Income-wealth test determines OBC creamy layer status absent established equivalence with government posts.

The Petitioner secured All India Rank 393 in the Civil Services Examination, 2021, applying under the Other Backward Classes (OBC) category

Despite submitting an OBC Non-Creamy Layer (NCL) certificate and qualifying all stages, he was not allocated a service

The Respondent (Union of India) treated him as falling within the ‘creamy layer’ because his father, a teacher in a Government Aided School, had a gross annual income exceeding ₹8 lakhs for three consecutive financial years (2017-2020)

The Petitioner challenged this before the Central Administrative Tribunal (CAT), arguing that his father should be treated as equivalent to a Group ‘C’ Government employee, which would exempt him from the income test under the governing Office Memorandum (OM)

The CAT dismissed the application at the threshold, leading to the present writ petition

1. Whether the Respondents were justified in applying the income/wealth test to the Petitioner in the absence of an established equivalence between his father’s post in a Government Aided School and a Government post

2. Whether the denial of reservation, despite the Petitioner possessing a valid certificate and participating in the selection process as an OBC candidate, was arbitrary or violative of Articles 14 and 16

3. Whether the judicial precedents in Ketan v. Union of India and Union of India v. Rohith Nathan prohibit the use of salary income as the sole criterion for determining creamy layer status in this specific context

The court primarily applied the DoPT Office Memorandum dated 08.09.1993, which establishes a structured framework for identifying the ‘creamy layer’ through six distinct, independent categories, including status-based service categories and Category VI (the Income/Wealth Test)

It noted that the income threshold was revised to ₹8 lakhs per annum via OM dated 13.09.2017

The court also referred to the principle established in Union of India v. Rohith Nathan, which clarifies that while status-based classifications take precedence, the income/wealth test remains a valid residual mechanism where equivalence of posts has not been established

The Court observed that the six categories for exclusion in the 1993 OM are disjunctive and independent; falling into any single category attracts the ‘creamy layer’ exclusion

The Petitioner failed to provide any notification or policy decision from a competent authority establishing that a teacher in a "Government Aided School" is equivalent to a Group ‘C’ Government post

Consequently, the Court held that in the absence of established equivalence, the Respondent was required to apply the residual Income/Wealth Test under Category VI

Regarding the Petitioner’s reliance on Rohith Nathan, the Court distinguished the case, stating that the precedent does not bar the income test when status-based categories (I-V) are inapplicable

Furthermore, the Court held that an OBC certificate is not conclusive and does not foreclose the Respondent's power to verify eligibility according to the governing policy framework

The Court affirmed that the Respondents did not act arbitrarily, as eligibility is subject to verification at any stage of the selection process

It concluded that there was no manifest error or mala fides in the administrative determination that would warrant judicial interference under Article 226