Supreme Court clarifies its March 11 OBC creamy layer ruling will not reopen past appointments

Key facts

• The Supreme Court, on November 6, 2026, clarified that its March 11 judgment on OBC creamy layer will not apply retrospectively to appointments already made.
• The March 11 judgment held that OBC candidates cannot be excluded from reservation benefits solely based on their parents' salary income, and it had given the government six months to implement it.
• A bench of Justices PS Narasimha and R Mahadevan ruled that the judgment will not lead to reopening of appointments already made, and the government is at liberty to have its own policy.
• The court held that its judgment will govern service allocation under the 2025 civil services examination, since that process was ongoing when the judgment was pronounced.
• In August, the Union government filed an application stating that retrospective operation of the judgment to all past appointments and admissions would lead to complete administrative chaos, and sought two years to work out equivalent posts for identifying the creamy layer among those in PSUs and private employment.
• The March judgment arose from appeals against Madras high court orders, where an OBC candidate recommended for the Indian Police Service became entitled to allocation under the Indian Foreign Service, and another candidate was held entitled to OBC reservation despite his father's higher-income PSU employment.
• The judgment said creamy layer classification is based on posts, and excluding children of those in PSUs or private employment solely on salary income, without reference to their posts, would amount to hostile discrimination and equals being treated unequally.
• The creamy layer notification of 1993 followed the Indra Sawhney judgment of 1992, which allowed 27% reservation for OBCs subject to creamy layer exclusion, and the 1993 order identified five occupational categories plus a sixth income and wealth test category.
• A 2004 clarificatory order said income from salaries and other sources are to be assessed separately, with exclusion only if either component exceeds the prescribed limit for three consecutive years.
• The March judgment held that both the 1993 office memorandum and the 2004 letter preserve the primacy of status-based exclusion, confining economic exclusion to the sixth category, and salary income cannot be mechanically aggregated in a manner that defeats Indra Sawhney.