2006 (3) TMI 688 - SC - Indian Laws

Whether Rules 4(2) and 9(10)(b) of the Kerala Abkari Shops Disposal Rules, 2002 are ultra vires? - Held YES - appeals are allowed

Summary

Issues Involved:
1. Whether Rules 4(2) and 9(10)(b) of the Kerala Abkari Shops Disposal Rules, 2002 are ultra vires the Abkari Act.
2. Whether the State has the power to impose employment conditions on toddy shop licensees under the Abkari Act.
3. Whether the impugned rules are consistent with the legislative intent and constitutional provisions.

Issue-wise Detailed Analysis:

1. Ultra Vires Nature of Rules 4(2) and 9(10)(b):
The primary issue was whether Rules 4(2) and 9(10)(b) of the Kerala Abkari Shops Disposal Rules, 2002, directing the employment of arrack workers in toddy shops, are ultra vires the Abkari Act. The court observed that the Abkari Act does not contain any provisions regarding the employment of workers, and the rules must be framed to carry out the purposes of the Act. The court held that the power to frame rules under Section 29(1) of the Act is limited to carrying out the provisions of the Act and cannot be extended to matters not contemplated by the Act. Hence, the rules were found to be beyond the scope of the Act and declared ultra vires.

2. State's Power to Impose Employment Conditions:
The court examined whether the State could impose employment conditions on toddy shop licensees under the Abkari Act. It was argued that the State's power to control liquor trade does not extend to imposing employment conditions on licensees. The court noted that while the State has exclusive privilege over the sale of liquor, it cannot impose conditions unrelated to the legislative policy of the Act. The court emphasized that the legislative policy is confined to regulating the trade in liquor and does not include employment matters. Consequently, the State's imposition of employment conditions was deemed beyond its jurisdiction.

3. Consistency with Legislative Intent and Constitutional Provisions:
The court evaluated whether the impugned rules align with the legislative intent and constitutional provisions. It was argued that the rules violated Article 14 of the Constitution by imposing unreasonable restrictions on toddy shop licensees. The court reiterated that while the State can regulate liquor trade, it must do so within the confines of the legislative policy and constitutional mandates. The court also noted that the rules were inconsistent with the Industrial Disputes Act, which governs employment matters. The court concluded that the rules did not promote the policy or secure the object of the Abkari Act and were therefore invalid.

Conclusion:
The Supreme Court held that Rules 4(2) and 9(10)(b) of the Kerala Abkari Shops Disposal Rules, 2002, are ultra vires the Abkari Act. The State's power to impose employment conditions on toddy shop licensees was found to be beyond the scope of the Act and inconsistent with legislative intent and constitutional provisions. The impugned rules were declared invalid, and the appeals were allowed.