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Disposing of the interlocutory applications and writ petitions, the Court HELD: 1.1. Caste only cannot be the basis for reservation. Reservation can be for a backward class citizen of a particular caste. But creamy layer of that caste are not socially and economically Backward Classes and thus they are to be excluded from the benefit of reservation. Inclusion of castes in the list of Backward Classes cannot be mechanical and cannot be done without adequate relevant data. Nor can it be done for extraneous reasons. Care should be taken that the Forward Castes do not get included in the backward castes list. If Forward Classes are mechanincally included in the list of Backward Classes or if the creamy layer among Backward Classes is not excluded, then the benefits of reservation will not reach the really backward among the Backward Classes. Most of the benefits will then be knocked away by the forward castes and the creamy layer. That will leave the truly backward, backward for ever. Thus in Indira Sawhney's case on the question of exclusion of `creamy layer' from the Backward Classes, there was agreement amongst majority of Judges of this Court [239-C, F; 240-B; 241-C] Indira Sawhney v. Union of India, [1992] Suppl. 3 SCC 217, followed. 1.2. In Indira Sawhney's case a specific declaration of law was made to the effect that those in higher services like IAS, IPS and AH India Services or near about as persons who have reached a higher level of social advancement and economic status, as a matter of law, such persons should be declared not entitled to be treated as backward. They are to be treated as creamy layer "without further inquiry." Likewise persons living in sufficient affluence who are able to provide employment to others are to be treated as having reached a higher social status on account of their affluence, and therefore outside the backward class. Those holding higher level of agricultural land holdings or getting income from property, beyond a limit, have to be excluded from the backward classes. Further, pursuant to Indira Sawhney's case, Government issued a notification dated 8.9.93 identifying certain broad categories of persons viz. constitutional functionaries, service personnel, professionals, persons in industry and trade, persons holding agricultural or urban land as creamy layer which was accepted by this Court in Ashok Kumar Thakur `s case. Thus, a declaration of law was made by this Court in Indira Sawhney's case and Ashok Kumar Thakur's case in relation to identification and exclusion of creamy layer. [244-F, G; 245-B, E, H; 246-A] Indira Sawhney v. Union of India, [1992] Suppl. 3 SCC 217, followed. Ashok Kumar Thakur v. State of Bihar and Ors., [1995] 5 SCC 403, relied on. 2. `Creamy layer' in the Backward Class is to be treated "on par" with the Forward Classes and is not entitled to benefits of reservation. If the `creamy layer' is not excluded, there will be discrimination and violation of Articles 14 and 16(1) of the Constitution of India since unequals (the creamy layer) cannot be treated as equals that is to say, equal to the rest of the Backward Class. Thus, any executive or legislative action refusing to exclude the creamy layer from the benefits of reservation will be violative of Articles 14 and 16(1) and also of Article 16(4). [246-C, D, E, F] 3.1. The provisions of Ss.3, 4 and 6 of the Kerala State Backward Classes (reservation of Appointments or Posts in the Services under the State) Act, 1995 are unconstitutional and violative of Articles 14, 16(1) and 16(4) of the Constitution and the law laid down by this Court [260-F] 3.2 The declaration in Sub-clause 3 of the Act providing that according to `known facts' there is no socially advanced sections in any backward Classes having the capacity to compete with forward classes has no factual basis in spite of the use of the words `known facts'. If the Kerala Government and the Kerala Legislature meant in their declaration in sub- clause(a) of section 3 that there was, in effect, no `creamy layer' in the State of Kerala, among the notified backward Classes, then they must go to the length of stating that there was none from backward classes who had so far been recruited to the services of IAS, IPS etc. or none had come within broad categories listed in the Central Government's O.M. dated 8.9.93, in the Kerala State. But it was not the case of the State of Kerala that the above categories of persons were non-existent in the State. Further the broad categories and norms are valid not merely for the present but for the future also. Thus, the declaration in S.3(a) is a mere cloak and is unrelated to facts in existence. It is also contrary to the principles laid down by this Court in Indira Sawhney and in Ashok Kumar Thakur. It is, therefore, violative of Articles 14 and 16(1) of the Constitution of India. Sub-clause (a) of S.3 is, therefore, declared unconstitutional. [253-C, 25S-B, C, D, F; 256-B, C] Indira Sawhney v. Union of India, [19921 Suppl. 3 SCC 217, followed. Ashok Kumar Thakur v. State of Bihar and Ors., [19951 5 SCC 403, relied on. 3.3. The mere inadequate representation of a particular Backward Class in public services flowing as a consequence of exclusion of creamy layer is not legally sufficient to provide or continue reservation to the creamy layer. Reservation even for Backward Classes can be made only if it will not undermine the efficiency of the administration in the particular department Though there is no specific constitutional provision in relation to the need for maintenance of `efficiency of administration' so far as Backward Classes are concerned (such as the special provisions in Article 335 in the case of Schedule Castes and Schedule Tribes). But such a principle of efficiency of administration is, equally paramount and is implied in Articles 14 and 16 of the Constitution even so far as Backward Classes are concerned. The Constitution has not envisaged that inadequately represented backward classes are to be placed on a more favourable footing than inadequately represented Schedule Castes/Tribes for that would offend Article 14 as between two sets of Backward Classes-namely the Scheduled Castes and the other Backward Classes. The qualifications, standard and talent necessary for Backward Classes cannot be relaxed or reduced to a level which may affect the efficiency of administration. The constitutional principle that equals cannot be treated unequally and unequals cannot be treated equally based on Articles 14 and 16(1) overrides other considerations. Thus, even assuming that, when creamy layer is excluded, there will be inadequate representation of certain Backward Classes in services, that cannot be a valid reason for the continued inclusion of the creamy layer in the Backward Class, after Indira Sawhney. Thus, sub-clause (b) of section 3 does not provide any valid answer for not eliminating the creamy layer and must also be held to be unconstitutional and violative of Articles 14, 16(1) and 16(4) of the Constitution. [257-F, G; 258-B, C, D, F, G, H; 259-A] Ajit Singh II v. State of Punjab, [1999] 7 SCC 209, referred to. 3.4. The non-obstante clause in S.4 of the Act cannot override the judgments of this Court based on Articles 14, 16(1) and 16(4) if the defect is not removed by the legislation. Neither Parliament nor the State Legislature can make any law to continue reservation to the creamy layer inasmuch as the judgments of this Court are based on Articles 14 and 16(1) of the Constitution of India, and no law can obviously be made to override the provisions of Articles 14 and 16(1). [259-G, H; 260-A] 3.5. It is true that whenever legislative or executive action is declared as being violative of the provisions of Part III of the Constitution, it will be permissible for the Executive or Legislature to remove the defect which is the cause for discrimination prospectively and which defect has been pointed out by the Court The defect can be removed retrospectively too by legislative action and the previous actions can also be validated. But where there is mere validation with retrospective effect, without the defect being legislatively removed with retrospective effect, the legislative action will amount to overruling the judgment of the courts by way of legislative fiat and will be invalid as being contrary to the doctrine of separation of powers. [246-G, H; 247-B] 3.6. If the legislature of any State does not take steps to remove the defect or to effectively and realistically remove the defect to exclude the `creamy layer' from the backward classes then the benefits of reservations which are invalidly continued in favour of the `creamy layer' cannot be declared retrospectively valid merely be a legislative declaration that such creamy layer is absent as done by Section 3 of the Kerala Act Nor can it be done by means of the validating provision contained in section 6 of that Act Further Section 6 cannot stand alone once Sections 3 and 4 are declared unconstitutional. As long as the creamy layer is not excluded and the defect continues, any validation - without elimination of the defect which is the basic cause of unconstitutionality -will be ineffective and will be invalid. [247-A, B, C] 4. Equality was one of the basic features referred to in the Preamble to our Constitution. Parliament and the legislatures in this country cannot transgress the basic feature of the Constitution, namely, the principle of equality enshrined in Article 14 of which Article 16(1) is a facet. Whether creamy layer is not excluded or whether forward castes get included in the list of backward classes, the position will be the same namely, that there will be a breach not only of Article 14 but of the basic structure of the Constitution. The non-exclusion of the creamy layer or the inclusion of Forward Castes in the list of backward classes will, therefore, be totally illegal. Such an illegality offending the root of the Constitution of India cannot be allowed to be perpetuated even by Constitutional amendment [260- H; 261-C, D, E] Keshavananda Bharati v. State of Kerala, [1973] 4 SCC 225, relied on. 5. The Report submitted by Justice Joseph Committee is accepted in toto subject to the addition of communities and sub-castes as pointed out in the affidavit of the State of Kerala dated 16.1.98. Adopting the principle of prospective overruling, the exclusion of creamy layer as stated in that Report shall be applicable from the date of this Judgment However, State of Kerala is permitted to make provision for exclusion of creamy layer among the Backward Classes in the State in accordance with Constitution and law laid down in Indira Sawhney and Ashok Kumar Thakur and in accordance with the principles laid down now. Once the State Government itself identifies the creamy layer, the recommendations of Justice Joseph Committee will cease to apply. [266-D; 268-B-D] 6. The unreasonable delay on the part of the Kerala Government and the discriminatory law made by the Kerala Legislature have been in virtual defiance of the Rule of Law and also an indefensible breach of the equality principle which is a basic feature of the Constitution. They are also in open violation of the Judgments of this Court which are binding under Article 141 and the fundamental concept of separation of powers which has also been held to be a basic feature of the Constitution. Attitude and action of the State of Kerala has unfortunately resulted in allowing `creamy layer' among backward Classes in the State to continue to grab the posts in the services in Government, public sector etc. even after Indira Sawhney's case and get away with the same. The result is that really backward among the Backward Classes have been deliberately deprived by the State of their legitimate rights because they have no voice in the decision making process. [268-G, H; 269-A] Akhil Bhartiya Soshit Karamchari Sangh v. Union of India, [1981] 1 SCC 246, referred to. CIVIL ORIGINAL JURISDICTION : LA. Nos. 35-36.

   

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