While positive psychology’s Values in Action (VIA) framework conceptualises honesty as a universal character strength, its enactment within hierarchically structured institutional settings remains critically underexamined. India’s reservation system in higher education introduces specific conditions under which honesty becomes both a moral imperative and a strategic risk for scholars from divergent social backgrounds. This study investigates how socio-economic stratification, and institutional frameworks shape the practice of honesty among Indian academics. Drawing on a qualitative case study approach, the authors analyse career narratives of scholars from Scheduled Classes (SC), Scheduled Tribes (ST), Other Backward Classes (OBC), and Forward Castes (FC), presenting five representative vignettes that illustrate how honesty is negotiated across socially differentiated positions within academic institutions. The findings demonstrate that honesty is uniformly virtuous and contextually contingent. For scholars from marginalised backgrounds, transparent self-disclosure often incurs institutional stigmatisation and career disadvantage, whereas academics from privileged castes encounter fewer risks in expressing honesty. The reservation system generates a condition of structural ambivalence, in which honesty functions as a form of moral agency exercised under conditions of unequal recognition and opportunity. This study reconceptualises honesty as a relational practice shaped by social origin and institutional power dynamics, thereby challenging the universalist premises of positive psychology and foregrounding the structural mediation of character strengths. The analysis reveals how meritocratic discourses in Indian higher education obscure the differential moral costs of honesty across caste groups, with broader implications for understanding institutional justice, and the lived realities of social mobility in stratified societies, particularly as rapid social transformation in the Anthropocene era intensifies the tension between traditional caste hierarchies and emerging meritocratic ideals.