# PURTABPORE CO. LTD • v. CANE COMMISSIONER OF BIBAR & ORS

- **Citation:** [1969] 2 S.C.R. 807
- **Court:** Supreme Court of India
- **Decided:** 1968-11-21
- **Case number:** Civil Appeal No. 1464 of 1968
- **Bench:** S. M. S!Kri, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/purtabpore-co-ltd-v-cane-commissioner-of-bibar-ors-4594
- **Pages:** 17

## Headnote

Sugar Cane (Control) Order, 1955-Central
Government's
power
under cl. 6 of Order 10 regulate supply of sugarcane to factories-Power
under cl. 6 delegated under cl. 11 to State Governments and Cane Commissioners-Cane Commissioner passing Order under cl. 6( 1) on direc ..
tion given by Chief Minister such order is invalid-An order under s. 6(1)
nwdifying a reservation in favour of a factory is quasi judicial-Requirement of natural justice must be satisfied.
The Sugar Cane (Control) Order, 1955 was promulgated by the Central Government in the exercise of its powers under the Essential Supplies
Act.
Under cl. 6 of the Order the Central Government could
reserve
any area where sugarcane was grown for a
factory taking into
account
various relevant !factors. Clause 11 allowed the Central Government to delegate its power under cl. 6, and the Central Government by a notification dated July 16, 1966 delegated the said power to the several State Governments
and the Cane Commissioners of those States. The appeIIant was a sugar
mill situated in U.P. near the border of Bihar State. For a long time its
source of supply of sugarcane had been the neighbour:ng area of Bihar
State consisting of 208 villages.
For the seasons 1966-67 and 1967-68
the 5th respondent-a sugar mill situate on the Bihar side of the bordersought to have the area reserved for itself but by order dated November
30, 1966 the request was rejected by the State Government. In December
1966 the Cane Commissioner, Bihar passed an order under cl. 6(1) df
the Sugar Cane (Control) Order reserving the said area of 208 villages
for the appellant for the seasons 1966-67 and 1967-68.
The 5th respondent made representations to the Chief Minister.
Acting on
direc1ions
given by the Chief Minister the Cane Commissioner, B:har passed orders
on November 14, 1967, whereby by a notification in the Bihar Government Gazette 121 of·the aforesaid villages were reserved for 1he appellant
and 99 villages for the 5th respondent. The appellant filed a writ petition
in the High Court challenging this order df the Cane Comm;ssioner but
the petition was rejected.
With certificate appeal was filed in this Court.
The contentions urged on behalf of the appellant were : (i) The orders in
question though purported to have been made by the Cane Commissioner
were in fact not so, and were therefore invalid; (ii) Every proceeding to
modify any reservation under c1. 6 is a quasi-judicial proceeding.
As the
impugned notifications were made without affording the appellant reasonable opportunity for representing its case they were bad in Jaw; (iii) Even
~f the said proceeding was considered an administrative proceeding
the
impugned orders were liable to be set aside on the basis of the rule laid
down by this Court in State of Orissa v. Dr. (Miss) Binapani Dei, [1961]
2 S.C.R. 625.
HELD: (i) From the material on nx:ord the only conclusion possible
was that the Chief Minister imposed his opinion on the Cane
Commissioner.
The power exercisable by the Cane Commissioner under cl. 6(1)
is a ~t~tutory power. He alone could have exercised that power.
While
exercismg that power he cannot abdicate his responsibility in favour of
anyone-not even in favour of the State Government or the Chief Minister. It was not proper for the Chief Minister to have interfered with the
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SUPREME COURT REPORTS
[1969] 2 S.C.R.
functions df the Cane Commissioner. In this case what had happened
A
was that the power of the Cane Commissioner had been exercised by the
Chief Minister, an authority not recognised by cl. (6) read with cl. (11)
but the responsibility for making those orders was asked to be taken by
the Cane Commissioner.
The executive officers entrusted with statutory discretions n1ay in some
cases be obliged to take into account considerations of public policy and
to some context the policy of a Minister or the Government as a whole
when it is a relevant factor in weighing the policy 'but this will not absolve
them from their duty to

## Text

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PURTABPORE CO. LTD •
v.
CANE COMMISSIONER OF BIBAR & ORS.
November 21, 1968
[S. M. S!KRI AND K. S. HEGDE, JJ.]
Sugar Cane (Control) Order, 1955-Central
Government's
power
under cl. 6 of Order 10 regulate supply of sugarcane to factories-Power
under cl. 6 delegated under cl. 11 to State Governments and Cane Commissioners-Cane Commissioner passing Order under cl. 6( 1) on direc ..
tion given by Chief Minister such order is invalid-An order under s. 6(1)
nwdifying a reservation in favour of a factory is quasi judicial-Requirement of natural justice must be satisfied.
The Sugar Cane (Control) Order, 1955 was promulgated by the Central Government in the exercise of its powers under the Essential Supplies
Act.
Under cl. 6 of the Order the Central Government could
reserve
any area where sugarcane was grown for a
factory taking into
account
various relevant !factors. Clause 11 allowed the Central Government to delegate its power under cl. 6, and the Central Government by a notification dated July 16, 1966 delegated the said power to the several State Governments
and the Cane Commissioners of those States. The appeIIant was a sugar
mill situated in U.P. near the border of Bihar State. For a long time its
source of supply of sugarcane had been the neighbour:ng area of Bihar
State consisting of 208 villages.
For the seasons 1966-67 and 1967-68
the 5th respondent-a sugar mill situate on the Bihar side of the bordersought to have the area reserved for itself but by order dated November
30, 1966 the request was rejected by the State Government. In December
1966 the Cane Commissioner, Bihar passed an order under cl. 6(1) df
the Sugar Cane (Control) Order reserving the said area of 208 villages
for the appellant for the seasons 1966-67 and 1967-68.
The 5th respondent made representations to the Chief Minister.
Acting on
direc1ions
given by the Chief Minister the Cane Commissioner, B:har passed orders
on November 14, 1967, whereby by a notification in the Bihar Government Gazette 121 of·the aforesaid villages were reserved for 1he appellant
and 99 villages for the 5th respondent. The appellant filed a writ petition
in the High Court challenging this order df the Cane Comm;ssioner but
the petition was rejected.
With certificate appeal was filed in this Court.
The contentions urged on behalf of the appellant were : (i) The orders in
question though purported to have been made by the Cane Commissioner
were in fact not so, and were therefore invalid; (ii) Every proceeding to
modify any reservation under c1. 6 is a quasi-judicial proceeding.
As the
impugned notifications were made without affording the appellant reasonable opportunity for representing its case they were bad in Jaw; (iii) Even
~f the said proceeding was considered an administrative proceeding
the
impugned orders were liable to be set aside on the basis of the rule laid
down by this Court in State of Orissa v. Dr. (Miss) Binapani Dei, [1961]
2 S.C.R. 625.
HELD: (i) From the material on nx:ord the only conclusion possible
was that the Chief Minister imposed his opinion on the Cane
Commissioner.
The power exercisable by the Cane Commissioner under cl. 6(1)
is a ~t~tutory power. He alone could have exercised that power.
While
exercismg that power he cannot abdicate his responsibility in favour of
anyone-not even in favour of the State Government or the Chief Minister. It was not proper for the Chief Minister to have interfered with the
808 .
SUPREME COURT REPORTS
[1969] 2 S.C.R.
functions df the Cane Commissioner. In this case what had happened
A
was that the power of the Cane Commissioner had been exercised by the
Chief Minister, an authority not recognised by cl. (6) read with cl. (11)
but the responsibility for making those orders was asked to be taken by
the Cane Commissioner.
The executive officers entrusted with statutory discretions n1ay in some
cases be obliged to take into account considerations of public policy and
to some context the policy of a Minister or the Government as a whole
when it is a relevant factor in weighing the policy 'but this will not absolve
them from their duty to exercise their personal
judgment in individual
cases unless explicit statutory provision has been
made for them to be
Riven binding instructions by a superior. [816 D-H]
Commissioner of Police, Bombay v. Gordhandas Bhanji, [1952] S.C.R.
135 and State of Punjab v. Hari Kishan Sharma, A.LR. 1966 S.C. 1081,
applied.
(ii) As soon as the 5th respondent moved the Government 'for altering or modifying the reservation made in favour of the appellant, a Us
commenced. The dispute that arose between the appellant and the 5th
respondent had to be decided on the basis of the objective criteria, prescribed by cl. 6 of the order i.e. (1) the crushing capacity of the appellant
mill; (2) the availability of the sugarcane in the reserved area and (3)
the need for the production of sugar. There could hardly be any doubt
that the modification df the reservation made in favour of the appellant
would have had serious repercussions on the working of the appellant's
mill.
It was bound to affect its interests adversely.
Hence it was not
possible to accept the conclusion of the High Court that the proceeding
before the Cane Commissioner was not a quasi-judicial proceeding.
[817
E-H]
Province of Bombay v. Kusaldas S. Advani & Ors., [1950] S.C.R. 621
at p. 725, Shivji Nathubhai v. The Union of India, [1960] 2 S.C.R. 775,
Board of High School and Intermediate
Education
U:P. Allahabad v.,
Ghanshyam Das Gupta & Oi:•., [1962] 3 Supp. S.C.R. 36,
New Zealand
Dairy Board v. Okitu Co-operative Dairy Co. Ltd., (1953) New Zealand
Law Repart; p. 366, and James
Edward Jeffs & Ors. v. New Zealand
Dairy Production & Marketing Board & Ors .. [1967] A.C. p. 551, referred
~
.
(iii) In the present case both the appellant and the 5th
respondent
were making repeated representations to the Chief Minister as ¥.rell as to
the Cane Commissioner.
The ·representations made by the 5th respondent or even the substance thereof were not made available to the appellant.
The proposal to split the reserved area into two or the manner in
\Vhich it was proposed to be split was not made known to the appellant
and his objection invited in that regard. It had no opportunity to represent against the same.
Hence the appellant was justified in complaining
that the principles· of natural justice had been contravened. [822 D-F]
Suresh Koshy George v. The University
of Kerula & Ors., [19691
1 'S.C.R. 317, referred to.
(iv) The appellant's interest was adversely affected by the impugned
order and the contention of the respondent that as no orders had been
passed under els. 6(c) and (d) of the 'order' the appellant could not be
considered as an aggrieved party, was not correct. [823 A]
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PURTABPORE co. LTD. v. CANE COMMR., B!HAR (Hegde, !.) 809
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[The Court did not consider it necessary to decide the questions (a)
B
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whether the impugned orders could have been validly made in an administrat.ive proceeding, (b) whether the Cane Commissioner who had the
power to make the reservation in question also had the power to alter or
modify that reservation]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1464 of
1968.
Appeal from the judgment and order dated March 18,
1968 of the Patna High Court in C.W.J.C. No. 816 of 1967.
A. K. Sen, Bhola Sen, D. Parkar Gupta, Om Khetan, B. P.
Maheshwari and R. K. Mμheshwari, for the appellant.
M. C. Chagla and R. C. Prasad, for respondents No~. 1 and 2.
M. C. Chagla, D. P. Singh, S. C. Agarwal, Uma Dutta and
S. Chakravarti, for respondent No. 5.
Sobhagmal Jain and Krishna Sen, for respondent Nos. 6 to 8.
The Judgment of the Court was delivered by
Hegde, J. This appeal by certificate arises from the decision
rendered on 18th March 1968 by the Patna High Court in
C.W.J.C. No. 816 of 1967.
That was a petition filed by the
appellant under Art. 226 of the Constitution praying, inter alia,
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that the High Court may be pleased to quash the two orders
made by the Cane Commissioner, Bihar on November 14, 1967
under which he excluded 99 vil!ages from the area reserved by
him in favour of the appellant under cl. 6 of the Sugar Cane (Control) Order 1966 (to be hereinafter referred to as the 'order') and
included those villages in the area reserved in favour of New Siwan
F
Mill (5th respondent in this appeal). The High Court dismissed
that writ petition.
The appellant Co. was established in 1903. Though its sugar
mill is in U.P., it used to draw its sugarcane requirement mainly
from the neighbouring areas in Bihar State. The mill in question
is within about 100 yards of the Bihar border.
The appellant's
case is that for the last over 30 years the 208 villages of Bihar,
with which we are concerned in this appeal had been the principal source of its supply of sugarcane and that the Bihar authorities used to reserve those villages for it.
The appellant claims
to have spent huge amount in the d.evelopment of sugarcane growing. areas in the said 208 villages in the course of years. It also
claims. to ~ave advanced large sums t~ the sugarcane growers in
the said villages, such sums to be adjusted later on against the
price of the sugarcane purchased. In 1955 the Central Govern-
810
SUPREME COURT REPORTS
[1969] 2 S.c.R.
ment promulgated the 'order' in exercise of its powers under the
Essential Commodities Act.· One of the main purpose of that
order was to regulate the supply and distribution of sugarcane.
Reservation of the said 208 villages in favour of the appellant
continued under that order. But in view of the agitation carried
on by the 5th respondent and others, during the two seasons
1962-63 and 1963-64 those villages were kept unreserved. Hence
any factory was free to make purchases in that area. Even during
that period the appellant continued to get its supplies from that
area.
On February 3, 1964, there was a meeting of the Cane
Commissioners of Bihar and U. P. with the object of deciding on
a long term basis the question of allotting sugarcane grown in the
border a~ea among the sugar factories situated near the Bihar
U.P. border. In that meeting it was decided inter' alia that the
afore-mentioned 208 villages should be reserved in favour of the
appellant; at the same time some of sugarcane growing areas in
U.P. were reserved for some of the Bihar sugar mills. Accordingly the Cane Commissioner of Bihar passed oders reserving the
aforementioned 208 villages for the appellant for two seasons i.e.
1964-65 and 1965-66. For the New Siwan mill (5th respondent)
100 more villages were reserved in Guthani area. The representation of the New Siwan mill for reserving the 208 villages mentioned earlier was rejected by the Cane Commissioner.
The powers of the Central Government under els. 6, 7, 8 and
9 of the 'order' were delegated to the several States and the Cane
Commissioners mentioned in the notification issued by the Central
Government on July 16, 1966. The State Government of Bihar
and the Cane Commissioner of Bihar are amongst the authorities
to whom the powers under those clauses were delegated. By its
order of November 4, 1966, the State Government of Bihar
rejected the representation made by New Siwan mill by its application of February 17, 1966 asking for reservation of the 208
villages mentioned earlier. Thereafter by his order of December
30, 1966, the Cane Commissioner Bihar reserved those villages
for the appellant under cl. 6(1)(a) of the 'order' for two seasons
(1966-67 and 1967-68). The New Siwan mill challenged the validity of that order in C.W.J.C. No. 63 of 1967 in the Patna
High Couri. The appellant filed its counter affidavit in that proceeding on March 21, 1967. The application was heard in part
on April 13, 1967 and April 14, 1967 but thereafter the case
was adjourned. Later the appellant learnt that the 5th respondent
had moved the Chief Minister of Bihar to revoke the reservation ·
made in favour of the appellant. Apprehending that the appellant's interest may be jeopardised, one of the Directors of the
appellant company wrote to the Chief Minister on June 15, 1967
praying that the reservation made in favour of the appellant should
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PURTABPORE co. LTD. v. CANE COMMR., BlHAR (Hegde, I.) s 11
not be disturbed. Subsequent to that, the appellant made numerous other representations both to the Chief Minister as well as
to the Cane Commissioner. One of the Director of the appellant
company met the Chief Minister as well as his .Private Secretary.
Meanwhile the 5th respondent was also making representations
to the Chief Minister as well as to the Cane Commissioner. From
the records produced before us, it is clear that the Cane Commissioner was firmly of the opinion that there was no justification
for disturbing the reservation made in favour of the appellant.
He strongly recommended to the Chief Minister against interfering with the said reservation.
According to him it was in the
interest of the Sugar industry as well as that of the Sugar mills in
Bihar not to disturb the agreement arrived at the meeting of the
Sugar Cane Commissioners of U .P. and Bihar. From the records
produced before us it is seen that one of the grounds urged by
the 5th respondent in support of his plea was that while it was a
Bihar mill, the appellant was a U.P. mill and as such the Bihar
villages should be reserved for its use. From the note submitted
by Shri Tarini Sahai, an officer in the Cane Commissioner's
department, to the Assistant Cane Commissioner on July 5,
1967, it is seen that the Chief Minister was interesting himself
in the controversy between the appellant. and the 5th respondent. That is also clear from the note submitted by S. Asanullah
another officer in the same department to the Cane Commissioner
on 7-7-1967.
It is unnecessary to refer to the correspondence
that passed between the Cane Commissioner and the Chief Minister but one thing is clear from that correspondence that while
the Cane Commissioner was firm in his opinion that .the agreement entered mto between him and his counter-part in U.P.
should be respected, the Chief Minister was inclined to alter the
reservation made in favour of the appellant.
In the notes submitted by the Assistant Cane Commissioner to the Cane Commissioner we find the following statement :
"As verbally ordered by the Cane Commissioner in
the background of the above notes of the Assistant
Cane Commissioner in connection with the discussions
held with the Chief Minister the undersigned examined
the geographical positions given in the map.
2~~ villages of Bihar are reserved for Pratabpur mill. They
are dlVlded as follows :
(a) Mirganj police station
87
(b) Siwan police station
106
(c) Darauli police station
15
Total .
208"
812
SUPREME COURT REPORTS
[1969] 2 S.C.R.
In the note submitted by the Cane Commissioner to the Chief
A
Minister on October 27, 1967, it is stated:
"As per order, the above two suggestions (Ka and
Kha) have been given for division of 208 villages between the New Siwan Mill and the Pratabpur Mill. Ac- ·
cording to one (Ka) the New Siwan Mill gets 121 villages and according to the second proposal (Kha) it
gets 99 villages. As it is clear from the notes of the
Assistant Cane Commissioner, the Chief Minister has
ordered that most of these 208 villages may be given
to the New Siwan Mill. This order is carried out under
proposal 'Kha', but under it, about 20-22 such vi!lages
come as are at a distance of only 2-3 miles from the
Pratabpur Mill and the farmers of those villages can also
have some objection on account of it.
Hence only after obtaining a clear order from the
Chief Minister, the necessary notification will be issued.
Sd/'Illegible
27-10. "
On November 7, 1967, the Chief Minister passed the following
order on the above note.
"I agree with the notes as at Kha of pag.~ 33. 99
villages be left to the New Siwan Mill and 109 villages
to the Pratabpur Mill. None of the two mills will have
the right to keep the weigh bridge of sugar-cane collecting centre in the area of each other.
Sd/- Mahamaya Pd. Sinha
7-11-67."
On the basis of this direction the Cane Commissioner made
the impugned orders on November· 14, 1967, which were duly
published· in the Gazette.
In the High Court the validity of the order made by
the
Cane Commissioner on November 14, 1967 was challenged on
six different grounds i.e. ( 1) that the Cane Commissioner had no
jurisdiction to pass those orders; (2) in passing those orders, the
Cane Commissioner practically abdicated his statutory functions
and mechanically implemented the directions issued by the Chief
Minister; (3) the orders are vitiated as the proceeding before the
authority culminating in those orders was a quasi-judicial proceeding and the authority had failed to afford a reasonable opportunity to the appellant to represent against the orders proposed
to be made; (4) even if the proceeding in question should be
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PURTABPORE co. LTD. v. CANE COMMR., BIHAR (Hegde, l.) 813
considered as an administrative proceeding as the orders made
involve civil consequence and the proceeding having not been
conducted consistently with the rules of natural justice, the impugned orders cannot be sustained; (5) those orders were passed
mala fide and lastly ( 6) they are discriminatory against the petitioner and hence hit by Art. 14 of the Constitution. The High
Court rejected every one of the contentions. It came to the conclusion that the Cane Commissioner who had the power to make
reservations under cl. 6 of the 'order' had also the power to modify
or cancel those reservations in view of s. 21 of the General Clauses
Act; the impugned orders were that of the Cane Conimissioner
both in fact as well as in law; the proceeding before the Cane
Commissioner which resulted in making the impugned orders is
a purely administrative proceeding; even if it is considered to be
quasi-judicial proceeding, reasonable opportunity had been given
to the appellant to represent its case and in fact it had represented
its case fully and effectively; the plea of ma/a-fide is unsubstantiated and the orders in question did not contravene Art. 14 of the
Constitution.
In this Court Shri A. K. Sen, learned Counsel for the appellant attacked the impugned order on the following grounds : ·
(1) The orders in question though purported to have been
made by the Cane Commissioner, were in fact not so; the Cane
Commissioner merely acted as the mouth-piece of the Chief
Minister; in truth he had abdicated his statutory functions
and
therefore the orders are bad; (2) Every proceeding to modify any
reservation made under cl. 6 of the 'order' is a quasi-judicial
proceeding. As the impugned modifications were made without
~ffording th.~ appellan.t reasonable opportunity for representing
its case they are bad m law; (3) Even if the said proceeding is
considered as an administrative proceeding, the impugned orders
ar~ liable t? be set aside_ on the basis of the rule laid down by
this Court m State of Onssa v. Dr. (Miss)
Binapani Dei and
Ors. (1), and ( 4). The impugned modificatio1ns contravene Art.
301 of the Constitution.
Shri Sen di~ not address any arguments on the last ground
formulated by him. Therefore we shall not deal with the same.
The conten~ions of Shri M. C. Chagla, learned Counsel for
the State of B1har as well as the 5th respondent were as follows:
M' '!'hough th~ Cane Commissioner had consulted the Chief
m1st~r' the impugned orders were really made b th f
hence it cannot be said that he had bd'
d .
Y e armer,
a !Cate his statutory func
(I) [1967] 2 S.C.R. 625.
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SUPREME COURT REPORTS
[1969] 2 S.C.R.
tions. According to ,him, the proceeding before the Cane ComA
missioner was administrative in character and to such a proceeding rules of natural justice are not attracted. He further urged
that even if it is held that the said proceeding was a quasi-judicial
proceeding, there w.as no contravention of the principles of natural justice as the appellant had represented his case fully both
before the Chief Minister as well as before the Cane CommisB
sioner.
Before we proceed to examine the contentions advanced on
behalf of. the. parties, it is necessary to refer to the relevant provisions of law. Clause 5 of the 'order' which de<Us with the power
to regulation, distribution and movement of sugarcane reads as
under:
(i) The Central Government may, by order notified in the
official gazette :
(a) reserve any area where sugarcane is grown (hereinafter in this clause referred to as reserved area) for
a factory having regard to the crushing capacity of
the factory, the availability of sugarcane in the reserved area and the need for produetion of sugar,
with a view to enabling the factory to purchase the
quantity of sugarcane required by it;
(b) determine the quantity of sugarcane which a factory
will require for crushing during· any year;
( c) fix, with respect to any specified sugarcane grower
or sugarcane growers generally in a reserved area,
the quantity or percentage of sugarcane grown by
such grower or growers, as the case may be, which
each such grower by himself or, if he is a member
of a co-operative society of sugarcane growers operating in the reserved area, through such society; shall
supply of the factory concerned;
(d) direct a sugarcane grower or a sugacane growers'
cooperative society supplying sugarcane to a factory,
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and the factory concerned to enter into an agreement
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to supply or purchase, as the case may be, the quantity of sugarcane fixed under paragraph (c);
( e) direct that no gur (jaggery) or khandsari sugar or
sugar shall be manufactured from sugarcane except
under and in accordance with the conditions specified
in the licence issued in this behalf;
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(f) prohibit or restrict or otherwise regulate the export
of sugarcane from any area (including a reserved
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PURTABPORE co. LTD. v. CANE COMMR., BIHAR (Hegde, !.) 815
area) except under and in accordance with a permit
issued in this behalf.
(2) Every sugarcane grower, sugarcane growers' co-operative
society and factory, to whom or to which an order made under
paragraph (c) of sub-clause (1) applies, shall be bound tq supply
or purchase, as the case may be, that quantity of sugarcane
covered by the agreement entered into under the paragraph and
any wilful failure on the part of the sugarcane growers' co-operative society or the factory to do so, shall constitute a breach of
the provisions of this Order :
Provided that where the default committed by any' sugarcane
growers' co-operative society is due to any failure on the part of
any sugarcane grower, being a member of such society such
society shall not be bound to make supplies of sugarcane to the
factory to the extent of such default.
Clause ( 11) deals with delegation of powers. It reads :
"The Central Government may, by notification in the
Official Gazette, direct that all or any of the powers
conferred upon it by this Order shall, subject to such
restrictions, exceptions and conditions, if any, as may
be specified in the direction, be exercisable also by :
(a) any officer or authority of the Central GovernD
ment;
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(b) a State Government or any officer or authority
of a State Government."
As seen earlier, the Central Government had delegated its
power unde~ cl. (6) to the State Government of Bihar as well as
to the Cane Commissioner, Bihar.
In the matter of exercise of the power under rule 6(1) the
State G.overnmen.t ~n~ the. Cane Commissioner are concurrent
authonties.
Therr 1unsd1chon is co-ordinate.
There was son
controvdersy before us whether a Cane Commissioner who ha1de
reserve
an area for a sug
f t
f
alter amend or m d'f
t~r ac ory or a particular period can
Peri~ Ii ed , A
o I y
~ area reserved in the middle of the
x ·
s seen earlier 208 villa
· h
h'
concerned in this ca
ges Wit
w 1ch we are
seasons i.e. 1966-67 ~en;er~9~~~~;ecl ,j.~r the app~llant for two
the. Cane Commissioner could no
.
. e contenti.on was that
vat10n within that period
Th ~· h~ve mterferecl with that reserclusion that the Cane Co.m . e.
ig Court has come to the conth
.
m 1ss10ner who had th
e reservat10n in question must be h Id
e power to make
to alter or modify that reservation
e t? ~ave had the power
us to pronounce on this question
· But it is not ?~cessary for
as we are of the op1mon that the
816
SUPREME COURT REPORTS
(1969] 2 S.C.R
impugned orders though purported to have been made by the
Cane Commissioner were in fact made by the Chief Minister and
hence they are invalid. We have earlier seen that the Cane Commissioner was definitely of the view that the reservation made in
favour of the appellant should not be disturbed but the Chief
Minister did not agree with that view. It is clear from the documents before us that the Chief Minister directed the. Cane Commissioner to divide the reserved area into two portions and allot
one portion to the 5th respondent.
In pursuance of that direction, the Cane Commissioner prepared two lists 'Ka' and 'Kha'.
Under the orders of the Chief Minister, the villages contained
in list 'Ka' were allotted to the appellant and in list 'Kha' to the
5th respondent. The Cane Commissioner merely carried out the
orders of the Chief Minister. It is true that the impugned orders
were issued in the name of the Cane Commissioner. He merely
obeyed the directions issued to him by the Chief Minister. We
are unable to agree with the contention of Shri Chagla that though
the Cane Commissioner was initially of the view that the reservation made in favour of the appellant should not be disturbed, he
changed his opinion after discussion . with the Chief Minister.
From the material before us, the only conclusion possible is that
the Chief Minister imposed his opinion on the Cane Commissioner. The power exercisable by the Cane Commissioner under
cl. 6(1) is a statutory power. He alone could have exercised that
power.
While exercising that power he cannot abdicate his responsibility in favour of anyone--not even in favour of the 'State
Government or the Chief Minister.
It was not proper for the
Chief Minister to have intefered with the functions of the Cane
Commissioner. In this case what has happened is that the power
of the Cane Commissioner has been exercised by the Chief Minister, an authority not recognised by cl. ( 6) r.ead with cl. ( 11) but
the responsibility for maki1ng those orders was asked to be taken
by the Cane Commissioner.
The executive officers entrusted with statutory discretions may
in some cases be obliged to take into account considerations of
public policy and in some context the policy of a Minister or
the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to
exercise their personal judgment in individual cases unless explicit
statutory provision has been made for them to be given binding
instructions by a superior.
In Commissioner c1 Police, Bombay v. Gordhandas Bhanji(')
this Court struck down the order purported to have been
passed by the Commissioner of Police in the exercise of his powers
(1) [1952] S.C.R. 135.
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under the Bombay Police Act and the rules made thereunder as
the order in question was in fact that of the Government.
The
rule laid down in that decision governs the question under consideratiin.
This Court reiterated that rule in State of Punjab v.
Hari Kishan Sharma('). Therein this Court held that the State
Government was not justified in assuming jurisdiction which had
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been conferred on the licensing authority by s. 5 (1) and (2) of
the Punjab Cinemas (Regulation) Act.
For the reasons
mentioned above we hold that the impugned orders are liable to be
struck down as they were not made by the prescribed authority.
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This takes us to the question whether the proceeding which
resulted in making the impugned orders is a quasi-judicial proceeding or an administrative proceeding.
There was some controversy. before us whether a proceeding under cl. 6(1) of the
'order' is a quasi-judicial proceeding. lt is not necessary for us
to decide that question as in this case we are only concerned
with the proceeding which resulted in making the impugned orders. In that proceeding the only question before the authorities
was whether all or some of the villages reserved for the appellant should be taken out from the reserved area and reserved for
the 5th respondent. The plea of the 5th respondent was that all
those villages should be reserved for it whereas the appellant insisted that the reservation made in its favour should not be disturbed.
Whether there was a /is between the appellant and the
5th respondent at an earlier stage or not, we are of the opinion,
as soon as the 5th respondent moved the Government for altering
or modifying the reservation made in favour of the appellant, a
/is commenced. The dispute that arose
between the appellant
and the 5th respondent had to be decided on the basis of the
objective criteria, prescribed by cl. 6 of the 'order' i.e. ( 1) the
crushing capacity of the appellant mill; (2) the availability of the
sugarcane in the reserved area and (3) the need for the production
of sugar.
There is hardly any doubt that the modification of the reservation made in favour of the appellant would have had serious
repercussions on the working of the appellant's mill. It was bound
to affect its interests adversely. Hence it is not possible to accept
the conclusion of the High Court that the proceeding before the
Cane Commissioner was not a quasi-judicial proceeding.
The impugned orders are similar to orders revoking or
modifying licenses.
It would not be proper to equate an order
revoking or modifying a licence with a decision not to grant a
licence. Therefore Shri Chagla is not right in his contention that
I) A.LR. 1%6. S.C. 1081.
818
SUPREM~ COURT REPORTS
[1969] 2 $.C.R.
in this case we are called upon to deal with a privilege and not a
right.
As observed by S.A. De Smith in his Judicial Review of
Administrative Action (2nd Edn.) at p. 211
"To equate a decision summarily to revoke a licence
with a decision not to grant a licence in the first instance may be still more unrealistic. Here the "privilege"
concept may be peculiarly inapposite; and its aptness
has not been enhanc.~d by the manner in which it has
been employed in some modern cases. It is submitted
that the courts should adopt a presumption that prior
notice and opportunity to be heard should be given before a licence can be revoked. The presumption should
be rebuttable in similar circumstances to those in which
summary interference with vested property rights may
be permissible.
That the considerations applicable to
the revocation of licences may be different from tl·JOse
applicable to the refusal of licences has indeed been
recognised by some British statutes and a number of
judicial decisions in other
Commonwealth
jurisdictions."
In Province of Bombay v. Kusaldas S. Advani and Ors. (1)
Das, J. formulated the following tests to find out whether a
proceeding before an authority or a iribunal is a quasi-judicial
proceeding :-
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(i) that if a statute empowers an authority, not being
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a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the
statute which claim is opposed by another party and
to determine the respective rights of the contesting
parties who are opposed to each other, there is a lis
and prima facie and in the absence of anything in
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the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority
is a quasi-judicial act; and
(ii) that if a statutory authority ha~ power to do any act
which will prejudicially affect the subject, then although there are not two parties apart from the auG
thority and the contest is between the authority proposing to do the act and the subject opposing it,
the final determination of the authority will yet be
a qua,i-judicial act provided the :..uthority is required
by the statute to act judicially.
These tests were adopted by this Court in Shivji Nathubhai
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v.
The Union of India and Ors. (2 ). Therein this
Court was
(!) [19501 S.C.R. 621 at p. 725.
(2) [1960] 2, S.C.R. 775.
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PURTABPORE co. LTD. v. CANE COMMR., BAHAR (Hegde, J.) 819
considering the validity of cancellation in review by the Central
Government a mining lease granted by the State Government. ln
that context this Court held that. even if the act of the State Government in granting a mining lease was an administrative act, it
was not correct to say that no right of any kind passed to the
Jessee until the review was decided by the Central Government
where a review had been applied for. Rule 52 of the rules framed
under the Mines and Minerals (Regulation and Development)
Act, No. 53 of 1941 which gives the aggrieved party the right
to a review created a /is between him and the ,Jessee and, consequently, in the absence of anything to the contrary either in rule
54 or the statute itself there could be no doubt that the Central
Government is required to act judicially under rule 54.
This Court in fJoard of High School and lntermediare Education U.P., Allahabad v. G/ianshyam Dm Gupta and Ors.(') held
that where the statute in question is silent as to the manner in
which the power conferred should be exercised by the authority
actin!; under it, the exercise of power will depend on the express
previsions of the statute read alongwith the nature of the rights
affected, the manner of disposal provided, the objective criteria,
if any, to be adopted, the effect of the decision on the persons
affected and other indicia afforded by the statute. The mere fact
that the Act in question or the relevant Regulations do not make
it obligatory on the authority to call for an explanation and to
hear the person concerned is not conclusive on the question whe• -
her the authority has to act as a quasi-judicial body when exercising its power under the statute.
On applying the various tests enunciated in the above decisions, there is hardly any doubt that the proceeding before the
Cane Commissioner was a quasi-judicial proceeding.
In this
connection reference may be usefully made to the decision of the
Court of Appeal of New Zealand in New Zealand Dairy !JoaYl
v. Okitu Co-operative Dairy Co., Ltd.('). We
are
referring
to that decision because the facts of that case bear a close resembla~ce to the facts of the present case. Therein as a result of a
Zon11.1g Order made by the Executive Commissioner of Agricultur~ m ~ay 1.937, the respondent dairy company, carrying on
busmess 11n G1.sbome. and the surrounding .district, and the Kia
Ora. Co-operative Darry Co. Ltd. became entitled to operate exclus1vely m a defined. area in the Gisborne district.
They were
excluded from operatmg outside that area
The
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zonmg con 10 es ~ is e contmued to exist until 1950, when the a
ellant Board issued the zoning orders which were impugned in p&at
case. . It may be noted that the zoning orders were made in the
exercise of the st_atutory power conferred on the appellant board.
(!). [19621 Supp, 3 S.C.R. 36.
(2). (1953) New Zealand Law Reports p, 366.
820
SUPREME COURT REPORTS
(1969] 2 S.C.R
Before 1942, the respondent Co. was approached by the Health
Department with a request that it undertakes the treatment and
supply of pasteurised milk to the public schools, and it was
informed that other dairy companies had declined the proposal.
The company complied with the request, after overcoming the
difficulties of finance.
The scheme was put into operation. In
1942 the respondent company put up a treatment plant and expanded its business.
This expansion resulted in an annual turnover in the company's milk department going upto about £ 90,000
as against £43,000 in its butter department. In March, I 950,
the Kia Ora company, by letter, expressed its desire that the
appellant Board (which had been substituted by regulation for
the Executive Commission) should examine the question of crean1
and milk supplies in the Gisborne and surrounding districts. This
letter was, in substance, an application to the Board to review
the whole question of zoning and to require the respondent company to cease the manufacture of butter. Moreover the letter set
out the circumstances in a manner prejudicial to the respondent
company.
After various meetings and negotiations between the
appellant Board, companies concerned, and interested parties,
at..none of which were the contents of the Kia .Ora company's
letter to the Board disclosed to the respondent company, no agreement was reached.
The result of discussions with the Kia Ora
company and detailed replies to complaints were given
to the
Board by the respondent company, and its letter ended with a
statement to the effect that it would appreciate the privilege of
appearing before the full Board with the object of stating its case
more fully or of answering any questions.
The Board ignored
this specific request. At a full meeting of the Board held on. May
31, 1950, the Board decided that only one butter factory should
operate in the Gisborne district. ·On August 3, the Board by
resolution, decided to give notice of its intention of issuing a
zonal order to operate as from October l, 1950 assigning to the
Kia Ora company the cream collection area over which the two
companies then operated. On August 29, the respondent com-·
pany wrote to the Board protecting against its proposal and asking for recession of the Board's resolution and for an opportunity
of being beard.
On September 2, 1950, the appellant Board
in exercise of the pqwer conferred upon it by Regulation 16 of
the Dairy Factory Supply Regulations, 193 6 and in terms of its
resolution of August 3, 1950, made Zoning Order No. 120 which
was the subject of the proceedings before the Supreme Court of
New Zealand. That order was to come into force on October 1,
1950. · Its effect was to assign exclusively to "the Kia Ora Co.
the area defined in Zoning Order (No. 30) of 1937 as that. in
which the two companies could joi;ntly collect cream produced in
supplying dairies situated in that area, artd to prohibit the resA
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PURTABPORE co. LTD. v. CANE COMMR., BAHAR (Hegde, J.) 82 l
pondent dairy company after October 1, 1950 from
collecting
or receiving any cream so produced for the purposes of manufac-
. ture into cream or butter.
The respondent company and others presented a petition to the
Parliament praying for relief and remedy by way of legislation
either in the direction of reversing and setting aside the Board's
decision in the matter of the zoning order or setting aside such
decision and rehearing of the matter by an independent tribunal.
The petition was heard by a select Committee of the House of
Representatives, which decided to make no recommendation on
the petition. · On August 4, the Board made an amended Zoning
Order (No. 120A) postponing until June l, 1951, the date of
the coming into operation of Zoning Order No. 120 already made,
but otherwise confirming that order.
The respondent company
commenced an action against the Board claiming (a) a declaration
that Zoning Orders Nos. 120 and. 120A issued by the Board were
invalidly passed and were of no legal effect; (b) an order of
certiorari to remove into the Supreme Court and quash the
zoning orders; and (c) an injunction restraining the Board from
carrying out its intention of promulgating the zoning orders or
from proceeding further or execising any jurisdiction in accordance with the same.
The action was heard by Mr.