Kerala State Beverages (M and M) Corporation Ltd. v. P.P. Suresh & Ors.

Civil Appeal · 2019 INSC 1129Decided 4 Oct 2019
Civil Appeal Nos. 7804-7813 of 2019
Justice L. Nageswara Rao · Justice Hemant Gupta

Background

When Kerala banned the sale of arrack (a cheap liquor) in 1996, about 12,500 arrack shop workers lost their jobs. After their protests, the state government promised in 2002 that 25% of future daily-wage vacancies in the Kerala State Beverages Corporation would be reserved for these displaced workers, but in 2004 it narrowed this promise to cover only the dependent sons of workers who had since died, and later further curtailed it citing a shortage of vacancies. The displaced workers and their families went to the Kerala High Court, which ruled in their favour and ordered the government to honour the original 2002 promise; the state and the Corporation appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the workers never acquired a permanent, vested right to employment that could rise to the level of a fundamental right to life under Article 21: the original 2002 policy had been validly modified by later government orders of 2004 and 2009, which replaced rather than merely supplemented it. Applying a proportionality test, the Court found that narrowing rehabilitation benefits from all displaced workers to a smaller group, because there genuinely weren't enough vacancies to go around, was a reasonable policy response to overriding public interest rather than an arbitrary or excessive measure. It disagreed with the High Court's view that an earlier related High Court judgment had made the 2004 order's illegality final, and ultimately allowed all the government's and Corporation's appeals, closing the connected contempt petition.

Lesson Learnt

A government policy promise made to a group of citizens is not necessarily permanent: if changed circumstances (like a genuine lack of vacancies) require the policy to be revised, courts will usually uphold the change as long as it is a proportionate, good-faith response and not an arbitrary withdrawal of what was promised.

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