This article is written by Vasundhara Thakur who is pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.
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Coffee in India is not merely a beverage, but a go-to drink, popular among people. Serving coffee is a vital part of whether it is a social gathering or official meeting. However, it is interesting to know that coffee was first introduced in India in the 17th century when an Indian Pilgrimage named Baba Budan sneaked seven coffee beans from Yemen in 1670 and planted them in the Chandragiri Hills In Karnataka. Earlier it was the Dutch, who helped in the cultivation of coffee throughout Indian. But in the nineteenth century, the British started the commercial exploitation of coffee. Later, after the enactment of the Coffee Act of 1942, an executive committee called the ‘Coffee Board’ was formed to regulate the coffee standards in India.
Background of Coffee regulation in India
The Indian coffee industry was largely dependent on exports from abroad after major damage caused due to diseases and pests at the beginning of this century. It was on the verge of vanishing since planters abandoned the cultivation of coffee. Keeping this situation in mind, the Government of India passed the Coffee Cess Act in 1935. It was the first Indian cess Committee to promote the sale and increase in the consumption of coffee at home and abroad.
The first Coffee control conference was held in September 1940 by the Government of India when the industry was facing a severe crisis which was beyond the dealings of the Coffee Cess committee after the outbreak of World War II headed by the then Commerce Minister in the Viceroy’s executive council Sir A. Ramaswamy Mudaliar and a Coffee Board was established, and the Government of India enacted the Coffee Act, 1942.
Purpose of the Enactment of Indian Coffee Act
The Coffee Act was enacted to develop the coffee industry. To be regulated by the Union government and for the expansion of coffee production, consumption, and sale in India and abroad markets.
Formation of the Coffee Board
The Coffee Board was first constituted as the Coffee Market Expansion Board, under Section 4 of the Indian Coffee Market Expansion Ordinance, 1940 which comes under the preview of the Indian Commerce Ministry, initially, for one year. For carrying on the work of the Indian Cess Committee with the additional work to collect and market the estimated coffee crop of the year under a controlled manner. Under the Coffee Expansion Amendment Act (VII of 1942) the Board was empowered to expand its control irrespective of the areas of cultivation. The Act was extended to all the states without any limit in the acreage. There were no internal sales quota after 1943 and obligated every planter to deliver their crop to the common pool, except the quantities prescribed by the Board to retain with them for domestic and for further plantation.
This was done to further develop the coffee industry under the control of the Central Government, and the coffee board was reconstituted, which came into effect from 1st August 1955. The major amendment brought by the amended Act was a full-time Chairman to be appointed by the Union Government as the Chief Executive of the Board. It shall be a body corporate having perpetual succession.
Constitution of the Board
The Board constituted under Section 4 of the Act with the total number of members to be 33 including the Chairman, three members of the Parliament and other such members expedient by the Government that shall not exceed 29. The term of membership for each member shall be 3 years, which are subject to re-appointment.
Functions of the Board
The followings are the functions that are performed by the Board:
- To promote the consumption of Indian coffee in Indian and abroad.
- To assist the coffee growers in the development of their estates.
- To promote agricultural and technological research in the interest of Indian coffee industry.
- To formulate welfare measures for workers on coffee plantations.
- To maintain funds which are divided into two categories as general fund and pool fund under Sections 30, 31 & 32.
- To control the sale of coffee, as to how much to be sold in the surplus pool and the quantity to be kept by the estate owner for domestic or for free sale.
- Inspection of accounts of estate owners.
- Maintaining records and accounts of coffee production, export, import, distribution in India and abroad.
- To utilize the general fund for the development of coffee holdings of unregistered owners.
- The board has the power to incur expenditure, can write-off losses up to 10,000/- in case of loss due to theft, robbery, fraud and negligence and Rs. 20,000/- in other cases.
Role of the Central Government
- The Central Government has empowered to cancel, modify, suspend any act of the board as it deems fit.
- It fixes the price of coffee at what amount it is to be sold both wholesale and retail.
- It can inspect or authorize on its behalf any member, to inspect the records of the Board.
- It works as an appellate body if an aggrieved person appeals/ approaches when the Board refuses to give license or cancel the license of the curing establishment within a period of sixty days of such order. By making a payment of Rs. Five which shall go to the government revenue account.
Registration of the owner of Coffee estate
Every owner of a coffee estate shall get registration from the registering officer appointed by the State government within one month on the date she/he became the owner of the estate. Such an owner will be deemed as registered owner as specified under Section 14 (1).
Registration once done cannot be cancelled unless cancelled by the registered office, as mentioned under Section 14(3).
Sale of coffee
A registered owner shall sell coffee if it is delivered through a curing establishment licenced under Section 28, or it is sold in accordance with the provision of a licence procured from the Board under Section 24.
A registered owner should inform the Board when sending coffee to the curing establishment the quantity sent to each estate. Every curing establishment shall inform the board the amount of coffee received from the uncured establishments.
Licensing of curing establishment
All the saleable coffee needs to be registered by the owner or delivered to the owner by a cured establishment as per Section 28. However, Section 24, specifies that an uncured coffee can be sold after acquiring the licence from the Board.
Export and Re-Import of coffee
Section 20 states that coffee shall be exported from India by the Board or any person authorized on behalf of the Board. The Central Government has the power to control the quantity of export. While re-importing of coffee is not allowed unless granted by the Board as mentioned in Section 20(1).
Offences and Penalties
A court of Metropolitan Magistrate or Judicial Magistrate of the first class can take cognizance of an offence on the following below grounds:
- Failed to Register- Every owner of the coffee estate must get themselves registered under Section 14 in case of failure, a fine of Rs. One thousand, which can extend to five thousand for subsequent failures.
- False Return- In case a registered owner files a false return, he/she will be punishable with a fine of Rs. 1000.
- Failure in delivery of coffee to the board- If a registered owner or a license curer fails to deliver the coffee to the board by court’s order can confiscate or penalize a fine up to Rs. One thousand.
- Obstruction- Whoever obstructs with the inspection of the members of the board shall be punishable with a fine that can be extended up to one thousand Rupees.
- In the case of a company- If the offence is committed by a company, then every person who was in charge and responsible for conducting the business of the company shall be punished.
Coffee Rules, 1955
The Board is under the control of the Central Government, as mentioned in Section 42 of the Act, which gives control to the Government to modify, rescind, amend any act of the board. However, as per Section 48, the Union Government empowered the Board to make certain rules and to do so the Coffee Rules came into picture which prescribes the functioning of the board, the membership, forming of various committees such as a coffee quality committee, research committee, marketing committee, duties of the members of the board, filling of vacancies, budgeting, managing of finances of the board, import and export and so on. These Rules are guidelines for the implementation of the Act.
Thus, the Coffee Act was enacted for the development of the coffee industry. To standardize Indian coffee in other parts of the world. While the union government empowers the controlling of coffee, the coffee Board was established to keep the checks and balances of production, distribution, sale and purchase of the coffee. Registration is required in case a person wants to cultivate coffee, however, licensing for selling uncured coffee is allowed with the permission and licence approved by the Board.
- Indian Coffee Act, 1942
- Coffee Rule, 1955
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