HC strikes down two provisions of Cashew Factory (Acquisition) Act, terms them unconstitutional

The Kerala High Court has struck down as unconstitutional Section 3A of the Kerala Cashew Factories (Acquisition) Act, 1974 as amended in 2015 that provided the government with power to acquire cashew factories in public interest if those factories remained closed for a period of not less than three months. It said such closure had prejudicially affected the interest of a majority of workers engaged in factories.

The court also declared as unconstitutional section 6A of the 1974 Act, which was inserted in 2015 through an amendment. Notwithstanding anything contained in any judgment, agreement, decree or order of any court, tribunal or other authority and notwithstanding anything contained in any other law, agreement or other instrument for the time being in force, the government could take over cashew factories listed in the schedule under Section 6A in public interest. The court also noted that the provisions in Section 6 contemplated the support of a resolution in the Assembly for action in terms of those provisions do not by itself make the provisions immune from the challenge.

Justice Gopinath P. made the declaration recently while allowing a writ petition filed by S.T. Sadiq, owner of a cashew factory in Kollam, against the takeover of his factory.

The court observed that the provisions are arbitrary and discriminatory and violative of Article 14 of the Constitution of India. The court added that section 6A is thus nothing but a reincarnation of the earlier section 6 of inserted in 1995 in the Act, which was declared unconstitutional by the Supreme Court.

The court observed that the notification taking over the factory of the petitioner in the exercise of the power under Section 3A of the 1974 Act amounted to hostile discrimination and was thus unsustainable.

Published - September 26, 2024 07:06 pm IST