OBC Creamy Layer Criteria: Supreme Court To Hear Centre’s Plea On Applicability To CSE 2025 On September 17

The Bench of Justices PS Narasimha and R Mahadevan scheduled the matter for hearing at 3 pm after the Solicitor General Tushar Mehta sought urgent consideration of an interim application concerning the candidates affected by the dispute.

During the hearing, counsel appearing for the respondents submitted that the concerned candidates had already cleared the relevant stages of the examination and were awaiting service allocation and training.

Advocate Sanjay Hegde opposed the Centre’s request, pointing out that the candidates had succeeded before the Central Administrative Tribunal (CAT) and the High Court. “We won in the CAT, we won in the High Court… everything is stayed. Now, after obtaining a stay, they say practically we cannot do this. This is most unfair, my Lords.”

Hegde urged the Court to consider the pending application and permit the process concerning the candidates to move forward.

Counsel for the respondents also asked the Court to examine the prayer in IA 5/1879, submitting that the application effectively sought directions that would impact the operation of an earlier judgment for the current examination year.

Justice PS Narasimha asked the parties to first examine the application. He said, “Kindly have a look at the prayer… just go through it. Then apply your mind.”

The respondents also raised a maintainability objection, submitting that copies of the application had already been served on the concerned parties and that judgments dealing with the preliminary objections would also be placed before the Court.

The Bench indicated that the application would be considered after the parties had an opportunity to examine it and respond.

Senior Advocate P Wilson, appearing for the respondents, thereafter pressed for urgent relief. He submitted that the concerned batch of candidates was already waiting for service allocation and training and asked whether they could be permitted to proceed provisionally.

The Bench, however, declined the suggestion.

The Solicitor General submitted that allowing the batch to proceed would not prejudice the petitioners. “None of them would be affected if this batch goes. None of them will be affected," the SG submitted.

The Bench responded: “We don’t know. We will consider your application.”

The Court directed the parties to ensure service of the application and asked them to examine its contents before the next hearing.

The Solicitor General sought an opportunity to press for interim relief at the next hearing. “We would persuade your Lordships for some interim orders also, subject to being persuaded," SG submitted.

The Court thereafter fixed the matter for September 17 at 3 pm, agreeing to the request for an afternoon hearing given the urgency and the presence of both sides.

The Centre’s plea concerns the applicability of the Supreme Court’s March 11, 2026 judgment on OBC creamy layer criteria to the CSE 2025 recruitment process.

Background

In March the Supreme Court had said that the purpose of excluding the “creamy layer” from OBC reservation is to ensure that socially advanced sections within the Other Backward Classes do not take away benefits meant for genuinely backward groups, and not to create artificial distinctions between people who are otherwise similarly placed.

In its application before the Supreme Court, the government has argued that the March 11 judgment “altering settled position” on creamy layer criteria was delivered five days after the final result of CSE-2025 had already been declared. It has said that CSE-2025 “stood substantially concluded prior to the pronouncement of the judgment” and is presently at the “terminal stage of service allocation”.

The Centre has further argued that a “mechanical or unqualified application of the ratio of the said judgment, with retrospective effect, to the already-concluded selection process of CSE-2025” would create “a peculiar and acute anomaly amounting to discrimination inter se candidates of the very examination cycle sought to be benefited”.

In the impugned decision, a Bench of Justices PS Narasimha and R Mahadevan upheld judgments of the Delhi, Madras and Kerala high courts, which had held that treating employees of private entities and PSUs differently from Government employees and their children for deciding reservation benefits would amount to hostile discrimination.

Court was hearing a batch of appeals filed by the Union government against high court judgments that had directed successful OBC candidates in the Civil Services Examination to be treated as falling within the non-creamy layer category. The bench held that deciding creamy layer status solely on the basis of income, without considering the categories of posts and status parameters laid down in the 1993 Office Memorandum (OM), is legally unsustainable.

It further said that giving excessive importance to a 2004 clarification letter, to the extent that income alone becomes the deciding factor without considering the parents’ status or category of service, would defeat the framework of exclusion envisaged under the 1993 OM. To be noted, the 1993 OM is the central policy document issued by the Union government on September 8, 1993 for identifying the “creamy layer” among OBCs and excluding them from reservation benefits. It was issued following the Supreme Court’s ruling in the case of Indra Sawhney v. Union of India and others.

The 2004 letter was a clarification issued on October 14, 2004 by the Department of Personnel and Training (DoPT), working under Ministry of Personnel, Public Grievances and Pensions, regarding application of the creamy layer test where equivalence of PSU/private sector posts with government posts had not been determined. “Mere determination of the status of a candidate as to whether he/she falls within the creamy layer or the non-creamy layer of the OBCs cannot be decided solely on the basis of the income,” the Bench observed in the present matter.

Court said a combined reading of the 1993 OM and the October 14, 2004 clarification letter makes it clear that salary income alone cannot determine whether a candidate falls within the creamy layer. According to the Bench, the status and category of the posts held by a candidate’s parents are also important factors. It explained that exclusion under Categories I to III of the Schedule is based on status rather than purely on income, since advancement in the government service hierarchy is considered a sign of social progression, irrespective of fluctuating salary levels.

“The evolution of the non-creamy layer principle demonstrates that the 1993 OM read with the 2004 Letter, preserves the primacy of status based exclusion and confines economic exclusion to the structured parameters of Category VI. Salary income cannot be mechanically aggregated in a manner that defeats the constitutional objective articulated in Indra Sawhney,” Court said. The Bench also reiterated that any classification under Article 14 of the Constitution must satisfy two conditions: there must be a clear distinction between groups, and that distinction must have a rational connection with the objective sought to be achieved. “If similarly situated persons are subjected to differential treatment without a constitutionally sustainable basis, such action would fall foul of Article 14,” Court had said.