caselaws.org

Supreme Court of India
Pichra Warg Kalyan Mahasabha … vs The State Of Haryana on 24 August, 2021Author: L. Nageswara Rao

Bench: L. Nageswara Rao, B.R. Gavai

Non-Reportable

IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL/APPELLATE JURISDICTION

Writ Petition (Civil) No. 60 of 2019

PICHRA WARG KALYAN MAHASABHA
HARYANA (Regd.) & ANR. …. Petitioners

Versus

THE STATE OF HARYANA & ANR. ….Respondents

With

Civil Appeal No.4952 of 2021
(Arising out of SLP (C) No. 21893 of 2018)

Civil Appeal Nos.4953-4954 of 2021
(Arising out of SLP(C) Nos. 32168-32169 of 2018

JUDGEMENT

L. NAGESWARA RAO, J.

Leave granted in SLP (C) No.21893 of 2018 & SLP (C)

Nos.32168-32169 of 2018.

1. Writ Petition (C) No. 60 of 2019 has been filed under

Article 32 of the Constitution of India for quashing

notifications dated 17.08.2016 and 28.08.2018 issued by the

First Respondent as arbitrary and violative of Articles 14, 15

and 16 of the Constitution of India. A further direction is

1 | Page
sought for a fresh survey and verification of data for

identification and specification of ‘creamy layer’ as per the

provisions of the Haryana Backward Classes (Reservation in

Services and Admission in Educational Institutions) Act, 2016

(hereinafter referred to as, the ‘2016 Act’). The Petitioners

have also sought for a direction to the Respondents to

provide reservation to backward classes in Haryana under

the 2016 Act by considering the existing defined criteria of

‘creamy layer’ by the National Commission for Backward

Classes or the criteria used by the State of Haryana prior to

the 2016 Act.

2. Reservation in backward classes as recommended by

the Mandal Commission was scrutinised by this Court in

Indra Sawhney v. Union of India 1 (hereinafter referred to

as, ‘Indra Sawhney-I’). In the said judgement, this Court

recommended constitution of a permanent body at the

Central level and at the level of the States to deal with the

inclusion, under-inclusion and over-inclusion of groups in the

lists of other backward classes of citizens. This Court

directed State Governments to identify ‘creamy layer’

amongst the backward classes and exclude them from the

purview of reservation. Pursuant to the directions issued in

1 1992 Supp (3) SCC 217

2 | Page
Indra Sawhney-I, the Haryana Second Backward Classes

Commission was constituted on 12.10.1993. The said

Commission was assigned the function of specifying the basis

for excluding socially advanced persons / creamy layer from

the backward classes. On 16.05.1995, the Haryana Second

Backward Classes Commission submitted its report

recommending the criteria for excluding socially advanced

persons/sections (creamy layer) from the backward classes.

The State Government accepted the recommendations of the

Commission and decided that the benefit of reservation shall

not extend to persons/sections mentioned in Annexure ‘A’ to

the circular dated 07.06.1995 issued by the Commissioner

and Secretary to Government of Haryana, Welfare and

Scheduled Castes and Backward Classes Department. The

said Annexure ‘A’ included the children of those who held

Constitutional Posts, who were Class I Officers of the All India

Central and State Services (Direct Recruits), Class II Officers

of the Central and State Services (Direct Recruits),

employees in Public Sector Undertakings etc., and personnel

belonging to Armed Forces including Para Military Forces

(excluding persons holding civil posts). Children of persons

belonging to a family which owned more than the permissible

land under the statute of Haryana pertaining to ceiling on

3 | Page
land holdings were also covered under Annexure ‘A’. Another

category specified in Annexure ‘A’ was with respect to the

children of persons with gross annual income of Rs. 1 lakh or

above or possessing wealth above the exemption limit as

prescribed in the Wealth Tax Act, 1957 for a period of three

consecutive years. Lastly, Annexure ‘A’ brought within its fold

children of persons of all other listed categories who were not

disentitled to the benefit of reservation but had income from

other sources of wealth bringing them within the

aforementioned income / wealth criteria.

3. On 31.08.2010, the Financial Commissioner and

Principal Secretary to Government of Haryana, Welfare of

Scheduled Castes & Backward Classes Department informed

the relevant authorities that the State Government had

decided to raise income limit to Rs. 4.5 lakh for determining

‘creamy layer’ amongst the backward classes under the

income / wealth criteria. Later, the Haryana Backward

Classes (Reservation in Services and Admission in

Educational Institutions) Act, 2016 was enacted to provide for

reservation in services and admission in educational

institutions to the persons belonging to backward classes in

the State of Haryana. Section 5 of the 2016 Act provides that

no persons belonging to ‘creamy layer’ amongst the

4 | Page
backward classes shall be considered for admission in

educational institutions against the seats reserved for

backward classes. They shall also not be entitled to claim

reservation for appointment in services under the State

against posts reserved for backward classes. Section 5(2) of

the Act postulates that the Government shall, by notification,

after taking into consideration social, economic and such

other factors, as deemed appropriate, specify the criteria for

exclusion and identification of persons belonging to the

backward classes as ‘creamy layer’.

4. In exercise of the powers conferred by the 2016 Act, the

State Government issued a notification on 17.08.2016

specifying the criteria for exclusion of ‘creamy layer’ within

the backward classes. As per the said notification, children of

persons having gross annual income up to Rs. 3 lakh shall

first of all get the benefit of reservation in services and

admission in educational institutions. The left-out quota shall

go to that class of backward classes of citizens who earn

more than Rs. 3 lakh but up to Rs. 6 lakh per annum. The

sections of backward classes earning above Rs. 6 lakh per

annum shall be considered as ‘creamy layer’ under Section 5

of the 2016 Act.

5 | Page
5. Students aspiring to be admitted to MBBS course for

the academic year 2018-2019 in the quota for backward

classes filed writ petitions in the High Court of Punjab and

Haryana challenging the notification dated 17.08.2016. The

main grievance of the petitioners in the said writ petitions

was the sub-classification of backward classes, with

preference in reservation given to a particular section of a

backward class group. The High Court by its judgement dated

07.08.2018 in CWP No. 15731 of 2018 and connected

matters set aside the notification dated 17.08.2016 on the

ground that the sub-classification of the backward classes is

arbitrary and violative of Article 14 of the Constitution of

India. The High Court directed the counselling of students to

be held afresh on the basis of the earlier criteria existing

prior to the 2016 Act. The State of Haryana questioned the

correctness of the judgement of the High Court before this

Court in SLP(C) No. 21893 of 2018. The request made by the

State to stay the judgement of the High Court dated

07.08.2018 was declined by this Court on 28.08.2018.

6. On the same day, the State Government issued a

notification after obtaining an opinion of the Advocate

General of Haryana, whereby the criteria for computing

annual income for the purposes of the notification dated

6 | Page
17.08.2016 was fixed as ‘gross annual income’, which shall

include income from all sources. By the said notification

dated 28.08.2018, all previous notifications and instructions

which provided for a different mode of computing annual

income stood overruled. Students, who having qualified in

NEET-2018 and seeking admission to MBBS and BDS courses

in the backward classes quota, filed CWP No. 22055 of 2018

in the High Court, assailing the legality and validity of the

notifications dated 17.08.2016 and 28.08.2018. The High

Court upheld both the notifications, aggrieved by which, SLP

(C) Nos. 32168-32169 of 2018 have been filed before this

Court. As the question arising in the Writ Petition (C) No. 60

of 2019 and the appeals arising from SLP (C) No. 21893 of

2018 and SLP (C) Nos. 32168-32169 of 2018 are common, all

of them are disposed of together by this judgement.

7. The point considered by the High Court in CWP No.

15731 of 2018 was restricted to the sub-classification of a

backward class group, while fixing the criteria for ‘creamy

layer’. By the notification dated 17.08.2016, apart from fixing

the income criterion as Rs. 6 lakh for identifying and

excluding the ‘creamy layer’, the State Government divided

the remaining backward classes of citizens, eligible for

reservation, into two groups on the basis of their annual

7 | Page
income. The first group is of those persons who have gross

annual income up to Rs. 3 lakh and the other, comprising

persons who have income between Rs. 3 lakh and Rs. 6 lakh.

According to the notification dated 17.08.2016, children of

persons having gross annual income up to Rs. 3 lakh shall

first be considered for the benefit of reservation in services

and admission in educational institutions. The left-over quota

shall then be filled up by the children of those whose annual

income is between Rs. 3 lakh and Rs. 6 lakh. The contention

on behalf of the State Government, that such division was

made to ensure that the benefit of reservation reached the

most marginalised amongst the backward classes, was

rejected by the High Court. The High Court was of the opinion

that this sub-classification is arbitrary and would result in

depriving the benefit of reservation to persons belonging to

backward classes who have income between Rs. 3 lakh to Rs.

6 lakh. After examining the material produced by the

Government, the High Court criticised the State Backward

Classes Commission for not examining and validating data to

establish social backwardness of the backward classes. By

making it clear that fixing Rs. 6 lakh as the income for

determining the ‘creamy layer’ amongst the backward

classes was not in question before it, the High Court in its

8 | Page
judgement dated 07.08.2018 concluded that the sub-

classification giving preference to those with annual income

less than Rs. 3 lakh is arbitrary.

8. In its judgement dated 31.08.2018 in CWP No. 22055

of 2018, the High Court upheld the fixation of the income

limit of Rs. 6 lakh per year as criteria for determining ‘creamy

layer’ amongst the backward classes. After clarifying that

the earlier notifications issued by the State Government on

07.06.1995, 09.08.2000 and 31.08.2010 had been

superseded by the 2016 Act, the High Court was of the

opinion that fixing the criteria for ‘creamy layer’ is in the

interests of persons belonging to the marginalised sections of

backward classes who actually need the benefit of

reservation. In so far as the notification dated 28.08.2018 is

concerned, the High Court held that the State Government

had jurisdiction under the 2016 Act to take into account the

gross annual income from all sources for the purpose of

arriving at the criteria for determining ‘creamy layer’. As

both the notifications dated 17.08.2016 and 28.08.2018 are

in the larger interests of those backward classes who require

the benefit of reservation, the High Court dismissed the writ

petition.

9 | Page
9. We have heard Mr. Siddharth Dave, learned Senior

Counsel appearing for the Petitioners and Mr. Arun Bhardwaj,

learned Senior Counsel appearing for the Respondent-State.

The principal contention of the Petitioners is that the

notifications dated 17.8.2016 and 28.08.2018 are contrary to

the law laid down by this Court in Indra Sawhney-I as

economic criterion cannot be the sole criterion for identifying

‘creamy layer’. It was contended on behalf of the Petitioners

that the notifications are violative of Section 5 of the 2016

Act, according to which social, economic and other factors

are to be taken into account for specifying the criteria for

exclusion and identification of persons belonging to the

backward classes as ‘creamy layer’. The learned Senior

Counsel for the Petitioners submitted that the sub-

classification of the backward classes on the basis of income

by the notification dated 17.08.2016 resulted in precluding

one section of backward class of persons, whose annual

income was between Rs. 3 lakh to Rs. 6 lakh, from the

benefit of reservation. Computation of gross income by

including income from all sources according to the

notification dated 28.08.2018 is contrary to the notifications

issued by the Government of India as well as the notifications

that were issued by the State Government prior to the 2016

10 | P a g e
Act. According to the Petitioners, clubbing of salary income

and agricultural income to compute the gross income results

in exclusion of a large number of eligible sections of

backward classes from seeking reservation in appointment to

public services and admission to educational institutions.

10. The submissions made on behalf of the Petitioners were

countered by the learned Senior Counsel appearing for the

State who submitted that the notifications have been issued

strictly in accordance with the judgement in Indra

Sawhney-I. On behalf of the State, it was contended that a

detailed district-wise survey was done by the Commission to

collect information relating to social and economic

backwardness of all the backward classes before issuing the

impugned notifications. Much stress was laid by the State on

the laudable object that is achieved by the two notifications

in question. The sub-classification amongst the backward

classes is to ensure that people with lower income amongst

backward classes get the benefit of reservation as they need

a helping hand more than the others who fall within the

higher income bracket of Rs. 3 lakh to Rs. 6 lakh. The

notification dated 28.08.2018 is also for the purpose of

providing the benefit of reservation to the marginalised

sections of backward classes as such of those sections

11 | P a g e
having a higher income should not get primacy and occupy

the majority of the reserved seats / posts.

11. The notification dated 17.08.2016 was issued in

exercise of the power conferred on the State Government

under the 2016 Act. Section 5(2) of the 2016 Act clearly

provides that social, economic and other factors have to be

taken into account for the purpose of determining and

excluding the ‘creamy layer’ within a backward class. It is

relevant to mention that the notification that was issued on

07.06.1995 was in tune with the judgement of this Court in

Indra Sawhney-I. The said notification excluded certain

persons who held constitutional posts and those who were in

employment of the State and the Centre in higher posts from

the benefit of reservation. In addition, the social

advancement of other categories was taken into account for

the purpose of including such categories in ‘creamy layer’.

Strangely, by the notification dated 17.08.2016, the

identification of ‘creamy layer’ amongst backward classes

was restricted only to the basis of economic criterion. In clear

terms, this Court held in Indra Sawhney-I that the basis of

exclusion of ‘creamy layer’ cannot be merely economic. J.

Jeevan Reddy in para 792 of the judgement in Indra

Sawhney-I held as follows:

12 | P a g e
“792. In our opinion, it is not a question of permissibility or
desirability of such test but one of proper and more
appropriate identification of a class — a backward class. The
very concept of a class denotes a number of persons having
certain common traits which distinguish them from the
others. In a backward class under clause (4) of Article 16, if
the connecting link is the social backwardness, it should
broadly be the same in a given class. If some of the
members are far too advanced socially (which in the
context, necessarily means economically and, may also
mean educationally) the connecting thread between them
and the remaining class snaps. They would be misfits in the
class. After excluding them alone, would the class be a
compact class. In fact, such exclusion benefits the truly
backward. Difficulty, however, really lies in drawing the line
— how and where to draw the line? For, while drawing the
line, it should be ensured that it does not result in taking
away with one hand what is given by the other. The basis of
exclusion should not merely be economic, unless, of course,
the economic advancement is so high that it necessarily
means social advancement. Let us illustrate the point. A
member of backward class, say a member of carpenter
caste, goes to Middle East and works there as a carpenter. If
you take his annual income in rupees, it would be fairly high
from the Indian standard. Is he to be excluded from the
Backward Class? Are his children in India to be deprived of
the benefit of Article 16(4)? Situation may, however, be
different, if he rises so high economically as to become —
say a factory owner himself. In such a situation, his social
status also rises. He himself would be in a position to
provide employment to others. In such a case, his income is
merely a measure of his social status. Even otherwise there

13 | P a g e
are several practical difficulties too in imposing an income
ceiling. For example, annual income of Rs 36,000 may not
count for much in a city like Bombay, Delhi or Calcutta
whereas it may be a handsome income in rural India
anywhere. The line to be drawn must be a realistic one.
Another question would be, should such a line be uniform for
the entire country or a given State or should it differ from
rural to urban areas and so on. Further, income from
agriculture may be difficult to assess and, therefore, in the
case of agriculturists, the line may have to be drawn with
reference to the extent of holding. While the income of a
person can be taken as a measure of his social
advancement, the limit to be prescribed should not be such
as to result in taking away with one hand what is given with
the other. The income limit must be such as to mean and
signify social advancement. At the same time, it must be
recognised that there are certain positions, the occupants of
which can be treated as socially advanced without any
further enquiry. For example, if a member of a designated
backward class becomes a member of IAS or IPS or any
other All India Service, his status is society (social status)
rises; he is no longer socially disadvantaged. His children
get full opportunity to realise their potential. They are in no
way handicapped in the race of life. His salary is also such
that he is above want. It is but logical that in such a
situation, his children are not given the benefit of
reservation. For by giving them the benefit of reservation,
other disadvantaged members of that backward class may
be deprived of that benefit. It is then argued for the
respondents that ‘one swallow doesn’t make the summer’,
and that merely because a few members of a caste or class
become socially advanced, the class/caste as such does not
cease to be backward. It is pointed out that clause (4) of

14 | P a g e
Article 16 aims at group backwardness and not individual
backwardness. While we agree that clause (4) aims at group
backwardness, we feel that exclusion of such socially
advanced members will make the ‘class’ a truly backward
class and would more appropriately serve the purpose and
object of clause (4). (This discussion is confined to Other
Backward Classes only and has no relevance in the case of
Scheduled Tribes and Scheduled Castes).”

The following directions were issued in Para 793 of the

judgement:

“793. Keeping in mind all these considerations, we direct
the Government of India to specify the basis of exclusion —
whether on the basis of income, extent of holding or
otherwise — of ‘creamy layer’. This shall be done as early as
possible, but not exceeding four months. On such
specification persons falling within the net of exclusionary
rule shall cease to be the members of the Other Backward
Classes (covered by the expression ‘backward class of
citizens’) for the purpose of Article 16(4). The impugned
Office Memorandums dated August 13, 1990 and September
25, 1991 shall be implemented subject only to such
specification and exclusion of socially advanced persons
from the backward classes contemplated by the said O.M. In
other words, after the expiry of four months from today, the
implementation of the said O.M. shall be subject to the
exclusion of the ‘creamy layer’ in accordance with the
criteria to be specified by the Government of India and not
otherwise.”

12. The implementation of the judgement of this Court in

Indra Sawhney-I by identification of ‘creamy layer’ was not

15 | P a g e
done promptly by certain states. The State of Kerala neither

appointed a Commission nor implemented the directions in

the judgement for more than three years, following which

contempt proceedings had to be initiated against the State. A

High-Level Committee was directed to be constituted by this

Court in the State of Kerala for identifying the ‘creamy layer’

among the designated backward classes of the State. This

Court in Indra Sawhney v. Union of India2 (hereinafter

referred to as, ‘Indra Sawhney-II’) examined certain

questions relating to the recommendations made by the said

High-Level Committee. After thoroughly examining the

factors which were given emphasis in the various opinions

rendered in Indra Sawhney-I for determining ‘creamy layer’

amongst the backward classes, this Court held that persons

from backward classes who occupied posts in higher services

like IAS, IPS and All India Services had reached a higher level

of social advancement and economic status and therefore,

were not entitled to be treated as backward. Such persons

were to be treated as ‘creamy layer’ without any further

inquiry. Likewise, people with sufficient income who were in a

position to provide employment to others should also be

taken to have reached a higher social status and therefore,

2 (2000) 1 SCC 168

16 | P a g e
should be treated as outside the backward class. Similarly,

persons from backward classes who had higher agricultural

holdings or were receiving income from properties, beyond a

prescribed limit, do not deserve the benefit of reservation.

The above-mentioned categories were necessarily to be

excluded from backward classes. This Court in Indra

Sawhney-II held that the exclusion of the above-mentioned

categories is a ‘judicial declaration’ made in Indra

Sawhney-I.

13. In Ashok Kumar Thakur v. State of Bihar3, this

Court was concerned with the notifications issued for the

identification of ‘creamy layer’ by the States of Bihar and

Uttar Pradesh. The Schedule to the memorandum issued by

the Government of India on 08.09.1993, pursuant to the

judgement of Indra Sawhney-I, laying down the criteria for

identifying ‘creamy layer’ was approved as being in

conformity with the law laid down in the said judgement. The

criteria fixed for identifying ‘creamy layer’ by the States of

Uttar Pradesh and Bihar, respectively, were held to be wholly

arbitrary and not to be in accordance with the guidelines laid

down by this Court in Indra Sawhney-I. Consequently, this

Court quashed the respective notifications issued by the

3 (1995) 5 SCC 403

17 | P a g e
States of Bihar and Uttar Pradesh and directed the States to

follow the criteria laid down by the Government of India in

the memorandum dated 08.09.1993 for the academic year

1995-96, with fresh criteria for subsequent years to be

framed in accordance with law.

14. In this case, we are concerned with the validity of the

notifications dated 17.08.2016 and 28.08.2018 issued by the

Government of Haryana. The notification dated 17.08.2016

is in flagrant violation of the directions issued by this Court in

Indra Sawhney-I and is at variance with the memorandum

dated 08.09.1993 issued by the Union of India. The criteria

mentioned for identifying such of those persons who are

socially advanced have not been taken into account by the

Government of Haryana while issuing the notification dated

17.08.2016. While issuing the notification dated

07.06.1995, the State Government had followed the criteria

laid out in the memorandum issued by the Union of India on

08.09.1993, which was in tune with the directions given by

this Court in Indra Sawhney-I. In spite of Section 5(2) of

the 2016 Act making it mandatory for identification and

exclusion of ‘creamy layer’ to be on the basis of social,

economic and other relevant factors, the State of Haryana

has sought to determine ‘creamy layer’ from backward

18 | P a g e
classes solely on the basis of economic criterion and has

committed a grave error in doing so. On this ground alone,

the notification dated 17.08.2016 requires to be set aside.

Therefore, we quash the notification dated 17.08.2016,

giving liberty to the State Government to issue a fresh

notification within a period of 3 months from today after

taking into account the principles laid down by this Court in

Indra Sawhney-I and the criteria mentioned in Section 5(2)

of the 2016 Act for determining ‘creamy layer’.

15. As we have struck down the notification dated

17.08.2016 in toto, there is no need for adjudicating the

validity of the notification dated 28.08.2018, which is solely

dependent on the notification dated 17.08.2016. Admissions

to educational institutions and appointment to state services

on the basis of the notifications dated 17.08.2016 and

28.08.2018 shall not be disturbed.

16. The Writ Petition and the Appeals arising from the

Special Leave Petitions are disposed of accordingly.

……………………………….J.
[ L. NAGESWARA RAO ]

……………………………….J.
[ ANIRUDDHA BOSE ]

New Delhi,
August 24, 2021.

19 | P a g e

Comments

Leave a Reply

Sign In

Register

Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.