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2011 DIGILAW 171 (KER)

Peermade Tea Company Limited v. Union Of India

2011-02-09

K.SURENDRA MOHAN

body2011
Judgment :- 1. The petitioner has filed this writ petition challenging the vires of Ext.P18, a public notice issued by the 2nd respondent in exercise of the powers under Section 16E of the Tea Act, 1953 (hereinafter referred to as the Act, for short) on the ground that the notice was not preceded by a formal order of the competent authority under the said provision and that the proceedings were issued without complying with the principles of Natural Justice. 2. The petitioner is a Public Limited Company incorporated under the Companies Act, 1956. The petitioner owns two tea estates by name Peermede and Lone Tree Estates at Elappara, Idukki District. The petitioner is engaged in the cultivation and manufacture of tea. At the two estates, the petitioner employs about 1300 workers, 80 staff, and other managerial personnel. The workmen of the petitioner are residing within the estates, in separate living quarters allotted to them. The petitioner has been in management of the tea estates since 1938. 3. According to the petitioner, of late, the tea industry in general and within the State of Kerala in particular, has been facing acute financial crisis on account of various reasons including a drastic fall in the price of tea globally, and a steep increase in the cost of production. Due to a host of other problems, the tea industry is facing an unprecedented situation that could even lead to the liquidation of all the tea plantations and factories in the country. In the case of the petitioner, the situation took a turn for the worse during the year 2000 due to the non-co-operation of the workers in the two estates. They started resorting to various forms of agitations like reporting late for work and leaving early from the work spot. The management also detected several instances of theft. The managerial action to curb the illegal activities resulted in physical threats and even threat to the lives of the managers, forcing them to abandon the work spot. Consequently, the control of the Management over the estates diminished. The workers freely indulged in collection of the tea leaves, selling them to unauthorized buyers and collecting the money. In other words, the workers excluded the petitioner and its managers from the factory and plantations and took complete control of the estates. There are even allegations of felling of valuable timber trees and of encroachments. The workers freely indulged in collection of the tea leaves, selling them to unauthorized buyers and collecting the money. In other words, the workers excluded the petitioner and its managers from the factory and plantations and took complete control of the estates. There are even allegations of felling of valuable timber trees and of encroachments. The electric connection to the plantations were dismantled for non-payment of electricity dues. The workers took a militant attitude and completely paralyzed the administration of the two tea estates and prevented even the access of the petitioner to those estates. 4. The resultant situation forced the petitioner to stop all manufacturing activities. The factories and the machinery therein were damaged due to misuse and neglect. The managerial personnel of the petitioner were driven out and the workers indulged in theft of tea leaves as well as timber trees, besides causing damage to machinery. The petitioner therefore, approached this Court by filing O.P.No.2430/2001, which resulted in the passing of Ext.P1(a) to P1(f) interim orders and finally, Ext.P1(g) judgment. A reading of the above orders and the judgment of this Court shows that the right of the petitioner to resume possession and management of the plantations and its factories was recognized by this Court and that directions were issued to the Government as well as the Police to ensure that the petitioner's right of management was protected. However, it is not in dispute that the petitioner and its managerial staff were effectively prevented from resuming control of the estates or its management and that the stalemate continues to this date. The petitioner was even permitted by this Court to post its own security men at the exit and entry gates with necessary directions to the Police to give protection to them. However, in spite of the above, the petitioner could not resume management of the plantations or the factory and therefore, the petitioner continues to be excluded from the management of the two estates to this date. 5. In the above circumstances, considering the general conditions prevailing in the tea plantations in Kerala and Tamil Nadu, an Expert Committee was appointed by the Central Government, to conduct a study of the situation and to submit a report regarding the same. Accordingly, the situation was gone into, analysed and elaborately considered by a team of experts who have submitted a report as evidenced by Ext.P2. Accordingly, the situation was gone into, analysed and elaborately considered by a team of experts who have submitted a report as evidenced by Ext.P2. The portion of the report of the Expert Committee relating to the petitioner's tea plantations is produced as Ext.P4. The said document has been produced by the second respondent in Ext.R2(a) also. Pursuant to Ext.P4 report, discussions were held at New Delhi with the petitioner and a course of action was agreed to as evidenced by Ext.P5. Accordingly, the petitioner agreed to sell an item of property at Trivandrum and to settle the dues that were remaining unpaid to its Bankers. It was further agreed that the said payment would be considered as promoters' contribution of the company, since they were hard pressed for funds. After clearing the bank dues, the company was to explore the possibility of raising further finance for reviving the plantations. 6. According to the petitioner, though Ext.P5 was entered into no action was taken by the authorities in the matter, thereafter. The petitioner on the other hand, took necessary steps to liquidate its liability to the Bank of Baroda, worked out a settlement of the entire dues and discharged the liability by making a One Time Payment of Rs.120 lakhs, the receipt of which is evidenced by Ext.P6. 7. The petitioner also obtained Ext.P7 and P8 interim orders by which, the operation of orders issued by the Employees Provident Fund Authority seeking to recover amounts from the petitioner have been stayed by this Court. It is the case of the petitioner that the electricity dues payable by them have already been settled. However, though the petitioner has been trying to obtain finance from other banks, as evidenced by Ext.P9 series correspondence, their efforts have not been successful so far. Consequently, the petitioner has not been able to revive its operations. 8. In the above circumstances, as per Ext.P10 proceedings issued by the second respondent, the petitioner was directed to show cause why action under Section 16 E of the Act should not be initiated in respect of the assets under its management. The second respondent also required the petitioner to give answers to the queries made therein. The petitioner replied to Ext.P10 by Ext.P11 letter informing the second respondent that the entire dues to the bank have been liquidated and that there were no dues payable by them to any bank. The second respondent also required the petitioner to give answers to the queries made therein. The petitioner replied to Ext.P10 by Ext.P11 letter informing the second respondent that the entire dues to the bank have been liquidated and that there were no dues payable by them to any bank. Though Ext.P11 reply was given on 15-10-2007, there was no further action in the matter thereafter. A series of correspondence, evidenced by Ext.P11 to P17 followed. In Ext.P13, the petitioner has particularly pointed out that no circumstance, justifying an invocation of the power under Section 16E of the Act exists in the present case. According to the petitioner, there was no voluntary act of closure of the estates on the part of the management. The estates had remained closed because the managerial personnel were driven out of management by the workers. In the above circumstances, the petitioner came across a newspaper advertisement issued by the second respondent in exercise of the powers under Section 16E of the Act, which is Ext.P18. As per Ext.P18, the second respondent has given a public notice inviting applications from persons interested in taking over the management of four tea gardens. Serial Nos.3 and 4 mentioned therein are the tea gardens of the petitioner. The applications were to be submitted within 30 days from the date of publication of the notice. Various other conditions are also stipulated therein. It was in the above circumstances, that the petitioner filed the present writ petition challenging the proceedings of the second respondent, Ext.P18. The petitioner has also challenged the constitutional authority of the enabling provisions of the Act. 9. The above writ petition was admitted on 3-3-2008 and an order of interim stay of all further proceedings pursuant to Ext.P18 was granted by this Court. The said interim order has been in force, ever since. 10. According to the senior counsel, Mr.Joseph Kodianthara who appears for the petitioner, Ext.P18 is arbitrary and unsustainable in law. According to him there has been no wrongful act on the part of the petitioner at any time. The petitioner and his managerial staff were driven out of the estate and the management thereof was forcibly taken over by the workers who were agitating against them. According to the counsel, the tea gardens were not able to function only because of the fact that they were prevented from functioning by the agitating workers. The petitioner and his managerial staff were driven out of the estate and the management thereof was forcibly taken over by the workers who were agitating against them. According to the counsel, the tea gardens were not able to function only because of the fact that they were prevented from functioning by the agitating workers. The counsel submits that the petitioner had been voluntarily pursuing its efforts to resolve the situation, at all times. It had obtained protection orders from this Court by filing a petition for Police protection. Various interim orders as evidenced by Ext.P1 (a) to P1(f) were passed. However, even the said orders could not help the petitioner resume management of the tea estates. The resultant situation forced it to discontinue operations. The factories in the tea estates suffered loss and damage due to neglect and misuse. However, acts of mischief committed by the workers caused much more severe loss to the petitioner. Therefore, it is contended that there are no circumstances justifying the conclusion that the petitioner had neglected the management of the tea estates or abandoned the same. 11. The counsel for the petitioner also contends that pursuant to Ext.P10 the petitioner has been making all earnest efforts to resume the functioning of the tea estates. The petitioner has already worked out a settlement of all their dues to the bank by making a one time payment of Rupees in 120 lakhs. The petitioner has also settled the dues to the Kerala State Electricity Board and has obtained interim orders staying recovery of the unjustified demands made by the Employees Provident Fund Organization. The counsel for the petitioner relies on the above circumstances to point out that there was no willful neglect or omission on the part of the petitioner. The closure of the tea plantations had been the result of an agitation carried on by the workmen, which could not be resisted, controlled or contained by the petitioner in spite of orders obtained by the petitioner from this Court. 12. It is the further contention of the counsel for the petitioner that no circumstance justifying invocation of the power under Section 16E of the Act exists in the present case. Further, it is pointed out that no proceedings under the said provision could be initiated without first giving an opportunity of being heard to the petitioner. 12. It is the further contention of the counsel for the petitioner that no circumstance justifying invocation of the power under Section 16E of the Act exists in the present case. Further, it is pointed out that no proceedings under the said provision could be initiated without first giving an opportunity of being heard to the petitioner. Since Section 16E involves deprivation of the petitioner of its property, very valuable assets admeasuring about 3,000 acres in extent, the action involved visitation of the petitioner with adverse civil consequences of great import. In any view of the matter, such action could be initiated only after considering the objections of the petitioner. It is also contended that Ext.P18 was not preceded by even a formal order or proceedings deciding to invoke the extraordinary power under Section 16E of the Act. For the above reasons, according to the counsel for the petitioner, Ext.P18 is liable to be set aside as being ultra virus and unsustainable. Therefore, he seeks the issue of proper directions or orders setting aside Ext.P18. 13. Though a number of reliefs have been claimed in the writ petition and though various contentions have been raised questioning the constitutionality of the provisions of the Act, since the said contentions are not necessary to be considered for the disposal of the Writ Petition, I refrain from considering any of them. It is agreed by both sides that all other contentions in the Writ Petition could be left open for being agitated, if necessary, at a later point of time. Therefore, all the other contentions raised in the writ petition save those that are specifically considered hereunder, are left open. 14. I have heard the Counsel for the Central Government as well as Advocate K.M.Jamaludheen, the Standing Counsel for the Tea Board on behalf of respondents 1 and 2. A counter affidavit and an additional counter affidavit have been filed on behalf of the contesting respondents. According to the learned counsel for respondents 1 and 2, the averments in the writ petition clearly show that the petitioner is not in possession or in management of the tea estates. Particular reference is made to the averments in paragraphs 2 and 3 of the writ petition. Therefore, it is contended that the petitioner is not entitled to claim protection of any rights that are admittedly not available to it at present. Particular reference is made to the averments in paragraphs 2 and 3 of the writ petition. Therefore, it is contended that the petitioner is not entitled to claim protection of any rights that are admittedly not available to it at present. Since the petitioner is neither in possession nor management of the tea estate it is contended that the petitioner is not in any way aggrieved by the taking over of the possession of the estate or by entrustment of the management thereof to any other person. According to the counsel, in the present case an expert committee was appointed to study the conditions of the closed tea gardens in the State of Kerala. On the basis of the report submitted by the Expert Committee, most of the tea gardens in Kerala were revived and reopened by availing facilities that were extended to them by the Central Government as well as the Tea Board. The estates of the petitioner were not revived only due to the lack of interest and initiative on the part of the petitioner. It is further contended that discussions were held on many occasions at various levels for reopening the tea estates. The representatives of the petitioner took part in all such discussions. The State of Kerala exempted the estates of the petitioner from payment of Plantation Tax. The Kerala State Electricity Board also has given various concessions to the petitioner. The second respondent has extended the benefits of the rehabilitation package announced by the Central Government after receiving the report of the Expert Committee. Thereafter, discussions were held at various levels among the first and second respondents and the representatives of the petitioner. However, the discussions were not fruitful and therefore, the power under Section 16E of the Act was invoked and Ext.P18 was issued pursuant thereto. It is therefore, contended that Ext.P18 has been issued after an elaborate consideration of all the issues involved and after finding that the petitioner was not interested in resuming the management of the estates. According to the counsel, the labourers were badly affected and their interests had to be protected. Therefore, invocation of the power under Section 16E of the Act was necessary and justified, in the circumstances. 15. According to the counsel, the labourers were badly affected and their interests had to be protected. Therefore, invocation of the power under Section 16E of the Act was necessary and justified, in the circumstances. 15. The counsel for respondents 1 and 2 further submit that tea being a very valuable product and an important export commodity, it was necessary to ensure that its cultivation and production was suitably regulated. The cultivation of tea can be done only at particular altitudes, in certain climates and under certain specialised conditions which are not available in most parts of our country. The rising demand for tea and the lack of its production have serious economic overtones that have come to the notice of the Central Government and that was the reason why as early as in the year 1953, the Tea Act was enacted. The provisions of the Tea Act are intended to ensure that the tea industry is properly regulated and controlled so as to ensure that the economy benefits to the maximum extent from the activities in the said sector. It is pointed out that the tea plantations of the petitioner have not been functional for the past 8 years and therefore, speedy action was required to the restore production in those estates. For the purpose, a proper management has to be installed first. It is contended that, Ext.P18 issued in exercise of the powers conferred by Section 16E of the Act is intended to achieve the above purpose. On the above ground, the counsel contends that Ext.P18 is perfectly warranted, in the circumstances, justified and legal. Therefore, he contends that the writ petition is liable to be dismissed. 16. I have heard the counsel on both sides. I have been taken through the record of the case and the dicta laid down by the Hon'ble Supreme Court in various decisions on the point. I have considered the rival contentions of the parties, anxiously. 17. The factual senario of this case is not seriously in dispute. The tea plantations of the petitioner have been remaining closed for the past about eight years. According to the counsel for the petitioner, the closure of the tea estates and the factories situate therein was a direct result of the high handed activities resorted to by the militant workmen of the estates. The tea plantations of the petitioner have been remaining closed for the past about eight years. According to the counsel for the petitioner, the closure of the tea estates and the factories situate therein was a direct result of the high handed activities resorted to by the militant workmen of the estates. Therefore, the closure of the estates was not on account of any voluntary act on the part of the management. The tea plantations could not function due to circumstances beyond the control of the petitioner. Ext.P1(a) and P1(b) show that the petitioner had approached this Court for Police protection by filing OP No.2430/2001. At various stages interim orders were issued by this Court for the purpose of ensuring that the plantations remained operational, as the agitation progressed. It is also seen that at various stages, interim orders had been issued by this Court to afford Police protection to the petitioner. However, in spite of the interim orders issued by this Court the fact remains that the plantations were not allowed to resume operations. At one stage as per Ext.P1(f) it has also been directed by a Division Bench of this Court that the petitioner could post its own security men, who would be provided Police protection, at the entry and exit gates of the estates. The above protection was given for the purpose of ensuring that ingress and egress to the petitioner's estates was maintained smoothly and without any obstruction. However, for various reasons, the orders failed to achieve the objective of ensuring that the tea estates remained operational. According to the petitioner, the workers indulged in theft of tea leaves, cutting and removal of timber trees and causing of damage to the machinery in the factories. In a situation where the management was not permitted to enter the premises, the workmen freely indulged in various, acts of sabotage which brought the functioning of the tea plantations to a standstill. The fact that the petitioner had been pursuing its legal remedies to ensure that the tea estates remained functional shows that the petitioner had no intention to close down the estates at any point of time. The report of the expert team in Ext.P4 shows that about 60% of the area can be put to plucking immediately. The fact that the petitioner had been pursuing its legal remedies to ensure that the tea estates remained functional shows that the petitioner had no intention to close down the estates at any point of time. The report of the expert team in Ext.P4 shows that about 60% of the area can be put to plucking immediately. With respect to the rest of the area, it is reported that shade trees would have to be established and the overgrown jungle growth would have to be cleaned up. The conditions of the factories are also stated to be capable of rectification. Therefore, the expert committee found that the tea estates are capable of being revived. It was in the light of Ext.P4 that discussions were held and after discussions, a course of action was agreed to as evidenced by Ext.P5. The conditions stipulated in Ext.P5 required the petitioner to clear off its bank liabilities by selling an item of property at Trivandrum that belonged to it. The petitioner was to have raised the necessary capital for revival by approaching some other banks, after clearing off its liabilities to its bank. Other stipulations providing for a periodic review of the functioning of the plantations are also included in Ext.P5. 18. Pursuant to Ext.P5, the petitioner worked out a settlement with its bank and cleared off the entire bank dues by making a one-time payment of Rs.120 lakhs to the Bank of Baroda as evidenced by Ext.P6. The petitioner also settled its dues to the Kerala State Electricity Board. Ext.P7 and P8 interim orders show that the petitioner has challenged the demands for payment of Employees Provident Fund Contribution made on it by the Provident Fund Authority and has obtained interim orders staying the recovery thereof. Ext.P9 series correspondence evidences the fact that the petitioner has been approaching various banks for obtaining the necessary finance to revive its operations. The above facts have also been intimated to the second respondent as per Ext.P11. Thereafter, a series of correspondence as evidenced by Ext.P12 to Ext.P17 appears to have taken place. Various discussions also appear to have been conducted. It is thereafter, that Ext.P18 public notice has been issued in purported exercise of the power under Section 16E of the Act. 19. It is not in dispute before me that Ext.P18 was issued without any preceding order under Section 16E of the Act. Various discussions also appear to have been conducted. It is thereafter, that Ext.P18 public notice has been issued in purported exercise of the power under Section 16E of the Act. 19. It is not in dispute before me that Ext.P18 was issued without any preceding order under Section 16E of the Act. According to the counsel for respondents 1 and 2 a number of meetings had been held, discussions at the highest level were conducted and the matter had been gone into by the first and second respondents as required by Section 16E of the Act. Therefore, there has been proper application of mind to the situation at hand and it was only thereafter that Ext.P18 was issued. For the said reason, according to the counsel, in the circumstances of the present case, a separate order invoking the power under Section 16E was not necessary to be issued before the issue of Ext.P18 public notice. 20. The tea industry undoubtedly occupies a very important position in the economy of our country. Tea produced by our country is considered to be the best, universally and earns precious foreign exchange for our country. However, the tea industry has been facing problems in the recent past due to various factors. In order to help the industry tide over the crisis, various measures have been introduced by the Central Government. However, the industry is still reeling under a lot of problems. In order to clothe the Central Government with sufficient powers to regulate the industry and to nurse it back to health again, the Tea Act, 1953 has also been amended, incorporating various additional provisions. Thus Chapter IIIA has been incorporated into the Act by amendment in the year 1976 with the object of arming the Central Government with sufficient regulatory powers to help the tea industry tide over the difficult situation. Section 16E is one of the provisions in Chapter IIIA of the Tea Act. The provisions of the Industries (Development and Regulation) Act, 1951 have been specifically made applicable to the Tea Industry also by Sub Section (2) of Section 16A of the Act. Sub Section (2) of Section 16E contains a provision specifically making Section 18AA of the Industries (Development and Regulation) Act, 1951 applicable to the Tea Industry in the same manner in which the said provision applies to an industrial undertaking. Sub Section (2) of Section 16E contains a provision specifically making Section 18AA of the Industries (Development and Regulation) Act, 1951 applicable to the Tea Industry in the same manner in which the said provision applies to an industrial undertaking. The above provisions make it clear that the provisions of the Tea Act as well as those of the Industries (Development and Regulation Act), 1951 referred to above are enacted with the same objective. Therefore, the scope and import of the provisions of the Tea Act have to be understood in the context of the scope and import of the provisions of the Industries (Development and Regulation) Act, 1951 referred to above. It is with the above perspective in mind that the controversy in the present case has to be resolved. 21. Therefore, the scope and import of the provisions of the Tea Act have to be understood in the context of the scope and import of the provisions of the Industries (Development and Regulation) Act, 1951 referred to above. It is with the above perspective in mind that the controversy in the present case has to be resolved. 21. Section 16E of the Act reads thus: Power to take over tea undertaking or tea unit without investigation under certain circumstances:- (1) Without prejudice to any other provision 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 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 (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. [Explanation - For the purpose of this sub-section, "incumbrances" includes any liability which may be recovered or satisfied from the assets of the tea undertaking or, as the case may be, tea unit or the person owning the tea undertaking or tea unit] (2) On the issue of a notified order under sub-section(1) in respect of a tea undertaking or tea unit,- (a) the provisions of sub-sections(2),(3) and (4) of section 16D, and the provisions of section 16G, shall apply to a notified order made under sub- section (1) as they apply to a notified order made under sub-section(1) of section 16D; and (b) the provisions of sub-sections (3) and (4) of section 18AA of the Industries (Development and Regulation) Act, 1951, shall apply to the tea undertaking or tea unit, as the case may be, to the same extent as they apply to an industrial undertaking. As per sub-section (1) extracted above, "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 the persons in charge of such tea undertaking or unit by reckless investment etc. have brought about a situation which is likely affect the production of tea manufacture etc. and " immediate action" is necessary to prevent such situation, it may by notified order authorise any person or body of persons to take over the management of a tea estate. Sub Clause (b) of Sub-Section (1) provides for a second situation that is, where it has been closed for a period of "not less than 3 months" and such closure is prejudicial to the interests of the concerned tea undertaking or tea unit and that the financial condition of the company owning the tea undertaking or tea unit is such that it is possible to re-start the tea undertaking and such restarting is necessary in the interests of general public. Therefore, the authority that has been conferred with the power under Section 16E is the Central Government. Therefore, the authority that has been conferred with the power under Section 16E is the Central Government. Before invoking the power, the authority has to be satisfied on the basis of documentary or other evidence in its possession that the plantation had been closed for a period exceeding 3 months and that such closure was prejudicial to the unit and the financial condition of the company or the tea undertaking and the plant and machinery are such that it is possible to restart the undertaking and such restarting of the tea undertaking is necessary in the interests of the general public. 22. It is clear from the wording of the provision that Section 16E contemplates two situations, firstly where the persons in charge of a tea undertaking or tea unit by reckless investment brings about a situation that is likely to affect the production of tea manufacture and secondly where a tea undertaking or a tea unit has been remaining closed for a period of not less than three months. In both the above situations, for the purpose of invoking the power under Section 16E the Central Government has to be satisfied from the documentary or other evidence in its possession that the conditions stipulated by the provision are in existence. In other words, before invoking the power under Section 16E of the Act, the Central Government has to be (i) satisfied; (ii) from the documentary or other evidence in its possession; iii) in relation to a tea undertaking or a tea unit that one of the situations envisaged by Clauses (a) or (b) of Sub Section (1) of Section 16E exists. If so, 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. As noticed above, Clauses (a) and (b) of Sub Section (1) contemplates two different situations. Since there are no allegations of reckless investment or creation of encumbrances against the petitioner, it is clear that the said provision does not apply to the facts of the present case. As noticed above, Clauses (a) and (b) of Sub Section (1) contemplates two different situations. Since there are no allegations of reckless investment or creation of encumbrances against the petitioner, it is clear that the said provision does not apply to the facts of the present case. Ext.P18 also clearly shows that the impugned proceedings in the present case have been issued under Clause (b) of Sub Section (1) of Section 16E. Therefore, in addition to the satisfaction that is to be arrived at by the Central Government in accordance with the stipulations in the body of Sub Section (1) referred to above, the further conditions stipulated by Clause (b) of the said Sub Section have also to be satisfied. In other words, in addition to the stipulations referred to as (i) to (iii) above, the following further conditions would also have to be satisfied; (iv) That the tea undertaking or tea unit has been closed for a period of not less than three months, whether by reason of the voluntarily winding up of the company owning the tea undertaking or tea unit or for any other reason; v) That such closure is prejudicial to the concerned tea undertaking or tea unit; vi) That the financial condition of the company owning the tea undertaking or tea unit and the condition of the plant and machinery thereof are such that it is possible to restart the tea undertaking or the tea unit ; viii) That such restarting is necessary in the interests of the general public. Each of the ingredients of the provision set out above in seriatum, has to be satisfied before invoking the power under Section 16E of the Act. The legislative intent that is clearly discernible is that the power under Section 16E is only to be used sparingly. It is clear without any doubt that the provision confers a drastic power on the Central Government, which has the effect of depriving persons like the petitioner of their private property. Therefore, the legislature has taken care to see that the power is hedged in by proper safeguards with the object of ensuring that the same is invoked only in exceptional circumstances where all the conditions stipulated by the provision stand satisfied. Therefore, the legislature has taken care to see that the power is hedged in by proper safeguards with the object of ensuring that the same is invoked only in exceptional circumstances where all the conditions stipulated by the provision stand satisfied. The power has been conferred in National Interest, in the interests of our economy, with the object of nursing back the sick Tea Industry to health and vitality. 23. Before the exercise of the power under Section 16E of the Act therefore, the various conditions referred to above would have to be satisfied on the basis of the evidence or documents in the possession of the authority, the Central Government in the present case. Needless to say that the satisfaction to be arrived at by the authority would have to be objective and would have to be borne out from the order or proceedings that is issued under the said provision. In the present case, there is only a public notice evidenced by Ext.P18 which does not spell out the existence of the necessary ingredients of which the authority is required to be satisfied. The mutual discussions that are stated to have been conducted by the Government as well as the Tea Board with the representatives of the petitioner and which are stated to have been unsuccessful, cannot be a substitute for an order that has to be formally issued by the Central Government in exercise of the power under Section 16E. The authority would certainly have to pass a formal order applying its mind to the evidence and the documents in its possession, as well the circumstances justifying the invocation of the power under Section 16E of the Act. In the absence of any such order by the competent authority to support Ext.P18, the said notification is unsustainable. It is contended by the learned counsel for the petitioner that Section 16E being a drastic power that has the effect of depriving a person of his rights in respect of a substantial item of immovable property, in this case, tea plantations extending to about 3000 acres in area, the principles of Natural Justice mandate that the petitioner should have been heard before the initiation of any such action. The counsel for the petitioner also relies on the decision in Swadeshi Cotton Mills v. Union of India AIR 1981 Supreme Court 818. The counsel for the petitioner also relies on the decision in Swadeshi Cotton Mills v. Union of India AIR 1981 Supreme Court 818. While considering the scope of Section 18-AA of the Industries (Development and Regulation) Act, 1951 as amended by Act 72 of 1971, which is similarly worded as Section 16E of the present Act, it has been held by the Apex Court as follows:- "65. From a plain reading of S.18-AA, it is clear that it does not expressly in unmistakable and unequivocal terms exclude the application of the audi alteram partem rule at the pre-decisional stage. The question, therefore, is narrowed down to the issue, whether the phrase "that immediate action is necessary" excludes absolutely, by inevitable implication, the application of this cardinal canon of fair play in all cases where Section 18-AA (1) (a) may be invoked. In our opinion, for reasons that follow, the answer to this question must be in the negative. 66. Firstly, as rightly pointed out by Shri Nariman, the expression "immediate action" in the said phrase, is to be construed in the light of the marginal heading of the section, its context and the Objects and Reasons for enacting this provision. Thus construed, the expression only means "without prior investigation" under S.15. Dispensing with the requirement of such prior investigation does not necessarily indicate an intention to exclude the application of the fundamental principles of natural justice or the duty to act fairly by affording to the owner of the undertaking likely to be affected, at the pre-decisional stage, wherever practicable, a short-measure fair hearing adjusted, attuned and tailored to the exigency of the situation." The majority has also considered the question as to how the satisfaction that is contemplated by the provision has to be arrived at. At paragraph 58 of the said decision, the Apex Court has made the following observation:- "58. Section 18-AA (1) (a), in terms, requires that the satisfaction of the Government in regard to the existence of the circumstances or conditions precedent set out above, including the necessity of taking immediate action, must be based on evidence in the possession of the government. Section 18-AA (1) (a), in terms, requires that the satisfaction of the Government in regard to the existence of the circumstances or conditions precedent set out above, including the necessity of taking immediate action, must be based on evidence in the possession of the government. If the satisfaction of the Government in regard to the existence of any of the conditions, (i) and (ii), is based on no evidence, or on irrelevant evidence or on an extraneous consideration, it will vitiate the order of 'takeover', and the Court will be justified in quashing such an illegal order on judicial review in appropriate proceedings. Even where the statute conferring the discretionary power does not, in terms, regulate or hedge around the formation of the opinion by the statutory authority in regard to the existence of preliminary jurisdictional facts with express checks, the authority has to form that opinion reasonably like a reasonable person." 24. There is absolutely no evidence or material available in this case to justify a conclusion that any 'satisfaction' as contemplated by the section and as explained by the apex court has been arrived at by the Central Government. 25. In the present case, no order has been passed by the Central Government, which is the authority empowered to initiate action under Section 16E of the Act. In the absence of an order formally invoking the power under Section 16E of the Act, Ext.P18 has no foundation. A notification like Ext.P18 can be issued only on the strength of an order passed by the Central Government invoking the power under Section 16E of the Act. Such an order can be passed only in compliance with the various stipulations contemplated by the provision. If any such order had been issued by the Central Government, the same would certainly have been produced in these proceedings. In fact, not even a formal counter affidavit has been filed on behalf of the Union of India. Section 16E does not authorize the second respondent to issue a notification like Ext.P18 independently. The second respondent is not conferred with any power by Section 16E of the Act. In view of the above, Ext.P18 cannot be sustained in the absence of any evidence to show that it was preceded by an order of the Central Government, in exercise of the power under Section 16E of the Act. The second respondent is not conferred with any power by Section 16E of the Act. In view of the above, Ext.P18 cannot be sustained in the absence of any evidence to show that it was preceded by an order of the Central Government, in exercise of the power under Section 16E of the Act. Therefore, Ext.P18 is unsustainable and liable to be set aside. 26. The counsel for the 2nd respondent has contended that even if an opportunity of hearing had been given to the petitioner, that would not have altered the situation in any manner for the reason that the plantation had been remaining closed for the past more than 8 years. It is also contended by the counsel that the impugned proceedings, Ext.P18 has been issued in public interest and that in a situation where private interest comes into conflict with private interest, it is the public interest that has to be prevail. Various precedents have also been pressed into service by the counsel to support the above proposition. There can be no dispute regarding the proposition that private interest would have to give way to the public interest whenever there is a conflict between the two. However, the fact remains that in the present case there has not been any application of mind by the competent authority to any supporting evidence that ought to have been available before it or to the circumstances that necessitated the invocation of the power under Section 16E of the Act. There was not even a formal order preceding the issue of the public notice, Ext.P18. It is trite that a right of hearing cannot be denied to a person on the ground that the same would only be an empty formality. Since Ext.P18 cannot be considered to be a proper exercise of the power under Section 16 E of the Act, the same is unsustainable. It is also to be borne in mind that Ext.P11 submitted by the petitioner is still under consideration of the authority. Therefore, in the absence of any evidence or material to show that there has been application of mind by the competent authority to Ext.P11, the exercise of the power by the 2nd respondent, purportedly under Section 16E of the Act, is absolutely without jurisdiction and illegal. Therefore, in the absence of any evidence or material to show that there has been application of mind by the competent authority to Ext.P11, the exercise of the power by the 2nd respondent, purportedly under Section 16E of the Act, is absolutely without jurisdiction and illegal. For the foregoing reasons, this writ petition is allowed: (a) Ext.P18 is set aside in relation to the two estates of the petitioner alone. (b) The 1st and 2nd respondents are at liberty to initiate fresh action in the matter from the stage of Ext.P10, in accordance with law, after considering the proposals of the petitioner contained in Ext.P11 and all other relevant items of evidence or materials available. (c) The petitioner shall also be afforded an opportunity of being heard before any fresh order is passed by respondents 1 and 2 as indicated above.