Change In Govt. Policy Due To Overriding Public Interest Must Be Given Due Weight While Considering Claim Of Legitimate Expectation : SC [Read Judgment]

The Supreme Court has observed that overriding public interest can be a reason for change in policy of the Government and that has to be given due weight while considering the claim of legitimate expectation.

The bench comprising Justice L. Nageswara Rao and Justice Hemant Gupta set aside the Kerala High Court judgment which directed the Government to implement its policy reserving daily wage employment vacancies to displaced arrack workers.

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. Protests followed and finally on 20.02.2002, 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 arrack.

Another GO dated 7.8.2004 altered this policy and 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 reemployment was that the dependent sons of deceased arrack workers should not have completed 38 years of age.

Displaced arrack workers approached the High Court seeking implementation of the Order passed by the Government on 20.02.2002 by which the benefit of rehabilitation was given to all the arrack workers who remained unemployed pursuant to the ban. Allowing their plea, the High Court held that the displaced workmen had a legitimate expectation of continued employment, which they could claim. The Division Bench, upholding the single bench judgment, held that the implementation of the Government Order dated 07.08.2004 is arbitrary and violative of Article 14 of the Constitution of India (for short "the Constitution"). As the matter pertained to the loss of employment resulting in deprivation of livelihood of the arrack workers, it opined that the Government Order dated 07.08.2004 was also violative of Article 21 of the Constitution.

In appeal, the Apex Court bench observed that no vested right was created by the Government Order dated 20.02.2002 and there was no unequivocal promise that all the displaced workers would be provided re-employment. The bench approved 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. It said:

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.

With regard to the contention that any change in policy should have been preceded by a suitable opportunity of hearing being given to the arrack workers, the bench observed:

"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."

The bench also disagreed with the observation of the High Court that a right of appointment accrued to the displaced workers and it matured into a Right to Life as provided in Article 21 of the Constitution.

"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 disproportionate" 

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