S.T. Sadiq v. State of Kerala & Ors.
Background
The Kerala Cashew Factories (Acquisition) Act, 1974 allowed the State to take over cashew factories under specified circumstances (e.g., large-scale unemployment at the factory) and was placed in the Constitution's Ninth Schedule, which normally shields a law from being struck down for violating fundamental rights. Between 1984-1988, the State issued near-identical notices and acquired 10 factories and then 36 more factories on the stated ground that they were closed and would otherwise cause large-scale unemployment. The owners of the 10 factories lost before the High Court, while the 36 factories' owners had earlier succeeded directly before the Supreme Court (Indian Nut Products case) and got their factories back; the 10-factory owners (including the appellant) then pursued these further appeals.
Decision Breakdown
The Court held that although the parent Act enjoyed Ninth Schedule protection, a later Amendment Act (Section 6) that singled out only the 10 factories for continued acquisition, while the 36 similarly-placed factories under the earlier Supreme Court ruling had already been returned to their owners, created an irrational and discriminatory classification with no rational connection to the law's stated purpose of preventing unemployment. Since all 46 factories were similarly situated and treated identically by the original notices, there was no intelligible differentia justifying different treatment, so the differentiation violated Article 14 of the Constitution. The Court allowed the appeals, set aside the High Court's judgment, and ordered the State to hand back the cashew factories and appurtenant land within eight weeks.
Lesson Learnt
Even a law or amendment that enjoys special constitutional protection (Ninth Schedule) can still be struck down if it arbitrarily treats similarly situated people differently without a rational basis: equal treatment under Article 14 remains a powerful check even against specially shielded legislation.