Supreme Court Questions Continued OBC Reservation Benefits for Economically Advanced Families

May 22, 2026 : The Supreme Court on Friday questioned the continued extension of reservation benefits to children of families that have already achieved significant educational, economic and social advancement through the reservation system, observing that such progress also results in upward social mobility.

A Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan made the observations while hearing a petition challenging a Karnataka High Court judgment that upheld the denial of OBC reservation benefits to a candidate on the ground that he fell within the creamy layer category.

The case relates to a candidate from the Kuruba community, classified under Category II(A) in Karnataka’s backward classes list, who had been selected as Assistant Engineer (Electrical) in the Karnataka Power Transmission Corporation Limited under the reserved category. However, the District Caste and Income Verification Committee refused to issue a caste validity certificate after finding that his family income exceeded the prescribed creamy layer limit. Records before the Court showed that the family’s annual income was approximately Rs 19.48 lakh and that both parents were government employees.

During the hearing, Justice Nagarathna expressed concern over the continued grant of reservation benefits to children of families that had already attained economic stability, educational progress and higher social status through affirmative action policies. The Bench observed that once parents secure stable government employment, financial security and social advancement, the issue of extending reservation benefits to the next generation requires reconsideration.

The Court also referred to cases where both parents hold senior government positions and questioned whether reservation benefits should continue in such circumstances despite clear economic and social advancement.

Advocate Shashank Ratnoo, appearing for the petitioner, argued that salary income was not the determining factor for identifying creamy layer status in the case of government employees. He submitted that the relevant criterion under the creamy layer framework was the status or category of service held by the parents, such as whether they belonged to Group A or Group B services, rather than the amount of salary earned.

The petitioner contended that if salary income alone were treated as the basis for creamy layer exclusion, even lower-ranking government employees such as clerks, drivers, peons and support staff could be denied reservation benefits merely because their income crossed the prescribed limit. It was further argued that salary income and agricultural income are generally excluded while determining creamy layer status for government employees, and that only income from business, trade or other independent sources should be considered.

Reliance was also placed on a Karnataka government clarification stating that salary and allowances of State government employees should not be included while assessing creamy layer status. Counsel argued that including all forms of income would blur the distinction between OBC reservation and Economically Weaker Sections (EWS) reservation, thereby weakening the constitutional framework governing backward class reservations.

The Bench, however, observed that the matter raises broader constitutional and policy issues concerning the objective of reservation and the principle behind creamy layer exclusion. Justice Nagarathna stated that a balance must be maintained between protecting socially and educationally backward communities and ensuring that reservation benefits reach genuinely disadvantaged sections.

The petitioner challenged a Division Bench judgment of the Karnataka High Court, which had reversed an earlier single-judge ruling. The single judge had held that the salary income of the petitioner’s parents could not be considered for determining creamy layer status and directed the issuance of a caste validity certificate. However, the Division Bench overturned that decision and held that the Central Government Office Memorandum dated September 8, 1993, excluding salary income from creamy layer computation, applied only to Union Government reservations and not to reservation policies implemented by the State of Karnataka.

Referring to Karnataka’s creamy layer policy, the High Court concluded that the petitioner’s family income exceeded the prescribed threshold and that he was therefore not entitled to OBC reservation benefits. The Supreme Court has now issued notice on the petition and agreed to examine the legal questions arising in the matter.