Gauhati High Court

Page No.# 1/18 vs The Union Of India And 4 Ors on 27 October, 2022

Page No.# 1/18

GAHC010194042021

THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

Case No. : WP(C)/6191/2021

M/S GOLDEN TEA HOUSE EXPORTS AND ANR
A PROPRIETORSHIP FIRM HAVING ITS OFFICE AT VIVEKANANDA PATH,
ULUBARI, GUWAHATI, 781007,BEING REPRESENTED BY ITS PROPRIETOR
SHRI MANASH CHAKRABORTY

2: SHRI MANASH CHAKRABORTY
S/O LATE NAGENDRA CHANDRA CHAKRABORTY
A RESIDENT OF VIVEKANANDA PATH
ULUBARI
GUWAHATI 78100

VERSUS

THE UNION OF INDIA AND 4 ORS
THROUGH THE SECRETARY, DEPARTMENT OF COMMERCE, MINISTRY OF
COMMERCE AND INDUSTRY, UDYOG BHAWAN, NEW DELHI 110107

2:THE STATE OF ASSAM

THROUGH THE COMMISSIONER AND SECRETARY TO THE GOVT. OF
ASSAM
MINISTRY OF COMMERCE AND INDUSTRY
DISPUR
GUWAHATI
781006
KAMRUP ASSAM

3:THE TEA BOARD INDIA

THROUGH ITS DEPUTY CHAIRMAN
14
B.T.M SARANI (FORMERLY BRABOURNE ROAD) KOLKATA 700001

4:THE GUWAHATI TEA AUCTION CENTRE
Page No.# 2/18

OFFICE OF THE TEA AUCTION COMMITTEE
DISPUR
GUWAHATI 781006

5:THE SECRETARY.
GUWAHATI TEA AUCTION COMMITTEE
G.S ROAD
DISPUR
GUWAHATI 78100

Advocate for the Petitioner : MR. S DUTTA

Advocate for the Respondent : ASSTT.S.G.I.

BEFORE
THE HON'BLE MR JUSTICE ARUN DEV CHOUDHURY

For the petitioner :Mr. S Dutta, Sr. Advocate
Ms. I Das, Advocate

For the Respondents : Ms. S Sarma, Mr. CKS Baruah, Mr. J Payeng.
Government Advocate

Date of Hearing : 27.07.2022

Date of Judgment & Order : 27.10.2022

JUDGEMENT & ORDER (CAV)

Heard Mr. S Dutta, learned Senior counsel assisted by Ms. I Das,

learned counsel for the petitioner. Also heard Ms. S Sarma, learned counsel

representing respondent Nos. 4 and 5, Mr. CKS Baruah, learned counsel representing

respondent No. 3 and Mr. J Payeng, learned counsel representing Union of India.
Page No.# 3/18

2. The present writ petition is filed assailing the action of the respondent No. 4 i.e.

Guwahati Tea Auction Centre (hereinafter referred to as GTAC) in issuing circular dated

19.01.2021 whereby upward segment movement of sample holder buyer has been

prohibited.

3. Background

fact of the case:

The facts leading it to the filing of the present writ petition can be summarized as

follows:

I. The Guwahati Tea Auction Centre is a licensed Tea Auction Centre

(hereinafter referred to as GTAC) and a Society registered under Societies

Registration Act, 1860, which came into existence on 25.06.1986.

II. The GTAC facilitates buying and selling of tea under license from the

Tea Board, a statutory authority (hereinafter referred to as the Board) and the

petitioner is a small sample holder buyer and as per the prevailing norms, the

petitioner is entitled for upward segment movement from small sample holder

buyer to medium sample holder buyer. However, for the circular impugned in

the present writ petition is the obstacle to such upward movement, claims the

petitioner.

III. In the aforesaid backdrop, the respondent Nos. 4 and 5 have raised an

preliminary objection as to the maintainability of the present writ petition on the

ground that the respondent No. 4 is a private body and not amenable to the

writ jurisdiction. Point of maintainability is also raised on the ground that there

is an arbitration clause in Guwahati Tea Auction Rule, which provides for an

alternative remedy of arbitration for resolution of dispute amongst the members Page No.# 4/18

of GTAC inasmuch as the petitioner is a member of GTAC. Accordingly, before

going to the merit of this case, this court first shall determine the

maintainability of the present writ petition.

4. Argument of the respondent Nos. 4 and 5 touching the issue of

maintainability:

Ms. S Sarma, learned counsel while raising the issue of maintainability of the writ

petition argues the followings:

I. The GTAC is a Society registered under the Societies Registration Act,

1860, which came to existence on 25.06.1986. The GTAC is a licensee under the

Tea Act, 1953 to operate as an auction centre.

II. There is no control whatsoever, operational, financial or administrative

of the Tea Board upon the GTAC and in the present proceeding no action of the

Tea Board being under challenge, the present writ petition against the society

functioning as licensed auction centre cannot be brought under the purview of

writ jurisdiction.

III. The control of the tea board upon its agents like GTAC are only

regulatory and the licensee being an independent authority the dispute amongst

its members cannot be a subject matter of writ jurisdiction.

IV. The management and other activities of the GTAC is governed by its

own set of rule called GTAC Rules, it survives upon the subscription fee paid by

its member on annual basis including the petitioner. The members of GTAC are

the tea sellers, buyers, brokers and warehouse keepers under the Rule 2 (a) of

the GTAC Rules. Therefore, the action impugned cannot be a subject matter of Page No.# 5/18

a writ petition, the GTAC not being an State within the meaning of Article 12 of

the Constitution of India.

V. The Rule 23 of the GTAC Rules provides for an alternative remedy of

arbitration. When any dispute is between the members of the GTAC and GTAC

and therefore, the petitioner could not have approached this court without

availing such alternative efficacious remedy.

VI. There is no public element whatsoever involved in buying and selling

tea a commercial product. Therefore, public function doctrine cannot also be

brought in the present case.

VII. In support of aforesaid, Ms. S Sarma, learned counsel relies on the

judgment of Pradeep Kumar Biswas vs. Indian Institute of Chemical

Biology reported in (2002) 5 SCC 111, Lt. Governor of Delhi vs. VK

Sodhi reported in (2007) 15 SCC 136, Biman Krishna Bose vs United

India Assurance Co. Limited and Anr. reported in (2001) 6 SCC 477 and

the BCCI vs Cricket Association of Bihar reported in (2015) 3 SCC 251.

5. Counter argument of the petition touching to issue of maintainability:

Countering such argument of Ms. Sarma, Mr. S. Dutta, learned Senior counsel

argues the following:

I. From the composition of GTAC as reflected in the Guwahati Tea

Auction Rules, it is clear that GTAC is composed of members, of whom at least

four including the Chairman are the Government officials. Thus, it cannot be

said that the GTAC is a purely private body.

II. The GTAC is an "organizer of tea auction" licensed by the statutory Page No.# 6/18

authority (Tea Board) and it conducts public auction of tea and is governed by

Tea Act, 1953 and Tea Marketing Control Orders issued time to time by the Tea

Board and thus the GTAC acts as an arm of Tea Board and discharges statutory

function which is entirely public in nature. Therefore, it discharges a public duty

within the reign of statutory bound.

III. The Guwahati Tea Auction Rule, 1970 is neither a statute nor does

have any force of law. Therefore, the plea of alternative remedy under Rule 23

of GTAC is un-sustainable and deserves rejection inasmuch as the same relates

to determination of dispute amongst the members of the GTAC not a dispute

involving the power of GTAC in issuing the impugned circular.

IV. As in the present case the impugned action of the respondent Nos. 4

and 5 directly violates the rights of the petitioner as guaranteed under Article 14

and 19 (1) (g) of the Constitution of India, the plea of alternative remedy raised

by the respondent Nos. 4 and 5 is not tenable in view of the ratio laid down by

the Hon'ble Apex Court in Whirlpool Corporation vs Registrar Of Trade

Marks, Mumbai & Ors.reported in (1998) 8 SCC 1.

V. There is a public element in the function of GTAC and it's functions are

essentially public in nature. Therefore, it is amenable to the writ jurisdiction of

this court.

6. Determination on Maintainability by the court:

For a proper determination of the issue of maintainability as raised in the present

writ petition, certain provisions of Tea Act 1953, Control Orders, Rules and some facts

are necessary and accordingly the same are summarized as follows:

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A. Provision of Act and Control Order and Rules:

I. Tea Act, 1953 was enacted to provide for the control by the Union of

India over the tea industry, including the control of the cultivation of tea, export

of tea from India and for that purpose to establish a Tea Board and levy duty of

excise on tea produce in India.

II. Section 4 of the Act provides for establishment and constitution of the

Tea Board.

III. Section 10 of the Tea Act mandates that it shall be the duty of the

Board to promote, by such measure as it thinks fit the development of the tea

industry under the control of Central Government.

IV. Subsection 2 of Section 2 provides certain measure to achieve such

purpose including regulating the production and extent of cultivation of tea,

quality of tea including regulation of sale and export of tea, registering and

licensing of manufacturers, brokers, tea base dealers and the persons engaged

in the business of blending tea.

V. Chapter (VI) of the Act deals with control by the Central Government

of tea.

VI. Section 30 empowers the Central Government to fix maximum or

minimum price, which may be charged by a grower of tea, manufacturer or

dealer, wholesaler or retailer whether for Indian market or for export, through

notification to be published in official Gazette.

VII. The Central Government is similarly empowered to fix maximum

quantity, which may, in one transaction to be sold to any person, fix prices of Page No.# 8/18

tea differently in different localities, or for different classes of dealers or for

grower of tea or manufacturers.

VIII. Section 33 empowers the Central Government to grant license to

brokers, tea manufacturers etc by framing rules through publication in official

Gazette. Section 33 further mandates that if any person on or after such

publication of Rule engages himself without obtaining a license issued by the

Board shall be deemed to have contravened the provision of Section 33.

IX. Chapter 8 dealing with miscellaneous provisions also makes provision

for penalties and offences for contravention of provision of the Tea Act and the

Rules framed thereunder.

X. Section 48 empowers the Central Government to make rule subject to

condition of previous publication, for carrying out the purpose of the Act.

XI. The Union of India in exercise of power under Section 30 (3) and (5)

notified a Tea Marketing Control Order, 2003 in superstation of Tea Marketing

Control Order, 1984 (hereinafter referred to as Control Order, 2003).

XII. The salient feature of the Control Order, 2003 can be summarized as

follows:

a. "Organizer of Tea Auction" as defined under Section 2 (j) of the Control

Order, 2003 means any one including any person, corporate body, co-

operative society or association, whether registered or not under whose

control or auspices public auctions of tea take place.

b. Paragraph 6 mandates that no buyer shall carry on activities of buying

tea from any public auction licensed by Tea Board or directly from Page No.# 9/18

manufacturer except under a valid registration obtained under the Control

Order, 2003.

c. Paragraph 9 mandates that organizer of tea auction shall not carry on

business of organizing and holding or conducting public tea auctions under

its control or auspices without a license obtained under the Control Order,

2003.

d. Paragraph 13 of the Control Order, 2003 empowers the licensing

authority at any time during the valid period of license to issue directions to

organizer of tea auction/ brokers either individually or collectively if, firstly,

the licensing authority has reason to belief that an organizer of tea auction is

indulging in or likely to indulge in mal-practices in the conduct of or in

relation to public auction, held under its control or auspices and secondly,

improving the efficiency of the public tea auction system and thirdly, to bring

about uniformity in the procedure of public tea auction held in various parts

of the country.

e. Paragraph 21 mandates that every registered manufacturer, from the

date of commencement of Control Order, 2003 shall sale such percentage as

may be prescribed by the registering authority through public auction in

India held under control or auspices of organizers of tea auction licensed to

do so.

f. Paragraph 22 of Control Order, 2003 mandates that every registered

buyers, on and from the date of commencement of the order shall buy such

percentage of his total purchase of tea as may be directed through public Page No.# 10/18

tea auction held under the control or auspices of Organizers of tea auction

licensed to do so.

XIII. Prior to issuance of the Control Order, 2003, Tea Marketing Control

Order, 1984 was issued in exercise of power under Section 30(3) and (5) of the

Tea Act.

XIV. Subsequently, on 01.02.2021, an order was issued in exercise of power

under clause 9 of Tea (Marketing Control) Order 1984 on "eligibility of buyers"

for free trade sample. Reading of the said order reflects that the licensing

authority had directed all the auction organizers of Kolkata, Siliguri, Guwahati,

Kochi, Conoor and Koimbator to take all necessary steps for implementation of

the relevant Auction Rules.Said Order further provides that it has determined,

categorized and fixed minimum qualifying percentage for the year 2000 to 2001

onwards for entitlement of free samples. The said order further reflects that

there are three categories of buyers, i.e. small, medium and large and that they

are entitled for free trade sample corresponding to their status. The said order

further reflects that eligibility for free sample is determined on the aggregate

purchase of previous two consecutive purchase years, for the sampling year

2000-2001 and sampling year 2001-2002 onwards, the basis of eligibility is

determined on the basis of aggregate purchase of previous three years

consecutive purchase etc.

XV. From the affidavit-in-opposition of GTAC, it is clear that the Pan India

Auction Rules was notified on 18.02.2006, which provided for certain relaxed

norms for qualification for 'medium category'.

Page No.# 11/18

XVI. Clause 12 of the Pan India Auction Rules deals with eligibility of buyers

to receive free trade sample and reflects that the Tea Organizer can fix such

eligibility considering the transaction volume by the buyer and the same should

be implemented, on prior intimation and approval of the Tea Board.

B. Necessary facts:

I. There is no dispute regarding the status of the petitioner as a

registered buyer and status of the respondent No. 4 as an Organizer of

Tea auction centre and there is also no dispute that the petitioner is

purchasing tea through the public auction conducted by the respondent

No. 4. There is also no dispute that the petitioner was a small buyer.

II. The petitioner claims that the petitioner had qualified for small

sample during the year 2021 based on the performance of the year

2017-2018, 2018-2019 and 2019-2020.

III. The petitioner further claims that by way of the impugned

circular, the GTAC has granted relaxation as one time measure on

purchase figure for the year 2020-2021 and the same will be used for the

sampling year 2021-2022, 2022-2023 and 2023-2024. However, such

relaxation was not allowed to be utilized for segment up-gradation. Thus,

the petitioner will remain in the small category though relaxation is

granted under the impugned circular.

IV. Accordingly, the petitioner further claims that the list of sample

holder buyers published by the GTAC on 11.08.2021, the petitioner was

classified as small buyer.

Page No.# 12/18

V. Being aggrieved, the petitioner filed representation before the

Tea Board and GTAC. The further grievance of the petitioner is that the

GTAC had refused the petitioner's claim, though admitted that during the

period 2018-19 and 2019-20, the petitioner qualified for medium sample.

VI. The Tea Board by communication dated 08.10.2021 intimated the

petitioner that the Tea Board is aware of the decision of the GTAC and in

case the petitioner is having any factual evidence and specific details

where violation made by the GTAC can be substantiated, the petitioner

may submit same before the Tea Board for further investigation of the

matter.

7. Conclusion :

I. The scheme of the Tea Act reflects that cultivation, production,

manufacture, sell, export of tea are directly controlled by the Tea Board and the

Tea Board is a statutory authority created by virtue of Tea Act. By virtue of the

Tea Act, tea industry is one, which by act of Parliament comes under the control

of Union of India and tea is a controlled product. Though GTAC is a registered

society, its identity for the purpose of the determination of the present lis,

undisputedly is a licensed organizer of tea auction and such auction is to be

done under the direct control and regulation of the Tea Board and the Chairman

of Tea Board under the scheme of the Tea Act.

II. Thus, from the aforesaid it is clear that cultivation, manufacture, sale and

purchase of tea are authorized to be controlled by the Tea Board and registering

authority under the Scheme of Tea Act and Rules and Control Orders framed Page No.# 13/18

therein i.e. tea is a controlled product in India. It is also clear that the

eligibility of buyers for free trade sample is also determined by the Tea Board in

exercise of its statutory power.

III. In the present case, the petitioner has challenged the impugned

circular mainly on the ground that the same is issued in violation of the Control

Order and Pan India Auction Rules. The petitioner further questions the

authority of GTAC to issue the circular and determine the eligibility as has been

done. In other words, the petitioner argues that the GTAC is having no sanction

and authority under law to issue the impugned circular, that too without

approval from the Tea Board.

IV. Therefore, in the aforesaid backdrop, this court is of the considered

opinion that so far relating to the issue of sale and purchase of tea through

GTAC, same is to be done strictly as per the provision of the Tea Act, Rules and

Control Order framed time to time by the Board and instructions issued by the

statutory body, tea being a controlled product.When the petitioner, who is a

licensed buyer under the licensing authority i.e. Chairman, Tea Board, raises a

grievance that a licensed Organizer of Tea Auction (GTAC) has violated the

provision of statutory rules and control orders and had issued an circular

without having any power resulting in violation of its right under the Act and

effecting the sale and purchase of tea, a writ petition shall be maintainable,

irrespective of the status of the organizer of tea auction being a society

registered under Societies Act, 1860 or not inasmuch as such action under

challenge is being exercised as a licensed organizer of tea auction and not as a Page No.# 14/18

society. Further, other facet of grievance of the petitioner is inaction on the part

of the Tea Board in exercising its statutory duty of control over the sale and

purchase of tea under GTAC as the impugned circular is alleged to have been

issued without approval of the GTAC.

V. The Rule 23 of the GTAC Rules operates in a field when there is

dispute amongst the members of the society and same cannot involve an

arbitration, when it relates to issue of sale and purchase of a controlled product

controlled by Union of India through the Tea Board constituted under Tea Act,

more particularly when jurisdiction and authority of GTAC is questioned in

issuing the impugned circular.

VI. Therefore, in view of the aforesaid reason and discussion, this court is

of un-hesitant view that the argument of doctrine of public function and

question of Article 12 shall not be necessary in the given fact and circumstance

of the present case inasmuch as action under challenge is not of a society but

an action which is required to be done under the provision of a statute and

Control Orders relating to sale of a control product controlled by the State i.e.

the Union of India.

VII. Accordingly, it is answered that in the given fact of the present case, a

writ petition is maintainable against the GTAC by the petitioner.

8. Decision on merit of the claim:

I. Having held so, while coming to the merit, this court at the cost of

repetition holds that the scheme of the Tea Act clearly depicts that a statutory

expert authority has already been constituted, which is having total control over Page No.# 15/18

the tea industry including cultivation of tea, export of tea from India and sale

and purchase of tea in India.

II. Chapter III deals in details regarding control over the extension of tea

cultivation including its method, limitation, grant of permission to plant tea in

special circumstances.

III. Chapter IIIA deals with the power of the Central Government to

manage and control of tea undertaking or tea unit in certain circumstances.

IV. Chapter IV deals with control over the tea and tea seeds including

plant of license and permit, allotment of export quotas and maintenance of

account quotas etc.

V. Chapter V deals with finance, account and audit, which includes

imposition of chase on tea produce in India, constitution of fund, borrowing,

writing of losses etc.

VI. Chapter VI deals with power of the Central Government to control

price and distribution of tea or tea waste. Chapter 7, which is miscellaneous

chapter deals with licensing brokers, tea manufacturers, power of inspection of

Tea Board, imposition of penalty, power to remove tea plantation which has

been done without permission of the Board, penalty for contravention of order

relating to price and distribution etc.

VII. The Tea Act is a complete code in itself, so far it relates to the control

of tea and entire responsibility to implement the object and purport of the

control product tea is vested upon Tea Board, which consists of a Chairman and

not exceeding 40 members to be appointed by the Central Government. Such Page No.# 16/18

member includes owner of tea estates and gardens, growers of tea, persons

employed in tea estate and garden, manufacturer of tea, dealer, both export

and internal trader of tea, consumers, the representative from Parliament, the

Government of principal tea grower states and such other persons, who in the

opinion of the Central Government ought to be represented in the Board.

VIII. Thus, the Board itself is an expert body. Therefore, under the aforesaid

statutory scheme, this court is of the considered opinion that the issue in the

present lis should be left to be determined by the said expert body i.e. Tea

Board inasmuch as the communication dated 08.10.2021 written by the Tea

Board to the petitioner, an option was given to the petitioner to approach the

Board with sustainable material for redressal of its grievances.

IX. Though, Tea Board has not filed any affidavit in the present writ

petition, however, the learned counsel for Tea Board has placed on record a

written instruction which discloses that the Board has not issued any direction to

issue the impugned circular. The impugned circular has been issued by GTAC in

terms of one Ahuja Committee report 20.04.1990. However, the Board has not

commented anything on the legality and validity of the circular issued by the

GTAC, which is under challenged.

X. The learned counsel for the petitioner has raised certain issues that

Ahuja Committee report is based on the Tea Marketing Control Order, 1984 and

the same has long been superseded by Tea Marketing Control Order, 2003.

Therefore, the recommendation of Ahuja Committee report dated 20.04.1990

shall not have any effect. The other argument of the learned counsel for the Page No.# 17/18

petitioner is that even if it is assumed that the impugned circular has been

issued on the basis of recommendation of Ahuja Committee Report, while

issuing such circular, no approval of the Tea Board has been taken and as

mandated in Pan India Auction Rule. As the Board has not filed any affidavit in

the present writ petition and has expressed its willingness to determine the

issue as reflected in the communication dated 08.10.2021, this court

considering the matter in its entirety is inclined to direct the Tea Board and its

Chairman to re-consider the claim of the petitioner regarding the validity of the

circular dated 19.01.2021 after giving an opportunity of hearing to both the

petitioner and GTAC and pass a reasoned order in this regard. While passing

such reason order, the Board shall also consider the issue of authority of GTAC

to issue the impugned circular and whether such circular can be implemented

without approval of the Tea Board being a statutory controlling authority over

the GTAC, so far the same relates to sale of tea through public auction. In the

event, it is held that the impugned circular dated 19.01.2021 is not permissible

and/ or bad in law, the Board shall consider granting the consequential relief to

the petitioner and pass a reasoned order.

9. Directions:

For the reasons and determination made herein above, the following directions are

passed:

I. The petitioner shall be at liberty to file a fresh representation before the

Chairman Tea Board, within a period of two weeks from passing of this order, if

so desires.

Page No.# 18/18

II. The Tea Board through its Chairman shall consider the claim/grievances

of the petitioner including the validity of the circular dated 19.01.2021 after

giving an opportunity of hearing to both the petitioner and GTAC and pass a

reasoned order in this regard.

III. While passing such reason order, the Board shall also consider the

issue of authority of GTAC to issue the impugned circular and whether such

circular can be implemented without approval of the Tea Board.

IV. In the event, it is held that the impugned circular dated 19.01.2021 is

not permissible and/ or bad in law, the Board shall consider granting the

consequential relief to the petitioner and pass a reasoned order.

V. The entire exercise shall be carried out within a period of six weeks from

the date of receipt of the present order to be furnished by the petitioner.