Supreme Court in Indra Sawhney seems to suggest that the creamy layer should be excluded, however there was no unanimity for determining what is creamy layer. Some judges took the view that the criteria for creamy layer exclusion is social advancement (i.e. based on social basis, educational, and economical basis) and others took the view that it will be economic basis alone. It is submitted that it must be kept in mind that the said judgment related only to OBCs; and
Jarnail Singh v Lachhmi Narain Gupta[ 2018 (10) SCC 396] is not an authority for the proposition that the creamy layer principle applies to SCs and STs. It dealt only with the competence of the Parliament to enact a law in relation to creamy layer without affecting Articles 341 and 342.
But the above resolution could be criticised on the following grounds:
(i) Indra Sawhney decided the issue of creamy layer as a principle of equality; and
(ii) Jarnail affirmed that if Nagaraj is rightly applied, creamy layer is a principle of equality and of the basic structure.
It could be argued that decision in E V Chinnaiah v State of AP[ (2005) 1 SCC 394] that the SCs and STs cannot be split or bifurcated and the adoption of the creamy layer principle would amount to a spilt in the homogenous groups of the SCs and STs. This argument according to Dr Dhavan, was rejected in Jarnail by the Constitution Bench.
M Nagaraj v Union of India[(2006) 8 SCC 212] held: “120…Concept of egalitarian equality is the concept of proportional equality and it expects the States to take affirmative action in favour of disadvantaged sections of society within the framework of democratic polity.
In Indra Sawhney [1992 Supp (3) SCC 217 : 1992 SCC (L & S) Supp 1 : (1992) 22 ATC 385] all the Judges except Pandian, J. held that the “means test” should be adopted to exclude the creamy layer from the protected group earmarked for reservation. In Indra Sawhney [1992 Supp (3) SCC 217 : 1992 SCC (L & S) Supp 1 : (1992) 22 ATC 385] Supreme Court has, therefore, accepted caste as a determinant of backwardness and yet it has struck a balance with the principle of secularism which is the basic feature of the Constitution by bringing in the concept of creamy layer. Views have often been expressed in supreme Court that caste should not be the determinant of backwardness and that the economic criteria alone should be the determinant of backwardness. As stated above, we are bound by the decision in Indra Sawhney [1992 Supp (3) SCC 217 : 1992 SCC (L & S) Supp 1 : (1992) 22 ATC 385] .
The question as to the “determinant” of backwardness cannot be gone into by us in view of the binding decision. In addition to the above requirements supreme Court in Indra Sawhney [1992 Supp (3) SCC 217 : 1992 SCC (L & S) Supp 1 : (1992) 22 ATC 385] has evolved numerical benchmarks like ceiling limit of 50% based on post-specific roster coupled with the concept of replacement to provide immunity against the charge of discrimination.”149
Then again, in paragraphs 121, 122 and 123, the Constitution Bench held: “121. The impugned constitutional amendments by which Articles 16 (4A) and 16 (4B) have been inserted flow from Article 16(4). They do not alter the structure of Article 16(4). They retain the controlling factors or the compelling reasons, namely, backwardness and inadequacy of representation which enables the States to provide for reservation keeping in mind the overall efficiency of the State administration under Article 335. These impugned amendments are confined only to SCs and STs. They do not obliterate any of the constitutional requirements, namely, ceiling limit of 50% (quantitative limitation), the concept of creamy layer (qualitative exclusion), the sub-classification between OBCs on one hand and SCs and STs on the other hand as held in Indra Sawhney [1992 Supp (3) SCC 217 : 1992 SCC (L & S) Supp 1 : (1992) 22 ATC 385] , the concept of post-based roster with inbuilt concept of replacement as held in R.K. Sabharwa [(1995) 2 SCC 745 : 1995 SCC (L & S) 548 : (1995) 29 ATC 481] .
It could be said that the ceiling limit of 50%, the concept of creamy layer and the compelling reasons, namely, backwardness, inadequacy of representation and overall administrative efficiency are all constitutional requirements without which the structure of equality of opportunity in Article 16 would collapse.
However, in this case, as stated above, the main issue concerns the “extent of reservation”. In this regard the State concerned will have to show in each case the existence of the compelling reasons, namely, backwardness, inadequacy of representation and overall administrative efficiency before making provision for reservation. As stated above, the impugned provision is an enabling provision. The State is not bound to make reservation for SCs/STs in matters of promotions.
However, if they wish to exercise their discretion and make such provision, the State has to collect quantifiable data showing backwardness of the class and inadequacy of representation of that class in public employment in addition to compliance with Article 335. It is made clear that even if the State has compelling reasons, as stated above, the State will have to see that its reservation provision does not lead to excessiveness so as to breach the ceiling limit of 50% or obliterate the creamy layer or extend the reservation indefinitely.
The reference before the Constitution Bench in Jarnail Singh v Lachhmi Narain Gupta, arose out of an initial reference by a two judge Bench in State of Tripura v Jayanta Chakraborty (“State of Tripura”)[ (2018) 1 SCC 146] and then by a three judge Bench in State of Maharashtra v Vijay Ghogre[(2018) 15 SCC 64]. The order in State of Tripura states: “2…However, apart from the clamour for revisit, further questions were also raised about application of the principle of creamy layer in situations of competing claims within the same races, communities, groups or parts thereof of SC/STs notified by the President under Articles 341 and 342 of the Constitution of India.”153
Before the Constitution Bench in Jarnail, the learned Attorney General specifically raised the following arguments:
“3…according to the learned Attorney General, the creamy layer concept has not been applied in Indra Sawhney (1) [Indra Sawhney v. Union of India, 1992 Supp (3) SCC 217 : 1992 SCC (L & S) Supp 1] to the Scheduled Castes and the Scheduled Tribes and Nagaraj [M. Nagaraj v. Union of India, (2006) 8 SCC 212 : (2007) 1 SCC (L & S) 1013] has misread the aforesaid judgment to apply this concept to the Scheduled Castes and the Scheduled Tribes. According to the learned Attorney General, once the Scheduled Castes and the Scheduled Tribes have been set out in the Presidential List, they shall be deemed to be Scheduled Castes and Scheduled Tribes, and the said List cannot be altered by anybody except Parliament under Articles 341 and 342.
It can further be argued that Nagaraj [M. Nagaraj v. Union of India, (2006) 8 SCC 212 : (2007) 1 SCC (L & S) 1013] does not indicate any test for determining adequacy of representation in service. It is important that we lay down that the test be the test of proportion of Scheduled Castes and Scheduled Tribes to the population in India at all stages of promotion, and for this purpose, the roster that has been referred to in R.K. Sabharwal v. State of Punjab [R.K. Sabharwal v. State of Punjab, (1995) 2 SCC 745 : 1995 SCC (L & S) 548] can be utilised.
The decision in Jarnail specifically addressed the issue of creamy layer: “28. Therefore, when Nagaraj [M. Nagaraj v. Union of India, (2006) 8 SCC 212 : (2007) 1 SCC (L & S) 1013] applied the creamy layer test to Scheduled Castes and Scheduled Tribes in exercise of application of the basic structure test to uphold the constitutional amendments leading to Articles 16 (4A) and 16 (4B), it did not in any manner interfere with Parliament’s power under Article 341 or Article 342. We are, therefore, clearly of the opinion that this part of the judgment does not need to be revisited, and consequently, there is no need to refer Nagaraj [M. Nagaraj v. Union of India, (2006) 8 SCC 212 : (2007) 1 SCC (L & S) 1013] to a seven-Judge Bench. We may also add at this juncture that Nagaraj [M. Nagaraj v. Union of India, (2006) 8 SCC 212 : (2007) 1 SCC (L & S) 1013] is a unanimous judgment of five learned Judges of supreme Court which has held sway since the year 2006. This judgment has been repeatedly followed and applied…”
Justice Rohinton Nariman speaking for the Constitution Bench in Jarnail explained the reason for applying the creamy layer principle: “25. However, when it comes to the creamy layer principle, it is important to note that this principle sounds in Articles 14 and 16 (1), as unequals within the same class are being treated equally with other members of that class.”
The judgment of Jarnail specifically examined the decision in Indra Sawhney, noticing that eight of the nine learned Judges applied the creamy layer principle as a facet of the larger equality principle. In fact, the decision in Indra Sawhney II v Union of India156 (“Indra Sawhney II”) summarised the judgments in Indra Sawhney I on the aspect of creamy layer. The judgment in Jarnail approved Indra Sawhney II when it held that the creamy layer principle sounds in Articles 14 and 16 (1): “12. In para 27 of the said judgment, the three-Judge Bench of supreme Court clearly held that the creamy layer principle sounds in Articles 14 and 16(1) as follows: [Indra Sawhney (2) case [Indra Sawhney (2) v. Union of India, (2000) 1 SCC 168 : 2000 SCC (L & S) 1] , SCC p. 190, para 27] “
(i) Equals and unequals, twin aspects 27. As the “creamy layer” in the backward class is to be treated “on a par” with the forward classes and is not entitled to benefits of reservation, it is obvious that if the “creamy layer” is not excluded, there will be discrimination and violation of Articles 14 and 16(1) inasmuch as equals (forwards and creamy layer of Backward Classes) cannot be treated unequally. Again, non-exclusion of creamy layer will also be violative of Articles 14, 16(1) and 16(4) of the Constitution of India since unequals (the creamy layer) cannot be treated as equals, that is to say, equal to the rest of the backward class…
Thus, any executive or legislative action refusing to exclude the creamy layer from the benefits of reservation will be violative of Articles 14 and 16(1) and also of Article 16(4).