Union of India and Others v. Rohith Nathan and Another, Etc.

Citation: [2026] 4 S.C.R. 1; 2026 INSC 230

Court: Supreme Court of India

Bench: PAMIDIGHANTAM SRI NARASIMHA , R MAHADEVAN

Judgment date: 2026-03-11

Case summary

2026 INSC 230. Supreme Court of India judgment dated 2026-03-11. Union of India and Others v. Rohith Nathan and Another, Etc. Read the judgment and case...

Judgment text

[2026] 4 S. C. R. 1 : 2026 INSC 230 Union of India and Others v. Rohith Nathan and Another, Etc. (Civil Appeal No(s). 2827-2829 of 2018) 11 March 2026 [Pamidighantam Sri Narasimha and R. Mahadevan,* JJ. ] Issue for Consideration Whether the clarificatory letter dated 14. 10. 2004 can have any overriding or superseding effect over the Office Memorandum dated 08. 09. 1993, which expressly lays down the criteria for exclusion from the benefit of reservation for Other Backward Classes (OBCs) by identifying the creamy layer namely, the socially advanced persons of sections among the Socially and Educationally Backward Classes; whether there can be hostile discrimination between employees of the Government and those working in Public or Private Sector Undertakings, when both occupy posts of the same grade or class.

Headnotes † Reservation – OBC reservation – Creamy layer status – Determination of, solely on the basis of income brackets without reference to the categories of posts and status parameters enunciated in 1993 Office Memorandum, unsustainable – 1993 OM laid down the criteria for exclusion from the benefit of reservation for OBCs by identifying the creamy layer namely, the socially advanced persons of sections among the Socially and Educationally Backward Classes, wherein income from salary and agricultural income stood excluded from the Income/Wealth Test for determination of creamy layer status – However, 2004 clarificatory letter, directed inclusion of salary income of PSU and private sector employees under Category II(C) – Respondents-candidates (parents of all respondent candidates were PSU employees, bank employees or otherwise fell under Category II(C) of the Schedule to the Office Memorandum dated 08. 09. 1993) qualified the Civil * Author 2 [2026] 4 S. C. R.

Supreme Court Reports Services Examination however, as the equivalence of posts in PSU, banks and other organisations vis-à-vis Government posts had not been formally determined, the DoPT applied the Income Wealth Test under Category VI of the 1993 OM r/w 2004 Letter and upon assessing the parental income of the respective candidates for the preceding three financial years, and classified them as falling within the Creamy Layer of the OBCs, rendering them ineligible for OBC (Non-Creamy Layer) reservation benefits – Thus, their cases were not considered for service allocation under the reserved category – CAT passed orders in favour of the the respondents – Challenged by appellants, writ petitions dismissed by the High Courts of Madras, Delhi and Kerala: Held: No infirmity in the impugned judgments – Determination of creamy layer status solely on the basis of income brackets, without reference to the categories of posts and status parameters enunciated in the 1993 OM is unsustainable in law – Overemphasis on the 2004 clarificatory letter to the extent of making income alone determinative without regard to parental status or category of service would defeat the structural framework of exclusion envisaged under the 1993 OM – Under the 1993 OM, salary income and agricultural income are consciously kept outside the common pool while determining exclusion under the Income/Wealth Test – A mere government letter cannot have the effect of overriding, overruling or superseding any proceeding in the nature of an executive instruction or an Office Memorandum issued in exercise of executive power u/Art.

162 – Therefore, the clarificatory letter must be construed strictly as one explaining or supplementing the foundational guidelines laid down in the 1993 OM, which was issued after due deliberation and following the requisite procedure and not as altering its substantive framework – Salary income cannot be mechanically aggregated in a manner that defeats the constitutional objective articulated in Indra Sawhney – A comprehensive reading of the 1993 OM along with the 2004 clarificatory letter shows that income from salaries alone cannot be the sole criterion to decide whether a candidate falls within the creamy layer – The status as well as the category of post to which a candidate’s parent or parents belong is essential – 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 [2026] 4 S. C. R. 3 Union of India and Others v. Rohith Nathan and Another, Etc.

the basis of the income – Any attempt to read paragraph 9 of the 2004 Letter in isolation, so as to dilute or override the substantive scheme of the 1993 OM would be legally untenable – Appellants to consider the claims of the respondent candidates and intervenors in accordance with the principles laid down in the present judgment, and to implement the same within six months from the date of this judgment. [Paras 21. 15, 21.

17, 26, 30, 31, 44] Reservation – OBC reservation – Creamy layer status – Whether there can be hostile discrimination between employees of the Government and those working in Public or Private Sector Undertakings, when both occupy posts of the same grade or class: Held: Treating similarly placed employees of private entities and PSUs differently from Government employees and their wards, while deciding their entitlement to reservation, would amount to hostile discrimination, as rightly held by the High Court – Treating the children of those employed in PSUs or private employment, etc.

, as being excluded from the benefit of reservation only on the basis of their income derived from salaries, and without reference to their posts (whether Group A or B, or Group C or D) would certainly lead to hostile discrimination between parties who are similarly placed and would amount to equals being treated unequally, thereby attracting the rigour of the equality doctrine under Articles 14, 15 and 16, of which reservation is a facet – Art. 16(4) is a structural reflection and a conceptualized representation of the principle of substantive equality embodied and envisaged u/Art. 16(1) – Therefore, any interpretation of the 1993 OM or the 2004 Letter that results in unequal treatment of similarly placed OBC candidates would not only be legally erroneous but constitutionally impermissible.

[Paras 34, 37, 40] Parent policy – Clarificatory instruction: Held: A clarificatory instruction cannot introduce a substantive condition that does not exist in the parent policy – If it travels beyond explanation and alters rights or liabilities, it ceases to be clarificatory and assumes the character of an amendment. [Para 24] Reservation – Constitutional and statutory background of reservation in India – Reservation framework for Other 4 [2026] 4 S. C. R. Supreme Court Reports Backward Classes (OBCs)/Socially and Educationally Backward Classes – Examined. [Paras 21. 2-21.

17] Reservation – OBC reservation – Creamy layer status – “equivalence of posts”, a matter of policy: Held: The question of “equivalence of posts” as contemplated both in the 1993 OM and in the subsequent 2004 Letter, is fundamentally a matter of policy – Such equivalence must be determined by the Government on the basis of a detailed analysis of data by experts in the field – Until such equivalence is formally evaluated and notified by the Government, the entitlement of candidates whose parent(s) work in organisations other than in Class I or II of the Central or State Civil Services, shall be decided by the Income/ Wealth Test. [Para 23] Case Law Cited Indra Sawhney v. Union of India and Others [1992] Supp. 2 SCR 454 : (1992) Supp. 3 SCC 217 – followed. Ashok Kumar Thakur v. Union of India [2008] 4 SCR 1 : (2008) 6 SCC 1; M. R. Balaji and Others v. State of Mysore [1963] Supp. 1 SCR 439 : AIR 1963 SC 649; Indra Sawhney v. Union of India and Others [1999] Supp.

5 SCR 229 : (2000) 1 SCC 168; Neil Aurelio Nunes v. Union of India [2022] 11 SCR 585 : (2022) 4 SCC 64; Madhuri Patil v. Commissioner, Tribal Development [1994] Supp. 3 SCR 50 : (1994) 6 SCC 241; R. P. Bhardwaj v. Union of India (2005) 10 SCC 244; Sushma Gosain v. Union of India (1989) 4 SCC 468; Dr. PPC Rawani v. Union of India (1992) 1 SCC 331; U nion of India v. Vijay Kumari (1994) Supp. 1 SCC 94; Dr. D. K. Reddy v. Union of India (1996) 10 SCC 177; Delhi Administration v. Nand Lal Pant [1997] Supp. 1 SCR 510 : (1997) 11 SCC 488; Union of India v. Parul Debnath [2009] 9 SCR 969 : (2009) 14 SCC 173; State of Andhra Pradesh and Another v. P. Sagar [1968] 3 SCR 595; K. C. Vasanth Kumar and Another v. State of Karnataka [1985] Supp. 1 SCR 352 : 1985 SCC OnLine SC 339 ; K. S. Jayasree v. State of Kerala [1977] 1 SCR 194 : (1976) 3 SCC 730; R. Chitralekha v. State of Mysore [1964] 6 SCR 368 : AIR 1964 SC 1823; State of Kerala and Others v. N. M.

Thomas and Others [1976] 1 SCR 906 : MANU/ SC/0479/1975 – referred to. K. Sampath v. State of Tamil Nadu MANU/TN/9958/2006 – referred to. [2026] 4 S. C. R. 5 Union of India and Others v. Rohith Nathan and Another, Etc. Books and Periodicals Cited 21st Report of the Parliamentary Committee on Welfare of Other Backward Classes (2018–19) – referred to. List of Acts Constitution of India. List of Keywords Reservation; Other Backward Classes (OBCs); OBC reservation; Non-Creamy Layer; Creamy layer; Exclusion from the benefit of reservation for OBCs; Office Memorandum dated 08. 09.

1993; 1993 Office Memorandum; OBC (Non-Creamy Layer) reservation benefits; Hostile discrimination between employees of Government and those in Public or Private Sector Undertakings; Income / Wealth Test for determination of creamy layer status; Determination of creamy layer status on the basis of income brackets; Categories of posts and status parameters; Income from salary and agricultural income excluded; Similarly placed employees of private entities and PSUs treated differently from Government employees and their wards; Denial of OBC-Non-Creamy Layer status to wards of PSU employees; Socially and educationally backward classes; Unequal treatment of similarly placed OBC candidates; Discrimination between employees of the Government and of Public or Private Sector Undertakings; Discrimination between the wards of Government servants and of PSU/private sector employees; Reservation policy; Social justice; Principle of advancement of weaker sections; Socio-Economic Refinement and Means Test; Mandal Commission; Caste; 2004 Clarificatory letter; Office Memorandum; Principle of substantive equality.

Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 2827-2829 of 2018 From the Judgment and Order dated 31. 08. 2017 of the High Court of Judicature at Madras in WP Nos. 6387, 6388, and 6389 of 2017 With Civil Appeal No(s). 3130-3141 of 2024 and 3297 of 2026 6 [2026] 4 S. C. R. Supreme Court Reports Appearances for Parties Advs. for the Appellant(s): Ms. Aishwarya Bhati, A. S. G. , Ms. S. Janani, Sr. Adv. , Aman Mehta, Mrs. Alka Agrawal, Apoorva Kurup, Navanajay Mahapatra, Madhav Sinhal, Mayank Pandey, Ms. Sansriti Pathak, Shreekant Neelappa Terdal, Ms. Sonali Jain, Ms. Manisha Chava, Ms. Shagun Thakur, N. Visakamurthy, Arvind Kumar Sharma, Kamal Kumar Pandey, Deepak Goel. Advs. for the Respondent(s): Basavaprabhu Patil, Sanjay Hegde, T. Raja, Sr. Advs. , Vikram Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava, Trishan Dollny, Ankit Tiwari, Arijit Sukla, Ashish, Tanay Hegde, Roy Abraham, Ms.

Reena Roy, Adithya Koshy Roy, Yaduinder Lal, Sarswata Mohapatra, Himinder Lal,, Vikram Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava, M. t. Arunan, Trishan Dollny, M. A. Aruneshe, Arijit Sukla, Prateek K Chadha, Sreekar Aechuri, Aniket Chauhaan, Harsh Parashar, Shreekant Neelappa Terdal, Vardhman Kaushik, Arindam Sarin, Mayank Sharma, Dhruv Joshi, Vinay Kaushik, Mrs. P S Vijayadharni, Nishant Gautam, Varinder Kumar Sharma, Ms. Manju Jetley, Parmanand Gaur, Abhikalp Pratap Singh, Dhanesh Relan, Ashish Batra, Siddhartha Jha, Vikram Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava, Trishan Dollny, Ankit Tiwari, Arijit Sukla, Ashish, Tanay Hegde, Vikram Hegde, Prateek K Chadha, Sreekar Aechuri, Aniket Chauhaan, Vikram Hegde, Ms. Hima Lawrence, Ms. Chinmayi Shrivastava, M. t. Arunan, Trishan Dollny, M. A. Aruneshe, Arijit Sukla, Anuroop Chakravarti, M. S. Vishnu Sankar, Ms. Dimple Nagpal, M/s Lawfic, Varun Thakur, Ms. Shraddha Saran, Ramkaran, Varinder Kumar Sharma.

Judgment / Order of the Supreme Court Judgment R. Mahadevan, J. Leave granted in SLP (C) No. 17651 of 2022. 2. This judgment deals with three matters arising out of separate orders passed by different High Courts. Since the questions of law involved in all the cases are substantially identical and common, they were heard together and are being decided by this common judgment. [2026] 4 S. C. R. 7 Union of India and Others v. Rohith Nathan and Another, Etc. FACTUAL BACKGROUND 3. The facts giving rise to the respective appeals are set out below. C. A. No(s). 2827 – 2829 of 2018 [Union of India & Ors. v. Rohith Nathan and Anr. Etc. ] 4. The present Civil Appeals have been filed against the common judgment dated 31. 08. 2017 passed by the High Court of Judicature at Madras in W. P. Nos. 6387, 6388 and 6389 of 2017, whereby the High Court dismissed the writ petitions filed by the appellants and affirmed the common order dated 12. 01.

2017 passed by the Central Administrative Tribunal 1 , Chennai Bench in O. A. Nos. 1133, 1132 and 1375 of 2014. 4. 1. Respondent No. 1 in CA. Nos. 2827 and 2828 of 2018, Rohith Nathan, secured All India Rank 174 in the Civil Services Examination, 2012 under the OBC category. His father was employed in a private organisation namely M/s. HCL Technologies Ltd. , and was drawing a salary exceeding the prescribed creamy layer limit under the extant guidelines. On that basis, he was treated as falling within the creamy layer. Though he was recommended by the UPSC as a General Merit candidate and allocated to the Indian Police Service against an unreserved vacancy, Respondent No. 1 sought benefit of OBC reservation and allocation to the Indian Foreign Service against the vacancy reserved for OBC candidates by treating him as OBC (Non-Creamy Layer) candidate. He accordingly filed O. A. No.

1132 of 2014 before the CAT, Chennai seeking a direction for allotment to the Indian Foreign Service as per his OBC rank in the Civil Services Examination, 2012. He also filed O. A. No. 1133 of 2014 seeking to quash the portion relating to Category II(C) in the Schedule to the Office Memorandum dated 08. 09. 1993 (O. M. No. 36012/22/93-Estt (SCT)). 4. 2. Respondent No. 1 in C. A. No. 2829 of 2018, G. Babu, appeared in the Civil Services Examination, 2013 under the OBC category and secured Rank 629. His father was employed in a Public Sector Undertaking namely Neyveli Lignite Corporation, as 1 For short, “CAT” 8 [2026] 4 S. C. R. Supreme Court Reports a Senior Executive Engineer. As his father’s salary income exceeded the prescribed limit, he was also treated as falling within the creamy layer under the applicable guidelines. To claim the benefit of OBC reservation for allocation to a service against a vacancy reserved for OBC candidates, Respondent No. 1 filed O. A. No.

1375 of 2014 before the CAT, Chennai Bench seeking reallocation to the Indian Police Service or any other service as per his OBC rank. 4. 3. The CAT, having heard the parties, held that under the Office Memorandum dated 08. 09. 1993, income from salary and agricultural income stood excluded from the Income / Wealth Test for determination of creamy layer status. It further held that paragraph 9 of the clarificatory letter dated 14. 10. 2004, insofar as it directed inclusion of salary income of PSU and private sector employees under Category II(C), resulted in hostile discrimination between the wards of Government servants and those of PSU/private sector employees. By its common order dated 12. 01. 2017, the CAT allowed all three Original Applications and directed as follows: “We direct the DoPT to withdraw the clarification in para 9 of the OM dated 14. 10.

2004 to the extent it is made applicable to II-C and reformulate it appropriately in the light of the observations made herein within a period of three months. The respondents are also directed to reallocate the service of the two applicants on the basis of their OBC status within a period of three months from the date of receipt of a copy of this order. ” 4. 4. Aggrieved, the Union of India and others filed W. P. (C) Nos. 6387, 6388 and 6389 of 2017 before the High Court of Madras. By common judgment dated 31. 08. 2017, the High Court dismissed all three writ petitions primarily on two grounds: (i) The failure of the Union of India to formulate an equivalence / comparability test resulted in placing the sons and daughters of PSU employees at a disadvantage compared to similarly placed Government servants; and (ii) When salary income of parents serving in State/Central Government in Group C and D posts, or those entering [2026] 4 S. C. R. 9 Union of India and Others v.

Rohith Nathan and Another, Etc. Group B and A posts, after attaining the age of 40 years, was not considered for creamy layer determination, inclusion of salary income of PSU employees under Category II-C introduced an element of hostile discrimination. 4. 5. Challenging the aforesaid common judgment, the appellants have preferred the present Civil Appeals. C. A. No(s). 3130 – 3141 of 2024 [Union of India v. Ketan and others etc. ] 5. The present batch of Civil Appeals has been preferred against the common judgment dated 22. 03. 2018 passed by the High Court of Delhi at New Delhi in W. P. Nos. 3073 – 3084 of 2017. By the said judgment, the High Court disposed of the writ petitions, set aside Letter No. 36033/5/2004- Estt. (Res. ) dated 14. 10. 2004, and directed the appellants to verify the creamy layer status of the respondent candidates (except Sagar Chourasia, who had already been selected) strictly in terms of Office Memorandum dated 08. 09. 1993. 5. 1.

According to the appellants, the respondents had appeared in the Civil Services Examination, 2015 claiming reservation under the OBC (non-creamy layer) category. The parents of all respondent candidates were PSU employees, bank employees or otherwise fell under Category II(C) of the Schedule to the Office Memorandum dated 08. 09. 1993 2 . The candidates were recommended by the UPSC for service allocation. While forwarding their dossiers, UPSC requested verification of their creamy layer status. 5. 2. Upon verification, it was found that equivalence of their parents’ posts qua Government posts had not been established. Accordingly, applying the 1993 OM read with the clarificatory letter dated 14. 10. 2004, the department applied the “income / wealth test” under Category VI and computed the parents’ salary income for the preceding three years. Since the income exceeded the prescribed ceiling, the respondents were treated as falling within the creamy layer.

Consequently, by publication dated 22. 06. 2016, the respondents were denied allocation under the OBC category. 2 For short, “1993 OM” 10 [2026] 4 S. C. R. Supreme Court Reports 5. 3. Challenging the same, the respondent candidates filed W. P. Nos. 3073 – 3084 of 2017 before the Delhi High Court inter alia seeking quashment of the clarificatory letter dated 14. 10. 2004 and issuance of a direction for allocation of services treating them as OBC (Non-Creamy Layer) candidates. 5. 4. During the pendency of the matter, the Union of India issued Office Memorandum No. DPE-GM-/0020/2014-GM-FTS-1740 dated 25. 10. 2017, clarifying gradation and creamy layer criteria in Central Public Sectors Enterprises, indicating that Board level and Managerial-level posts (below Board level) subject to the proviso that executives whose annual income as per 1993 OM was less than Rs. 8 lakhs, would not fall under the creamy layer. 5. 5. By the impugned judgment dated 22. 03.

2018, the Delhi High Court disposed of the writ petitions, by holding that the 1993 OM contemplated consideration only of income from “other sources” for applying the Income / Wealth Test where equivalence had not been established. It further held that the clarificatory letter dated 14. 10. 2004 impermissibly introduced salary income as a determinative factor and lacked rational basis. Consequently, the High Court set aside the letter dated 14. 10. 2004 and directed re-verification strictly in accordance with the 1993 OM. 5. 6. Pursuant thereto, the appellants issued a speaking order dated 22. 05. 2018 reconsidering the matter under the 1993 OM, but again rejected the claim of Non-Creamy Layer status by taking into account parental salary. Certain respondents thereafter filed Contempt Petition (C) Nos. 684/2018, 972/2018 and 973/2018 before the Delhi High Court, in which notices were issued. 5. 7. Apprehending coercive proceedings, the appellants have preferred the present appeals.

Civil Appeal @ SLP (C) No. 17651 of 2022 [Union of India & Anr. v. DR. Ibson Shah. I. and Anr. ] 6. This Civil Appeal challenges the final judgment dated 25. 02. 2022 passed by the High Court of Kerala at Ernakulam in OP (CAT) No. 94 of 2021, whereby the High Court declined to interfere with the order dated 13. 10. 2020 passed by the Central Administrative Tribunal, Ernakulam Bench in O. A. No. 718 of 2018. [2026] 4 S. C. R. 11 Union of India and Others v. Rohith Nathan and Another, Etc. 6. 1. The UPSC had issued notification for the Civil Services Examination, 2016 and the Department of Personnel and Training 3 notified the detailed rules vide Gazette Notification dated 27. 04. 2016. Rule 24 required candidates to possess requisite certificates in the prescribed format for OBC reservation. Rule 25 stipulated that OBC status, including creamy layer determination would be reckoned as on the closing date of applications. 6. 2. Respondent No.

1 appeared in the Civil Services Examination, 2016 and the Civil Services Examination, 2017 under the OBC category and secured Rank 540 (2016) and Rank 620 (2017). His father had been directly recruited as a Lower Division Clerk (Group C) in the Legal Metrology Department, Government of Kerala, and died in 2012. His mother was directly recruited as Junior Assistant (Group C clerical cadre) in Kerala State Financial Enterprises (KSFE), a State PSU. 6. 3. Upon verification, DoPT found that the mother, being employed in a PSU under Category II(C), earned salary exceeding Rs. 6 lakhs per annum for three consecutive years (as revised by the Office Memorandum dated 27. 05. 2013). Accordingly, Respondent No. 1 was treated as falling within the creamy layer. In CSE-2017 he was denied allocation; in CSE-2016 he was treated as a General Merit candidate and allocated Indian Defence Accounts Service (IDAS) vide letter dated 21. 08. 2017. 6. 4. Aggrieved, Respondent No. 1 filed O. A. No.

718/2018 before the CAT, Ernakulam, which ruled in his favour on 13. 10. 2020. The High Court of Kerala affirmed the same and dismissed OP(CAT) No. 94/2021 filed by the appellants, on 25. 02. 2022, inter alia holding that: ● The respondent possessed a valid OBC-NCL certificate before the cut-off date; ● Both parents were Group C entrants (clerical cadre) below Group A and B; ● Under Category II of the 1993 OM, mere parental service in a PSU could not lead to creamy layer exclusion; 3 For short, “DoPT” 12 [2026] 4 S. C. R. Supreme Court Reports ● The comparability exercise under Category II(C) was transitional; ● The Government’s failure to determine equivalence could not prejudice candidates; and ● Denial of OBC-NCL status to wards of PSU employees, while granting it to similarly placed Government servants, would constitute hostile discrimination. Therefore, the appellant, Union of India, is before this Court with the present appeal. SUBMISSIONS OF THE PARTIES 7.

The learned Additional Solicitor General of India appearing for the appellant in CA Nos. 2827 – 2829 of 2018 / Union of India submitted that the impugned judgment dated 31. 08. 2017 passed by the High Court of Madras in W. P. Nos. 6387, 6388 and 6389 of 2017 is ex facie unsustainable in law and deserves to be set aside. It was urged that the exclusion of persons falling within the Creamy Layer is aimed at ensuring that reservation benefits are not extended to those who are no longer backward. Any legislative or executive action to remove such persons, individually or collectively, cannot be constitutionally invalid but is in consonance with the principle laid down by this Court in Indra Sawhney v. Union of India and others 4 . This Court in Indra Sawhney v.

Union of India and others 5 , explained the rationale underlying the rule of exclusion of the Creamy Layer, holding that nonexclusion thereof would amount to discrimination and violation of Articles 14 and 16, inasmuch as unequals cannot be treated as equals. It was further submitted that the Union of India was fully competent and empowered to issue the clarificatory letter dated 14. 10. 2004 in order to ensure that the intended benefits of reservation reach the truly deserving candidates among the backward classes. To sustain the spirit of the constitutional provisions of equality, it is obligatory on the State to identify the most deserving candidates, as the State is obliged to remove inequalities and backwardness from society. If nondeserving candidates are given the benefit of reservation, it 4 (1992) Supp. 3 SCC 217 5 (2000) 1 SCC 168 [2026] 4 S. C. R. 13 Union of India and Others v. Rohith Nathan and Another, Etc. would breach the spirit of the constitutional provision.

Reliance was also placed on the decision in Ashok Kumar Thakur v. Union of India 6 , wherein this Court held that the Government should not proceed on the basis that once a class is considered backward, it should continue to be backward for all times, as such an approach would defeat the very purpose of reservation. 7. 1. The learned counsel further submitted that the respondents have reached a comparatively higher level of social advancement and economic status, and therefore, as a matter of law, the declaration of such persons as being nonentitled to be treated as backward is sustainable. The Department has rightly considered the respondents as falling under the Creamy Layer, and vacancies reserved for OBC candidates are earmarked and allocated to other nonCreamy Layer candidates who are eligible and entitled. 7. 2.

It was contended that the High Court erred in dismissing the writ petitions solely on the ground of alleged discrimination between wards of PSU employees and wards of Government employees, without examining the merits of the individual cases decided by the Tribunal. The income from the salary of the parents of the respondents was not considered by the High Court while deciding the case. The delay in determination of equivalence between PSU employees and Government employees should not result in providing an undue advantage to the respondent candidates who belong to a comparatively higher strata of the OBC category by virtue of their parents’ salary income as this would deny the benefit of reservation to deserving candidates. 7. 3. It was further contended that the 1993 OM has been upheld by this Court in Ashok Kumar Thakur (supra) , and the High Court erred in holding that the 1993 OM and the clarificatory letter dated 14. 10. 2004 bring about hostile discrimination.

Clause IIC of the Schedule to the 1993 OM clearly states that employees in PSUs, banks, insurance organisations, universities etc. are to be treated on the same footing as Government employees, and pending evaluation of equivalence, the criteria specified in Category VI would apply. All candidates producing certificates for 6 (2008) 6 SCC 1 14 [2026] 4 S. C. R. Supreme Court Reports claiming the benefit of reservation under the OBC NonCreamy Layer category must undergo all six tests given in the Schedule to the 1993 OM to determine their Creamy Layer status. The service status of the parents of persons employed in PSUs or private enterprises, in which equivalence has not been established visàvis Government services is determined by the quantum of salary that they receive. 7. 4. It was submitted that the clarificatory letter dated 14. 10.

2004 was issued only to clarify the procedure to be adopted for applying the income / wealth test in the case of sons and daughters of parents employed in PSUs, etc. , where equivalence has not been established. The High Court erred in holding that para 9 of the letter was not in consonance with the 1993 OM. The timely rise in the income of Government servants through successive Pay Commissions has not erased the importance of the social status criteria to be adopted in their case. For determining Creamy Layer status, the sons and daughters of Government servants undergo both social and economic tests, whereas those of PSU and private employees undergo only the economic test. 7. 5. The learned counsel further contended that an appointment given to a noneligible candidate deprives an eligible NonCreamy Layer OBC candidate of appointment. The judgment of the High Court is contrary to the established policy of the Government.

This Court has held that it is not within the domain of the courts to embark upon an inquiry as to whether a particular public policy is wise or acceptable, or whether a better policy could be evolved. Such a policy decision would normally not be interfered with unless it is capricious, arbitrary, or offends Article 14. 7. 6. It was thus submitted that the 1993 OM and the letter dated 14. 10. 2004 form part of a consistent and constitutionally sound framework for the identification of the creamy layer, and that the inclusion of salary in gross annual income aligns with the principle of substantive equality and prevents distortion of the reservation system. Further, it was contended that the exclusion of salary would subvert the constitutional goal of social justice, lead to reverse discrimination, and create administrative chaos, thereby undermining the rights of genuinely backward OBC candidates. [2026] 4 S. C. R. 15 Union of India and Others v. Rohith Nathan and Another, Etc. 7. 7.

On these grounds, the learned counsel prays that the impugned judgment of the High Court dated 31. 08. 2017 deserves to be quashed and that the respondents be declared as falling within the Creamy Layer and not entitled to reservation benefits under the OBC category. 8. The learned senior counsel appearing for Respondent No. 1 (Rohith Nathan) submitted that the 1993 OM carries the authority of law, having been issued pursuant to the directions in Indra Sawhney and others v. Union of India and others 7 after due deliberation by an Expert Committee, parliamentary scrutiny, and interministerial consultation. He pointed out that the Expert Committee had evolved criteria for the exclusion of socially advanced persons from the benefit of reservation for OBCs, with emphasis on social status and high income from business, profession, or other sources, while expressly excluding income derived from salary and agricultural land.

The report of the Committee was laid before both Houses of Parliament and formally accepted by the Government, and the 1993 OM was issued after vetting by the Law Ministry and consultation with the Ministry of Social Justice & Empowerment. 8. 1. In contrast, the learned senior counsel submitted that the clarificatory letter dated 14. 10. 2004 8 was issued without consultation, deliberation, or any traceable administrative record, and by the DoPT, which was not the competent authority under the Allocation of Business Rules, 1961. He referred to RTI responses confirming that no consultation with the Ministry of Social Justice & Empowerment preceded the issuance of the 2004 letter, and that the file notings were not traceable. He therefore contended that the 2004 Letter is non est in law and cannot override or dilute the binding effect of the 1993 OM. 8. 2.

The learned senior counsel further submitted that the implementation of the 1993 OM itself demonstrates that salary and agricultural income are excluded from the income/wealth test. He referred to the DoPT’s Office Memorandum dated 15. 11. 1993 annexing a model application form which expressly excluded salary and agricultural income, and pointed out that 7 (1992) Supp. 3 SCC 217 8 For short, “2004 Letter” 16 [2026] 4 S. C. R. Supreme Court Reports various State Governments such as Andhra Pradesh, Telangana, and Tamil Nadu, as well as statutory bodies including the National Commission for Backward Classes and the Ministry of Social Justice & Empowerment, have consistently followed this principle. 8. 3. The learned senior counsel contended that it is incorrect for the Government to submit that OBCs belonging to Category IIC of the 1993 OM are to suffer exclusion until the equivalence of posts is conducted.

The Expert Committee had expressly recommended that, pending evaluation of equivalence of posts in PSUs and other bodies, persons falling under Category IIC would still be entitled to reservation, subject only to exclusion under Category VI by application of the income/wealth test. 8. 4. The learned senior counsel also submitted that the Government’s interpretation of Explanation (i) to the income/wealth test is erroneous. The Government has contended that either income from salary or income from agricultural land is to be considered, but not both excluded, in determining whether the monetary limit has been exceeded. He argued that this interpretation is unsupported by reasoning, contrary to the consistent implementation of the 1993 OM, and inconsistent with the Union’s own stand in Neil Aurelio Nunes v. Union of India 9 . In that case, the Union distinguished OBC and EWS criteria by clarifying that for OBCs, salary income is excluded, whereas for EWS, salary income is included.

Acceptance of the Government’s present stand would obliterate this distinction, leading to arbitrariness and inconsistency. 8. 5. Thus, the learned senior counsel urged that the 1993 OM, having statutory force and having been consistently implemented, must prevail, and that the 2004 Letter, lacking authority, cannot dilute or override the settled criteria. 9. The learned counsel appearing for Respondent No. 1 (G. Babu) submitted that the DoPT cannot question the validity of an OBC certificate once it has been duly issued by the competent authority. He contended that DoPT is not the authority empowered to issue 9 (2022) 4 SCC 64 [2026] 4 S. C. R. 17 Union of India and Others v. Rohith Nathan and Another, Etc. or scrutinize OBC certificates. Under the DoPT Office Memorandum dated 15. 11.

1993, the competent authorities for issuance and verification of OBC certificates are District Magistrates, Collectors, Deputy Commissioners, SubDivisional Magistrates, Tehsildars and other designated revenue officers. These authorities are specially entrusted with determining whether an applicant belongs to the OBC category and whether he or she falls within the Creamy Layer, strictly in accordance with the criteria prescribed in the Schedule to the 1993 OM. 9. 1. The learned counsel emphasised that the model application form appended to the 1993 OM mandates disclosure of detailed particulars regarding parental qualifications, employment, income, assets and wealth, which are verified by the issuing authority. Further, the revised OBC certificate format introduced by the DoPT’s Office Memorandum dated 30. 05. 2014 expressly requires the certifying authority to declare that the candidate does not belong to the Creamy Layer.

The certificate is thus issued after comprehensive scrutiny of contemporary data, including parental income for the preceding three financial years. He contended that such certificates cannot be lightly disregarded or questioned in a cavalier manner. Reliance was placed on Madhuri Patil v. Commissioner, Tribal Development 10 , wherein this Court held that a social status certificate remains valid unless it is found to be false or fraudulently obtained pursuant to investigation by a duly constituted Scrutiny Committee. 9. 2. The learned counsel further submitted that the 1993 OM issued pursuant to the recommendations of the Mandal Commission, the directions of this Court in Indra Sawhney and others v. Union of India and others 11 , and the report of the Expert Committee of the Ministry of Social Justice, comprehensively delineates the categories falling within the Creamy Layer exclusion.

He argued that the Union of India seeks to rely upon the 2004 Letter; however, such a letter cannot override or qualify the binding provisions of the 1993 OM. It was submitted that while the 1993 OM excluded salary and agricultural income from the income / wealth test, the 2004 Letter sought to include salary income in 10 (1994) 6 SCC 241 11 (1992) Supp. 3 SCC 217 18 [2026] 4 S. C. R. Supreme Court Reports the case of PSU employees, thereby introducing an artificial and hostile discrimination between children of government servants and those of PSU employees. 9. 3. It was further submitted that it is settled law that a mere executive letter cannot override or amend a subsisting Office Memorandum. In support, reliance was placed upon R. P. Bhardwaj v. Union of India 12 , wherein this Court held that an operative Office Memorandum cannot be modified or curtailed through a mere circulation of a letter. Reference was also made to K. Sampath v.

State of Tamil Nadu 13 reiterating the same principle. Accordingly, the 2004 Letter was contended to be devoid of statutory authority and incapable of diluting the binding effect of the 1993 OM. 10. The learned counsel appearing for the Intervenors submitted that the Intervenors adopt the oral and written submissions advanced on behalf of the respondents. He urged that no separate or novel relief is required to be crafted. The present Civil Appeals were instituted by the Union of India against judgments of various High Courts, seeking direction to the DoPT to reallocate services to the concerned applicants. In the event of dismissal of the appeals, the said directions would revive, and the DoPT would be obligated to proceed with reallocation and verification of OBC status in accordance with law. 10. 1. The learned counsel submitted that the Union of India has been aware of these directions since 2017, 2018 and 2022, and had in certain matters obtained interim orders of stay.

The Union was thus fully conscious that, if unsuccessful, it would be required to implement the High Court directions. It cannot now plead administrative inconvenience. He drew attention to the 21st Report of the Parliamentary Committee on Welfare of Other Backward Classes (2018–19), wherein representatives of the DoPT had informed the Committee that supernumerary posts would be created to implement the decision of the Delhi High Court dated 22. 03. 2018. It was argued that having undertaken to create such posts, the Union cannot resile from its stated position upon dismissal of the appeals. 12 (2005) 10 SCC 244 13 MANU/TN/9958/2006 [2026] 4 S. C. R. 19 Union of India and Others v. Rohith Nathan and Another, Etc. 10. 2. The learned counsel further submitted that this Court in W. P. (C) No. 914/2016, by order dated 20. 03.

2017, had directed that candidates selected through the Civil Services Examination, 2016 be notified that their selection and seniority would remain subject to the outcome of litigation initiated by OBC candidates. The DoPT complied with this direction by issuing an Office Memorandum dated 20. 12. 2016. It was contended that delays in disposal of the present batch were attributable to repeated adjournments sought by the Union of India. In such circumstances, the Union cannot invoke equitable considerations to avoid compliance with binding directions. 10. 3. It was submitted that this Court possesses ample powers under Article 142 of the Constitution to direct creation of supernumerary posts where candidates have been wrongfully denied appointment or promotion. In this regard, reliance was placed upon decisions including Sushma Gosain v. Union of India 14 , Dr. PPC Rawani v. Union of India 15 , Union of India v. Vijay Kumari 16 , Dr. D. K. Reddy v.

Union of India 17 , Delhi Administration v. Nand Lal Pant 18 and Union of India v. Parul Debnath 19 , wherein directions for creation of supernumerary posts were issued in exceptional circumstances. While acknowledging that cadre management ordinarily falls within the executive domain, it was contended that in special situations, this Court may exercise its plenary power to do complete justice. 10. 4. Finally, it was urged that upon dismissal of the Civil Appeals and application of the doctrine of merger, subordinate fora would be bound to apply the ratio of this Court in the present batch, namely, that Creamy Layer status must be assessed without reference to the 2004 Letter. Relegation would only result in multiplicity of proceedings, delay and administrative uncertainty. Many Intervenors have been litigating the issue 14 (1989) 4 SCC 468 15 (1992) 1 SCC 331 16 (1994) Supp. 1 SCC 94 17 (1996) 10 SCC 177 18 (1997) 11 SCC 488 19 (2009) 14 SCC 173 20 [2026] 4 S. C. R.

Supreme Court Reports for more than five years. It was therefore submitted that this is a fit case for exercise of power under Article 142 to render complete justice by extending the benefit of the present decision to the Intervenors, thereby conserving judicial and administrative resources and minimizing disturbance to existing cadres and seniority positions. 11. The learned Additional Solicitor General of India for the appellant in CA. Nos. 3130 - 3141 of 2024 / Union of India submitted that the Delhi High Court fundamentally erred in construing Column 3 of the Schedule to the 1993 OM as being confined merely to an “officer class” criterion. 11. 1. It was further submitted that the High Court erred in holding that Category VI of the 1993 OM excludes the component of “salary” entirely from the expression “gross annual income”.

According to the learned counsel, there are three distinct components of income – income from salary, income from other sources, and income from agriculture – and Explanation (a) to Category VI merely prohibits the clubbing of salary and agricultural income with income from other sources; it does not mandate exclusion of salary per se . The income from each source, it was contended, must be assessed separately. If either the income from salary or the income from other sources exceeds the prescribed threshold for three consecutive years, the candidate would fall within the creamy layer. 11. 2. With respect to Category II-C of the 1993 OM, which pertains to employees of PSUs, banks and similar institutions where equivalence with Government posts has not been established, it was submitted that the 1993 OM itself provides that pending evaluation of equivalence, the criteria specified under Category VI, namely, the Income / Wealth Test, shall apply.

In such circumstances, Clause VI operates as the primary test for determination of creamy layer, and exclusion of salary from consideration would render the test otiose. The 2004 Letter, it was argued, merely harmonizes Paras 9 and 10 of the 1993 OM and does not override or amend the 1993 OM; rather, it clarifies that in the absence of established equivalence, income from salary is relevant for applying the income test. [2026] 4 S. C. R. 21 Union of India and Others v. Rohith Nathan and Another, Etc. 11. 3. It was further contended that a purposive interpretation must be given to the expression “gross annual income”. Exclusion of salary of PSU or private employees from consideration would lead to anomalous and absurd consequences, whereby children of highly placed PSU executives drawing substantial salaries could continue to claim non-creamy layer status merely because their income from other sources falls below the threshold.

Such an interpretation, it was submitted, would defeat the constitutional principle of qualitative exclusion recognized in Ashok Kumar Thakur (supra) and reaffirmed subsequently, and would run contrary to the object underlying the creamy layer doctrine. 11. 4. The learned counsel contended that exclusion of the creamy layer is a constitutional imperative and that the State possesses policy latitude in identifying reasonable parameters for such exclusion. In the absence of established equivalence between Government posts and PSU posts, there exists, according to the Union, an intelligible differentia which justifies a distinct method of applying the income test to Category II-C employees. The delay in determining equivalence, it was submitted, cannot operate to confer an unintended benefit upon comparatively advanced sections within the OBCs.

It was further argued that the High Court failed to consider the broader policy framework and instead proceeded on an erroneous assumption of discrimination, without appreciating that the income test under Category VI would be rendered redundant if salary were excluded in cases where equivalence had not been determined. Consequently, the impugned judgment, which has the effect of nullifying the 2004 Letter and reopening settled selections, was stated to be unsustainable in law and contrary to the constitutional scheme governing OBC reservations. 12. The learned senior counsel for Respondent(s) in CA. Nos. 3130 – 3141 of 2024 submitted that the Constitution Bench in Indra Sawhney v. Union of India (supra) directed the Union of India to specify appropriate socio-economic criteria for excluding the socially advanced sections – commonly referred to as the Creamy Layer – from the ambit of Other Backward Classes.

Pursuant thereto, the Government constituted the Ram Nandan Prasad Committee, 22 [2026] 4 S. C. R. Supreme Court Reports whose report was laid before both Houses of Parliament. The recommendations of the Committee were accepted in toto and culminated in the issuance of the 1993 OM. 12. 1. It was submitted that under the 1993 OM, the sons and daughters of Government officers directly recruited to Class I posts, and those promoted from Class II to Class I before the age of 40, were to be treated as falling within the creamy layer. Children of employees in autonomous bodies, public sector undertakings, banks, insurance organisations, universities and private enterprises were to be considered creamy layer where their parents held posts equivalent or comparable to those specified for Government servants. Further, the income / wealth test prescribed that persons whose gross family income for the preceding three years exceeded the notified threshold (Rs.

6,00,000 at the relevant time; presently Rs. 8,00,000) would fall within the creamy layer. Crucially, income from salaries and agricultural land was expressly excluded from such computation. 12. 2. Learned counsel emphasised that DoPT itself interpreted the 1993 OM as excluding salary income, as reflected in its Office Memorandum dated 15. 11. 1993 and the Model Form appended thereto. The Model Form specifically required disclosure of income excluding salary income. This form, it was submitted, continues to be uniformly adopted by all certificate-issuing authorities across the country without modification. 12. 3. Reference was then made to the 2004 Letter. Paragraph 3 thereof acknowledged that the criteria prescribed for Government servants were to apply mutatis mutandis to similarly placed employees of PSUs, banks and other organisations. Paragraph 10 reiterated that income from salaries and agricultural land shall not be taken into account while applying the income / Wealth Test.

However, paragraph 9 of the same 2004 Letter, it was contended, introduced a contradictory position by providing that where equivalence of posts had not been determined, income from salaries and other sources was to be assessed separately, and if either exceeded the prescribed limit, the candidate would be treated as creamy layer. Agricultural income alone was excluded. [2026] 4 S. C. R. 23 Union of India and Others v. Rohith Nathan and Another, Etc. 12. 4. According to the learned counsel, paragraph 9 effectively introduced a discriminatory regime whereby salary income would be counted in the case of PSU employees and others falling within Category IIC, but not for Government servants, armed forces personnel, or constitutional functionaries. The failure of the Government to determine equivalence of posts could not justify imposing dual income thresholds for Category IIC.

Such an interpretation, it was argued, runs contrary to the spirit of the Expert Committee’s report and the 1993 OM, and may lead to anomalous results – disqualifying even the wards of lower-level employees such as peons, drivers or typists solely on account of salary progression. 12. 5. It was further submitted that paragraph 9 of the 2004 Letter was not operationalized until the Civil Services Examination 2015 and even thereafter its implementation remained confined to the UPSC Civil Services Examination, without adoption by other recruiting bodies. The interpretation is thus peculiar to DoPT and lacks uniform application. 12. 6. On the aspect of estoppel and legitimate expectation, learned counsel contended that the Union of India is precluded from assailing the impugned judgment of the Delhi High Court dated 22. 03. 2018, having complied with it by issuing a Compliance Order dated 22. 05. 2018.

Having accepted and acted upon the judgment, the Union of India cannot now resile therefrom without first recalling or withdrawing its compliance. 12. 7. It was also urged that the Government cannot adopt a stand before this Court diametrically opposed to its representations before Parliament, the National Commission for Backward Classes 20 and this Court in other proceedings. Reliance was placed on: 1. Legal Opinion of the Law Secretary dated 06. 02. 2019 opining that pending determination of equivalence, salary cannot be used as a criterion for Category IIC and that such cases must fall for consideration under Clause VI(b). 20 For short, “NCBC” 24 [2026] 4 S. C. R. Supreme Court Reports 2. The observations of the Parliamentary Committee recommending withdrawal of the Union’s affidavit founded upon paragraph 9 of the 2004 Letter, as being contrary to the Law Ministry’s advice and the NCBC’s stance. 3.

The Tenure Report (2019-2022) of the NCBC holds that salary ought not to be included in computing gross total income for creamy layer determination. 4. The affidavit filed by the Union in Neil Aurelio Nunes v. Union of India, WP(C) No. 961 of 2021 (EWS matter), wherein it was specifically distinguished that the Rs. 8 lakh thresholds for EWS includes salary income, whereas the threshold for OBC creamy layer excludes salary income. 5. The inconsistency between the stand taken in the EWS matter and the position now advanced in Union of India v. Ketan (Civil Appeal No. 3130 of 2024). 12. 8. On the strength of these representations, it was argued that a legitimate expectation has arisen that the Government would maintain consistency in its stand. Any deviation would not only defeat such expectation but also undermine parliamentary accountability and the constitutional principle of collective responsibility. 12. 9. Lastly, learned counsel submitted that this Court by order dated 28. 11.

2016 in WP(C) No. 914 of 2016 and connected matters, directed that all subsequent selections would be subject to the final outcome of the pending petitions. The matters were transferred to the Delhi High Court, which rendered its judgment on 28. 03. 2018. The same was complied with on 22. 05. 2018. The present appeals were filed after a delay of more than 600 days, without withdrawal of the compliance order. In these circumstances, the concurrent findings of the CAT, Madras Bench; the Delhi High Court; the Madras High Court; and the Kerala High Court warrant affirmation along with consequential relief. 13. Adding further, it was submitted on behalf of the appellant in SLP (C) No. 17651 of 2022 that the 1993 OM expressly employs the expression “gross annual income” and therefore, the Kerala High Court erred in inferring that only “income from other sources” forms [2026] 4 S. C. R. 25 Union of India and Others v. Rohith Nathan and Another, Etc.

the basis for determination of creamy layer status in the case of PSU employees where equivalence has not been established. According to the learned counsel, such an interpretation is contrary to the spirit and consistent understanding of the 1993 OM, as clarified on multiple occasions by the Reservation Division, and amounts to reading into the 1993 OM, a restriction which it does not contemplate. 13. 1. It was further submitted that equivalence of posts in State PSUs vis-à-vis Central or State Government posts has not yet been comprehensively undertaken, as the exercise involves complex comparative assessment of a multitude of posts across States and Union Territories, differing pay structures, service conditions, and attendant perks and privileges.

It was contended that precisely to address such contingencies, the 1993 OM provides under Category VI for application of the Income / Wealth Test pending evaluation of equivalence, and that this mechanism ensures continued implementation of the creamy layer principle even in the absence of formal equivalence. 13. 2. The learned counsel also assailed the Government Order dated 31. 05. 2018 issued by the State of Kerala purporting to determine equivalence in respect of posts in the Kerala State Financial Enterprises, contending that the said order was passed on the basis of an individual representation and not as a policy decision founded upon objective and quantifiable data. It was urged that such an exercise is not in consonance with the principles laid down in Indra Sawhney and others v. Union of India of others 21 , which require identification of socially and educationally backward classes based on objective criteria and quantifiable data before extending reservation benefits. 13.

3. It was further submitted that in any event, even assuming the validity of the Government Order dated 31. 05. 2018, the said equivalence determination came into existence subsequent to the relevant selection process and was not in force at the time of consideration of the respondent’s candidature. Reliance was placed on Rule 10 of the Civil Services Examination Rules, 21 (1992) Supp. 3 SCC 217 26 [2026] 4 S. C. R. Supreme Court Reports 2017, to contend that candidates seeking reservation benefits must be in possession of requisite and valid certificates in support of their claim as on the closing date of the application, i. e. 17. 03. 2017. Since the equivalence, even if assumed valid, was not operative on the relevant date, the respondent could not claim its benefit retrospectively. 13. 4. On these grounds, learned counsel prayed for setting aside the impugned judgment and allowing the appeal. 14. The learned counsel for Respondent No. 1 in SLP (C) No.

17651 of 2022 submitted that by the impugned judgment dated 25. 02. 2022 passed by the Kerala High Court, the respondent was directed to be considered as an OBC-NCL candidate in the merit list for the Civil Services Examination, 2017. This was on the ground that the sole surviving parent (mother) of the respondent was appointed as a Group C employee in a Public Sector Undertaking owned by the Government of Kerala, and that the PSU was governed by a subsisting order of equivalence with corresponding posts in the Government of Kerala. The said equivalence order had been produced before the DoPT by the candidate. 14. 1. It was further contended that the High Court in its judgment, examined the validity of the equivalence order and held that such an order could only have been issued by the Government of Kerala. The High Court substantively validated the equivalence order after examining the comparability methodology adopted therein.

In paragraph 27 of the judgment, it was categorically held that the post to which the candidate’s mother was appointed was equivalent to a Group C post in the public services of the Government of Kerala. In paragraph 30, the High Court declared that the DoPT had erred in denying OBC-NCL allocation to the candidate. It was submitted that the DoPT had adopted a mutually contradictory position first demanding an equivalence order and thereafter disregarding it when duly furnished. 14. 2. It was submitted that the High Court highlighted the arbitrary conduct of the DoPT in paragraphs 20 and 25 of the judgment. The DoPT had altered the procedure for verification of Creamy Layer status of candidates whose parents were appointed to State Public Sector Enterprises, both during the Civil [2026] 4 S. C. R. 27 Union of India and Others v. Rohith Nathan and Another, Etc.

Services Examination, 2016 and midway through the CSE- 2017 process, without any public notice or notification, thereby violating settled procedures and principles of natural justice. In 2016, the procedure adopted was to seek clarification from the concerned State Government regarding comparability of posts. However, in 2017 midway through the examination process, the DoPT began insisting upon formal equivalence orders issued by the State Governments. 14. 3. Reference was also made to paragraph 31 of the judgment, wherein the High Court observed that there was no justification for the DoPT to reject the equivalence order issued by the State Government. It clarified that the equivalence order to be submitted could only be an order of the State Government, and in the present case, one issued by the Government of Kerala.

It was contended that “State Public Services” and “State Public Service Commissions” fall within the exclusive domain of the State List under the Seventh Schedule to the Constitution. Consequently, the jurisdiction to declare comparability or equivalence between posts in the public services of the State of Kerala and Public Sector Enterprises owned by it lies exclusively within the State Government. It was urged that this constitutional demarcation had been disregarded by the DoPT in filing the present appeal. 14. 4. It was further submitted that the DoPT had not disputed the status of the post held by the candidate’s deceased father (who passed away in 2012) which had been accepted as a Group C post in the Government of Kerala based on orders issued by the same State Government. However, the DoPT was disputing the equivalence order issued by that very Government in relation to the candidate’s mother, who was appointed to a Group C post in a State PSU.

This differential treatment, it was contended, amounted to discrimination against the candidate’s mother alone and reflected arbitrariness in administrative decision-making. The High Court had noted such arbitrariness in paragraph 33 of its judgment and dismissed the petition filed by the DoPT. 14. 5. It was also contended that the action of the DoPT in treating the salary of an employee of a State PSU, irrespective of 28 [2026] 4 S. C. R. Supreme Court Reports the post held, as income for determining Non-Creamy Layer status was discriminatory, particularly when, in the case of employees of the Central Government, State Governments, or Central PSUs, salary income was exempted from such computation. This aspect had been extensively dealt with by the High Court. 14. 6. Finally, it was submitted that the DoPT lacked locus standi to raise disputes on behalf of the Union Government against orders issued by State Governments regarding equivalence of posts within the State.

The DoPT’s powers are circumscribed by the Allocation of Business Rules, 1961, and the subject matter of challenging equivalence determinations of State Governments does not fall within its assigned business. It was contended that the DoPT neither possesses authority to reject orders issued by the appropriate State Government nor to issue directions or requisitions to State Governments in that regard. Consequently, the challenge to the equivalence order issued by the Government of Kerala was said to be contrary to the Allocation of Business Rules, 1961, and violative of Article 77(3) of the Constitution of India. 14. 7. It was emphasized that procedural violations were writ large in the actions of the DoPT in altering verification norms during the conduct of the Civil Servies Examinations and in adopting inconsistent verification practices from year to year.

Until 2016, the DoPT had sought clarification from State Governments regarding the nature of posts held by parents serving in State PSUs. In 2017, however, it insisted upon formal equivalence orders midway through the examination process, without amending the governing rules or issuing any notification, and thereafter rejected or ignored such orders when produced. According to the learned counsel, this arbitrary shift in procedure appeared designed to deny OBC claims of candidates whose parents were employees of State Public Sector Enterprises. It was further submitted that State Governments have consistently exercised their constitutional authority under the Seventh Schedule to issue equivalence orders whenever officers of State Public Services are posted to State PSUs. By disputing such actions of the “appropriate [2026] 4 S. C. R. 29 Union of India and Others v. Rohith Nathan and Another, Etc.

Government” within the exclusive domain of the State, the DoPT was alleged to have engaged in unconstitutional overreach in filing the present appeal. 15. The learned counsel appearing for the Union Public Service Commission (UPSC) submitted that the role of the said respondent is strictly confined to conducting the Civil Services Examination in accordance with the Rules and Regulations framed by the DoPT. The UPSC conducts the examination, processes the results, and makes recommendations for appointment to the various services based on the vacancies requisitioned by the respective Cadre Controlling Authorities. It was contended that the UPSC neither frames policy nor possesses the authority to adjudicate upon issues relating to reservation status or the application of the Creamy Layer criteria. 15. 1.

It was further submitted that the determination of eligibility for reservation benefits, including verification of OBC Non- Creamy Layer status, falls exclusively within the domain of the DoPT, which is the appellant herein and the nodal authority for such matters. Therefore, the issues raised in the present proceedings, as well as the reliefs sought by the appellants pertain solely to the DoPT, and no substantive relief has been claimed or could be claimed against the UPSC. DISCUSSION & FINDINGS 16. We have heard learned counsel appearing for the parties at length and perused the materials available on record. 17. The present batch of Civil Appeals arises from judgments of the Madras High Court, Kerala High Court and Delhi High Court. By the impugned judgments, the respective High Courts adjudicated upon the eligibility of certain candidates claiming the benefit of OBC (Non-Creamy Layer) reservation in the Civil Services Examination conducted in different years. 18.

It is not in dispute that the respondent candidates were successful in the Civil Services Examination. However, as the equivalence of posts in Public Sector Undertakings, banks and other organisations vis-à-vis Government posts had not been formally determined, the DoPT applied the Income /Wealth Test under Category VI of the 1993 OM read with 2004 Letter. Upon assessing the parental income of 30 [2026] 4 S. C. R. Supreme Court Reports the respective candidates for the preceding three financial years, the DoPT classified them as falling within the Creamy Layer of the Other Backward Classes, thereby rendering them ineligible for OBC (Non- Creamy Layer) reservation benefits. Consequently, their cases were not considered for service allocation under the reserved category. Aggrieved thereby, the respondent candidates approached the CAT and obtained orders in their favour.

The writ petitions filed by the appellants challenging the said orders were dismissed by the High Courts of Madras, Delhi and Kerala. It is in these circumstances that the present Civil Appeals filed by the appellants have been placed before us for consideration. 19. The issues involved are allied and overlapping, though they require distinct treatment for the purpose of analysis. The first issue is whether the clarificatory letter dated 14. 10. 2004 can have any overriding or superseding effect over the Office Memorandum dated 08. 09. 1993, which expressly lays down the criteria for exclusion from the benefit of reservation for OBCs by identifying the creamy layer namely, the socially advanced persons of sections among the Socially and Educationally Backward Classes. The second issue is whether there can be hostile discrimination between employees of the Government and those working in Public or Private Sector Undertakings, when both occupy posts of the same grade or class. 20.

Since the issues raised are broader in nature and concern the constitutional architecture governing identification of the creamy layer, the validity and interpretation of executive instructions, and the equality mandate under Article 14, it is neither necessary nor appropriate for this Court to enter into the granular factual matrix of each individual case. Moreover, the judgments impugned before us record largely concurrent findings on the material aspects. The controversy, therefore, turns essentially on questions of law of general public importance, warranting authoritative determination by this Court. 21. Before proceeding further, it is apposite to examine the constitutional and statutory background of reservation in India. 21. 1. India’s reservation framework for Other Backward Classes (OBCs)/ Socially and Educationally Backward Classes (SEBCs) has evolved through a sustained dialogue between [2026] 4 S. C. R. 31 Union of India and Others v. Rohith Nathan and Another, Etc.

constitutional text, legislative intervention, and judicial doctrine. The objective has consistently been to reconcile the mandate of substantive equality with the imperatives of administrative efficiency. Constitutional framework 21. 2.

The Constitution embedded the principle of advancement of weaker sections through: ● Article 46 (Directive Principles of State Policy), which mandates the State to promote with special care the educational and economic interests of the weaker sections, particularly, Scheduled Castes and Scheduled Tribes; ● Article 15(4) (inserted by the First Constitutional Amendment, 1951), enabling the State to make special provision for the advancement of socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes; ● Article 16(4) empowering the State to make provisions for reservation in appointments or posts in public services for any backward classes inadequately represented; ● Article 15(5), later inserted, enabling reservation in admissions to educational institutions, including private educational institutions whether aided or unaided by the State, other than the minority educational institutions.

For ease of reference, the above provisions read as under: “46. Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections . — The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation. ” 32 [2026] 4 S. C. R. Supreme Court Reports “ 15. Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth - (4) Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.

” (5) Nothing in this article or in sub-clause (g) of clause (1) of article 19 shall prevent the State from making any special provision, by law, for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes or the Scheduled Tribes in so far as such special provisions relate to their admission to educational institutions including private educational institutions, whether aided or unaided by the State, other than the minority educational institutions referred to in clause (1) of article 30. ” “16. Equality of opportunity in matters of public employment- (4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State. ” From its inception, Article 16(4) was conceived not as an exception to equality, but as an instrument to achieve it.

Early Judicial Evolution 21. 3. In M. R. Balaji and others v. State of Mysore 22 , this Court held that caste may be a relevant factor in identifying backwardness, but it cannot be the sole or dominant test. Social backwardness, the Court observed, is on the ultimate analysis 22 AIR 1963 SC 649 [2026] 4 S. C. R. 33 Union of India and Others v. Rohith Nathan and Another, Etc. closely linked with poverty, and excessive reservation under the guise of special provisions would subvert the constitutional scheme. The Court broadly indicated that reservation should ordinarily remain below 50%, recognising the need to balance advancement of weaker sections with societal interests at large. The following paragraphs are pertinent: “23.

Besides, if the caste of the group of citizens was made the sole basis for determining the social backwardness of the said group, that test would inevitably break down in relation to many sections of Indian society which do not recognise castes in the conventional sense known to Hindu society. How is one going to decide whether Muslims, Christians or Jains, or even Lingayats are socially backward or not? The test of castes would be inapplicable to those groups, but that would hardly justify the exclusion of these groups in toto from the operation of Article 15(4). It is not unlikely that in some States some Muslims or Christians or Jains forming groups may be socially backward. That is why we think that though castes in relation to Hindus may be a relevant factor to consider in determining the social backwardness of groups or classes of citizens, it cannot be made the sole or the dominant test in that behalf.

Social backwardness is on the ultimate analysis the result of poverty to a very large extent. The classes of citizens who are deplorably poor automatically become socially backward. They do not enjoy a status in society and have, therefore, to be content to take a backward seat. It is true that social backwardness which results from poverty is likely to be aggravated by considerations of caste to which the poor citizens may belong, but that only shows the relevance of both caste and poverty in determining the backwardness of citizens . … 34. ……. If admission to professional and technical colleges is unduly liberalised, it would be idle to 34 [2026] 4 S. C. R. Supreme Court Reports contend that the quality of our graduates will not suffer.

That is not to say that reservation should not be adopted; reservation should and must be adopted to advance the prospects of the weaker sections of society, but in providing for special measures in that behalf care should be taken not to exclude admission to higher educational centres to deserving and qualified candidates of other communities. A special provision contemplated by Article 15(4) like reservation of posts and appointments contemplated by Article 16(4) must be within reasonable limits. The interests of weaker sections of society which are a first charge on the States and the Centre have to be adjusted with the interests of the community as a whole. The adjustment of these competing claims is undoubtedly a difficult matter, but if under the guise of making a special provision, a State reserves practically all the seats available in all the colleges, that clearly would be subverting the object of Article 15(4).

In this matter again, we are reluctant to say definitely what would be a proper provision to make. Speaking generally and in a broad way, a special provision should be less than 50%; how much less than 50% would depend upon the present prevailing circumstances in each case. ” Similarly, in State of Andhra Pradesh and another v. P. Sagar 23 , this Court reiterated that classification for the purposes of Article 15(4) cannot rest solely upon caste; the objective remains the advancement of socially and educationally backward classes. Socio-Economic Refinement and Means Test 21. 4. By 1985, the doctrine had matured further in K. C. Vasanth Kumar and another v. State of Karnataka 24 , where a Seven- Judge Bench emphasised that reservation policy cannot 23 [1968] 3 SCR 595 24 1985 SCC OnLine SC 339 [2026] 4 S. C. R. 35 Union of India and Others v. Rohith Nathan and Another, Etc.

remain static but must be subjected to periodic review to ensure that the truly backward continue to receive its benefits. Justice D. A. Desai in his concurring opinion, stressed that economic criteria must increasingly inform the identification of beneficiaries and cautioned that reservation cannot be allowed to crystallise into a vested or hereditary entitlement. The Court endorsed the “caste-cum-means” test, drawing support from K. S. Jayasree v. State of Kerala 25 , where the imposition of an income ceiling within backward classes was upheld as constitutionally valid. Likewise, in R. Chitralekha v. State of Mysore 26 , the Court recognised income and occupation as permissible indicators of backwardness. These decisions marked a decisive shift towards economic refinement within socially backward classes, a principle that ultimately took firm doctrinal shape in Indra Sawhney v. Union of India (supra) , where the exclusion of the ‘creamy layer’ was constitutionally crystallised.

The relevant paragraphs from the judgment in K. C. Vasanth Kumar read as under: “26 . Therefore, a time has come to review the criterion for identifying socially and educationally backward classes ignoring the caste label. The only criterion which can be realistically devised is the one of economic backwardness. To this may be added some relevant criteria such as the secular character of the group, its opportunity for earning livelihood etc. but by and large economic backwardness must be the loadstar. Why I say this? … 30. Let me conclude. If economic criterion for compensatory discrimination or affirmative action is accepted, it would strike at the root cause of social and educational backwardness, and simultaneously take a vital step in the direction of destruction of caste structure which in turn would advance the secular character of the Nation. 25 (1976) 3 SCC 730 26 [1964] 6 SCR 368 : AIR 1964 SC 1823 36 [2026] 4 S. C. R.

Supreme Court Reports This approach seeks to translate into reality the twin constitutional goals: one, to strike at the perpetuation of the caste stratification of the Indian Society so as to arrest regressive movement and to take a firm step towards establishing a casteless society; and two, to progressively eliminate poverty by giving an opportunity to the disadvantaged sections of the society to raise their position and be part of the mainstream of life which means eradication of poverty. 31. Let me make abundantly clear that this approach does not deal with reservation in favour of Scheduled Castes and Scheduled Tribes. Thousands of years of discrimination and exploitation cannot be wiped out in one generation. But even here economic criterion is worth applying by refusing preferred treatment to those amongst them who have already benefited by it and improved their position. And finally reservation must have a time span otherwise concessions tend to become vested interests.

This is not a judgment in a lis in an adversary system. When the arguments concluded, a statement was made that the Government of State of Karnataka would appoint a Commission to determine constitutionally sound and nationally acceptable criteria for identifying socially and educationally backward classes of citizens for whose benefit the State action would be taken. This does not purport to be an exhaustive essay on guide lines but may point to some extent, the direction in which the proposed Commission should move. ” 125…… While caste or community is a relevant factor in determining the social and educational backwardness, it cannot be said that all members of a caste need be treated as backward and entitled to reservation under Article 15(4) or Article 16(4). Caste- cum-means test would be a rational test in identifying persons who are entitled to the benefit of those provisions. This principle has received acceptance at the hands of this Court in K. S. Jayasree v.

State of Kerala [(1976) 3 SCC 730]. In that case a Commission [2026] 4 S. C. R. 37 Union of India and Others v. Rohith Nathan and Another, Etc. appointed by the Government of the State of Kerala to enquire into the social and economic conditions of the people of that State and to recommend as to what sections of the people should be extended the benefits under Article 15(4) of the Constitution found that only the rich amongst certain castes or communities were enjoying the benefit of reservations made earlier. It, therefore, recommended adoption of a means-cum-caste/community test for determining the sections of the people who should be given the benefit under the relevant constitutional provisions. The State Government accordingly stipulated that applicants who were members of certain castes or communities and whose family income was less than Rs 10000 per year were only entitled to reservation under Article 15(4).

The petitioner in the above case who belonged to one such community but whose family income was above Rs 10,000 per year questioned the order before the Kerala High Court on the ground that the imposition of the ceiling of family income was unconstitutional. The learned Single Judge who heard the petition allowed it. The Division Bench of the Kerala High Court, however, reversed the decision of the learned Single Judge and dismissed the petition. On appeal, this Court while affirming the decision of the Division Bench in the above case on the question of social backwardness observed at pp. 199-200 thus: (SCC p. 735, para 21) …… 143. Since economic condition is also a relevant criterion, it would be appropriate to incorporate a “means test” as one of the tests in determining the backwardness as was done by the Kerala Government in Jayasree case63.

These two tests namely, that the conditions of caste or group or community should be more or less similar to the conditions in which the Scheduled Castes or Scheduled Tribes are situated and that the income of the family to which the candidate belongs does not exceed the specified 38 [2026] 4 S. C. R. Supreme Court Reports limit would serve as useful criteria in determining beneficiaries of any reservation to be made under Article 15(4). For the purpose of Article 16(4) however, it should also be shown that the backward class in question is in the opinion of the Government not adequately represented in the Government services. 144. There is one other basis on which a classification made for purposes of Article 15(4) or Article 16(4) of the Constitution has received the approval of this Court in Chitralekha case . In that case the Court was concerned with a list of backward classes prepared on the basis of economic condition and occupation.

According to that Government Order, persons whose family income was Rs 1200 per annum or less and who were engaged in occupations such as agriculture, petty business, inferior services, crafts or other occupations involving manual labour we

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