HIDAYATULLAH , - (1.) THE following Judgments of the court wore delivered by ; (Majority judgment i Das, Kapur, Sarkar and Hidayatullah, JJ.):
(2.) THIS is an appeal on a certificate granted by the High court of Allahabad under Article 133 (1) (c) of the Constitution against its judgment and order dated 2/02/1956. By the judgment, under appeal, which was passed in a Letters Patent Appeal, the Divisional bench confirmed the order of a learned single judge dismissing the petition of the appellant under Art. 226 of the Constitution. Seth Banarsi Das, the appellant before us, was the petitioner in the High court and the two respondents before us, namely, the Cane Commissioner, U. P., Lucknow, and the Cane Marketing Society Ltd., Bijnor, were the opposite parties. The petition asked for a number of writs in the alternative, but its purport was to seek to prohibit the two respondents from continuing certain proceedings pending before the Cane Commissioner under rule 23 of the United Provinces Sugar Factories Control Rules, 1938. That rule provides for arbitration in disputes touching agreements entered into by sugar cane factories and cane growers for supply of sugar cane as laid down by the United Provinces Sugar Factories Control Act, 1938. The facts of the case are as follows:- The appellant was at the material time the lessee and 'Occupier' of Shiva Prasad Banarsi Das Sugar Mills, Bijnor, for five years from the crushing season 1946-47 to 1950-51. The second respondent is the Cane Marketing Society Ltd., Bijnor, which is a society registered under the Uttar Pradesh Co-operative Societies Act, and one of its objects is to supply sugar cane grown by its members to the sugar mills. Before the control of sugar cane, cane growers, whether they belonged to a cooperative society or not, sold sugar cane directly to the factories and made Supplies from any area as it suited them. The United Provinces Sugar Factories Control Act was passed for the purpose of licensing of sugar factories and for regulating the supply of sugar cane intended for use in such factories and the price at which it may be purchased and for such other matters as may be incidental thereto. The broad outline of the Act and the rules framed thereunder may be given here. Under the Act the control of sugar cane grown in the State was vested in an officer known as the cane Commissioner and Advisory Committees and Sugar Control Board were to be appointed to advise upon and effectuate control of sugar and sugar cane. There was a scheme for licensing of factories with which we are not concerned in this case. Ch. IV of the Act made provision for regulating the purchase of sugar cane. Under s. 14, the State government could require the 'Occupier' of any factory to submit to 'the Cane Commissioner an estimate in the prescribed form and manner of the quantity of sugar cane which would be required in his factory during a crushing season. This estimate was examined by the Cane Commissioner who, after consulting the Advisory Committee in that area, published it with such modifications, if any, as he. thought fit to make. Under s. 15 the Cane Commissioner, in consultation with the Advisory Committee (if any) and the ,Occupier' of the factory, could issue an order declaring an area to be 'a reserved area' for the purpose of supply of sugar 'cane to a particular factory. Section 18 then provided as follows '18. Purchase of cane in reserved area.-(1) A cane-grower or a Cane-growers' Co-operative Society in a reserved area may offer, in the form and by the date prescribed, to supply to the occupier of the factory for which the area is reserved cane grown by the cane-grower or by the members of such Cane-growers' Cooperative Society as the case may be, not exceeding the quantity, if any, prescribed for such grower or Cane-growers' Co-operative Society. (2)The Occupier or manager of a factory for which an area is reserved shall enter into an agreement, in such form, by such date and on such terms and conditions as may by prescribed, to purchase the cane offered in accordance with Ss. (1) : Provided that, he shallnot enter into an agreement to purchase cane from a person who is a member of a Cane-growers' co-operative Society. (3)Except with the permission of the Provincial government, cane grown in a reserved area shall not be purchased in such area by a purchasing agent, or by any person other than occupier of the factory for which such area has been reserved. (4)Cane grown in a reserved area shall not be sold by any person other than a cane-grower or a Cane-growers' Co-operative Society: Provided that a cane-grower or a Cane-growers' Co-operative Society may deliver cane intended for use in a factory through another canegrower or through a carrier. (5)During the crushing season the Provincial government may, if it is satisfied that there is likely to be in the area reserved for a factory any quantity of cane available for sale to the occupier of the factory in excess of the quantity for which he is required to enter into agreements, direct that cane shall not be purchased outside the reserved areas until the occupier of the factory enters into agreements to purchase all the cane offered to him in the reserved area : Provided that such prohibition shall not apply in respect of cane for the supply of which agreements in writing have been entered into before such direction was issued.'
(3.) IN addition to the reserved area, s. 19 provided for declaration of assigned area. and purchase of sugar cane therein. The factory was authorised to take its supplies also from the assigned area. The important difference between the two areas was that the factory was bound to enter into agreements with cane growers or cane growers' cooperative societies in an area reserved for-the factory for the prescribed quantity of sugar cane but in an assigned area, the Factory could enter into an agreement for a specified quantity of sugar cane as the factory desired. IN other words, in a reserved area if sugar cane of the prescribed quality was offered by the cane grower or cane growers' society, the factory was bound to purchase that cane up to the prescribed quantity but in an assigned area the factory was at liberty to purchase cane, as it needed, subject to its entering into an agreement for the purpose. In addition to the reserved and assigned areas there was a third category, namely, areas which were neither reserved nor assigned. We are not concerned with such areas or the provisions dealing with the purchase of sugar cane from such areas. Section 27 provided for certain penalties. Subsection 3 (b) provided as follows: '(3) If the occupier or manager of a factory-x x x x (b) intentionally fails to enter into agreements as required by section (2) of section 18...... he shall be punishable with fine which may extend to two thousand rupees'.;