The correct option states that Statement-I is correct but Statement-II is incorrect because while the Supreme Court has indeed held that reservation policies under Article 16(4) must be balanced against the need to maintain efficiency in administration as stipulated by Article 335, Article 335 itself does not define 'efficiency of administration.' Instead, it emphasizes that the claims of Scheduled Castes and Scheduled Tribes to services and posts should be taken into consideration but always in the context of maintaining administrative efficiency. This principle is critical in examining the relationship between affirmative action and governance, reflecting the tension between social justice and administrative competence in the context of Article 16 and Article 335 of the Constitution.