Belsund Sugar Co.Ltd vs State Of Bihar & Ors. Etc on 10 August, 1999
The latter decision is rendered
in the case of SIEL Ltd. and Others vs. Union of India and
Others (supra), as noted earlier. It must, therefore, be
held that mere possibility of issuance of any future order
under Section 30 (1) of the Tea Act by the Central
Government, in the absence of any existing express order to
that effect, cannot be said to have occupied the field
regarding purchase and sale of manufactured tea and fixation
of maximum or minimum price thereof, or the location of such
sales. These topics cannot be said to be legitimately
covered by the Tea Act. Hence, the field is wide open for
the State Legislature to exercise its concurrent legislative
power under Entry 33 of List III for effectively dealing
with these matters. This is precisely what has been done by
the State Legislature by enacting the Market Act. The
insertion of item pertaining to Tea (leaf and dust) in the
Schedule, therefore, cannot be said to be an unauthorised
exercise on the part of the delegate of the State
Legislature, namely, the State Government which has
exercised its power under Section 39 of the Market Act.
Before parting with the discussion on the Tea Act, it is
also necessary to keep in view the history of tea industry
in India. It is apparent that the Tea Committee 1934,
Indian Tea Control Act, 1938 and Central Tea Board Act, 1949
had been made with a view to control export of tea and tea
cultivation. The Tea Act, 1953 was enacted to provide for
taking several functions of licensing and vesting it in the
Board and to exercise (1) control over tea cultivation and
(2) control over the export of tea and tea seeds. The
preamble of the Act states that it is intended to provide
for the control by the Union of the tea industry, including
the control, in pursuance of the International Agreement, of
the cultivation of tea and export of tea. Thus the
objective of the Tea Act is focussed on tea cultivation/tea
export and establishment of tea manufacturing plants. It is
quite different from that of the Market Act, 1960 made by
the Bihar Legislature. The Tea Act has no concern with the
establishment of markets in the State of Bihar or other
States wherein packed tea could be sold in wholesale or
retail markets so as to ultimately reach the Indian
consumers. That takes us to the consideration of the
Control Orders issued by the Central Government in exercise
of its power under Section 30, sub-sections (3) and (5)
thereof. One such order is the Tea (Distribution and
Export) Control Order, 1957 which pertains to licensing of
the distributors and exporters of tea. Clause 3 requires
distributors carrying on the business of distributing tea to
have a licence under this order. The export of tea is not
touched by the Market Act as it has nothing to do with the
export of tea to other countries. Clause 9 says that the
licence given is personal and nontransferable. Clause 10
requires the licensee to pack and mark containers of tea in
the manner mentioned therein. The proviso is significant.
According to it, Clause 10 (c) does not apply to containers
containing not more than 20 Kg. net or such other weight as
to make it package tea for the purpose of the Central
Excises and Salt Act, 1944. Clause 11 provides that no
distributor shall distribute tea for sale which is not
packed and marketed as per Clause 10 and which is
adulterated or which makes false claim for such tea.
Thereafter, are noted various statutory requirements.
Firstly, the "distributor" contemplated by the 1957 Order is
a distributor in the commercial sense who as principal or
agent distributes tea to the wholesaler. Secondly, the
distribution controlled is linked with export. Thirdly,
since distribution is clubbed with export, it can at best be
said to be distribution which is being made in similar bulk
as exports. Fourthly, Form A provides for granting of
licence to carry on business in manufactured tea as
distributors at the places mentioned in the application.
While Form B deals with licence to carry on business in
manufactured tea as distributor/exporter of tea. It thus,
becomes at once clear that this Control Order does not
command licencee to carry on distribution of tea for sale at
any particular place/market. The aforesaid Control Order
has nothing to do with the establishment of markets for
selling packed tea. The requirement of packing and
marketing is again not contemplated by the Market Act, 1960.
Hence, it is difficult to appreciate how this Control Order
has occupied the field of regulation of sale and purchase of
packed tea in market areas. The next Order on which Shri
Shanti Bhushan, learned senior counsel for the appellant,
strongly relied was the Tea (Marketing) Control Order, 1984.
The said Order was promulgated by the Central Government in
exercise of its power under subsections (3) and (5) of
Section 30 of the Tea Act, 1953. It pertains to licensing
of the distributors and exporters. A mere look at the said
Order shows that it does not provide for any regulation of
sale and purchase of tea in the markets in different States
in India. Clause 3 requires registration of manufacturer of
tea and such manufacturer has to submit monthly return under
Clause 5 in Form C. Clauses 6 and 7 pertain to Organiser of
Tea Auction and Broker in Tea Auction. Clause 14 declares
that the licence is personal and non-transferable. These
persons are to maintain records as per Clause 16. Clause 17
directs the manufacturer to sell not less than 75% or such
higher percentage, as specified by the Board, of tea
manufactured by him in a year through public tea auctions in
India held under the control of organisers of tea auction.
Clause 19 exempts tea marketed directly by the manufacturer
as packet tea, instant tea, tea bags, aromatic tea and green
tea from computation of the total production under para 17.
Firstly, 1984 Order deals with manufacturers and organisers
of tea auction and brokers of tea auction and its basic
concern is to require them to have licences in the form of
authority. It is obvious that even this Order cannot
advance the case of the appellant. The next Order which was
pressed in service was the Tea Warehouses (Licensing) Order,
1989. The said order was also promulgated by the Central
Government in exercise of the power conferred by
sub-sections (3) and (5) of Section 30 of the Tea Act, 1953.
A mere look at the salient features of 1989 Order shows that
it has not covered the field tried to be occupied by the
Market Act. The public tea auctions contemplated by 1984
Order are those which are held under Clause 3 of the Tea
Warehouses (Licensing) Order, 1989. In fact Clause 14(7)
prohibits the warehouse owner from entering into any
transaction with the manufacturer/broker/organiser of tea
auction unless they have licences under the 1984 Order. The
public tea auctions are held in specified areas in Calcutta,
Siliguri, Guwahati, Cochin, Coimbatore and Amritsar. Thus,
the 1984 Order and the Tea Warehouses (Licensing) Order 1989
are basically concerned with the public tea auctions and the
licensing of manufacturer/broker/organiser of public auction
and warehouses with regard to holding of public tea
auctions. The warehouse is to be governed as per Clause
10(7) of the 1989 Order. This Order does not apply to the
storage godowns in the markets established under the Market
Act, 1960. But assuming it applies, the only effect would
be that the storage places in markets should be in
conformity with Clause 10(7). As far as obtaining of
licence is concerned, it has to be obtained by the warehouse
owner who carries on the activities of storing, blending or
packing of tea in the warehouse. Once the manufacturer or
trader takes space from the Market Committee in the godown
in the Market Yard, then he would be the warehouse owner
under Clause 2(1) of the 1989 Order and would have to take a
licence, as authority, from the Tea Board. Both under the
1984 Order and 1989 Order, there is no requirement to carry
on the business at any particular place/market. These
Orders do not concern themselves with establishment of
market or fixing place of business. The aforesaid Orders on
which reliance was placed by learned senior counsel Shri
Shanti Bhushan indicate that the Central Government in its
wisdom did not think it fit to issue any Order under Section
30, sub-section (1), clauses (a) & (b) and, therefore, kept
the field wide open in connection with the topics covered by
the said provisions of Section 30 for the State Governments
to exercise their legislative powers and enact suitable
legislations under Entry 33 of the Concurrent List III of
the Seventh Schedule of the Constitution. Our attention was
then invited by Shri Shanti Bhushan, learned senior counsel
for the appellant, to the Tea Waste (Control) Order, 1959.
Even this order is issued by the Central Government under
sub-sections (3) and (5) of Section 30 The Tea Waste
(Control) Order, 1959 applies only to tea waste as defined
in Clause 2 (f). Thereunder a person selling/offering for
sale/buying/holding any stock in tea waste is required to
have licence. (Clauses 3,4,5, and 6). Clause 9 provides
that licence is not transferable. Clause 13 provides that
licensee shall have in possession tea waste not exceeding
that which may be fixed by the licensing authority. Under
Clause 19A false declaration is prohibited. On a conjoint
reading of the aforesaid statutory Orders issued under the
Tea Act and the relevant scheme of the Tea Act, it becomes
at once clear that the provisions regarding fixation of
appropriate price at which blended and packed tea can be
sold to wholesalers in any established market or particular
place at which sale transactions of such manufactured tea
between the manufacturers on the one hand and the traders or
other wholesale producers/dealers on the other are outside
the sweep either of the Tea Act or of the relevant statutory
Orders framed under Section 30 by the Central Government
under the very same Act. The places at which public
auctions can be held in connection with sale of roasted tea
leaves to be purchased by manufacturers like the appellant
are the earmarked six places indicated in 1984 and 1989
Orders. These auctions have nothing to do with the later
sales of manufactured blended tea by such auction purchasers
of tea leaves, who manufacture packed tea by blending and
packing roasted tea leaves in their factories. The public
auctions as contemplated by these Orders, therefore, serve
out their purpose once the manufacturers of blended tea,
like the appellants, purchase roasted tea leaves in public
auctions. Once such purchased tea leaves are further
processed after blending and packed in suitable receptacles
for sale in local markets the stage is reached for
regulating such sale transactions by manufacturers of tea
when they are subjected to further auctions to be held in
the market areas wherein the licensed distributors and
manufacturers of tea can be subjected to the procedure of
Section 15, sub-section (2) of the Market Act. So far as
these later transactions are concerned, neither the Tea Act
nor any of the aforesaid Orders can hold the field. Such
sale transactions of manufactured tea in packed condition
will, therefore, necessarily have to be governed by the
provisions of the Market Act applicable to the area wherein
such sale transactions in favour of wholesalers or retailers
are effected by the stockists of the appellant operating in
the market areas concerned. It is also pertinent to note
that Section 15 of the Market Act gets attracted to such
transactions of sale. It is not possible to agree with the
contention of learned senior counsel Shri Shanti Bhushan
that once the retail prices are fixed by the appellant there
is no necessity of auctioning this tea in packed condition
as per Section 15 sub-section 2 of the Market Act. It has
to be kept in view that under the relevant Orders issued by
the Central Government under Section 30 of the Tea Act, as
noted earlier, the purchasers of tea have also to be
licensed. Such licensed purchasers can bid at the auctions
to be held as per Section 15, sub-section (2) of the Market
Act for purchasing such packed tea. At that stage, there is
no inconsistency or conflict between the earlier public
auction held under the relevant statutory Orders issued
under Section 30 of the Tea Act concerning roasted tea
leaves and the auction of packed and processed tea by the
appellant selling such commodities in the market areas
through their stockists to wholesale dealers and traders
operating in the market area and the market yard or
sub-market yards concerned. In this connection, we may note
one other submission of learned senior counsel Shri Shanti
Bhushan for the appellant. He submitted that for almost 16
years tea was not a scheduled item governed by the Market
Act. In fact, the Bihar Legislature did not think it fit to
include Tea (leaf and dust) as a scheduled item from the
inception but it is only the delegate, namely, the State of
Bihar in exercise of its power under Section 39 thought it
fit to introduce Tea (leaf and dust) as a scheduled item.
The procedure of Sections 3 and 4 has not to be followed
while undertaking this exercise. In this connection, it was
submitted that no reasonable person could have undertaken
such an exercise as tea was already a controlled commodity
under the Tea Act and also governed by the relevant Orders
issued thereunder. As we have seen earlier, under the
relevant provisions of the Tea Act and the operative Orders
promulgated thereunder the Central Government has left
untouched the field of regulation of prices and the location
of market places where such packed tea could be sold to the
wholesale dealers or even to the retailers. When that field
was wide open, the State Government in its wisdom, could
legitimately try to cover the filed by issuing appropriate
Orders under Section 39 of the Act. It cannot be said,
therefore, that such an exercise was totally ultra vires or
amounted to non-application of mind. In fact, what the
Central Government should have done and did not do by
issuing appropriate Orders under Section 30, subsection (1)
Clauses (a) & (b) of the Tea Act could legitimately be done
by the State Government. It was not required to wait
indefinitely till the Central Government could find time to
issue such an Order. Shri Shanti Bhushan, in this
connection, further submitted that if that is so, then if in
future the Central Government wakes up and issues such an
Order, would the then existing Entry in the Schedule
regarding tea get superseded or become inoperative ? This
is a hypothetical question raised which does not require any
answer obviously at this stage. As and when in future such
an eventuality occurs, then the question of continuation of
regulation of sale and purchase transactions of Tea (leaf
and dust) by retaining this item in the Schedule may have to
be examined. But as the statutory provisions stand at
present, in the absence of any such existing Order under
Section 30 sub-section (1) Clauses (a) & (b) by the Central
Government, the field remains wide open and at least it was
definitely open when the State Government introduced the
Entry of Tea (leaf and dust) in the Schedule to the Market
Act in 1976. This exercise, by no stretch of imagination,
could be said to be unauthorised, illegal or amounting to
non-application of mind. The second contention, therefore,
is answered in negative against the appellant and in favour
of the respondent. That takes us to the consideration of
contention no.3 POINT NO. 3 : Once it is held that the
Market Act covers the transactions of sale of packed blended
tea in sealed packets and receptacles by the appellant's
stockist in the market areas concerned especially when these
transactions take place in the market yard or sub-market
yards as laid down by Section 15 of the Act which remains
fully operative to cover such transactions, there is no
escape from the conclusion that the entire infrastructural
facilities for regulation of such sale transactions as made
available by the market committee concerned would enure for
the benefit of sellers of such packed blended tea. It is
also pertinent to note that so far as the appellant is
concerned, all that is required of it is to take licence for
selling packed tea in market yards, sub-market yards from
the market committee concerned. The appellant is not
required to bear the burden of any market fee. As per
Section 27 of the Act, the burden of market fee is to be
borne by the purchasers of such packed tea, namely, the
wholesale dealers licensed to purchase such tea as per the
Central Orders mentioned earlier. Such purchasers have not
brought in challenge levy of market fee on them. So far as
the appellant is concerned, once its stockist sells the
packed tea in the market yard or sub-market yards maintained
by the market committee, the entire infrastructural
facilities made available by the market committee to all the
purchasers and sellers of agricultural produce in the market
yard, would automatically become available to the
appellant's stockist who sells its goods, namely, packed tea
in the market yard or sub-market yards concerned. In this
connection, it has also to be kept in view that
establishment of markets and maintenance thereof is a topic
of legislation squarely covered by Entry 28 of List II of
the Seventh Schedule. For maintaining such markets, the
market committees obviously have to spend large amounts for
providing necessary infrastructure for the benefit of those
who use such established markets. In this connection,
Section 30 of the Market Act, as noted earlier, becomes
relevant for our consideration. Amongst others, the Market
Committee Fund has to be utilised under Section 30 for the
following purposes :