NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS.

A municipalities’ refers to all municipalities legally constituted; and (vi) Other Arguments: The total seats have been increased by 56 percent in MBBS and by 80 percent in PG in the last six years. Therefore, the total number of seats available for B the general category has increased. The issue of whether reservation for the EWS would violate the law laid down in Indra Sawhney v. Union of India⁸ since it exceeds the 50 percent reservation cap is the subject matter of reference to a five-judge Bench in Janhit Abhiyan v. Union of India⁹, which is adjudicating upon the constitutional validity of the C Constitution (One Hundred and Third Constitution Amendment) Act 2019. D. Major Sinho Commission Report

9. At this stage, a reference must be made to the Major Sinho D Commission report since the Union Government has strongly relied on the observations in the report on using the income limit for identifying the creamy layer of the OBC for determining the EWS. The Major Sinho Commission was constituted for determining the EWS among the unreserved categories. Chapter III of the Commission’s report noted that the welfare measures (excluding reservation which would require E other considerations) may be extended to the EWS category.¹⁰ Chapter IV of the report discusses the parameters to determine the EWS category. The relevant parameters for the identification of EWS were enumerated as follows:

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 671 [DR. DHANANJAYA Y CHANDRACHUD, J.]

(a) Monthly Per Capita Expenditure; A 11 (b) Below Poverty Line Category; (c) Occupational Pattern and Backwardness; (d) Educational Backwardness; (e) Status of Health and Nutrition; and B (f) Housing Conditions

10. Analysing the above parameters across categories, the Commission arrived at the following conclusions: (i) A part of the general category formed a class of poor along with poor of other social groups. Poor households resulted from landlessness, high women illiteracy, marginal farm holdings and part-time/temporary work in the unrecognized sector. Such people have to cope with kutcha housing, poor hygiene and inability to spend on basics; (ii) Socio-economic condition of the general category is better than other social groups but segments within the general category are equivalent to or worse off than the OBCs; and (iii) The general category has a deeper creamy layer than OBCs. The lower end of the spectrum of the general category and the OBCs are comparable. The Major Sinho Commission made the following recommendations for the identification of the EWS: (i) Socio-economic backwardness prevails at a community level. However, economic backwardness prevails at a family level. Thus, the family should be the unit for identification of EWS; and (ii) The BPL families must be identified as EWS. This view was also expressed by various States. While the creamy layer criteria could be used for the identification of EWS, G the creamy layer was a concept exclusive to a class that suffers both social and educational backwardness. The economic needs of EWS differs and hence just one criterion of BPL or setting creamy layer of OBC as the upper limit 11 “BPL” H

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A would not be effective to ensure intended benefits to EWS. The percentage of BPL among the general category was less compared to the backward class, however the poor of the general category (though above BPL) still suffered from malnutrition, poor health, and low standard of living. Therefore, families with income less than the current non- B taxable limit of Rs. 1,60,000 (as may be revised from time to time) and the BPL families should be identified as EWS. E. Union Government’s Decision to Revisit the EWS Criteria

11. On 28 October 2021, the learned Solicitor General sought an adjournment, requesting that the petitions be heard after the Diwali C vacation. Thereafter, on 25 November 2021, the learned Solicitor General stated that the Union Government had taken a considered decision to revisit the criteria for determining EWS in accordance with the provisions of the explanation to Article 15 of the Constitution inserted by the Constitution (One Hundred and Third Constitution Amendment) Act 2019. D The Solicitor General submitted that a period of four weeks would be required to conduct this exercise and the counselling would remain suspended during such period. Acceding to the Union Government’s request to revisit the criteria, this Court posted the petitions for hearing on 6 January 2022.

13. Thereafter, the Union Government filed an affidavit before this Court submitting that it has accepted the recommendations of the

12 “Pandey Committee” H

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 673 [DR. DHANANJAYA Y CHANDRACHUD, J.]

Pandey Committee including its recommendation that the new criteria A for identifying EWS must be applied prospectively and not in the current admission year of 2021-2022. F. The Findings of the Pandey Committee

14. It is important to advert to the findings of the Pandey Committee on the issues raised by this Court by its order dated 21 October 2021. B The Pandey Committee’s short responses to the issues raised by this Court are given in the table below13:

13 Internal page number 29 of the Report H

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A 15. The Pandey Committee observed that income limit is the most appropriate criteria to identify EWS as opposed to a multiple-criteria approach because the latter requires complex and large-scale surveys. The periodic surveys may not be able to capture the evolving nature of the EWS category. Further, over-reliance on consumption patterns would result in beneficiaries hiding or avoiding the consumption of goods and services. The report stated thus: “3.3.1.24. The problem with a multiple-criteria approach is that it requires complex, large-scale surveys. While it may be possible to periodically do such detailed socio-economic surveys, it should be noted that our idea of EWS keeps evolving. For example, using the refrigerator or a phone connection as one of the parameters may have been valid for exclusion in 2011 but may not be true today. Moreover, if we start to rely too heavily on certain consumption patterns to identify beneficiaries, we will end up with people gaming the system by hiding or avoiding certain goods and services.”

D 16. The Pandey Committee sought to justify the use of Rs 8 lakhs income-cut off for determining the EWS category by placing reliance on the Major Sinho Commission report, which it submitted, proposed using the concept of “creamy layer” in OBCs to determine the criteria for identifying EWS among the general category. Further, it noted that despite having a similar threshold of Rs 8 lakhs, the criteria applied for the determination of E creamy layer in OBCs and EWS is different. The report contains the following table enumerating the differences between the two criteria¹⁴: Table III: Creamy Lawyer among OBCs vs EWS criteria

H 14 Internal page number 44 of the Report

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 675 [DR. DHANANJAYA Y CHANDRACHUD, J.]

The Pandey Committee also submitted that if adequate investments A are made and deductions are taken advantage of, the effective income tax exemption limit is Rs 7 to 8 lakhs. The relevant portion of the report is reproduced below: “3.3.1.39 The current annual income tax exemption limit is Rs 2,50,000. However, in February 2019 the Government through B Finance Act amended the Income Tax Act to provide relief to the low-income individuals wherein anyone having taxable income up to five lakhs of rupees per annum was exempt from paying income tax. Whatever tax that was calculated for the income exceeding Rs.2,50,000 was given back to the taxpayer by way of rebate which effectively meant that individuals having taxable income C up to 5 lakhs of rupees had their entire income tax free. As a result, even persons having gross income up to Rs. 6.50 lakhs are not be required to pay any income tax if they make investments in provident funds, specified savings, insurance etc. In fact, with additional deductions such as interest on a home loan up to Rs 2 D lakh, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens etc, persons having even higher income do not have to pay any tax. In addition, salaried persons get an additional standard deduction of Rs 50,000. Income from capital gain on listed shares/ units up to Rs 100,000 too is exempt from tax. Effectively, a person E earning up to around Rs 8 lakhs are not be required to pay any income tax from the financial year 2019-2020 onwards, provided he makes some specified savings etc. Further, Income from agriculture too is not included for the purpose of income tax in this case. F …. 3.3.1.42 It should be noted that the Rs 8 lakh annual gross annual income limit for inclusion into EWS is -is for the entire family as against the individual income tax G exemption limit of Rs 5 lakh -is without any deduction’s available various provisions of income tax such as 80C, standard deductions etc. -includes agricultural income. The individual income tax exemption limit does not include agricultural income. H

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A 3.3.1.43 As per current income tax norms, the effective income tax on individuals is zero for those with incomes up to INR 5 lakhs. As discussed in the foregoing paras after taking advantage of the various provisions for savings, insurance etc., the tax-payer may not need to pay any tax up to an annual income of INR 7-8 lakhs. Thus, the EWS cut-off, if applied to just an individual, is in the ballpark of income tax requirements for zero tax liability. Once applied to include family income and farm income, however, it becomes much more demanding.” In the Pandey Committee’s opinion, a lower-income limit would increase the risk of excluding deserving candidates. However, to avoid undeserving candidates from taking the benefit of reservation, a set of simple asset criteria should be introduced to weed out such candidates instead of lowering the income limit.15

17. The Pandey Committee submitted that uniform criteria should be imposed for identifying EWS because prescribing different income limits based on the differences in purchasing power in urban and rural areas would create complications, especially on account of migration. It will also lead to administrative difficulty in implementation. The Pandey Committee concluded thus: “3.3.2.5 In the present context of establishing a uniform income criterion across the country for determining EWS, this judgment draws focus on the need to have a uniform criterion for determining EWS across the country, as it relates to the practical implementation of such criterion. It was argued before the Supreme Court in Jaishree Laxman Rao Patil (Supra) that the establishment of such standards by the states may lead to vote-bank politics and that a F national body that would be charged with establishing such uniform criteria would be able to objectively, “without being pressurised by the dust and din of electoral politics” be able to provide benefits. 3.3.2.6 Therefore, the Committee is of the view having different income limits for different geographies or areas is neither feasible G nor desirable.”

18. The Pandey Committee submitted that the Rs 8 lakhs cut-off is not over-inclusive because data shows that the majority of the candidates fall within the lower income brackets of below Rs 5 lakhs.

H 15 Para 3.3.1.34 at internal page 44 of the Report.

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 677 [DR. DHANANJAYA Y CHANDRACHUD, J.]

The Pandey Committee relied on the data on household income distribution for qualified EWS candidates in UPSC, NEET-UG 2020 and JEE (2021) examinations. The Pandey Committee’s conclusion is reproduced below: “3.3.3.6 After analysing the data of the three different entrance examinations. The committee is of the view that there is no evidence that the current cut-off of Rs 8 lakhs is leading to a major problem of the inclusion of undeserving candidates. Nonetheless, the committee observed that the distribution of the deserving candidates will have a long “tail” for various factors such as income volatility, size of family, the inclusion of agricultural income, high cost of living in certain locations and so on. Therefore, C despite the fact that the bulk of the qualifying candidates is below Rs 5 lakhs, a somewhat higher threshold is needed which ensures that deserving beneficiaries in the tail of the distribution are not excluded. 3.3.3.⁷ Thus, the committee is of opinion that the income criteria D of INR 8 lakh per annum performs well based on evidence and should be kept unchanged for identifying EWS.”

19. The Pandey Committee was of the view that there should be no interference with the existing criteria relating to exclusion of families having agricultural land of 5 acres or more from the category of EWS E even if their gross income is less than Rs 8 lakhs. The Pandey Committee observed that it is the marginal and small farmers who have farm holdings up to 5 acres whose monthly income is in the range of Rs 10,000. The Pandey Committee observed thus: “3.3.4.¹⁷ The situation is quite vulnerable for the marginal (less F <1 hectare) and small farmers (1-2 hectares of land) as their income is way behind that of the medium and large farmers. A finer categorisation of farmers as per the size of land holdings reveals that the marginal and small farmers’ average monthly earning are barely Rs 9,099, and Rs 11,000 respectively. G 3.3.4.18 Therefore, considering that the marginal and small farmers (having landholding up to 5 acres of land) are able to have monthly income only in the range of around Rs 10,000, the committee is of the view, there is no need to interfere in the criterion of 5 acres of agricultural land.” H

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A 20. The Pandey Committee opined that the residential asset criteria for identifying EWS must be removed. The Pandey Committee noted that there are practical difficulties in identifying a common denominator that can be used in rural and urban areas for determining EWS. The Pandey Committee submitted that it could be difficult to apportion the share of the nuclear family in the residential house of a joint family. B Further, in rural and semi-rural areas, house plots are also used for storing grains, agricultural equipment and sheltering cattle. It will be difficult to demarcate the criteria of the residential house. In urban areas, various measurements are used like carpet area, built-up area and super-built- up area. It will place an onerous burden on a candidate to get these C areas measured and calculated for obtaining certificates from the designated authority. The Pandey Committee also observed that criteria of residential house or plot area does not encapsulate the value of the land which may differ according to geographic location. The Pandey Committee concluded thus: D “3.3.4.31…. The Committee is therefore of the view that a similar approach could be adopted for EWS wherein residential asset exclusion criterion may be omitted for simplicity, ease, and convenience. In short, an asset criterion on residential plot size or flat floor area should not be imposed unless there is clear evidence E that the system is being widely gamed in practice. Even if there was evidence of misuse, the Committee is of the opinion that it may be easier to mine the wealth of digital information to establish real income rather than get caught in a complex debate about ownership and valuation.”

F 21. Thus, effectively the only revision that the Pandey Committee has recommended is the exclusion of the residential asset criteria in determining the category of EWS. The Pandey Committee in its report observed that applying the new criteria would disturb the ongoing admissions and lead to delay. It was further stated that since the present EWS criteria was being applied since 2019, no serious prejudice would G be caused if it is implemented in the present year as well. The relevant observations of the Pandey Committee are reproduced below: “4.19…. ….. H

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 679 [DR. DHANANJAYA Y CHANDRACHUD, J.]

(iv) The Committee deliberated upon the vexed question as to A from which year the criteria suggested in his Report should be used, adopted and made applicable. The Committee found that the existing criteria [the criteria applicable prior to this Report] is in use since 2019. The question of desirability of the existing criteria arose and a possibility of its being revisited arose only recently in B Neil Aurelio Nunes and ors. versus Union of India and ors. and a batch of petitions towards the later part of 2021. By the time this Hon’ble Court started examining the said question and the Central Government decided to revisit the criteria by appointing this Committee, the process with respect to some appointments / admissions have taken place ormust have been at an irreversible and advanced stage. The existing system which is going on since 2019, if disturbed at the end or fag-end of the process would create more complications than expected both for the beneficiaries as well as for the authorities. In case of admissions to educational institutions, sudden adoption of a new criteria inevitably and necessarily would delay the process by several months which would have an inevitable cascading effect on all future admissions and educational activities / teaching / examination which are time bound under various statutory / judicial time prescriptions. E Under these circumstances, it is completely unadvisable and impractical to apply the new criteria (which are being recommended in this report) and change the goal post in the midst of the on-going processes resulting in inevitable delay and avoidable complications. When the existing system is ongoing since 2019, F no serious prejudice would be caused if it continues for this year as well. Changing the criteria midway is also bound to result in spate of litigations in various courts across the country by the people/persons whose eligibility would change suddenly. The Committee, therefore, after analysing the pros and cons on G this issue and after giving serious consideration, recommends that the existing and ongoing criteria in every on-going process where EWS reservation is available, be continued and the criteria recommended in this Report may be made applicable from next advertisement / admission cycle.” H

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A 22. The petitions were listed on 5 January 2022 after a request for urgent listing was made by the Solicitor General. It was urged on behalf of the Union Government that the OBC and EWS reservation (following the old criteria) must be allowed to be implemented in the present admission year. This has been contested by the petitioners.

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 681 [DR. DHANANJAYA Y CHANDRACHUD, J.]

The OBC category suffer from both social and economic backwardness unlike the unreserved category. The criteria for exclusion cannot be used as the criteria for inclusion; (b) The prescription of the Rs 8 lakhs income limit would amount to treating unequal’s equally. For example, the per capita income of States differs. Goa has a per capita income of Rs 4 lakhs, while Bihar has a per capita income of Rs 40,000. The Minister of State of the Ministry of Statistics and Programme implementation, while answering a Parliamentary question acknowledged the disparity in per capita income among States and the rural and urban populations. The 8 lakhs income criteria is higher than the per capital income of any of the States; (c) The Rs 8 lakhs cap is on the higher end and does not cover the section of those who are economically weaker. The affluent of the general category would take away all the reserved seats available. Thus, the Rs 8 lakhs limit is over-inclusive; (d) The Major Sinho Commission was constituted for the purpose of determining the feasibility of providing reservation for the EWS and the criteria for determining EWS category. The Commission submitted its report in 2010 after extensive study and consultation with all States. After undertaking such an extensive study, it recommended that the criteria for the determination of EWS shall be families that fall under the BPL category and the families exempted from payment of income tax (that is Rs. 1.6 lakhs at the relevant time); (e) The common income limit of Rs 8 lakhs does not include factors such as income volatility, size of family, and high cost of living in certain locations; (f) The current non-taxable limit is Rs. 2.5 lakhs. A person who saves Rs. 2-3 lakh a year to avail benefits under Section 80C of the Income Tax Act 1961 cannot be termed as ‘economically weak’; H

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A (g) According to the Seventh Pay Commission, a class IV employee receives a salary between Rs 18,000 to Rs, 30,0000. Therefore, the Rs 8 lakh limit is over- inclusive; and (h) The Rs 8 lakhs limit is a top down approach and not B a bottom up approach. The Pandey Committee has erroneously interpreted the recommendations of the Major Sinho Commission. (iv) The Pandey Committee report does not have any reasons to reject the recommendation of the Major Sinho C commission. The report does not sufficiently address the issues raised by this Court by the order dated 21 October 2021 because: (a) The report acknowledges the absence of reliable data; (b) The report was submitted within three weeks without D undertaking any study, unlike the Major Sinho Commission report which was submitted after four years of extensive research by placing reliance on data, survey reports, and feedbacks; (c) The Pandey Committee did not consult with the State E Governments/Union Territories while framing the report. Without any consultation, it is recommended that there should not be different income limits for different States or areas based on purchasing power; (d) The report stated that the family income of Rs 8 lakh does not seem to be over-inclusive as the ‘available F data’ on actual outcomes does not indicate over- inclusion. However, no data was submitted on ‘actual outcomes’ to prove the claim; (e) The justification in the report for not considering the varying costs of living in metropolitan and non- G metropolitan cities, rural and urban areas for determining the EWS criteria was that it would create complications. Such a justification is not reasonable; (f) The 5 acres agricultural land asset exemption is arbitrary since no exemption is made between wet and dry lands; and

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 683 [DR. DHANANJAYA Y CHANDRACHUD, J.]

(g) The Pandey committee has determined the criteria by ignoring the relevant factors and taking into account irrelevant factors. (v) The explanation to Article 15 states that for the purposes of Article 15 and Article 16, ‘economically weaker sections’ shall be notified by the State from time to time on the basis of family income and other indicators of economic disadvantage. Both the Union and the State Governments have the power to determine the EWS. However, the Pandey committee did not even consult the States before arriving at the criteria. The Kerala Government constituted a commission for determining the criteria for identifying the EWS. The Commission chaired by Mr. K Sasidharan Nair submitted its report on 29 November 2019 recommending that Rs 4 lakhs gross family income must be used to identify the EWS category in Kerala; (vi) The open category seats are filled by the members of the general category and the reserved categories. According to the Rajan committee report submitted in Tamil Nadu, only 2.3 percent of the open category seats are occupied by the forward community. By improperly identifying the EWS, the injustice suffered by the forward community is being compounded; (vii) This Court in Indra Sawhney (supra) held that a class identified for the purposes of reservation under Articles 15 and 16 must have common traits. The EWS class identified by the impugned criteria does not possess common traits; and (viii) In the case of Shantistar Builders v. Narayan K. Totame16, a three-judge Bench of this Court held that the ‘economic basis’ or the ‘means test’ maybe adopted as a working guideline for determining ‘weaker sections of the society’. In this case, a family having an annual income not exceeding Rs 18,000 was considered to be belonging to the weaker sections of the society.

16 (1990) 1 SCC 520 H

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A 25. Mr. Anand Grover, senior counsel appearing for the intervenors made the following submissions challenging the criteria for the determination of EWS: (i) The explanation to Article 15 states that EWS must be determined on the basis of ‘family income and other B indicators of economic disadvantage’. Therefore, the criteria used for the identification of the class must encompass both the income and other indicators. However, the criteria devised does not use any other indicator for economic disadvantage; C (ii) The EWS category is identified by the income limit, and other indicators are used only to exempt a class falling within the income criteria. Indicators such as housing, literacy, education, and health have been ignored while identifying the EWS category;

D (iii) The daily minimum wage in India is Rs 176 per day, which is not even half of what is recommended by the Parliamentary Committee. Around 76 percent of India’s population does not receive a minimum wage. Therefore, the criteria only identifies the creamy layer and not the ‘poorest of the poor’; E (iv) The income criteria must be the based on the income tax exemption slab that is Rs. 2.5 lakhs. Considering that the cut off of Rs. 2.5 lakhs was fixed in 2004, the amount may be increased by 10-12 percent; and (v) The Pandey committee report states that ‘despite the fact that the bulk of the qualifying candidates are below Rs 5 lakhs, a somewhat higher threshold is needed which ensures that deserving beneficiaries affected by various factors such as income volatility, size of family, high cost of living in certain locations are not excluded.’ No other justification is given to not prescribe Rs. 5 lakhs as the income limit.

26. On behalf of the Union of India, the Solicitor General, Mr Tushar Mehta, and the Additional Solicitor General, Mr KM Natraj, made the following submissions: (i) The rules of the game were not changed after the game had begun since the reservation through the impugned notice

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 685 [DR. DHANANJAYA Y CHANDRACHUD, J.]

issued on 29 July 2021 was introduced much prior to the date on which the exams were conducted and before the commencement of the counselling process. The NEET PG examination schedule is as under: (a) Release of Information Brochure: 23 February 2021 (b) Commencement of Registration Process: 23 B February 2021 (c) Last date of Registration: 15 March 2021 (d) Scheduled examination date: 18 April 2021 (e) Postponement for four months on: 03 May 2021 C (f) New date of examinations announced on: 13 July 2021 (g) New date for examination: 11 September 2021 Clause 11.1 of the information bulletin issued on 23 February D 2021 states that reservation of PG seats shall be as per the norms of the Central Government and the respective State Governments. Clause 11.2 states that a separate handbook providing information on the counselling process and applicable reservation shall be released by the designated counselling authority for NEET-PG 2021. Therefore, the process begins only with the commencement of the counselling process and not when the registration closes; (ii) The reservation in AIQ seats in terms of the notice dated 29 July 2021 has been already implemented in MDS admissions for the current academic year 2021-2022 to comply with the order of this court dated 11 August 2021 in Debraj Samanta & Ors. v. Medical Counselling Committee 17; (iii) The EWS reservation is already in place and is now being extended to AIQ seats for UG/PG admission in medical and dental courses. The EWS reservation has already been implemented for IITs and Central educational institutions, amongst others. The reservation is in compliance with The

17 WP (C) No. 680 of 2021 H

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A Constitution (One Hundred and Third Amendment) Act 2019 and is in terms of the prescribed parameters of eligibility criteria, which, inter alia, includes gross income; (iv) The reservation for EWS was introduced on broader considerations of equality of opportunity and concerns of B social justice. Around 550 EWS students for MBBS and 1000 EWS students for PG medical courses would benefit each year; from this reservation (v) In the last six years, MBBS seats has been increased by 56 percent from 54, 348 seats in 2014 to 84, 649 seats in 2020 and the number of PG seats has been increased by 80 C percent from 30,191 seats in 2014 to 54, 275 seats in 2020. In the same duration, 179 medical colleges have been established and now there are 558 medical colleges in the country. Thus, the reservation for the EWS category will not be at the expense of other categories; D (vi) The challenge to the constitutional validity of the Constitution (One Hundred and Third Amendment) Act 2019 has been referred to a Constitution Bench by the order dated 5 August 2020 in Janhit Abhiyan v. Union of India & Ors.18. While referring the challenge to the Constitution Bench, this Court did not stay the operation of the constitutional amendment. E Thus, the implementation of the constitutional amendment through the notice dated 29 July 2021 cannot be questioned in the present writ petitions; (vii) The criteria for reservation for admission in the AIQ seats is a question of policy and is within the powers of Union F Government. The criteria depends on an overall assessment and survey of requirements of various categories of persons to whom it is essential to provide facilities of higher education. The contours of judicial review have been defined by this Court in BK Pavithra v. Union of India19, G which is the “Barium Chemicals Test”. Thus, unless the criteria for EWS is so grossly unfair that no person with common sense would arrive at it, there is no reason for judicial interference;

18 WP (C) No. 55 of 2019 H 19 (2019) 16 SCC 129.

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(viii) It is always possible to come up with an alternative criteria. A However, the judiciary is only required to assess whether the Government took into account only relevant considerations, showed application of mind and did not adopt an absurd view that no person with common sense would arrive at; B (ix) The Union Government had undertaken an exercise for the determination of the EWS criteria as stipulated in the OM, which was arrived at after due deliberation within the Ministry of Social Justice and Empowerment and all concerned stakeholders. Even before the OM came into existence, the Government had set up the Major General C Sinho Commission in 2005. The Major Sinho Commission in its report dated July 2010 arrived at various conclusions including that the creamy layer threshold among the OBCs can serve as the basis to decide the upper limit for identifying the economically backward category among the unreserved D category. Even then the criteria that applies to the OBC creamy layer is significantly different from the criteria applicable for identifying the EWS. The criteria for the latter is more stringent; (x) The Pandey Committee has merely tweaked the Major Sinho E Commission report. It has also considered relevant material including the Socio Economic and Caste Census 2011. Based on the material, it opined that economic weakness is a complex issue and no single indicator can be used to capture the level of poverty. The Pandey Committee observed that a multi-pronged criteria requires complex and large-scale F surveys. Since EWS is a dynamic concept and keeps evolving, it is suitable to have an income criteria. A criteria based on consumption patterns would lead to people avoiding certain goods and services for the purpose of securing the reservation benefit; G (xi) The Major Sinho Commission report recommended using the income tax exemption limit. While the current income tax exemption limit is Rs 2.5 lakhs, the income of Rs 8 lakhs effectively falls within the income tax exemption limit since a tax rebate is provided for income upto Rs 5 lakhs H

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A and with sufficient savings and investments, such a tax rebate can be obtained. Further, income tax exemption limit applies to individuals but the 8 lakhs income limit applies to families. If three members of a family annually earn Rs 3 lakhs, they could fall outside the bracket of EWS; B (xii) If a lower income limit for identifying EWS is adopted, it will be underinclusive. For being eligible for EWS reservation, the beneficiary household income has to be less than Rs 8 lakhs in the preceding financial year. Merely one year of windfall income earned by a household can push them out of the EWS category; C (xiii) It is important to note that the state is not identifying the poor but rather those belonging to the economically weaker category. Such people may be above the poverty line; (xiv) It will be difficult to adopt different income limits for urban and rural areas because of internal migration and it would lead to implementation issues. A uniform criteria can be used to provide reservation; (xv) It will be discriminatory if EWS reservation is not implemented in medical and dental colleges, when it is being implemented in other educational institutions; and (xvi) While the Pandey Committee has highlighted that the certification process for determining the size of the residential plot is a cumbersome process and has recommended doing away with the residential criteria for exemption from the EWS category, it has also recommended that the new criteria should apply prospectively. The EWS candidates would have prepared their respective certificates to satisfy the EWS criteria which are to be submitted once the counselling process begins for this admission cycle. Thus, no hardship would be caused to them for applying this year. G On the other hand, if the new criteria is implemented from this year, it would disturb the entire admission process since candidates who qualify under the new criteria would have to be given additional time to satisfy it and participate in the counselling process. H

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H. Analysis A

27. It has been brought to our notice that the counselling for the MDS courses has already begun, where the reservation for EWS in AIQ has been provided. On behalf of the petitioners, Mr Shyam Divan has urged that a completely separate exercise is conducted for MDS courses. He has submitted that a separate notification is issued for admission to MDS courses and a different schedule for examination and counselling is followed. Be that as it may, the medical and dental courses have been treated on the same footing with respect to the creation of the AIQ seats. The decision of this Court in Pradeep Jain v. Union of India20 which led to the inception of AIQ seats in State-run medical and dental colleges specifically clarified that the observations and directions made with regard to MBBS and MD/MS courses would equally apply to BDS and MDS courses.21 The notification dated 29 July 2021 introduced reservation for the OBC and EWS categories for AIQ seats in both medical and dental courses. Thus, there has been parity between medical and dental courses with regard to the implementation of the D AIQ and the reservation policy governing seat distribution. Mr Divan has also submitted that a separate challenge22 has been mounted to the notification dated 29 July 2021 by doctors possessing a Bachelor’s degree in Dental Surgery, which is being heard with the current batch of petitions. This argument, in fact, supports the conclusion that while the reservation in both the medical and dental courses has been challenged, any interim stay on the implementation of reservation for the former in view of the pending counselling process, would creat a position of disparity between the two streams which have always been treated alike. Therefore, a stay on reservation for this academic year for medical courses would lead to differential treatment being meted out to dental candidates who are similarly placed.

28. On behalf of the petitioners, it has been urged that the rules of the game cannot be changed midway and hence, the notification dated 29 July 2021 is liable to be set aside because it was issued after the registration for the examination was closed. We have dealt with this argument in detail in the judgement delivered on 20 January 2022 in the current batch of petitions on the validity of OBC reservation in AIQ 20 1984 AIR 1420 21 Paragraph 23. 22 WP (C) No. 1105 of 2021 H

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A seats. The information bulletin dated 23 February 2021 issued for the purpose of conducting NEET examination specifically mentioned that the counselling authority would issue a separate handbook relating to details of counselling process and applicable reservation. Thus, during the registration process which commenced on 23 February 2021 and ended on 15 March 2021, the candidates knew that the details relating to B the seat matrix would only be available during the counselling process. The notification dated 29 July 2021 was issued much before the exams were conducted and the counselling process was to begin. It cannot be said that the rules for the game were set when the registrations closed on 15 March 2021 as has been urged on behalf of the petitioners.

C 29. In the judgement pronounced on 20 January 2022 on the validity of OBC reservation in AIQ seats, we have dealt with the challenge to the power of the Union Government to implement reservation in AIQ seats. The Union of India in view of Article 15 (5) and Article 15(6) of the Constitution has the power to provide reservation in AIQ seats since these seats have been surrendered to the Centre.

30. The argument of the petitioners on the validity of EWS reservation was not limited to the permissibility of reservation in the AIQ seats. Rather, the petitioners challenged the very criteria for the determination of the EWS, which would not only require us to hear the matter at length but would also entail us to hear all interested parties. However, in view of the delay in the counselling process due to the pendency of this petition, we deem it necessary to allow the counselling session to begin with the existing criteria for the identification of the EWS category. Judicial propriety would not permit us to pass an interim order staying the criteria for determination of the EWS category. It is a F settled principle of law that in matters involving challenge to the constitutionality of a legislation or a rule, the Court must be wary to pass an interim order, unless the Court is convinced that the rules are prima facie arbitrary.23 However, at this stage, without hearing all the interested parties at length on arguments such as (i) extent of judicial review of G materials relied on for providing reservation under Article 15; (ii) the power of the States to determine EWS in view of the explanation to Article 15 and in view of an alternative criteria proposed by the committee formed by the Government of Kerala; and (iii) the meaning of EWS - the identification of the poor or the poorest, it would be impermissible for

H 23 Heart of Millions v. Union of India, 2014 (14) SCC 496

NEIL AURELIO NUNES & ORS. v. UNION OF INDIA & ORS. 691 [DR. DHANANJAYA Y CHANDRACHUD, J.]

us to form a prima facie opinion on the alleged arbitrariness of the criteria. A These arguments are only indicative of the wide range of arguments that have been raised before us, which would require proper consideration as it has wide ranging constitutional and societal implications on equality and the law.

31. Additionally, any judicial intervention which would have changed the stated reservation policy for this academic year 2021-2022 would have delayed the admission process. The notification introducing reservation for OBC and EWS was issued on 29 July 2021. Thereafter, a notice dated 6 August 2021 was issued to allow candidates to change their category and EWS status. The window for editing one’s status was between 16 August 2021 and 20 August 2021. The exam was conducted on 11 September 2021. The candidates who qualify for the EWS category would have prepared the necessary documentation to satisfy the eligibility criteria for applying for reservation. Any change in the eligibility status for reservation at this stage would have caused confusion and led to possible litigation challenging such a change. This D would have only caused further delay. We are still in the midst of the pandemic and any delay in the recruitment of doctors would impact the ability to manage the pandemic. Hence, it is necessary to avoid any further delays in the admission process and allow counselling to begin immediately. As a result, we allow the implementation of EWS reservation in AIQ seats in NEET UG and PG seats for the academic year of 2021- E

2022. The EWS category shall be identified in view of the criteria in O.M No. 36039/1/2019. The challenge to the validity of the criteria determined by the Pandey committee for the identification of the EWS category shall be listed for final hearing in the third week of March

Divya Pandey Matters to be listed for final hearing. (Assisted by : Roopanshi Virang, LCRA)