# Union of India. The Supreme Court in Indra Sawhney & Ors v. Union of India

- **Citation:** [2007] 3 S.C.R. 149
- **Court:** Supreme Court of India
- **Decided:** 2007-02-23
- **Bench:** S.B. Sinha, P.P. Naolekar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-the-supreme-court-in-indra-sawhney-ors-v-union-of-india-22571
- **Pages:** 33

## Headnote

B
Consitution of India, 1950.
Articles 14, 15, & 16-Mandal Commission Report- 'Creamy layer'-
Guide/ines issued in Indra Sawhney-1 directing States to identify 'Creamy C
layer' amongst backward classes to exclude them from purview of
reservation-State of Kera/a not complying with the said directionsCommittee constituted by Chief Justice of Kera/a High Court at the request
of Supreme Court-Report of Committee accepted in Indra Sawhney-11 and
State directed to implement recommendations of Committee till State D
determines its own criteria for determining 'creamy layer-State not
complying with the said directions and appointing another committeeTerms of reference of committee providing that maximum protection be granted
to backward classes-Committee submitting report-Notification accepting
report challenged-Held, terms of reference while appointing commission is E
subject to judicial report-Maximum protection to backward classes not
contemplated in Indra Sawhney-1-Determination of creamy layer is part of
constillltional scheme-Terms. of reference of subsequent committee held bad
in law-Subsequent committee raising annual income to Rs. 3 lakhs from Rs.
1.5 lakhs by earlier committee-Subsequent committee not proceeding
scientifically in fixing annual income-Unwarranted criticism of report of F
earlier committee by subsequent committee-Jn the facts and circumstances,
report of subsequent committee set aside and State directed to appoint fresh
commission.
Manda! Commission Report was accepted by Union oflndia. Writ petition
was filed in Supreme Court questioning the said action on the part of the G
Union of India. The Supreme Court in Indra Sawhney & Ors. v. Union of India
& Ors., (1992) Supp. 3 SCC 217 (Indra Sawhney-1) inter alia directed the
States to identify 'creamy layer' amongst the backward classes and exclude
them from the purview of reservation.
149
H
A
B
ISO
SUPREME COURT REPORTS
[2007] 3 S.C.R.
The State of Kera la did not comply with the said directions of the
Supreme Court. The Supreme Court by order dated 10.7.1995 in Indra
Sawhney v. Union of India & Ors., reported in 119951 5 SCC 429 while
holding the State of Kerala to be guilty of contempt of this Court, gave it two
month's time to purge the same and report its compliance. The legislature of
the State of Kerala thereafter enacted the Kerala State Backward Classes
(Reservation of Appointments or Posts in the Services Under the State) Act,
1995 in terms whereof it was declared that there was no socially advanced
section in the State and that reservation, which had been in operation since
1958, shall continue to operate. Petitioner Society filed writ petition before
Kerala High Court questioning the validity of the State Act. The Supreme
C Court passed an Order dated 4.11.1996 requesting the Chief Justice of the
Kerala High Court to appoint a High Powered Committee to determine the
criteria for identification of 'creamy layer' and accordingly, 'the Joseph
Committee' headed by Justice K.J. Joseph was constituted which submitted
its report on 4.8.1997. The Supreme Court in Indra Sawhney v. Union of India
D & Ors., (2000) I SCC 168 (Indra Sawhney-11) while holding Sections 3, 4 and
6 of the 1995 State Act to be unconstitutional accepted the report of the Joseph
Committee in toto subject to certain additions of communities and sub-castes
and passed strictures against the State Government for contemptuous acts in
deliberately violating the orders of the Court, It was directed that the
recommendations of the Joseph Committee Should be implemented forthwith
E until such time the State comes up with its own criteria for determining
'creamy layer'. It was further directed that the suo motu contempt previously
initiated by the Court be kept pending and the State should purge its contempt
only by complying with the directions contained in Indra Sawhney-11. The
recommendations made by the Joseph Committee in its report, however, were
F not implemented forthwith in terms of the d

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"
.,
NAIR SERVICE SOCIETY
A
STATE OF KERALA
FEBRUARY 23, 2007
[S.B. SINHA AND P.P. NAOLEKAR, JJ.)
B
Consitution of India, 1950.
Articles 14, 15, & 16-Mandal Commission Report- 'Creamy layer'-
Guide/ines issued in Indra Sawhney-1 directing States to identify 'Creamy C
layer' amongst backward classes to exclude them from purview of
reservation-State of Kera/a not complying with the said directionsCommittee constituted by Chief Justice of Kera/a High Court at the request
of Supreme Court-Report of Committee accepted in Indra Sawhney-11 and
State directed to implement recommendations of Committee till State D
determines its own criteria for determining 'creamy layer-State not
complying with the said directions and appointing another committeeTerms of reference of committee providing that maximum protection be granted
to backward classes-Committee submitting report-Notification accepting
report challenged-Held, terms of reference while appointing commission is E
subject to judicial report-Maximum protection to backward classes not
contemplated in Indra Sawhney-1-Determination of creamy layer is part of
constillltional scheme-Terms. of reference of subsequent committee held bad
in law-Subsequent committee raising annual income to Rs. 3 lakhs from Rs.
1.5 lakhs by earlier committee-Subsequent committee not proceeding
scientifically in fixing annual income-Unwarranted criticism of report of F
earlier committee by subsequent committee-Jn the facts and circumstances,
report of subsequent committee set aside and State directed to appoint fresh
commission.
Manda! Commission Report was accepted by Union oflndia. Writ petition
was filed in Supreme Court questioning the said action on the part of the G
Union of India. The Supreme Court in Indra Sawhney & Ors. v. Union of India
& Ors., (1992) Supp. 3 SCC 217 (Indra Sawhney-1) inter alia directed the
States to identify 'creamy layer' amongst the backward classes and exclude
them from the purview of reservation.
149
H
A
B
ISO
SUPREME COURT REPORTS
[2007] 3 S.C.R.
The State of Kera la did not comply with the said directions of the
Supreme Court. The Supreme Court by order dated 10.7.1995 in Indra
Sawhney v. Union of India & Ors., reported in 119951 5 SCC 429 while
holding the State of Kerala to be guilty of contempt of this Court, gave it two
month's time to purge the same and report its compliance. The legislature of
the State of Kerala thereafter enacted the Kerala State Backward Classes
(Reservation of Appointments or Posts in the Services Under the State) Act,
1995 in terms whereof it was declared that there was no socially advanced
section in the State and that reservation, which had been in operation since
1958, shall continue to operate. Petitioner Society filed writ petition before
Kerala High Court questioning the validity of the State Act. The Supreme
C Court passed an Order dated 4.11.1996 requesting the Chief Justice of the
Kerala High Court to appoint a High Powered Committee to determine the
criteria for identification of 'creamy layer' and accordingly, 'the Joseph
Committee' headed by Justice K.J. Joseph was constituted which submitted
its report on 4.8.1997. The Supreme Court in Indra Sawhney v. Union of India
D & Ors., (2000) I SCC 168 (Indra Sawhney-11) while holding Sections 3, 4 and
6 of the 1995 State Act to be unconstitutional accepted the report of the Joseph
Committee in toto subject to certain additions of communities and sub-castes
and passed strictures against the State Government for contemptuous acts in
deliberately violating the orders of the Court, It was directed that the
recommendations of the Joseph Committee Should be implemented forthwith
E until such time the State comes up with its own criteria for determining
'creamy layer'. It was further directed that the suo motu contempt previously
initiated by the Court be kept pending and the State should purge its contempt
only by complying with the directions contained in Indra Sawhney-11. The
recommendations made by the Joseph Committee in its report, however, were
F not implemented forthwith in terms of the directions of the Supreme Court
in Indra Sawhney-11. The State, on the other hand, appointed another
Commission headed by Justice K.K. Narendran and issued Notification dated
27.5.2000 accepting the report of the Narendran Commission with certain
modifications. The Narendran Commission report inter alia provided that
income limit should be raised to Rs. 3 lakhs, advocated change of age from
G 40 to 35, exclusion of backward classes in category Nos. I, II, III, V and V-A
on the basis of status and not on the basis of annual income, and exclusion of
salary and agricultural income in calculating annual income in respect of
category VI for determining the category of 'creamy layer'. The Joseph
Committee in its report had !ncluded income from agriculture and salary.
H The petitioner Society has challenged the validity of the said notification in
the present writ petition.
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NAIR SERVICE SOCIETY v. STA TE OF KERA LA
151
Petitioner inter alia contended that the State in accepting the report of A
·-.:t
the Narendran Commission violated the judgments of the Supreme Court
emphasizing the requirements to exclude those categories, which ceased to
be backward classes so as to obtain the benefit of reservation; that attempt in
the said report was to include more and more people thereunder and even by
the terms of rtference alone the Commission had been directed to give more B
thar. the maximum protection otherwise available to them ; and that whereas
those who continue hereditary occupations had been sought to be protected,
the State made an attempt to modify the same by bringing in those categories
of persons whose fore-fathers were carrying on such occupations regardless
of the fact as to what occupations they have been carrying out now.
c
Respondent-State inter alia contended that income is not static and
recommendations of the Narendran Commission in regard to the annual
income being Rs. 3 lakhs should not be interfered with; that exclusion of
salary and agricultural income from annual income would apply only to people
falling in category VI taking into account Central Government office D
memorandum ; and that Court should not interfere with policy decision of the
State.
...
Allowing the writ petition, the Court
"\
HELD: 1. The concept of identification of 'creamy layer' came up for
consideration in Indra Sawhney-1 and this Court has issued certain directions E
in this behalf. Criteria were adopted by the States so as to avoid implementation
of this Court's judgments and the criteria laid down by the State of Bihar and
U.P. have been struck down by this Court being violative of Articles 14 and
16(4) of the Constitution of India. The State of Kerala did not follow the said
direction as a result whereof it was found to be guilty of contempt of this Court. F
A stern action thereupon was proposed to be taken up against the State of
Kerala in view of its contemptuous conduct. It was in the aforementioned
backdrop, the legislation passed by the legislature of Kerala was not only
struck down during the pendency of the proceedings by this Court, a
Committee was also directed to be constituted. The recommendations of the G
Joseph Committee were accepted in toto. The State, without any demur,
accepted the recommendations thereof with modifications by addition ofone
-"';
caste or sub-caste. It is, therefore, difficult to appreciate as to on what basis
Narendran Commission was appointed. (Para 24) (165-B, C, E, DJ
Indra Sawhney and Ors. v. Union of India & Ors., [1992] Supp. 3 SCC H
152
SUPREME COURT REPORTS
(2007] 3 S.C.R.
A 217, followed.
Ashoka Kumar Thakur v. State of Bihar & Ors., (1995) 5 SCC 403, Indra
Sawhney v. Union of India & Ors., (2000) 1 SCC 168 and Indra Sawhney v.
Union of India & Ors., [ 19951 5 SCC 429, relied on.
B
2. It is, furthermore, difficult to comprehend as to on what basis, while
appointing Narendran Commission, in the terms of reference, the State of
Kerala could say that the maximum benefit should be given to a particular
Section of People. It is no longer res integra that the terms of reference while
· appointing a commission may be subject to judicial review. For the purpose of
C construing a judgment, it is well-Known that the .same must be read in its
entirety. The validity of the terms of reference of the Narendran Commission
and the report submitted by it would, thus fall for consideration not only on
the anvil of certain observations of this Court but also on reading the
judgment in its entirety as also the criteria laid down in the subsequent
judgments. The judgment of this Court in Indra Sawhney-1 clearly lays down
D that what is necessary is identification of a class which had never been
backward or ceased to be backward during the passage of time, but it would
rise to a question as to whether in making such identification the class should
be equated with other socially and economically forward classes. The Central
Government to the State Government, evidently, had not laid down any criteria
E from that angle. It is, however, beyond any cavil of doubt that Indra Sawhney1 categorically states that identification of such a class should be done on a
realistic basis. [Paras 25 and 261 [ 165-E, F, G, H; 166-A, B, CJ
F
Indra Sawhney & Ors. v. Union of India & Ors., [19921 Supp. 3 SCC
217, followed.
Rama Krishna Dalmia & Ors. v. Shri Justice S.R. Tendolkar & Ors.,
[ 1959) SCR 279, relied on.
3. Maximum protection to the backward classes, was not contemplated
in Indra Sawhney - I It is also relevant to notice that in Indra Sawhney-1 this
G Court directed both the Central Government as also the states that where
reservation in favour of all the backward classes was already in operation,
they should evolve a suitable criteria within a period of six months and apply
the same to the socially advanced persons/sections from the designated other
r~
backward classes. This Court did not say that maximum protection was to be
H granted to the backward classes. It was expected that the endeavour of the
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NAIR SERVICE SOCIETY v. ST A TE OF KERALA
153
State should have been to evolve a criterion in tune with the underlying A
constitutional scheme that the protection is required to be given only to those
who remain socially and educationally backward and not to those who have
ceased to be. Those who are no longer members of the socially and
educationally backward class are not to be permitted to obtain the benefit of
the reservation. Thus while laying down the criteria, the State was required
to give effect to the underlying principles envisaged in the constitutional B
scheme as interpreted in Indra Sawhney-1. It is trite that those, who have
reached the status of general category, cannot be permitted to defeat the
purport and object of the concept of 'creamy layer' as the idea of creamy layer
was conceptualized on that philosophy. It is also trite that the State can also
lay down a legislative policy as regards the extent of reservation to be made C
for different members of the backward class, provided they remain as such.
The terms of reference in the afore-mentioned premises should be held to be
bad in law. (Paras 27, 28, 29, 31and34) (166-D, E, F, G, H; 168-E; 169-DI
Indra Sawhney & Ors. v. Union of India & Ors .. (1992) Supp. 3 SCC
217, followed.
D
Ashoka Kumar Thakur v. State of Bihar & Ors., [20051 5 SCC 403,
__,
relied on.
E. V. Chinnaiah etc. v. State of A.P. & Ors., (1995) 1 SCC 394, referred
to.
4.1. The Narendran Commission sat in appeal over the Joseph
Committee report despite the fact that the same has been accepted in toto by
E
this Court It did not assign any reason to justify its stand as to on what
basis the income limit of Rs. 1.5 lakhs fixed by the Joseph Committee in 1997 F
was doubled to Rs. 3 lakhs within a period of three years; particularly, in
view of the fact that even the Central Government, having regard to the rate
of inflation prevailing throughout the Country in 2004, came to the conclusion
that the income limit should be raised upto 2.5 lakhs. [Para 371 (170-F, G, H[
4.2. While fixing the income limit, although a State is entitled to take G
into consideration the level of literacy, the village income, the rise of living
index and other relevant factors into consideration, it should not have accepted
a report of the Committee which did not proceed scientifically, particularly,
having regard to the constitutional scheme as explained by this Court in its
judgments. There is no justification for fixing the income limit at Rs. 3 lakhs.
This Court places on record its displeasure as to the manner in which Joseph H
154
SUPREME COURT REPORTS
(2007) 3 S.C.R.
A Committee report received severe criticism by the Narendran Committee,
most of which were wholly unwarranted. The tests adopted by the Joseph
Committee could not have been given a complete go-by, by the Narendran
Commission. The findings of a Commission in respect of a matter of such
grave significance and importance should have been based on scientific data
B as alw evidence of experts. If Government tends to consider without adequate
data and inquiry, a stage would come when the whole system of reservation
will become farcical and negation of constitutional provisions. Hence, before
arriving at the final conclusion, it should have noticed the rate if inflation
and other relevant factors. Economic growth ofa country, as a result of the
village income of citizens of India, keep on changing, although while
C determining an issue as to whether persons who have attained economic
sufficiency so as not to furthermore describe them as economically backward,
is required to be taken into consideration. [Paras 41 and 42)
D
(174-F, G, H; 175-A-B-CI
Indra Sawhney v. Union af India & Ors., [2001) l SCC 168, relied on.
Indra Sawhney & Ors. v. Union of India & Ors., [1992) Supp. 3 SCC
217, referred to.
5. Equality clauses contained in Articles 14, 15 and 16 of the
Constitution of India may in certain situations constitute the heart and soul
E of the Constitution of India. When a law is patently arbitrary, Such
infringement of the equality clause contained in Article 14 or Article 16
would be violative of the equality clause of the Constitution. [Para 44) [175-E)
Waman Rao v. Union of India, [1981) 2 SCC 362, Maharao Saheb Shri
Bhim Singhji, etc. v. Union of India & Ors, AIR (1981) SC 234; Minerva Mills
p Ltd. & Ors. v. Union of India & Ors., [1980) 3 SCC 625 and Mithu v. State of
Punjab, AIR (1983) SC 473, referred to.
6. A Statute Professing division amongst citizens, subject to Articles
15 and 16 of the Constitution of India may be considered to be a suspect
legislatnon. A suspect legislation must pass the test of strict scrutiny. Articles
G 15(4) and Article 16(4) Profess to bring the socially and educationally
backward people to the forefront. Only for the purpose of invoking equality
·-
clause, the makers of the Constitution thought of protective discrimination
~·
and affirmative action. Such recourse to protective discrimination and
affirmative action had been thought ofto do away with social disparitie. Solong
as social dispanities among groups of people are patent and one class of
H citizens in spite of best efforts cannot effectively avail equality of opportunity
NAIR SERVICE SOCIETY v. ST A TE OF KERALA
155
A
due to social and economic handicaps, the policy of affirmative action must
-
.('
receive the approval of the constitutional courts. For the said purpose, however,
the conditions precedent laid down therefore in the Constitution must be held
to be sine qua non. Thus, affirmative action in essence and spirit involves
classification of People as backward class of citizens and those who are not
backward class of citizens. A group of persons although are not as such B
backward or have by passage of time ceased to be backward would come within
the purview of the creamy layer doctrine evolved by this Court. The court by
evolving said doctrine intended to lay a law that in terms of our constitutional
scheme no groups of persons should be held to be more equal than the other
group. This Court rationalized the creamy layer rule as necessary between
the competing ends of caste based reservations and the principle of secularism. c
This Court, thus, has categorically laid down the law that determination of
creamy layer is a part of the constitutional scheme.
[Paras 44, 48, 491 [175-G-H; 176-A-B-C; 179-C-E)
Indra Sawhney & Ors. v. Union of India & Ors., [19921 Supp. 3 SCC D
217, followed.
Indra Sawhney v. Union of India & Ors., [2000) I SCC 168, Ashoka
-I
Kumar Thakur v. State of Bihar & Ors., (1995) 5 SCC 403, Secretary, State of
~
Karnataka & Ors. v. Umadevi (3) & Ors., [20(16) 4 SCC I and M Nagaraj
and Ors. v. Union of India and Ors., [2006[ 8 SCC 212, relied on.
E
T.MA. Pai Foundation v. State of Karnataka, (2002) 8 SCC 481, Islamic
Academy of Education v. State of Karnataka, [2003) 6 SCC 697 and P.A.
lnamdar v. State of Maharashtra, (2005) 6 SCC 537, referred to.
7. Interpretation and application of constitutional law particularly, in F
regard to the equality clause contained in Articles 14 to Article 16 of the
_,
Constitution, have never been limited by this Court. If a measure tends to
perpetuate inequality and makes the goel of equality a mirage, such measure
should not receive the approval of the Court. Directions have been issued by
this Court in a number of cases where the question involves greater public G
interest or public good, including enforcement of fundamental rights. The
Court never hesitates to express its opinion on the interpretation of the
~ .... 1
Constitution despite political thicket. (Para 511 (180-A, Bl
Islamic Academy of Education v. State of Karnataka, [2003) 6 SCC 697,
Ani/ Kum'ar Jha v. Union of India & Ors., 120051 3 SCC 150, Rameshwar H
156
SUPREME COURT REPORTS
[2007) 3 S.C.R.
A Prasad (JV) & Ors. v. Union of India & Anr., (2005] 7 SCC 157, WB. Freedom
fighters' Organisation v. Union of India, (2004) 7 SCC 716 and Bombay
Dyeing & Mfg. Co. Ltd v. Bombay Environmental Action Group & Ors., (2006)
3 sec 434, referred to.
8. While setting aside the report of the Narendran Commission, the
B State is directed to appoint a fresh Commission who should go into all these
aspects of the matter and submit its report. [Para 56) ( 181-B)
c
D
CIVIL ORIGINAL JURISDICTION: Writ Petitiom (Civil) No. 598 of2002.
(Under Article 32 of the Constitution of India)
WITH
Contempt Petition (Civil) No. 108 of2000.
And
Contempt Petition (Civil) No. I 09 of 2000.
WITH
Suo Motu Contempt petition (Civil) No ..... 2006.
In writ Petition (Civil) No. 930of1990.
E
K.K. Venugopal, Krishnan Venugopal, Prasad Vijay Kumar, Haripriya,
K.V. Balakrishnan, K.V. Mohan, and T. Raja for the Petitioner and Indra
Sawhney, Petitioner-In-Person (NP).
Addi. Advocate General Beeran, T.L.V. Iyer, L. Nageswara Rao, K.R.
Sasiprabhu, M.K. Sreegesh, Roy Abraham, Seema Jain, Himinder Lal, S. Uday
F Kumar Sagar, E.M.S. Anam, Lily Isabel Thomas and Arvind Kumar Sharma for
the Respondent.
The Judgment of the Court was delivered by
S.B. SINHA, J. I. In these petitions, interpretation of this Court's
G judgment as regards identification of 'creamy layer' amongst the backward
classes and their exclusion from the purview of reservation, vis-a-vis, the
report of Justice K.K. Narendran Commission (hereinafter referred to as
'Narendran Commission') and acceptance thereof by the State of Kerala in
issuing the impugned notification dated 27.5.2000, falls for our consideration
H in this writ petition by the Nair Service Society ('the Society'), a Society which
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NAIR SERVICE SOCIETYv. STATE OF KERALA [S.B. SINHA, J.]
157
was initially registered under Section 26 of the Travancore Companies Act, A
. ..,
~'
1914 and after coming into force the Companies Act, 1956, it would be deemed
to have been registered under Section 25 thereof. The objects of the Society
are said to be :
·i
(i) to remove the difference prevailing from places to places amongst
Nairs in their social customs and usages as well as the unhealthy B
practices prevalent among them;
(ii) to participate in the efforts of other communities for the betterment
of their lot and to maintain and foster communal amity;
(iii) to work for the uplift of the depressed classes;
(iv) to start and maintain such institutions as are found necessary to
promote the objects of the society.
c
2. It is not in dispute that it had filed a writ petition before the Kerala
High Court questioning the validity of the report commonly known as Manda! D
Commission Report. The writ petition was later on transferred to this Court.
It also took part in the proceedings before Narendran Commission. Manda!
Commission Report was accepted by Union of India.
3. A writ petition was filed before this Court, questioning the said action
on the part of the Union of India by one Indra Sawhney. This Court, in its E
judgment in Indra Sawhney & Ors. v. Union of India & Ors., [19921 Supp.
3 SCC 217 (hereinafter referred to as 'Indra Sawhney-1'), inter alia, directed the
States to identify 'creamy layer' amongst the backward classes and exclude
them from the purview of reservation.
4. Indisputably, pursuant to or in furtherance of the said directions, the F
Union of India appointed a Commission. It issued an Office Memorandum
being dated September 8, 1993 laying down guidelines for identifying 'creamy
layer', inter alia, stipulating that the sons and daughters of persons having
gross annual income of Rs. I lakh or above would be excluded.
5. The State of Kerala, it is not in dispute, did not comply with the said G
direction of this Court.
6. At this juncture, it may be noticed that the constitutional validity of
the criteria for determining the 'creamy layer' for the purpose of exclusion from
backward classes laid down by the States of Bihar and Uttar Pradesh came H
158
SUPREME COURT REPORTS
(2007] 3 S.C.R .
. A up for consideration before this Court in Ashoka Kumar Thakur v. State of
Bihar & Ors., [1995) 5 SCC 403. This Court held that having regard to the
observations made in Indra Sawhney-I, the said criteria were ultra vires
stating :
B
c
D
"This Court in Manda! case Indra Sawhney v. Union of India, [1992)
Supp.3 SCC 217 has clearly and authoritatively laid down that the
affluent part of a backward class called "creamy layer" has to be
excluded from the said class and the benefit of Article 16( 4) can only
be given to the 'class' which remains after the exclusion of the "creamy
layer". The backward class under Article 16(4) means the class which
has no element of "creamy layer" in it. It is mandatory under Article
16( 4) - as interpreted by this Court - that the State must identify the
"creamy layer" in a backward class and thereafter by excluding the
"creamy layer" extend the benefit of reservation to the 'class' which
remains after such exclusion. This Court has laid down, clear and easy
to follow, guidelines for the identification of "creamy layer". The
States of Bihar and Uttar Pradesh have acted wholly arbitrary and in
utter violation of the law laid down by this Court in Manda! case ... "
7. By an order dated 10th July, 1995, this Court, while holding the State
of Kerala to be guilty of contempt of this Court, gave it two month's time to
purge the same and report its compliance. The Chief Secretary of the State,
E pursuant to said order appeared before this Court.
F
·G
8. In its order dated 10th July, 1995, this Court, in Indra Sawhney v.
Union of India & Ors., reported in [1995) 5 SCC 429, observed :
"We are, therefore, of the opinion that this is a case for taking action
in contempt. We hold the respondent guilty of contempt. However, in
order to give the respondent an opportunity to purge the contempt
before \Xe pass the sentence, we adjourn the matter by two months
to enable the State Government to report compliance before 11-9-1995,
failing which this Court will proceed to pass appropriate orders in
respect of the contempt. The Chief Secretary will remain present at the
next date of hearing i.e. on 11-9-1995 to inform this Court whether or
not the order has been complied with. If not, he runs the risk of being
sentenced. Let the !As Nos. 35 and 36 come up on 11-9-1995."
9. The legislature of the State of Kerala thereafter enacted the Kerala
H State Backward Classes (Reservation of Appointments or Posts in the Services
..
_)
.,
. \
NAIR SERVICE SOCIETY v. ST A TE OF KERALA [S.B. SINHA,J.]
J 59
Under the State) Act, 1995 ('the State Act'), in terms whereof it was declared A
that there was no socially advanced section in the State. Section 4 of the
State Act contemplates that nothing contained in the law or in any judgment,
decree or order of any Court or any other authority, the reservation, which
had been in operation since 1958, shall continue to operate. The Society filed
a writ petition before the Kerala High Court questioning the validity of the B
State Act. This Court admittedly passed an order dated 4.11.1996 requesting
the Chief Justice of the Kerala High Court to appoint a High Powered Committee
to determine the criteria for identification of 'creamy layer'.
10. Pursuant to the directions of the Chief Justice of Kerala High Court,
a Committee headed by Justice K.J. Joseph (hereinafter referred to as 'the C
Joseph Committee') was constituted. The Committee submitted its report on
4.8.1997. Objections to the said report were filed before this Court. By
judgment and order dated 13.12.1999 in Indra Sawhney v. Union of India &
Ors., since reported in (2000] I SCC 168 (hereinafter referred to as 'Indra
Sawhney-II~, this Court, while holding the provisions of Sections 3, 4 and 6
of the State Act to be unconstitutional, upon consideration of the objections D
to the report of the Joseph Committee, accepted the same in toto, subject to
certain additions of communities and sub-castes, in the following terms:
"In the result, we accept the Justice Joseph Committee Report in toto
subject to the addition of communities and sub-castes as pointed out
in the affidavit of the State dated 16-1-1998, referred to above."
E
1 I. The Court furthermore noticed the contemptuous acts on the part
of the authorities of State of Kerala and held that they had deliberately been
violating the orders of this Court. Some strictures were also passed against
the State Government.
It was directed that the recommendations of the
Joseph Committee should be implemented forthwith until such time the State F
comes up with its own criteria for determining 'creamy layer'. It further
directed that the suo motu contempt previously initiated by the Court would
be kept pending and the State should purge its contempt only by complying
with the directions contained in Indra Sawhney-Il.
12. The recommendations made by the Joseph Committee in its report,
however, were not implemented forthwith in terms of the directions of this
Court. The State, on the other hand, appointed another Commission headed
by Justice K.K. Narendran. The terms of reference for the said Commission
were as under:
G
H
160
A
"(a)
B
(b)
(c)
c
D
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SUPREME COURT REPORTS
[2007] 3 S.C.R.
What should by the criteria to be adopted to exclude those
belong to the creamy layer among Other Backward Classes from
the benefits of reservation in accordance with the observations
in the judgment of the Supreme Court or what criteria should be
adopted to provide maximum protection to those belonging to
such communities in accordance with the above mentioned
judgment.
Whether there is any class which may be excluded from the
creamy layer on the basis of hereditary occupation or otherwise.
(i) Whether there should be different criteria regarding income/
property for different categories coming within the creamy layer.
(ii) If so, what should be the ceiling for such income/property.
(iia) While calculating the income, whether it is necessary to
exclude income from any particular source or sources.
(iii) While making its recommendations, the Commission will take
into account the existing socio-economic conditions and the
special features of the Other Backward Classes in the State.
(iv) The Commission should submit its report to Government
within one month.
(v) The Officer of the Commission will be at Thiruvananthapuram
and its Headquarters at Emakulam.
(vi) The Commission will have the salary, allowances and other
perquisites as admissible to a sitting Judge of the High Court."
F
13. The Commission submitted an interim report. Its request seeking
extension of time was accepted. At the instance of the petitioner-Society the
Commission, however, in its interim report directed the State to implement the
report of the Joseph Committee. The Committee sought for certain records
of 9 .2.2000. On 16.2.2000 the State issued fresh guidelines for identifying
creamy layer in accordance with the Joseph Committee report. The Commission
G submitted its final report on 11.4.2000. In this writ petition filed by the
Society, the validity of the said notification is in question.
H
14. Mr. Krishan Venugopal, learned counsel appearing on behalf of the
petitioner would submit that the State in accepting the said report violated
the underlying principles contained in the judgments of this Court in Indra
~
_,,_
f
'r
I -
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NAIR SERVICE SOCIETY v. STATE OF KERALA [S.B. SINHA, J.]
161
Sawhney-1 & II (supra) as also in Ashoka Kumar Thakur (supra). According A
to the learned counsel, therein this Court emphasized the requirements to
exclude those categories, which ceased to be backward classes so as to
obtain the benefit of reservation. Attempt in the said report was to include
more and more people thereunder. It would be evident from the fact, argued
Mr. Venugopal, that even by the terms of reference alone the Commission has
been directed to give more than the maximum protection otherwise available B
to them.
It was furthermore submitted that whereas those who continue
hereditary occupations had been sought to be protected, the State made an
attempt to modify the same by bringing in those categories of persons whose
fore-fathers were carrying on such occupations regardless of the foct as to
what occupations they have been carrying out now.
C
15. Mr. T.L.V. Iyer, learned senior counsel appearing on behalf of the
State of_ Kerala, on the other hand, would submit that the Society represents
the members of the forward classes and even if the recommendations of the
Narendran Commission are set aside, the same would not make much difference
as the rights of the members of the Society would not be affected. It was D
submitted that the society is not in any way concerned with the correctness
or otherwise of the report submitted by Narendran Commission or the order
issued by the State on 27.5.2000 inasmuch as it is not the case of the
petitioner-Society that their members would become entitled to the benefit of
reservation in terms of Article 16(4) of the Constitution of India.
16. Our attention has been drawn to the notification dated 12.6.2000
wherein guidelines were issued, which, inter alia, are on the following terms:
E
7. The rule of exclusion made mention in the schedule attached to
these guidelines will not apply to persons working as artisans or F
engaged in hereditary occupations, calling and included in Annexure
'B' appended herewith and person/group of persons coming within the
definition of the expression "Fishermen Community" in Annexure C
appended to these guidelines."
17. It was submitted that such guidelines have been issued by the G
Central Government as would appear from the office memorandum issued by
the Government of India, as was noticed in Ashoka Kumar Thakur v. State
...
I
of Bihar & Ors., [1995] 5 sec 403 which is on the same terms.
18. Our attention was further drawn to Annexure B to the said guidelines
wherein seven categories of hereditary occupations/calling, which had been H
162
SUPREME COURT REPORTS
[2007) 3 S.C.R.
A excluded from the category of 'creamy layer', have been identified. It was
urged that it would not be correct to contend that even where the persons
concerned have left their hereditary occupation, still they would be entitled
to the benefit of the reservation inasmuch as such benefit is to be granted
so long as they are engaged in such occupations. As regards the quantum
B of income, it was submitted that limit thereof is not static and even in Ashoka
Kumar Thakur (supra), this Court pointed out that the income criteria in terms
of the report was required to be modified taking into account the change of
per capita annual income and having regard to report of the Narendran
Commission constituted in the year 2003. Recommendations of the Narendran
Commission in regard to the annual income being Rs. 3 lakhs, thus, Mr. Iyer
C submitted, should not be interfered with. While excluding salary and agricultural
income, it was contended, that the Central Government office memorandum
had been taken into consideration, which would apply only to people falling
in category YI. It was furthermore submitted that as regards gross annual
income, reasons have been assigned by the Commission. The learned counsel
would contend that this Court should not interfere with the policy decision
D of the Government and it is presumed to be aware of the requirements of the
people and having regard to the change in social and economic conditions
of people in each State, no accurate assessment is possible. It was urged that
for the purpose of consideration of the criteria in regard to the persons who
should be included in the group of creamy layer, the question which is
E required to be posed and answered is as to whether they have reached the
status of the people belonging to the general category. It was argued that
jurisdiction of the court ir this behalf is to find out if there is any evidence
in the matter and if there is some evidence, ii may not exercise its jurisdiction ..
Furthermore, the State had made changes only in regard to occupation and
merely added one community in Schedule B, i.e., Kudumbi community. Mr.
F L. Nageshwara Rao, learned senior counsel appearing on behalf of the
impleaded party would adopt the submissions of Mr. Iyer and furthermore
submit that the reference is not bad in law warranting interference by this
Court.
19. It stands admitted that the income limit in terms of the Joseph
G Committee Report, which was published in the year 1996, was Rs.1.5 lakhs;
whereas the same according to the Narendran Commission Report, which was
J
published in the year 2000, should be raised to Rs.3 lakhs. In the year 2004
r
the Central Government opined that the income limit should be fixed at Rs.2.5
lakhs. The Commission received a vast majority of representations, including
H one from the petitioner-Society. The purport and object of the said report
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NAIR SERVICESOCIETYv. STATEOFKERALA [S.B. SINHA,J.]
163
sought for is stated in paragraph I 0.4 thereof. According to the Commission, A
the only question was as to what criteria should be adopted for identifying
the 'creamy layer'. It criticized the Joseph Committee Report in paragraph 11.3
of its Report observing that the former did not assign any reason nor was
there any justification for making the provision stricter in the matter of
exclusion from 'creamy layer' of backward classes.
20. It also advocated the change of age from 40 to 35. Although, it
noticed that a few representations have been submitted by the forward classes,
B
the same have not been dealt with at all. While identifying the backward
classes in several categories, i.e. category Nos. I, II, III, V and VA, the
exclusion was recorded only on the basis of status and not on the basis of C
annual income. However, in addition to category No. VI it was stated that in
calculating the annual income, the salary income or income from agriculture
would not be taken into account. No reason, however, has been assigned
as to why salary income or income from agriculture would not be included
for determining the category of 'creamy layer'. The intention of the State
Government as revealed from the terms of reference, i.e., "giving maximum D
protection" has been taken note of in paragraph 15.1 of the report. The
Committee recommended:
"I. Term (b) of the terms ofreference:
Only persons of a backward class traditionally engaged in the hereditary E
occupation of that backward class will be excluded from Creamy Layer.
There will not be any endblock exclusion of any backward class on
the basis of the hereditary occupation of that backward class.
2. Terms of reference (a) & (c) of the terms of reference :
The gross annual income for exclusion of backward classes as creamy
layer is fixed as Rs.3 lakhs or above. The scheme of criteria for
exclusion as creamy layer is that under categories I,11,Ill and VA, the
exclusion is on the basis of status and not in terms of gross annual
income. In the case of a category for which the gross annual income
F
as mentioned in category VI is the criterion income from salary or G
income from agricultural holdings should not be taken into account.
On the ground of social backwardness persons traditionally engaged
i_n the hereditary occupation of all backward classes are excluded from
Creamy layer.
On the ground of educational backwardness, all backward classes H
164
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SUPREME COURT REPORTS
(2007] 3 S.C.R.
who have not successfully completed Lower Primary education are
excluded from Creamy layer.
Recruitments to all posts where the salary is paid from the consolidated
fund of the State will be governed by the Principles of reservation for
backward classes.
When there are persons, in the rank list or supplementary list waiting
for appointment nobody temporarily recruited should be allowed to
continue to work.
Clear instructions regarding the criteria for exclusion of Creamy Layer
C
should be issued to the Revenue Authorities. At any rate a Creamy
Layer certificate will have to be issued or refused within ten days of
the receipt of application for the same."
21. The State, as indicated hereinbefore, by and large accepted the said
report and issued a Government. order dated 27.5.2000. However, the
D recommendations had not been accepted in toto, but certain modifications
have been made therein. It is in the aforementioned context the correctness
of the report of the Narendran Commission is required to be considered.
22. At the outset, we may mention that it is not possible for us to
dismiss the writ petition summarily on the ground of lack of locus standi on
E the part of the petitioners. It is not disputed that in terms of Kerala State and
Subordinate Services Rules, 1958, although, reservation for backward classes
under the scheme is to be carried out in the following years, even if thereafter
no backward candidates are available, such posts are left unfilled. Ultimately,
the selection would be made on merit. Furthermore, the writ petition has been
F filed in public interest. As noticed hereinbefore, the petitioner-Society has
raised this question again and again and had been taking part in the
proceedings before the Narendran Commission. In any view of the matter,
when the question of such grave importance has been brought to the notice
of this Court, having regard to the principle underlying the purport and object
for which the 'creamy layer' was sought to be excluded, this Court cannot shut
G its eyes and refuse to determine the question.
23. It is not in dispute that the Central Government had issued an office
memorandum on 9.3.2004. It is furthennore not in dispute that Joseph Committee
in its report included the income from agricultural income and salary, whereas
in Narendran Commission it excluded the same. It is furthermore not in
H dispute that before this Court the State of Kerala did not raise any objection
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NAIR SERVICESOCIETYv. STATE OF KERALA [S.B. SINHA, J.)
165
thereto.
24.