The concept of ‘creamy layer’ has been evolved by Hon’ble the Supreme Court in various judgments. In the case of K.C. Vasanth Kumar and Another Vs. State of Karnataka, , it was held that the root cause of social and educational backwardness lies in economic backwardness and therefore, economic criterion should be applied to identify social and educational backwardness for the purpose of compensatory discrimination or affirmative action. Although, the Supreme Court had observed that economic criterion is worth applying for reservation to Scheduled Castes and Scheduled Tribes but the aforesaid view has not met with an approval of the Supreme Court in its later pronouncement. Accordingly, directions were issued re-determining the question of backwardness of the various Castes/Tribes and for the purposes of Articles 15(4) and 16(4) in the light of the latest figures which were to be collected on various relevant factors in order to refix the extent of reservation for backward classes. It is significant to notice that the reservation based on occupation-cum-income can in any event be availed of by members of backward communities and castes.
Suffice would it be to state that as against members belonging to Scheduled Castes or Scheduled Tribes, where even a billionaire would be entitled to reservation, the legal position with respect to Backward Classes is different. Creamy layers have to be excluded and thus there being a requirement of OBC certificates being issued within three years prior to the date of receipt of applications. A person may have less wealth on a particular date and may become wealthy a few years later and thereby coming within the Creamy Layer.
Inadmissibility of reservation to creamy layers of OBC was decided by the Supreme Court in the case of Indra Sawhney etc. etc Vs. Union of India and others, etc. etc., .
In Ashoka Kumar Thakur Vs. Union of India (UOI) and Others, case one of the fundamental issues raised before the Five Judge Constitution Bench is Whether Creamy Layer is to be excluded from the category of socially and educationally backward classes and considerable time has been devoted to determine the aforesaid issue. The Supreme Court has noticed 9-Judge Bench decision rendered earlier in Indra Sawhney’s case (supra) and after critically examining the constitutional desirability of exclusion of ‘Creamy Layer’ has issued direction to the government that there was no way out but to accept the principles of exclusion of the Creamy Layer from the category of backward class for the purposes of configuring the constitutional benefit of reservation. All these questions and related issues have been critically examined by Professor Dr. Virendra Kumar in his learned Article titled as “Dynamics of Reservation Policy”, Vol.50 Journal of Indian Law Institute (2008) Oct-Dec p.478. The Supreme Court in Ashoka Kumar Thakur’s case (supra) has laid down that exclusion of Creamy Layer is imperative for upholding the paramount principles of equality and that it is basic structure of the Constitution. Therefore, non-exclusion of ‘creamy layer’ violates the principle of equality in two principal ways. If one continues to confer reservation benefits on ‘creamy layers’, on the one hand that would amount to ‘treating equals unequally’ vis-a-vis persons belong to ‘forward’ or ‘advanced’ class; on the other hand, to rank them with the rest of backward classes would amount to ‘treating ‘un-equals equally’. Thus, non-exclusion of ‘creamy layer’ leads to “perverting” the very objective of special constitutional provisions. It discourages the beneficiaries to stand at their own feet and compete with the forward classes as equal citizens. Non-exclusion would also keep the backward class ‘in-perpetual backwardness’ as if by saying: ‘Once a backward class is always a backward class’. The resultant impact of non-exclusion has been put forward as an aphorism by Bhandari, J: Creamy layer inclusion robs the poor and gives to the rich. Realizing the constitutional imperative of ‘creamy layer exclusion’ for upholding the paramount principle of equality, the Supreme Court sealed the possibility of inclusion of creamy layer even in future by resorting to the amendment of the Constitution. Such an amendment will be totally illegal and violate the basic structure of the Constitution. Inclusion of creamy layer, therefore, cannot be allowed to be perpetuated even by constitutional amendments.
Identification of Creamy layers
We may point out that the identification of creamy layer in every backward class is in fact based upon horizontal division of every section of the backward class into creamy layer or non-creamy layer. For example, if there are a dozen named backward classes and each have particular percentage of D quota in the reservation, they can be arranged in a vertical distribution one after the other (see para 812 of Indira Sawhney referring to vertical and horizontal divisions), and the separate and the aggregate quota meant for them can be spelled out. But in each of these named backward classes listed one below the other, it is not difficult to make horizontal divisions of those p belonging to (i) constitutional offices (ii) particular services, (iii) professions (iv) industry and trade (v) particular income level and (vi) particular holding of property etc. to segregate the creamy and non-creamy layers in each vertical sub-classification of backward class and say that the children of such persons in these horizontal sub-divisions of the backward classes will be creamy layer and therefore outside the backward classes. This is not a difficult exercise. It is also important to notice that such a horizontal division based on such norms will be applicable not only to those in the Backward Classes presently falling under the norm but the norms or limits so set would also be applicable to those reaching that level in the future. May be, as stated in the notification of the Central Government dated 8.9.93 issued pursuant to Indira Sawhney, the income levels may have to be reasonably upgraded periodically to set off inflation. Subject to such a reasonable revision in the norms, if any, periodically, the norms whether laid down by the Central Government or the State Governments must apply not only for the immediate present but also for the future. This, in our view, was the declaration of law made in Indira Sawhney and in Ashok Kumar Thakur in relation to identification and exclusion of creamy layer.
The Rule of Exclusion
While dealing with these Acts, this Court referred to the fact that pursuant to Indira Sawhney the Government of India had appointed a Commission presided over by a retired Judge of the High Court of Patna and on the basis of the Report of the Commission, it had issued an office Memorandum dated 8.9.93 designating (A) Children of holders of Constitutional posts like (a) President of India (b) Vice President of India, (c) Judges of the Supreme Court and High Courts, (d) Chairman and Members of UPSC and State Public Service Commission, Chief Election Commissioner, Comptroller and Auditor-General of India, (e) Persons holding constitutional positions of like nature, (B) Service category: children of (a) parents, Group A/Class I officers of All India Central Services and State Services (direct recruits) where both or one of the parents are Class I officers, subject to certain conditions; children of Group B/Class II officers of the Central and State Services (direct recruitment), subject to certain conditions; children of employees of Public Sector Undertakings, Banks, Insurance Organisations, Universities etc., and in comparable posts and positions under private employment; children of members of Armed Forces and Para-Military Forces; (C) Professional Category; children of those in professional class or those engaged in Trade and Industry beyond a particular income limit; (D) Property owners (agricultural holdings), Plantations, Vacant land or buildings in Urban areas or urban agglomerations holding property beyond a particular extent -as being outside the Backward Classes. In respect of the above, Para VI of the Schedule to the O.M. dated 8.9.93 gave the gross annual income limits of rupees 1 lakh and above, subject to upward modification of the limits every 3 years etc. Various other conditions were also imposed. Care was taken by the O.M to see that none from the creamy layer could escape the net of exclusion from the Backward Classes. This Court, in Ashok Kumar Thakur after referring to the above guidelines, observed that the criteria fixed in the O.M. were “in conformity with the law laid down by this Court in Mandal case” and that the Court had no hesitation in approving the said criteria as being reasonable. In the light of the criteria so approved, this Court considered the validity of the Bihar and U.P. Legislations and held that the unreasonably high limits or other norms fixed by the Bihar and U.P. Legislatures were “contrary to the guidelines laid down by this Court in Mandal Case” as they would not result in the elimination of the creamy layer. It was pointed out that the conditions laid down by the States of Bihar and U.P. had no “nexus” with the object sought to be achieved. Since the conditions were not severable, the criteria laid down in each of the legislations as a whole were struck down. The Court held: (see para 17)
The Backward class under Article 16(4) means the class which has no element of ‘creamy layer’ in it. It is mandatory under Article 16(4) – as interpreted by this Court – that the State must identify the ‘creamy layer’ in a backward class and thereafter, by excluding the ‘creamy layer’ extend the benefit of reservation to the class which remains after such exclusion.
The Court observed that the States of Bihar and Uttar Pradesh had acted in a wholly arbitrary fashion and in utter violation of the law laid down in Mandal case. However, the principle of prospective overruling was invoked. The States were directed to lay down fresh criteria and till then it was directed that the criteria laid down in the Central Government’s O.M. dated 8.9.93 were to apply in Bihar and Uttar Pradesh. We are in entire agreement with the views expressed in Ashok Kumar Thakur.
In the judgment of six learned Judges in Indira Sawhney, as stated earlier, there is a specific declaration of law that the children of IAS, IPS and other All India Services in the Backward Classes are creamy layer and this is true “without further inquiry”. These persons are to be deemed, in law and, in fact, to have reached such a level of social advancement that they cease to belong to the backward class. The judgment also refers to a classification of “affluent” sections identified by way of income or property holding.
Further, in Ashok Kumar Thakur it was held as a matter of law that certain broad categories mentioned in the O.M. of the Central Govt. dated 8.9.93 belong to the creamy layer. There was no answer from the State of Kerala as to why the same categories as mentioned in Indira Sawhney or those mentioned in the O.M., as approved in Ashok Kumar Thakur could not be declared as creamy layer, subject to any realistic modification of the income or holding levels, if need be. It was not the case of the State before us that these categories, which form the vertical divisions of the backward classes, (as pointed out under point 1) were non-existent so far as Kerala State was concerned. It was not also its case that such a class of persons would not be existent in future in the Backward Classes of the State.
The road ahead:
When Governments unreasonably refuse to eliminate creamy layers from the backward classes or when governments tend to include more and more castes in the list of Backward Classes without adequate data and inquiry, a stage will be reached soon when the whole system of reservation will become farcical and a negation of the constitutional provisions relating to reservations. The resistance of the creamy layer to get out of the lists is as bad as the clamour for entry into the quota system of various castes whose social status does not conform to the law decided by this Court. We earnestly hope that Constitutional provisions will not be converted into citadels for unjustified patronage.
Krishna Iyer, J. warned in Akhil Bharatiya Soshit Karamchari Sangh (Railway) represented by its Assistant General Secretary on behalf of the Association Vs. Union of India (UOI) and Others, :
…to politicise this provision (i.e., Article 16(4) for communal support and Party ends is to subvert the solemn undertaking of Article 16(1).[ INDIRA SAWHNEY Vs. UNION OF INDIA AND OTHERS (2000) AIR(SC) 498 ]