Delegated legislation cannot impose rehabilitation employment obligations beyond the parent Act; Kerala Abkari rules were struck down.

Delegated legislation under the Abkari Act was valid only so far as it carried out the Act's legislative policy and statutory purpose. Although the Act permitted regulation of intoxicating liquor and the imposition of licence conditions, the Supreme Court held that Rules 4(2) and 9(10)(b) of the Kerala Abkari Shops Disposal Rules, 2002 went beyond that power because they sought to implement a rehabilitation policy for displaced arrack workers, a subject not covered by the Act. The Court rejected reliance on other labour and contract statutes and held that the State could not impose employment obligations on unwilling toddy-shop licence holders through subordinate legislation. Rule 4(2) was also held inseverable. The rules were therefore ultra vires and unconstitutional.

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Issues: Whether Rules 4(2) and 9(10)(b) of the Kerala Abkari Shops Disposal Rules, 2002, which required engagement of displaced arrack workers in toddy shops, were within the rule-making power under the Abkari Act and valid as conditions attached to licences.

Analysis: The Act was held to authorise regulation of intoxicating liquor, but the rule-making power under Section 29(1) extended only to carrying out the purposes of the Act and not to introducing a new welfare policy unrelated to its legislative scheme. Sections 18A and 24(c), (d) permitted conditions on licences, yet those conditions had to remain within the confines of the Act, the legislative policy, and the constitutional scheme. The impugned rules were framed after arrack trade had already been prohibited and their object was rehabilitation of former arrack workers, a subject not covered by the Act. The Court held that the State could not, through delegated legislation, thrust a class of workers upon unwilling toddy-shop employers, nor could it justify the rules by reference to the Industrial Disputes Act, the Contract Act, or the general entries in the Seventh Schedule. Rule 4(2) was also held not severable because its invalid part could not be separated from the rest.

Conclusion: Rules 4(2) and 9(10)(b) were ultra vires the Abkari Act and unconstitutional, and the challenge succeeded in favour of the appellants.

Ratio Decidendi: Delegated legislation and licence conditions under a parent Act are valid only when they conform to the Act's legislative policy and cannot be used to create a new policy or impose employment obligations unrelated to the statutory purpose.

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