Ashoka Kumar Thakur Vs. State of Bihar and Ors.
EmailAppeal: Writ Petition (C) No. 631 of 1994
Petitioner: Ashoka Kumar Thakur
Respondent: State of Bihar and Ors.
Apeal: Writ Petition (C) No. 631 of 1994
Judges: KULDIP SINGH & S. SAGHIR AHMAD, JJ.
Date of Judgment: Sep 04, 1995
Head Note:
CONSTITUTION OF INDIA, 1950:
Article 16(4) – Job reservations for OBCs – Exclusion of ‘creamy layer’ – Tests for identification of – Means test – Criteria for identifying ‘creamy layer’ laid down by Govt. of India approved – Held that the criteria, for identification of ‘creamy-layer’, laid down by the States of Bihar and Uttar Pradesh is violative of Article 16(4), wholly arbitrary and against the law laid-down by the Court in ‘Mandal case’ – Bihar Reservation of vacancies in posts and services (for Scheduled Castes, Scheduled Tribes and other Backward Classes) (Amendment) Ordinance, 1995 – Uttar Pradesh Public Services Reservation of Scheduled Castes and Scheduled Tribes and other backward classes Act, 1994, section 3(b) and Schedule II.
Held:
The protective discrimination in the shape of job reservations under Article 16(4) has to be programmed in such a manner that the most deserving section of the backward class is benefited. Means-test by which ‘creamy layer’ is excluded, ensures such a result. The process of identifying backward class cannot be perfected to the extent that every member of the said class is equally backward. There are bound to be disparities in the class itself. Some of the members of the class may have individually crossed the barriers of backwardness but while identifying the class they may have come within the collectivity. It is often seen that comparatively rich persons in the backward class are able to move in the society without being discriminated socially. The members of the backward class are differentiated into superior and inferior. The discrimination which was practiced on them by the higher class is in turn practiced by the affluent members of the backward class on the poorer members of the same class. The benefits of social privileges like job reservations are mostly chewed up by the richer or more affluent sections of the backward class and the poorer and the really backward sections among them keep on getting poorer and more backward. It is only at the lowest level of the backward class where the standards of deprivation and the extent of backwardness may be uniform. The jobs are so very few in comparison to the population of the backward classes that it is difficult to give them adequate representation in the State services. It is, therefore, necessary that the benefit of the reservation must reach the poorer and the weakest section of the backward class. Economic ceiling to cut off the backward class for the purpose of job reservations is necessary to benefit the needy sections of the class. The means-test is, therefore, imperative to skim-off the affluent section of the backward class.
We have carefully examined the criteria for identifying the ‘creamy layer’ laid down by the Government of India in the Schedule, quoted above, and we are of the view that the same is in conformity with the law laid down by this Court in ‘Mandal case’. We have no hesitation in approving the rule of exclusion framed by the Government of India in para 2(c) read with the Schedule of the Office memorandum quoted above. Learned counsel for the petitioners have also vehemently commended that the State Governments should follow the Government of India and lay down similar criteria for identifying the ‘creamy layer’.
This Court has categorically held in “mandal case” that a person, belonging to a backward class, who becomes member of IAS, IPS or any other All India Service, his children cannot avail the benefit of reservation. The States of Bihar and Uttar Pradesh have added further conditions such as salary of rupees ten thousand or more per mensum, the wife or husband to be graduate and one of them owning a house in an urban area. So far as the professionals are concerned, an income of Rs. 10 lakhs per annum has been fixed as the criterion. It is further provided that the wife or husband is at least graduate and the family owns immovable property of the value of at least rupees twenty lakhs. Similarly, the criteria regarding traders, industrialists, agriculturists and others is wholly arbitrary apart from being contrary to the guidelines laid down by this Court in ‘Mandal case’.
Multiple conditions have been provided in all the categories. The ‘spouse’ to be a graduate and holding property in urban area, are the conditions attached to almost every category. These conditions have no nexus with the object sought to be achieved. Since the conditions are not severable the two criterias as a whole have to be struck-down.
This Court, in ‘Mandal case’ has clearly and authoritatively laid down that the affluent part of a backward class called ‘creamy layer’ has to be excluded from the said class and the benefit of Article 16(4) can only be given to the “class” which remains after the exclusion of the ‘creamy layer’. 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. This Court has laid down, clear and easy to follow, guidelines for the identification of ‘creamy layer’. The States of Bihar and Uttar Pradesh have acted wholly arbitrary and in utter violation of the law laid down by this Court in ‘Mandal case’. It is difficult to accept that in India where the per capita national income is Rs. 6929 (1993-94), a person who is a member of the IAS and a professional who is earning less than Rs. 10 lakhs per annum is socially and educationally backward. We are of the view that the criteria laid down by the States of Bihar and Uttar Pradesh for identifying the ‘creamy layer’ on the face of it is arbitrary and has to be rejected.
We, therefore, hold that the above quoted criteria, for identification of ‘creamy-layer’, laid down by the States of Bihar and Uttar Pradesh is violative of Article 16(4), wholly arbitrary – violative of Article 14 – and against the law laid-down by this Court in ‘Mandal case.’
We allow the writ petitions and quash (except clause 1 of Schedule III) the Bihar reservation of vacancies in posts and services (for scheduled castes, scheduled tribes and other backward classes) (Amendment) Ordinance 1995 (also the Act if ordinance has been converted into Act). We also quash Schedule II read with Section 3(b) of the Uttar Pradesh Public Services Reservation of Scheduled Caste and Scheduled Tribes and Other Backward Classes Act, 1994.
We further direct that for the academic year 1995-96 the States of Uttar Pradesh and Bihar shall follow the criteria laid down by the Government of India, reproduced above, in the memorandum dated September 8, 1993. It will be open to the two States to lay down fresh criteria for the subsequent years in accordance with law. (Paras 3, 10, 14 to 19)
Cases Reffered:
Indra Sawhney v. Union of India, JT 1992 (6) SC 273 = 1992 Supp. (3) SCC 217. (Para 2)
JUDGEMENT:
KULDIP SINGH, J. :
1. Constitutional validity of the criteria, for determining the ‘creamy layer’ for the purpose of exclusion from backward classes, laid-down by the States of Bihar and Uttar Pradesh, has been challenged in these writ petitions under Article 32 of the Constitution of India.
2. A Nine-Judge Bench of this Court in ~Mandal case” – Indra Sawhney v. Union of India (JT 1992 (6) SC 273 = 1992 Supp. (3) SCC 217) – authoritatively interpreted various aspects of Article 16(4) of the Constitution of India. While holding that Article 16(4) aims at group backwardness this Court came to the conclusion that socially advanced members of a backward class – ‘creamy layer’ – have to be excluded from the said ‘class’. It was held that the ‘class’ which remains after excluding the ‘creamy layer’ would more appropriately serve the purpose and object of Article 16(4).
3. The protective discrimination in the shape of job reservations under Article 16(4) has to be programmed in such a manner that the most deserving section of the backward class is benefited. Means-test by which ‘creamy layer’ is excluded, ensures such a result. The process of identifying backward class cannot be perfected to the extent that every member of the said class is equally backward. There are bound to be disparities in the class itself. Some of the members of the class may have individually crossed the barriers of backwardness but while identifying the class they may have come within the collectivity. It is often seen that comparatively rich persons in the backward class are able to move in the society without being discriminated socially. The members of the backward class are differentiated into superior and inferior. The discrimination which was practiced on them by the higher class is in turn practiced by the affluent members of the backward class on the poorer members of the same class. The benefits of social privileges like job reservations are mostly chewed up by the richer or more affluent sections of the backward class and the poorer and the really backward sections among them keep on getting poorer and more backward. It is only at the lowest level of the backward class where the standards of deprivation and the extent of backwardness may be uniform. The jobs are so very few in comparison to the population of the backward classes that it is difficult to give them adequate representation in the State services. It is, therefore, necessary that the benefit of the reservation must reach the poorer and the weakest section of the backward class. Economic ceiling to cut off the backward class for the purpose of job reservations is necessary to benefit the needy sections of the class. The means-test is, therefore, imperative to skim-off the affluent section of the backward class.
4. We may refer to the opinions given by the learned Judges in ‘Mandal case’ on the question of exclusion of the ‘creamy layer’ from the backward class.
5. P.B. Sawant, J. spoke about the ‘creamy layer’ in the following words:
The correct criterion for judging the forwardness of the forwards among the backward classes is to measure their capacity not in terms of the capacity of others in their class, but in terms of the capacity of the members of the forward classes, as stated earlier. If they cross the Rubicon of backwardness, they should be taken out from the backward classes and should be made disentitled to the provisions meant for the said classes.
It is necessary to highlight another allied aspect of the issue, in this connection. What do we mean by sufficient capacity to compete with others? Is it the capacity to compete for Class IV or Class III or higher class posts? A Class IV employee’s children may develop capacity to compete for Class III posts and in that sense, he and his children may be forward compared to those in his class who have not secured even Class IV posts. It cannot, however, be argued that on that account, he has reached the ~creamy” level. If the adequacy of representation in the services as discussed earlier, is to be evaluated in terms of qualitative and not mere quantitative representation, which means representation in the higher rungs of administration as well, the competitive capacity should be determined on the basis of the capacity to compete for the higher level posts also. Such capacity will be acquired only when the backward sections reach those levels or at least, near those levels.”
6. R.M. Sahai, J. Held that the exclusion of ‘creamy layer’ is a social purpose. Any legislation or executive action to remove such persons individually or collectively cannot be constitutionally invalid. The learned Judge elaborated his conclusions as under:-
“More backward and backward is an illusion. No constitutional exercise is called for it. What is required is practical approach to the problem. The collectivity or the group may be backward class but the individuals from the class may have achieved the social status or economic affluence. Disentitle them from claiming reservation. Therefore, while reserving posts for backward classes, the departments should make a condition precedent that every candidate must disclose the annual income of the parents beyond which one could not be considered to be backward. What should be that limit can be determined by the appropriate State. Income apart, provision should be made that wards of those backward classes of persons who have achieved a particular status in society either political or social or economic or if their parents are in higher services then such individuals should be precluded to avoid monopolisation of the services reserved for backward classes by a few. Creamy layer, thus, shall stand eliminated.”
7. B.P. Jeevan Reddy, J. speaking for the Court enunciated the concept of ‘creamy layer’ in the following words:
” 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 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 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 in 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 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)… 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”.
8. It is difficult to draw a line where a person, belonging to the backward class, ceases to be so and becomes part of the ‘creamy layer’. It is not possible to lay down the criteria exhaustively. This Court has, however, speaking through Jeevan Reddy, J., dealt with the question elaborately and has brought home the point succinctly by illustrating various stages where a member of a backward class ceases to be backward and starts floating with the ‘creamy layer’.
9. Pursuant to the directions by this Court in ‘Mandal case’ Government of India, Ministry of Personnel, Public Grievances and Pensions (Department of Personnel and Training) issued office memorandum dated September 8, 1993 providing for 27% reservation for the Other Backward Classes. Para 2(c) of the memorandum excludes the persons/sections mentioned in column 3 of the Schedule to the said memorandum. In other words, the Schedule consists of the ‘creamy layer’. It would be useful to reproduce the relevant paras of the said memorandum hereunder:
“OFFICE MEMORANDUM”
Subject: Reservation for Other Backward Classes in Civil Posts and Services under the Government of India – Regarding.
————
The undersigned is directed to refer to this Department’s O.M. No. 36012/31/90-Estt. (SCT), dated the 13th August, 1990 and 25th September 1991 regarding reservation for Socially and Educationally Backward Classes in Civil Posts and Services under the Government of India and to say that following the Supreme Court judgment in the Indira Sawhney and others v. Union of India and other case (writ Petition (Civil) No. 930 of 1990) the Government of India appointed an Expert Committee to recommend the criteria for exclusion of the socially advanced persons/sections from the benefits; of reservations for Other Backward Classes in civil posts and services under the Government of India.
2. Consequent to the consideration of the Expert Committee’s recommendations this Department’ Office Memorandum No. 36012/31/90-East. (SCT), dated 13.8.90 referred to in para (1) above is hereby modified to provide as follows:
(a) 27% (twenty seven percent) of the vacancies in civil posts and services under the government of India, to be filled through direct recruitment, shall be reserved for the Other Backward Classes. Detailed instructions relating to the procedure to be followed for enforcing reservation will be issued separately.
(b)…………………….
(c) (i) The aforesaid reservation shall not apply to persons/sections mentioned in column 3 of the Schedule to this office memorandum.
(ii) The rule of exclusion will not apply to persons working as artisans or engaged in hereditary occupation, callings. A list of such occupations, callings will be issued separately by the Ministry of Welfare.
(d)…………………..
(e)…………………..
3. …………………..
SCHEDULE
———————————
Description of category To whom rule of exclusion will
apply
———————————
1. 2 3
———————————
I. CONSTITUTIONAL POSTS Son(s) and daughter(s) of
(a) President of India;
(b) Vice President of India;
(c) Judges of the Supreme Court
and of the High Courts;
(d) Chairman & Members of UPSC and
of the State Public Service
Commission; Chief Election
Commissioner; Controller & Auditor
General of India;
(e) Persons holding Constitutional
positions of like nature.
II. SERVICE CATEGORY Son(s) and daughter(s) of
A. Group A/Class I (a) parents, both of whom are
officers of All Class I officers;
India Central and (b) parents, either of whom is
State Services a Class I officer;
(Direct Recruits). (c) parents, both of whom are
Class I officers, but one of
them dies or suffers permanent
incapacitation.
(d) parents, either of whom is a
Class I officer and such parent
dies or suffers permanent
incapacitation and before such
death or such incapacitation has
had the benefit of employment in
any International Organisation
like UN,IMF, World Bank, etc. for
a period of not less than 5 years.
(e) parents, both of whom are class
I officers die or suffer permanent
incapacitation and before such
death or such incapacitation of
the both, either of them has had
the benefit of employment in any
International Organisation like
UN,IMF, World Bank, etc. for a
period of not less than 5 years.
Provided that the rule of exclusion
shall not apply in the following
cases:
(a) Sons and daughters of parents
either of whom or both of whom are
Class-I officers and such parent(s)
dies/die or suffer permanent
incapacitation.
(b) A lady belonging to OBC
category has got married to a
Class-I officer, and may herself
like to apply for a job.
B. Group B/Class II Son(s) and daughter(s) of
officers of the Central (a) parents both of whom are Class
& State Services II officers.
(Direct Recruitment) (b) parents of whom only the
husband is a Class II officer and
he gets into Class I at the age of
40 or earlier.
(c) parents, both of whom are
Class II officers and one of them
dies or suffers permanent
incapacitation and either one of
them has had the benefit of
employment in any International
Organisation like UN,IMF, World
Bank, etc. for a period of not
less than 5 years before such
death or permanent incapacitation;
(d) parents of whom the husband is
a Class I officer (direct recruit
or pre-forty promoted) and the wife
is a Class II officer and the wife
dies; or suffers permanent
incapacitation; and
(e) parents, of whom the wife is a
Class I officer (Direct Recruit or
pre-forty promoted) and the husband
is a Class II Officer and the
husband dies or suffers permanent
incapacitation
Provided that the rule of exclusion
shall not apply in the following
cases:
Sons and daughter of
(a) Parents both of whom are Class
II officers and one of them dies or
suffers permanent incapacitation.
(b) Parents, both of whom are
Class Ii officers and both of them
die or suffer permanent incapacit-
ation, even though either of them
has had the benefit of employment
in any International Organisation
like UN,IMF, World Bank, etc. for
a period of not less than 5 years
before their death or permanent
incapacitation.
C. Employees in Public The criteria enumerated in A & B
Sector Undertakings etc. above in this Category will apply
mutatis mutandi to officers holding
equivalent or comparable posts in
PSUs, Banks, Insurance Organisa-
tions Universities, etc. and also
to equivalent or comparable posts
and positions under private
employment, Pending the evaluation
of the posts on equivalent or
comparable basis in these insti-
tutions, the criteria specified in
Category VI below will apply to the
Officers in these Institutions.
III. ARMED FORCES INCLUDING Son(s) and daughter(s) of parents
PARAMILITARY FORCES either or both of whom is or are in
(Persons holding civil the rank of Colonel and above in
posts are not included) the Army and to equivalent posts in
the Navy and the Air Force and the
Para Military Forces.
Provided that:-
(i) if the wife of an Armed Forces
Officer is herself in the Armed
Forces (i.e. the category under
consideration) the rule of
exclusion will apply only when she
herself has reached the rank of
Colonel;
(ii) the services ranks below
Colonel of husband and wife shall
not be clubbed together;
(iii) If the wife of an officer
in the Armed Forces is in civil
employment, this will not be taken
into account for applying the rule
of exclusion unless she falls in
the service category under item
No. II in which case the criteria
and conditions enumerated therein
will apply to her independently
IV. PROFESSIONAL CLASS AND
THOSE ENGAGED IN TRADE
AND INDUSTRY
(I) Persons engaged in Criteria specified against Category
profession as a doctor, VI will apply:-
lawyer, chartered
accountant, Income-Tax
consultant, financial
or management consultant,
dental surgeon, engineer,
architect, computer
specialist, film artists
and other film professional,
author, playwright, sports
person, sports professional,
media professional or any
other vocations of like
status.
(II) Persons engaged in trade Criteria specified against Category
business and industry. VI will apply:
Explanation:
(i) Where the husband is in some
profession and the wife is in a
Class II or lower grade employment,
the income/wealth test will apply
only on the basis of the husband’s
income
(ii) If the wife is in any
profession and the husband is in
employment in a Class II or lower
rank post, then the income/wealth
criterion will apply only on the
basis of the wife’s income and the
husband’s income will not be
clubbed with it.
V. PROPERTY OWNERS
A. Agricultural holdings Son(s) and daughter(s) of persons
belonging to a family (father,
mother and minor children) which
owns
(a) only irrigated land which is
equal to or more than 85% of the
statutory area, or
(b) both irrigated and unirrigated
land, as follows:
(i) The rule of exclusion will
apply where the pre-condition
exists that the irrigated area
(having been brought to a single
type under a common denominator)
40% or more of the statutory
ceiling limit for irrigated land
(this being calculated by
excluding the unirrigated portion).
If this pre-condition of not less
than 40% exists, then only the area
of unirrigated land will be taken
into account. This will be done by
converting the unirrigated land on
the basis of the convertion formula
existing, into the irrigated type.
The irrigated area so computed from
unirrigated land shall be added to
the actual area of irrigated land
and if after such clubbing together
the total area in terms of
irrigated land is 80% or more of
the statutory ceiling limit for
irrigated land, then the rule of
exclusion will apply and disentit-
lement will occur.
(ii) The rule of exclusion will not
apply if the land holding of a
family is exclusively unirrigated.
B. Plantations
(i) Coffee, tea, rubber, Criteria of income/wealth specified
etc. in Category VI below will apply.
(ii) Mango, citrus, apply Deemed as agricultural holding and
plantations etc. hence criteria at A above under
this Category will apply.
C. Vacant land and/or Criteria specified in Category VI
buildings in urban areas below will apply.
or urban agglomerations
Explanation: Building may be used
for residential, industrial or
Commercial purpose and the like two
or more such purposes.
VI. INCOME/WEALTH TEST Son(s) and daughter(s) of
(a) Persons having gross annual
income of Rs. 1 lakh or above or
possessing wealth above the
exemption limit as prescribed in
the Wealth Tax Act for a period of
three consecutive years.
(b) Persons in Categories I, II,
III and V A who are not disentitled
to the benefit of reservation but
have income from other sources of
wealth which will bring them within
the income/wealth criteria
mentioned in (a) above.
Explanation:
(i) Income from salaries or
agricultural land shall not be
clubbed;
(ii) The income criteria in terms
of rupee will be modified taking
into account the change in its
value every three years. If the
situation however, so demands, the
interrugnum may be less.
Explanation: Wherever the
expression “permanent
incapacitation” occur in
this schedule, it shall
mean incapacitation which
results in putting an officer
out of service.”
10. We have carefully examined the criteria for identifying the ‘creamy layer’ laid down by the Government of India in the Schedule, quoted above, and we are of the view that the same is in conformity with the law laid down by this Court in ‘Mandal case’. We have no hesitation in approving the rule of exclusion framed by the Government of India in para 2(c) read with the Schedule of the Office memorandum quoted above. Learned counsel for the petitioners have also vehemently commended that the State Governments should follow the Government of India and lay down similar criteria for identifying the ‘creamy layer’.
11. In the light of the above background, we may examine the criteria for the identification of the ‘creamy layer’ as laid down by the States of Bihar and Uttar Pradesh.
12. The Governor of Bihar promulgated Ordinance No.5 of 1995 on January 27, 1995 called “the Bihar Reservation of vacancies in posts and services (for Scheduled Castes, Scheduled Tribes and other Backward Classes) (Amendment) Ordinance, 1995”. By the said Ordinance Section 4 of the Bihar Act 3 of 1992 was amended and after the second proviso, the following proviso was added:
“Provided also that reservation under clause (d) shall not apply to the category of backward classes specified in Schedule III.”
Schedule III is reproduced hereunder:
“Schedule III
(See Section 4(2))
1. The son or daughter of the President of India, the Vice-President of India, the Chief Justice and Judges of the Supreme Court of India, the Chief Justice and Judges of the High Courts, the Chairman and Members of the Union Public Service Commission and the Chief Election Commissioner;
2. The son or daughter of such officers who has been directly recruited in Class I Services of the Central Government or a State Government or an Undertaking or an institution fully or partially financed by them; and
(a) Whose income from salary is rupees ten thousand or more per mensum, and
(b) Whose wife or husband, as the case may be, is at least a graduate, and
(c) Who or his wife or her husband, as the case may be, owns a house in an urban area, and
(d) Whose mother or father has also been directly recruited to Class I services.
Explanation. – Class I means the pay bracket fixed by the State Government from time to time for Class I.
3. The son or daughter of such person engaged as doctor, advocate, chartered accountant, tax consultant, financial consultant, management consultant, architect or other professionals, and
(a) Whose average income from all sources for three consecutive financial years is not less than rupees ten lakhs per annum; and
(b) Whose wife or husband, as the case may be, is atleast a graduate; and
(c) Whose family owns immovable property at least of rupees twenty lakhs.
4. The son or daughter of such person engaged in trade or commerce, and –
(a) Whose average income from all sources for three consecutive financial years is not less than rupees ten lakhs per annum; and
(b) Whose wife or husband, as the case may be, is at least a graduate; and
(c) Whose family owns immovable property at least of rupees twenty lakhs.
5. The son or daughter of such industrialist:-
(a) Whose level of investment in running unit or units is more than rupees ten crores; and
(b) Such unit or units are engaged in commercial production for at least five years; and
(c) His wife or husband, as the case may be, is at least a graduate.
6. The son or daughter of such agricultural land-holder:-
(a) Whose average income from all sources other than agriculture for three consecutive financial years is not less than rupees ten lakhs per annum; and
(b) Whose wife or husband, as the case may be, is at least a graduate; and
(c) Who or his wife or her husband, as the case may be, owns house at least of rupees twenty lakhs in an urban area.
7. The son or daughter of person, other than the persons specified in serial 1 to 6 of this Schedule:-
(a) Whose main source of income is other than animal husbandry, fisheries, poultry, weaving, craftsmanship, handicraft and artisanship and
(b) Whose average income from all sources for three consecutive financial years is not less than rupees ten lakhs per annum; and
(c) Whose wife or husband, as the case may be, is at least a graduate; and
(d) Whose family owns immovable property at least of rupees twenty lakhs.
8. If a person included in serial 1 to 7 of this Schedule performs inter-castes marriage with a backward class person other than the categories under serial 1 to 7 of this Schedule, his/her son or daughter shall not be excluded.
Note:-I The level of income and the value of property shall be modified taking into account the variation in the money value every three years or less period, as the situation may demand.
II. An affidavit field by the father or the mother of the candidate, or in case of their death, by the candidate himself, shall be deemed to be decisive in respect of income, value of property and educational qualification.”
13. So far as the State of Uttar Pradesh is concerned the categories sought to be excluded from the backward classes (creamy layer) are mentioned in Schedule II read with Section 3(b) of the Uttar Pradesh Public Services Reservation of Scheduled Castes and Scheduled Tribes and other backward classes Act, 1994. The said categories are as under:
“Categories of Persons excluded Criteria for exclusion
1. sons and daughters
of
(a) IAS,IFS, IPS Indian Forest (i) Income from salary of
Service other central service such member of service is
(direct or promotee) 10,000/- or above per
mensum.
(b) U.P. Civil Service, U.P. (ii) Spouse is at least
Police Service State Service graduate.
(direct recruit).
(iii) He or his spouse owns
a house in urban area.
(c) Group A/Class I officers of
any Deptt. or Ministry of
Govt. of India or Educational,
Research or other institutions
(no.1 included in above (a).
(d) Group A/Class-I officer of
any Deptt. or Institution
of State Govt. (No.1 included
in (b) above.
(e) An officer of defence forces
or Para Military forces not
below rank of colonel or
equivalent.
2. SONS AND DAUGHTERS OF –
persons engaged in profession as (i) his average income
a doctor, surgeon, engineers, from all sources should
lawyer, architect, Chartered not be less than Rs. 10
Accountant, media & information lakhs per year for 3
professional, management and consecutive financial
other consultant film profess- years
ional, running educational
institution or coaching institute
or engaged in the business as a (ii) Spouse at least a
share broker or in entertainment graduate.
business
(iii) His family property
(immovable) should be
worth Rs. 20 lakh.
3. Sons and daughters of- (i) Provided whose
Businessman. average income for 3
consecutive financial
years is not less than
Rs. 10 lakh per annum.
(ii) Spouse at least a
graduate.
(iii) immovable family
property worth at least
20 lakhs.
4. Sons and Daughters of (i) whose level of
Industrialist. investment in running
units is over Rs. 10
crore and such units are
engaged in production for
at least 5 years
(ii) spouse at least a
graduate.
5. Sons and Daughters of – a person (i) has an income of
whose holdings is within limit Rs. 10 lakhs in a year
fixed under the U.P. Imposition of from sources other than
Ceiling on Land Holdings Act 1060. agriculture.
(ii) His spouse at least
a graduate.
6. Sons and Daughters of – (i) Whose income from all
any others person not sources for 3 consecutive
mentioned in afore-mentioned financial years is not
categories. less than Rs. 10 lakhs
per annum.
(ii) Spouse at least a
graduate.
(iii) Immovable family
property worth at least
Rs. 20 lakhs.”
14. This Court has categorically held in “mandal case” that a person, belonging to a backward class, who becomes member of IAS, IPS or any other All India Service, his children cannot avail the benefit of reservation. The States of Bihar and Uttar Pradesh have added further conditions such as salary of rupees ten thousand or more per mensum, the wife or husband to be graduate and one of them owning a house in an urban area. So far as the professionals are concerned, an income of Rs. 10 lakhs per annum has been fixed as the criterion. It is further provided that the wife or husband is at least graduate and the family owns immovable property of the value of at least rupees twenty lakhs. Similarly, the criteria regarding traders, industrialists, agriculturists and others is wholly arbitrary apart from being contrary to the guidelines laid down by this Court in ‘Mandal case’.
15. Multiple conditions have been provided in all the categories. The ‘spouse’ to be a graduate and holding property in urban area, are the conditions attached to almost every category. These conditions have no nexus with the object sought to be achieved. Since the conditions are not severable the two criterias as a whole have to be struck-down.
17. This Court, in ‘Mandal case’ has clearly and authoritatively laid down that the affluent part of a backward class called ‘creamy layer’ has to be excluded from the said class and the benefit of Article 16(4) can only be given to the “class” which remains after the exclusion of the ‘creamy layer’. 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. This Court has laid down, clear and easy to follow, guidelines for the identification of ‘creamy layer’. The States of Bihar and Uttar Pradesh have acted wholly arbitrary and in utter violation of the law laid down by this Court in ‘Mandal case’. It is difficult to accept that in India where the per capita national income is Rs. 6929 (1993-94), a person who is a member of the IAS and a professional who is earning less than Rs. 10 lakhs per annum is socially and educationally backward. We are of the view that the criteria laid down by the States of Bihar and Uttar Pradesh for identifying the ‘creamy layer’ on the face of it is arbitrary and has to be rejected.
17. We, therefore, hold that the above quoted criteria, for identification of ‘creamy-layer’, laid down by the States of Bihar and Uttar Pradesh is violative of Article 16(4), wholly arbitrary – violative of Article 14 – and against the law laid-down by this Court in ‘Mandal case.’
18. We allow the writ petitions and quash (except clause 1 of Schedule III) the Bihar reservation of vacancies in posts and services (for scheduled castes, scheduled tribes and other backward classes) (Amendment) Ordinance 1995 (also the Act if ordinance has been converted into Act). We also quash Schedule II read with Section 3(b) of the Uttar Pradesh Public Services Reservation of Scheduled Caste and Scheduled Tribes and Other Backward Classes Act, 1994.
19. We further direct that for the academic year 1995-96 the States of Uttar Pradesh and Bihar shall follow the criteria laid down by the Government of India, reproduced above, in the memorandum dated September 8, 1993. It will be open to the two States to lay down fresh criteria for the subsequent years in accordance with law. No costs.
21. Mr. Venugopal, learned counsel appearing for the petitioners, stated that there are various other law-points in these writ petitions which were not raised and he sought liberty to raise the same in appropriate proceedings, if necessary. We order accordingly.
1. Constitutional validity of the criteria, for determining the ‘creamy layer’ for the purpose of exclusion from backward classes, laid-down by the States of Bihar and Uttar Pradesh, has been challenged in these writ petitions under Article 32 of the Constitution of India.
2. A Nine-Judge Bench of this Court in ~Mandal case” – Indra Sawhney v. Union of India (JT 1992 (6) SC 273 = 1992 Supp. (3) SCC 217) – authoritatively interpreted various aspects of Article 16(4) of the Constitution of India. While holding that Article 16(4) aims at group backwardness this Court came to the conclusion that socially advanced members of a backward class – ‘creamy layer’ – have to be excluded from the said ‘class’. It was held that the ‘class’ which remains after excluding the ‘creamy layer’ would more appropriately serve the purpose and object of Article 16(4).
3. The protective discrimination in the shape of job reservations under Article 16(4) has to be programmed in such a manner that the most deserving section of the backward class is benefited. Means-test by which ‘creamy layer’ is excluded, ensures such a result. The process of identifying backward class cannot be perfected to the extent that every member of the said class is equally backward. There are bound to be disparities in the class itself. Some of the members of the class may have individually crossed the barriers of backwardness but while identifying the class they may have come within the collectivity. It is often seen that comparatively rich persons in the backward class are able to move in the society without being discriminated socially. The members of the backward class are differentiated into superior and inferior. The discrimination which was practiced on them by the higher class is in turn practiced by the affluent members of the backward class on the poorer members of the same class. The benefits of social privileges like job reservations are mostly chewed up by the richer or more affluent sections of the backward class and the poorer and the really backward sections among them keep on getting poorer and more backward. It is only at the lowest level of the backward class where the standards of deprivation and the extent of backwardness may be uniform. The jobs are so very few in comparison to the population of the backward classes that it is difficult to give them adequate representation in the State services. It is, therefore, necessary that the benefit of the reservation must reach the poorer and the weakest section of the backward class. Economic ceiling to cut off the backward class for the purpose of job reservations is necessary to benefit the needy sections of the class. The means-test is, therefore, imperative to skim-off the affluent section of the backward class.
4. We may refer to the opinions given by the learned Judges in ‘Mandal case’ on the question of exclusion of the ‘creamy layer’ from the backward class.
5. P.B. Sawant, J. spoke about the ‘creamy layer’ in the following words:
The correct criterion for judging the forwardness of the forwards among the backward classes is to measure their capacity not in terms of the capacity of others in their class, but in terms of the capacity of the members of the forward classes, as stated earlier. If they cross the Rubicon of backwardness, they should be taken out from the backward classes and should be made disentitled to the provisions meant for the said classes.
It is necessary to highlight another allied aspect of the issue, in this connection. What do we mean by sufficient capacity to compete with others? Is it the capacity to compete for Class IV or Class III or higher class posts? A Class IV employee’s children may develop capacity to compete for Class III posts and in that sense, he and his children may be forward compared to those in his class who have not secured even Class IV posts. It cannot, however, be argued that on that account, he has reached the ~creamy” level. If the adequacy of representation in the services as discussed earlier, is to be evaluated in terms of qualitative and not mere quantitative representation, which means representation in the higher rungs of administration as well, the competitive capacity should be determined on the basis of the capacity to compete for the higher level posts also. Such capacity will be acquired only when the backward sections reach those levels or at least, near those levels.”
6. R.M. Sahai, J. Held that the exclusion of ‘creamy layer’ is a social purpose. Any legislation or executive action to remove such persons individually or collectively cannot be constitutionally invalid. The learned Judge elaborated his conclusions as under:-
“More backward and backward is an illusion. No constitutional exercise is called for it. What is required is practical approach to the problem. The collectivity or the group may be backward class but the individuals from the class may have achieved the social status or economic affluence. Disentitle them from claiming reservation. Therefore, while reserving posts for backward classes, the departments should make a condition precedent that every candidate must disclose the annual income of the parents beyond which one could not be considered to be backward. What should be that limit can be determined by the appropriate State. Income apart, provision should be made that wards of those backward classes of persons who have achieved a particular status in society either political or social or economic or if their parents are in higher services then such individuals should be precluded to avoid monopolisation of the services reserved for backward classes by a few. Creamy layer, thus, shall stand eliminated.”
7. B.P. Jeevan Reddy, J. speaking for the Court enunciated the concept of ‘creamy layer’ in the following words:
” 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 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 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 in 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 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)… 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”.
8. It is difficult to draw a line where a person, belonging to the backward class, ceases to be so and becomes part of the ‘creamy layer’. It is not possible to lay down the criteria exhaustively. This Court has, however, speaking through Jeevan Reddy, J., dealt with the question elaborately and has brought home the point succinctly by illustrating various stages where a member of a backward class ceases to be backward and starts floating with the ‘creamy layer’.
9. Pursuant to the directions by this Court in ‘Mandal case’ Government of India, Ministry of Personnel, Public Grievances and Pensions (Department of Personnel and Training) issued office memorandum dated September 8, 1993 providing for 27% reservation for the Other Backward Classes. Para 2(c) of the memorandum excludes the persons/sections mentioned in column 3 of the Schedule to the said memorandum. In other words, the Schedule consists of the ‘creamy layer’. It would be useful to reproduce the relevant paras of the said memorandum hereunder:
“OFFICE MEMORANDUM”
Subject: Reservation for Other Backward Classes in Civil Posts and Services under the Government of India – Regarding.
————
The undersigned is directed to refer to this Department’s O.M. No. 36012/31/90-Estt. (SCT), dated the 13th August, 1990 and 25th September 1991 regarding reservation for Socially and Educationally Backward Classes in Civil Posts and Services under the Government of India and to say that following the Supreme Court judgment in the Indira Sawhney and others v. Union of India and other case (writ Petition (Civil) No. 930 of 1990) the Government of India appointed an Expert Committee to recommend the criteria for exclusion of the socially advanced persons/sections from the benefits; of reservations for Other Backward Classes in civil posts and services under the Government of India.
2. Consequent to the consideration of the Expert Committee’s recommendations this Department’ Office Memorandum No. 36012/31/90-East. (SCT), dated 13.8.90 referred to in para (1) above is hereby modified to provide as follows:
(a) 27% (twenty seven percent) of the vacancies in civil posts and services under the government of India, to be filled through direct recruitment, shall be reserved for the Other Backward Classes. Detailed instructions relating to the procedure to be followed for enforcing reservation will be issued separately.
(b)…………………….
(c) (i) The aforesaid reservation shall not apply to persons/sections mentioned in column 3 of the Schedule to this office memorandum.
(ii) The rule of exclusion will not apply to persons working as artisans or engaged in hereditary occupation, callings. A list of such occupations, callings will be issued separately by the Ministry of Welfare.
(d)…………………..
(e)…………………..
3. …………………..
SCHEDULE
———————————
Description of category To whom rule of exclusion will
apply
———————————
1. 2 3
———————————
I. CONSTITUTIONAL POSTS Son(s) and daughter(s) of
(a) President of India;
(b) Vice President of India;
(c) Judges of the Supreme Court
and of the High Courts;
(d) Chairman & Members of UPSC and
of the State Public Service
Commission; Chief Election
Commissioner; Controller & Auditor
General of India;
(e) Persons holding Constitutional
positions of like nature.
II. SERVICE CATEGORY Son(s) and daughter(s) of
A. Group A/Class I (a) parents, both of whom are
officers of All Class I officers;
India Central and (b) parents, either of whom is
State Services a Class I officer;
(Direct Recruits). (c) parents, both of whom are
Class I officers, but one of
them dies or suffers permanent
incapacitation.
(d) parents, either of whom is a
Class I officer and such parent
dies or suffers permanent
incapacitation and before such
death or such incapacitation has
had the benefit of employment in
any International Organisation
like UN,IMF, World Bank, etc. for
a period of not less than 5 years.
(e) parents, both of whom are class
I officers die or suffer permanent
incapacitation and before such
death or such incapacitation of
the both, either of them has had
the benefit of employment in any
International Organisation like
UN,IMF, World Bank, etc. for a
period of not less than 5 years.
Provided that the rule of exclusion
shall not apply in the following
cases:
(a) Sons and daughters of parents
either of whom or both of whom are
Class-I officers and such parent(s)
dies/die or suffer permanent
incapacitation.
(b) A lady belonging to OBC
category has got married to a
Class-I officer, and may herself
like to apply for a job.
B. Group B/Class II Son(s) and daughter(s) of
officers of the Central (a) parents both of whom are Class
& State Services II officers.
(Direct Recruitment) (b) parents of whom only the
husband is a Class II officer and
he gets into Class I at the age of
40 or earlier.
(c) parents, both of whom are
Class II officers and one of them
dies or suffers permanent
incapacitation and either one of
them has had the benefit of
employment in any International
Organisation like UN,IMF, World
Bank, etc. for a period of not
less than 5 years before such
death or permanent incapacitation;
(d) parents of whom the husband is
a Class I officer (direct recruit
or pre-forty promoted) and the wife
is a Class II officer and the wife
dies; or suffers permanent
incapacitation; and
(e) parents, of whom the wife is a
Class I officer (Direct Recruit or
pre-forty promoted) and the husband
is a Class II Officer and the
husband dies or suffers permanent
incapacitation
Provided that the rule of exclusion
shall not apply in the following
cases:
Sons and daughter of
(a) Parents both of whom are Class
II officers and one of them dies or
suffers permanent incapacitation.
(b) Parents, both of whom are
Class Ii officers and both of them
die or suffer permanent incapacit-
ation, even though either of them
has had the benefit of employment
in any International Organisation
like UN,IMF, World Bank, etc. for
a period of not less than 5 years
before their death or permanent
incapacitation.
C. Employees in Public The criteria enumerated in A & B
Sector Undertakings etc. above in this Category will apply
mutatis mutandi to officers holding
equivalent or comparable posts in
PSUs, Banks, Insurance Organisa-
tions Universities, etc. and also
to equivalent or comparable posts
and positions under private
employment, Pending the evaluation
of the posts on equivalent or
comparable basis in these insti-
tutions, the criteria specified in
Category VI below will apply to the
Officers in these Institutions.
III. ARMED FORCES INCLUDING Son(s) and daughter(s) of parents
PARAMILITARY FORCES either or both of whom is or are in
(Persons holding civil the rank of Colonel and above in
posts are not included) the Army and to equivalent posts in
the Navy and the Air Force and the
Para Military Forces.
Provided that:-
(i) if the wife of an Armed Forces
Officer is herself in the Armed
Forces (i.e. the category under
consideration) the rule of
exclusion will apply only when she
herself has reached the rank of
Colonel;
(ii) the services ranks below
Colonel of husband and wife shall
not be clubbed together;
(iii) If the wife of an officer
in the Armed Forces is in civil
employment, this will not be taken
into account for applying the rule
of exclusion unless she falls in
the service category under item
No. II in which case the criteria
and conditions enumerated therein
will apply to her independently
IV. PROFESSIONAL CLASS AND
THOSE ENGAGED IN TRADE
AND INDUSTRY
(I) Persons engaged in Criteria specified against Category
profession as a doctor, VI will apply:-
lawyer, chartered
accountant, Income-Tax
consultant, financial
or management consultant,
dental surgeon, engineer,
architect, computer
specialist, film artists
and other film professional,
author, playwright, sports
person, sports professional,
media professional or any
other vocations of like
status.
(II) Persons engaged in trade Criteria specified against Category
business and industry. VI will apply:
Explanation:
(i) Where the husband is in some
profession and the wife is in a
Class II or lower grade employment,
the income/wealth test will apply
only on the basis of the husband’s
income
(ii) If the wife is in any
profession and the husband is in
employment in a Class II or lower
rank post, then the income/wealth
criterion will apply only on the
basis of the wife’s income and the
husband’s income will not be
clubbed with it.
V. PROPERTY OWNERS
A. Agricultural holdings Son(s) and daughter(s) of persons
belonging to a family (father,
mother and minor children) which
owns
(a) only irrigated land which is
equal to or more than 85% of the
statutory area, or
(b) both irrigated and unirrigated
land, as follows:
(i) The rule of exclusion will
apply where the pre-condition
exists that the irrigated area
(having been brought to a single
type under a common denominator)
40% or more of the statutory
ceiling limit for irrigated land
(this being calculated by
excluding the unirrigated portion).
If this pre-condition of not less
than 40% exists, then only the area
of unirrigated land will be taken
into account. This will be done by
converting the unirrigated land on
the basis of the convertion formula
existing, into the irrigated type.
The irrigated area so computed from
unirrigated land shall be added to
the actual area of irrigated land
and if after such clubbing together
the total area in terms of
irrigated land is 80% or more of
the statutory ceiling limit for
irrigated land, then the rule of
exclusion will apply and disentit-
lement will occur.
(ii) The rule of exclusion will not
apply if the land holding of a
family is exclusively unirrigated.
B. Plantations
(i) Coffee, tea, rubber, Criteria of income/wealth specified
etc. in Category VI below will apply.
(ii) Mango, citrus, apply Deemed as agricultural holding and
plantations etc. hence criteria at A above under
this Category will apply.
C. Vacant land and/or Criteria specified in Category VI
buildings in urban areas below will apply.
or urban agglomerations
Explanation: Building may be used
for residential, industrial or
Commercial purpose and the like two
or more such purposes.
VI. INCOME/WEALTH TEST Son(s) and daughter(s) of
(a) Persons having gross annual
income of Rs. 1 lakh or above or
possessing wealth above the
exemption limit as prescribed in
the Wealth Tax Act for a period of
three consecutive years.
(b) Persons in Categories I, II,
III and V A who are not disentitled
to the benefit of reservation but
have income from other sources of
wealth which will bring them within
the income/wealth criteria
mentioned in (a) above.
Explanation:
(i) Income from salaries or
agricultural land shall not be
clubbed;
(ii) The income criteria in terms
of rupee will be modified taking
into account the change in its
value every three years. If the
situation however, so demands, the
interrugnum may be less.
Explanation: Wherever the
expression “permanent
incapacitation” occur in
this schedule, it shall
mean incapacitation which
results in putting an officer
out of service.”
10. We have carefully examined the criteria for identifying the ‘creamy layer’ laid down by the Government of India in the Schedule, quoted above, and we are of the view that the same is in conformity with the law laid down by this Court in ‘Mandal case’. We have no hesitation in approving the rule of exclusion framed by the Government of India in para 2(c) read with the Schedule of the Office memorandum quoted above. Learned counsel for the petitioners have also vehemently commended that the State Governments should follow the Government of India and lay down similar criteria for identifying the ‘creamy layer’.
11. In the light of the above background, we may examine the criteria for the identification of the ‘creamy layer’ as laid down by the States of Bihar and Uttar Pradesh.
12. The Governor of Bihar promulgated Ordinance No.5 of 1995 on January 27, 1995 called “the Bihar Reservation of vacancies in posts and services (for Scheduled Castes, Scheduled Tribes and other Backward Classes) (Amendment) Ordinance, 1995”. By the said Ordinance Section 4 of the Bihar Act 3 of 1992 was amended and after the second proviso, the following proviso was added:
“Provided also that reservation under clause (d) shall not apply to the category of backward classes specified in Schedule III.”
Schedule III is reproduced hereunder:
“Schedule III
(See Section 4(2))
1. The son or daughter of the President of India, the Vice-President of India, the Chief Justice and Judges of the Supreme Court of India, the Chief Justice and Judges of the High Courts, the Chairman and Members of the Union Public Service Commission and the Chief Election Commissioner;
2. The son or daughter of such officers who has been directly recruited in Class I Services of the Central Government or a State Government or an Undertaking or an institution fully or partially financed by them; and
(a) Whose income from salary is rupees ten thousand or more per mensum, and
(b) Whose wife or husband, as the case may be, is at least a graduate, and
(c) Who or his wife or her husband, as the case may be, owns a house in an urban area, and
(d) Whose mother or father has also been directly recruited to Class I services.
Explanation. – Class I means the pay bracket fixed by the State Government from time to time for Class I.
3. The son or daughter of such person engaged as doctor, advocate, chartered accountant, tax consultant, financial consultant, management consultant, architect or other professionals, and
(a) Whose average income from all sources for three consecutive financial years is not less than rupees ten lakhs per annum; and
(b) Whose wife or husband, as the case may be, is atleast a graduate; and
(c) Whose family owns immovable property at least of rupees twenty lakhs.
4. The son or daughter of such person engaged in trade or commerce, and –
(a) Whose average income from all sources for three consecutive financial years is not less than rupees ten lakhs per annum; and
(b) Whose wife or husband, as the case may be, is at least a graduate; and
(c) Whose family owns immovable property at least of rupees twenty lakhs.
5. The son or daughter of such industrialist:-
(a) Whose level of investment in running unit or units is more than rupees ten crores; and
(b) Such unit or units are engaged in commercial production for at least five years; and
(c) His wife or husband, as the case may be, is at least a graduate.
6. The son or daughter of such agricultural land-holder:-
(a) Whose average income from all sources other than agriculture for three consecutive financial years is not less than rupees ten lakhs per annum; and
(b) Whose wife or husband, as the case may be, is at least a graduate; and
(c) Who or his wife or her husband, as the case may be, owns house at least of rupees twenty lakhs in an urban area.
7. The son or daughter of person, other than the persons specified in serial 1 to 6 of this Schedule:-
(a) Whose main source of income is other than animal husbandry, fisheries, poultry, weaving, craftsmanship, handicraft and artisanship and
(b) Whose average income from all sources for three consecutive financial years is not less than rupees ten lakhs per annum; and
(c) Whose wife or husband, as the case may be, is at least a graduate; and
(d) Whose family owns immovable property at least of rupees twenty lakhs.
8. If a person included in serial 1 to 7 of this Schedule performs inter-castes marriage with a backward class person other than the categories under serial 1 to 7 of this Schedule, his/her son or daughter shall not be excluded.
Note:-I The level of income and the value of property shall be modified taking into account the variation in the money value every three years or less period, as the situation may demand.
II. An affidavit field by the father or the mother of the candidate, or in case of their death, by the candidate himself, shall be deemed to be decisive in respect of income, value of property and educational qualification.”
13. So far as the State of Uttar Pradesh is concerned the categories sought to be excluded from the backward classes (creamy layer) are mentioned in Schedule II read with Section 3(b) of the Uttar Pradesh Public Services Reservation of Scheduled Castes and Scheduled Tribes and other backward classes Act, 1994. The said categories are as under:
“Categories of Persons excluded Criteria for exclusion
1. sons and daughters
of
(a) IAS,IFS, IPS Indian Forest (i) Income from salary of
Service other central service such member of service is
(direct or promotee) 10,000/- or above per
mensum.
(b) U.P. Civil Service, U.P. (ii) Spouse is at least
Police Service State Service graduate.
(direct recruit).
(iii) He or his spouse owns
a house in urban area.
(c) Group A/Class I officers of
any Deptt. or Ministry of
Govt. of India or Educational,
Research or other institutions
(no.1 included in above (a).
(d) Group A/Class-I officer of
any Deptt. or Institution
of State Govt. (No.1 included
in (b) above.
(e) An officer of defence forces
or Para Military forces not
below rank of colonel or
equivalent.
2. SONS AND DAUGHTERS OF –
persons engaged in profession as (i) his average income
a doctor, surgeon, engineers, from all sources should
lawyer, architect, Chartered not be less than Rs. 10
Accountant, media & information lakhs per year for 3
professional, management and consecutive financial
other consultant film profess- years
ional, running educational
institution or coaching institute
or engaged in the business as a (ii) Spouse at least a
share broker or in entertainment graduate.
business
(iii) His family property
(immovable) should be
worth Rs. 20 lakh.
3. Sons and daughters of- (i) Provided whose
Businessman. average income for 3
consecutive financial
years is not less than
Rs. 10 lakh per annum.
(ii) Spouse at least a
graduate.
(iii) immovable family
property worth at least
20 lakhs.
4. Sons and Daughters of (i) whose level of
Industrialist. investment in running
units is over Rs. 10
crore and such units are
engaged in production for
at least 5 years
(ii) spouse at least a
graduate.
5. Sons and Daughters of – a person (i) has an income of
whose holdings is within limit Rs. 10 lakhs in a year
fixed under the U.P. Imposition of from sources other than
Ceiling on Land Holdings Act 1060. agriculture.
(ii) His spouse at least
a graduate.
6. Sons and Daughters of – (i) Whose income from all
any others person not sources for 3 consecutive
mentioned in afore-mentioned financial years is not
categories. less than Rs. 10 lakhs
per annum.
(ii) Spouse at least a
graduate.
(iii) Immovable family
property worth at least
Rs. 20 lakhs.”
14. This Court has categorically held in “mandal case” that a person, belonging to a backward class, who becomes member of IAS, IPS or any other All India Service, his children cannot avail the benefit of reservation. The States of Bihar and Uttar Pradesh have added further conditions such as salary of rupees ten thousand or more per mensum, the wife or husband to be graduate and one of them owning a house in an urban area. So far as the professionals are concerned, an income of Rs. 10 lakhs per annum has been fixed as the criterion. It is further provided that the wife or husband is at least graduate and the family owns immovable property of the value of at least rupees twenty lakhs. Similarly, the criteria regarding traders, industrialists, agriculturists and others is wholly arbitrary apart from being contrary to the guidelines laid down by this Court in ‘Mandal case’.
15. Multiple conditions have been provided in all the categories. The ‘spouse’ to be a graduate and holding property in urban area, are the conditions attached to almost every category. These conditions have no nexus with the object sought to be achieved. Since the conditions are not severable the two criterias as a whole have to be struck-down.
17. This Court, in ‘Mandal case’ has clearly and authoritatively laid down that the affluent part of a backward class called ‘creamy layer’ has to be excluded from the said class and the benefit of Article 16(4) can only be given to the “class” which remains after the exclusion of the ‘creamy layer’. 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. This Court has laid down, clear and easy to follow, guidelines for the identification of ‘creamy layer’. The States of Bihar and Uttar Pradesh have acted wholly arbitrary and in utter violation of the law laid down by this Court in ‘Mandal case’. It is difficult to accept that in India where the per capita national income is Rs. 6929 (1993-94), a person who is a member of the IAS and a professional who is earning less than Rs. 10 lakhs per annum is socially and educationally backward. We are of the view that the criteria laid down by the States of Bihar and Uttar Pradesh for identifying the ‘creamy layer’ on the face of it is arbitrary and has to be rejected.
17. We, therefore, hold that the above quoted criteria, for identification of ‘creamy-layer’, laid down by the States of Bihar and Uttar Pradesh is violative of Article 16(4), wholly arbitrary – violative of Article 14 – and against the law laid-down by this Court in ‘Mandal case.’
18. We allow the writ petitions and quash (except clause 1 of Schedule III) the Bihar reservation of vacancies in posts and services (for scheduled castes, scheduled tribes and other backward classes) (Amendment) Ordinance 1995 (also the Act if ordinance has been converted into Act). We also quash Schedule II read with Section 3(b) of the Uttar Pradesh Public Services Reservation of Scheduled Caste and Scheduled Tribes and Other Backward Classes Act, 1994.
19. We further direct that for the academic year 1995-96 the States of Uttar Pradesh and Bihar shall follow the criteria laid down by the Government of India, reproduced above, in the memorandum dated September 8, 1993. It will be open to the two States to lay down fresh criteria for the subsequent years in accordance with law. No costs.
21. Mr. Venugopal, learned counsel appearing for the petitioners, stated that there are various other law-points in these writ petitions which were not raised and he sought liberty to raise the same in appropriate proceedings, if necessary. We order accordingly.
