The Doctrine of Legitimate Expectation IV

Retail outlets for sale of arrack were started by Kerala State Beverages Corporation Limited 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. There is no dispute that a number of abkari workers lost their livelihood due to the ban on arrack in the State, in the year 1996. There was no unequivocal promise that all the displaced workers would be provided re-employment.

If the promise made by an authority is clear, unequivocal and unambiguous, a person can claim that the authority in all fairness should not act contrary to the promise. M. Jagannadha Rao, J. observed in Punjab Communications Ltd. v. Union of India, (1999) 4 SCC 727 that the procedural part of legitimate expectation relates to a representation that a hearing or other appropriate procedure will be afforded before the decision is made. The substantive part of the principle is that if a representation is made that a benefit of a substantive nature will be granted or if the person is already in receipt of the benefit, that it will be continued and not be substantially varied, then the same could be enforced.

It has been held by R. V. Raveendran, J. in Ram Pravesh Singh v. State of Bihar, (2006) 8 SCC 381 that legitimate expectation is not a legal right. Not being a right, it is not enforceable as such. It may entitle an expectant to an opportunity to show cause before the expectation is dashed or to an explanation as to the cause of denial. In appropriate cases, the Courts may grant a direction requiring the authority to follow the promised procedure or established practice.

An expectation entertained by a person may not be found to be legitimate due to the existence of some countervailing consideration of policy or law. Administrative policies may change with changing circumstances, including changes in the political complexion of Governments. The liberty to make such changes is something that is inherent in our constitutional form of Government. The decision makers’ freedom to change the policy in public interest cannot be fettered by applying the principle of substantive legitimate expectation. So long as the Government does not act in an arbitrary or in an unreasonable manner, the change in policy does not call for interference by judicial review on the ground of a legitimate expectation of an individual or a group of individuals being defeated.

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.”

Hon’ble Justice L. Nageswara Rao, Kerala State Beverages (M and M) Corporation Limited v. P.P. Suresh, [Civil Appeal Nos. 7804-7813 of 2019].