Holding

The criteria for identifying the 'creamy layer' laid down by Bihar and Uttar Pradesh are violative of Articles 14 and 16(4) and are struck down; the States must follow the central government's creamy‑layer criteria.

Summary

The petitioners challenged the criteria adopted by the States of Bihar and Uttar Pradesh for identifying the 'creamy layer' to be excluded from reservation benefits under Articles 14 and 16(4) of the Constitution. Both states had introduced multiple conditions – such as a minimum salary of Rs.10,000 per month, a graduate spouse, and ownership of urban property worth Rs.20 lakh – to determine exclusion. The Supreme Court examined whether these criteria were arbitrary, lacked nexus with the objective of protecting the truly backward, and violated the guidelines laid down in the Mandal (Indra Sawhney) case. The Court held that the criteria were not in conformity with the Mandal guidelines, were violative of Articles 14 and 16(4), and therefore unconstitutional. Consequently, the Bihar ordinance and the Uttar Pradesh schedule were quashed (except for clause 1 of Schedule III), and the States were directed to follow the central government's creamy‑layer criteria for the academic year 1995‑96.

Issues considered

The constitutional validity of the Bihar and Uttar Pradesh criteria for identifying the 'creamy layer' under Articles 14 and 16(4).
Whether the States must adopt the central government's creamy‑layer guidelines as laid down in the Mandal (Indra Sawhney) case.
Whether the multiple conditions (salary, spouse’s education, property) have a rational nexus with the purpose of reservation and are severable.

Legislation cited

Bihar Reservation of Vacancies in Posts and Services (Amendment) Ordinance, 1995s. Section 4
Constitution of Indias. Art. 14, s. Art. 16(4)
Uttar Pradesh Public Services Reservation of Scheduled Castes and Scheduled Tribes and Other Backward Classes Act, 1994s. 3(b)
Wealth Tax Act

Subjects

ReservationCreamy layerBackward classesArticle 14Article 16(4)Means testAffirmative actionConstitutional validityUttar PradeshBiharMandal case

Judgment

ASHOK KUMAR THAKUR A
v.
STATE OF BIHAR AND OTHERS

SEPTEMBER 4, 1995

[KULDIP SINGH AND S. SAGHIR AHMAD, JJ.) B

Constitution of India-Arts. 14 and 16(4).

Reservation for backward classes of citizens in the services of the
State-Criteria laid down by the States of Bihar and Uttar Pradesh, for C
detennining the 'creamy layer', for the purpose of exclusion from the backward
classes-Constitutional validity of-Whether violative of Arts. 14 & 16(4) of
the Constitution of India.

Backward class-Meaning of-Under Art. 16(4) of the Constitution-A
class which has no element of 'creamy layer' in it. D
The law laid down in Mandal's case to be followed-Protective dis-
crimination in the shape of job reservation under A1t. 16(4) has to be
programmed--Most deserving section of the backward classes must be
benefited-Benefit of reservation must reach the poorer and the weakest
section of the backward classes. E
''Means test" to be applied-Imperative to skim off the affluent section
of the backward classes.

Rule of exclusion fanned by the Govemment of India in confomiity
with the law laid down by the Supreme Court in Mandal's case'-Same F
should be fallowed by the State govemments-Similar criteria for identifying
the 'creamy layer' ought to be followed by the States.

For the purpose of reservation of jobs for the members of the SC/ST

- and the backward classes of the society the respective Governments of the
States of Bihar and U.P. laid down the criteria for the exclusion of the
'Creamy layer' from the said classes. While the State of Uttar Pradesh,
laid down the criteria by way of schedule II of section 3(b) of the U.P.
G

Public Services Reservation of Scheduled castes & Scheduled Tribes and
other Backward classes Act 1994, the State of Bihar introduced, the said
criteria by way of an ordinance called the Bihar reservation of vacancies H
269
270 SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A in posts and services (for scheduled castes, scheduled tribes and other
backward classes) (Amendment) Ordinance 1995. The said criterion, in
addition to the rule of exclusion, laid down by the Government of India
added further conditions for identifying the 'creamy layer' such a salary
of rupees ten thousand or more per mensem, the wife or the husband to
be a graduate and one of them owning a house in an urban area, or the
B
family owning immovable property of the value of at least rupees 20 lakhs
etc.

The said criterion laid down by the respective States of Bihar and
U.P. were challenged, by way of writ petitions before the Supreme Court
C of India on the grounds that : (a) They were wholly arbitrary and violative
of the fundamental rights guaranteed under Art. 14 & 16(4) of the Con-
stitution. (b) The criterion were contrary to the guidelines laid down by
this Hon'ble Court in 'Mandal case'. (c) The multiple' conditions laid down
by the said criterion had no nexus to the object sought to be achieved,
D namely the exclusion of the 'creamy layer' from the backward classes. (d)
The State governments should follow the Government of India and lay
down similar criteria for identifying the 'creamy layer'.

Allowing the Writ Petitions, this Court,

E HELD: 1.1. It has been clearly and authoritatively laid down in
'Mandal case' that the affiuent part of a backward class called the 'creamy
layer', has to be excluded from the said class and the benefit of Art. 16(~)
can only be given to the class that remains after the exclusion of the
'creamy layer'. [291-C]

F 1.2. The benefits of social privileges like job reservation are mostly
chewed up by the richer or more aflluent sections of the backward classes
and the poorer and the really backward sections among them keep getting
poorer and more backWard. It is only the lowest of the backward class, where

-
the standards of deprivation and extent of backwardness may be uniform.
G The jobs are so few in comparison to the population of the Backward class
that it is difficult to give them adequate representation in the State services.
It is therefore necessary that the benefit of reservation must reach the
poorer and the weakest section of the backward classes. [272-H; 273-A]

1.3. The economic ceiling to cut off the backward class for the
H purpose of job reservation is necessary to benefit the needy sections of the
•.

AK. THAKUR v. STATE 271

class. The means-test is therefore, imperative to skin off the affluent A
sections of the backward class. [273-B]

Indra Sawhney v. Union of India, [1992] Supp 3 SCC 217, followed.

2. The backward class under Art. 16(4), means the class which has
no element of 'creamy layer', in it. It is mandatory under Art. 16(4) of the B
Constitution, that the State must identify the 'creamy layer' in a backward
1
class and thereafter by excluding the 'creamy layer', extend the benefit of
reservation to the class which remains after such exclusion. [291-C-D]

3. The criteria for identifying the 'creamy layer', laid down by the
Government of India is in conformity with the law laid down by the
c
Supreme Court in Mandal's case, but the criterion laid down by the States
of Bihar and U.P., which have added further conditions, are wholly ar-
bitrary apart from being contrary to, and in utter violation of the
guidelines laid down in Mandal's case. [285-C; 291-F]
0
4. Multiple conditions have been provided in all the categories under
the impugned criterion. The 'spouse' to be a graduate and holding property
in urban area, are the conditions attached to almost every category. These
conditions have no nexus to the object sought to be achieved. Since the
conditions are not severable, the two criteria as a whole have to be struck
down. [291-B] E

5. This court has laid down, clear and easy to follow guidelines for
the identification of the 'creamy layer'. The States of Bihar and U.P. have
acted wholly arbitrary and in utter violation of the same. [291-D]

6. Thus the criterion for identification of the 'creamy layer•: laid
F
down by the States of Bihar and U.P. are violative of Art. 14 & 16(4) of the
Constitution and are liable to be quashed. It will be open to the two States
to lay down, fresh criteria for the subsequent years in accordance with the
•.
law. [292-B]
G
CIVIL ORIGINAL JURISDICTION: Writ Petition (c) No. 631 of
1994.

Under Article 32 of the Constitution of India.

Kapil Sibal, K.K. Venugopal, K.N. Bhatt, Dr. Rajiv Dhawan and H
272 SUPREME COURT REPORTS [1995] S.UPP. 3 S.C.R.

A Harish N Salve, A. Sharan, Ms. Bina Gupta, N.S. Bisht, D.S. Bora, P.P.
Tripathi, N.K. Goel, Mrs. Sheela Goel, B.B. Singh, R.B. Misra, R.C.
Pandey, M.M. Kashyap, Ms. Shashi Kiran, Ms. Usha Mishra, Navin
Prakash and Irshad Ahmad, for the appearing parties.

The Judgment of the Court was delivered by
B
KULDIP SINGH, J. Constitutional validity of the criteria, for deter-
mining the 'creamy layer' for the purpose of exclusion from backward
classes, laid-down by the States of Bihar and Uttar Pradesh, has been
challenged in these writ petitions under Article 32 of the Constitution of
India.
c
A Nine-Judge Bench of this Court in "Mandal case" - Indra Sawhney
v. Union of India, [1992] Supp. 3 SCC 217 - authoritatively interpreted
various aspects of Article 16(4) of the constitution of India. While holding
that article 16(4) aims at group backwardness this Court came to the
D conclusion that socially advanced members of a backward class - 'creamy
layer' - have to be excluded from the said 'class. It was held that the 'class'
which remains after excluding the 'creamy layer' would more appropriately
serve the purpose and object of Article 16(4).

The protective discrimination in the shape of job reservations under
E Article 16(4) has to be programmed in such a manner that the most
deserving section of the backward class is benefitted. Means-test by which
'creamy layer' is excluded, ensures such a result. The process of identifying
backward class cannot be perfected to the extent that every member of the
said class is equally backward. There are bound to be disparities in the
F class itself. Some of the members of the class may have individually crossed
the barriers of backwardness but while identifying the class they may have
come within the collectivity. It is often seen that comparatively rich persons
in the backward class are able to move in the society without being
discriminated socially. The members of the backward class are differen-
tiated into superior and inferior. The discrimination which was practiced
G on them by the Higher class is in turn practiced by the affluent members
of the backward class on the poorer members of the same class. ·The
benefits of social privileges like job reservations are mostly chewed up by
the richer or more affluent sections of the backward class and the poorer
and the really backward sections among them keep on getting poorer and
H more backward. It is only at the lowest level of the backward class where
AK. THAKUR v. STATE [KULDIP
;
SINGH,J.) 273

the standards of deprivation and the extent of backwardness may be A
uniform. The jobs are so very few in comparison to the population of the
backward classes that it is difficult to give them adequate representation
, . in the State services. It is, therefore, necessary that the benefit of the
reservation must reach the poorer and the weakest section of the backward
class. Economic ceiling to cut off the backward class for the purpose of
B
job reservations is necessary to benefit the needy sections of the class. The
means- test is, therefore, imperative to skim-off the affluent section of the
backward class.

We may refer to the opinions given by the learned Judges in 'Mandal
case' on the question of exclusion of the 'creamy layer' from the backward c
class.

P.B. Swant, J. spoke about the 'creamy layer' in the following words:

"The correct criterion for judging the forwardness of the for.,..<trds D
among the backward classes is to measure their capacity not in
terms of the capacity of others in their class, but in terms of the
capacity of the members of the forward classes, as stated earlier.
If they cross the Rubicon of backwardness, they should be taken
out from the backward classes and should be made disentitled to
the provisions meant for the said classes. E

It is necessary to highlight another allied aspect of the issue, in
this connection, what do we mean by sufficient capacity to compete
with others? Is it the capacity to compete for class IV or Class III
or higher class posts? A Class JV employee's children may develop F
capacity to compete for Class III posts and in that sense, he and
his children may be forward compared to those in his class who
have not secured even class IV posts. It cannot, however, be argued
that on that account, he has reached the "creamy" level. If the
adequacy of representation in the services as discussed earlier, 'is G
to be evaluated in terms of qualitative and not mere quantitative
representation, which means representation in the higher rungs of
administration as well, the competitive capacity should be deter-
mined on the basis of the capacity to compete for the higher level
posts also. Such capacity will be acquired only when the backward
sections reach those levels or at least, near those levels." H
274 SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.
'
A R.M. Sahai, J. held that the exclusion of 'creamy layer' is a social
purpose. Any legislation or executive action to remove such persons in-
dividually or collectively cannot be constitutionally invalid. The learned
Judge elaborated his conclusions as under : ....
"More backward and backward is an illusion. No constitutional
B
exercise is called for ·it. What is required is practical approach to
the problem. The collectivity or the group may be backward class
but the individuals from that class may have achieved the social
status or economic affluence. Disentitle them from claiming reser-
vation. Therefore, while reserving posts for backward classes, the
c departments should make a condition precedent that every can-
didate must disclose the annual income of the parents beyond
which one could not be considered to be backward. What should
be that limit can be determined by the appropriate State. Income
apart, provision .should be made that wards of those backward
D classes of persons who have achieved a particular status in society
either political or social or economic or if their parents are in
higher services then such individuals should be precluded to avoid
monopolisation of the services reserved for backward classes by a
few. Creamy layer, thus, shall stand eliminated."

E KP. Jeevan Reddy, J. Speaking for the Court enunciated the concept
of 'creamy layer' in the following words :

"The very concept of a class denotes a number of persons having
certain common traits which distinguish them from the others. In
F a backward Class under Clause (4) of Article 16, if the connecting
link is the social backwardness, it should broadly be the same in a
given class. 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. After
G excluding them alone, would the class be a compact class. In fact,
such exclusion benefits the truly backward. Difficulty, however,
really lies in drawing the line-how and where to draw the line?
For, while drawing the line, it should be ensured that it does not
result in taking away with one hand what is given by the other. The
H basis of exclusion should not merely be economic, unless, of course,
AK. TIIAKUR v. STATE [KULDIP SINGH, J.) 275

r the economic advancement is so high that it necessarily means A
social .advancement. Let us illustrate the point. A member of
backward class, say a member of carpenter caste, goes to Middle
East and works there as a carpenter. If you take his annual income
in rupees, it would be fairly high from the Indian standard. Is he
to be excluded from the Backward Class? Are his children in India B
to be deprived of the benefit of Article 16(4)? Situation may,
however, be different, if he rises so high economically as to become
- say a factory owner himself. In such a situation, his social status
also rises. He himself would be in a position to provide employ-
ment to others. In such a case, his income is merely a measure of
his social status. Even otherwise there are several practical difficul- C
ties too in imposing an income ceiling. For example, annual income
of Rs. 36,000 may not count for much in a city like Bombay, Delhi
or Calcutta whereas it may be a handsome income in rural India
anywhere. The line to be drawn must be a realistic one. Another
question would be, should such a line be uniform for the entire D
country or a given State or should it differ from rural to urban
areas and so on. further, income from agriculture may be difficult
to assess and, therefore, in the case of agriculturists, the line may
have to be drawn wii:h reference to the extent of holding. While
the income of a person can be taken as a measure of his social E
advancement, the limit to be prescribed should not 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. At the same time, it must be recognised that there
are certain positions, the occupants of which can be treated as
F
socially advanced without any further enquiry. For example, if a
member of a designated backward class becomes a member of IAS
or IPS or any other All India Service, his status in Society (social
status) rises : he is no longer socially disadvantaged. His children
get full opportunity to realise their potential. They are in no way
handicapped in the race of life. His salary is also such that he )s G
above want. It is but logical that in such a situation, his children
are not given the benefit of reservation. For by giving them the
benefit of reservation, other disadvantaged members of that back-
ward class may be deprived of that benefit. It is then argued for
the respondents that 'one swallow doesn't make the summer', and H
276 SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A that merely because a few members of a caste or class become
socially advanced, the class/caste as such does not cease to be
backward. It is pointed out that clause (4) of Article 16 aims at
group backwardness and not individual backwardness. While we
agree that clause (4) aims at group backwardness, we feel that
exclusion of such socially advanced members will make the 'class'
B a truly backward class and would more appropriately serve the
purpose and object of clause (4). (This discussion is confined to
Other Backward Classes only and has no relevance in the case of
Scheduled Tribes and Scheduled Castes) ...... Keeping in mind all
these considerations, we direct the Government of India to specify
c the basis of exclusion - whether on the basis of income, extent of
holding or otherwise - of 'creamy layer"'.

It is difficult to draw a line where a person, belonging to the back-
ward class, ceases to be so and becomes part of the 'creamy layer'. It is
not possible to lay down the criteria exhaustively. This Court has, however,
D speaking through J eevan Reddy, J ., dealt with the question elaborately and
has brought home the point succinctly by illustrating various stages where
a member of a backward class ceases to be backward and starts floating
with the 'creamy layer'.

Pursuant to the directions by this Court in 'Mandal case' Government
E of India, Ministry of Personnel, Public Grievances and Pensions (Depart-
ment of Personnel and Training) issued office memorandum dated Sep-
tember 8, 1993 providing for 27% reservation for the Other Backward
Classes. Para 2(c) of the memorandum excludes the persons/sections men-
tioned in column 3 of the Schedule to the said memorandum. In other
F words, the Schedule consists of the 'Creamy layer'. It would be useful to
reproduce the relevant paras of the said memorandum hereunder :

0FFICE MEMORANDUM

Subject : Reservation for Other Backward Classes in Civil Posts and
G Services under the Government of India - Regarding.
The undersigned is directed to refer to this Department's O.M. No.
36012/31/90-Estt. (SCT), dated the 13th August, 1990 and 25th September,
1991 regarding reservation for Socially and Educationally Backward Clas-
ses in Civil Posts and Services under the Government of India and to say
H that following the Supreme Court Judgment in the Indira Sawhney and
AK. THAKUR v. STATE [KULDIP SINGH, J.] 277

others v. Union of India and others case (Writ Petition (Civil) No. 930 of A
1990) the Government of India appointed an Expert Committee to recom-
mend the criteria for exclusion of the socially advanced persons/sections
from the benefits; of reservations for Other Backward Classes in civil posts
and services under the Government of India.

2. Consequent to the consideration of the Expert Committee's B
recommendations this Department's Office Memorandum No.
36012/31/90-Estt. (SCT), dated 13.8.90 referred to in para (1) above is
hereby modified to provide as follows :

·. (a) 27% (twenty seven percent) of the vacancies in civil posts and
services under the Government of India, to be filled through direct recruit- C
ment, shall be reserved for the Other Backward Classes. Detailed instruc-
tions relating to the procedure to be followed for enforcing reservation will
be issued separately.

(b) ................. .
D
(c) (i) The aforesaid reservation shall not apply to persons/sections
mentioned in column 3 of the Schedule to this office memorandum.

(ii) The rule of exclusion will not apply to persons working as artisans
or engaged in hereditary occupation, callings. A list of such occupations,
callings will be issued separately by the Ministry of Welfare. E
(d) ................ ..

(e) ................. .

3................... .
F
SCHEDULE

Description of category To whom rule of exclusion will apply

I. CONSTITUTIONAL POSTS Son (s) and daughter (s) of
G
(a) president of India;

(b) Vice President of India

(c) Judges of the Supreme Court
and of the High Courts; H
278 SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A (d) Chairman & Members of UPSC
and of the State Public Service
Commission; Chief Election
Commissioner; Comptroller &
Auditor General of India;
B (e) persons holding Constitutional
positions of like nature.

II. SERVICE CATEGORY Sons (s) and daughter (s) of
A Group A/Class I officers (a) parents, both of whom are ...
.....
c of the all India Central and Class I officers;
State Services (Direct Recruits). (b) parents, either of whom is a
Class I officer;

(c) parents, both of whom are class
I officers, but one of them dies
D or suffers permanent in-
capacitation.

(d) parents, either of whom is a
Class I officer and such parent
dies or suffers permanent in-
E capacitation and before such
death or such incapacitation has
had the benefit of employment
in any International Organisa-
tion like UN, IMF, World Bank,
F etc. for a period of not less than
5 years.

(e) parents, both of whom are class
I officers die or suffer per-
manent incapacitation and
G before such death or such in-
capacitation of the both, either
of them has had the benefit of
employment in any international
Organisation like UN, IMF,
H World Bank, etc. for a period of
AK. THAKUR v. STATE (KULDIP SINGH,J.] 279

not less than 5 years. A
Provided that the rule of exclusion
shall not apply in the following
cases:

(a) Sons and daughters of parents 'B
either of whom or both of whom
are Class-I officers and such
parent (s) dies/die or suffer per-
manent incapacitation.

(b) A lady belonging to OBC C
category has got married to a
Class-I officer, and may herself
like to apply for a job.

B. Group B/Class II officers of Son (s) and daughter (s) of D
the Central & State Services (a) parents both of whom are Class
(Direct recruitment) II officers.

(b) parents of whom only the hus-
band is a Class II officer and he
gets into Class I at the age of 40 E
or earlier.

- (c) parents, both of whom are Class
II officers and one of them dies
or suffers permanent m-
capacitation and either one of F
them has had the benefit of
employment in any Internation-
al Organisation like UN, IMF,
World Bank, etc. for a period of
not less than 5 years before such G
death or permanent incapacita-
tion;

(d) parents of whom the husband is
a Class I officer (direct recruit
or pre-forty promoted) and the H
280 SUPREME COURT REPORTS. (1995) SUPP. 3 S.C.R.

A wife is a class II officer and the
wife dies; or suffers permanent
incapacitation; and
."
(e) parents, of whom the wife is
Class I officer (Direct Recruit
B or pre-forty promoted) and the
husband is a Class II Officer and
the husband dies or suffers per-
manent incapacitation

c Provided that he rule of exclusion
shall not apply in the following
cases:

Sons and daughters of

D (a) Parents both of whom are Class
II officers and one of them dies
or suffers permanent in-
capacitation.

(b) Parents, both of whom are Class
E II officers and both of them die
or suffer permanent incapacita-
tion, even though either of them
has had the benefit of employ-
ment in any International Or-
F ganisation like, UN, IMF,
Wodd Bank, etc. for a period of
not less than 5 years before their
death or permanent incapacita-
tion
G C. Employees in Public Sector The criteria enumerated in A & B
Undertakings etc. above in this Category will apply
mutatis mutandi to officers holding
equivalent or comparable posts in
PSU's, Banks Insurance Organisa-
H tions Universities, etc. and also to
A.K. THAKUR v. STATE [KULDIP SINGH, J.] 281

equivalent or comparable posts and A
positions under private employment,
Pending the evaluation of the posts
on equivalent or comparable basis in
these institutions, the criteria
specified in Category VI below will
B
apply to the officers in these Institu-
tions.

III. ARMED FORCES Sons(s) and daughter (s) of parents
INCLUDING PARAMILI- either or both of whom is or are in
TARY FORCES (persons the rank of Colonel and above in the c
holding civil posts are not Army and to equivalent posts in the
iiieluded) Navy and the Air force and the para
Military Forces.

Provided that :
D
(i) if the wife of an Armed Forces
Officer is herself in the Armed
Forces (i.e. the category under
consideration) the rule of ex-
clusion will apply only when she
E
herself has reached the rank of
Colonel;

(ii) the service ranks below Colonel
of husband and wife shall not be
clubbed together; F

(iii) If the wife of an officer in the
Armed Forces is in civil employ-
ment, this will not be taken into
account for applying the rule of
exclusion unless she falls in the G
service categor)'. under item No.
1

11 in Which tase the criteria
and conditions enumerated
therein will apply to her inde-
pendently H
282 SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A IV. PROFESSIONAL CLASS
AND THOSE ENGAGED
IN TRADE AND INDUSTRY

(I) Persons engaged in profession Criteria specified against Category
as a doctor, lawyer, chartered IV will apply :-
B accountant, Income-tax con-
sultant, financial or manage-
ment consultant, dental surge-
on, engineer, architect, com-
puter specialist, film artists
c and other film professional,
author, playwright, sports per-
son, sports professional,
media professional or any
other vocations of like status.

D (II) Persons engaged in trade, Criteria specified against Category
business and industry. VI will apply :

Explanation :

(i) Where the husband is in some
E
profession and the wife is in a
Class II or lower grade employ-
ment, the income/wealth test
will apply only on the basis of
the husband's income
F
(ii) If the wife is in any profession
and the husband is in employ-
ment in a Class II or lower rank
post, then the income;wealth
criterion will apply only on the
G basis of the wife's income and
the husband's income will not be
clubbed with it.

V. PROPERTY OWNERS • Son (s) and daughter (s) of persons
H A. Agricultural holdings belonging to a family (father, mother
AK. THAKUR v. STATE [KULDIP SINGH, J.] 283

and minor children) which owns. A

(a) only irrigated land which is equal
to or more than 85% of the statutory
area, or

(b) both irrigated and unirrigated B
land, as follows :

(i) The rule of exclusion will apply
where the pre-condition exists that
the irrigated area (having been
brought to a single type under a
c
common denominator) 40% or more
of the statutory ceiling limit for ir-
rigated land (this being calculated by
excluding the unirrigated portion). If
this pre-condition of not less than D
40% exists, then only the area of
unirrigated land will be taken into
account. This will be done by con-
verting the unirrigated land on the
basis of the conversion formula ex-
E
isting, into the irrigated type. The
irrigated area so computed from
unirrigated land shall be added to
the actual area of irrigated land and
if after such clubbing together the
total area in terms of irrigated land F
is 80% or more of the statutory ceil-
ing limit for irrigated land, then the
rule of exclusion will apply and dis-
entitlement will occur.
G
(ii) The rule of exclusion will not
apply if the land holding of a family
is exclusively unirrigated.

B. Plantations Criteria of income/wealth specified
(i) Coffee, tea, rubber, etc. in Category VI below will apply. H
284 SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A (ii) Mango, citrus, apply Deemed as agricultural holding and
plantations etc. hence criteria at A above under this
category will apply.

C. Vacant land and/or buildings Criteria specified m Category
in urban areas or urban VI below will apply.
B agglomorations

Explanation: Building may be
used for residential, industrial
or commercial purpose and the
c like two or more such purposes.

VI. INCOME/WEALTH TEST Son (s) and daughter(s) of

(a) Persons having gross annual in-
D
come of Rs. 1 lakh or above or
possessing wealth above the ex-
emption limit as prescribed in
the Wealth Tax Act for a period
of three consecutive years.
E
(b) Persons in Categories I, II, III
and V A who are not disentitled
to the benefit of reservation but
have income from other sources

F
of wealth which will bring them
within the income/wealth
criteria mentioned in (a) above.
-
Explanation :

(i) Income from salaries or agricul-
G
tural land shall not be clubbed;

(ii) The income criteria in terms of
rupee will be modified taking
into account the change in its
H value every three years. If the
AK. THAKUR v. STATE [KULDIP SINGH, J.] 285

situation, however, so demands, A
the interrugnum may be less.

Explanation: Wherever the ex-
pression "permanent in-
capacitation" occur in this
schedule, it shall mean in- B
capacitation which results in
putting an officer out of ser-
vice."

We have carefully examined the criteria for identifying the 'creamy C
layer' laid down by the Government of India in the Schedule, quoted above,
and we are of the view that the same is in conformity with the law laid
down by this Court in 'Manda/ case'. We have no hesitation in approving
the rule of exclusion framed by the Government of India in para 2(c) read
with the schedule of the Office Memorandum quoted above. Learned
counsel for the petitioners have also vehemently commended that the State D
Governments should follow the Government of India and lay down similar
criteria for identifying the 'creamy layer'.

In the light of the above background, we may examine the criteria
for the identification of the 'creamy layer' as laid down by the States of E
Bihar and Uttar Pradesh.

The Government of Bihar promulgated Ordinance No. 5 of 1995 on
January 27, 1995 called "the Bihar Reservation of vacancies in posts and
services (for Scheduled Castes, Scheduled Tribes and other Backward
Classes) Amendment) Ordinance, 1995. By the said Ordinance Section 4 F
of the Bihar Act 3 of 1992 was amended and after the second proviso, the
following proviso was added :

"Provided also that reservation under clause ( d) shall not apply to
the category of backward classes specified in Schedule III." G

Schedule III is reproduced hereunder :

"Schedule III

(See Section 4(2)] H
286 SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A 1. The son or daughter of the President of India, the Vice-Presi-
dent of India, the Chief Justice and Judges of the Supreme Court
of India, the Chief Justice and Judges of .the High Courts, the
Chairman and Members of the Union Public Service Commission
and the Chief Election Commissioner;

B 2. The son or daughter of such officers who has been directly
recruited in Class I Services of the Central Government or a State
Government or an Undertaking or an institution fully or partially
financed by them; and

(a) Whose income from salary is rupees ten thousand or
c more per mensum, and

(b) Whose wife or husband, as the case may be, is at least
a graduate, and

(c) Who or his wife or her husband, as the case may be,
D.
owns a house in an urban area, and

( d) Whose mother or father has also been directly recruited
to class I services.

Explanation.--Class I means the pay bracket fixed by the State
E
government from time to time for Class I.

3. The son or daughter of such person engaged as doctor,
advocate, chartered accountant, tax consultant, financial consult-
ant, management consultant, architect or other professionals, and
F
(a) Whose average income from all sources for three con-
secutive financial years is not less than rupees ten lakhs
per annum; and

(b) Whose wife or husband, as the case may be, is atleast
G a graduate; and

(c) Whose family owns immovable property at least of
rupees twenty lakhs.

4. The son or daughter of such person engaged in trade or.
H commerce, and -
AK. THAKUR v. STATE [KULDIP SINGH, J.) 287

(a) Whose average income from all sources for three con- A
secutive financial years is not less than rupee ten lakhs
per annum; and

(b) Whose Wife or husband, as the case may be, is at least
a graduate; and
B
(c) Whose family owns immovable property at least of
rupees twenty lakhs.

5. The son or daughter of such industrialist. -

(a) Whose level of investment in running unit or units is C
more than rupees ten crores; and

(b) Such unit or units are engaged in commercial produc-
tion for at least five years; and

(c) His wife or husband, as the case may be, is at least a D
graduate.

6. The son or daughter of such agricultural land-holder.-

(a) whose average income from all sources other than
agriculture for three consecutive financial years is not E
less than rupees ten lakhs per annum; and

(b) Whose wife or husband, as the case may be, is at least
a graduate; and
F
(c) Who or his wife or her husband, as the case may be,
owns house at least of rupees twenty lakhs in an urban
area.

7. The son or daughter of person, other than the persons
specified in serial 1 to 6 of this Schedule : G
(a) Whose main source of income is other than animal
husbandry, fisheries, poultry, weaving, craftsmanship,
handicraft and artisanship; and

(b) Whose average income from all sources for three con- H
288 SUPREME COURT REPORTS (1995] SUPP. 3 S.C.R.

A secutive financial years is not less than rupees ten lakhs
per annum; and

(c) Whose wife or husband, as the case may be, is at least
a graduate, and

B (d) Whose family owns immovable property at least of
rupees twenty lakhs.

8. If a person included in serial 1 to 7 of this Schedule performs
inter-castes marriage with a backward class person other than the
c categories under serial 1 to 7 of this Schedule, his/her son or
daughter shall not be excluded.

Note - I. The level of income and the value of property shall
be modified taking into account the variation in the
money value every three years or less period, as the
D situation may demand.

II. An affidavit filed by the father or the mother of the ''
~

candidate, or in case of their death, by the candidate
himself, shall be deemed to be decisive in respect of
income, value of property and educational qualifica-
E
tion."

So far as the State of Uttar Pradesh is concerned the categories
sought to be excluded from the backward classes (creamy layer) are
mentioned in Schedule II read with Section 3(b) of the Uttar Pradesh
F Public Services Reservation of Scheduled Castes and Scheduled Tribes and
other backward classes Act, 1994. The said categories are as under :

"Categ01ies of Persons Criteria for exclusion
excluded

G 1. sons and daughters
of

(a) IAS, IFS, IPS Indian Forest (i) Income from salary of such mem-
Service other central service ber of service is 10,000 or above per
H (direct or promotee) mens um.
A.K. THAKUR v. STATE [KULDIP SINGH, J.] 289

(b) U.P. Civil Service, U.P. (ii) Spouse is at least graduate. A
Police Service State
Service. (direct recruit).

(iii) He or his spouse owns a house
in urban area.
\ B
(c) Group A/Class I officers of
any Deptt. or Ministry of
Govt. of India or Educational,
Research or other institutions
(no.1 included in above (a)).
c
(d) Group A/Class-I officer of any
Deptt. or Institution of State
.... Govt. (No.1 included in (b)
above.
D
( e) An officer of defence forces or
Para Military forces not below
. rank of colonel or equivalent.

2. SONS AND DAUGHTERS OF --
E
persons engaged in profession (i) his average income from all
as a doctor, surgeon, engineers, sources should not be less than
lawyer, architect, Chartered Rs. 10 lakhs per year for 3 con-
Accountant, media & information secutive financial years
professional, management and
other consultant film artist & (ii) Spouse at least a graduate. F
other film professional running
educational institution or (iii) His family property (im-
coaching institute or engaged movable) should be worth Rs.
in the business as a share 20 lakh.
broker or in entertainment G
business

3. Sons and daughters of -- (i) Provided whose average income
Businessman. for 3 consecutive financial years
is not less than Rs. 10 lakh per
annum. H
290 SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A · (ii) Spouse at least a graduate.

(iii) immovable family property
worth at least 20 lakhs.

4. Sons and Daughters of (i) Whose level of investment m
B Industrialist. rtfnning units is over Rs. 10
crore and such units are
engaged in production for at
least 5 years.

(ii) Spouse at least a graduate.
c
5. Sons and Daughters of - (i) has an income of Rs. 10 lakhs in
a person whose holdings a year from sources other than
is within limit fixed under agriculture.
the U.P. Imposition of ceiling
D on Land Holdings Act 1960. (ii) His spouse at least a graduate.

6. Sons and Daughters of - (i) whose income from all sources
any others person not for 3 consecutive financial years
mentioned in aforementioned is not less than Rs. 10 lakhs per
categories. annum.
E
(ii) Spouse at least a graduate.

(iii) Immovable family property
worth at least Rs. 20 lakhs."
F This Court has categorically held in 'Manda! Case' that a person,
belonging to a backward class, who becomes member of IAS, IPS or any
other All India Service, his Children cannot avail the benefit of reservation.
The States of Bihar and Uttar Pradesh have added further conditions such
as salary of rupees ten thousand or more per mensum, the wife or husband
G to be graduate and one of them owning a house in an urban area. so far
as the professionals are concerned, an income of Rs. 10 lakhs per annum
has been fixed as the criterion. It is further provided that the wife or
husband is at least graduate and the family owns immovable property or
the value of at least rupees twenty lakhs. Similarly, the criteria regarding
H trades, industrialists, agriculturists and others is wholly arbitrary apart from
AK. TIIAKUR v. STATE [KULDIP SINGH, J.] 291

being contrary to the guidelines laid down by this Court in 'Manda/ case'. A

Multiple conditions have been provided in all the categories. The
'Spouse' to he a graduate and holding property in urban area, are the
conditions attached to almost every category. These conditions have no
nexus with the object sought to be achieved. Since the conditions are not
severable the two criterias as a whole have to be struck-down.
B

This Court, in 'Manda! case' 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'. C
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 D
Court has laid down, clear and easy to follow, guidelines for ~he identifica-
tion of 'creamy layer'. The States of Bihar and Uttar Pradesh have acted
wholly arbitrary and in uttar violation of the law laid down by this Court
in 'Manda! case'. It is difficult to accept that in India where the per capita
national income is Rs. 6929 (1993- 94), a person who is a member of the
IAS and a professional who is earning less than Rs. 10 lakhs per annum is E
socially and educationally backward. We are of the view that the criteria
laid down by the States of Bihar and Uttar Pradesh for identifying the
.... 'creamy layer' on the face of it is arbitrary and has to be rejected .

We, therefore, hold that the above quoted criteria, for identification F
of 'creamy layer', laid down by the States of Bihar and Uttar Pradesh is
violative of Article 16(4), wholly arbitrary - violative of Article 14-and
against the law laid-down by this Court in 'Manda! case'.

We allow the writ petitions and quash (except clause 1 of Schedule
III) the Bihar reservation of vacancies in posts and services (for scheduled G
castes), scheduled tribes and other backward classes) (Amendment) or-
dinance 1995 (also the Act if ordinance has been converted into Act). We
also quash schedule II read with Section 3(b) of the Uttar Pradesh Public
Services Reservation of Scheduled Caste and Scheduled Tribes and other
backward classes Act, 1994. H
292 SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A We further direct that for the academic year 1995-96 the States of
Uttar Pradesh and Bihar shall follow the criteria laid down by the Govern-
ment of India, reproduced above, in the memorandum dated September 8,
1993. It will be open to the two States to lay down fresh criteria for the
subsequent years in accordance with law. No costs.

B Mr. Venugopal, learned counsel appearing for the petitioner, stated
that there are various other law-points in these writ petitions which were
not raised and he sought liberty to raise the same in appropriate proceed-
ings, if necessary. We order accordingly.

T.W. Petitions allowed.

..