Calcutta High Court (Appellete Side)
Duncans Industries Limited And Another vs Union Of India And Others on 15 March, 2016
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
WP 1897 (W) of 2016
DUNCANS INDUSTRIES LIMITED AND ANOTHER
-VERSUS-
UNION OF INDIA AND OTHERS
With
WP 2105 (W) of 2016
SANTIPARA TEA COMPANY PRIVATE LIMITED AND ANOTHER
-VERSUS-
UNION OF INDIA AND OTHERS
For the Petitioners: Mr Anindya Kumar Mitra, Sr Adv.,
Mr Abhrajit Mitra, Sr Adv.,
Mr Soumya Roy Chowdhury, Adv.,
Mr Dipan Sarkar, Adv.,
Mr Subhransu Ganguly, Adv.
For the Union of India: Mr Koushik Chanda, Addl S-G,
Mr T. J. Tiwari, Adv.
For the Tea Board: Mr Tilok Kumar Bose, Sr Adv.,
Mr Biswaroop Bhattacharya, Adv.,
Mr Arunabha Sarkar, Adv.
For the State: Mr Abhrotosh Majumdar, Adv.,
Mr Prithu Dudharia, Adv.,
Mr T. M. Siddiqui, Adv.
For the Workers: Ms Debapriya Mukherjee, Adv.,
Mr Santanu Chakraborty, Adv.,
Mr Atindryo Chakraborty, Adv.
Hearing concluded on: March 10, 2016.
BEFORE
SANJIB BANERJEE, Judge
Date: March 15, 2016.
SANJIB BANERJEE, J. : -
In these petitions under Article 226 of the Constitution of India, the
petitioners question the propriety of a notification of January 28, 2016 issued by
the Central government for taking over the management and control of seven tea
estates. The notification has been issued in apparent exercise of the powers
conferred in the Central government under Section 16E(1) of the Tea Act, 1953.
2. The petitioners claim that the notice is ex facie illegal as it does not
indicate the reasons for the exercise of the extraordinary authority under the
relevant provision. The petitioners contend that there is no evidence of the
formation of the Central government's opinion for the publication of the
notification. They assert that not only did the situation envisaged by either clause
(a) or clause (b) of Section 16E(1) of the said Act not arise, but there is also no
recording of the Central government's satisfaction that such circumstances
existed warranting the taking over of the management of the concerned tea
estates. The petitioners submit that the notification is expropriatory in nature
and is otherwise violative of Article 300A of the Constitution. The petitioners
maintain that the said notification is malafide and the authority has not been
exercised for the purpose envisaged in the provision, but a particular group has
been targeted. The petitioners also say that no ameliorative steps in respect of
the seven tea estates have yet been taken by the Central government or the
person authorised under the notification and such authorised person, the Tea
Board, has invited expressions of interest to delegate its obligation to manage the
tea estates to some other, which is impermissible.
3. The impugned notification, in its opening recital, refers to the
representation received by the Central government on the "deteriorating condition
of the tea gardens of West Bengal, in particular the tea gardens owned and
managed by M/s Duncan Industries Ltd." The notification refers to the Tea
Board, a statutory body constituted under the said Act of 1953, having submitted
a report on all 14 tea gardens owned by Duncans pursuant to a direction of the
Central government. It also speaks of a report received from the State
government on the status of stressed tea gardens in this State. It refers to the
situation in the tea gardens in West Bengal being assessed by the Central
government "on the basis of the report of the Tea Board and the State
Government of West Bengal and consultations with the stakeholders of tea
sector." The opinion formed by the Central government is reflected in the final
recital as follows:
"And whereas, the Central Government is of the considered
opinion that the tea gardens as listed below are being managed in a
manner highly detrimental to the tea industry and to public interest
..."
4. Section 16E(1) of the Act of 1953 requires either set of conditions
enumerated in clauses (a) and (b) thereof to arise before the Central government
may authorise any person or body of persons to take over the management of a
whole or a part of the concerned tea undertaking or tea unit.
"16E. Power to take over tea undertaking or tea unit without
investigation under certain circumstances. - (1) Without prejudice
to any other provision of this Act, if, from the documentary or other
evidence in its possession, the Central Government is satisfied, in
relation to a tea undertaking or tea unit, that -
(a) the persons in charge of such tea undertaking or tea
unit have, by reckless investments or by creation of
encumbrances on the assets of the tea undertaking or tea unit,
or by diversion of funds, brought about a situation which is
likely to affect the production of tea, manufactured or
produced by the tea undertaking or tea unit and that
immediate action is necessary to prevent such a situation ; or
(b) it has been closed for a period of not less than three
months (whether by reason of the voluntary winding up of the
company owning the tea undertaking or tea unit or for any
other reason) and such closure is prejudicial to the concerned
tea undertaking or tea unit and that the financial condition of
the company owning the tea undertaking or tea unit and the
plant and machinery of such tea undertaking or tea unit are
such that it is possible to restart the tea undertaking or tea
unit and such restarting is necessary in the interests of the
general public,
it may, by notified order, authorise any person or body of persons to
take over the management of the whole or any part of the tea
undertaking or tea unit or to exercise in respect of the whole or any
part of the tea undertaking or tea unit such functions of control as
may be specified in the order."
5. These petitions were effectively taken up for the first time on February 19,
2016. At such ad interim stage, an order was made for the conditional stay of the
operation of the impugned notification upon a deposit of Rs.4 crore being made
by the petitioners. Indeed, a limited unconditional order was passed, staying the
operation of the notification, to afford the petitioners some time to make the
deposit. The deposit has not been made and there is no stay of the operation of
the notification. Appeals have been preferred by the two sets of petitioners from
the ad interim order. Though such appeals have not yet been disposed of, since
the parties have filed their affidavits, the petitions have been taken up for final
consideration.
6. On March 3, 2016 an application made by some of the workers for leave to
be added parties to the present proceedings has been disposed of by permitting
the applicants to intervene and be heard, without such applicants being formally
added as parties to the proceedings. The order of March 3, 2016 also recorded
that the additional grounds indicated in the supplementary affidavit affirmed on
behalf of the petitioners on February 22, 2016 would be treated as additional
grounds in aid of the reliefs claimed.
7. The petitioners have primarily referred to copies of several documents from
an affidavit of the Tea Board affirmed by its officiating secretary on February 25,
2016. It may be noticed in passing that the Tea Board, which has been
constituted under Section 4 of the said Act of 1953, is without a regular secretary
and a regular chairman. It is also of some significance that the stand taken by
both the Union and the Tea Board in their respective affidavits in the present
proceedings appear to be at considerable variance with what has been stated on
behalf of the Tea Board in an affidavit, coincidentally filed on January 28, 2016,
in a petition filed in public interest elsewhere in this court.
8. The petitioners refer to a signed report of November 24, 2015 of the deputy
director of Tea Development of the Tea Board as the source of the problem. The
petitioners say that the report was not sought by any authority but appears to
have been prepared by the concerned officer for no apparent rhyme or reason.
The report refers to the information gathered by surveys and field reports and
interaction with the local people. It indicates that the average yield at the
Duncans gardens for the three previous years could not be verified "as there was
no management staff available in most of the gardens during enquiry and also
the clerical staffs present were seemed to be not willing to disclose the facts and
figures." Four of the Duncans gardens, including two which have been notified,
were said to be filing their e-returns. Such report went on to add that the wages
of the workers at the Duncans gardens were not being paid on regular basis and
other benefits were not being accorded to the workers; that every garden had
huge dues on account of electricity; that medical facilities were poor; and, that
"the gardens are defaulter in payment of P.F. & gratuities." The report observed
that "appropriate action may be initiated as deemed fit under Tea Act 1953." The
papers appended to the report covered 12 gardens, all under the Duncans
management, including the seven gardens which were subsequently named in
the impugned notification of January 28, 2016. It may be relevant to extract
some of the information from the relevant charts pertaining to the six notified tea
units and one tea undertaking:
Name Dues (in Rs. lakh) Electricity status
PF Wages Bonus
&
Dues
Salary
1. Birpara TE 494.07 114.59 25.17 The Bulk electricity
connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
2. Garganda TE 318 60.72 14.43 The Bulk electricity
connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
3 Lankapara TE 458.18 83.70 17.57 The Bulk electricity
connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
4. Tulsipara TE 209.42 44.44 10.25 The Bulk electricity
connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
5. Huntapara TE 394.1 737.92 17.75 The Bulk electricity
connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
6. Dhumchipara 406.24 151.05 14.18 The Bulk electricity
TE connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
7. Demdima TE 372.91 77 16.34 The Bulk electricity
connection has been
disconnected. No
electricity at the Office,
Factory, Garden
Hospital and Staff
quarters. Individual
electric connections are
available at the labour
quarters.
9. The petitioners claim that since inquiries at the petitioners' gardens led
them to apprehend that some action could be contemplated against some of the
Duncans gardens, the chairman of the flagship company wrote to the Secretary
in the Union Ministry of Commerce and Industry on November 30, 2015
indicating the status of the operations at the Duncans gardens in North Bengal.
The chairman emphasised that none of the tea gardens of the company was
closed and that reports of an imminent lockout at the gardens were "completely
baseless." The chairman referred to the general malaise in the tea industry and
spoke of the theft of green leaf at the gardens. The chairman claimed that
operations at nine of the 15 gardens had been normalised and the rest were
expected to follow suit. The chairman represented that funds amounting to Rs.21
crore "have already been brought in and a further amount of Rs.20 crores will be
infused in December."
10. The petitioners, however, say that the matters culminating in the issuance
of the impugned notification of January 28, 2016 were set into motion by a notice
issued by the Director (Plantation) in the Union Ministry of Commerce and
Industry to the chairman of the Tea Board on December 3, 2015. The letter
referred to "tea gardens in West Bengal (including those managed by Duncan Tea
Estates) and Kerala have recently come under severe stress resulting in loss of
production and livelihood to workers." The message went on to add that the
Union government had received several representations on the issue of
"impending closure/abandonment of tea gardens in West Bengal." The letter
instructed the Tea Board to depute officers "to visit the stressed tea estates
particularly the Duncan's tea garden and a report on the issues and current
status ... be sent" by December 7, 2015. The petitioners claim that in such letter
making a particular reference to the Duncans gardens and allowing barely three
days' time to the Tea Board, it is evident that there was some evil design to get at
the petitioners by means foul and unfair.
11. The petitioners have no grievance against the stand taken by the State or
against the report forwarded by the State to the Central government, urging
immediate ameliorative action for the workers at the North Bengal tea gardens.
The petitioners point out that the Chief Minister's letter of December 4, 2015 to
the Prime Minister referred to the tea industry as a whole and did not single out
the Duncans gardens by way of any special mention. The petitioners demonstrate
that though the State provided assistance of Rs.1,500/- per worker per month in
all the closed tea gardens under a scheme by the name of Financial Assistance to
the Workers in Locked-out Industrial Units (FAWLOI), no money on such account
was required by the State to be paid to any of the workers at the Duncans
gardens.
12. Following the Central government's letter of December 3, 2015, the Tea
Board constituted a four-man committee on the next day to visit the stressed tea
estates, particularly the Duncans gardens and such committee submitted a
report on the relevant issues and current status. The petitioners refer copiously
to the report and the functioning of the committee. A technical objection is taken
that members who were not appointed on the committee had conducted visits on
the 14 Duncans gardens and status reports were prepared without reference to
the petitioners or the garden management. The petitioners also argue that since
the Central government's letter of December 3, 2015 did not seek a report
pertaining exclusively to the Duncans gardens, the Tea Board's immediate report
being confined to the Duncans gardens demonstrates a kind of aversion to the
petitioners' group that is unbecoming of a statutory body. The petitioners suggest
that since the report prepared by the committee did not indicate that any of the
Duncans gardens remained closed for a period in excess of three months or that
the owners or the management had diverted company funds, the jurisdictional
facts necessary for assuming authority under Section 16E of the said Act were
not in existence and, as a consequence, no measure under such provision could
have been adopted. Again, in the context of the petitioners' challenge, the report
prepared by the committee pertaining to the functioning at the notified tea units
and undertaking calls for a scrutiny:
"Name" "Present garden functioning"
1. Birpara TE "As reported by the workers, Mr Bapan Bhowal is
the Incharge of the garden who has not attended
before the committee member during visit. Garden
leaf was plucked upto Nov, 2015 on cash-plucking
mode. During Oct & Nov plucking was done
through a group comprising staffs and workers
which was neither recognised by the garden
management nor by the civil administration.
Plucked leaf sold to outside through agent. After
July workers were deployed on cash-plucking ...
Presently there is no garden activity. Most of the
sections are not managed, reached unpluckable
height and covered with jungle."
2. Garganda TE "As reported by the workers, Mr M. M. Jha is the
Incharge of the garden who has not attended
before the committee member during visit. Green
leaf was plucked upto Nov, 2015 on cash-plucking
mode. Leaf sold to outside through agent by the
management. After July workers were deployed on
cash-plucking ... Presently there is no garden
activity. Most of the sections are not managed,
reached unpluckable height and covered with
jungle."
3. Lankapara TE "As reported by the workers, Mr Bhatnagar is the
Incharge of the garden who has not attended
before the committee member during visit. Green
leaf was plucked upto Nov, 2015 on cash-plucking
mode. Pluck leaf sold to outside through agent by
the management. After July workers were
deployed on cash-plucking ... Presently there is no
garden activity. Most of the sections are not
managed, reached unpluckable height and
covered with jungle."
4. Tulsipara TE "As reported by the workers, Mr R. Gogoi is the
Incharge of the garden who has not attended
before the committee member during visit. Green
leaf was plucked upto Nov, 2015 on cash-plucking
mode. Leaf sold to outside through agent by the
management. After July workers were deployed on
cash-plucking ... Presently there is no garden
activity. Most of the sections are not managed,
reached unpluckable height and covered with
jungle."
5. Huntapara TE "As reported by the workers, Mr Bhatnagar is the
Incharge of the garden who has not attended
before the committee member during visit. Green
leaf was plucked upto Nov, 2015 on cash-plucking
mode. Leaf sold to outside through agent by the
management. After July workers were deployed on
cash-plucking ... Presently there is no garden
activity. Most of the sections are not managed,
reached unpluckable height and covered with
jungle."
6. Dhumchipara TE "As reported by the workers, Mr Bhatnagar is the
Incharge of the garden who has not attended
before the committee member during visit. Green
leaf was plucked upto Nov, 2015 on cash-plucking
mode. Leaf sold to outside through agent by the
management. After July workers were deployed on
cash-plucking ... Presently there is no garden
activity. Most of the sections are not managed,
reached unpluckable height and covered with
jungle."
7. Demdima TE "As reported by staffs present in factory reported
that the estate is having Garden Manager, Mr S
Mukherjee. During visit no managerial staff
attended before the committee. Committee
member discussed with staffs (Mr S. Sanyal) and
few workers who were available in the factory.
Green leaf was plucked up to Nov, 2015 on cash-
plucking mode. Leaf sold to outside through agent
by the management. After July workers were
deployed on cash-plucking ... Presently there is no
garden activity. Most of the sections are not
managed, reached unpluckable height and
covered with jungle."
13. On the basis of the aforesaid report of the committee, the Tea Board
forwarded a status report to the Central government under cover of a letter dated
December 8, 2015. The report indicated that seven of the 14 Duncans gardens
were not functioning at all; that of the 12 factories in such gardens, eight were
not in operation. The workers' liabilities were disclosed in the report as
Rs.3705.23 lakh on account of provident fund; Rs.987.53 lakh on account of
gratuity; and, Rs.816.07 lakh on account of wages and salary. On account of
bonus, the report indicated that only 60 per cent of the first of the two
installments had been paid to the workers. Ration was shown to be due, on an
average, for 70 fortnights in 12 of the gardens.
14. The petitioners assert that nothing in the status report indicates that any
of the gardens was closed for a period of not less than three months or that the
persons in charge of any of the tea undertakings or tea units had indulged in
reckless investments or had diverted any funds from the tea gardens. The
petitioners say that, in any event, in the Central government making a particular
reference to the petitioners' flagship company and the status report being
confined to the 14 Duncans gardens, it is evident that the petitioners' group had
been singled out for the pre-planed, confiscatory measure being taken by denying
the petitioners their right of management and the incidence of the ownership of
the tea gardens.
15. The petitioners next refer to a letter of December 17, 2005 addressed by
the Chief Secretary to the State to the Secretary to the Union Ministry of
Commerce and Industry by which a status report on the tea gardens in West
Bengal was forwarded. The petitioners have no quarrel with such report and say
that the list of stressed gardens appended to the report covered 41 gardens
including the seven which were subsequently notified. The petitioners place a
report of August 13, 2015 prepared by a group of State ministers on the tea
industry. The petitioners say that paragraph 13 of such report names
Bundapani, Redbank, Surendranagar, Dharanipur, Madhu and Dheklapara tea
estates as the six tea gardens which were closed, but none of the Duncans
gardens was named therein.
16. The petitioners say that the report prepared by the committee appointed by
the Tea Board and the status report forwarded by the Tea Board to the Central
government betrayed a complete lack of understanding of the tea industry, its
seasons and the nature of activities undertaken at the gardens. The petitioners
say that it is common knowledge that green leaf is plucked till or about the
month of November and there is almost no plucking of leaves in the month of
December. The petitioners claim that since green leaf has a short shelf-life,
plucked leaf cannot be kept waiting for more than a few days before the
processing thereof. According to the petitioners, it is only natural that in the
month of December, a casual visitor at a tea garden in the Dooars would find its
factory closed and no plucking activity being undertaken in the fields.
17. The petitioners refer to a meeting attended by the chairman of the
petitioners' group with the Union Minister of State of Commerce and Industry on
January 4, 2016 when the chairman referred to the imminent infusion of funds
in the company and the group's tea business as "Rs.20.00 crores is being
arranged through ECB route." The petitioners say that it is not as if only the
Duncans gardens have fared poorly in the recent times. The petitioners submit
that the Duncans gardens have done no better or worse than the comparable
gardens and the fact that only seven Duncans gardens have been notified under
the draconian Section 16E of the said Act betrays hostile discrimination and a
motivated attack on the petitioners and their group. The petitioners say that the
usual course of action ought to be under Section 16B of the Act to cause an
investigation, then resort to Section 16C of the Act to issue appropriate directions
and, only then, if necessary, resort to Section 16D of the Act to take over the
management or control over any tea undertaking or tea unit in the extreme case.
The petitioners suggest that in view of the scheme envisaged under Sections 16B,
16C and 16D of the Act, ordinarily, the Central government ought not resort to
Section 16E directly. The petitioners submit that since Section 16E of the Act is
harsh and confiscatory in nature, it should be strictly construed and the material
on which the satisfaction of the Central government is reached thereunder
should be evident from the notification or, at the very least, from the order that
should be passed on the basis on which a notification would be published.
18. The petitioners refer to an affidavit filed by the Tea Board in a recent
petition apparently filed in public interest elsewhere in this court. The two
individuals as petitioners in such matter have complained of the poor sanitation,
health, safety and working conditions in the tea estates and the failure by the
relevant authorities to take appropriate steps in accordance with law that have
resulted in "many poor girls and women workers ... getting involved in (the) flesh
trade due to poverty and illiteracy." In the affidavit filed on behalf of the Tea
Board in such matter, which is affirmed by its officiating secretary who has also
affirmed Tea Board's affidavits in the present proceedings, there is a reference to
a rehabilitation package formulated by the Union Ministry of Commerce and
Industry in 2007 on the basis of a report filed by a committee constituted in 2003
under Section 16B of the Act. The petitioners herein refer to a notice of October
5, 2007 which has been mentioned in the Tea Board's affidavit in the PIL. Such
notice was apparently issued to the managements of tea gardens which remained
closed, "asking them to show cause within 10 days as to why section 16E of the
Tea Act, 1953 would not be invoked against them for reopening of the gardens."
The petitioners herein say that if it was the understanding of the Central
government in 2007 that an element of natural justice had to be read into
Section 16E of the Act, the issuance of the impugned notification of January 28,
2016 without reference to the petitioners should be found to be incurably bad. In
particular, the petitioners herein refer to a communication of February 1, 2008
disclosed in the Tea Board's affidavit in the PIL. Such communication was
addressed by the director in the Department of Commerce to the chairman of the
Tea Board. It recorded the satisfaction of the Central government under clause
(b) of sub-section (1) of Section 16E of the said Act, including that there was a
possibility of restarting the concerned tea gardens and that the resumption of
production thereat was necessary. The communication called upon the Tea
Board to seek the permission of the High Courts in seisin of the winding-up or
writ proceedings against the relevant companies to enable the Central
government "to take over the management of the gardens as per the Tea Act,
1953."
19. The petitioners refer to a simultaneous communication of February 1, 2008
from the Department of Commerce to the Tea Board requiring the Tea Board to
invite expressions of interest to manage the gardens proposed to be taken over by
the Central government. The petitioners assert that it would be evident from the
manner in which the Central government approached the matter in 2008 that it
planned for an alternative management of the gardens to be identified by the time
the take-over process was completed after issuing show-cause notices to the
original owners of the gardens and obtaining requisite permission from the
courts. The petitioners contrast the approach of the Central government in 2008
with the suddenness of the move culminating in the issuance of the impugned
notification of January 28, 2016 without obtaining the leave of the Board for
Industrial and Financial Reconstruction (BIFR) before which a reference has long
been pending under the Sick Industrial Companies (Special Provisions) Act, 1985
pertaining to Duncans Industries Ltd.
20. The petitioners question the rationale of the extreme measure being
adopted by the Central government by publishing the impugned notification of
January 28, 2016 without planning out how the gardens would be managed or
maintained. The petitioners say that January is generally the month of clearing,
cleaning and maintenance at the Dooars gardens. Pruning and cultivation
activities are taken up in the month of February and early March for the plucking
season to begin shortly thereafter. The petitioners say that the ill-timed
publication of the impugned notification of January 28, 2016 has stopped the
preparatory activities being undertaken at the concerned gardens. They say that,
as a consequence, there cannot be any effective cultivation or production and
that would lead to more chagrin to the workers than if the Central government
had not intervened. The petitioners say that with the petitioners' status qua the
seven gardens being in a limbo, so to say, the petitioners have been prevented by
the impugned notification of January 28, 2016 from paying the arrear wages due
to the workers on January 31, 2016 and till the end of February, 2016. The
petitioners claim that the payment of such wages pursuant to a tripartite
settlement would have resulted in the workers getting immediate relief with
further prospects of work leading up to the tea season. The petitioners suggest
that the ill-conceived measure adopted by the Central government by way of the
impugned notification of January 28, 2016 does more to harm the cause of the
workers than to provide them any relief or hope.
21. The petitioners maintain that the purpose of the measures available to the
Central government under Chapter IIIA of the said Act of 1953 is not to punish
any owner or management, but to ensure the longevity of the industry and the
welfare of all connected therewith. The petitioners say that the tea industry is
ailing at the moment, most of the gardens have old trees and the good and bad
times in the industry come in cycles. They suggest that long-term measures have
to be taken with the assistance of both the Central government and the State
government to keep the tea industry viable in the wake of reduced foreign
demand and increased competition.
22. Coming back to the Tea Board's affidavit filed in January, 2016 in the said
PIL, the petitioners refer to a copy of a letter dated December 16, 2015 appended
thereto which, according to the petitioners, has been deliberately suppressed in
the present proceedings. The petitioners place a paragraph from such letter
addressed to the Department of Commerce wherein the Tea Board suggests that
an expert committee should be formed "to investigate as per the provisions laid
down under Section 16B of the Tea Act, 1953 in respect of 12 no. tea gardens
owned by Ms Duncan Industries Limited ..." The petitioners submit that if the
Tea Board had recommended the setting up of an expert body on December 15,
2015 notwithstanding its earlier report of December 8, 2015 qua the Duncans
gardens, there was no occasion for the Central government to form any opinion
to invoke Section 16E of the Act. Further, the petitioners refer to paragraph
4(xxxi)(c) of the Tea Board's affidavit in the PIL, particularly the last two
sentences thereof:
"Section 16E inter alia provides that without prejudice to any
other provisions of the 1953 Act and without causing any
investigation, the Central Government may by a notified order
authorize any person or body of persons to take over the
management and control of any Tea Estate, either whole or in part,
and to exercise of such functions of control but before taking such
action the Central Government is to be satisfied first from the
documentary or other evidences in its possession, about the
situations described in the clauses (a) and (b) of the said section
16E. However, it is obvious that the Central Government being
sovereign itself is required to follow the principle of natural justice
and to be fair in taking such action."
23. The petitioners maintain that they do not interpret Section 16E of the Act
any other way than how it is viewed by the Tea Board, which is an expert body
dealing with the tea industry. The petitioners reiterate that a prior notice is a
must before any action can be taken by the Central government under Section
16E of the Act. They repeat that there must be adequate material in support of
the Central government's opinion that the conditions exist for the exercise of the
authority under Section 16E of the Act and such opinion must be produced along
with the evidence in support thereof upon any action taken under Section 16E of
the Act being challenged. The petitioners lament that in the voluminous papers
churned out in these proceedings by the Union and the Tea Board, the opinion of
the Central government on the basis of which the impugned notification of
January 28, 2016 was issued has not been disclosed.
24. The petitioners claim that Tulsipara TE, which does not have a factory of
its own, is neither a tea unit nor a tea undertaking within the meaning of either
expression in Section 16A of the Act, and, as such, the Central government has
exceeded its brief in including Tulsipara TE under the impugned notification. The
petitioners seek to contend that since Tulsipara TE can only be regarded as
agricultural land, in view of Entries 14 and 18 in List II of the Seventh Schedule
to the Constitution, the State would have exclusive jurisdiction over matters
pertaining to Tulsipara TE; as a tea garden without a factory cannot be regarded
as a part of any industry.
25. The petitioners refer to a judgment reported at ILR (2011) 3 Ker 193
(Peermade Tea Company Limited v. Union of India) where a measure taken under
Section 16E of the Act was struck down on the ground that the pre-conditions to
the exercise of the authority under Section 16E of the Act had not been complied
with. However, the wind out of the petitioners' sails has been taken out by the
Tea Board in demonstrating from paragraphs 1 and 25 of the judgment that
there was no notification published in the Official Gazette in the Kerala case. The
Tea Board has also produced a copy of the public notice published by the Tea
Board in the Hindu newspaper on February 6, 2008, which was the subject-
matter of the Kerala judgment. In such circumstances, particularly when a
"notified order" is defined in Section 16A of the Act to mean an order notified in
the Official Gazette, it is not necessary to dwell on the Kerala judgment any
further.
26. The petitioners submit that since none of the reports of the Tea Board
indicate that any of the seven gardens remained closed for a minimum of three
months, the assertion at paragraph 5 of the Union's affidavit that "it will be
evident that the gardens are closed for more than 3 months" is perverse as it is
not based on any material and no reasonable person in the position of a
secretary or additional secretary in the concerned ministry could have deduced
the same when the apparently adverse report of the committee appointed by the
Tea Board recorded plucking of tea leaf in October and November, 2015. The
petitioners insist that the expression, "has been closed for a period of not less
than three months" appearing in Section 16E(1)(b) of the Act refers to the
complete closure of a tea unit or a tea undertaking and cannot imply only the
closure of the factory at the tea unit or connected with the tea undertaking to be
the sole criterion for the pre-condition to such provision being met. The
petitioners point out that the members of the committee had undisturbed access
to all the seven gardens, interacted with workers and officials thereat, discovered
that tea-plucking activities continued at the gardens till November, 2015; and yet
the Central government was satisfied that for three months prior to the
publication of the notification in the Official Gazette, the gardens remained
closed. The petitioners submit that such an absurd conclusion should not be
countenanced by the court, quite apart from the fact that the other conditions
stipulated in the relevant clause were also not complied with. The petitioners say
that since it is nobody's case that clause (a) of Section 16E(1) was pressed into
service for the publication of the impugned notification of January 28, 2016, it
must be inferred that such notification is founded in clause (b) thereof. Such
second clause, according to the petitioners, requires the Central government to
be satisfied on four counts: that the concerned tea undertaking or tea unit "has
been closed for a period of not less than three months"; that "such closure is
prejudicial to the concerned tea undertaking or tea unit"; that the "financial
condition of the company owing the tea undertaking or tea unit and the plant
and machinery ... are such that it is possible to restart" the same; and, that
"such restarting is necessary in the interests of the general public". The
petitioners assert that if any one of the conditions remains unfulfilled or the
"satisfaction" of the Central government on any count is not supported by
"documentary or other evidence in its possession", the notification is bad and the
same has to be declared null and void. The petitioners insist that there is no
satisfaction of the relevant conditions which is recorded anywhere, far less any
material that has been produced to substantiate the existence of all the
conditions.
27. The petitioners refer to a judgment reported at (2005) 7 SCC 627
(Hindustan Petroleum Corporation Limited v. Darius Shapur Chenai) and place
paragraphs 24 to 29 thereof. The petitioners say that just as in the reported case,
the impugned action herein is also expropriatory in nature; and, as such, the
provisions of the statute in such a case should be strictly construed as it
deprives a person of his land and property without his consent. The petitioners
also maintain that the grounds recited in the notification must be taken to be the
grounds on which the Central government was satisfied as to the existence of the
conditions for invoking Section 16E(1)(b) of the Act, particularly since no
independent order recording such satisfaction has been produced.
28. The petitioners rely on a judgment reported at (2006) 2 SCC 545 (State of
Bihar v. Project Uchcha Vidya, Sikshak Sangh) for the recognition therein that
management is part of the bundle of rights that accompanies the ownership of a
property. Taking a cue from the reported judgment, the petitioners submit that
since the right to manage a property is also a right to property, the same cannot
be confiscated without complying with the principles of natural justice and
without strictly following the procedure laid down by any law.
29. The petitioners also allege that such action is violative of Article 330A of
the Constitution. A judgment reported at (1995) Supp 1 SCC 596 (Jilubhai
Nanbhai Khachar v. State of Gujarat) has been placed for the proposition that for
a property to be acquired by the State, due compensation should be paid and
such compensation cannot be illusory. The petitioners say that no compensation
has been provided for in this case upon the petitioners' right to manage the tea
gardens being snatched away by the Central government.
30. The petitioners have brought a judgment reported at (2008) 4 SCC 144
(Bhikhubhai Vithlabhai Patel v. State of Gujarat) for the proposition that where the
law requires an opinion to be formed before taking a particular measure, the
opinion has to be formed on cogent grounds and should demonstrate the
application of mind rather than be founded on imaginary grounds or wishful
thinking.
31. Finally, the petitioners submit that the subsequent action taken by the Tea
Board of inviting expressions of interest in respect of the only tea garden which
does not require BIFR permission, smacks of patent illegality. According to the
petitioners, if the Tea Board has been designated by the Central government to
be the authorised body of persons to manage the tea gardens, such Board does
not have the authority to delegate its duties to any other. The petitioners seek to
suggest that if the impugned action cuts off the petitioners' ties to the gardens
temporarily and also results in the gardens not being managed or reopened, if
they were closed in the first place, it would be more of a problem than a solution
of any kind; and the court should not lose sight of the larger picture.
32. The Union says that a notification of the kind impugned herein does not
call for any detailed scrutiny in course of any judicial review. The Union submits
that though Sections 16B, 16C and 16D of the said Act may be seen as part of a
same process, Section 16E thereof stands on a different footing. The Union
claims that if there is some material on the basis of which the subjective
satisfaction of the Central government is reached as to the existence of the pre-
conditions for invoking the provision, the court in exercise of its power of judicial
review will not place itself in the position of the Central government to assess
whether it would have been satisfied of the existence of the necessary pre-
conditions. The Union, however, fairly adds that it does not suggest that the
court will not look at the material at all; its submission is that if it was possible
for the Central government's satisfaction to be reached on the basis of the
material available to the Central government, the court may not go through the
documents and other evidence with a toothcomb to supplant its view in place of
the Central government's.
33. The Union first sets about to dispel the impression given by the petitioners
that the notified seven tea units and undertaking were not closed for a period of
three months prior to the issuance of the impugned notification of January 28,
2016. The Union declares that it is the second clause of Section 16E(1) of the Act
that has been invoked for the purpose of notifying the seven tea units and
undertaking and clause (a) does not apply in this case. The Union says that the
summarised and detailed reports pertaining to the Duncans gardens submitted
to it by the Tea Board reveal that there were no operations at the notified tea
units and undertaking for a period not less than three months prior to the
inspection conducted on December 5, 2012 by the Tea Board. The Union says
that it is beyond doubt that the factories at the six tea units were not functioning
for a considerable period of time prior to October, 2015. It is also evident from
the reports that tea-plucking at all the notified gardens had ceased after July,
2015. That the workers plucked the leaves and may have sold them to maintain
themselves should not be regarded as the usual operations conducted by a
management in control of a tea garden. If anything, according to the Union, the
plucking of tea leaves by the workers and outsiders without supervision by the
management implied that not only where the relevant tea gardens closed, but
also that the management may not have been in control thereof.
34. The Union submits that there was no attempt on the part of the Central
government to single out the Duncans group or target the tea units or
undertaking of such group for a special order under Section 16E of the Act. To
begin with, the Union maintains that in the light of the dismal performance of the
Duncans gardens over a length of time, it may not lie in the mouth of the
petitioners to suggest that they were as bad as the worst, but they had been
chosen for special treatment. Equality does not operate in the negative sense,
exhorts the Union. The Union also emphasises that the report furnished by the
Chief Secretary to the State and the group of ministers spoke of the terrible plight
of the nearly 12,000 workers at the Duncans gardens. The Union says that
provisions of the FAWLOI scheme launched by the State did not apply to workers
at the Duncans gardens since no formal order of closure thereof had been issued
and the Duncans workers lost out merely on the definition in the scheme and not
because they were better off than others who were eligible to obtain dole under
the scheme.
35. The Union seeks to demonstrate, by referring copiously to the several
reports prepared by the Tea Board and the reports furnished by the Chief
Secretary to the State and the group of ministers, that the notified gardens
remained effectively closed for all practical purposes and the workers thereat
were left in the lurch by the management without even their previous dues,
ration and the like being settled or basic amenities or medical facilities being
provided. The Union says that if tea bushes were reported to have grown beyond
pluckable height, it was apparent that normal functioning at such gardens had
ceased.
36. The Union asserts that Chapter IIIA was inserted into the Act of 1953 to
safeguard the overall interests of the industry and to protect the interest of the
workers thereat. The Union refers to the invitation by the Union Minister of State
for Commerce and Industry to the chairman of the Duncans group and the
failure by the petitioners to abide by the commitment made by the chairman in
course of the relevant meeting. The Union relies on the Duncans chairman's
letter of November 30, 2015 and the reference therein to illegal plucking of tea
leaves at the Duncans gardens to assert that the letter was an admission, if any
was needed, that the Duncans gardens or most of them remained closed without
any permissible activity for a considerable period of time. The chairman had said
in such letter of November 30, 2015 that "large scale theft of assets is taking
place, both in the tea gardens and in the factories" and "green leaf is being
illegally plucked and sold to outsiders without any benefit accruing either to the
workers or the company." The chairman went on to add that "Operations at 9 out
of the 15 tea gardens of the company have already been normalized and the
remaining gardens are expected to follow suit shortly." The Union suggests that
implicit in such assertion was the admission that several of the tea units and
undertakings remained closed without any operations and the situation was
beyond the control of the management though some attempt at normalisation
had been made at nine of the 15 gardens.
37. The Union places strong reliance on the report forwarded to the Union
Ministry of Commerce and Industry by the Chief Secretary to the State on
December 17, 2015 and on the minutes of the first meeting of the group of
ministers held on August 13, 2015. The Chief Secretary's report pertained to
stressed tea gardens in the Alipurduar and Jalpaiguri districts and was a follow-
up to the letter of December 4, 2015 issued by the Chief Minister to the Prime
Minister.
38. The Chief Secretary's report gives an overview of the tea industry in the
State and a background to the present situation, including a reference to
newspapers reports. According to such report, there are 282 tea gardens in West
Bengal, out of which 149 do not have a "sound management." The organised tea
industry in the State, the report says, is spread over 377 gardens covering
1,40,000 ha of land with about 3 lakh workers who are directly employed. The
report says that the tea industry is the biggest employer in North Bengal, "with
50 % women and a large tribal population".
39. As to the Duncans group, the report indicates that a reference under
Section 15 of the Act of 1985 was made by Duncans Industries Limited before the
BIFR and the company was declared sick on February 21, 2007; that the State
Bank of India was appointed as the operating agency with a direction to prepare
a revival scheme; and, the proposed rehabilitation entails a cost of Rs.1059.40
crore to be funded by equity brought in by the promoters and certain reliefs and
concessions to be afforded by the State government.
40. The report speaks of nine tea gardens being altogether closed down and 34
other gardens "heading towards sickness and possible closure." The report
observes that the management at several tea gardens "have defaulted on
providing statutory payments, arrear wage payments and due facilities to the
workers as per the Plantation Labour Act, 1951." A list of 41 stressed tea gardens
which were closed or sick is appended to the report. All the seven notified
gardens which are in the Dooars area in Alipurduar are mentioned in the list.
41. The Union refers to the appeal for intervention made in the report by
referring to Section 16A to 16N in Chapter IIIA of the Act. The report summarises
the position thus qua the Duncans gardens: "13 Tea gardens owned and
operated by M/s Duncans Industries Limited are under heavy stress. All the TGs
of this conglomerate are closed or sick. The said group has defaulted on giving of
payments & other mandatory benefits to their workers & plantation persons. This
has led to a compounding of the problems despite the Government's best efforts.
The State Government has lodged 119 cases in recent past against the company."
42. The State government's report also relies on a report of a special
commissioner appointed by the Supreme Court in WP (Civil) No.196 of 2001
(People's Union for Civil Liberties v. Union of India). Such commissioner visited
several tea estates in North Bengal and reported that labourers at six Duncans
gardens were in extremely distressed conditions as the management had stopped
payment of wages and cut off electricity supply without prior notice in February,
2015. The commissioner observed that there was illegal and undeclared stoppage
of wage payment and ration payment in the Duncans gardens which had resulted
in gross hardship to the workers and their families.
43. The minutes of the meeting held by the group of ministers on August 13,
2015 deal with several aspects of the tea industry in the State and its current
status, including how the industry-wide wage agreement is traditionally decided
by a tripartite agreement involving the managements, the labour unions and the
State government. The minutes record that the cash component of the payment
to the workers includes basic wages, plucking incentives, bonus, provident fund
and gratuity and the non-cash component consists of statutory benefits such as
medical facilities, housing facilities, education facilities and non-statutory
benefits such as supply of concessional foodgrain, firewood and tea in terms of
the tripartite agreement. The minutes refer to the daily wages being fixed under a
tripartite settlement at Rs.112.50 per day in 2014-15; Rs.122.50 per day for
2015-16 and, Rs.132.50 per day in 2016-17. The minutes refer to six closed tea
gardens, none of them belonging to the Duncans group. As for the Duncans
gardens, the minutes record that "15 tea gardens, controlled by Duncans
Industries Ltd., are heading towards major irretrievable sickness and possible
closure." The minutes recommend that all efforts be made to reopen the closed
tea estates and refer to the Duncans group being "responsible for the livelihood of
about 12,000 permanent workers". The minutes exhort that the "Government of
India in the Union Commerce Ministry has a statutory responsibility under the
Tea Act, 1953, for vesting the management/control of closed/sick tea under-
takings."
44. The Union says that in the light of the detailed reports forwarded to it by
the State government, including the minutes of the group of ministers
constituted specifically for the purpose of looking into the tea industry, it was
incumbent on the Union to take appropriate steps since there could be no
dispute that the tea industry in Bengal was failing and its workers were in great
distress. The Union submits that the notification of January 28, 2016 is the first
of a series of measures that the Union proposes to take to overhaul and revive
the tea industry. The Union maintains that the reports submitted to it by the Tea
Board corroborate the salient points made out in the Chief Minister's letter of
December 4, 2015 to the Prime Minister. The Union says that the State's
subsequent report lends credence to the findings of the Tea Board and the
reports of both the Chief Secretary and the group of ministers rely on an
independent opinion of the special commissioner appointed in a PIL by the
Supreme Court.
45. According to the Union, such material as the reports of the State including
the special commissioner's observation and the reports of the Tea Board
culminated in the Central government being satisfied that the conditions existed
for the immediate invocation of Section 16E(1)(b) of the Act to reopen and revive
the notified tea units and undertaking. The Union asserts that when the material
is before it and the Union is satisfied on the basis thereof that the pre-conditions
to invoking Section 16E(1)(b) exists, no formal recording of any opinion indicating
the "satisfaction" was necessary. The Union submits that the fact that the
Central government was satisfied as to the existence of the conditions is reflected
in the publication of the notification and no previous or subsequent act or deed
was necessary to perfect the impugned action.
46. The Union has also placed the minutes of the meeting of January 4, 2016
chaired by the Central Minister and the letters dated January 8, 2016 and
January 9, 2016 issued by the Central government to the State and the
concerned Central Minister to the Chief Minister, respectively. In the letter of
January 8, 2016 the Union Department of Commerce informed the Chief
Secretary to the State that the Central Minister had visited North Bengal on
January 3 to 5, 2016 "to review the situation of closed/stressed tea gardens in
general in the tea growing areas" and "Consultations were held with stakeholders
including the state government representatives and estate owners to explore
ways of reopening the closed gardens". The letter called upon the State to
consent to the proposed action and said the following qua the Duncans gardens:
"On the margin of the meetings, the DIL had assured that they
would hold consultation with the workers' bodies on 6th January,
2016 to finalise the modalities of payment of overdue wages and
commence current operations in their estates. It is, however,
understood that the DIL has taken no step in this regard till date and
has continued the default.
"Considering the current situation in the tea estates managed
by the DIL as assessed during the visit, and in light of the report
received from the Tea Board as also the state government, it is felt
that the continued inaction on the part of DIL regarding clearance of
workers' dues and planting operations warrants immediate action
under the relevant provisions of the Tea Act for taking over the
management and entrusting it to an alternative agency as per
statutory provisions and rules."
47. The Central Minister's letter of January 9, 2016 to the Chief Minister
referred to the need for urgently addressing the issues relating to workers'
welfare and productivity in a comprehensive manner, the identification of the
reasons for sickness and closure of gardens and the implementation of a revival
plan. The Central Minister sought the State's support for the proposed steps. The
letter also observed as follows in its penultimate paragraph:
"A large number of tea gardens tend to fall sick not only
because of adverse conditions in the market or low price realisation
but also due to lack of capital infusion by the owners, and
mismanagement of planting practices. While Central Government is
prepared to take steps to entrust management of such
sick/stressed/closed estates to alternative agencies, it is felt that an
agreed mechanism needs to be evolved with involvement of all
stakeholders including the Centre, State and owners, to handle the
past liabilities and lease hold rights of land in the interest of lasting
and effective solution to the issue ..."
48. The Union submits that Section 16E of the Act requires the Central
government's satisfaction, based on documentary or other evidence, that either
set of conditions in clauses (a) and (b) of sub-section (1) thereof exists for a
notified order to be made authorising any person to take over the management of
the whole or any part of the relevant tea unit or tea undertaking. The Union
claims that the material conditions, for the purpose of Section 16E(1)(b), are only
the two: that a tea undertaking or tea unit has been closed for a period of not
less than a three months for any reason; and, that such closure is prejudicial to
the concerned tea undertaking or tea unit. According to the Union, the remainder
of the provision should be regarded as the incidental details. The Union has
produced an original file and circulated an extract of the printed and written
notings that reveal that a draft notification under Section 16E of the Act was
prepared and discussed before approval. The hand-written file noting of the
additional secretary in the Department of Commerce makes interesting reading:
"We have not received any response of WB State Govt. to the letters
of CIM to CM West Bengal sent on 29.12.2015 and 09.01.2016 my
letter to C.S West Bengal has also remained unresponded.
Considering the urgency of the matter and the deteriorating
conditions in the tea gardens, particularly those managed by
Duncans, it is now proposed to issue direction to Tea Board to take
steps to take over 7 (seven) of their non-functioning gardens under
Sec. 16E of Tea Act.
As regards other 29 gardens reported to be stressed by the WB Govt.,
we may ask the Tea Bd to carry out a detailed enquiry and
recommend actions under 16B. This includes 6 gardens that are
closed and matter is either with the Courts (2) or with the State Govt.
who have cancelled land lease (4).
..."
49. The above observation of the additional secretary in the ministry is
preceded by a file noting, also of January 15, 2016, of the under-secretary
(Plantation). The note details the matter relating to the closed tea gardens in the
State, quotes several provisions from Chapter IIIA and records, inter alia, as
follows:
"As per the report of the Tea Board, the normal field operations
are being carried out only 3 gardens of DIL. 4 Gardens of DIL are
partially carrying out field operations and 7 of DIL gardens are not
functioning at all ... Tea Board has also mentioned that 8 factories
are not running/not in operation, 4 are running ... in 2 TE there is
no factory."
50. The Union has referred to several judgments for the proposition that when
such an action taken by the government as the present one is challenged, the
court has to examine the records and attendant circumstances to see whether
the subjective satisfaction of the government could have been reached on the
basis thereof. In a judgment reported at (1996) 1 SCC 9 (Jai Narain v. Union of
India) a notification issued, inter alia, under Section 17(4) of the Land Acquisition
Act, 1894 was challenged. The issue was whether there was any urgency for the
government to resort to Section 17(4) of the Act instead of taking the usual
course of action. The court observed that the "existence of urgency is a matter
which is entirely based on the subjective satisfaction of the Government." Such
decision may not be apposite in the present context where the issue is not one of
urgency but as to the closure of the notified tea units and undertaking and
whether such closure can be regarded to have persisted for a period of not less
than three months. In the next judgment cited by the Union, reported at (1968) 2
SCR 117 (Ganga Bishnu Swaika v. Calcutta Pinjrapole Society), a notification
under Section 6 of the Act of 1894 was challenged on the ground that the
notification did not record that the Governor was satisfied that the land was a
needed for a public purpose. The court observed that though the satisfaction of
the government after consideration of a report under Section 5A of the relevant
Act was indispensable, "there is nothing in sub-section (1) of Section 6 which
requires that such satisfaction need be stated in the declaration." A more recent
judgment, reported at (2010) 10 SCC 282 (Nand Kishore Gupta v. State of U.P.),
has been placed for the recognition therein that records can be looked into by the
court for discovering the basis of the satisfaction as to the fulfilment of any
statutory condition. The court also held that such satisfaction "can be assailed
only on the ground that there was no sufficient material ... or that the order
suffered from malice."
51. The Union has also relied on a judgment reported (1981) 1 SCC 664
(Swadeshi Cotton Mills v. Union of India) for the recognition therein that if a post-
decisional opportunity is given in cases of such take-over of management, that
would conform to the principles of natural justice notwithstanding a pre-
notification opportunity not being afforded to the owner. That case pertained to a
situation under Section 18AA of the Industries (Development and Regulation)
Act, 1951 which is the model on which Section 16E of the Tea Act is based.
However, Section 18F of the Act of 1951 which is in pari materia with Section
16H of the Act of 1953 does not appear to provide for a post-decisional hearing as
to the propriety of an order made under Section 18AA of the Act of 1951 (or
Section 16E of the Act of 1953). The post-decisional hearing in the reported case
was on the concession of the Union that a "full and effective hearing on all
aspects touching the validity and/or correctness of the order and/or action of
take-over" would be afforded to the appellant before the Supreme Court. Indeed,
the petitioners have placed more reliance on such judgment, needlessly cited by
the Union, to suggest that the audi alteram partem rule may be read into Section
16E of the Act of 1953 as an order under Section 16E has serious civil
consequences affecting the owner of the concerned tea undertaking or tea unit.
The Union has also referred to a contemporaneous judgment reported at (1981) 4
SCC 113 (Tea Trading Corporation of India Ltd v. Pashok Tea Co. Ltd) where the
majority view in Swadeshi Cotton Mills (supra) was doubted.
52. In Pashok Tea, orders passed by the Central government under Section
16E(1)(a) of the Act of 1953 were challenged. The challenge was upheld before a
single Bench of this court and such order was affirmed in appeal. The Division
Bench held that in passing the relevant orders under Section 16E(1)(a) of the Act,
the Central government had considered material which was extraneous to the
dictates of the relevant provision. However, the Division Bench also held that it
was not necessary for the Central government to give the owner of the garden any
opportunity of being heard. It was the second limb of the Division Bench
judgment that was attacked before the Supreme Court on the basis of the
majority dictum in Swadeshi Cotton Mills. The court found that if the majority
view in Swadeshi Cotton Mills, of a hearing being required to be afforded to the
owner prior to the takeover, was correct, "it must equally apply to the case in
hand because the provisions which call for interpretation here are precisely the
same." The court expressed its doubt regarding the correctness of such aspect of
Swadeshi Cotton Mills. The judgment in Pashok Tea also doubted whether an
order rendered void upon its failure to comply with the principles of natural
justice could be cured if an opportunity of hearing was given ex post facto. The
issue was required to be placed before a larger bench, but the Union says that
the reference has not been decided.
53. The Tea Board has highlighted only two aspects of the matter and has
indicated that since the Union is represented, the Tea Board is not called upon to
say anything on how the Central government's satisfaction was reached before
the notification was issued. The Tea Board submits that the primary issue is the
meaning of the expression "has been closed for a period of not less than three
months" appearing in clause (b) of sub-section (1) of Section 16E of the Act; and,
in particular, the purport of word "closed". The Tea Board also asserts that
Tulsipara TE has to be regarded as a tea undertaking within the definition of
such expression in Section 16A of the Act.
54. According to the Tea Board the expression "has been closed for a period of
not less than three months" and the material word "closed' appearing therein
have to be interpreted on the basis of the purpose of the Tea (Amendment) Act,
1976 since "closed" is neither defined in the Act nor in Chapter IIIA inserted as a
complete code in 1976. The Tea Board has placed the statement of object and
reasons pertaining to the Amending Act of 1976:
"Tea Industry occupies a very important position in the economy of
the country, in that it provides employment to over six lakh workers
and earns over rupees 200 crores worth of foreign exchange for India
in a year. There are in North-East India some 16 growing areas, each
having its own peculiar agro-climate. There are some 1000 gardens
over these areas. These gardens are scattered in rural areas and, in
addition, they are comparatively small units. North-East India
produces a wider variety of tea than any other growing area in the
world. From the Himalayan heights of Darjeeling descend the world's
most flavoury and, therefore, the most expensive teas. On the other
hand, from the plains of the Brahmaputra Valley come teas which
are the most attractive to look at, the richest to drink and the longest
to endure in freshness. But unfortunately, the tea units in general
and in North-East India, in particular, are facing difficulties in the
matter of finance, managerial skill, etc. A number of tea gardens are
reported to have been closed; few others are reported to be sick or
uneconomic. Unless timely corrective action is taken, it is feared that
sick and uneconomic tea gardens may be closed down resulting in
problems of unemployment and economic hardship which might
ultimately affect productivity of tea and country's earnings of foreign
exchange by the export of tea.
"In the Tea Act, 1953, there is no provision for taking over the
management of the sick and uneconomic gardens. That Act only
provides for the control and development of tea industry under the
Union Government. It is, therefore, proposed to include in the said
Act provisions, analogous to the provisions contained in Chapter III,
IIIA, IIIAA, IIIAB, IIIAC of the Industries (Development and
Regulation) Act, 1951, to empower the Central Government -
(a) to order an investigation into the working of a tea
undertaking or tea unit which is sick and uneconomic;
(b) to take over the management of such tea undertaking or
tea unit initially for a period of five years with the possible
extension of one year at a time but not beyond seven years in
the whole;
(c) to take decision for liquidation or reconstruction of the
managed tea undertaking or tea unit in accordance with the
provisions contained in Chapter IIIAC of the Industries
(Development and Regulation) Act, 1951."
55. The Tea Board says that in its understanding, a tea undertaking or a tea
unit is closed if its ceases its usual operations. The usual operations at any tea
unit or tea undertaking involves tending to the bushes, cultivation, plucking and
all activities that lead to the production of tea leaves for being processed in a
factory. The Tea Board says that it is implicit from paragraph 9 of the petitions
that there was no production of tea at any of the seven notified gardens
subsequent to March, 2015. The Tea Board also refers to paragraph 6(s) of its
affidavit in opposition where it has detailed the last returns filed by the notified
tea units and undertaking. The Board says that the filing of returns is mandatory
under a Tea Marketing Control Order issued by the Tea Board and the petitioners
have not denied the following assertion made at paragraph 6(s) of their affidavit
in reply:
"6(s). ... The last return filed by Demdima is for the month of
December, 2014, that for Dhumchipara is for July, 2015, for
Gargandha the last return filed is for February, 2015, for Hantapara
the last return filed is for July, 2015, Birpara for March, 2015 and
finally for Lankapara is for December, 2014. ..."
56. It is also necessary in the context to notice a part of paragraph 9 of Tea
Board's affidavit in opposition since it was the opinion and reports of the Tea
Board that weighed with the Central government in issuing the impugned
notification of January 28, 2016:
"9. ... It appears from the various reports prepared on the current
status of the gardens maintained by the petitioners with
factories in none of the gardens/tea estates referred to in the
impugned notification were in operation. In fact, Tulsipara Tea
Estate does not even have a factory. ... The tea produced by
Tulsipara Tea Garden, however, is processed and
manufactured in another tea unit of Duncans, namely the
factory at Lankapara and Garganda garden. ... Therefore it is
no (sic, not) correct on the part of the petitioners to contend
that the gardens have not been closed by them. Close (sic,
closure) in the context of the Industrial Disputes Act might not
have been there but the gardens/tea estates are virtually
closed from the operation and running point of view that is to
say the gardens or the factories were not in any form of
operation."
57. The Tea Board also relies on an order passed on August 6, 2010 by the
Supreme Court in WP (Civil) No. 365 of 2006:
"Having examined the facts of the case, we find that, since 2006, this
writ petition has been pending. No steps have been taken under the
provisions of Tea Act, 1953. The Tea Estates have been abandoned
by the Tea Companies. The workers are left high and dry. They are
living in pitiable conditions. They have not received their dues. Till
date, several meetings have been held. However, there is no outcome.
In the circumstances, we direct the Central Government to carry out
their statutory duties under the provisions of Tea Act, particularly, in
terms of Sections 16B, 16C, 16D and 16E within a period of six
months from today."
The Tea Board says that it is not for the factual basis that the order is referred to,
but only to show the Supreme Court's concern for the workers' problems and the
direction, in such circumstances, for the exercise of the Central government's
authority, inter alia, under Section 16E of the Act.
58. The Tea Board submits that the word "closed" is not defined in Chapter IIIA
of the Act of 1953 or the comparable Chapter IIIA of the Act of 1951, but such
word in the Act of 1951, since such statute pertains to industries, would take
colour from the definition of "closure" inserted in the Industrial Disputes Act,
1947 as Section 2(cc) by an amendment that came into effect in 1984. However,
the word "closed" appearing in Section 16E(1)(b) of the Act of 1953 has to be seen
in the broader context of the mischief that the provision tries to arrest as evident
from the statement of object and reasons pertaining to the Amending Act of 1976.
The Tea Board makes a clean breast of its stand: if the suspension of normal
operations at a tea undertaking or tea unit for a period in excess of three months
cannot be regarded as the concerned tea unit or tea undertaking being "closed for
a period of not less than three months", then there may not have been any
closure at the seven notified gardens. However, the Board submits, closure in
such context must necessarily be seen to be the cessation of normal operations
at a tea unit or tea undertaking for the statutory period of three months, even if
there is no permanent closure or a closure by a formal announcement by the
owner as under the Act of 1947.
59. Apropos the insinuation made by the petitioners against the Tea Board, it
says that it has not axe to grind against the Duncans group and it merely
reported what it saw and rendered only such opinion as was warranted by what
it saw. The Tea Board says that if there is widespread disenchantment among the
workers towards the tea industry and they migrate to greener pastures, it would
be prejudicial to the industry as a whole apart from ruining the prospects of the
closed tea units and undertakings for all time to come.
60. The Tea Board also clarifies that a tea garden without a factory of its own
can be regarded as a tea undertaking within the meaning of Section 16A(1)(e) of
the Act since any undertaking engaged either in the production or manufacture
of tea, or both, through another tea unit is said to be a tea undertaking. The Tea
Board says since it is the undeniable position that Tulsipara TE manufactured
tea for commercial use by having its tea leaves processed at the Lankapara and
Garganda factories, Tulsipara TE has to be regarded as a tea undertaking and
the reference by the petitioners to List II of the Seventh Schedule to the
Constitution is, thus, irrelevant. The Tea Board has referred to a judgment
reported at (1962) 1 SCR 422 (The Swadeshi Cotton Mills Company Limited v. The
State of U.P.) for the proposition that when a notification is issued, the formation
of opinion is not necessary to be recited therein. That was a case under Section 3
of the Act of 1947 by which industrial tribunals were set up by the State of Uttar
Pradesh. The other decision cited by the Tea Board is reported at (1974) 2 SCC
687 (M. A. Rasheed v. The State of Kerala). Paragraphs 8 and 10 of the report are
of particular relevance in the present context.
"8. Where powers are conferred on public authorities to
exercise the same when "they are satisfied" or when "it appears to
them", or when "in their opinion" a certain state of affairs exists; or
when powers enable public authorities to take "such action as they
think fit" in relation to a subject matter, the courts will not readily
defer to the conclusiveness of' an executive authority's opinion as to
the existence of a matter of law or fact upon which the validity of the
exercise of the power is predicated."
"10. Administrative decisions in exercise of powers even
conferred in subjective terms are to be made in good faith on relevant
consideration. The courts inquire whether a reasonable man could
have come to the decision in question without misdirecting himself
on the law or the facts in a material respect. The standard of
reasonableness to which the administrative body is required to
conform may range from the courts' own opinion of what is
reasonable to the criterion of what a reasonable body might have
decided. The courts will find out whether conditions precedent to the
formation of the opinion have a factual basis."
61. The State has supported the impugned notification and says that the pre-
conditions to exercising the authority under Section 16E of the Act were complied
with as would be evident from, inter alia, the reports of the Chief Secretary to the
State and its group of ministers. The State also refers to its response of February
15, 2016 to the letter dated January 8, 2016 issued by the Union Ministry of
Commerce and Industry. The State has assured all support to the Centre for the
"immediate re-opening of closed tea gardens and the general improvement of the
health of the stressed tea estates so that the wages and living conditions of the
workers improved." The State has also expressed its willingness to approach the
BIFR jointly with the Union in respect of the six tea units and undertaking of
Duncans Industries Limited.
62. The State also asserts that the Tea Board's report pertaining to the notified
tea units and undertaking leave no manner of doubt that such units and
undertaking remained closed for all practical purposes since or about July, 2015
and there is no evidence to the contrary produced by the petitioners that there
were any operations in any of the units or undertaking at any time within three
months preceding the publication of the impugned notification of January 28,
2016. The State also claims that the Central government may have resorted to
Section 16D(1)(d) of the Act to take over the management of the notified tea units
and undertaking without taking recourse to either Section 16B of the Act or
Section 16E thereof. In this context, the State refers to a judgment reported at
(2009) 9 SCC 173 (P. K. Palanisamy v. N. Arumugham) for the proposition that
when the power exists under a statutory provision to do a certain thing, the
mistaken reference to another provision in course of doing such thing would not
vitiate the action.
63. The State has also placed a judgment reported at (1984) Supp SCC 443
(Rashtriya Mill Mazdoor Sangh, Nagpur v. Model Mills, Nagpur) for the enunciation
of the legal principle therein that a change of management under Chapter IIIA of
the Act of 1951 "does not tantamount to either acquisition of the industrial
undertaking or a take over of its ownership ..." The State says that since Chapter
IIIA of the Act of 1953 is fashioned on Chapter IIIA of the Act of 1951, the same
principle will hold good in this case.
64. Four workers at two of the notified tea units have been permitted to
intervene. The submission on their behalf is crisp and to the point. They want
their past dues and their future employment at the earliest. They only remind the
court of the human tragedy that some of the closed tea units and undertaking
have brought. They say that have no work for more than eight months and they
have not been paid for nearly a year.
65. Though the petitioners had not cited the 1981 judgment of Swadeshi
Cotton Mills, they have taken advantage of the Union referring to such judgment
to assert that on the solitary ground that the management of the petitioners'
gardens have been taken over without affording the petitioners an opportunity of
hearing, the impugned notification is liable to be set aside. They also maintain
that no attempt has been made by the Union or any of the other respondents to
demonstrate that the pre-conditions to exercising the authority under Section 16E(1)(b) had been complied with prior to the issuance of the impugned notification of January 28, 2016. They also refer to the printed and hand-written extract from the file notings relied upon by the Union to suggest that the Central government completely misdirected itself in taking extraneous matters into account for erroneously invoking the extraordinary authority under Section 16E of the Act. The petitioners have submitted in the rejoinder that much hue and cry has been made to paint the Duncans group as the villain of the piece without referring to the general malaise that afflicts the tea industry. The petitioners protest the manner in which the delay on the petitioners' part to pay the wages and other dues of the workers at their tea gardens has been highlighted to prejudice the court, though non-payment of dues and the like is not a ground for taking any measure under Section 16E of the Act of 1953.
66. There are several questions that are required to be answered, not the least of them being whether the workers have been altogether left in the lurch by the authorities doing their bit without any real benefit to the workers. Even in the backdrop of the larger picture involving the tea industry in Bengal and the plight of the workers connected therewith, the other issues that arise are as to whether the issuance of the notification is vitiated by its breach of the principles of natural justice; whether the Central government possessed documentary or other evidence to be satisfied that the notified tea units and undertaking had been closed for a period of not less than three months; and, whether the other pre- conditions, if any, to the exercise of the authority under Section 16E (1)(b) of the Act of 1953 were complied with.
67. On a plain reading of Section 16E of the Act, it does not appear that any pre-decisional hearing is required to be afforded to the owner of a tea unit or undertaking prior to its management being taken over. However, high authorities instruct that when an action or order results in serious civil consequences or has the effect of depriving an owner of his property, the principles of natural justice must be read into the provision to make it reasonable. Indeed, as the petitioners suggest, the issue may have to be answered in their favour in view of the majority dictum in the 1981 judgment of Swadeshi Cotton Mills. It is, thus, that the Swadeshi Cotton Mills judgment must be carefully noticed to discern its dictum and assess the applicability of such dictum in the present context. However, the fundamental principle governing the doctrine of precedents may first be appreciated even in the context of the unambiguous command under Article 141 of the Constitution of India. For such purpose, the judgments reported at (1901) AC 495 (Quinn v. Leathem), (2013) 5 SCC 414 (Arasmeta Captive Power Company Private Limited v. Lafarge India Private Limited), (1978) 1 SCC 248 (Maneka Gandhi v. Union of India) and (2015) 10 SCC 241 (Laxmi Devi v. State of Bihar) have been brought to the notice of the appearing parties at the final stage of the hearing since such authorities have a telling impact on how the dictum in Swadeshi Cotton Mills must be read.
68. The essential features of how to read and understand precedents is captured in the following passage from the report in Quinn v. Leathem which has been noticed in scores of judgments of the Supreme Court up to the present times:
"Now, ... there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all."
69. It is only the enunciation of the reason or principle on which a question before a court has been decided that is binding as precedent. Such rule goes with the caveat that the words used by judges in their judgments are not to be read as if they are words in an Act of Parliament. What can be seen to be the ratio decidendi in a judgment and how the same has to be discovered have been laid down in judgments down the years and described thus in Arasmeta Captive Power Company Limited:
"31. ... The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre- existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If is not clear, it is not the duty of the court to spell it out with difficulty in order to be bound by it. ..."
70. A recent judgment reported at (2015) 10 SCC 241 (Laxmi Devi v. State of Bihar) discussed the doctrine by referring to several English and Indian decisions. The flavour of the discussion appears from paragraph 22 of the report:
"22. A Constitution Bench has also reflected on the true nature of ratio decidendi in Krishena Kumar vs. Union of India as is discernable from the following passages:
"19. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required". This was what Lord Selborne said in Caledonian Railway Co. v. Walker's Trustees and Lord Halsbury in Quinn v. Leathem. Sir Frederick Pollock has also said:
"Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision."
"20. ..."
71. In the light of the above, the majority opinion in Swadeshi Cotton Mills may be seen. Though the majority judgment refers to Section 18AA of the Act of 1951 and the necessity of reading the principle of audi alteram partem therein, the dictum therein must be seen to be restricted to Section 18AA(1)(a) of Act of 1951 which corresponds to Section 16E(1)(a) of the Act of 1953. Paragraph 67 of the report provides both the legal question and the answer thereto, though the reasons in support of the answer are found in the later paragraphs of the majority judgment:
"67. From a plain reading of Section 18-AA, it is clear that it does not expressly in unmistakable and unequivocal terms exclude the application of the audi alteram partem rule at the pre- decisional stage. The question, therefore, is narrowed down to the issue, whether the phrase "that immediate action is necessary"
excludes absolutely, by inevitable implication, the application of this cardinal canon of fair play in all cases where Section 18- AA(1)(a) may be invoked. In our opinion, for reasons that follow, the answer to this question must be in the negative."
72. It is the second and third sentences of paragraph 67 of the majority opinion in Swadeshi Cotton Mills that can be said to be relevant for the purpose of discerning the ratio decidendi in such opinion. It is true that the first sentence of the relevant paragraph implies that the audi alteram partem rule must be read into Section 18AA of the Act of 1951, but it must be remembered that the judgment considered a situation covered only by clause (a) of sub-section (1) of Section 18AA of the Act of 1951 which, exactly like clause (a) of Section 16E(1) of the Act of 1953, hinges on an element of mismanagement attributable to the persons in charge of the concerned undertaking. With respect, the majority judgment in Swadeshi Cotton Mills did not hold that even in a situation covered by clause (b) of Section 18AA(1) of the Act of 1951, a pre-decisional hearing had to be afforded to the owner of the undertaking. As tempting as it may be to view the first sentence of paragraph 67 of the majority opinion in Swadeshi Cotton Mills to imply that the principles of natural justice for a pre-decisional hearing must be read into the provision even for situations covered by clause (b) thereof, that is not a part of the ratio decidendi in the majority opinion. Again, with respect, it is not the law declared by the Supreme Court, within the meaning of Article 141 of the Constitution, that every situation covered by clause (b) of Section 18AA(1) of the Act of 1951 would require a pre-decisional hearing to be afforded to the owner of the concerned undertaking before the management thereof is taken over.
73. Indeed, even if the dictum in the majority opinion in Swadeshi Cotton Mills is seen as the indispensability of the principle of natural justice before a measure is taken by the Central government under Section 18AA(1) of the Act of 1951, that would be the law declared qua the Act of 1951. It would have great persuasive value in interpreting a like provision of similar import in another statute, but it would still leave room for discussion as to the applicability thereof in the context of another statute. There is certainly a difference between any ordinary industry covered by the Act of 1951 and the tea industry for which an independent statute was put in place in 1953 by not including tea as a scheduled industry under the Act of 1951. Comparable or identical words in two different statutes may not necessarily have the same effect or impact if the contexts of the statutes are different. For instance, it cannot be accepted that the concept of closure as implied by the word "closed" in the opening limb of clause (b) of Section 16E(1) of the Act can be interpreted with reference to the Act of 1947. However, the concept of closure implied by the word "closed" in Section 18AA(1)(b) of the Act of 1951 would, obviously, take colour from the definition of "closure" in the Act of 1947 which also pertains to industry in general.
74. Thus, if a key word in identically worded provisions appearing in different statutes cannot be seen to convey the same meaning, it cannot be said that the law declared by the Supreme Court in the context of another statute containing a comparable provision will be binding in the context of some other statute, though high regard must be had to the interpretation of a comparable provision rendered by the highest court of the land.
75. The majority opinion was dissented from on cogent grounds in the minority judgment and a subsequent bench of two judges in Pashok Tea doubted the majority opinion, of reading the principles of natural justice into the relevant provision; though the subsequent bench did not express any conclusive opinion but required the matter to be referred to a larger bench.
76. In the minority opinion in Swadeshi Cotton Mills it was observed that action under Section 18AA of the Act of 1951 was preventive and remedial. The following passage from paragraph 111 of the minority judgment is relevant for the present discussion.
"111. The likelihood of production being jeopardized or the stoppage of production in a key industrial undertaking is a matter of grave concern affecting the public interest. Parliament has taken so serious a view of the matter that it has authorised the Central Government to take over the management of the industrial undertaking if immediate action may prevent jeopardy to production or restore production where it has already stopped. The necessity for immediate action by the Central Government, contemplated by Parliament, is definitely indicative of the exclusion of natural justice. ..."
77. There is a further reason for not reading the principles of natural justice into Section 16E(1) of the Act of 1953 in the light of its purpose and the larger public interest that it seeks to serve. Ordinarily, a provision which is seen to be confiscatory or expropriatory in nature is required to conform to the principles of natural justice on the ground that it may otherwise fall foul of the reasonableness required under Article 14 of the Constitution. However, in view of Article 31-A of the Constitution introduced by the first amendment to the suprema lex, and which is to be deemed to always have been a part of the Constitution, "Notwithstanding anything contained in Article 13, no law providing for ... the taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property ... shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19."
If a provision does not expressly provide for the operation of the audi alteram partem rule, such rule is generally read into the provision to make it conform to the test of reasonableness under Article 14 of the Constitution when such provision appears in its ordinary sense to be expropriatory or having grave civil consequences. But if any provision in any law made by Parliament provides for the taking-over of the management of any property by the State for a limited period in public interest, such provision may be inconsistent with Article 14 or Article 19 of the Constitution and yet be valid by virtue of Article 31-A(1)(b) of the Constitution. It appears, thus, that since the reasonableness of a provision like Section 16E(1) of the Act of 1953 cannot be questioned on the anvil of Article 14 of the Constitution, the audi alteram partem rule need not be read into such a provision. Again, it a fundamental canon of statutory interpretation that words that do not appear in a provision may not be added thereto or subtracted therefrom unless the provision is required to be read down or read up to make it conform to the Constitutional norms. It cannot be doubted, in view of the Constitution Bench judgment in Maneka Gandhi, that the audi alteram partem rule is a rule of reasonableness emanating from the wider ethos of Article 14 of the Constitution.
78. The statement of object and reasons of the Tea (Amendment) Act, 1976 which introduced Chapter IIIA, intituled "Management of Control of Tea Undertakings or Tea Units by the Central Government in certain circumstances", on the same lines as the amendment of 1971 to the Act of 1951, refers to the tea industry providing employment to over six lakh workers. One of the reasons for introducing the chapter in the Act of 1953 was to take "timely corrective action"
as "it is feared that sick and uneconomic tea gardens may be closed down resulting in problems of unemployment and economic hardship ..." Thus, every provision in Chapter IIIA of the Act of 1953 has to be viewed in the context of preserving the tea industry and taking care of its workers. There is no doubt that an industry is not only for the purpose of taking care of employment or improving the conditions of workers thereat; but an industry has a contribution to the economy and the rights of the owners, workers and various other factors are required to be taken into consideration for preserving or furthering the longevity of the same. But the very purpose of the chapter is, inter alia, to protect the interests of the workers and the underlying sentiment of the impugned notification appears to be the same. The tea industry must also be regarded as somewhat different from the usual industry. Apart from the fact that the distinction is recognised in the tea industry being carved out for a special legislation, it has also to be appreciated that it is an agriculture-based industry. The tea plant, or camellia sinensis (l) o. kuntze as it is defined in the Act of 1953, is, like the rose, a bush. In this State the plant grows particularly well in and around the foothills of the Himalayas and has, primarily, the tribal population of the region and the diminutive hills-folk as the workers in the industry. The tea industry is known by its everlasting depiction of two leaves and a bud. This insignia competes with the abiding picture of a young mother carrying an infant in a basket on her back, balanced by a strap running across her forehead, as she plucks the leaves from the plant as the emblem of the tea industry. The tea bush and the worker are both indispensable to the industry, just as there has to be a management to run the gardens or the units and undertakings. The theme of the Amending Act of 1976 is to protect both the industry and its workers.
79. If then, the workers in the Dooars tea units and undertakings have remained unpaid for long with little prospect of immediate income and the Central government invokes its powers under Chapter IIIA of the Act of 1953, the motive behind the move can scarcely be questioned. When the gardens pertaining to the notified units and undertaking have not had regular activity or operations after July, 2015 and the intermittent plucking thereafter has been described by the management or the owners as "theft" and "illegal", the reports prepared and forwarded by the Tea Board to the Central government provided sufficient documentary evidence for the Central government to be satisfied on the basis thereof that the relevant units and undertaking had "being closed for a period of not less than three months" at the time that the decision to notify an order under Section 16E of the Act of 1953 was taken. Such decision is reflected in the letters dated January 8, 2016 and January 9, 2016 issued, respectively, by the Central government and its Minister to the State and its Chief Minister. What is evident from the reports prepared by the Tea Board and available with the Central government is that the electricity connections to the factories, offices and even the garden hospitals and staff quarters had been disconnected.
80. The matter has to be seen in the appropriate prospective and not, as the petitioners attempt, to pick out something from one report and some other thing from another by losing the whole picture. To begin with, nothing in Section 16E(1)(b) of the Act of 1953 requires the word "closed" to be understood as implying a ceremonial closure to be declared by the owner or such closure having the attributes of permanency. The very nature of the provision calls for an early detection of the ailment for immediate remedial measures to be taken in the larger public interest. It cannot be said that a tea unit would be closed for months and years and its estate remain merely a picturesque backdrop for the bungalow to be used as a tourist hot-spot, but such closure not be regarded as a closure till such time that the owner deigns to declare as such. It is absurd to suggest that closure within the meaning of the word "closed' in Section 16E(1)(b) of the Act would depend on the whims of the owner, irrespective of the lack of the usual operations at the tea unit or undertaking. The very ethos of Chapter IIIA of the Act of 1953 is to divest the owners of the incidence of their ownership for a limited period in the larger interests of the industry, its workers and public interest.
81. It is laughable that the Tea Board reports of plants growing to unpluckable heights by December, 2015 remain unrefuted, that the observations that bulk electricity supply at the units and the undertaking remain disconnected for a long time are not contested, and yet it is repeated ad nauseam that the first pre- condition to clause (b) was not complied with. The chairman's letter of November 30, 2015 admitted that the operations at the 15 gardens of Duncans Industries Ltd. were not normal for some time and only nine out of the 15 gardens "have already been normalized and the remaining gardens are expected to follow suit shortly", but in attacking the impugned notification the submission is that it was business as usual at the notified units and undertaking. The petitioners appear to be immensely proud of the fact that the FAWLOI scheme of the State government did not apply to the workers at the notified units and undertaking. But that was not because the Duncans workers were flush with money, but only because the notified units and undertaking have not been formally locked out for the workers to come within the definition of the scheme.
82. The petitioners flaunt the tripartite settlement inked on January 22, 2016 and say that the fifth clause therein recognises that the monthly-rated workers would be paid their wages from August, 2015 and the backlog for the five months till the end of the year would be cleared in three installments payable in the second half of the current calendar year. The relevant document does not detract from the fact that the notified gardens have remained effectively closed (and closed within the larger meaning under clause (b) of Section 16E(1) of the Act) for a period in excess of three months prior to the issuance of the impugned notification.
83. At the end of the day, what the petitioners challenge is the subjective satisfaction of the Central government as to the existence of a set of conditions based on certain objective criteria. It would not do for the petitioners to say that the petitioners would have concluded otherwise than the Central government has done on the documentary or other evidence in the possession of the Central government. It was for the petitioners to rely on material to contradict the reports of the Tea Board which formed the primary evidence before the Central Government. However, the petitioners have glossed over the colossal shortcoming on their part to restrict their challenge by trying to pick holes in the report without bringing any material to contradict the same.
84. There is no doubt that an extraordinary measure as the taking-over of the management of a tea unit or undertaking without previous notice to the owners would require a justification by the Central government on the basis of the documentary and other evidence in its possession at the time of taking the decision to notify an order under Section 16E(1) of the Act. But when such documentary and other evidence is brought to light by the Central government in course of a challenge to a notified order, the petitioners cannot catapult themselves to the position of the Central government and sit in judgment over the decision by criticising the paucity of the material to form the relevant opinion. The burden is, doubtless on the Central government to produce the documentary and other evidence that went into the formation of the opinion of the Central government to notify an order under Section 16E(1) of the Act. But on the state of the evidence when such material is produced, the onus is on the challenger to discredit the same and establish that not even the meanest mind could have formed the opinion on the basis of the material produced by the Central government. Such exercise on the part of a challenger would invariably involve the production of contrary material. The petitioners have reduced this exercise to a farce by confining their endeavour to only point out the undotted i's and the uncrossed t's in the reports on which the Central government's satisfaction as to the existence of the relevant circumstances is founded.
85. In the context of the wealth of material disclosed by the Union and the Tea Board, it was expected that the petitioners would produce copies of bills pertaining to supply of electricity at the notified units or undertaking or at the offices at the gardens. One may also have expected affidavits from garden managers - if there were any - to cite the activities undertaken in the three or six months preceding the publication of the impugned notification of January 28, 2016. No bills or other material have been produced by the petitioners to demonstrate any kind of activity at any of the notified units or undertaking.
86. It is necessary at this juncture to get rid of the bogey of the inapplicability of Section 16E of the Act of 1953 to Tulsipara TE on the ground that such tea estate has only a tea garden and no factory of its own. There is no denial in the petitioners' reply to the assertion by the Tea Board that the tea produced at Tulsipara TE was processed at the factories in Lankapara TE and Garganda TE. If a tea garden or a tea estate is engaged in the production or manufacture of tea, or both, through one or more tea units, it has to be regarded as a tea undertaking within the meaning of the definition of "tea undertaking" in Section 16A(1)(e) of the Act of 1953. The word undertaking is not defined either in Chapter IIIA or in Section 2 of the Act of 1953 but such word in the definition of "tea undertaking" implies a tea garden or a tea estate. Even more fundamentally, it is not acceptable that the Act of 1953 would apply to Tulsipara TE - since no argument to the contrary has been proffered - but such tea estate would be outside the purview of Chapter IIIA thereof. Indeed, the definitions of "owner" and "tea" in Section 2 of the Act make it impermissible to regard a tea garden without a factory to stand beyond the pale of the Act of 1953.
87. The argument that the impugned notification is violative of Article 300A of the Constitution is equally fallacious. Such provision mandates that no person shall be deprived of his property save by authority of law. Section 16E(1) of the Act of 1953 is the authority of law by which an owner of a tea unit or tea undertaking can be deprived of his property for a limited period either in public interest or in order to secure the proper management of the tea unit or tea undertaking. And, as noticed above, a law providing for the taking-over of the management of any property by the State for a limited period either in public interest or in order to secure the proper management of the property cannot be questioned as unreasonable in view of Article 31-A(1)(b) of the Constitution.
88. Section 16B of the Act of 1953 empowers the Central government to make, or cause to be made, a full and complete investigation into the affairs of a tea unit or a tea undertaking if the Central government is of the opinion that any of the four conditions recognised in the provision has arisen. The first of such conditions pertains to the concerned tea undertaking or unit making losses in three out of the five years immediately preceding the year in which the opinion is formed; the second condition pertains to the fall of the average yield of the tea undertaking or unit to below 25 per cent of the district average for three of the five preceding years; the third condition pertains to the habitual default of the owners in the payment wages or provident fund dues of the workers or employees of a tea undertaking or unit or other specified dues; and, the fourth condition arises when the tea undertaking or unit is being managed in a manner highly detrimental to the tea industry or the public interest. Section 16B(2) of the Act of 1953 permits an investigation in respect of a tea undertaking owned by a company which is being wound up under the supervision of a court and the mandate is for the court to grant such permission, notwithstanding anything contained in the Companies Act, 1956.
89. Section 16C of the Act permits the Central government, if it satisfied that action under such provision is desirable, to issue directions to a tea undertaking or unit in respect whereof an investigation has been made under Section 16B of the Act. The directions could be for regulating the production of tea or fixing the standards of production at the tea undertaking or unit; requiring the undertaking or unit to take such steps as may be directed to stimulate the production, manufacture or plantation of tea; prohibiting the undertaking or unit from resorting to any act or practice which may reduce its production, capacity or economic value; or controlling the prices or regulating the distribution of the tea produced or manufactured by the undertaking or unit. Section 16C(2) of the Act of 1953 makes such directions binding on the concerned undertaking or unit.
90. Section 16D(1) of the Act of 1953 covers the same four conditions as Section 16B(1) thereof, except that the first condition has an additional limb pertaining to the failure to comply with any direction issued under Section 16C of the Act of 1953. It would, thus, be evident that an investigation has first to be conducted under Section 16B of the Act in respect of any of the four situations recognised in clauses (a) to (d) of sub-section (1) thereof before the management of the tea undertaking or unit may be taken over under Section 16D of the Act. Apart form the additional ground in Section 16D(1)(a) of the Act, the other grounds under Section 16D(1) of the Act being identical to Section 16B(1) thereof, it is evident that an investigation must first be made, or caused to be made, in respect of any of the situations which are common to both 16B(1) of the Act and Section 16D(1) thereof before the management of the concerned tea undertaking or unit may be taken over under Section 16D of the Act.
91. Neither Section 16B nor Section 16D of the Act expressly requires any notice to be issued to the owner of a tea undertaking or unit before an investigation in respect of such undertaking or unit is started or the management of such undertaking or unit is taken over after the investigation is completed. It is only to the extent that an investigation pertaining to a tea undertaking or unit would require the books and records of the owner of the concerned undertaking or unit to be looked into, that there is an element of natural justice that is required to be followed. But once the investigation initiated under Section 16B is completed, there is no further requirement of any pre-decisional hearing or notice being afforded to the owner of the concerned tea undertaking or unit in respect whereof the investigation confirms the opinion of the Central government as to the state of the undertaking or unit or the conduct of its owners. The taking-over of the management of a tea undertaking or unit under Section 16D of the Act is for a limited duration as specified and, in such regard, the period is the same in respect of any action taken under Section 16E of the Act.
92. But Section 16E of the Act stands on an altogether different pedestal as to the circumstances in which it may be invoked. It begins with an non-obstante clause that gives it overriding effect qua the other provisions of the Act. Since the present matter pertains to a situation under Section 16E(1)(b) of the Act, such provision needs to be looked at closely. On a plain reading of such provision, four conditions are required to be met before an order may be notified for taking over the management of the whole or any part of a tea undertaking or unit: that it has been closed for a period of not less than three months; that such closure is prejudicial to the tea undertaking or unit; that the financial condition of the undertaking or unit and the plant and machinery thereof are such that it is possible to restart the undertaking or unit; and, such restarting is necessary in the interests of the general public.
93. The words in parentheses in clause (b) are of wide import, particularly the expression "for any other reason" appearing at the end thereof. It must also be noticed that unlike Section 16B(2) of the Act, Section 16E thereof does not call for any permission to be sought from the company court supervising the liquidation of the company which owns the concerned tea undertaking or unit and the expression "for any other reason" would cover a situation where the concerned company is being wound up by a court.
94. The documentary and other evidence pertaining to the notified tea units and undertaking in the possession of the Central government were sufficient for the Central government to be satisfied on the basis thereof that the notified tea units and undertaking had been closed for a period of not less than three months prior to its decision to notify an order under Section 16E of the Act in the larger sense that there were no operations of the usual kind at any of the units or undertaking for such period though the same may not been formally closed. That such closure was prejudicial to the notified tea units and undertaking is beyond dispute since the prejudice of the workers at a tea unit or undertaking has to be taken into consideration to assess the prejudice that is relevant for the second condition of clause (b). That such material in the possession of the Central government could satisfy the Central government that the restarting of the tea notified units and undertaking was necessary in the interest of the general public, may also be seen to have been complied with since a closed tea unit or undertaking (in the sense that its normal operations have stopped for the relevant period) results in the loss of production of tea and causes serious prejudice to the workers thereat.
95. The matter, thus, hinges on whether the third of the four conditions in clause (b) can be seen to have been complied with on the basis of the documentary and other evidence in the possession of the Central government immediately prior to the issuance of the notification. Such third condition must be seen to have a major premise and a minor premise. The major premise is that "it is possible to restart the tea undertaking or tea unit" and the minor premise would be the reason for it be possible to restart the undertaking or unit. The minor premise has two limbs to it: the financial condition of the company owning the unit or undertaking; and, the plant and machinery of such undertaking or unit. To assess the feasibility of restarting a closed tea undertaking or unit, both the financial condition of the company owning the undertaking or unit and the state of plant and machinery thereat must be taken into consideration. It is the totality of both which forms the basis of the minor premise for the fulfilment of the major premise. The third condition does not imply that both the financial condition of the company owning the undertaking or unit has to be good and that the state of its plant and machinery has also to be satisfactory. The minor premise is upon a conjoint consideration of both factors: the financial condition and the state of the plant and machinery; and, if it is possible to conclude on the basis of the material available before the Central government that it would be possible to restart the notified undertaking or unit, that would suffice.
96. There is a distinction between the regular industry and the tea industry. For example, a factory in any regular industry would require raw material and the machinery to process the same; but the raw material may not be easily accessible and such consideration has to weigh with the Central government in assessing the feasibility of restarting the industrial unit or undertaking. When it comes to a tea unit, which necessarily has both a garden and a factory, the assessment is much easier if the garden is in a state that, with some work, production can be commenced thereat; and the connected factory is in a position to process the tea. The same would apply to a tea undertaking with an identified tea factory.
97. In the present case, the reports before the Central government do not reveal that the gardens pertaining to the notified tea units and undertaking cannot produce tea or the factories connected therewith are beyond repair or that such factories cannot be restarted. Indeed, it is the petitioners' case that normal operations can be resumed within a short time at all the notified tea units and undertaking. Thus, the Central government's decision cannot be questioned on the ground that it is not feasible or possible to restart the notified tea units or undertaking or that the material before it could not have led the Central government to conclude that it was possible to restart the operations at the notified tea units or undertaking.
98. On the basis of the documentary or other evidence that was before the Central government, it was possible for the Central government to be satisfied that all the conditions enumerated in Section 16E(1)(b) of the Act had been covered for the Central government to notify an order thereunder for taking over the management of the notified tea units and undertaking. Since Section 16E(1) of the Act does not stipulate the recording of the reasons in a notified order issued under such provision, the petitioners' submission in such regard is repelled. The further contention, that a ground not relevant to Section 16E(1) of the Act has been recorded in the notification, is equally fallacious since the material produced by the Central government in course of the present proceedings sufficiently justifies the basis of the Central government's satisfaction as to the existence of a situation covered by Section 16E(1)(b) of the Act.
99. However, the taking-over of the management of the notified tea units and undertaking is one matter, but the larger picture involves the appropriate management of the units and undertaking to achieve the objects of the provision. Though it may not be relevant for the present consideration, it appears that both the State - at whose behest the measure has been taken - and the Central government - which has taken the measure - perceive that the work is done in the management of the notified tea units and undertaking being taken over. In the larger scheme of Chapter IIIA of the Act of 1953, the notification is only the first step and nothing but the means towards an end. There have been cases in the past of the Central government taking over the management of tea units and undertakings. There was a company owned by the Central government by the name of Tea Trading Corporation of India Ltd, which failed to properly manage the units and undertakings taken over and was, ultimately, wound up. If the larger purpose of the taking-over of the management of the notified tea units and undertakings is to be achieved, a lot more needs to be done than is evident from the post-notification steps taken. But that is a matter of future concern.
100. There is no merit in the petitioners' challenge to the notification dated January 28, 2016 or the decision culminating in the issuance thereof. The petitioners' intransigence is reflected in their refusal to clear the past dues of the workers under the settlement of January 22, 2016, which had nothing to do with the issuance of the subsequent notification. If nothing else, both the Central and the State governments should use might of the sovereign to ensure that the workers of the notified tea units and undertakings get their dues immediately and are able to be re-employed as expeditiously as possible.
101. WP 1897 (W) of 2016 and WP 2105 (W) of 2016 are dismissed with costs assessed at Rs.5 lakh that should immediately be paid by the petitioners to the Central government through the Tea Board for the Tea Board to take immediate steps to restart the notified units and undertaking.
102. Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J.)