Parents' Salary Income From Private Sector Must Be Considered To Decide If A Person Falls Under Non-Creamy Layer: Kerala High Court

The Kerala High Court on Wednesday (July 29) held that salary income of the parents must be included while deciding whether a person falls under Creamy Layer or not for the purpose of reservation in professional colleges. [2026 LiveLaw (Ker) 408]Justice Bechu Kurian Thomas dismissed two writ petitions filed by KEAM and NEET aspirants praying for a declaration that they fall under the Non-Creamy Layer after their applications were declined for high income.Referring to a 2015 Government Order relating to the scheme of exclusion of creamy layer from reservation in professional courses, the Court remarked:“as far as private sector employment is concerned, till date, no equivalent or comparable posts with the Government have been notified. When such comparable or equivalent posts have not been notified, as per the scheme of the Government Order dated 01.01.2015, it cannot lead to a situation where there is no Creamy Layer at all in private employment. The stipulation is that when equivalent posts have not been notified, the method to identify the Non-Creamy Layer is the income or wealth test… it is evident that the gross annual income is the factor to be reckoned for the persons employed in the private sector, where the equivalent or comparable posts have not been notified.,,if income or wealth test is required to be applied, excluding the salary income could lead to absurd results… Such an interpretation goes against the very scheme of creating the Creamy Layer category. Of course, assets are also to be reckoned to identify whether they possess wealth above the maximum limit.”The father of one of the petitioners was a Senior Vice-President in a big private company with an annual salary income of more than Rs. 1.12 crores and, he owned apartments in Kerala and Hyderabad as well as two cars. The family's 'income from other sources' was Rs. 58, 163. The father of the other petitioner was an NRI working abroad with only salary income, amounting to Rs. 33 lakhs.The petitioners contended that the income from other sources of their family is not above 8 lakhs, which is the present cut off limit for income, and therefore, they are eligible to come under 'non-creamy layer' category. They relied on Apex Court's decision in Union of India and Others v. Rohith Nathan and Anr. to argue that income from salary must be excluded.In the counter filed, it was stated that non-creamy layer criteria for posts in public sector banks and insurance companies have been notified and only non-executive level posts are considered as non-creamy layer. It was contended that if privately employed persons' incomes are not considered, ineligible persons would wrongly avail the benefit of reservation, defeating the very purpose for which it exists.The respondents also relied on a circular issued by the SC/ST department which stated that children of parents with wealth exceeding Rs. 30 lakhs are not eligible for reservation. Moreover, wealth includes buildings, land, cars, cash, jewellery, etc. and therefore, the wealth of the petitioners' parents would also be above the threshold prescribed, it was stated.After hearing the parties, the Court referred to the landmark decision in Indira Sawhney v. Union of India (1992), where the Supreme Court had held that non-exclusion of creamy layer from the benefits of reservation would violate Articles 14 and 16(1) of the Constitution. The Apex Court had also directed States to identify creamy lawyer by appointing Commissions.The Court also relied on the later Indira Sawhney case (2000), in which the Supreme Court struck down various provisions in the Kerala State Backward Classes (Reservation of Appointments or Posts in the Services under the State) Act, 1995, and had observed that non-creamy layer persons must not be permitted to get the benefits of reservation.Next, referring to the 2015 GO, where Explanation to category VI (Income/Wealth Test) stipulates that income from salaries and agricultural land must not be clubbed, the Court observed that the same applies only to the second category mentioned there:“Income/Wealth Test has two categories of which the first is (a) i.e., a person with gross annual income of more than Rs.8 lakhs or possessing wealth above the exemption limit. The second is (b). i.e., persons who are employed in Categories I,II, III and V(A) (those holding constitutional posts, Group A & B Officers, Officers of Armed Force and those property owners who hold more than 5 hectare of agricultural holdings). Persons, who, though falling under the said categories, and are yet not disentitled for benefit of reservation, will still be disentitled, if they have income from other sources of wealth. Taking note of the principles laid down in the First Indira Sawhney case and the scheme of Government Order referred above, it is evident that the 'Explanation' can apply only to the category of persons mentioned in Category VI(b) and not to Category VI(a).”The Court was of the opinion that another...

Parents' Salary Income From Private Sector Must Be Considered To Decide If A Person Falls Under Non-Creamy Layer: Kerala High Court

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Parents' Salary Income From Private Sector Must Be Considered To Decide If A Person Falls Under Non-Creamy Layer: Kerala High Court

K. Salma Jennath

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