Legal Talks by Desikanoon

Can 'Creamy Layer' be Determined Solely on the Basis of Income?

Episode Summary

On today’s show, we will discuss the case of Pichra Warg Kalyan Mahasabha Haryana (Regd.) and Another v. State of Haryana & Another, 2021 SCC OnLine SC 635, wherein the Hon’ble Supreme Court discussed the concept of ‘creamy layer’ in relation to Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act, 2016 (in short, “Haryana Reservation Act”).

Episode Notes

On today’s show, we will discuss the case of Pichra Warg Kalyan Mahasabha Haryana (Regd.) and Another v. State of Haryana & Another, 2021 SCC OnLine SC 635, wherein the Hon’ble Supreme Court discussed the concept of ‘creamy layer’ in relation to Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act, 2016.

To know more about it, please visit https://www.desikanoon.co.in/2021/08/reservation-creamy-layer-indra-sawhney-haryana.html

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Credits:

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Episode Transcription

Hi everyone.

Welcome to Legal Talks by Desi Kanoon.

I am Suyash and I am excited to have started this show.

But what is ‘creamy layer’? In layman language, ‘creamy layer’ could be termed as a sort of exclusion from the backward classes for the purposes of reservation on the basis of socio-economic factors such as income, social status etc. A similar definition has also been provided under Section 5 (2) of the Haryana Reservation Act.

Before adverting any further, let us also briefly peruse the texts of Article 14 and Article 16 (4) of the Constitution of India. Article 14 states that “the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India” and Article 16 (4) provides power to the State to make provisions for reservation of posts in favour of backward classes that are not adequately represented.

The brief backdrop of this case stems from the celebrated case of Indra Sawhney v. Union of India, 1992 Supp (3) SCC 217, wherein “the Court directed the state governments to identify ‘creamy layer’ amongst the backward classes and exclude them from the purview of reservation.” In this regard, the Haryana Second Backward Classes Commission was constituted on 12.10.1993. The State Government accepted the recommendations of the Commission and decided that the benefit of reservation shall not be extended to certain persons. Thereafter in the year 2016, the Haryana Reservation Act was enacted in which Section 5 provides that no person belonging to creamy layer amongst the backward classes shall be given reservation.

“In exercise of the powers conferred by the 2016 Act, the State Government issued a notification on 17.08.2016 specifying the criteria for exclusion of ‘creamy layer’ within the backward classes. As per the said notification, children of persons having gross annual income up to Rs. 3 lakh shall first of all get the benefit of reservation in services and admission in educational institutions. The left-out quota shall go to that class of backward classes of citizens who earn more than Rs. 3 lakh but up to Rs. 6 lakh per annum. The sections of backward classes earning above Rs. 6 lakh per annum shall be considered as ‘creamy layer’ under Section 5 of the 2016 Act.”

Thus, two classes of persons, one having income up to Rs. 3 Lakhs and the other having income between Rs. 3 Lakhs and Rs. 6 Lakhs was created. Another Notification dated 28.08.2018 was also issued by the State Government indicating that gross annual income to be computed shall include income from all the sources. These Notifications dated 17.08.2016 and 28.08.2018 were challenged before the Court inter alia on the following grounds: -

1. “The sub-classification of the backward classes is arbitrary and violative of Article 14 of the Constitution of India.”

2. Such classification “would result in depriving the benefit of reservation to persons belonging to backward classes who have income between Rs. 3 lakh to Rs. 6 lakh.”

3. According to the Indra Sawhney Judgment, economic criterion cannot be the sole criterion for identifying ‘creamy layer’.

4. The said notifications are violative of Section 5 of the 2016 Act, according to which social, economic and other factors are to be taken into account for specifying the criteria for exclusion and identification of persons belonging to the backward classes as ‘creamy layer.’

5. Clubbing of salary income and agricultural income and computing gross income by including income from all sources according to Notification dated 28.08.2018 would result in exclusion of a large number of eligible sections of backward classes from seeking reservation in appointment to public services and admission to educational institutions.

Now, let us go through the pertinent observations by the Court.

Firstly, the Court quoted the relevant excerpts from the Indra Sawhney Judgment wherein it was observed that if some members of a backward class are advanced socially and economically, then it becomes imperative to exclude such persons from the ambit of reservation. The basis of exclusion of such advanced persons should not only be economic but also social and imposition of any income limit must have correlation and significance with their social advancement. According to the Court, Article 16 (4) aims at group backwardness and not individual backwardness. Exclusion of individuals who are socially advanced members of a class ought to be excluded to further the object of Article 14 and Article 16 (4).

Secondly, the Court opined that the Notification dated 17.08.2016 is in flagrant violation of the Indra Sawhney Judgment as “in spite of Section 5(2) of the 2016 Act making it mandatory for identification and exclusion of ‘creamy layer’ to be on the basis of social, economic and other relevant factors, the State of Haryana has sought to determine ‘creamy layer’ from backward classes solely on the basis of economic criterion and has committed a grave error in doing so.”

Therefore, upon cumulative consideration of the matter, the Hon’ble Supreme Court struck down the Notifications dated 17.08.2016 and 28.08.2018 and directed the State Government to issue a fresh notification that is in compliance with Section 5 of Haryana Reservation Act and the Indra Sawhney Judgment.

That was all about the case. So, what are my concluding remarks?

Reservation is a tricky and a touchy issue. Emotions run high when people discuss the topic of reservation. But despite the diverse public opinion, our laws and judicial pronouncements do provide for existence of ‘creamy layer’ in reservation, the rational for which has already been explained in this judgment. In my humble opinion, reservation represents the complex socio-political and economic reality of our country. Our society is quite compartmentalized and divided in many senses. The Law too acknowledges this and in order to bring everyone at par, affirmative action in form of reservation has been introduced and quite rightly so. Today, due to reservation, people belonging to backward classes are able to connect to mainstream life and enjoy good income and social status. The concept of ‘creamy layer’ only furthers the cause of reservation as it helps in identifying the neediest candidates who deserve the benefit of reservation.