Case: Kerala State Beverages Corporation Limited and Ors Vs. P.P. Suresh and Ors

2. Retail outlets for sale of arrack were started by the Corporation in the year 1995, in view of the decision taken by the Government of Kerala to abolish arrack shops which were hitherto run by private parties. Thereafter, on 01.04.1996, arrack was banned in the State of Kerala. Consequentially, 12,500 arrack workers were deprived of their livelihood. Since it was not possible to provide re-employment to the displaced arrack workers, the State Government paid compensation of Rs. 30,000/- each to the arrack workers in lieu of rehabilitation. In addition, an ex gratia of Rs.2000/- was also disbursed by the Government, apart from the provident fund pension and DCRG. Dissatisfied with the decision of the Government in not providing re-employment, the arrack workers launched an agitation demanding rehabilitation. Pursuant to an agreement between the arrack workers and the Government, G.O.(Rt) No.81/2002/TD dated 20.02.2002 was issued. The Government ordered that 25% of all daily wage employment vacancies which would arise in the Corporation in future shall stand reserved to be filled up by displaced workers who were members of the Abkari Workers Welfare Fund Board and whose services were terminated due to the ban of arrack3. The criteria for rehabilitation of arrack workers was altered by G.O.(Rt) No. 567/2004/TD dated 07.08.2004. Vide this Order, 25% of all daily wage employment vacancies likely to arise in the Corporation, were directed to be earmarked for the dependent sons of arrack workers who had perished consequent to the loss of employment, due to the ban on arrack in the State. In case the claimants exceeded the number of available vacancies, employment would be provided after a selection. The eligibility for seeking re- employment was that the dependent sons of deceased arrack workers should not have completed 38 years of age.

Court's reasoning:
12. The assurance given to the abkari workers that they would be considered for employment in 25% of the daily wage vacancies that would arise in the Corporation, according to the Government, had to be altered due to administrative exigencies. The implementation of the decision to provide employment to displaced abkari workers was not possible in view of the fact that the number of vacancies of daily wage employees after the year 2002 were very less whereas there was a large number of displaced abkari workers to be accommodated. In view of the difficulties faced by the Government in implementation of the Government Order dated 20.02.2002, the Government found it fit to modify the policy decision by a Government Order dated 07.08.2004. It came to the notice of the Government that several displaced abkari workers perished after 1996. Their families had to be provided immediate succur. T o give priority to the families in immediate need, the Government decided that dependent sons of the deceased abkari workers who died after the year 1996 would be provided employment against the 25% daily wage vacancies in the Corporation. The said decision cannot be termed as unreasonable or arbitrary as it was taken in light of overriding public interest. Relevant considerations were taken into account by the Government to alter the Government Order dated 20.02.2002A. Vested Right of Employment19. The assurance given to the Respondents that they would be considered for appointment in the future vacancies of daily wage workers, according to the Respondents, gives rise to a claim of legitimate expectation. The Respondents contend that there is no valid reason for the Government to resile from the promise made to them. We are in agreement with the explanation given by the State Government that the change in policy due was to the difficulty in implementation of the Government order dated 20.02.2002. Due deference has to be given to the discretion exercised by the State Government. As the decision of the Government to the change policy was to balance the interests of the displaced Abkari workers and a large number of unemployed youth in the State of Kerala, the decision taken on 07.08.2004 cannot be said to be contrary to public interest. We are convinced that the overriding public interest which was the reason for change in policy has to be given due weight while considering the claim of the Respondents regarding legitimate expectation. We hold that the expectation of the Respondents for consideration against the 25 per cent of the future vacancies in daily wage workers in the Corporation is not legitimate. Procedural Legitimate Expectation20. The other contention of the Respondents which found favour with the High Court was that they were entitled for an opportunity before the assurance of rehabilitation given to them was withdrawn. There is no dispute that each of the displaced abkari workers was not given an opportunity before the assurance was altered. However, the Government contended that the displaced abkari workers were consulted through their representatives before passing the Government Order dated 07.08.2004. The requirement of an opportunity to be given before altering the policy by which an assurance is given to a large number of individuals has to be examined21. In case of a complaint that an administrative authority has reneged from a promise without giving an opportunity of hearing which was the past practice, a claim of legitimate expectation can be raised. In other words, if the policy or practice was to give an opportunity before the benefit is withdrawn, the non-compliance of such a practice would result in defeating the legitimate expectation of an individual or group of individuals. In Attorney General of Hong Kong v. Ng Yuen Shiu[1983] 2 All ER 346 , the Privy Council was concerned with a dispute relating to an assertion of legitimate expectation of hearing, by an illegal immigrant. The Respondent in that case entered Hong Kong illegally and remained for a long period of time without being detected. He became part owner of a factory which employed several workers. A change in immigration policy was announced whereby illegal immigrants would be interviewed in due course, but no guarantee was given that they would not be removed from Hong Kong. The Respondent approached the immigration authorities for interview and after being interviewed he was detained until a removal order was made by the Director of Immigration. His appeal was dismissed by the Immigration Tribunal. The Court of Appeal of Hong Kong granted the Respondent an order of prohibition till an opportunity was given to him to explain the circumstances of his case before the Director. The Appeal filed by the Attorney General of Hong Kong was dismissed by the Privy Council. The only question raised by the Respondent in the Appeal was whether he was entitled to have a fair inquiry under common law, before a removal order was made against him. Without expressing any opinion on violation of principles of natural justice, the right of hearing of the Respondent in the peculiar facts of the case was adjudicated upon. It was held that the Respondent had a legitimate expectation of being accorded a hearing before an order of removal was passed22. We have referred to the above judgment to demonstrate that there can be situation where the very claim made can be with regard to an opportunity not being given before withdrawing a promise which results in defeating the legitimate expectation23. The principle of procedural legitimate expectation would apply to cases where a promise is made and is withdrawn without affording an opportunity to the person affected. The imminent requirement of fairness in administrative action is to give an opportunity to the person who is deprived of a past benefit. In our opinion, there is an exception to the said rule. If an announcement is made by the Government of a policy conferring benefit on a large number of people, but subsequently, due to overriding public interest, the benefits that were announced earlier are withdrawn, it is not expedient to provide individual opportunities to such innominate number of persons. In other words, in such cases, an opportunity to each individual to explain the circumstances of his case need not be given. In Union of India v. Hindustan Development Corporation and Ors. (supra) it was held that in cases involving an interest based on legitimate expectation, the Court will not interfere on grounds of procedural fairness and natural justice, if the deciding authority has been allotted a full range of choice and the decision is taken fairly and objectively.Judicial Review and Proportionality24. The challenge to the order dated 07.08.2004 by which the Respondents were deprived of an opportunity of being considered for employment is on the ground of violation of Articles 14, 19 and 21 of the Constitution of India. Lord Diplock in Council of Civil Service Unions and Ors. v. Minister for the Civil Services , held that the interference with an administrative action could be on the grounds of illegality, irrationality and procedural impropriety. He was of the opinion that proportionality could be an additional ground of review in the future. Interference with an administrative decision by applying the Wednesburys principles is restricted only to decisions which are outrageous in its defiance of logic or of accepted moral standards that no sensible person who applied his mind to the question to be decided could have arrived at it.25. Traditionally, the principle of proportionality has been applied for protection of rights guaranteed under the European Convention for the Protection of Human Rights and Fundamental Freedoms, 195027. While exercising primary review, the Court is entitled to ask the State to justify the policy and whether there was an imminent need for restricting the fundamental rights of the claimants. In secondary review, the Court shows deference to the decision of the executive29. An administrative decision can be said to be proportionate if: (a) The objective with which a decision is made to curtail fundamental rights is important; (b) The measures taken to achieve the objective have a rational connection with the objective; and (c) The means that impair the rights of individuals are no more than necessary30. In the instant case, the Respondents challenged the order dated 07.08.2004, as being violative of Articles 14, 19 and 21. The High Court accepted the submissions made by the Respondents and held that the Order dated 07.08.2004 is vitiated as it suffers from the vice of arbitrariness and unreasonableness. However, in view of the challenge to the decision of the Government being on the ground of violation of Articles 14, 19 and 21, the test of proportionality should be applied to review the impugned decision of the Government32. The promise held out by the Government to provide employment to the displaced Abkari workers had become an impossible task in view of the non-availability of vacancies in the Corporation. The decision taken by the Government in overriding public interest was a measure to strike a balance between the competing interest of the displaced Abkari workers and unemployed youth in the State of Kerala. The impairment of the fundamental rights of the Respondents due to the change in policy cannot be said to be excessive. Hence, it cannot be said that the change in policy regarding re-employment of displaced abkari workers is disproportionate33. Another contention of Respondents which found favour with the High Court was that the Order dated 07.08.2004 was found illegal in Writ Petition (C) No.26878 of 2007 and that the said judgment has become final. Aggrieved by their non- appointment in spite of inclusion in the list of 265 dependent sons of the deceased displaced workers, they filed a Writ Petition seeking a direction to the Government to appoint them. The High Court directed the Government to appoint those persons who were included in the list, pursuant to the Order dated 07.08.2004 within a period of six weeks. The High Court further observed that the Order dated 20.02.2002 should not have been altered and directed the Government to reconsider the order dated 07.08.2004. The Government complied with the direction of the High Court in the Writ Petition above and issued a Government Order dated 30.04.2009 by which employment was provided to 265 dependent sons of deceased Abkari workers. Therefore, it cannot be said that the validity of the order dated 07.08.2004 has been finally decided in Writ Petition (C) No.26878 of 200734. We are not in agreement with the findings recorded by the High Court that a right of appointment accrued to the Respondents and it matured into a Right to Life as provided in Article 21 of the Constitution. We disapprove the opinion of the High Court that the Order dated 07.08.2004 is in continuation of the Order dated 20.02.2002 in view of the Order dated 20.02.2002 not being superceded. The Order dated 07.08.2004 was issued in modification of the Order dated 20.02.2002. A close scrutiny of both the Orders would indicate that the Order dated 07.08.2004 replaces the Order dated 20.02.2002 in view of a fresh decision taken to provide employment only to the dependent sons of deceased Abkari workersJudicial Review and ProportionalityJudicial Review and ProportionalityA. Vested Right of Employment