The central government finds itself in a legal dilemma over a landmark Supreme Court judgment regarding the "creamy layer" criteria for Other Backward Classes (OBC). The ruling had paved the way for the induction of OBC candidates who cleared the civil services examinations over the past decade but were denied appointments.
On August 25, the government approached the apex court seeking clarification on the Union of India vs Rohit Nathan judgment. The landmark ruling laid down that "salary" could not be added to "income" to determine if an OBC candidate from a Public Sector Undertaking (PSU) background falls under the "creamy layer"—aligning them with the rules applied to non-PSU families.
In its application, the government requested permission to proceed with service allocations for the Civil Services-2025 without implementing the Nathan judgment, while also raising questions regarding the Supreme Court's definition of the "creamy layer."
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This move directly contrasts with the Centre’s stance taken just a week prior before the Central Administrative Tribunal (CAT). While appearing before the principal bench of CAT on August 19 during a contempt petition filed by an OBC candidate, Basant Singh, the Additional Solicitor General (ASG) assured the tribunal that the Centre intended to execute the March 11 Supreme Court order.
"A decision has been made to implement the decision in terms of the judgement rendered by SC in Union of India vs Rohit Nathan," the ASG told the principal bench of CAT.
The ASG added that the government was actively processing similar grievances:
"It is further submitted by the learned ASG that 56 similarly placed candidates are also being considered along with the applicant," CAT quoted the ASG as submitting.
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Relying on the Centre's undertaking that necessary steps were being taken to implement the judgment, CAT adjourned the hearing. However, these contradictory positions adopted by the government within a span of seven days have caused deep disappointment among OBC candidates who believed the March Supreme Court judgment had finally resolved their long-standing wait.
The core of the dispute
The issue stems from the Department of Personnel and Training’s (DoPT) differential application of the "creamy layer" criteria. Under the foundational 1993 Office Memorandum:
"Salary" and "agricultural income" are excluded when computing family income to determine creamy layer status.
Candidates whose parents fall under Group A and Group B categories are automatically ineligible for reservations.
Candidates whose parents belong to other categories remain eligible if their annual income does not exceed ₹8 lakh.
Despite these guidelines, the DoPT has consistently factored in "salary" when calculating income for candidates whose parents work in PSUs, banks, or universities. The government has attributed this practice to the lack of an official "equivalence of posts"- which maps PSU positions to standard government Group A, B, C, and D designations.
Following decisions by three High Courts in favor of the candidates, the Supreme Court ruled in March that "salary" cannot be used as a metric to determine the "creamy layer" for any category under the 1993 memorandum, ordering that affected candidates be duly inducted into the civil services.
