Calcutta High Court
Assam Bought Leaf Tea Manufacturers ... vs Tea Board India And Ors on 26 September, 2024
Author: Shampa Sarkar
Bench: Shampa Sarkar
OD -33
ORDER SHEET
WPO/932/2024
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
ASSAM BOUGHT LEAF TEA MANUFACTURERS ASSOCIATION
VS
TEA BOARD INDIA AND ORS.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 26th September, 2024.
Appearance:
Mr. S.N. Mookherji,Sr.Adv.
Mr. Deepan Kr. Sarkar, Adv.
Mr. Dinabandhu Daw, Adv.
Mr. Yash Singhi, Adv.
Mr. Dipayan Daw, Adv.
.... for the petitioner
Mr. M.S. Tiwari, Adv.
Mr. Manabendranath Bandopadhyay, Adv.
...for the respondents
1. The Court: The petitioner is an association represented by the
Chairman,Chand Kumar Gohain. This association is a society registered
under the Society Registration Act, 1861. The members of the association
deal in the manufacture of tea from bought leaf tea. The subject matter of
challenge is the orderno S.0.854(E) dated February 23, 2024 issued by the
Ministry of Commerce and Industry.In exercise of power under Section 30
sub-sections 3 and 5 of the Tea Act, 1953, the Tea (Marketing) Control
Order 2003 was amended. The Central Government notified the Tea
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(Marketing) Control (Amendment) Order, 2004. The said order came into
effect from April 1, 2024. According to the amendment, every registered
tea manufacturer shall,on and from the date of commencement of the
amended Control Order, 2024 sell:-
(i) not less than fifty per centon total tea manufactured in a calendar
year, excluding tea mentioned in clause (ii);and
(ii) one hundred per cent of dust grades tea manufactured in a calendar
year in its manufacturing units located in the geographical area of
States of Andhra Pradesh, Assam, Bihar, Himachal Pradesh,
Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhandand
West Bengal,
through public auction, held under the control of the organizer of tea
auction, licensed to do so.
2. Reference is made to an order of February 23, 2024 of the Ministry, by
which the Tea Board had been permitted to specify the percentages with
regard to the geographical area of coverage and period of applicability of the
amended Control Order, with prior approval of the Central Government.
3. Mr. Mookerji, learned senior advocate appearing for the petitioner submits
that by an order dated March 8, 2024 issued by the Tea Board India, the
amended Control Order was made applicable with effect from April 1, 2024.
It is further submitted that the order was lastly made applicable for a
period of two months from August 1, 2024. Such period was to expire on
September 30, 2024.
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4. Prayer is that the extension of the amended Control Order should be stayed
by an interim order of this Court, for the following reasons:-
(a) That a distinction was made between the manufactures of
different grades of tea.The imposition of the condition of sale of
50% of other varieties of tea by public auction,but sale of 100% of
dust tea by public auction was discriminatory. There was no basis
for such classification amongst the two grades of tea.
(b) The manufacturers of dust tea would suffer because proper
pricecould not be fetched in a public auction. Most of the tea
would remain unsold and would get wasted.
(c) The issue was already pending before the Tea Board with regard to
the veracity of the public auction system. All stakeholders had
participated in the meetings and had given their views. There were
contradictions.
(d) The Tea Board, upon consultation with the stake holders, had
decided to form an expert committee to look into the proposals of
the Government and the stakeholders. Accordingly, a committee
was formed with experts in the field. During the pendency of the
matter, the Control Order was amended without soliciting the
views of the shareholders.
(e) The agenda would show reason for the constitution of the
committee and what were the issues before the committee. Public
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auction was one of the main issues and there were various
comments against such process of sale.
(f) The decision dated December 4, 2023, issued by the Deputy
Chairman, Tea Board India records that the committee should
look into the recommendation of Prof. Mahadevan Committee. The
committee was to consult with the representative bodies of the tea
growers, producers, buyers and the tea auctioneers as well as any
other stakeholders in the tea value chain or experts on auctions in
this regard. During the consideration by the committee, the
impugned order was issued.
5. Mr. Mookherji also relies upon the report of BDO India LLP., which had
undertaken a comprehensive study for determination of the price sharing
formula for all tea growing districts of India, except the Nilgiri region. The
final report was submitted to the Tea Board. According to the said report,
the small tea growers were found to be unaware of the intricacies of the
price sharing formula. According to the Committeesuch lack of awareness,
could lead to unfair compensation and could hinder the long term
sustainability of the tea industry. With regard to auction related issues, the
findings were thattea sold at auctions often commanded discounted price.
Thisdisparity in pricingmechanismsresulted in suboptimal returns for tea
growers. In reality, less than fifty percent of the tea produced in India could
be sold through auction. Often,tea sold through private channels resulted
in higher price realization. The auction price remained subdued due to the
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relatively inferior quality of tea offered. Tea auctioning was majorly
controlled by the buyer community and the trade was mostly done by top
6-7 playerswho made up 60% to 70 % of the volume. It was found that
sizable trade in the tea was done through private channels.
6. Another such report has been placed by Mr. Mookherji which was not
before the Tea Board when the Order was notified. The said report was
prepared by a three member committee and the committee opined that the
overall auction process and its complexity, resulted in huge challenges to
the industry. Suggestions were made to improve the auction design.
7. Mr. Mookerji submits that when these reports were before the authority
and the stakeholders were being consulted by the Tea Board at various
levels on various issues of the public auction system, the effect of the
Control Order should not be extended. When the Tea Board had itself
constituted the Committee to get an overview of the entire auction process
along with expert opinion on the challenges faced by the Tea
Industry,including routingof hundred per cent dust tea through the public
auction system,the amended order should be kept in abeyance, for the ends
of justice. The extension would render the entire exercise undertaken by
experts, redundant.
8. The amendment was made on February 23, 2024 which came into effect
from April 1, 2024. The amendment has been operative for the past five
months. At this stage, it would not be prudent for this Court to stay the
Order.The Control Order has a statutory flavour and has already been
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enforced.Only on the ground that some of the reports have not spoken very
profitably about the public auction system, the amendment to the Control
Order cannot be stayed. To the query of the Court as to why adistinction
had been made between other variety of the tea and dust tea, insofar as,
enforcing sale of 100% of dust tea through the public auction system, Mr.
Tiwari submits that the tea growers would be protected. The procedure for
growing crops and farming activity would improve. The auction would get
the best price for small farmers who only grow the leafs.TheStandard
Operating Procedure has been produced, which shows that,after two times
out lots, the manufacturer could withdraw for the auction and the tea could
be sold through private channels.
9. In this way, the channel for private sale was not totally closed. On the other
hand, the small tea growers would be protected.Most of the bought tea leaf
come from small tea growers who produce such leaf under difficult
circumstances. They were required to be protected by fetching a fair price.
Moreover, the tea would be tested during public auction and the presence
of toxins and chemicals often used in the crops could be ruled out. It is
submitted that upon implementation of the order, there had been an
increase in the price of dust tea by Rs.40/- to Rs.50/- per KG. The SOP
also shows that the associations have been asked to conduct an outreach
programme to handhold the small tea growers.
10. Finally, the policy decision of the authority to impose a condition of 100%
sale of dust tea through public auction should not be inferred with at the
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interim stage, as the petitioners have not been able to show either
arbitrariness or illegality in the decision.
11. In the matter of BALCO Employees' Union (Regd.) -Vrs.- Union of India
reported in (2002) 2 Supreme Court Cases 333, the Hon'ble Apex Court
held as follows:-
"93. Wisdom and advisability of economic policies are ordinarily not
amenable to judicial review unless it can be demonstrated that the
policy is contrary to any statutory provision or the Constitution. In
other words, it is not for the courts to consider relative merits of
different economic policies and consider whether a wiser or better one
can be evolved. For testing the correctness of a policy, the appropriate
forum is Parliament and not the courts. Here the policy was tested
and the motion defeated in the Lok Sabha on 1-3-2001.
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98.In the case of a policy decision on economic matters, the courts
should be very circumspect in conducting any enquiry or
investigation and must be most reluctant to impugn the judgment of
the experts who may have arrived at a conclusion unless the court is
satisfied that there is illegality in the decision itself.
12. In the matter of Directorate of Film Festivals -Vrs.- Gaurav Ashwin Jain
reported in (2007) 4 Supreme Court Cases 737, the Hon'ble Apex Court
held as follows:-
"16. The scope of judicial review of governmental policy is now well
defined. Courts do not and cannot act as Appellate Authorities
examining the correctness, suitability and appropriateness of a
policy, nor are courts advisors to the executive on matters of policy
which the executive is entitled to formulate. The scope of judicial
review when examining a policy of the Government is to check
whether it violates the fundamental rights of the citizens or is
opposed to the provisions of the Constitution, or opposed to any
statutory provision or manifestly arbitrary. Courts cannot interfere
with policy either on the ground that it is erroneous or on the ground
that a better, fairer or wiser alternative is available. Legality of the
policy, and not the wisdom or soundness of the policy, is the subject
of judicial review."
13. InSmall Scale Industrial Manufactures Assn. -Vrs.-Union of India,
reported in (2021) 8 SCC 511, the Hon'ble Apex Court observed that
when it was found that the action of the executive was arbitrary and
violative of any constitutional, statutory or other provisions of law, the
courts could interfere. Except on the ground of palpable arbitrariness,
courts should stay their hands.The Courtsmust give a large leeway to the
executive and the legislature in matters of economic policy.
14. The power of the Ministry to amend the Control Order is embodied in the
Tea Act. Sub- Section (3) of Section 30 of the Tea Act, 1953 provides that
the Central Governmentcan control price and distribution of tea and tea
waste by making a general or special order.
The provision is quoted below :-
30(3) The Central Government may, by general or special order-
(a) prohibit the disposal of tea or tea waste except in such circumstances
and under such conditions as may be specified in the order;
(b) direct any person growing, manufacturing or holding in stock tea or
tea waste to sell the whole or a part of such tea or tea waste so grown or
manufactured during any specified period, or to sell the whole or a part
of the tea or tea waste so held in stock, to such person or class of
persons and in such circumstances as may be specified in the order;
(c) regulate by licences, permits or otherwise the production, storage,
transport or distribution of tea or tea waste.
15. Price protection for the small tea growers who belong to an unorganized
sector, upgradation oftheir farming/agricultural activity and use of
healthy manure, fertilizers and chemicalswere the objectives behind such
decision.These small tea growers do not have the resources,
infrastructure and wherewithal to manufacture tea and could not be
forced to sell their crops at erratic/variable prices. The crops and the
manufacture of tea should also be free from health hazards.
16. The justiciability of such amended Control Order has to be finally decided
on the basis of affidavits to be filed by the respondent, justifying the
rationale behind such policy. It is submitted that some of the stake
holders have encouraged such amendment, whereas, the petitioner and
some other stake holders had expressed their objection to the same. An
information has been supplied to the Court, which shows that Shri
Chand Kumar Gohain, Chairman of the petitioner association, did not
participate in a single auction during the financial year 2023 - 24, 2024
- 25.
17. Under such circumstances, this Court does not find any reason to pass any
interim order, staying the operation of the Tea (Marketing) Control
(Amendment) Order, 2024. All the issues which have been urged in the
writ petition shall be decided finally.The objection of the petitioner that
the stake holders who supported the amendedOrder were not affected by
the same as they did not manufacture dust tea, shall be looked into at
the final hearing.
18. Affidavit-in-opposition be filed by the respondents within two weeks after
the reopening of the Court after the puja vacation; reply, thereto, if any
be filed within two weeks thereafter.
19. This order shall not preclude the Tea Board from considering the reports
which have been submitted before it. In the affidavit, the effect of such
expert opinion and the take away from such reports shall be elaborated.
Another issue which has to be highlighted in the affidavit is how the
AmendedControl Order would be beneficial for the tea industry.
20. Let this appear on 19th December, 2024.
21. As the Amended ControlOrder has been challenged, a copy of this writ
petition be served in the office of the learned Additional Solicitor General.
22. All parties are to act on a server copy of this order.
(SHAMPA SARKAR, J.)
TR/A/s./Gb
