JUDGMENT

M. JAGANNADHA RAO, J.:-

1. The cases in this batch raise common issues relating to the identification of the "creamy layer" among the backward classes in the State of Kerala and the implementation of the law declared and directions issued in Indra Sawhney v. Union of India ["Indra Sawhney I," AIR 1993 Supreme Court 477]. The State of Kerala took time for implementation of the directions in Indra Sawhney¹ for appointment of a Commission for the purpose of identifying the Commission or to proceed with the implementation. Indra Sawhney¹ was decided in 1992. For more than three years the state of Kerala did not implement the judgment. This court by its order dated 10-7-1995 held (in IAS Nos. 35 and 36 filed by the State for extension of time etc.)that the State of Kerala, represented by its Chief Secretary was guilty of contempt but gave a further opportunity to the State to purge the contempt and adjourned the matter to 11-9-1995, It was made clear that if the directions of this court were not complied with, the Chief Secretary would "run the risk of being sentenced". Having sought time for years to appoint a commission, the Kerala Legislature then suddenly came forward with the Kerala State Backward Classes (Reservation of Appointments or Posts in the Services Under the State) Act, 1995 which, in Section 3 declared that "having regard to known facts in existence in the State of Kerala, that there are no socially advanced sections in any backward classes who have acquired capacity to compete with forward classes" and that the backward classes in the State were not "adequately represented" in the services under the State and they would continue to be entitled to reservation under clause (4) of Article 16 of the constitution. The provisions of Section 4 continued the existing system of reservation which was in force as per rules made in 1958 and Section 6 was incorporated as a validating section with retrospective effect. On the ground that the provisions of this Act of 1995 were discriminatory and violative of Articles 14 and 16 of the Constitution, WP No. 727 of 1995 was filed by one K. Ramaswamy, belonging to Elavami community of Kerala (a backward community) to declare the provisions of the Act as unconstitutional and violative of Articles 14 and 16 of the Constitution of India....

2. As the State Government failed to appoint a Commission as directed in Indra Sawhey¹ this Court, by an elaborate order dated 4-11-1996 deemed it necessary to appoint a High-Level Committee to gather the necessary information regarding the "creamy layer" and requested the Chief Justice, Kerala High Court, to appoint a retired Judge of the High Court to be the Chairman of the High-Level committee. The chairman of the Committee, it was held, could induct not more that 4 persons as members from various walks of life "to identify the creamy layer among the designated backward classes" in the State of Kerala in the light of the ruling of this Court in Indra Sawhney¹ and forward its report to the Supreme Court within three months. This court directed the State Government to extend cooperation to the above committee. This court also directed that the OM of the Government of India dated 8-9-1993 (Ministry of Personnel, Public Grievances and Pensions) where the Central government laid down guidelines for identification of the creamy layer, be placed before the High Level committee "For use and guidance" in identifying the "creamy layer" among the other backward classes in the State of Kerala.

3. Accordingly, the Chief Justice of the High Court of Kerala nominated Shri Justice K.J. Joseph, as Chairman of the High-Level committee. The other members of the committee were Shri O.C. Vincent, IAS, Shri K.P. Mohammed, Advocate, Shri K. Aravindaksha Menon, retired district and Sessions Judge and Shri K. Asokan, retired Director of Public Relations. The said committee, after a public notification, received evidence and gave opportunity of hearing to various individuals, communities etc. and submitted its Report dated 4-8-1997 to this Court identifying the "creamy layer" in the backward classes of Kerala State. Thereafter, objections were filed in this court by various parties to the said Report and that is how the matter has come before us.

7. Our Constitution is wedded to the concept of equality and equality is a basic feature. Under Article 15(2), there is a prohibition that the State shall not discriminate against any citizen on the grounds only of religion, race, caste, sex and place of birth or any of them. It is equally true that ours is a caste-ridden society. Still, it is a constitutional mandate not to discriminate on the basis of caste alone. Provisions can be made for the upliftment of socially and educationally backward classes, Scheduled Castes or Scheduled Tribes or for women and children. Article 16(4) empowers the States for making any provision for reservation in appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State. Reservation is permissible (i) in favour of any backward class of citizens; and (ii) if it is not adequately represented in services under the State.

8. Caste only cannot be the basis for reservation. Reservation can be for a backward class citizen of a particular caste. Therefore, from that caste, the creamy layer and the non-backward class of citizens are to be excluded. If the caste is to be taken into consideration then for finding out the socially and economically backward class, the creamy layer of the caste is to be eliminated for granting benefit of reservation, because that creamy layer cannot be termed as socially and economically backward. These questions are exhaustively dealt with by a nine-Judge Bench of this Court in Indra Sawhney v. Union of India¹ and it has been specially held that "only caste" cannot be the basis for reservation.

13. In Indra Sawhney¹ on the question of exclusion of the "creamy layer" from the backward classes, there was agreement among eight out of the nine learned Judges of this Court. There were five separate judgements in this behalf which required the "creamy layer" to be identified and excluded.

14. The judgment of Jeevan Reddy, J. was rendered for himself and on behalf of three other learned Judges, Kania, C. J. and M. N. Venkatachaliah, A.M. Ahmadi, JJ. (as they then were). The said judgment laid emphasis on the relevance of caste and also stated that upon a member of the backward class reaching an "advanced social level or status", he would no longer belong to the backward class and would have to be weeded out. Similar views were expressed by Sawant, Thommen, Kuldip Singh, and Sahai, JJ. in their separate Judgments.

17. Jeevan Reddy, J. dealt with the "creamy layer' under Question 3(d) (paras 790, 792, 793, of SCC) and under question 10 (paras 843, 844). This what the learned Judge declared: there are sections among the backward classes who are highly advanced, socially and educationally and they constitute the forward section of that community. These advanced sections do not belong to the true backward class. They are (para 790) "as forward as any other forward class member".

"If some of the members are far too advanced socially (which in the context, necessarily means economically and, may also mean educationally) the connecting thread between them and the remaining class snaps. They would be misfits in the class."(SCC p. 724, para 792). (emphasis supplied)

The learned judge said: (SCC p. 724, para 792)

"After excluding them alone, would the class be a compact class. In fact, such exclusion benefits the truly backward."(emphasis supplied)

A line has to be drawn, said the learned judge, between the forward in the backward and the rest of the backward but it is to be ensured that what is given with one hand is not taken away the other. The basis of exclusion of the "creamy layer" must not be merely economic, unless economic advancement is so high that it necessarily means social advancement, such as where a member becomes owner of a factory and is himself able to give employment to others. In such a case, his income is a measure of his social status. In the case of agriculturists, the line is to be drawn with reference to the agricultural landholding. While fixing income as a measure, the limit is not to be such as to result in taking away with one hand what is given with the other. The income limit must be such as to mean and signify social advancement. There are again some offices in various walks of life-the occupants of which can be treated as socially advanced, without further inquiry", such as IAS and IPS officers or others in All India Services. In the case of these persons, their social status in society rises quite high and the person is no longer socially disadvantaged. Their children get full opportunity to realise their potential. They are in no way handicapped in the race of life. Their income is also such that they are above want. It is but logical that children of such persons are not given the benefits of reservation. If the categories or sections above-mentioned are not excluded, the truly disadvantaged members of the backward class to which they belong will be deprived of the benefits of reservation. The Central Government is, therefore, directed (para 793) to identify and notification, the "creamy layer" within the backward class shall "cease" to be covered by the reservations under Article 16(4). Jeevan Reddy, J. finally directed (see Question 10) that the exclusion of the creamy layer must be on the basis of social advancement and not on that basis -the "creamy layer" within a given caste, community or occupational group is to be excluded to arrive at the true backward class. There is to be constituted a body which can go into these questions as follows: SCC p. 757, para 847)

"We direct that such a body be constituted both at Central level and at the level of the States within four months from today …… There should be a periodic revision of these lists to exclude those who have ceased to be backward or for inclusion of new classes, as the case may be." (emphasis supplied) 

31. ... pursuant to Indra Sawhney¹ the Government of India had appointed a Commission presided over by a retired judge of the High Court of Patna and on the basis of the Report of the Commission, it had issued an office memorandum ["OM"] dated 8-9-1993 designating:

(A) children of holders of constitutional posts like

President of India; Vice-President of India; Judges of the Supreme Court and High Courts; Chairman and Members of UPSC and State Public Service Commission, Chief Election commissioner, comptroller and Auditor General of India; [and] Persons holding constitutional positions of like nature;

(B) service category: children of parents, Group A/Class I officers of All-India Central Services and State Services (direct recruits) where both or one of the parents are Class I officers, subject to certain conditions; children of Group B/Class II officers of the Central and State Services (direct recruitment), subject to certain condition; children of employees of public sector undertakings, banks, insurance organisations, universities etc. and comparable posts and positions under private employment; children of members of armed forces and paramilitary forces;

(C) professional category: children of those in professional class or those engaged in trade and industry beyond a particular income limit;

(D) property- owners (agricultural - holdings), plantations, vacant land or buildings in urban areas or urban agglomerations holding property beyond a particular extent

- as being outside the backward classes.

In respect of the above, para VI of the Schedule to the OM dated 8-9-1993 gave the gross annual income limits of rupees 1 lakh and above, subject to upward modification of the limits every 3 years etc. Various other conditions were also imposed. Care was taken by the OM to see that none from the creamy layer could escape the net of exclusion from the backward classes.

84. We therefore, direct as follows:

(1) We direct that the exclusion of the creamy layer as stated in that Report [defining the creamy layer in Kerala that was prepared in this case for the Supreme Court] shall be applicable from today, to all cases where appointment orders have not been issued to the members of the backward classes and for all future selection in public service as stated in the Report. ... It shall be necessary for the candidate belonging to the backward classes to file the certificates as envisaged in the Report and satisfy the employer that he or she does not belong to the creamy layer. The income limits and property-holdings as mentioned in the schedule to the said Report will be applicable from today. The exclusion of certain occupations/communities etc. shall however be as specified in the Report. Any violation of this direction will make the appointment or selection made on or after this day, unconstitutional.

It is made clear that any infraction of this direction will be treated seriously and this Court will also not hesitate to take further fresh action for contempt of court, if need be.

(2) We are of the view that it will be appropriate to allow the State of Kerala one more chance to conform to the rule of law. We, therefore, permit the State of Kerala to make such provision as it may deem fit for exclusion of the creamy layer among the backward classes in the State of Kerala, in accordance with law and in a manner consistent with the Constitution, the basic structure of the Constitutions, Articles 14 and 16 and the judgements in Indra Sawhney¹ and Ashoka Kumar Thakur³ and in accordance with the principles laid sown in the judgment now rendered by us.

(3) Once such provision is made and published in accordance with law, it shall come into force and the recommendations of the Justice K.J. Joseph committee as accepted by this court shall cease to apply. But as long as the State of Kerala does not bring about any such alternative provisions to exclude the creamy layer, the recommendation of the provisions to exclude the creamy layer, the recommendation of the Justice K.J. Joseph committee shall operate from today subject to any further directions which this Court might give in that behalf. Any fresh alternative provision that may be made by the State of Kerala, it is needless to say, will be subject to such further decision of this court, in case the validity thereof is questioned.

(4) In the event of alternative provisions being made by the State of Kerala either by executive order or by legislative measures or by way of rules, no court shall entertain any challenge thereto, and all proceedings in relation thereto shall have to be taken out only in this Court.

85. Before parting with the case, we may state that 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 basic feature of the Constitution. The State has already been held guilty of contempt.

86. This attitude and action of the State of Kerala has unfortunately resulted in allowing the "creamy layer" among the backward classes in the State of Kerala to continue to grab the posts in the services in government, public sectors etc., even after Indra Sawhney¹ and get away with the same. The result is that the really backward among the backward classes have been deliberately deprived by the State, - of their legitimate right to these posts which would have otherwise obviously gone to them. To us is appears to be rather anomalous that while the Governments declare endlessly that they will see to it that benefits of reservations really reach the needy among the backwards, -the very action of the governments both on the executive side and on the legislative side, deliberately refusing to exclude the creamy layer and in indiscriminately including more castes in the backward classes' list are leading to a serous erosion of the reservation programme. The sudden Cabinet decision of the State of Kerala not to appoint a Commission to identify the creamy layer as promised but to pass the impugned law was nothing but an attempt to perpetuate the creamy layer and allow it to knock away the benefits of reservation. Such a decision appears to us to have been taken because the real backwards obviously have no voice in that decision-making process.

87. Unfortunately today, as a matter of political expediency, Governments tend to knowingly violate the rule of law and the Constitution and pass on the buck to the courts to strike down the unconstitutional provisions. It would then become easy for the Government to blame the courts for striking down the unconstitutional provisions. The case on hand is a typical illustration of such an attitude.

88. In this context, the words of Sir Anthony Mason, Chief Justice of Australia (quoted in para 684 of Indra Sawhney¹ by Jeevan Reddy, J.) are extremely appropriate: (SCC p.658)

"There are other reasons, of course….that cause Governments to leave decisions to be made by courts. They are of expedient political character. The community may be so divided on a particular issue that a Government feels that the safe course for it to pursue is to leave the issue to be resolved by the courts, thereby diminishing the risk it will alienate significant sections of the community." (emphasis supplied)

and conclude: (SCC p. 658, para 684)

"…. My own feeling is that the people accept the courts as the appropriate means of resolving disputes when Governments decide not to attempt to solve the disputes by the political process."

89. In the present case, the State of Kerala did not care if its Chief Secretary was to go behind the bars. It did not care if the real backwards were left in the lurch, It then took to legislation inasmuch as it would then be difficult for this Court to hold the legislature in contempt. It is difficult for us to think that the Kerala Government really believed in the validity of its legislation. It appears to us this it thought it better to leave it to the courts to strike down the act. Years would roll by and in the interregnum the creamy layer could continue to reap the benefits of reservation.

90. When governments unreasonably refuse to eliminate creamy layers from the backward classes or when governments tend to include more and more castes in the list of backward classes without adequate data and inquiry, a stage will be reached soon when the whole system of reservation will become farcical and a negation of the constitutional provisions relating to reservations. The resistance of the creamy layer to get out of the lists is as bad as the clamour for entry into the quota system of various castes whose social status does not conform to the law decided by this court. We earnestly hope that constitutional provisions will not be converted into citadels for unjustified patronage.

91. Krishan Iyer, J. warned in Akhil Bharatiaya Soshit Karamchari Sangh (Rly.) v. Union of India⁸: (SCC at p. 264, para 22) .

"[T]o politicise this provision [i.e. Article 16(4)] for communal support and party ends is to subvert the solemn undertaking of Article 16(1)]"