Workers' Dues Of Rs 70 Crores : Supreme Court Mulls Ordering Sale Of Assam Tea Corporation's Assets

The Supreme Court on Thursday (November 14) sought the details of all the properties of Assam Tea Corporation Limited (ATCL) and expressed that it will order sale of the assets so that the proceeds can be used to pay the dues of the tea garden workers.

A of Justice Abhay S Oka and Justice AG Masih Court directed the Chairman and Managing Director of ATCL to file a detailed affidavit by December 7, listing all of the corporation's properties, specifying their particulars to facilitate potential asset liquidation if required.

“From the statement made by Shri Ravi Kota, Chief Secretary of Assam it is apparent that now the state is not in a position to help out ATCL which is an entity created by the state itself. As of today the dues of the workers are to the tune of approximately Rs. 70 crores. We direct the Chairman and Managing Director of the Assam Tea Corporation to file an affidavit on record giving all the details of the immovable and movable properties held by ATCL with all its particulars so that at appropriate stage court will have to pass an order for sale of assets held by ATCL. Affidavit along with the necessary documents shall be filed by ATCL by 7th of December”, the Court ordered.

The Court had previously directed Assam's Chief Secretary, Ravi Kota, to appear and explain the state's failure to resolve these outstanding payments, which have remained unpaid despite multiple Supreme Court orders over the years.

The Chief Secretary today submitted the state cabinet's decision in this regard, stating –

“Further diverting budgetary resources to a loss-making company (ATCL) is neither prudent nor in the interest of public at large. ATCL is free to explore any statutory remedies including the Companies Act, I and B code, NCLT, we are quite okay.”

During the hearing, counsel for the state explained that severe financial constraints hindered payment to both current and former workers. The counsel highlighted that ATCL had sustained losses of Rs. 120 crore in both the current and previous years. He further stated that Assam, being a “revenue-deficit state,” faced a dilemma between allocating resources for current salaries or settling past dues, noting that 6.45 percent of the state's revenue was already allocated to such expenses.

Justice Oka emphasized the state's duty as a welfare state, remarking, “You are not obliging the citizens by paying.” He further observed that ATCL, as a state-owned entity, managed 14 tea estates, suggesting that if the state did not present a viable payment scheme, the Court will consider ordering the sale of these estates to generate funds for the workers. Addressing the Chief Secretary directly, Justice Oka stated, “You are not coming with any scheme, any assurance, or any outer limit for making payment.”

The state's counsel said that the funds from the Union Government were not coming and requested that a one-time financial assistance could potentially be provided by the Tea Board.

Justice Oka said that in the absence of a substantial proposal from the state, the Court might have no option but to proceed with orders for sale of ATCL's assets. “Tell us in the next hearing how property will be sold to get the funds to pay the workers,” he instructed.

Background

In 2023, the Supreme Court had directed both the state and central governments to disburse Rs. 645 crores to 28,556 workers from 25 tea gardens. Fifteen of these gardens are managed by the state-owned ATCL.

In 2006 when the International Union of Food and Agricultural Workers filed a petition before the Supreme Court demanding payment of overdue wages and benefits. Despite a Supreme Court direction in 2010 ordering the disbursement of the dues, compliance remained incomplete, leading to the present contempt petition in 2012.

In 2020, the Supreme Court had constituted a one-person committee, headed by retired Justice AM Sapre, to calculate the dues owed to the workers. According to the committee's findings, Rs. 414.73 crores were owed to the workers, while an additional Rs. 230.69 crores were due to the Provident Fund Department.

Case no. – Contempt Petition (C) No. 16/2012

Case Title – International Union of Food Agricultural & Ors v. Union of India