September 30, 2022

The Tea Act: The power of Government to take over the control of Tea undertaking

The provisions for taking over tea undertakings are given under Tea Act, 1953. This act was enacted for following purposes-

  • to provide for the control by the Union of the Tea industry, including the control, in pursuance of the International Agreement now in force, of the cultivation of tea in, and
  • of the export of tea from, India and
  • for that purpose, to establish a Tea Board and
  • levy a duty of excise on tea produced in India.

Power of government to make investigation in relations to tea undertaking

The government may exercise its power of investigation in following cases-

  • the tea undertaking, or tea unit, has made losses in three out of five years immediately preceding the year; or
  • the average yield of the tea undertaking, or, tea units, during three years out of five years immediately preceding the year, has been lower than the district average yield by twenty-five per cent, or more; or
  • the persons owning the tea undertaking, or, the tea unit, have habitually made default in the payment of wages, or provident fund dues of workers and other employees, or rent of the land, or duties of excise, or such other dues as they are under an obligation to pay under any law for the time being in force; or
  • the tea undertaking, or, as the case may be, the tea unit, is being managed in a manner highly detrimental to the tea industry or to public interest.

The government may give the duty of investigation to a body of persons.

Directions of investigation body

The investigation body may give directions to the tea undertaking or unit for followings purposes-

  • regulating the production of tea by the tea undertaking or unit and fixing the standards of production;
  • requiring the tea undertaking or, unit to take such steps as the Central Government considers necessary to stimulate the production, manufacture or plantation, of tea;
  • prohibiting the tea undertaking or, tea unit from resorting to any act or practice which might reduce its production, capacity or economic value;
  • controlling the prices, or regulating the distribution, of tea produced or manufactured by the tea undertaking or unit.

 And if tea undertaking does not follow the directions given by investigation board, Central Government may, authorise any person or body of persons to take over the management of the whole or any part of the tea undertaking or tea unit.

Power to take over tea undertaking without investigation

The government may take over the control of tea undertaking without investigation if, from the documentary or other evidence in its possession, the Central Government is satisfied, that—

  • the persons in charge of such tea undertaking or tea unit have, by reckless investment or by creation of incumbrances on the assets of the tea undertaking or tea unit, or by diversion of funds,

brought about a situation which is likely to affect the production of tea manufactured or produced by the tea undertaking or tea unit, and that immediate action is necessary to prevent such a situation; or

  • it has been closed for a period of not less than three months (whether by reason of the voluntary winding up of the company owning the tea undertaking or tea unit or for any other reason) and such closure is prejudicial to the concerned tea undertaking or tea, unit and that the financial condition of the company owning the tea undertaking or tea unit and the plant and machinery of such tea undertaking or tea unit are such that

it is possible to restart the tea undertaking or tea unit and such restarting is necessary in the interests of the general public, it may, authorise any person or body of persons to take over the management of the whole or any part of the tea undertaking or tea unit.

No tea seed shall be exported unless covered by a permit issued by or on behalf of the Central Government.