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The Supreme Court has held that the State of Haryana has committed a grave error in determining 'creamy layer’ from backward classes, solely based on economic criterion through its notifications dated August 17, 2016 and August 28, 2018.

A division bench of Justice L Nageshwar Rao and Justice Anuradha Bose noted, "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."

The petition had been filed challenging the notification issued by the Haryana Government for identification of 'creamy layer' amongst the backward classes in the State of Haryana and their exclusion from the purview of reservation in services and admissions of educational institutions in Haryana State.

The plea further sought for a direction to the Respondents to provide reservation to backward classes in Haryana under the 2016 Act by considering the existing defined criteria of ‘creamy layer’ by the National Commission for Backward Classes or the criteria used by the State of Haryana before the 2016 Act.

As per the provision of Sec 9 of the Act, the Commission has the power to examine the request for inclusion or exclusion of any class of citizens as a backward class and tender such advice to the state government as deemed appropriate.

Senior Advocate Siddharth Dave appearing for the petitioner had submitted that the Haryana Government has made this specification of ‘creamy layer’ solely based on the economic criteria which violate section 5 (2) of Reservation Act, 2016.

Dave further submitted that the Act is only for the identification of the creamy layer and that part of the notification is fine but the manner it has been dissolved is beyond the scope of the Act itself. Dave further explained with an example that it will become gross in the case of a person who is in a rural area and another is in an urban area. How the equality is maintained as the income is more in urban areas in comparison to rural areas. This is treating a class within a class.

Advocate Arun Bhardwaj appearing on behalf of the State of Haryana, submitted that the identification of backward classes remains as it is. The only thing the state has done is create a methodology of extending the benefit of reservation to those who require it most. 

The state has done nothing else but reach out to the last man in the room who needs reservation based on verifiable data from the record. The High Court has made an error to the extent of saying that we don’t have data. I can produce the entire thing before the Court, Bharadwaj added.

The plea stated that the State of Haryana has issued a notification under section 2 (d) & 5(2) of Act, 2016 specifying ‘creamy layer’ among backward classes. That as per this notification, ‘creamy layer’ is specified solely on economic basis and that too in two slabs (For reservations first preference was given to persons having annual income between 0-3 Lac and leftover seats for persons having annual income between 3-6 Lakh). 

The Court noted, "After thoroughly examining the factors which were given emphasis in the various opinions rendered in Indra Sawhney-I for determining ‘creamy layer’ amongst the backward classes, thid Court held that persons from backward classes who occupied posts in higher services like IAS, IPS and All India Services had reached a higher level of social advancement and economic status and therefore, were not entitled to be treated as backward. Such persons were to be treated as ‘creamy layer’ without any further inquiry. Likewise, people with sufficient income who were in a position to provide employment to others should also be taken to have reached a higher social status and therefore, should be treated as outside the backward class."

Whereas, while dealing with the issue of the validity of the notification the bench observed that the notification, "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 Court struck down the notification of 2016 while giving liberty to the Haryana Government to issue fresh notification within a period of 3 months in accordance with the principles laid down by the Supreme Court in Indra Sawhney-I and the critaria mention in Section 5(2) of the 2016 Act.

Case Title- Pichra Warg Kalyan Mahasabha Haryana (Regd.) & Anr. Vs. State of Haryana & Anr.