Quick answer
Both rules come from Indra Sawhney v. Union of India (16 November 1992), the Mandal case, decided by a nine-judge bench of the Supreme Court. The Court upheld 27% reservation for Other Backward Classes (OBCs) in central government posts, but only after excluding the "creamy layer" (socially advanced members of those classes). It also held that reservations under Article 16(4) should not normally exceed 50%, except in extraordinary situations. It further held that Article 16(4) does not allow reservation in promotions, a point later changed by constitutional amendment.
The case
Indra Sawhney v. Union of India, AIR 1993 SC 477, Supreme Court of India, 16 November 1992. Nine judges: M.H. Kania, CJ, M.N. Venkatachaliah, S. Ratnavel Pandian, T.K. Thommen, A.M. Ahmadi, Kuldip Singh, P.B. Sawant, R.M. Sahai and B.P. Jeevan Reddy, JJ. The leading judgment, for Kania, CJ, Venkatachaliah, Ahmadi and Jeevan Reddy, JJ., was delivered by Jeevan Reddy, J. The petitions challenged the Office Memorandum of 13 August 1990, which reserved 27% of vacancies in central civil posts for socially and educationally backward classes on the basis of the Mandal Commission Report. They also challenged the Office Memorandum of 25 September 1991.
Key holdings
- Caste and backwardness: a caste can be, and often is, a social class in India. If it is socially backward, it can be a backward class under Article 16(4). Identification may begin with caste, but must cover all groups in society.
- Not economic criteria alone: a backward class cannot be identified only on economic criteria.
- Creamy layer: the creamy layer "can be, and must be excluded". The Government of India was directed to set the criteria for exclusion within four months. The 1990 memorandum was valid subject to this exclusion.
- 50% rule: reservations under Article 16(4) should not exceed 50%. Some relaxation is possible in extraordinary situations, such as far-flung and remote areas, with extreme caution. The rule applies to each year's appointments.
- Promotions: Article 16(4) does not permit reservation in promotions. This applied prospectively, and existing promotion reservations could continue for five years.
- Article 16(4) is wider than Article 15(4): the backward classes in Article 16(4) are not the same as the socially and educationally backward classes in Article 15(4). The accent is on social backwardness.
- Sub-classification: backward classes may be divided into backward and more backward categories.
- 10% economic quota struck down: the 1991 reservation of 10% for "other economically backward sections" not covered by existing schemes was held invalid.
- Permanent commission: a permanent body was to be set up to examine requests for inclusion in, and complaints of over-inclusion or under-inclusion in, OBC lists.
Then and now
| Issue | Indra Sawhney (1992) | Later position |
|---|---|---|
| Creamy layer for OBCs | Must be excluded | Continues for OBCs |
| Reservation in promotion | Not allowed under Article 16(4) | Article 16(4A), inserted by the Seventy-seventh Amendment (1995), allows it for SCs and STs |
| Reservation on economic criteria | 10% economic quota struck down | Up to 10% for economically weaker sections under Articles 15(6) and 16(6), inserted by the One Hundred and Third Amendment (2019) and upheld in Janhit Abhiyan (2022) |
| 50% ceiling | General rule, with exceptions only in extraordinary situations | Remains the general rule from Indra Sawhney; Article 16(6) makes the EWS quota "in addition to the existing reservation" |
Aadil belongs to a notified OBC community. Both his parents hold senior positions in a central service. Under the creamy layer rule, Aadil may be treated as socially advanced and excluded from the OBC quota, even though his community is backward. Renu, from the same community, has parents who are farm labourers, so she remains eligible.
Current-law note
The Statement of Objects of the Seventy-seventh Amendment Act, 1995 refers directly to Indra Sawhney's ruling that Article 16(4) is confined to initial appointment. In Janhit Abhiyan v. Union of India (7 November 2022), a five-judge bench upheld the One Hundred and Third Amendment by a 3:2 majority. For a fuller case note, see the Law Easy page on Indra Sawhney v. Union of India.
Exam point
Indra Sawhney (1992, nine judges): 27% OBC reservation was upheld with creamy layer exclusion. Caste can mark a backward class, but economic criteria alone cannot. The 50% ceiling applies except in extraordinary situations, and no reservation in promotion was allowed under Article 16(4). The promotion point was later changed by Article 16(4A).
