Supreme Court To Hear Centre's Plea To Clarify Judgment That Parental Salary Alone Can't Decide OBC Creamy Layer Status

A bench of Justice Pamidighantam Sri Narasimha and Justice R. Mahadevan issued notice on the Centre's clarification application and kept the matter for hearing on 17^th September, 2026.

The Centre has raised concerns about the consequences of applying the judgment retrospectively. It has stated that such an interpretation could affect recruitments and admissions already undertaken by the Central Government, 18 States and Union Territories,

“Retrospective or belated application of a changed eligibility criterion may unsettle appointments and admissions made under the rules and certificates prevailing at the relevant time and may create uncertainty regarding OBC-NCL status, seniority, service conditions and career progression. It may also affect admissions to Central and State educational institutions, universities and professional institutions. The Applicant therefore respectfully submits that the temporal operation of the Judgment requires clarification so as to avoid unsettling completed selections, appointments and admissions and the consequential rights arising therefrom”, the plea states.

The Centre has sought two years to establish equivalence of posts in other organisations with government posts after consultations with the concerned stakeholders and to formulate a uniform mechanism for determining OBC creamy-layer status where equivalence has not been established.

The Centre has also sought permission to finalise service allocation for 958 candidates recommended by the Union Public Service Commission (UPSC) in the Civil Services Examination (CSE) 2025, pending a decision on the clarification application.

By the March 11 judgment, the Supreme Court held that salary income alone cannot determine whether a candidate belongs to the OBC creamy layer. It said the status and category of the post held by the candidate's parent or parents are also essential factors. The dispute concerned the interpretation of the Office Memorandum dated August 8, 1993 and a clarificatory letter dated October 14, 2004.

The 1993 OM does not make a parent's salary the basis for determining creamy-layer status. Depending on the applicable category, the parent's post is relevant. Where the Income/Wealth Test applies, salary and agricultural income are excluded from the income calculation.

The 2004 clarification, however, provided for consideration of salary income of parents in cases where equivalence between posts in organisations such as PSUs, banks, universities and private entities with government posts had not been determined.

The Supreme Court held that the 2004 clarification could not introduce a substantive condition that was absent from the 1993 policy. It also held that treating children of PSU or private-sector employees differently from similarly placed government employees, by treating their salary income as a basis for exclusion, could amount to hostile discrimination and violate Articles 14 and 16 of the Constitution.

In its present clarification application, the Union Government has said that it is not seeking a review of the March 11 judgment. It has instead sought clarification regarding the temporal operation of the judgment and the manner in which its directions are to be implemented.

The Government has said that between 2016 and 2025, more than 5.69 lakh reserved vacancies, including 3.70 lakh OBC vacancies, were filled in Ministries and Departments of the Central Government and their attached and subordinate offices. It has said these recruitments were made on the basis of the August 8, 1993 Office Memorandum and subsequent instructions and guidelines.

According to the Centre's plea, retrospective implementation could require reconsideration of service allocations made in Civil Services Examinations since 2012. It could also result in reallocation of services and cadres to candidates who have already been appointed and could affect seniority and promotions of officers currently in service.

The Centre has argued that retrospective implementation could also affect ongoing examinations and recruitment processes, and lead to increased litigation from candidates who were previously denied OBC-NCL benefits or extra attempts.

The Government has referred to recruitments conducted through various examination bodies and departments, including the Railways, banks, Department of Posts and paramilitary organisations. It has said similar issues could arise in recruitments conducted by 18 States and Union Territories that follow the 1993 Office Memorandum.

The Government has also raised concerns regarding candidates who may become eligible for technical services years after the relevant examination. It has said some candidates may face difficulties in satisfying the prescribed physical and medical standards due to the passage of time.

The application also states that lakhs of admissions have been made in higher educational institutions since 2012 on the basis of the OBC creamy-layer criteria under the 1993 Office Memorandum. It has expressed concern that retrospective changes could affect such admissions, particularly where institutions do not have provisions for supernumerary seats.

It has also contended that retrospective implementation would disrupt government functioning and affect persons who were not parties to the original litigation without giving them an opportunity to have their individual circumstances considered.

The Centre has therefore sought a clarification that the March 11 judgment should not retrospectively reopen completed selections, appointments, service or cadre allocations, seniority positions or admissions made under the rules and eligibility conditions applicable at the relevant time. It has also sought clarification regarding candidates participating in examinations or recruitment processes that were already underway on March 11, 2026.

Separately, the Centre has filed an interim application seeking permission to allocate services to 958 candidates recommended by the UPSC in CSE-2025 in accordance with the existing August 8, 1993 Office Memorandum, pending adjudication of the clarification application.

The Government has said that any further delay in service allocation would defer the Foundation Course and the annual training and induction cycle of the 958 candidates. It has submitted that such prejudice could not be undone if the clarification application is eventually decided in its favour.

Case no. – Diary No. 51879 and 51897 of 2026

Case Title – Union of India v. Rohith Nathan and Anr.