A.D. Koshal, J. - (1.) In pursuance of two orders dated 11th October, 1976 passed by the Central Government in exercise of the powers conferred on it by Clause (a) of Sub-section (1) of Section 16E of the Tea Act, 1953 (hereinafter referred to as the Act) the Tea Trading Corporation of India Ltd. (for short, the Corporation) took over the management of the whole of two units known as Pashok Tea Estate and Looksan Tea Estate, both owned by the Pashok Tea Company Ltd. (hereinafter called the Company). The legality of the orders was challenged by the Company through two petitions under Article 226 of the Constitution of India before the Calcutta High Court, a learned Single Judge of which accepted both of them by a judgment dated 9th April 1979. The Union of India and the Corporation re-agitated the matter in separate appeals which were, however, dismissed by a Division Bench of the High Court whose judgment dated 2nd July 1980 is now sought to be reversed by the Union of India in Civil Appeals Nos. 2691 and 2692 of 1980 and by the Corporation in Civil Appeals Nos. 1728, 1729 and 2132 of 1980. All these five appeals have been instituted on the strength of a certificate granted by the High Court and are being heard together.
(2.) The impugned judgment is based on the interpretation of Clause (a) of Sub-section (1) of Section 16E of the Act and its application to the facts of the case. That Sub-section is reproduced below: 16E (1) Without prejudice to any other provisions of this Act, if, from the documentary or other evidence in its possession, the Central Government is satisfied, in relation to a tea undertaking or tea unit, that- (a) the persons in charge of such tea undertaking or tea unit have, by reckless investments or 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 (b) 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, by notified order, 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 or to exercise in respect of the whole or any part of the tea undertaking or tea unit such functions of control as may be specified in the order.
(3.) The main conclusions arrived at in the impugned judgment were: (a) In passing the two orders dated the 11th October 1976 the Central Government considered material which was extraneous to the dictates of Clause (a) of Sub-section (1) of Section 16E of the Act. Such material consists of figures of average tea produced during the period 1972-74 in the districts in which the two Estates are situate and the fact of unrest in the labour force employed at the two Estates by reason of the non-payment to them of their provident fund, wages, gratuity, etc. Both the orders were, therefore, illegal. (b) It was not necessary for the Central Government to give the Company any opportunity of being heard. This follows from that part of Clause (a) of Sub-section (1) of Section 16E of the Act which entitles Government to take immediate action in exercise of its powers conferred thereunder.;