter of policy – Such equivalence must be determined by the
Government on the basis of a detailed analysis of data by experts
in the field – Until such equivalence is formally evaluated and
notified by the Government, the entitlement of candidates whose
parent(s) work in organisations other than in Class I or II of the
Central or State Civil Services, shall be decided by the Income/
Wealth Test. [Para 23]
Case Law Cited
Indra Sawhney v. Union of India and Others [1992] Supp. 2 SCR
454 : (1992) Supp. 3 SCC 217 – followed.
Ashok Kumar Thakur v. Union of India [2008] 4 SCR 1 : (2008) 6
SCC 1; M.R. Balaji and Others v. State of Mysore [1963] Supp.
1 SCR 439 : AIR 1963 SC 649; Indra Sawhney v. Union of India
and Others [1999] Supp. 5 SCR 229 : (2000) 1 SCC 168; Neil
Aurelio Nunes v. Union of India [2022] 11 SCR 585 : (2022) 4
SCC 64; Madhuri Patil v. Commissioner, Tribal Development
[1994] Supp. 3 SCR 50 : (1994) 6 SCC 241; R.P. Bhardwaj v.
Union of India (2005) 10 SCC 244; Sushma Gosain v. Union
of India (1989) 4 SCC 468; Dr. PPC Rawani v. Union of India
(1992) 1 SCC 331; Union of India v. Vijay Kumari (1994) Supp.
1 SCC 94; Dr. D.K. Reddy v. Union of India (1996) 10 SCC 177;
Delhi Administration v. Nand Lal Pant [1997] Supp. 1 SCR 510 :
(1997) 11 SCC 488; Union of India v. Parul Debnath [2009] 9
SCR 969 : (2009) 14 SCC 173; State of Andhra Pradesh and
Another v. P. Sagar [1968] 3 SCR 595; K.C. Vasanth Kumar and
Another v. State of Karnataka [1985] Supp. 1 SCR 352 : 1985
SCC OnLine SC 339; K.S. Jayasree v. State of Kerala [1977] 1
SCR 194 : (1976) 3 SCC 730; R. Chitralekha v. State of Mysore
[1964] 6 SCR 368 : AIR 1964 SC 1823; State of Kerala and
Others v. N.M. Thomas and Others [1976] 1 SCR 906 : MANU/
SC/0479/1975 – referred to.
K. Sampath v. State of Tamil Nadu MANU/TN/9958/2006 – referred
to.
[2026] 4 S.C.R. 5
Union of India and Others v. Rohith Nathan and Another, Etc.
Books and Periodicals Cited
21st Report of the Parliamentary Committee on Welfare of Other
Backward Classes (2018–19) – referred to.
List of Acts
Constitution of India.
List of Keywords
Reservation; Other Backward Classes (OBCs); OBC reservation;
Non-Creamy Layer; Creamy layer; Exclusion from the benefit of
reservation for OBCs; Office Memorandum dated 08.09.1993;
1993 Office Memorandum; OBC (Non-Creamy Layer) reservation
benefits; Hostile discrimination between employees of Government
and those in Public or Private Sector Undertakings; Income / Wealth
Test for determination of creamy layer status; Determination of
creamy layer status on the basis of income brackets; Categories of
posts and status parameters; Income from salary and agricultural
income excluded; Similarly placed employees of private entities
and PSUs treated differently from Government employees
and their wards; Denial of OBC-Non-Creamy Layer status to
wards of PSU employees; Socially and educationally backward
classes; Unequal treatment of similarly placed OBC candidates;
Discrimination between employees of the Government and of Public
or Private Sector Undertakings; Discrimination between the wards
of Government servants and of PSU/private sector employees;
Reservation policy; Social justice; Principle of advancement of
weaker sections; Socio-Economic Refinement and Means Test;
Mandal Commission; Caste; 2004 Clarificatory letter; Office
Memorandum; Principle of substantive equality.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 2827-2829
of 2018
From the Judgment and Order dated 31.08.2017 of the High Court
of Judicature at Madras in WP Nos. 6387, 6388, and 6389 of 2017
With
Civil Appeal No(s). 3130-3141 of 2024 and 3297 of 2026
6 [2026] 4 S.C.R.
Supreme Court Reports
Appearances for Parties
Advs. for the Appellant(s):
Ms. Aishwarya Bhati, A.S.G., Ms. S. Janani, Sr. Adv., Aman Mehta,
Mrs. Alka Agrawal, Apoorva Kurup, Navanajay Mahapatra, Madhav
Sinhal, Mayank Pandey, Ms. Sansriti Pathak, Shreekant Neelappa
Terdal, Ms. Sonali Jain, Ms. Manisha Chava, Ms. Shagun Thakur,
N. Visakamurthy, Arvind Kumar Sharma, Kamal Kumar Pandey,
Deepak Goel.
Advs. for the Respondent(s):
Basavaprabhu Patil, Sanjay Hegde, T. Raja, Sr. Advs., Vikram
Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava,
Trishan Dollny, Ankit Tiwari, Arijit Sukla, Ashish, Tanay Hegde,
Roy Abraham, Ms. Reena Roy, Adithya Koshy Roy, Yaduinder
Lal, Sarswata Mohapatra, Himinder Lal,, Vikram Hegde, Ms. Hima
Lawrence, Ms. Chinmayi Shrivastava, M.t. Arunan, Trishan Dollny,
M.A. Aruneshe, Arijit Sukla, Prateek K Chadha, Sreekar Aechuri,
Aniket Chauhaan, Harsh Parashar, Shreekant Neelappa Terdal,
Vardhman Kaushik, Arindam Sarin, Mayank Sharma, Dhruv Joshi,
Vinay Kaushik, Mrs. P S Vijayadharni, Nishant Gautam, Varinder
Kumar Sharma, Ms. Manju Jetley, Parmanand Gaur, Abhikalp
Pratap Singh, Dhanesh Relan, Ashish Batra, Siddhartha Jha, Vikram
Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava, Trishan
Dollny, Ankit Tiwari, Arijit Sukla, Ashish, Tanay Hegde, Vikram
Hegde, Prateek K Chadha, Sreekar Aechuri, Aniket Chauhaan,
Vikram Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava,
M.t. Arunan, Trishan Dollny, M.A. Aruneshe, Arijit Sukla, Anuroop
Chakravarti, M.S.Vishnu Sankar, Ms. Dimple Nagpal, M/s Lawfic,
Varun Thakur, Ms. Shraddha Saran, Ramkaran, Varinder Kumar
Sharma.
Judgment / Order of the Supreme Court
Judgment
R. Mahadevan, J.
Leave granted in SLP (C) No. 17651 of 2022.
2. This judgment deals with three matters arising out of separate orders
passed by different High Courts. Since the questions of law involved
in all the cases are substantially identical and common, they were
heard together and are being decided by this common judgment.
[2026] 4 S.C.R. 7
Union of India and Others v. Rohith Nathan and Another, Etc.
FACTUAL BACKGROUND
3. The facts giving rise to the respective appeals are set out below.
C.A. No(s). 2827 – 2829 of 2018 [Union of India & Ors. v. Rohith
Nathan and Anr. Etc.]
4. The present Civil Appeals have been filed against the common
judgment dated 31.08.2017 passed by the High Court of Judicature
at Madras in W.P. Nos. 6387, 6388 and 6389 of 2017, whereby the
High Court dismissed the writ petitions filed by the appellants and
affirmed the common order dated 12.01.2017 passed by the Central
Administrative Tribunal1, Chennai Bench in O.A. Nos. 1133, 1132
and 1375 of 2014.
4.1. Respondent No. 1 in CA. Nos. 2827 and 2828 of 2018, Rohith
Nathan, secured All India Rank 174 in the Civil Services
Examination, 2012 under the OBC category. His father
was employed in a private organisation namely M/s. HCL
Technologies Ltd., and was drawing a salary exceeding the
prescribed creamy layer limit under the extant guidelines. On
that basis, he was treated as falling within the creamy layer.
Though he was recommended by the UPSC as a General Merit
candidate and allocated to the Indian Police Service against
an unreserved vacancy, Respondent No. 1 sought benefit of
OBC reservation and allocation to the Indian Foreign Service
against the vacancy reserved for OBC candidates by treating
him as OBC (Non-Creamy Layer) candidate. He accordingly
filed O.A. No. 1132 of 2014 before the CAT, Chennai seeking
a direction for allotment to the Indian Foreign Service as per
his OBC rank in the Civil Services Examination, 2012. He also
filed O.A. No. 1133 of 2014 seeking to quash the portion relating
to Category II(C) in the Schedule to the Office Memorandum
dated 08.09.1993 (O.M. No. 36012/22/93-Estt (SCT)).
4.2. Respondent No. 1 in C.A. No. 2829 of 2018, G. Babu, appeared
in the Civil Services Examination, 2013 under the OBC category
and secured Rank 629. His father was employed in a Public
Sector Undertaking namely Neyveli Lignite Corporation, as
1 For short, “CAT”
8 [2026] 4 S.C.R.
Supreme Court Reports
a Senior Executive Engineer. As his father’s salary income
exceeded the prescribed limit, he was also treated as falling
within the creamy layer under the applicable guidelines. To
claim the benefit of OBC reservation for allocation to a service
against a vacancy reserved for OBC candidates, Respondent
No. 1 filed O.A. No. 1375 of 2014 before the CAT, Chennai
Bench seeking reallocation to the Indian Police Service or any
other service as per his OBC rank.
4.3. The CAT, having heard the parties, held that under the Office
Memorandum dated 08.09.1993, income from salary and
agricultural income stood excluded from the Income / Wealth
Test for determination of creamy layer status. It further held that
paragraph 9 of the clarificatory letter dated 14.10.2004, insofar
as it directed inclusion of salary income of PSU and private
sector employees under Category II(C), resulted in hostile
discrimination between the wards of Government servants and
those of PSU/private sector employees. By its common order
dated 12.01.2017, the CAT allowed all three Original Applications
and directed as follows:
“We direct the DoPT to withdraw the clarification in
para 9 of the OM dated 14.10.2004 to the extent it is
made applicable to II-C and reformulate it appropriately
in the light of the observations made herein within
a period of three months. The respondents are also
directed to reallocate the service of the two applicants
on the basis of their OBC status within a period of
three months from the date of receipt of a copy of
this order.”
4.4. Aggrieved, the Union of India and others filed W.P. (C) Nos. 6387,
6388 and 6389 of 2017 before the High Court of Madras. By
common judgment dated 31.08.2017, the High Court dismissed
all three writ petitions primarily on two grounds:
(i) The failure of the Union of India to formulate an
equivalence / comparability test resulted in placing the
sons and daughters of PSU employees at a disadvantage
compared to similarly placed Government servants; and
(ii) When salary income of parents serving in State/Central
Government in Group C and D posts, or those entering
[2026] 4 S.C.R. 9
Union of India and Others v. Rohith Nathan and Another, Etc.
Group B and A posts, after attaining the age of 40 years, was
not considered for creamy layer determination, inclusion
of salary income of PSU employees under Category II-C
introduced an element of hostile discrimination.
4.5. Challenging the aforesaid common judgment, the appellants
have preferred the present Civil Appeals.
C.A. No(s). 3130 – 3141 of 2024 [Union of India v. Ketan and
others etc.]
5. The present batch of Civil Appeals has been preferred against the
common judgment dated 22.03.2018 passed by the High Court of
Delhi at New Delhi in W.P. Nos. 3073 – 3084 of 2017. By the said
judgment, the High Court disposed of the writ petitions, set aside
Letter No. 36033/5/2004- Estt. (Res.) dated 14.10.2004, and directed
the appellants to verify the creamy layer status of the respondent
candidates (except Sagar Chourasia, who had already been selected)
strictly in terms of Office Memorandum dated 08.09.1993.
5.1. According to the appellants, the respondents had appeared
in the Civil Services Examination, 2015 claiming reservation
under the OBC (non-creamy layer) category. The parents of all
respondent candidates were PSU employees, bank employees
or otherwise fell under Category II(C) of the Schedule to the
Office Memorandum dated 08.09.19932. The candidates were
recommended by the UPSC for service allocation. While
forwarding their dossiers, UPSC requested verification of their
creamy layer status.
5.2. Upon verification, it was found that equivalence of their parents’
posts qua Government posts had not been established.
Accordingly, applying the 1993 OM read with the clarificatory
letter dated 14.10.2004, the department applied the “income /
wealth test” under Category VI and computed the parents’
salary income for the preceding three years. Since the income
exceeded the prescribed ceiling, the respondents were treated
as falling within the creamy layer. Consequently, by publication
dated 22.06.2016, the respondents were denied allocation under
the OBC category.
2 For short, “1993 OM”
10 [2026] 4 S.C.R.
Supreme Court Reports
5.3. Challenging the same, the respondent candidates filed W.P.
Nos. 3073 – 3084 of 2017 before the Delhi High Court inter alia
seeking quashment of the clarificatory letter dated 14.10.2004
and issuance of a direction for allocation of services treating
them as OBC (Non-Creamy Layer) candidates.
5.4. During the pendency of the matter, the Union of India issued
Office Memorandum No. DPE-GM-/0020/2014-GM-FTS-1740
dated 25.10.2017, clarifying gradation and creamy layer criteria
in Central Public Sectors Enterprises, indicating that Board level
and Managerial-level posts (below Board level) subject to the
proviso that executives whose annual income as per 1993 OM
was less than Rs. 8 lakhs, would not fall under the creamy layer.
5.5. By the impugned judgment dated 22.03.2018, the Delhi High
Court disposed of the writ petitions, by holding that the 1993 OM
contemplated consideration only of income from “other sources”
for applying the Income / Wealth Test where equivalence had
not been established. It further held that the clarificatory letter
dated 14.10.2004 impermissibly introduced salary income as a
determinative factor and lacked rational basis. Consequently, the
High Court set aside the letter dated 14.10.2004 and directed
re-verification strictly in accordance with the 1993 OM.
5.6. Pursuant thereto, the appellants issued a speaking order dated
22.05.2018 reconsidering the matter under the 1993 OM, but
again rejected the claim of Non-Creamy Layer status by taking
into account parental salary. Certain respondents thereafter filed
Contempt Petition (C) Nos. 684/2018, 972/2018 and 973/2018
before the Delhi High Court, in which notices were issued.
5.7. Apprehending coercive proceedings, the appellants have
preferred the present appeals.
Civil Appeal @ SLP (C) No. 17651 of 2022 [Union of India &
Anr. v. DR. Ibson Shah. I. and Anr.]
6. This Civil Appeal challenges the final judgment dated 25.02.2022
passed by the High Court of Kerala at Ernakulam in OP (CAT) No.
94 of 2021, whereby the High Court declined to interfere with the
order dated 13.10.2020 passed by the Central Administrative Tribunal,
Ernakulam Bench in O.A. No. 718 of 2018.
[2026] 4 S.C.R. 11
Union of India and Others v. Rohith Nathan and Another, Etc.
6.1. The UPSC had issued notification for the Civil Services
Examination, 2016 and the Department of Personnel and
Training3 notified the detailed rules vide Gazette Notification
dated 27.04.2016. Rule 24 required candidates to possess
requisite certificates in the prescribed format for OBC
reservation. Rule 25 stipulated that OBC status, including creamy
layer determination would be reckoned as on the closing date
of applications.
6.2. Respondent No. 1 appeared in the Civil Services Examination,
2016 and the Civil Services Examination, 2017 under the OBC
category and secured Rank 540 (2016) and Rank 620 (2017).
His father had been directly recruited as a Lower Division Clerk
(Group C) in the Legal Metrology Department, Government of
Kerala, and died in 2012. His mother was directly recruited
as Junior Assistant (Group C clerical cadre) in Kerala State
Financial Enterprises (KSFE), a State PSU.
6.3. Upon verification, DoPT found that the mother, being employed
in a PSU under Category II(C), earned salary exceeding Rs.
6 lakhs per annum for three consecutive years (as revised
by the Office Memorandum dated 27.05.2013). Accordingly,
Respondent No. 1 was treated as falling within the creamy
layer. In CSE-2017 he was denied allocation; in CSE-2016 he
was treated as a General Merit candidate and allocated Indian
Defence Accounts Service (IDAS) vide letter dated 21.08.2017.
6.4. Aggrieved, Respondent No. 1 filed O.A. No. 718/2018 before
the CAT, Ernakulam, which ruled in his favour on 13.10.2020.
The High Court of Kerala affirmed the same and dismissed
OP(CAT) No. 94/2021 filed by the appellants, on 25.02.2022,
inter alia holding that:
● The respondent possessed a valid OBC-NCL certificate
before the cut-off date;
● Both parents were Group C entrants (clerical cadre) below
Group A and B;
● Under Category II of the 1993 OM, mere parental service
in a PSU could not lead to creamy layer exclusion;
3 For short, “DoPT”
12 [2026] 4 S.C.R.
Supreme Court Reports
● The comparability exercise under Category II(C) was
transitional;
● The Government’s failure to determine equivalence could
not prejudice candidates; and
● Denial of OBC-NCL status to wards of PSU employees,
while granting it to similarly placed Government servants,
would constitute hostile discrimination.
Therefore, the appellant, Union of India, is before this Court with
the present appeal.
SUBMISSIONS OF THE PARTIES
7. The learned Additional Solicitor General of India appearing for the
appellant in CA Nos. 2827 – 2829 of 2018 / Union of India submitted
that the impugned judgment dated 31.08.2017 passed by the High
Court of Madras in W.P. Nos. 6387, 6388 and 6389 of 2017 is ex facie
unsustainable in law and deserves to be set aside. It was urged that
the exclusion of persons falling within the Creamy Layer is aimed at
ensuring that reservation benefits are not extended to those who are
no longer backward. Any legislative or executive action to remove
such persons, individually or collectively, cannot be constitutionally
invalid but is in consonance with the principle laid down by this Court
in Indra Sawhney v. Union of India and others4. This Court in Indra
Sawhney v. Union of India and others5, explained the rationale
underlying the rule of exclusion of the Creamy Layer, holding that
nonexclusion thereof would amount to discrimination and violation of
Articles 14 and 16, inasmuch as unequals cannot be treated as equals.
It was further submitted that the Union of India was fully competent
and empowered to issue the clarificatory letter dated 14.10.2004 in
order to ensure that the intended benefits of reservation reach the
truly deserving candidates among the backward classes. To sustain
the spirit of the constitutional provisions of equality, it is obligatory
on the State to identify the most deserving candidates, as the State
is obliged to remove inequalities and backwardness from society.
If nondeserving candidates are given the benefit of reservation, it
4 (1992) Supp. 3 SCC 217
5 (2000) 1 SCC 168
[2026] 4 S.C.R. 13
Union of India and Others v. Rohith Nathan and Another, Etc.
would breach the spirit of the constitutional provision. Reliance was
also placed on the decision in Ashok Kumar Thakur v. Union of
India6, wherein this Court held that the Government should not
proceed on the basis that once a class is considered backward, it
should continue to be backward for all times, as such an approach
would defeat the very purpose of reservation.
7.1. The learned counsel further submitted that the respondents have
reached a comparatively higher level of social advancement
and economic status, and therefore, as a matter of law, the
declaration of such persons as being nonentitled to be treated
as backward is sustainable. The Department has rightly
considered the respondents as falling under the Creamy Layer,
and vacancies reserved for OBC candidates are earmarked
and allocated to other nonCreamy Layer candidates who are
eligible and entitled.
7.2. It was contended that the High Court erred in dismissing the writ
petitions solely on the ground of alleged discrimination between
wards of PSU employees and wards of Government employees,
without examining the merits of the individual cases decided
by the Tribunal. The income from the salary of the parents of
the respondents was not considered by the High Court while
deciding the case. The delay in determination of equivalence
between PSU employees and Government employees should
not result in providing an undue advantage to the respondent
candidates who belong to a comparatively higher strata of the
OBC category by virtue of their parents’ salary income as this
would deny the benefit of reservation to deserving candidates.
7.3. It was further contended that the 1993 OM has been upheld by
this Court in Ashok Kumar Thakur (supra), and the High Court
erred in holding that the 1993 OM and the clarificatory letter
dated 14.10.2004 bring about hostile discrimination. Clause IIC
of the Schedule to the 1993 OM clearly states that employees
in PSUs, banks, insurance organisations, universities etc. are
to be treated on the same footing as Government employees,
and pending evaluation of equivalence, the criteria specified in
Category VI would apply. All candidates producing certificates for
6 (2008) 6 SCC 1
14 [2026] 4 S.C.R.
Supreme Court Reports
claiming the benefit of reservation under the OBC NonCreamy
Layer category must undergo all six tests given in the Schedule
to the 1993 OM to determine their Creamy Layer status. The
service status of the parents of persons employed in PSUs
or private enterprises, in which equivalence has not been
established visàvis Government services is determined by the
quantum of salary that they receive.
7.4. It was submitted that the clarificatory letter dated 14.10.2004 was
issued only to clarify the procedure to be adopted for applying
the income / wealth test in the case of sons and daughters of
parents employed in PSUs, etc., where equivalence has not
been established. The High Court erred in holding that para
9 of the letter was not in consonance with the 1993 OM. The
timely rise in the income of Government servants through
successive Pay Commissions has not erased the importance
of the social status criteria to be adopted in their case. For
determining Creamy Layer status, the sons and daughters of
Government servants undergo both social and economic tests,
whereas those of PSU and private employees undergo only
the economic test.
7.5. The learned counsel further contended that an appointment
given to a noneligible candidate deprives an eligible NonCreamy
Layer OBC candidate of appointment. The judgment of the High
Court is contrary to the established policy of the Government.
This Court has held that it is not within the domain of the courts
to embark upon an inquiry as to whether a particular public
policy is wise or acceptable, or whether a better policy could be
evolved. Such a policy decision would normally not be interfered
with unless it is capricious, arbitrary, or offends Article 14.
7.6. It was thus submitted that the 1993 OM and the letter dated
14.10.2004 form part of a consistent and constitutionally sound
framework for the identification of the creamy layer, and that
the inclusion of salary in gross annual income aligns with the
principle of substantive equality and prevents distortion of the
reservation system. Further, it was contended that the exclusion
of salary would subvert the constitutional goal of social justice,
lead to reverse discrimination, and create administrative chaos,
thereby undermining the rights of genuinely backward OBC
candidates.
[2026] 4 S.C.R. 15
Union of India and Others v. Rohith Nathan and Another, Etc.
7.7. On these grounds, the learned counsel prays that the impugned
judgment of the High Court dated 31.08.2017 deserves to be
quashed and that the respondents be declared as falling within
the Creamy Layer and not entitled to reservation benefits under
the OBC category.
8. The learned senior counsel appearing for Respondent No.1 (Rohith
Nathan) submitted that the 1993 OM carries the authority of law,
having been issued pursuant to the directions in Indra Sawhney
and others v. Union of India and others7 after due deliberation
by an Expert Committee, parliamentary scrutiny, and interministerial
consultation. He pointed out that the Expert Committee had evolved
criteria for the exclusion of socially advanced persons from the benefit
of reservation for OBCs, with emphasis on social status and high
income from business, profession, or other sources, while expressly
excluding income derived from salary and agricultural land. The
report of the Committee was laid before both Houses of Parliament
and formally accepted by the Government, and the 1993 OM was
issued after vetting by the Law Ministry and consultation with the
Ministry of Social Justice & Empowerment.
8.1. In contrast, the learned senior counsel submitted that the
clarificatory letter dated 14.10.2004 8 was issued without
consultation, deliberation, or any traceable administrative record,
and by the DoPT, which was not the competent authority under
the Allocation of Business Rules, 1961. He referred to RTI
responses confirming that no consultation with the Ministry of
Social Justice & Empowerment preceded the issuance of the
2004 letter, and that the file notings were not traceable. He
therefore contended that the 2004 Letter is non est in law and
cannot override or dilute the binding effect of the 1993 OM.
8.2. The learned senior counsel further submitted that the
implementation of the 1993 OM itself demonstrates that salary
and agricultural income are excluded from the income/wealth
test. He referred to the DoPT’s Office Memorandum dated
15.11.1993 annexing a model application form which expressly
excluded salary and agricultural income, and pointed out that
7 (1992) Supp. 3 SCC 217
8 For short, “2004 Letter”
16 [2026] 4 S.C.R.
Supreme Court Reports
various State Governments such as Andhra Pradesh, Telangana,
and Tamil Nadu, as well as statutory bodies including the
National Commission for Backward Classes and the Ministry
of Social Justice & Empowerment, have consistently followed
this principle.
8.3. The learned senior counsel contended that it is incorrect for
the Government to submit that OBCs belonging to Category
IIC of the 1993 OM are to suffer exclusion until the equivalence
of posts is conducted. The Expert Committee had expressly
recommended that, pending evaluation of equivalence of posts
in PSUs and other bodies, persons falling under Category IIC
would still be entitled to reservation, subject only to exclusion
under Category VI by application of the income/wealth test.
8.4. The learned senior counsel also submitted that the Government’s
interpretation of Explanation (i) to the income/wealth test
is erroneous. The Government has contended that either
income from salary or income from agricultural land is to be
considered, but not both excluded, in determining whether
the monetary limit has been exceeded. He argued that this
interpretation is unsupported by reasoning, contrary to the
consistent implementation of the 1993 OM, and inconsistent
with the Union’s own stand in Neil Aurelio Nunes v. Union
of India9. In that case, the Union distinguished OBC and EWS
criteria by clarifying that for OBCs, salary income is excluded,
whereas for EWS, salary income is included. Acceptance of the
Government’s present stand would obliterate this distinction,
leading to arbitrariness and inconsistency.
8.5. Thus, the learned senior counsel urged that the 1993 OM, having
statutory force and having been consistently implemented, must
prevail, and that the 2004 Letter, lacking authority, cannot dilute
or override the settled criteria.
9. The learned counsel appearing for Respondent No. 1 (G. Babu)
submitted that the DoPT cannot question the validity of an OBC
certificate once it has been duly issued by the competent authority.
He contended that DoPT is not the authority empowered to issue
9 (2022) 4 SCC 64
[2026] 4 S.C.R. 17
Union of India and Others v. Rohith Nathan and Another, Etc.
or scrutinize OBC certificates. Under the DoPT Office Memorandum
dated 15.11.1993, the competent authorities for issuance and
verification of OBC certificates are District Magistrates, Collectors,
Deputy Commissioners, SubDivisional Magistrates, Tehsildars and
other designated revenue officers. These authorities are specially
entrusted with determining whether an applicant belongs to the
OBC category and whether he or she falls within the Creamy Layer,
strictly in accordance with the criteria prescribed in the Schedule to
the 1993 OM.
9.1. The learned counsel emphasised that the model application
form appended to the 1993 OM mandates disclosure of detailed
particulars regarding parental qualifications, employment,
income, assets and wealth, which are verified by the issuing
authority. Further, the revised OBC certificate format introduced
by the DoPT’s Office Memorandum dated 30.05.2014 expressly
requires the certifying authority to declare that the candidate does
not belong to the Creamy Layer. The certificate is thus issued after
comprehensive scrutiny of contemporary data, including parental
income for the preceding three financial years. He contended
that such certificates cannot be lightly disregarded or questioned
in a cavalier manner. Reliance was placed on Madhuri Patil v.
Commissioner, Tribal Development10, wherein this Court held
that a social status certificate remains valid unless it is found
to be false or fraudulently obtained pursuant to investigation
by a duly constituted Scrutiny Committee.
9.2. The learned counsel further submitted that the 1993 OM issued
pursuant to the recommendations of the Mandal Commission, the
directions of this Court in Indra Sawhney and others v. Union
of India and others11, and the report of the Expert Committee
of the Ministry of Social Justice, comprehensively delineates
the categories falling within the Creamy Layer exclusion. He
argued that the Union of India seeks to rely upon the 2004 Letter;
however, such a letter cannot override or qualify the binding
provisions of the 1993 OM. It was submitted that while the 1993
OM excluded salary and agricultural income from the income /
wealth test, the 2004 Letter sought to include salary income in
10 (1994) 6 SCC 241
11 (1992) Supp. 3 SCC 217
18 [2026] 4 S.C.R.
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the case of PSU employees, thereby introducing an artificial and
hostile discrimination between children of government servants
and those of PSU employees.
9.3. It was further submitted that it is settled law that a mere
executive letter cannot override or amend a subsisting Office
Memorandum. In support, reliance was placed upon R.P.
Bhardwaj v. Union of India12, wherein this Court held that an
operative Office Memorandum cannot be modified or curtailed
through a mere circulation of a letter. Reference was also
made to K. Sampath v. State of Tamil Nadu13 reiterating the
same principle. Accordingly, the 2004 Letter was contended to
be devoid of statutory authority and incapable of diluting the
binding effect of the 1993 OM.
10. The learned counsel appearing for the Intervenors submitted that
the Intervenors adopt the oral and written submissions advanced on
behalf of the respondents. He urged that no separate or novel relief
is required to be crafted. The present Civil Appeals were instituted
by the Union of India against judgments of various High Courts,
seeking direction to the DoPT to reallocate services to the concerned
applicants. In the event of dismissal of the appeals, the said directions
would revive, and the DoPT would be obligated to proceed with
reallocation and verification of OBC status in accordance with law.
10.1. The learned counsel submitted that the Union of India has
been aware of these directions since 2017, 2018 and 2022,
and had in certain matters obtained interim orders of stay. The
Union was thus fully conscious that, if unsuccessful, it would
be required to implement the High Court directions. It cannot
now plead administrative inconvenience. He drew attention to
the 21st Report of the Parliamentary Committee on Welfare of
Other Backward Classes (2018–19), wherein representatives
of the DoPT had informed the Committee that supernumerary
posts would be created to implement the decision of the
Delhi High Court dated 22.03.2018. It was argued that having
undertaken to create such posts, the Union cannot resile from
its stated position upon dismissal of the appeals.
12 (2005) 10 SCC 244
13 MANU/TN/9958/2006
[2026] 4 S.C.R. 19
Union of India and Others v. Rohith Nathan and Another, Etc.
10.2. The learned counsel further submitted that this Court in W.P.(C)
No. 914/2016, by order dated 20.03.2017, had directed that
candidates selected through the Civil Services Examination,
2016 be notified that their selection and seniority would
remain subject to the outcome of litigation initiated by OBC
candidates. The DoPT complied with this direction by issuing
an Office Memorandum dated 20.12.2016. It was contended
that delays in disposal of the present batch were attributable
to repeated adjournments sought by the Union of India.
In such circumstances, the Union cannot invoke equitable
considerations to avoid compliance with binding directions.
10.3. It was submitted that this Court possesses ample powers
under Article 142 of the Constitution to direct creation of
supernumerary posts where candidates have been wrongfully
denied appointment or promotion. In this regard, reliance
was placed upon decisions including Sushma Gosain v.
Union of India14, Dr. PPC Rawani v. Union of India15,
Union of India v. Vijay Kumari16, Dr. D.K. Reddy v. Union
of India17, Delhi Administration v. Nand Lal Pant18 and
Union of India v. Parul Debnath19, wherein directions for
creation of supernumerary posts were issued in exceptional
circumstances. While acknowledging that cadre management
ordinarily falls within the executive domain, it was contended
that in special situations, this Court may exercise its plenary
power to do complete justice.
10.4. Finally, it was urged that upon dismissal of the Civil Appeals
and application of the doctrine of merger, subordinate fora
would be bound to apply the ratio of this Court in the present
batch, namely, that Creamy Layer status must be assessed
without reference to the 2004 Letter. Relegation would only
result in multiplicity of proceedings, delay and administrative
uncertainty. Many Intervenors have been litigating the issue
14 (1989) 4 SCC 468
15 (1992) 1 SCC 331
16 (1994) Supp. 1 SCC 94
17 (1996) 10 SCC 177
18 (1997) 11 SCC 488
19 (2009) 14 SCC 173
20 [2026] 4 S.C.R.
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for more than five years. It was therefore submitted that this
is a fit case for exercise of power under Article 142 to render
complete justice by extending the benefit of the present
decision to the Intervenors, thereby conserving judicial and
administrative resources and minimizing disturbance to existing
cadres and seniority positions.
11. The learned Additional Solicitor General of India for the appellant in
CA. Nos. 3130 - 3141 of 2024 / Union of India submitted that the
Delhi High Court fundamentally erred in construing Column 3 of the
Schedule to the 1993 OM as being confined merely to an “officer
class” criterion.
11.1. It was further submitted that the High Court erred in holding
that Category VI of the 1993 OM excludes the component of
“salary” entirely from the expression “gross annual income”.
According to the learned counsel, there are three distinct
components of income – income from salary, income from
other sources, and income from agriculture – and Explanation
(a) to Category VI merely prohibits the clubbing of salary and
agricultural income with income from other sources; it does
not mandate exclusion of salary per se. The income from each
source, it was contended, must be assessed separately. If
either the income from salary or the income from other sources
exceeds the prescribed threshold for three consecutive years,
the candidate would fall within the creamy layer.
11.2. With respect to Category II-C of the 1993 OM, which pertains
to employees of PSUs, banks and similar institutions where
equivalence with Government posts has not been established,
it was submitted that the 1993 OM itself provides that pending
evaluation of equivalence, the criteria specified under Category
VI, namely, the Income / Wealth Test, shall apply. In such
circumstances, Clause VI operates as the primary test for
determination of creamy layer, and exclusion of salary from
consideration would render the test otiose. The 2004 Letter, it
was argued, merely harmonizes Paras 9 and 10 of the 1993
OM and does not override or amend the 1993 OM; rather, it
clarifies that in the absence of established equivalence, income
from salary is relevant for applying the income test.
[2026] 4 S.C.R. 21
Union of India and Others v. Rohith Nathan and Another, Etc.
11.3. It was further contended that a purposive interpretation must
be given to the expression “gross annual income”. Exclusion
of salary of PSU or private employees from consideration
would lead to anomalous and absurd consequences, whereby
children of highly placed PSU executives drawing substantial
salaries could continue to claim non-creamy layer status
merely because their income from other sources falls below
the threshold. Such an interpretation, it was submitted, would
defeat the constitutional principle of qualitative exclusion
recognized in Ashok Kumar Thakur (supra) and reaffirmed
subsequently, and would run contrary to the object underlying
the creamy layer doctrine.
11.4. The learned counsel contended that exclusion of the creamy
layer is a constitutional imperative and that the State possesses
policy latitude in identifying reasonable parameters for such
exclusion. In the absence of established equivalence between
Government posts and PSU posts, there exists, according to
the Union, an intelligible differentia which justifies a distinct
method of applying the income test to Category II-C employees.
The delay in determining equivalence, it was submitted, cannot
operate to confer an unintended benefit upon comparatively
advanced sections within the OBCs. It was further argued
that the High Court failed to consider the broader policy
framework and instead proceeded on an erroneous assumption
of discrimination, without appreciating that the income test
under Category VI would be rendered redundant if salary
were excluded in cases where equivalence had not been
determined. Consequently, the impugned judgment, which has
the effect of nullifying the 2004 Letter and reopening settled
selections, was stated to be unsustainable in law and contrary
to the constitutional scheme governing OBC reservations.
12. The learned senior counsel for Respondent(s) in CA. Nos. 3130 –
3141 of 2024 submitted that the Constitution Bench in Indra
Sawhney v. Union of India (supra) directed the Union of India to
specify appropriate socio-economic criteria for excluding the socially
advanced sections – commonly referred to as the Creamy Layer –
from the ambit of Other Backward Classes. Pursuant thereto, the
Government constituted the Ram Nandan Prasad Committee,
22 [2026] 4 S.C.R.
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whose report was laid before both Houses of Parliament. The
recommendations of the Committee were accepted in toto and
culminated in the issuance of the 1993 OM.
12.1. It was submitted that under the 1993 OM, the sons and
daughters of Government officers directly recruited to Class I
posts, and those promoted from Class II to Class I before the
age of 40, were to be treated as falling within the creamy layer.
Children of employees in autonomous bodies, public sector
undertakings, banks, insurance organisations, universities
and private enterprises were to be considered creamy layer
where their parents held posts equivalent or comparable to
those specified for Government servants. Further, the income /
wealth test prescribed that persons whose gross family income
for the preceding three years exceeded the notified threshold
(Rs. 6,00,000 at the relevant time; presently Rs. 8,00,000)
would fall within the creamy layer. Crucially, income from
salaries and agricultural land was expressly excluded from
such computation.
12.2. Learned counsel emphasised that DoPT itself interpreted the
1993 OM as excluding salary income, as reflected in its Office
Memorandum dated 15.11.1993 and the Model Form appended
thereto. The Model Form specifically required disclosure of
income excluding salary income. This form, it was submitted,
continues to be uniformly adopted by all certificate-issuing
authorities across the country without modification.
12.3. Reference was then made to the 2004 Letter. Paragraph
3 thereof acknowledged that the criteria prescribed for
Government servants were to apply mutatis mutandis to
similarly placed employees of PSUs, banks and other
organisations. Paragraph 10 reiterated that income from
salaries and agricultural land shall not be taken into account
while applying the income / Wealth Test. However, paragraph
9 of the same 2004 Letter, it was contended, introduced a
contradictory position by providing that where equivalence
of posts had not been determined, income from salaries and
other sources was to be assessed separately, and if either
exceeded the prescribed limit, the candidate would be treated
as creamy layer. Agricultural income alone was excluded.
[2026] 4 S.C.R. 23
Union of India and Others v. Rohith Nathan and Another, Etc.
12.4. According to the learned counsel, paragraph 9 effectively
introduced a discriminatory regime whereby salary income
would be counted in the case of PSU employees and others
falling within Category IIC, but not for Government servants,
armed forces personnel, or constitutional functionaries. The
failure of the Government to determine equivalence of posts
could not justify imposing dual income thresholds for Category
IIC. Such an interpretation, it was argued, runs contrary to
the spirit of the Expert Committee’s report and the 1993 OM,
and may lead to anomalous results – disqualifying even the
wards of lower-level employees such as peons, drivers or
typists solely on account of salary progression.
12.5. It was further submitted that paragraph 9 of the 2004 Letter
was not operationalized until the Civil Services Examination
2015 and even thereafter its implementation remained confined
to the UPSC Civil Services Examination, without adoption by
other recruiting bodies. The interpretation is thus peculiar to
DoPT and lacks uniform application.
12.6. On the aspect of estoppel and legitimate expectation, learned
counsel contended that the Union of India is precluded from
assailing the impugned judgment of the Delhi High Court dated
22.03.2018, having complied with it by issuing a Compliance
Order dated 22.05.2018. Having accepted and acted upon
the judgment, the Union of India cannot now resile therefrom
without first recalling or withdrawing its compliance.
12.7. It was also urged that the Government cannot adopt a stand
before this Court diametrically opposed to its representations
before Parliament, the National Commission for Backward
Classes20 and this Court in other proceedings. Reliance was
placed on:
1. Legal Opinion of the Law Secretary dated 06.02.2019
opining that pending determination of equivalence,
salary cannot be used as a criterion for Category IIC
and that such cases must fall for consideration under
Clause VI(b).
20 For short, “NCBC”
24 [2026] 4 S.C.R.
Supreme Court Reports
2. The observations of the Parliamentary Committee
recommending withdrawal of the Union’s affidavit founded
upon paragraph 9 of the 2004 Letter, as being contrary
to the Law Ministry’s advice and the NCBC’s stance.
3. The Tenure Report (2019-2022) of the NCBC holds that
salary ought not to be included in computing gross total
income for creamy layer determination.
4. The affidavit filed by the Union in Neil Aurelio Nunes v.
Union of India, WP(C) No. 961 of 2021 (EWS matter),
wherein it was specifically distinguished that the Rs. 8 lakh
thresholds for EWS includes salary income, whereas the
threshold for OBC creamy layer excludes salary income.
5. The inconsistency between the stand taken in the EWS
matter and the position now advanced in Union of India v.
Ketan (Civil Appeal No. 3130 of 2024).
12.8. On the strength of these representations, it was argued that a
legitimate expectation has arisen that the Government would
maintain consistency in its stand. Any deviation would not only
defeat such expectation but also undermine parliamentary
accountability and the constitutional principle of collective
responsibility.
12.9. Lastly, learned counsel submitted that this Court by order dated
28.11.2016 in WP(C) No. 914 of 2016 and connected matters,
directed that all subsequent selections would be subject
to the final outcome of the pending petitions. The matters
were transferred to the Delhi High Court, which rendered its
judgment on 28.03.2018. The same was complied with on
22.05.2018. The present appeals were filed after a delay of
more than 600 days, without withdrawal of the compliance
order. In these circumstances, the concurrent findings of the
CAT, Madras Bench; the Delhi High Court; the Madras High
Court; and the Kerala High Court warrant affirmation along
with consequential relief.
13. Adding further, it was submitted on behalf of the appellant in SLP
(C) No. 17651 of 2022 that the 1993 OM expressly employs the
expression “gross annual income” and therefore, the Kerala High
Court erred in inferring that only “income from other sources” forms
[2026] 4 S.C.R. 25
Union of India and Others v. Rohith Nathan and Another, Etc.
the basis for determination of creamy layer status in the case of PSU
employees where equivalence has not been established. According
to the learned counsel, such an interpretation is contrary to the spirit
and consistent understanding of the 1993 OM, as clarified on multiple
occasions by the Reservation Division, and amounts to reading into
the 1993 OM, a restriction which it does not contemplate.
13.1. It was further submitted that equivalence of posts in State
PSUs vis-à-vis Central or State Government posts has not yet
been comprehensively undertaken, as the exercise involves
complex comparative assessment of a multitude of posts
across States and Union Territories, differing pay structures,
service conditions, and attendant perks and privileges. It was
contended that precisely to address such contingencies, the
1993 OM provides under Category VI for application of the
Income / Wealth Test pending evaluation of equivalence,
and that this mechanism ensures continued implementation
of the creamy layer principle even in the absence of formal
equivalence.
13.2. The learned counsel also assailed the Government Order
dated 31.05.2018 issued by the State of Kerala purporting to
determine equivalence in respect of posts in the Kerala State
Financial Enterprises, contending that the said order was
passed on the basis of an individual representation and not as
a policy decision founded upon objective and quantifiable data.
It was urged that such an exercise is not in consonance with
the principles laid down in Indra Sawhney and others v. Union
of India of others21, which require identification of socially and
educationally backward classes based on objective criteria
and quantifiable data before extending reservation benefits.
13.3. It was further submitted that in any event, even assuming the
validity of the Government Order dated 31.05.2018, the said
equivalence determination came into existence subsequent to
the relevant selection process and was not in force at the time
of consideration of the respondent’s candidature. Reliance was
placed on Rule 10 of the Civil Services Examination Rules,
21 (1992) Supp. 3 SCC 217
26 [2026] 4 S.C.R.
Supreme Court Reports
2017, to contend that candidates seeking reservation benefits
must be in possession of requisite and valid certificates in
support of their claim as on the closing date of the application,
i.e. 17.03.2017. Since the equivalence, even if assumed valid,
was not operative on the relevant date, the respondent could
not claim its benefit retrospectively.
13.4. On these grounds, learned counsel prayed for setting aside
the impugned judgment and allowing the appeal.
14. The learned counsel for Respondent No. 1 in SLP (C) No. 17651 of
2022 submitted that by the impugned judgment dated 25.02.2022
passed by the Kerala High Court, the respondent was directed to
be considered as an OBC-NCL candidate in the merit list for the
Civil Services Examination, 2017. This was on the ground that the
sole surviving parent (mother) of the respondent was appointed as
a Group C employee in a Public Sector Undertaking owned by the
Government of Kerala, and that the PSU was governed by a subsisting
order of equivalence with corresponding posts in the Government of
Kerala. The said equivalence order had been produced before the
DoPT by the candidate.
14.1. It was further contended that the High Court in its judgment,
examined the validity of the equivalence order and held
that such an order could only have been issued by the
Government of Kerala. The High Court substantively validated
the equivalence order after examining the comparability
methodology adopted therein. In paragraph 27 of the judgment,
it was categorically held that the post to which the candidate’s
mother was appointed was equivalent to a Group C post in the
public services of the Government of Kerala. In paragraph 30,
the High Court declared that the DoPT had erred in denying
OBC-NCL allocation to the candidate. It was submitted that
the DoPT had adopted a mutually contradictory position first
demanding an equivalence order and thereafter disregarding
it when duly furnished.
14.2. It was submitted that the High Court highlighted the arbitrary
conduct of the DoPT in paragraphs 20 and 25 of the judgment.
The DoPT had altered the procedure for verification of Creamy
Layer status of candidates whose parents were appointed
to State Public Sector Enterprises, both during the Civil
[2026] 4 S.C.R. 27
Union of India and Others v. Rohith Nathan and Another, Etc.
Services Examination, 2016 and midway through the CSE-
2017 process, without any public notice or notification, thereby
violating settled procedures and principles of natural justice.
In 2016, the procedure adopted was to seek clarification from
the concerned State Government regarding comparability of
posts. However, in 2017 midway through the examination
process, the DoPT began insisting upon formal equivalence
orders issued by the State Governments.
14.3. Reference was also made to paragraph 31 of the judgment,
wherein the High Court observed that there was no justification
for the DoPT to reject the equivalence order issued by the
State Government. It clarified that the equivalence order to be
submitted could only be an order of the State Government, and
in the present case, one issued by the Government of Kerala.
It was contended that “State Public Services” and “State Public
Service Commissions” fall within the exclusive domain of the
State List under the Seventh Schedule to the Constitution.
Consequently, the jurisdiction to declare comparability or
equivalence between posts in the public services of the State
of Kerala and Public Sector Enterprises owned by it lies
exclusively within the State Government. It was urged that
this constitutional demarcation had been disregarded by the
DoPT in filing the present appeal.
14.4. It was further submitted that the DoPT had not disputed the
status of the post held by the candidate’s deceased father
(who passed away in 2012) which had been accepted as a
Group C post in the Government of Kerala based on orders
issued by the same State Government. However, the DoPT
was disputing the equivalence order issued by that very
Government in relation to the candidate’s mother, who was
appointed to a Group C post in a State PSU. This differential
treatment, it was contended, amounted to discrimination against
the candidate’s mother alone and reflected arbitrariness in
administrative decision-making. The High Court had noted such
arbitrariness in paragraph 33 of its judgment and dismissed
the petition filed by the DoPT.
14.5. It was also contended that the action of the DoPT in treating
the salary of an employee of a State PSU, irrespective of
28 [2026] 4 S.C.R.
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the post held, as income for determining Non-Creamy Layer
status was discriminatory, particularly when, in the case of
employees of the Central Government, State Governments,
or Central PSUs, salary income was exempted from such
computation. This aspect had been extensively dealt with by
the High Court.
14.6. Finally, it was submitted that the DoPT lacked locus standi
to raise disputes on behalf of the Union Government against
orders issued by State Governments regarding equivalence of
posts within the State. The DoPT’s powers are circumscribed
by the Allocation of Business Rules, 1961, and the subject
matter of challenging equivalence determinations of State
Governments does not fall within its assigned business. It
was contended that the DoPT neither possesses authority to
reject orders issued by the appropriate State Government nor
to issue directions or requisitions to State Governments in that
regard. Consequently, the challenge to the equivalence order
issued by the Government of Kerala was said to be contrary
to the Allocation of Business Rules, 1961, and violative of
Article 77(3) of the Constitution of India.
14.7. It was emphasized that procedural violations were writ large
in the actions of the DoPT in altering verification norms
during the conduct of the Civil Servies Examinations and in
adopting inconsistent verification practices from year to year.
Until 2016, the DoPT had sought clarification from State
Governments regarding the nature of posts held by parents
serving in State PSUs. In 2017, however, it insisted upon
formal equivalence orders midway through the examination
process, without amending the governing rules or issuing
any notification, and thereafter rejected or ignored such
orders when produced. According to the learned counsel, this
arbitrary shift in procedure appeared designed to deny OBC
claims of candidates whose parents were employees of State
Public Sector Enterprises. It was further submitted that State
Governments have consistently exercised their constitutional
authority under the Seventh Schedule to issue equivalence
orders whenever officers of State Public Services are posted
to State PSUs. By disputing such actions of the “appropriate
[2026] 4 S.C.R. 29
Union of India and Others v. Rohith Nathan and Another, Etc.
Government” within the exclusive domain of the State, the DoPT
was alleged to have engaged in unconstitutional overreach in
filing the present appeal.
15. The learned counsel appearing for the Union Public Service
Commission (UPSC) submitted that the role of the said respondent
is strictly confined to conducting the Civil Services Examination in
accordance with the Rules and Regulations framed by the DoPT. The
UPSC conducts the examination, processes the results, and makes
recommendations for appointment to the various services based
on the vacancies requisitioned by the respective Cadre Controlling
Authorities. It was contended that the UPSC neither frames policy
nor possesses the authority to adjudicate upon issues relating to
reservation status or the application of the Creamy Layer criteria.
15.1. It was further submitted that the determination of eligibility
for reservation benefits, including verification of OBC Non-
Creamy Layer status, falls exclusively within the domain of the
DoPT, which is the appellant herein and the nodal authority
for such matters. Therefore, the issues raised in the present
proceedings, as well as the reliefs sought by the appellants
pertain solely to the DoPT, and no substantive relief has been
claimed or could be claimed against the UPSC.
DISCUSSION & FINDINGS
16. We have heard learned counsel appearing for the parties at length
and perused the materials available on record.
17. The present batch of Civil Appeals arises from judgments of the
Madras High Court, Kerala High Court and Delhi High Court. By
the impugned judgments, the respective High Courts adjudicated
upon the eligibility of certain candidates claiming the benefit of OBC
(Non-Creamy Layer) reservation in the Civil Services Examination
conducted in different years.
18. It is not in dispute that the respondent candidates were successful
in the Civil Services Examination. However, as the equivalence of
posts in Public Sector Undertakings, banks and other organisations
vis-à-vis Government posts had not been formally determined, the
DoPT applied the Income /Wealth Test under Category VI of the 1993
OM read with 2004 Letter. Upon assessing the parental income of
30 [2026] 4 S.C.R.
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the respective candidates for the preceding three financial years, the
DoPT classified them as falling within the Creamy Layer of the Other
Backward Classes, thereby rendering them ineligible for OBC (Non-
Creamy Layer) reservation benefits. Consequently, their cases were
not considered for service allocation under the reserved category.
Aggrieved thereby, the respondent candidates approached the CAT
and obtained orders in their favour. The writ petitions filed by the
appellants challenging the said orders were dismissed by the High
Courts of Madras, Delhi and Kerala. It is in these circumstances that
the present Civil Appeals filed by the appellants have been placed
before us for consideration.
19. The issues involved are allied and overlapping, though they require
distinct treatment for the purpose of analysis. The first issue is whether
the clarificatory letter dated 14.10.2004 can have any overriding or
superseding effect over the Office Memorandum dated 08.09.1993,
which expressly lays down the criteria for exclusion from the benefit
of reservation for OBCs by identifying the creamy layer namely,
the socially advanced persons of sections among the Socially and
Educationally Backward Classes. The second issue is whether there
can be hostile discrimination between employees of the Government
and those working in Public or Private Sector Undertakings, when
both occupy posts of the same grade or class.
20. Since the issues raised are broader in nature and concern the
constitutional architecture governing identification of the creamy
layer, the validity and interpretation of executive instructions, and
the equality mandate under Article 14, it is neither necessary nor
appropriate for this Court to enter into the granular factual matrix
of each individual case. Moreover, the judgments impugned before
us record largely concurrent findings on the material aspects. The
controversy, therefore, turns essentially on questions of law of
general public importance, warranting authoritative determination
by this Court.
21. Before proceeding further, it is apposite to examine the constitutional
and statutory background of reservation in India.
21.1. India’s reservation framework for Other Backward Classes
(OBCs)/ Socially and Educationally Backward Classes
(SEBCs) has evolved through a sustained dialogue between
[2026] 4 S.C.R. 31
Union of India and Others v. Rohith Nathan and Another, Etc.
constitutional text, legislative intervention, and judicial doctrine.
The objective has consistently been to reconcile the mandate
of substantive equality with the imperatives of administrative
efficiency.
Constitutional framework
21.2. The Constitution embedded the principle of advancement of
weaker sections through:
● Article 46 (Directive Principles of State Policy), which
mandates the State to promote with special care the
educational and economic interests of the weaker
sections, particularly, Scheduled Castes and Scheduled
Tribes;
● Article 15(4) (inserted by the First Constitutional
Amendment, 1951), enabling the State to make special
provision for the advancement of socially and educationally
backward classes of citizens or for the Scheduled Castes
and the Scheduled Tribes;
● Article 16(4) empowering the State to make provisions for
reservation in appointments or posts in public services
for any backward classes inadequately represented;
● Article 15(5), later inserted, enabling reservation in
admissions to educational institutions, including private
educational institutions whether aided or unaided by the
State, other than the minority educational institutions.
For ease of reference, the above provisions read as under:
“46. Promotion of educational and economic
interests of Scheduled Castes, Scheduled Tribes
and other weaker sections.—
The State shall promote with special care the
educational and economic interests of the weaker
sections of the people, and, in particular, of the
Scheduled Castes and the Scheduled Tribes, and
shall protect them from social injustice and all forms
of exploitation.”
32 [2026] 4 S.C.R.
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“15. Prohibition of discrimination on grounds of
religion, race, caste, sex or place of birth-
(4) Nothing in this article or in clause (2) of article
29 shall prevent the State from making any special
provision for the advancement of any socially and
educationally backward classes of citizens or for
the Scheduled Castes and the Scheduled Tribes.”
(5) Nothing in this article or in sub-clause (g) of
clause (1) of article 19 shall prevent the State
from making any special provision, by law, for the
advancement of any socially and educationally
backward classes of citizens or for the Scheduled
Castes or the Scheduled Tribes in so far as such
special provisions relate to their admission to
educational institutions including private educational
institutions, whether aided or unaided by the State,
other than the minority educational institutions
referred to in clause (1) of article 30.”
“16. Equality of opportunity in matters of public
employment-
(4) Nothing in this article shall prevent the State
from making any provision for the reservation of
appointments or posts in favour of any backward
class of citizens which, in the opinion of the State,
is not adequately represented in the services under
the State.”
From its inception, Article 16(4) was conceived not as an
exception to equality, but as an instrument to achieve it.
Early Judicial Evolution
21.3. In M.R. Balaji and others v. State of Mysore22, this Court
held that caste may be a relevant factor in identifying
backwardness, but it cannot be the sole or dominant test. Social
backwardness, the Court observed, is on the ultimate analysis
22 AIR 1963 SC 649
[2026] 4 S.C.R. 33
Union of India and Others v. Rohith Nathan and Another, Etc.
closely linked with poverty, and excessive reservation under
the guise of special provisions would subvert the constitutional
scheme. The Court broadly indicated that reservation should
ordinarily remain below 50%, recognising the need to balance
advancement of weaker sections with societal interests at
large. The following paragraphs are pertinent:
“23. Besides, if the caste of the group of citizens
was made the sole basis for determining the social
backwardness of the said group, that test would
inevitably break down in relation to many sections of
Indian society which do not recognise castes in the
conventional sense known to Hindu society. How is
one going to decide whether Muslims, Christians or
Jains, or even Lingayats are socially backward or
not? The test of castes would be inapplicable to those
groups, but that would hardly justify the exclusion of
these groups in toto from the operation of Article 15(4).
It is not unlikely that in some States some Muslims
or Christians or Jains forming groups may be socially
backward. That is why we think that though castes in
relation to Hindus may be a relevant factor to consider
in determining the social backwardness of groups or
classes of citizens, it cannot be made the sole or the
dominant test in that behalf. Social backwardness
is on the ultimate analysis the result of poverty
to a very large extent. The classes of citizens
who are deplorably poor automatically become
socially backward. They do not enjoy a status
in society and have, therefore, to be content
to take a backward seat. It is true that social
backwardness which results from poverty is likely
to be aggravated by considerations of caste to
which the poor citizens may belong, but that only
shows the relevance of both caste and poverty in
determining the backwardness of citizens.
…
34. ……. If admission to professional and technical
colleges is unduly liberalised, it would be idle to
34 [2026] 4 S.C.R.
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contend that the quality of our graduates will not
suffer. That is not to say that reservation should not
be adopted; reservation should and must be adopted
to advance the prospects of the weaker sections
of society, but in providing for special measures
in that behalf care should be taken not to exclude
admission to higher educational centres to deserving
and qualified candidates of other communities. A
special provision contemplated by Article 15(4) like
reservation of posts and appointments contemplated
by Article 16(4) must be within reasonable limits. The
interests of weaker sections of society which are a
first charge on the States and the Centre have to
be adjusted with the interests of the community as
a whole. The adjustment of these competing claims
is undoubtedly a difficult matter, but if under the
guise of making a special provision, a State reserves
practically all the seats available in all the colleges,
that clearly would be subverting the object of Article
15(4). In this matter again, we are reluctant to say
definitely what would be a proper provision to make.
Speaking generally and in a broad way, a special
provision should be less than 50%; how much
less than 50% would depend upon the present
prevailing circumstances in each case.”
Similarly, in State of Andhra Pradesh and another v. P.
Sagar23, this Court reiterated that classification for the purposes
of Article 15(4) cannot rest solely upon caste; the objective
remains the advancement of socially and educationally
backward classes.
Socio-Economic Refinement and Means Test
21.4. By 1985, the doctrine had matured further in K.C. Vasanth
Kumar and another v. State of Karnataka24, where a Seven-
Judge Bench emphasised that reservation policy cannot
23 [1968] 3 SCR 595
24 1985 SCC OnLine SC 339
[2026] 4 S.C.R. 35
Union of India and Others v. Rohith Nathan and Another, Etc.
remain static but must be subjected to periodic review to
ensure that the truly backward continue to receive its benefits.
Justice D.A.Desai in his concurring opinion, stressed that
economic criteria must increasingly inform the identification of
beneficiaries and cautioned that reservation cannot be allowed
to crystallise into a vested or hereditary entitlement. The Court
endorsed the “caste-cum-means” test, drawing support from
K.S. Jayasree v. State of Kerala25, where the imposition of
an income ceiling within backward classes was upheld as
constitutionally valid. Likewise, in R. Chitralekha v. State
of Mysore26, the Court recognised income and occupation
as permissible indicators of backwardness. These decisions
marked a decisive shift towards economic refinement within
socially backward classes, a principle that ultimately took firm
doctrinal shape in Indra Sawhney v. Union of India (supra),
where the exclusion of the ‘creamy layer’ was constitutionally
crystallised. The relevant paragraphs from the judgment in
K.C. Vasanth Kumar read as under:
“26. Therefore, a time has come to review the
criterion for identifying socially and educationally
backward classes ignoring the caste label. The
only criterion which can be realistically devised
is the one of economic backwardness. To this
may be added some relevant criteria such as the
secular character of the group, its opportunity for
earning livelihood etc. but by and large economic
backwardness must be the loadstar. Why I say this?
…
30. Let me conclude. If economic criterion for
compensatory discrimination or affirmative action
is accepted, it would strike at the root cause
of social and educational backwardness, and
simultaneously take a vital step in the direction
of destruction of caste structure which in turn
would advance the secular character of the Nation.
25 (1976) 3 SCC 730
26 [1964] 6 SCR 368 : AIR 1964 SC 1823
36 [2026] 4 S.C.R.
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This approach seeks to translate into reality the twin
constitutional goals: one, to strike at the perpetuation
of the caste stratification of the Indian Society so as
to arrest regressive movement and to take a firm
step towards establishing a casteless society; and
two, to progressively eliminate poverty by giving an
opportunity to the disadvantaged sections of the
society to raise their position and be part of the
mainstream of life which means eradication of poverty.
31. Let me make abundantly clear that this approach
does not deal with reservation in favour of Scheduled
Castes and Scheduled Tribes. Thousands of years of
discrimination and exploitation cannot be wiped out
in one generation. But even here economic criterion
is worth applying by refusing preferred treatment to
those amongst them who have already benefited by
it and improved their position. And finally reservation
must have a time span otherwise concessions
tend to become vested interests. This is not a
judgment in a lis in an adversary system. When the
arguments concluded, a statement was made that the
Government of State of Karnataka would appoint a
Commission to determine constitutionally sound and
nationally acceptable criteria for identifying socially
and educationally backward classes of citizens for
whose benefit the State action would be taken. This
does not purport to be an exhaustive essay on guide
lines but may point to some extent, the direction in
which the proposed Commission should move.”
125…… While caste or community is a relevant
factor in determining the social and educational
backwardness, it cannot be said that all members of
a caste need be treated as backward and entitled to
reservation under Article 15(4) or Article 16(4). Caste-
cum-means test would be a rational test in identifying
persons who are entitled to the benefit of those
provisions. This principle has received acceptance at
the hands of this Court in K.S. Jayasree v. State of
Kerala [(1976) 3 SCC 730]. In that case a Commission
[2026] 4 S.C.R. 37
Union of India and Others v. Rohith Nathan and Another, Etc.
appointed by the Government of the State of Kerala
to enquire into the social and economic conditions
of the people of that State and to recommend as
to what sections of the people should be extended
the benefits under Article 15(4) of the Constitution
found that only the rich amongst certain castes or
communities were enjoying the benefit of reservations
made earlier. It, therefore, recommended adoption of
a means-cum-caste/community test for determining
the sections of the people who should be given the
benefit under the relevant constitutional provisions.
The State Government accordingly stipulated that
applicants who were members of certain castes
or communities and whose family income was
less than Rs 10000 per year were only entitled to
reservation under Article 15(4). The petitioner in the
above case who belonged to one such community
but whose family income was above Rs 10,000 per
year questioned the order before the Kerala High
Court on the ground that the imposition of the ceiling
of family income was unconstitutional. The learned
Single Judge who heard the petition allowed it. The
Division Bench of the Kerala High Court, however,
reversed the decision of the learned Single Judge and
dismissed the petition. On appeal, this Court while
affirming the decision of the Division Bench in the
above case on the question of social backwardness
observed at pp. 199-200 thus: (SCC p. 735, para 21)
……
143. Since economic condition is also a relevant
criterion, it would be appropriate to incorporate a
“means test” as one of the tests in determining the
backwardness as was done by the Kerala Government
in Jayasree case63. These two tests namely, that the
conditions of caste or group or community should
be more or less similar to the conditions in which
the Scheduled Castes or Scheduled Tribes are
situated and that the income of the family to which
the candidate belongs does not exceed the specified
38 [2026] 4 S.C.R.
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limit would serve as useful criteria in determining
beneficiaries of any reservation to be made under
Article 15(4). For the purpose of Article 16(4) however,
it should also be shown that the backward class in
question is in the opinion of the Government not
adequately represented in the Government services.
144. There is one other basis on which a classification
made for purposes of Article 15(4) or Article 16(4)
of the Constitution has received the approval of this
Court in Chitralekha case. In that case the Court
was concerned with a list of backward classes
prepared on the basis of economic condition and
occupation. According to that Government Order,
persons whose family income was Rs 1200 per
annum or less and who were engaged in occupations
such as agriculture, petty business, inferior services,
crafts or other occupations involving manual labour
were treated as belonging to backward classes. The
petitioner who had filed the petition in the High Court
did not challenge the validity of the said classification.
But on a submission made on behalf of the State
Government, the Court expressed its general approval
to the method of classification….”
21.5. Thus, the above decisions collectively established three guiding
propositions:
1. Caste may serve as an initial identifying marker but
cannot be the exclusive determinant.
2. Economic condition is a relevant and rational refining
criterion.
3. Reservation policy must balance social justice with
broader societal interests.
Mandal Commission and OBC Reservation
21.6. The Mandal Commission, formally known as the Socially and
Educationally Backward Classes Commission (SEBC) was
constituted in 1979 under the chairmanship of B.P. Mandal
with the mandate to identify the socially and educationally
[2026] 4 S.C.R. 39
Union of India and Others v. Rohith Nathan and Another, Etc.
backward classes in India. In its 1980 report, drawing upon
data from the 1931 Census (the last caste-based census)
along with contemporaneous sample studies, the Commission
estimated that Other Backward Classes (OBCs) constituted
approximately 52% of the population. It recommended 27%
reservation in civil posts and services under the Government
of India and Public Sector Undertakings, as well as in higher
educational institutions, thereby bringing the total reservations
for SCs, STs and OBCs to 49.5%.
21.7. Acting upon the said report, the Government of India issued
an Office Memorandum dated 13.08.1990 providing for
27% reservation in civil posts and services for Socially and
Educationally Backward Classes (SEdBCs). The said O.M. was
amended on 25.09.1991 to provide that preference within the
27% reservation would be given to candidates belonging to
the poorer sections among the SEdBCs. The implementation
of the Mandal recommendations led to widespread public
debate and social unrest, ultimately resulting in a constitutional
challenge before this Court.
21.8. The validity of the above mentioned 1990 O.M. was considered
by nine-Judge Bench in Indra Sawhney and others v. Union
of India and others27. This Court upheld the constitutional
validity of 27% reservation for OBCs under Article 16(4),
but imposed crucial limitations. It held that total reservations
ordinarily should not exceed 50%, save in extraordinary
circumstances, and most significantly, it mandated the
exclusion of the “creamy layer” from among the OBCs. The
Court emphasised that backwardness under Article 16(4) is
primarily social and that reservation cannot be sustained purely
on economic criteria.
21.9. Justice Sahai, while concurring with the majority, underscored
that backwardness is not static and that individuals within a
backward class who have achieved higher social or economic
status must be excluded to prevent monopolisation of benefits.
He observed that while a collectivity may be backward,
individuals from that group who have achieved advancement
27 (1992) Supp. 3 SCC 217
40 [2026] 4 S.C.R.
Supreme Court Reports
in status, service, or affluence must be disentitled from
claiming reservation. The exclusion of the creamy layer was
thus articulated as a constitutional necessity to preserve
substantive equality. The following passage from the decision
in Indra Sawhney is relevant:
“629. More backward and backward is an illusion.
No constitutional exercise is called for it. What is
required is practical approach to the problem. The
collectivity or the group may be backward class but
the individuals from that class may have achieved the
social status or economic affluence. Disentitle them
from claiming reservation. Therefore, while reserving
posts for backward classes, the departments should
make a condition precedent that every candidate must
disclose the annual income of the parents beyond
which one could not be considered to be backward.
What should be that limit can be determined by the
appropriate State. Income apart, provision should
be made that wards of those backward classes of
persons who have achieved a particular status in
society either political or social or economic or if their
parents are in higher services then such individuals
should be precluded to avoid monopolisation of the
services reserved for backward classes by a few.
Creamy layer, thus, shall stand eliminated. And once
a group or collectivity itself is found to have achieved
the constitutional objective then it should be excluded
from the list of backward class. Therefore,
(1) No reservation can be made on economic criteria.
(2) It may be under Article 16(4) if such class satisfies
the test of inadequate representation.
(3) Exclusion of creamy layer is a social purpose. Any
legislative or executive action to remove such persons
individually or collectively cannot be constitutionally
invalid.”
21.10. The Court further directed the Government of India to specify,
within four months, the socio-economic criteria for excluding
[2026] 4 S.C.R. 41
Union of India and Others v. Rohith Nathan and Another, Etc.
socially advanced persons or sections from the OBC category
and made implementation of the 1990 O.M. subject to such
exclusion. It is in furtherance of these directions that the
Ministry of Social Justice appointed an Expert Committee to
evolve criteria for exclusion of the socially advanced sections,
the term “creamy layer” being only a shorthand expression for
this constitutional principle. The Expert Committee, keeping
in view the directions in Indra Sawhney, evolved criteria
centred primarily on social status arising from positions and
placements in life, rather than on income alone. The guiding
principle was to identify positions whose occupants could
reasonably be deemed to have ceased to be socially backward
and to have attained social advancement. Accordingly, the
Committee framed exclusion criteria under various categories,
including the Service Category.
21.11. Under the Service Category, the Committee recommended
that the criteria applicable to officers directly recruited in
Central and State Government services should apply mutatis
mutandis to officers in equivalent or comparable posts in
Public Sector Undertakings, Banks, Insurance Corporations,
Universities, Autonomous Bodies, Local Self-Government
Bodies and other similar institutions. Importantly, to avoid
delay in implementation pending equivalence evaluation,
the Committee recommended that during the interim period,
the Income / Wealth Test (Category VI) would apply to such
persons.
21.12. The Expert Committee made it explicit that even during this
interim phase, persons falling within such PSU and analogous
categories would continue to be entitled to reservation, and
exclusion, if any, could only be on the basis of the prescribed
Income / Wealth criteria. The intent was clear: status-based
exclusion would operate once equivalence is determined;
until then, economic filtering under structured criteria alone
could apply.
Evolution of Non-Creamy Layer
21.13. The doctrine of exclusion of the “creamy layer”, crystallised
by this Court in Indra Sawhney and others v. Union of
42 [2026] 4 S.C.R.
Supreme Court Reports
India and others28, forms the constitutional foundation of
the 1993 OM. The subsequent executive framework must
therefore be understood as an operational mechanism to
give effect to that binding constitutional mandate.
1993 OM
21.14. Pursuant to the said constitutional mandate and the
recommendations of the Expert Committee, the Government
of India issued the 1993 OM, which codified the above
structural framework. For better appreciation, the OM is
reproduced below:
“No.36012/22/93-Estt. (SCT)
Government of India
Ministry of Personnel, Public
Grievances & Pensions (Department of
Personnel & Training)
New Delhi, the 8th
September, 1993
OFFICE MEMORANDUM
Subject:- Reservation for Other Backward Classes
in Civil Posts and Services under the Government
of India - Regarding.
The undersigned is directed to refer to this
Department’s O.M. No. 36012/31/90-Estt. (SCT),
dated the 13th August, 1990 and 25’” September,
1991 regarding reservation for Socially and
Educationally Backward Classes in Civil Posts
and Services under the Government of India and
to say that following the Supreme Court judgment
in the Indra Sawhney and others Vs. Union of
India and others case [Writ Petition (Civil) No.
930 of 1990] the Government of India appointed
an Expert Committee to recommend the criteria
for exclusion of the socially advanced persons/
28 (1992) Supp. 3 SCC 217
[2026] 4 S.C.R. 43
Union of India and Others v. Rohith Nathan and Another, Etc.
sections from the benefits of reservations for Other
Backward Classes in civil posts and services under
the Government of India.
2. Consequent to the consideration of the Expert
Committee’s recommendations this Department’s
Office Memorandum No. 36012/31/90-Estt. (SCT),
dated 13.08.90 referred to in Para(1) above is
hereby modified to provide as follows:
(a) 27% (twenty seven percent) of the vacancies
in civil posts and services under the Government
of India, to be filled through direct recruitment,
shall be reserved for the Other Backward Classes.
Detailed instructions relating to the procedure to
be followed for enforcing reservation will be issued
separately.
(b) Candidates belonging to OBCs recruited on the
basis of merit in an open competition on the same
standards prescribed for the general candidates
shall not be adjusted against the reservation quota
of 27%.
(c)(i) The aforesaid reservation shall not apply to
persons/sections mentioned in column 3 of the
Schedule to this office memorandum.
(ii) The rule of exclusion will not apply to persons
working as artisans or engaged in hereditary
occupations, callings. A list of such occupations,
callings will be issued separately by the Ministry
of Welfare.
(d) The OBCs for the purpose of the aforesaid
reservation would comprise, in the first phase,
the castes and communities which are common
to both the report of the Mandal Commission and
the State Government’s Lists.
A list of such castes and communities is being
issued separately by the Ministry of Welfare.
44 [2026] 4 S.C.R.
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(e) The aforesaid reservation shall take immediate
effect. However, this will not apply to vacancies
where the recruitment process has already been
initiated prior to the issue of this order.
3. Similar instructions in respect of public sector
undertaking and financial institutions including
public sector banks will be issued by the Department
of Public Enterprises and by the Ministry of Finance
respectively effective from the date of this Office
Memorandum.
Sd/-
(Smt. Sarita Prasad)
Joint Secretary to the
Government of India
To
All Ministries/Department of Government of India.”
The Schedule appended to the above 1993 OM enumerated
specific categories for exclusion and operationalised the
status-based criteria, while providing a residual Income /
Wealth Test under Category VI.
Under Category II (Service Category), the Schedule classified
Government servants into sub-categories II A and II B,
referring respectively to officers directly recruited to Class I
(Group A) and Class II (Group B) services. These provisions
unmistakably pertain to higher echelons of service and do not
concern lower-level employees. Category II C extends the
same principle to employees of Public Sector Undertakings,
Banks, Insurance Organisations, Universities and similar
bodies, by stipulating that the criteria in sub-categories II
A and II B shall apply mutatis mutandis to officers holding
equivalent or comparable posts in such organisations.
Income / Wealth Test
21.15. However, the 1993 OM expressly provides that pending
evaluation of equivalence or comparability of posts vis-à-
vis Government services, the Income / Wealth Test under
[2026] 4 S.C.R. 45
Union of India and Others v. Rohith Nathan and Another, Etc.
Category VI alone would apply. This is significant. The specific
criteria for disentitlement under II C, namely direct recruitment
to a post equivalent to Class I / Group A, or promotion to
such post before the age of 40, remain inoperative until
equivalence is determined. Thus, in the absence of such
evaluation, the entire category II C cannot be automatically
deprived of reservation; exclusion, if any, can only be under
Category VI.
Category VI, which embodies the Income / Wealth Test
operates as a residual filter. Explanation (i) under this category
specifically provides that income from salaries and income
from agricultural land shall not be clubbed with income from
other sources for the purpose of computing gross annual
income. Explanation (ii) pertains to the periodic revision of
the prescribed income limit. The plain language of these
explanations makes it clear that salary income and agricultural
income are consciously kept outside the common pool while
determining exclusion under the Income / Wealth Test.
2004 - Letter of Clarification
21.16. In 2004, a letter of clarification was issued to address practical
issues that had arisen in implementation. The clarification
recognizes that where equivalence of posts in PSUs and
similar organisations has not been evaluated, creamy layer
status must be determined on the basis of the Income / Wealth
Test. It reiterates that income from salaries and income from
agricultural land shall not be taken into account while applying
the test. The clarification further explains that income from
salaries and income from other sources (excluding salaries
and agricultural land) are to be assessed separately, and
exclusion would follow only if either component exceeds the
prescribed limit for three consecutive years.
21.17. Thus, the evolution of the non-creamy layer principle
demonstrates that the 1993 OM read with the 2004 Letter,
preserves the primacy of status-based exclusion and confines
economic exclusion to the structured parameters of Category
VI. Salary income cannot be mechanically aggregated in a
manner that defeats the constitutional objective articulated
46 [2026] 4 S.C.R.
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in Indra Sawhney. The interpretation of the 1993 OM and its
implementation in the present case must therefore be tested
against this constitutional architecture. In this backdrop, we
now proceed to examine the issues involved herein.
Issue No. 1
Whether the clarificatory letter dated 14.10.2004 can have any
overriding or superseding effect over the Office Memorandum
dated 08.09.1993, which expressly lays down the criteria for
exclusion from the benefit of reservation for OBCs by identifying
the creamy layer namely, the socially advanced persons of
sections among the Socially and Educationally Backward
Classes?
22. A bare perusal of the 1993 OM makes it abundantly clear that certain
categories of persons, namely, the sons or daughters of those holding
Class I/Group A or Class II/Group B posts in the Civil Services of the
Central and State Governments, have been excluded. The income/
wealth test has also been stipulated in the office memorandum,
which prescribes an Income / Wealth Test as an additional criterion
of exclusion. Significantly, the 1993 OM provides that these criteria
shall apply mutatis mutandis for exclusion from reservation in respect
of the children of those working in Public Sector Undertakings, Banks,
Insurance organisations, Universities and other similar institutions, as
well as those holding equivalent or comparable positions in private
employment.
23. The question of “equivalence of posts” as contemplated both in
the 1993 OM and in the subsequent 2004 Letter, is fundamentally
a matter of policy. Such equivalence must be determined by the
Government on the basis of a detailed analysis of data by experts
in the field. Until such equivalence is formally evaluated and notified
by the Government, the entitlement of candidates whose parent(s)
work in organisations other than in Class I or II of the Central or
State Civil Services, shall be decided by the Income/ Wealth Test.
The core question therefore is whether paragraph 9 of the 2004
Letter merely explains the scheme of the 1993 OM or impermissibly
alters its substantive structure of exclusion.
24. Before adverting to the 2004 Letter, it is essential to reiterate the well-
established principle that a mere government letter cannot have the
[2026] 4 S.C.R. 47
Union of India and Others v. Rohith Nathan and Another, Etc.
effect of overriding, overruling or superseding any proceeding in the
nature of an executive instruction or an Office Memorandum issued
in exercise of executive power under Article 162 of the Constitution.
The clarificatory letter must, therefore, be construed strictly as one
explaining or supplementing the foundational guidelines laid down in
the 1993 OM, which was issued after due deliberation and following
the requisite procedure and not as altering its substantive framework.
It is settled law that a clarificatory instruction cannot introduce a
substantive condition that does not exist in the parent policy. If it
travels beyond explanation and alters rights or liabilities, it ceases
to be clarificatory and assumes the character of an amendment.
25. In order to understand the impact of the clarificatory letter dated
14.10.2004, it is apposite to extract Paragraphs 7-10 thereof as
follows:
“7. In regard to clause (v) of para 4, it is clarified that the
sons and daughters of parents of whom only the husband
is a directly recruited Class II/Group B officer who gets into
Class I/Group A at the age of 40 or earlier are treated to
be in creamy layer. If the father is directly recruited Class
III/Group C or Class IV/Group D employee and he gets into
Class I/Group A at the age of 40 or earlier, his sons and
daughters shall not be treated to be falling in creamy layer.
8. In regard to clauses (vi), (vii) and (viii) of para 4, it is
clarified that the creamy layer status of a candidate is
determined on the basis of the status of his parents and
not on the basis of his own status or income or on the basis
of status or income or on the basis of status or income of
his/her spouse. Therefore, while determining the creamy
layer status of a person the status or the income of the
candidate himself or of his/her spouse shall not be taken
into account.
9. In regard to clause (ix) of para 4, it is clarified that
the creamy layer status of sons and daughters of
persons employed in organizations where equivalence or
comparability of posts vis-à-vis posts in Government has
not been evaluated is determined as follows:
Income of the parents from the salaries and from the
other Sources [other than salaries and agricultural land] is
48 [2026] 4 S.C.R.
Supreme Court Reports
determined separately. If either the income of the parents
from the salaries or the income of the parents from other
sources [other than salaries and agricultural land] exceeds
the limit of Rs.2.5 lakh per annum for a period of three
consecutive years, the sons and daughters of such persons
shall be treated to fall in creamy layer. But the sons and
daughters of parents whose income from other sources is
less than Rs.2.5 lakh per annum and income from other
sources is also less than Rs.2.5 lakh per annum will not
be treated as falling in creamy layer even if the sum of
the income from salaries and the income from the other
sources is more than Rs.2.5 lakh per annum for a period
of three consecutive years. It may be noted that income
from agricultural land is not taken into account while
applying the Test.
10. In regard to clause (x) of para 4, it is clarified that while
applying the Income/Wealth Test to determine creamy layer
status of any candidate as given in Category VI of the
Schedule to the OM, income from the salaries and income
from the agricultural land shall not be taken into account.
It means that if income from salaries of the parents of any
candidate is more than Rs.2.5 lakh per annum, income
from agricultural land is more than Rs.2.5 lakh per annum,
but income from other sources is less than Rs.2.5 lakh per
annum, the candidate shall not be treated to be falling in
creamy layer on the basis of Income/Wealth Test provided
his parent(s) do not possess wealth above the exemption
limit as prescribed in the Wealth Tax Act for a period of
three consecutive years.”
26. The above extract makes it clear that income from salaries, agriculture
or other sources cannot be clubbed for the purpose of applying
the income/wealth test to determine the creamy layer status of a
candidate. It is also evident from a comprehensive reading of the 1993
OM along with the clarificatory letter dated 14.10.2004 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
[2026] 4 S.C.R. 49
Union of India and Others v. Rohith Nathan and Another, Etc.
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. Mere determination of 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 the income.
27. In fact, paragraph 7 of the 2004 Letter makes it amply clear that a
mechanical application of income thresholds may in certain situations,
produce inequitable outcomes. To that limited extent, the 2004
Letter may be understood as reinforcing the scheme of the 1993
OM provided it is construed as explanatory and not as altering the
substantive framework.
28. In this context, a perusal of the 21st Report of the Parliamentary
Committee on Welfare of Other Backward Classes (2018–19)
elucidates the evolution of the guidelines governing exclusion from
reservation by identification of the creamy layer. It is also necessary
to point out that the 21st report records that the 2004 Letter has
done more to confuse the position than to clarify it, which was its
intended purpose.
29. The observations of the Parliamentary Committee lend institutional
support to the view that paragraph 9 has generated interpretative
ambiguity and may have been applied beyond its intended contours.
The Report records that the 2004 Letter did not emanate from the
DoPT Secretariat and that its origin could not be traced in terms of
the initial note file. It further observes that determining exclusion
from reservation solely on the basis of income from salaries, as
indicated in the 2004 Letter, would not be consistent with the original
framework. The entire architecture of paragraph 9 of the 2004
Letter is premised on a prior determination of equivalence. Income
is intended to operate only as a surrogate measure in the absence
of such equivalence; it cannot supplant the primary status-based
framework embodied in the 1993 OM.
30. In light of the foregoing, any attempt to read paragraph 9 of the 2004
Letter in isolation, so as to dilute or override the substantive scheme
of the 1993 OM would be legally untenable. Overemphasis on the
2004 Letter to the extent of making income alone determinative
without regard to parental status or category of service would defeat
the structural framework of exclusion envisaged under the 1993 OM.
50 [2026] 4 S.C.R.
Supreme Court Reports
31. 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.
Issue No. 2
Whether there can be hostile discrimination between employees
of the Government and those working in Public or Private Sector
Undertakings, when both occupy posts of the same grade or
class?
32. The second issue that needs to be decided here is whether caste,
as a determining factor for entitlement to reservation, can be diluted
or distorted by introducing invidious discrimination between similarly
placed categories of persons.
33. At the outset, it must be noted that while caste may be an indicator of
historical disadvantage, it cannot be treated as the sole determinant
of backwardness. The exclusion of the creamy layer among the
backward classes is not a matter of mere policy preference but
a constitutional imperative intended to ensure that the benefits of
reservation reach those who are socially and educationally backward
in the true sense of the phrase. The principle seeks to prevent relatively
advanced segments within the backward classes from siphoning
off the advantages of affirmative action, so that the objective and
purpose of the constitutional scheme of affirmative action, of which
reservation is a reflection, are adhered to.
34. It is in this context that the Tribunal as well as the High Courts
have held that Group C and Group D employees who, by virtue of
promotion and efflux of time, surpass the income levels as stated
in the excluded categories of persons in the Schedule to the Office
Memorandum, which applies to Group A and Group B Government
employees (direct recruits), and who by virtue of such income
from salary alone do not stand excluded from reservation, cannot
be treated differently from those employees of PSUs and private
undertakings who also belong to or are equivalent to such Group C
and Group D categories of posts. Treating them differently, or in other
words, treating the children of those employed in PSUs or private
employment, etc., as being excluded from the benefit of reservation
[2026] 4 S.C.R. 51
Union of India and Others v. Rohith Nathan and Another, Etc.
only on the basis of their income derived from salaries, and without
reference to their posts (whether Group A or B, or Group C or D)
would certainly lead to hostile discrimination between parties who are
similarly placed and would amount to equals being treated unequally,
thereby attracting the rigour of the equality doctrine under Articles
14, 15 and 16, of which reservation is a facet.
35. It is well settled that a classification, to withstand scrutiny under
Article 14, must satisfy the twin requirements of (i) intelligible
differentia distinguishing persons grouped together from others left
out, and (ii) a rational nexus with the object sought to be achieved.
If similarly situated persons are subjected to differential treatment
without a constitutionally sustainable basis, such action would fall
foul of Article 14.
36. The object of excluding the creamy layer is to ensure that socially
advanced sections within the OBCs do not appropriate benefits meant
for the genuinely backward; it is not to create artificial distinctions
between equally placed members of the same social class.
37. The principle laid down in Indra Sawhney and others v. Union of
India and others29 that “To continue to confer upon such advanced
sections special benefits would amount to treating equals unequally;
to rank them with the rest of the backward classes would amount
to treating the unequals equally” would stand attracted equally to
a case where proper identification of a section or class of persons
or a person belonging to OBC as being either socially advanced or
backward is not carried out by the Government. In fact, it would not
be an overstatement to say that if this exercise is not undertaken
in a manner that is rational, non-arbitrary, reasonable and equal,
it would lead to the illegal exclusion of genuine claimants and
deserving persons within the OBC category from the benefit of
reservation, which, being a facet of equality, is a right protected by
the Constitution, as made amply clear by the judgments in State of
Kerala and Others v. N.M. Thomas and Others30 as well as Indra
Sawhney v. Union of India. To state it in other words, Article 16(4)
is a structural reflection and a conceptualized representation of the
principle of substantive equality embodied and envisaged under Article
29 (1992) Supp. 3 SCC 217
30 MANU/SC/0479/1975 : 19.09.1975 - SC
52 [2026] 4 S.C.R.
Supreme Court Reports
16(1) of the Constitution. Therefore, any interpretation of the 1993
OM or the 2004 Letter that results in unequal treatment of similarly
placed OBC candidates would not only be legally erroneous but
constitutionally impermissible.
38. Relevant portion of the judgment in State of Kerala v. N.M. Thomas
(supra) is extracted for reference:
“44. Our Constitution aims at equality of status and
opportunity for all citizens including those who are
socially, economically and educationally backward. The
claims of members of backward classes require adequate
representation in legislative and executive bodies. If
members of Scheduled Castes and Tribes, who are said by
this Court to be backward classes, can maintain minimum
necessary requirement of administrative efficiency, not only
representation but also preference may be given to them to
enforce equality and to eliminate inequality. Articles 15(4)
and 16(4) bring out the position of backward classes to merit
equality. Special provisions are made for the advancement
of backward classes and reservations of appointments and
posts for them to secure adequate representation. These
provisions will bring out the content of equality guaranteed
by Articles 14, 15(1) and 16(1). The basic concept
of equality is equality of opportunity for appointment.
Preferential treatment for members of backward classes
with due regard to administrative efficiency alone can
mean equality of opportunity for all citizens. Equality under
Article 16 could not have a different content from equality
under Article 14. Equality of opportunity for unequals
can only mean aggravation of inequality. Equality of
opportunity admits discrimination with reason and prohibits
discrimination without reason. Discrimination with reasons
means rational classification for differential treatment
having nexus to the Constitutionally permissible object.
Preferential representation for the backward classes in
services with due regard to administrative efficiency is
permissible object and backward classes are a rational
classification recognised by our Constitution. Therefore,
differential treatment in standards of selection are within
the concept of equality.
[2026] 4 S.C.R. 53
Union of India and Others v. Rohith Nathan and Another, Etc.
45. A rule in favour of an under-represented backward
community specifying the basic needs of efficiency of
administration will not contravene Articles 14, 16(1) and
16(2). The rule in the present case does not impair the
test of efficiency in administration inasmuch as members
of Scheduled Castes and Tribes who are promoted have
to acquire the qualification of passing the test. The only
relaxation which is done in their case is that they are
granted two years more time than others to acquire the
qualification. Scheduled Castes and Tribes are descriptive
of backwardness. It is the aim of our Constitution to bring
them up from handicapped position to improvement. If
classification is permissible under Article 14. it is equally
permissible under Article 16, because both the Articles
lay down equality. The quality and concept of equality
is that if persons are dissimilarly placed they cannot be
made equal by having the same treatment. Promotion
of members of Scheduled Castes and Tribes under the
impeached rules and orders is based on the classification
with the object of securing representation to members of
Scheduled Castes and Tribes. Efficiency has been kept
to view and not sacrificed.
46. All legitimate methods are available for equality of
opportunity in services under Article 16(1). Article 16(1)
is affirmative whereas Article 14 is negative in language.
Article 16(4) indicates one of the methods of achieving
equality embodied in Article 16(1). Article 16(1) using the
expression “equality” makes it relatable to all matters of
employment from appointment through promotion and
termination to payment of pension and gratuity. Article
16(1) permits classification on the basis of object and
purpose of law or State action except classification involving
discrimination prohibited by Article 16(2). Equal protection
of laws necessarily involves classification. The validity
of the classification must be adjudged with reference to
the purpose of law. The classification in the present case
is justified because the purpose of classification is to
enable members of Scheduled Castes and Tribes to find
representation by promotion to a limited extent. From the
54 [2026] 4 S.C.R.
Supreme Court Reports
point of view of time a differential treatment is given to
members of Scheduled Castes and Tribes for the purpose
of giving them equality consistent with efficiency.”
39. Approving the decision in N.M. Thomas, this Court held in Indra
Sawhney and Others v. Union of India and Others31 as follows:
“741. In Balaji it was held - “there is no doubt that Article
15(4) has to be read as a proviso or an exception to
Articles 15(1) and 29(2)”. It was observed that Article
15(4) was inserted by the First Amendment in the light of
the decision in Champakam, with a view to remove the
defect pointed out by this Court namely, the absence of a
provision in Article 15 corresponding to Clause (4) of Article
16. Following Balaji it was held by another Constitution
Bench (by majority) in Devadasan - “further this Court
has already held that Clause (4) of Article 16 is by way
of a proviso or an exception to Clause (1)”. Subbarao, J.,
however, opined in his dissenting opinion that Article 16(4)
is not an exception to Article 16(1) but that it is only an
emphatic way of stating the principle inherent in the main
provision itself. Be that as it may, since the decision in
Devadasan, it was assumed by this Court that Article 16(4)
is an exception to Article 16(1). This view, however, received
a severe set-back from the majority decision in State of
Kerala and Ors. v. N.M. Thomas MANU/SC/0479/1975 :
(1976) I LLJ 376 SC. Though the minority (H.R. Khanna
and A.C. Gupta, JJ.) stuck to the view that Article 16(4)
is an exception, the majority (Ray, C.J., Mathew, Krishna
Iyer and Fazal Ali, JJ.) held that Article 16(4) is not an
exception to Article 16(1) but that it was merely an emphatic
way of stating a principle implicit in Article 16(1). (Beg. J.
took a slightly different view which it is not necessary to
mention here). The said four learned Judges - whose
views have been referred to in para 41 - held that Article
16(1) being a facet of the doctrine of equality enshrined in
Article 14 permits reasonable classification just as Article
14 does. In our respectful opinion, the view taken by the
31 (1992) Supp. 3 SCC 217
[2026] 4 S.C.R. 55
Union of India and Others v. Rohith Nathan and Another, Etc.
majority in Thomas is the correct one. We too believe
that Article 16(1) does permit reasonable classification
for ensuring attainment of the equality of opportunity
assured by it. For assuring equality of opportunity, it may
well be necessary in certain situations to treat unequally
situated persons unequally. Not doing so, would perpetuate
and accentuate inequality. Article 16(4) is an instance
of such classification, put in to place the matter beyond
controversy. The “backward class of citizens” are classified
as a separate category deserving a special treatment in
the nature of reservation of appointments/posts in the
services of the State. Accordingly, we hold that Clause (4)
of Article 16 is not exception to Clause (1) of Article 16. It
is an instance of classification implicit in and permitted by
Clause (1). The speech of Dr. Ambedkar during the debate
on draft Article 10(3) [corresponding to Article 16(4)] in
the Constituent Assembly - referred to in para 28 - shows
that a substantial number of members of the Constituent
Assembly insisted upon a “provision (being) made for the
entry of certain communities which have so far been outside
the administration”, and that draft Clause (3) was put in
recognition and acceptance of the said demand. It is a
provision which must be read along with and in harmony
with Clause (1). Indeed, even without Clause (4), it would
have been permissible for the State to have evolved such
a classification and made a provision for reservation of
appointments/posts in their favour. Clause (4) merely puts
the matter beyond any doubt in specific terms.
742. Regarding the view expressed in Balaji and
Devadasan, it must be remembered that at that time it was
not yet recognised by this Court that Article 16(1) being
a facet of Article 14 does implicitly permit classification.
Once this feature was recognised the theory of Clause
(4) being an exception to Clause (1) became untenable.
It had to be accepted that Clause (4) is an instance of
classification inherent in Clause (1). Now, just as Article
16(1) is a facet or an elaboration of the principle underlying
Article 14, Clause (2) of Article 16 is also an elaboration
of a facet of Clause (1). If Clause (4) is an exception to
56 [2026] 4 S.C.R.
Supreme Court Reports
Clause (1) then it is equally an exception to Clause (2).
Question then arises, in what respect is Clause (4) an
exception to Clause (2), if ‘class’ does not means ‘caste’.
Neither Clause (1) nor Clause (2) speak of class. Does
the contention mean that Clause (1) does not permit
classification and therefore Clause (4) is an exception
to it. Thus, from any point of view, the contention of the
petitioners has no merit”.
40. 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, the corner stone of our Republic. Having regard to the
peculiar facts of the present cases, the reasoning adopted by the
High Court that treating similarly placed employees of private entities
and PSUs differently from Government 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.
41. Thus, we find no infirmity in the judgments impugned before us. The
civil appeals accordingly fail.
42. As regards the intervention applications, we find that several
candidates who were successful in the Civil Services Examination of
different years sought permission to intervene the present proceedings
to advance their respective contentions. They submit, in substance,
contentions similar to those urged by the respondent candidates in
the civil appeals, asserting that they belong to the Non-Creamy Layer
of the Other Backward Classes. It is their case that their applications,
representations, or proceedings are presently pending consideration
before the Department of Personnel and Training (DoPT), the High
Courts or the Central Administrative Tribunal, and that any decision
rendered in the present batch of matters would have a direct bearing
upon their entitlement. Accordingly, they seek appropriate orders in
the present proceedings.
43. At this juncture, it is to be noted that supernumerary posts have
already been assured by the DoPT and this position stands recorded
in the 21st Report of the Parliamentary Committee on the Welfare
of Other Backward Classes. In view thereof, we find no difficulty
[2026] 4 S.C.R. 57
Union of India and Others v. Rohith Nathan and Another, Etc.
in directing the appellants to create such supernumerary posts, as
required, to accommodate the candidates who satisfy the non-creamy
layer criteria as clarified in the present judgment, subject to their
otherwise fulfilling eligibility conditions.
CONCLUSION
44. To sum up
(i) All the Civil Appeals are dismissed.
(ii) The appellants are directed to consider the claims of the
respondent candidates and intervenors in accordance with the
principles laid down in this judgment, and to implement the same
within a period of six months from the date of this judgment.
(iii) There shall be no order as to costs.
(iv) Pending application(s) including Intervention Applications, stand
disposed of accordingly.
Result of the case: Appeals dismissed.
†
Headnotes prepared by: Divya Pandey
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