The Kerala High Court has ruled that children of affluent private-sector employees cannot claim non-creamy layer status merely because the government has not identified private-sector positions equivalent to government posts for the purpose of reservation.
The decision came while the Court considered petitions filed by two students from the Other Backward Classes (OBC) community who sought non-creamy layer certificates for admissions through NEET and the Kerala Engineering, Architecture and Medical Entrance Examination (KEAM). Revenue authorities had rejected their applications after finding that their parents’ earnings exceeded the prescribed limits.
Justice Bechu Kurian Thomas, dismissing the petitions, held that income earned through private employment remains a crucial factor in determining whether a person belongs to the creamy layer when no equivalent private-sector posts have been formally notified by the government.
The Court observed that the absence of such a notification cannot automatically place all private-sector employees within the non-creamy layer category. In those cases, the income and wealth criteria become the governing test.
According to the judgment, allowing wealthy private-sector families to avail reservation benefits solely because comparable posts have not been identified would run contrary to the principles laid down by the Supreme Court in the landmark Indira Sawhney decisions.
The dispute centred on a government order issued on January 1, 2015, which lays down the framework for identifying creamy layer candidates for admission to professional courses. The order classifies applicants on the basis of their parents’ occupations, official status and financial standing.
For government employees and certain public officials, exclusion from reservation is linked to the rank and nature of the post. However, where parents work in the private sector and their positions have not been declared equivalent to government posts, the income-and-wealth test applies.
The petitioners argued that an explanation attached to the government order stated that salary income and agricultural income should not be combined while assessing eligibility. On that basis, they contended that the salaries earned by their parents in private employment should be ignored.
One of the students claimed eligibility despite her father’s annual salary of ₹1.12 crore, arguing that the amount should not be counted while computing gross income. Another petitioner maintained that his father’s salary of around ₹33 lakh, earned through employment with a UK-based consumer bank, should also be excluded from consideration.
The State opposed the petitions, pointing out that the father earning ₹1.12 crore annually also owned two apartments and two cars, including an Audi. It argued that such families could not be treated as socially and economically backward merely because income from other sources remained below the prescribed ceiling.
Rejecting the students’ interpretation, the High Court clarified that the explanation relied upon by the petitioners was intended for a different category of beneficiaries—government employees who are otherwise eligible for reservation but earn additional income from separate sources.
The Court explained that the provision does not apply to private-sector employees seeking non-creamy layer status. Reading it otherwise, the judgment noted, would create an absurd situation in which individuals earning crores of rupees every year could continue to enjoy reservation benefits.
The Court further held that excluding salary income while calculating annual earnings would defeat the very purpose behind the creamy layer principle, which seeks to ensure that reservation benefits reach genuinely disadvantaged sections of society.
Finding that the families of both petitioners possessed income and assets far above the prescribed limits, the Court refused to interfere with the authorities’ decision and dismissed the petitions.
