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1999 Supreme(Gau) 128
GAUHATI HIGH COURT
A. K. PATNAIK AND D. BISWAS, J.
Tufanialonga Tea Co.Ltd., Calcutta and another -Appellant
Versus
State of Tripura and others -Respondent
Civil Rule No. 67 of 1994
Decided On : 09-04-1999
G. C. Chakravorty, Sr. Advocate and U. Chakravorty, B. P. Kataky, Standing Counsel for the State of Tripura; B. K. Das, Sr. Advocate
Headnote:
The Tripura Tea Companies (Taking Over of Certain Tea Units) Ordinance 1986 and the Tripura Tea Companies (Taking Over of Management of Certain Tea Units) Act, 1987 were challenged by the petitioners on the grounds of being ultra vires the Constitution and the Tea Act, 1953. The Court held that the impugned Ordinance and the impugned Act are in pith and substance law relating to production of tea falling under Entry 33 of List III of the 7th Schedule of the Constitution and Entry 27 of List II of the 7th Schedule of the Constitution in respect of which the State Legislature has power under Articles 246 (2) and 246 (3) of the Constitution. The Court further held that the provisions of the impugned Act and the impugned Ordinance are not hit by Sections 16 A to 16 N of the Tea Act, 1953, as sub-section (3) of Section 8 of the impugned Act states that its provisions will not be in derogation of the provisions of the Tea Act, 1953 or any other Central law relating to Tea industry and nothing contained in this Act shall exempt any person or body of person, who may, for the time being, be entrusted with the management of a Tea Unit under this Act from the operation of the provisions of any such Central Law. The Court also held that the sale of the two tea estates belonging to the petitioner companies for recovery of land revenue was fraudulent, illegal, invalid, ultra vires and contrary to the procedure established by law.
Fact of the Case:
The petitioners, who are limited companies registered under the Indian Companies Act, 1913, owned two tea estates located at Tebaria. On 13-11-1986, the Tripura Tea Companies (Taking Over of Certain Tea Units) Ordinance 1986 was promulgated by the Governor of Tripura. By the said Ordinance, with effect from the date of promulgation of the Ordinance, the management of the Tea Companies in relation to tea units mentioned in the schedule to the Ordinance vested in the State of Tripura for a period of 5 years. The Tripura Tea Companies (Taking Over of Management of Certain Tea Units) Act, 1987, received assent of the President of India on 29-1-1987. After the expiry of the period of 5 years, the period for management of the undertakings of the tea companies in relation to the tea units by the State Government was extended for one year with effect from 11-11-1991 by notification dated 9-4-1991 of the State Government. Thereafter, the said period was again extended by notification dated 14-10-1992 of the State Government for one year with effect from 11-11-1992. In the meanwhile, Certificate Proceedings were initiated against the petitioners for non-payment of land revenue amounting to Rs. 4147.34 and Rs. 6639.92 respectively and the tea estates of the petitioners were sold in auction on 4-6-1987 at a token price of Re. 1/- for each tea estate in course of the said Certificate Proceedings and the said sales were confirmed on 27-7-1987.
Finding of the Court:
The Court held that the impugned Ordinance and the impugned Act are in pith and substance law relating to production of tea falling under Entry 33 of List III of the 7th Schedule of the Constitution and Entry 27 of List II of the 7th Schedule of the Constitution in respect of which the State Legislature has power under Articles 246 (2) and 246 (3) of the Constitution. The Court further held that the provisions of the impugned Act and the impugned Ordinance are not hit by Sections 16 A to 16 N of the Tea Act, 1953, as sub-section (3) of Section 8 of the impugned Act states that its provisions will not be in derogation of the provisions of the Tea Act, 1953 or any other Central law relating to Tea industry and nothing contained in this Act shall exempt any person or body of person, who may, for the time being, be entrusted with the management of a Tea Unit under this Act from the operation of the provisions of any such Central Law. The Court also held that the sale of the two tea estates belonging to the petitioner companies for recovery of land revenue was fraudulent, illegal, invalid, ultra vires and contrary to the procedure established by law.
Issues: 1. Whether the impugned Ordinance and the impugned Act are ultra vires the Constitution and the Tea Act, 1953? 2. Whether the provisions of the impugned Act and the impugned Ordinance are hit by Sections 16 A to 16 N of the Tea Act, 1953? 3. Whether the sale of the two tea estates belonging to the petitioner companies for recovery of land revenue was fraudulent, illegal, invalid, ultra vires and contrary to the procedure established by law?
Ratio Decidendi: 1. The impugned Ordinance and the impugned Act are in pith and substance law relating to production of tea falling under Entry 33 of List III of the 7th Schedule of the Constitution and Entry 27 of List II of the 7th Schedule of the Constitution in respect of which the State Legislature has power under Articles 246 (2) and 246 (3) of the Constitution. 2. The provisions of the impugned Act and the impugned Ordinance are not hit by Sections 16 A to 16 N of the Tea Act, 1953, as sub-section (3) of Section 8 of the impugned Act states that its provisions will not be in derogation of the provisions of the Tea Act, 1953 or any other Central law relating to Tea industry and nothing contained in this Act shall exempt any person or body of person, who may, for the time being, be entrusted with the management of a Tea Unit under this Act from the operation of the provisions of any such Central Law. 3. The sale of the two tea estates belonging to the petitioner companies for recovery of land revenue was fraudulent, illegal, invalid, ultra vires and contrary to the procedure established by law.
Final Decision: The Court set aside the sales and confirmation of sales of the two tea estates to the State Government and remitted the matter back to the Revenue Court for taking fresh steps in accordance with the 1960 Act and the 1961 Rules. The Court also directed that the State Government will within six months from today specify the rate payable every year to the petitioner companies under Section 5 of the impugned Act and pay the amount determined on the basis of such rate specified by the State Government to the petitioner companies for the period from 13-11-1986 to 4-6-1987. The Court further directed that the State Government will within six months from today also determine the compensation that will be payable to the petitioner companies for the period from 4-6-1987 onwards till the date of this judgment in accordance with this judgment and pay the same to the petitioner companies within six months from today.
PATNAIK, J. :- In this application under Article 226 of the Constitution of India, the petitioners have prayed for declaring the Tripura Tea Companies (Taking Over of Certain Tea Units) Ordinance 1986 and the Tripura Tea Companies (Taking Over of Management of Certain Tea Units) Act, 1987, as ultra vires the Constitution and for quashing the notification and orders issued thereunder as well as the Certificate Proceedings leading to the sale of the tea estates belonging to the petitioners in course of the said Certificate Proceedings and for a direction on the respondents to pay proper compensation with interest at 18% per annum for the damages suffered by the petitioners on account of the take over of the tea estates of the petitioners.
2. The relevant facts briefly are that the petitioner No. 1 is a limited company registered under the Indian Companies Act, 1913 and was the owner of the Tufanialonga Tea Easte located at Tebaria. The petitioner No. 2 is also a limited company registered under the Indian Companies Act, 1913 and was the owner of the Laxmilonga Tea Estate located at Tebaria, Tripura West. The petitioner No. 3 is a Director of the petitioner Nos. 1 and 2 Companies. The petitioners have been carrying on the business of producing and manufacturing of tea in the said tea estates since 1918-19. On 13-11-86, the Tripura Tea Companies (Taking Over of Management of Certain Tea Units) Ordinance, 1986, was promulgated by the Governor of Tripura. By the said Ordinance, with effect from the date of promulgation of the Ordinance, the management of the Tea Companies in relation to tea units mentioned in the schedule to the Ordinance vested in the State of Tripura for a period of 5 years. The Tufanialonga and the Laxmilonga tea estates were included in the said schedule to the Ordinance. In exercise of powers conferred by sub-section (1) of Section 4 of the said Ordinance, the State Government appointed the Tripura Tea Estates Development Corporation Limited as the custodian of the aforesaid two tea estates. The Managing Director of the Tripura Tea Estates Development Corporation Limited sent notices dated 13-11-86 to the petitioner Nos. 1 and 2 to furnish to him the inventories and agreements in relation to the two tea units and to deliver to him all books, papers and other documents relating to the two tea units. On 13-11-86, the Managing Director of Tripura Tea Estates Development Corporation Limited also issued notifications appointing Shri Dilip Kumar Das, Labour Inspector, Government of Tripura as the custodian of the Tufanialonga tea estate and Shri Ratan Chakravorty, Labour Inspector, Government of Tripura, as custodian of the Laxmilonga tea estate. By the two notifications dated 13-11-86, Shri Dilip Kumar Das and Shri Ratan Chakravorty were authorised to take over charge of the management of the respective tea units. Two notices dated 13-11-86 were also issued by the Managing Director of Tripura Tea Estate Development Corporation Limited to the petitioner Nos. 1 and 2 to deliver to the said Shri Dilip Kumar Das and Shri Ratan Chakravorty all the properties in possession, custody and control of the petitioner Nos. 1 and 2. The Ordinance was substituted by the Tripura Tea Companies (Taking Over of Management of Certain Tea Units) Act, 1986, which received assent of the President of India on 29-1-87. After the expiry of the period of 5 years, the period for management of the undertakings of the tea companies in relation to the tea units by the State Government was extended for one year with effect from 11-11-91 by notification dated 9-4-91 of the State Government. Thereafter, the said period was again extended by notification dated 14-10-92 of the State Government for one year with effect from 11-11-92. In the meanwhile, Certificate Proceedings were initiated against the petitioners Nos. 1 and 2 for non-payment of land revenue amounting to Rs. 4147.34 and Rs. 6639.92 respectively and the tea estates of the petitio
