Economic criterion cannot be the sole criterion for identifying creamy layer: Supreme Court quashes Haryana Govt. notification

By - Hiranmayi Gowravajhula*

The Supreme Court on August 24, 2021, nullified a notification issued by the State of Haryana on August 17, 2016, regarding identification of creamy layer and sub-classification of backward classes, with preference in reservation given to a particular section of a backward class group. 

The State has been given three months to issue a fresh notification, as ordered by the Court. However, the bench has allowed that admittance and placements in state services that have already been made on the basis of the aforementioned notification shall not be disrupted. 

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The reason for this decision is that despite Section 5(2) of the Haryana Backward Classes (Reservation in Services and Admission in Educational Institutions) Act, 2016, (the 2016 Act) which made it mandatory for the identification and exclusion of the “creamy layer” to be based on social, economic, and other relevant factors, the State of Haryana has sought to determine the “creamy layer” from backward classes solely on the basis of  economic status.

“...the State of Haryana has made a severe mistake in attempting to identify the 'creamy layer' from the backward classes simply based on economic criteria. The notification dated 17.08.2016 must be set aside on this basis alone", the bench observed.

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The issue was that the State Government had declared those with an annual income of up to Rs.6,00,000/- (Rupees Six Lakhs only) to be covered under non-creamy layer in the OBC category, and those with an annual income of more than that to be covered under creamy layer. 

However, in the non-creamy layer, priority has been given to individuals of the category with yearly income up to Rs.3,00,000/- (Rupees Three Lakhs) in matters of admission to medical colleges and other institutions, according to a circular dated 17.08.2016.

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Pursuant to the judgment of Supreme Court in Indra Sawhney v. Union of India 1992 Supp (3) SCC 217, (Indra Sawhney-I), the Government of India had issued a memorandum dated 08.09.1993, and the schedule to the said memorandum laid down the criteria for identifying creamy layer which was in conformity with the law laid down in the said judgment.

“The notification dated 17.08.2016 is in flagrant violation of the directions issued by this Court in Indra Sawhney-I and is at variance with the memorandum dated 08.09.1993 issued by the Union of India. The criteria mentioned for identifying such of those persons who are socially advanced have not been taken into account by the Government of Haryana while issuing the notification dated 17.08.2016.”, the bench observed. 

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The bench comprising Justices L. Nageswara Rao and Aniruddha Bose quashed the notification dated August 17, 2016, giving liberty to the State Government to issue a fresh notification within a period of 3 months from August 24, 2021, after taking into account the principles laid down by the Supreme Court in Indra Sawhney-I and the criteria mentioned in Section 5(2) of the 2016 Act for determining creamy layer.

CLICK HERE TO READ JUDGMENT.

*Hiranmayi Gowravajhula is a 1st year student pursuing B.B.A.LL.B from Symbiosis Law School, Hyderabad.