SC Directs Assam Tea Corp To Submit Asset List Amid Financial Struggles

Assam Tea Corp

The Supreme Court on Thursday directed the chairman of Assam Tea Corporation Limited to provide a detailed list of the corporation’s movable and immovable assets after the Assam state government expressed its inability to inject further funds into the struggling, state-run entity.

ATCL, which manages 14 tea gardens, has faced prolonged financial troubles, leaving it unable to meet its obligations to employees, including unpaid wages and provident fund dues.

A bench of Justices Abhay S. Oka and Augustine George Masih considered the state government’s stand, presented by Assam Chief Secretary Ravi Kota, who appeared virtually before the court. Kota explained that the Assam government has already made significant efforts to support ATCL but has found the situation unsustainable. “The state cabinet has reviewed the situation and decided that further funding would not be practical,” Kota stated.

The bench warned that if the state government opts against further financial assistance, it might order the sale of ATCL’s 14 tea gardens to raise funds for paying outstanding dues to employees. The court is addressing a contempt petition filed by the International Union of Food and Agriculture Workers, demanding overdue payments to ATCL workers, a case originally initiated in 2006.

In 2010, the Supreme Court had ordered payments to these employees, but a lack of compliance led to the current contempt proceedings, filed in 2012.

At the hearing, the bench directly questioned ATCL on its plans for fulfilling worker dues, noting the corporation had not denied its liability. Senior advocate Nalin Kohli, representing ATCL and the Assam government, argued that ATCL’s severe financial constraints limit its ability to pay.

“The corporation can cover current or recent salaries but cannot repeatedly be compelled to pay arrears,” Kohli contended, adding that Assam, as a deficit state, lacks resources for continuous payments.

The court emphasized the government’s duty as a welfare state, asserting that the state cannot neglect its responsibilities toward employees. Kohli suggested that the Tea Board of India might be a possible source of funding assistance for ATCL.

Justice Oka observed that if ATCL cannot independently meet its obligations, selling its tea gardens may be a solution to generate funds for unpaid dues. Kohli requested an additional opportunity to discuss options with Assam’s Chief Minister.

Meanwhile, amicus curiae advocate Gaurav Agarwal insisted that a practical solution must be found, as leaving workers unpaid is untenable.

The court has scheduled further hearings for December 9, instructing ATCL’s chairman to submit a comprehensive inventory of its assets. In a prior hearing on October 21, the court had summoned the Assam Chief Secretary and questioned the lack of genuine efforts by the state and ATCL to pay worker dues.

A court-appointed committee in 2020 estimated ATCL’s total obligations to workers at Rs 414.73 crore, with an additional Rs 230 crore in unpaid provident funds.

Earlier this year, on February 7, the court ordered Assam to pay approximately Rs 650 crore to 28,556 workers across 25 tea gardens, including the 15 gardens managed by ATCL.

The case underscores the urgent need for sustainable solutions to address ATCL’s financial struggles and ensure that its employees receive their long-overdue dues.