Income cannot be sole determinant of OBC cream layer: SC

New Delhi: The Supreme Court has said that the income of parents cannot be the only criterion for excluding candidates from the OBC quota on the grounds of “creamy layer” and stressed that the employment status and category of the parents must be taken into consideration with the income/wealth test as an additional criterion for exclusion. Currently, the threshold income for determining the “creamy layer” is Rs 8 lakh per annum.The court’s ruling will have a huge impact on PSU and private sector employees as income is seen as the sole determinant of their “creamy layer” status, while job category is the determining factor in the case of government employees. A bench of Justices PS Narasimha and R Mahadevan said that children of Group A and Group B government employees are barred from availing OBC reservation benefit due to their employment status, but wards of Group C and Group D employees are eligible for OBC reservation benefit even if their income level exceeds the limit due to promotion and loss of time.The court rejected Center’s plea upholding the income/wealth test and accepted the claims of the aggrieved children of PSU employees, who had been fighting the case for more than a decade through their defense lawyer Shashank Ratnoo.An office memorandum issued by the Center in 1993 said the same principles would apply to employees holding equivalent or equivalent positions in public sector undertakings, banks, insurance institutions, universities and similar institutions. But the “job equivalence” envisaged in the OM has not yet materialized and the government issued a clarification letter in 2004, making the income/wealth test the sole criterion for employees in public institutions and the private sector.The SC said undue emphasis on the 2004 letter without taking into account the status of parenthood or category of service would undermine the structural framework of exclusion envisaged in the 1993 OM.No double standards for children of government workers: SCA comprehensive reading of the 1993 OM and the clarification letter also shows that salary income alone cannot be used as the sole criterion for deciding whether a candidate belongs to the creamy layer. The status and job category to which the candidate’s parents belong is crucial. The exclusions in Categories I to III of the Schedule are status-based rather than purely income-based, reflecting the policy understanding that promotion within government service grades implies social advancement independent of fluctuations in wage levels. Whether a candidate belongs to the creamy layer or non-creamy layer of OBC cannot be decided on the basis of income alone,” Justice Mahadevan, who wrote the judgment, said. “Hence, determining creamery status solely on the basis of income scale without reference to job categories and status parameters spelled out in the OM 1993 is clearly not legally sustainable.”The court emphasized that there cannot be different standards for the children of government employees and others, as this would amount to discrimination, which cannot be allowed.“Adopting an interpretation that is disadvantageous to a section of the same backward class without reasonable justification amounts to treating equality as inequality and thus the opposite of equality… In view of the peculiar facts of the present case, the reasoning adopted by the HC that treating similar employees of private entities and public institutions differently from government employees and their guardians while deciding to reserve rights would amount to hostile discrimination certainly inspires the confidence of this court,” it said.