TUFANIALONGA TEA CO LTD Vs. STATE OF TRIPURA

JUDGEMENT

(1.) 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 petitioner's 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 tothe 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 petitioners Nos. 1 and 2 were sold in auction on 4-6-87 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 27-7-87. The petitioners have challenged the said Ordinance and the Act and the said sales of their tea estates in the Certificate Proceedings in the present writ petition.

(3.) Mr. G. C. Chakravorty, learned counsel appearing for the petitioners, submitted that the impugned Ordinance and the impugned Act are beyond the legislative competence of the Governor and the State Legislature of Tripura and are, therefore, unconstitutional and void. He contended that under Article 246 (1) of the Constitution, Parliament has exclusive powers to make law with respect to any of the matters enumerated in List I of the 7th Schedule of the Constitution and Entry 52 of the said List I related to "industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest". In exercise of its powers under Article 246 (1) of the Constitution read with Entry 52 of the List I of the 7th Schedule of the Constitution. Parliament has declared in Section 2 of the Tea Act, 1953 that it is expedient in the public interest that the Union should take under its control the tea industry and has made elaborate provisions relating to the tea industry in the said Act. Mr. Chakravorty referred to the provisions of Chapter III A of the Tea Act, 1953 to show that elaborate provisions have been made therein for management and control of tea undertakings or tea units by the Central Government in certain circumstances. He submitted that it will be clear from the express language used in Entry 24 of List II of the 7th Schedule read with Article 246 (2) of the Constitution that the power of the State Legislature to make law relating to industry is subject to the provisions of Entry 52 of the List I of the 7th Schedule of the Constitution. He explained that as Parliament has made the Tea Act, 1953, under Entry 52 of List I of the 7th Schedule of the Constitution which includes, inter alia, provisions with regard to take over of the management and control of tea undertakings or tea units by the Central Government in certain circumstances, the State Legislature cannot make any law on the very same subject. The impugned Act was, therefore, beyond the competence of the State Legislature. Mr. Chakravorty submitted that since the power of the Governor to make an Ordinance under Article 213 of the Constitution is co-extensive with the power of the State Legislature to make law, the impugned Ordinance was also beyond the competence of the Governor. Mr. Chakravorty pointed out that the impugned Act received the assent of the President but such assent cannot validate an Act made by the Legislature of State on a matter covered under the entries in List I of the 7th Schedule of the Constitution. The assent of the President may be of relevance only if the Act has been made by the State Legislature on a matter enumerated in List III (Concurrent List) as would be clear from Article 254 (2) of the Constitution. Alternatively, Mr. Chakravorty submitted that the impugned Ordinance and the impugned Act are hit by the provisions of Sections 16 A to 16 N of Chapter III A of the Tea Act, 1953, inasmuch as, the impugned Ordinance and the Act make provisions for take over of the management of the tea companies by the State Government, although elaborate provisions have been made in the said Sections 16 A to 16 N of Chapter III A of the Tea Act, 1953 for the control of the tea estates and tea units including the take over of the management of the tea estates and tea units in certain circumstances by the Central Government. In support of these submissions, Mr. Chakravorty cited the decisions of the Supreme Court in Hingir-Rampur Coal Co. v. State of Orissa, AIR 1961 SC 459, State of Orissa v. M. A. Tullock and Co., AIR 1964 SC 1284 and ITC Ltd. v. State of Karnataka, 1985 (Supp) SCC 476.