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State cannot ask toddy shops to employ ousted arrack workers

Legal Correspondent

It cannot impose unreasonable conditions: Supreme Court


  • Kerala High Court judgment quashed
  • Rules must not violate statutory scheme
  • Power exercised arbitrarily

    New Delhi: A State Government cannot compel an employer to employ workers, who have been ousted from service in another department pursuant to a policy decision, the Supreme Court has held.

    A Bench consisting of Justices S.B. Sinha and P.K. Balasubramanyan gave this ruling while quashing a Kerala High Court judgment, which upheld the Government's direction to toddy shops that they provide employment to workers who were thrown out of employment following the closure of arrack shops.

    The Bench agreed with the contention of the Kerala Samsthana Chethu Thozhilali Union, a federation of trade unions of toddy tappers and workers, that the State's exclusive privilege of liquor business did not mean it could impose unreasonable conditions while parting with that special right. "The State may have unfettered powers to regulate the manufacture, sale or export-import of intoxicants but in the absence of any statutory provision, it cannot, in purported exercise of the said powers, direct a particular class of workers to be employed in other categories of liquor shops," the Bench said.

    Legislative policy

    The powers to frame rules and impose terms and conditions must conform to the legislative policy.

    The rules must not be framed in contravention of the constitutional or statutory scheme.

    Even assuming that toddy and arrack workers belonged to the same class, rehabilitation of the arrack workers, who were thrown out of employment because of the State's excise policy, did not have any reasonable nexus with the purpose of the Act. The power was exercised unreasonably.

    The impugned rules were ultra vires in their entirety.

    Kerala banned arrack sale from April 1, 1996.

    A policy decision was taken that workers who engaged in arrack business be rehabilitated in toddy shops.

    Rules amended

    Accordingly the rules were amended directing that one arrack worker be employed in each of the toddy shops in the State.

    Both toddy licence holders and toddy workers questioned the validity of the rules. A single judge and a Division Bench of the High Court upheld their validity.

    The Supreme Court allowed the appeal against the judgment.

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