In a major setback to the Telangana government, the Supreme Court on Thursday dismissed its special leave petition (SPL) challenging the Telangana High Court order which stayed the government order (GO) No 9 providing 42 per cent reservation to the Backward Classes in local bodies. "You continue with your elections with the same reservation which was existing. Dismissed," a bench of Justices Vikram Nath and Sandeep Mehta said. It observed that it could not go against the 50 per cent ceiling set by the apex court’s Constitution Bench on quota in reservations.

The state government issued the GO on September 26 to provide 42 per cent reservation to the Backward Classes in local bodies. It challenged in the apex court the October 9 order of the High Court which had issued an interim stay on the GO. While dismissing the plea, the bench however said its order would not affect the High Court in deciding the petitions pending before it on its own merits.

The HC had passed the order on a batch of petitions which said the GO had raised the total reservation in local bodies to 67 per cent. The petitioners told the High Court that the GO breached the 50 per cent ceiling on quota laid down by the apex court in its verdicts.

The High Court, while hearing the petitions challenging the GO, had directed the state to file its reply in four weeks. During the hearing on Thursday, senior advocate Abhishek Manu Singhvi, appearing for the Telangana government, told the apex court that the state was "very heavily aggrieved" by the High Court's interim order. "You continue with the elections," the bench observed. One of the advocates appearing in the matter said the High Court had not stayed the elections.

"This is a policy decision of a state which wants to inform, educate and enlighten itself and then make all policies targeted to what it believes are a very heavy percentage of Backward Classes," Singhvi argued. He also said how can the GO be stayed without pleadings. Singhvi said barring the last two pages, no reasons were given by the High Court for the stay. "It is not your case that there is no reservation. There is a reservation. You are increasing the percentage of reservation," the bench said.

Singhvi said it was a misconception that the apex court's earlier judgements had put a cap of 50 per cent on reservation. "Why could you not issue your GO prior in point of time from the date of notifying the election," the bench asked.

Singhvi said the Governor had kept the Bill pending. "You have to tell us something. Based on these exercises, you did come out with an ordinance and also with the bill. That is yet to take a final shape," the bench observed.

Singhvi urged the bench to entertain the plea and hear it on the "larger issue of whether you can ever touch 50 per cent". When the bench observed that the High Court's October 9 order was an interim order, Singhvi said it had stayed the whole exercise.

Opposing the state’s SLP, senior advocate Gopal Sankaranarayanan, representing Buttemgari Madhava Reddy, who had challenged the government orders before the High Court, put up strong arguments saying the interim stay was based on well-established constitutional principles.

It may be mentioned here that following the High Court's order, the Telangana State Election Commission had issued a statement saying the poll notification issued on September 29 and further activities were being suspended until further notification. The SEC on September 29 announced a five-phased schedule for elections for the local bodies.