OBC Creamy-Layer Criteria: Supreme Court to Consider Special Bench on Centre’s Plea

The Supreme Court of India has agreed to consider establishing a special Bench to address an application moved by the Union government seeking clarification on the application of its March 11 ruling regarding Other Backward Classes (OBC) creamy-layer criteria. The Department of Personnel and Training (DoPT) has approached the court to permit service allocation for 958 candidates recommended in the Civil Services Examination (CSE) 2025 using the assessment norms in place prior to the March 11 verdict.

What Happened

On March 11, the Supreme Court delivered a judgment in Union of India v. Rohith Nathan regarding the interpretation of the income and wealth test under the OBC creamy-layer exclusion framework for public employment and education. The court specifically reviewed the application of the income test to candidates whose parents work in posts where equivalence with government positions has not been defined, such as in public sector undertakings (PSUs) or the private sector.

The court concluded that taking parental salary into account for employees outside the government, while omitting salary for government servants, created “hostile discrimination.” To rectify this, the court ordered the creation of supernumerary posts for the affected petitioners who had been excluded from reservation benefits solely because of their parents’ salaries.

In response, the Union government filed a batch of applications stating that retrospectively implementing the March 11 decision would be “extremely difficult” and could trigger a “cascading effect” across settled service matters dating back to 2012, affecting all categories, including Unreserved posts. The Centre requested that both CSE 2025 and CSE 2026 proceed under the previous framework, noting that the foundation course for the 2025 cohort is scheduled to begin at the end of the month and rules for the 2026 examination had already been issued.

Key Highlights

• The Supreme Court agreed to consider forming a special Bench to hear the Centre’s request regarding the applicability of the March 11 ruling to CSE 2025 candidates.
• The DoPT seeks to finalize allocations for 958 UPSC-recommended candidates under the criteria utilized prior to the judgment.
• The Union government warned that retrospective enforcement could disrupt over 3.7 lakh OBC recruitments made in Central posts since 2016, alongside ongoing and concluded recruitments in 18 States and Union Territories.
• The government submitted that implementing the judgment for 56 litigant candidates could alter seniority rankings by 2 to 13 years, potentially leading to resentment among serving personnel.
• Affected candidates have contested the government’s position, asserting that the Centre is backtracking abruptly and arguing that the claimed adverse impacts on other recruitments do not exist.
• The application follows a statement made on August 19 by Additional Solicitor General Chetan Sharma before the Central Administrative Tribunal indicating that the judgment was being implemented.

Why This Matters

The Union government has argued that treating parental salary as an exclusion factor is a primary way to differentiate between resource-deprived candidates and those whose parents earn high incomes in the private sector. According to the government’s submissions, the interpretation laid down by the court could enable candidates whose parents earn over Rs 1 crore annually to qualify for Non-Creamy Layer benefits, which it argued could undermine the core purpose of reservation policies.

Additionally, the government noted that creating supernumerary posts solves only the numerical allocation of positions, without remedying collateral administrative complexities regarding promotions, seniority lists, and cadre distributions across public sector entities, banks, railways, and higher educational institutions.

What to Watch Next

The Supreme Court will determine the formation of the special Bench to adjudicate the Centre’s applications. The immediate focus remains on whether the court grants permission to proceed with service allocations for the CSE 2025 candidates prior to the upcoming commencement of their foundation course.

Frequently Asked Questions

What did the Supreme Court decide in its March 11 judgment?

The Supreme Court ruled that evaluating the OBC creamy layer by including parental salary for individuals in PSUs and the private sector, while excluding it for those in government service where equivalence is not established, constituted hostile discrimination. It instructed the government to create supernumerary posts for the affected petitioners.

Why is the Centre asking to keep the older criteria for CSE 2025 and 2026?

The Centre submitted that applying the new criteria retrospectively would disrupt settled service arrangements from 2012 onwards and create administrative confusion. It also noted that the CSE 2025 foundation course is starting soon and the CSE 2026 examination notice has already been issued under the former rules.

What administrative complications did the DoPT outline?

The DoPT pointed out that retrospective implementation could alter seniority landscapes by 2 to 13 years for litigant candidates and generate numerous challenges across more than 3.7 lakh Central appointments completed since 2016, as well as selection processes conducted across 18 States and Union Territories.

Source: Based on reporting from The Hindu with inputs from PTI.