bill no 285 of 1980  i , $ the tea (amendment) bill, 1980  a billfurther to amend the tea act, 1953 be it enacted by parliament in the thirty-first' year of the republic of india as follows:-1 (1) this act may be called the tea (ametldment) act, 1980 (2) this section and section 8 shall come into farce at oj'lce short title add commeft~ mento s (3) sections 3 ana 4 shall be deemed to have come iilto force' on and with effect from the date of commencement of the tea (amendment) act, 1916 '15 of 19'16 (4) section 7 shall be deemed to have come into force on and with effect from the 13th day of october, 1980  10 (5) sections 2, 5 and 6 shall come into force on such date as the central government may, by notification in the oftlcial gazette, appoint 28 of 1853 amendmentor section 10 z in the' tea act, 1953 (hereinafter refej'ted to as the prlncip8l act), in section 10, in sub-section (2), after clause (j), the following clause shall be inserted, namely:-"(jj) subscribing to the share capital of, 01' eta1q batb' any agreement or other arranpment ("hetht'll' by war 01 paridenhip, joint venture or in any otmr  ) with, any tiod,y coi7on1e for the purpose of promotldr the development of tea industry or for promouon and marketlnr of tea, in bella or elsewhere;" 3 in the principal act, in section 16e, in sub-section (1) ,-amendment of ection 16e (a) in clause (a), between the words "by reckless investments or" and "creation of incumbrances", the word "by" shall be inserted; s (b) the following explanatoon shall be inserted at the end, namely:-(exptanation-for the purposes of this sub-section, "incumbrances" includes any liability which may be recovered or satisfied from the a'3sets of the tea undertaking or, as the case may be, 10 tea unit or the person owning the tea undertaking or tea unit' 4 after section 16l of the principal act, the following section shall be inserted, namely:-insertion of new ection 16ll "16ll every debt arising out of any loan or any other financial accommodation obtained by the authorised person for carrying on is the management of, or exercising functions of control in relation to, the whole or any part of a tea undertaking or tea unit, the management of which has been taken over or is purported to have been taken over under section 16d or section 16e or section 16-1,-| debts     | in-    ||-----------|--------|| curred    |        || and       |        || invest-   |        || ments     |        || made      |        || by        |        || the       | autho- || rised     |        || per      |        || loll      |        || to        |        || have      |        || priority |        |(a) shall have priority over all other debts, whether secured 20' or unsecured, incurred before the management of such tea undertaking or tea unit was taken over; (b) shall be a preferential debt within the meaning of aection 530 of the companies act, 1956, and all such debts shall rank equally among themselves and be paid 2s in full out of the assets of the tea undertaking or tea unit, unless s'llch assets are insufficient to meet them, in which case they shall be recoverable from the owner of the tea undertaking or tea unit as arrears of land revenue notwlthsta~ding that the period of management or contra! has end~d due to expiry of the period for which it 30 was taken over or due to cancellation of the order under section 1611 or in pursuance of the order of any court" 5 in section 27 of the principal act, in sub-section (1), clause (aa) shall be re-iettered as clause (ab) and before that clause as so li'elettered, the following cla'use shall be inserted, namely:-3s amendment of section 27 "(aa) any sum of money including dividend, if any, realised by  the board in carrying out any measure referred to in claule· (jj) of sub-section (2) of orection 10;" ~ section 46 of the p~tincipal act shall be re-numbered as sub-section (1) thereofand,-  ,    4c a-nendment of section 46 ~(a) h'l sub-section~· (1) as so re-llwnb~red, for the words uthe !ules , the words uany  rule ot' ord~ shall be substituted; (b)' after sub-section '(1) as so re-numbered, the following sud-section shall be inserted, namely:-"(2) no suit or other legal proceeding shall lie against the central government for any damage caused or likely to be' s caused by anything which is in good faith done or intended tq' be done under this act ot' any rule or order made thereunder,", valida-' tum 750'11976 7 notwithstanding any judgment, decree or order of any court, any' action or thing (including any order passed or proceeding initiated) taken or done or purported to have been taken or done under sub-section (1) lo of section 16e of the principal act at any time after the commencement of the tea (amendment) act, 1976, shall be deemed to be as valid and effective as if the amendments made by section 3 had been in force at the time such action or thing was taken or done 8 (1) the tea (amendment) ordinance, 1980, is hereby repealed 15 of 1980 repeal and 15 (2) notwithstanding such repeal, anything done or any action taken savini under the principal act as amended by the said ordinance shall be deemed to have been done or taken under the principal act as amended by this act  statement of objects and reasonsthe tea act, 1953 was amended by the tea (amendment) act, 19'16, intet alia, to enable the central government to take over the managemento! a lick and uneconomic tea undertaking or tea unit seetion 16e which was inserted by the said amendment act specified the circumstadees in which the central government may take over a tea undertakidgor tea unit without invest~gation under sub-section (1) of the aai4 action 16k as originally enacted, the central government may, if sataft  trom dooumel1tary or other evidence in its possession in relation to a tea undertaking or tea unit, that the persons in charge of such tea undertaking or tea unit have by reckless investment or creation of idc:uidbr'ances on the assets at the tea undertaking or tea unit or by diversjon of fupds, brought about a situation which is·wre1y to afjadt the prqciuction of tea jnailufactured or produced by the tea underukidg <or tea \ulit and that immediate action 1$ necessary to p~~such a situation, wthorise by notified order any person or body of persone to tue over the management of the whole or any part of the tea undertaking or tea unit the intention w  that the power under this provision should be capable of being used where the incumbrances created, irrespective of their being recklea or not, have brought about a situation likely to affect the production of tea manufactured or produced by the tea undertaking or tea unit the intention was also that the expression "incumbrances" should take in all types of liabilities a contrary view was taken by a single judge at the calc'utta high court to the effect that the expression "incumbranc would cover only incumbrances which have been created recklessly and that it would not cover all liabilities an appeal against this w&s heard by a division bench and a stay order was granted by it till the disposal of the appeal this appeal was dismissed and an appeal was preferred to the supreme court pending the decision in this appeal before the supreme court it was considered urgently expedient to amend the section suitably to bring out the intention clearly hence the presirte'nt promulgated on the 13th october, 1980 the tea (amendment) ordirance, 1980 2 the ordinance amended section 16e of the tea act to-(i) clarify that the word "reckless" in clause (a) of sub-section (1) of section 16e governs only "investments" and not "incumbrances"; and (ii) amplify the meaning of "incumbrances" in the said provision so as to cover all kinds of liabilities which may be recovered or satisfied from the assets of a tea undertaking or a tea unit or the person owning such undertaking or unit the ordinance made the necessary validating provision and also inserted a new section 16ll relating to debts incurred and investments made by authorised persons (that is, persons appointed by the central government to take over the management of a tea undertakid~ or a tea unit)" - to live priority to debts incurred and investments made by the authorijed persons for carrying out the management or exercising the functions of control in relation to a tea undertaking or a tea unit over all other debts so as to enable the authorised persons to obtain finance from financial institutions 3 the bill seeks to replace the aforesaid ordinadoe~rlunity is beinj availed of·to make certain amendments in section&jo, 27'uci 46 at "the ~a a-et the amendment to section 10 is for the~ ql elulbl1hg the tea board "to enter into agreements or arrangements wub olber bodies corporate for the purpose of promoting the deve10pmedt of ~ industry or promotion and marketing of tea in india or elsewhere the amendment ·tosecuon 27 is coiul8qwtl'1ttlllto thia·amandmtmi the"untlildmentto seotion 46 is for the purpose of 'pl'oyidbc inlmuaityto the<oeiidn1 government in the same nuumer  has been ,provided id iection 28c(~) of the industiies (development and reaulatton)' ·a'ct, 1961 new belhi; the 2ith november 1980 clause 2 of the bill seeks to amend section 10 of the tea act, 1953 so as to enable the tea board to subscribe to the share capital of, or enter into partnership or any other joint venture with, any body corporate tor the purpose of promoting the development of tea industry or, for promotion and marketing of tea, in india or elsewhere 2 the above provision of the bill, though only enabling in nature, may involve expenditure by the tea board by way of share capital participation or any other financial arrangement with any -body corporate for the purpose of promoting the development of tea industry or for promotion and marketing of tea, in india or elsewhere as the tea board will not be in a position to meet this expenditure from its own resources the required funds will have to be made available to the tea board from the consolidated fund of india either as a loan or as an investment 3 the amount of expenditure likely to be incurred by tea board would depend on the specific proposals for partnership, joint venture or any nther collaboration arrangement that may be received from time to time it is, therefore, not possible at this stage to specify the recurring and non-recurring expenditure that will be involved if this bill is enacted an~ brauiht into operation  the tea (amendment) ordina7lce, 1980in addition to the provisions contained in the ordinance the bill cod-tains three new provisions (vide clauses 2, ~ and 6 of the bill) 2 clause 2 of the bill seeks to amend section 10 of the tea mt, by inserting in sub-section (2), a new clause (jj) to enable the tea board to enter into agreements or other arrangements with other bodies corporate for the purpose of promoting the development of tea industry or for promotion and marketing of tea in india or elsewhere clause 5 of the bill seeks to make the necessary consequential amendment in section 27 of the act to provide that any sum of money including dividend realised by the board as a result of such agreements or arrangements shall be credited to the tea fund clause 6 seeks to amend section 46 of the act to provide immunity to the central government in the same manner as has been provided in section 29c (2) of the industries (development and regulation) act, 1951 - - • , h (1) (,2& 01' 1~3) - - - - - functions oftbe board (z)· wjtaout, p'ejw1ice· tp tbe  p1lel'auty of·tlle pmv1aiopii qt sub-~iqd (l},·tile meuurea tefc'ed to tbentin mw·, pto~ foj':'p'"' - - - - - he (1) without pre'juclice ~ any other ~vt8ior ef this aet, if, from the documentary or other mdebce in its popeibien, the- central government is sattsfted, m relation to a tea udderia1ddg or tea wt, tbat-power to take over tea undertakin&' or tea unit without investigation under certain circumstances (a) the persons in charge of such teaund~ ~ 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 aftect the production of tea, manufactured or produced by the tea undertaking or tea untt, 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 ttl 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 "ver 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 - - - - - constitution of fund 27 (1) there shall be formed a fund to be called the tea fund, and there shall be credited thereto-- - - - - protection cf action taken in good 1aith 46 no suit, prosecution or othf:r legal proceeding shall lie apinst any person for anything which is in good faith done or intended to be done under this act or the rules made thereunder - - - - - bill further _ amerlld the tea aet, 1963 (shf'i pra'll4b kumclf' mukhef'jee minister of commef'oe ni steel 4"4 mi,,") 