Tata Tea's plans to exit from its tea plantations spread over 24,137 hectares in the Munnar hills in Kerala have hit a roadblock, following a court injunction. The munsiff court in Devikulam on a petition by a representative of the Poonjar Kovilakam that leased out the land has ordered an injunction on the transfer. According to the order of February 25, the court has restrained Tata Tea Ltd from transferring or selling or creating third party interest on the entire land granted to it under lease and licence.

Tata Tea executive director V Venkiteswaran told IE that there was an injunction. However, the matter had earlier been raised in the Kerala high court that had not taken any decision in the matter. Also, it was only a section of the relatives of the Kovilakam family that raised the issue, he added. The company's response to transfer 15 estates to a new limited company where the Tatas would have a stake less than 20% had received good response from the staff and trade unions, he said.

It was going ahead with getting the shareholders' nod for the exit, he added. The company had over 24,000 workers in its South plantations. As per the plans of the Tatas, shifting of ownership to the workers would help drop the production cost by over Rs 8 per kg. ICICI Securities would be extending debt to the new company. A spokesman of the Kovilakam told IE that the land in Kannan Devan Hills, Mankulam and Anavatty villages were private properties of the family, popularly known as Poonjar Kovilakam.

A part of this was leased out to the late John Daniel Munroe in 1877 and another to the North Travancore Land Planting and Agriculture Society in 1900. As per the lease agreement, the land was given for a consideration of Rs 5,000 deposit and an annual rent of Rs 3,000. The lease agreement made it clear that whenever the lessee wanted to give up the land he would have to relinquish the claims to the houses and improvements made as also the deposit of Rs 5,000 and surrender the promises to the Kovilakam.

In case the lessee failed to comply with the covenants of the agreement, he would have to surrender the premises. In 1901, after the society went into liquidation, the land went back to the Kovilakkam. In 1977, the land was leased out to Tata Tea that has been paying the lease rent. According to the spokesman, Tata Tea was only entitled to plant and enjoy produce profit as long as it respected the terms of the lease. There was a state move to implement the Kannan Devan Hills Act, 1977 in which the Supreme Court was moved, following which no action initiated to acquire the Kovilakam land.