Supreme Court Says OBC Creamy Layer Cannot Be Decided Only By Parental Salary

The Supreme Court has held that creamy layer status among Other Backward Classes cannot be decided only by looking at parental salary. In an important ruling, a Bench of Justices PS Narasimha and R Mahadevan dismissed appeals filed by the Union government and upheld earlier High Court decisions in favour of civil services candidates.

The dispute began after several candidates who had cleared the Civil Services Examination were denied OBC reservation benefits. The Department of Personnel and Training had treated them as belonging to the creamy layer by taking their parents’ salary into account while assessing their status.

These candidates challenged that decision before different courts. The Madras, Delhi and Kerala High Courts ruled in their favour. The Supreme Court has now affirmed those rulings and clarified how creamy layer status must be determined under the existing legal framework.

The Court examined the 1993 Office Memorandum, which governs OBC reservation in civil posts and services, along with a 2004 clarificatory letter. It said the 1993 framework gives importance not only to income but also to the status and category of the post held by a candidate’s parents.

The Bench made it clear that exclusion under certain categories is based on status, not merely on earnings. According to the Court, advancement in government service reflects social progression and cannot be reduced to fluctuating salary figures alone.

Explaining this position, the Court observed: “The exclusion under Categories I to III of the Schedule is status-based rather than purely income-based, reflecting the policy understanding that advancement within the governmental service hierarchy denotes social progression independent of fluctuating salary levels. Mere determination of the status of a candidate as to whether he/she falls within the creamy layer or the non-creamy layer of the OBCs cannot be decided solely on the basis of the income.”

The Court also held that the 2004 clarification cannot override the core structure of the 1993 Office Memorandum. It said any interpretation that gives complete control to income brackets, while ignoring post category and status, would be legally unsustainable.

On the issue of equality, the Bench agreed that similarly placed persons cannot be treated differently just because one works in government service while another is employed in a public sector undertaking or the private sector. Such a division, it said, would unfairly split members of the same backward class.

The Court further directed the government to accommodate eligible candidates by creating supernumerary posts wherever required. This means candidates who satisfy the non-creamy layer criteria, and are otherwise eligible, must not lose their opportunity because of an incorrect interpretation of the law.