Patna High Court
Partabpore Company Ltd. vs Cane Commissioner And Seven Ors. on 18 March, 1968
Equivalent citations: 1969(17)BLJR46
JUDGMENT R.L. Narasimham, C.J.
1. The petitioner is a company owning a sugar factory at Rampur, police station Ban-kata, district Deoria of Uttar Pradesh, known as Purtabpore Sugar Factory. The factory is located at a distance of about hundred yards from the Uttar Pradesh-Bihar border, and the district of Saran of the State of Bihar is adjacent east of the factory. The nearest railway station for the factory is Mairwa Railway Station of the North-Eastern Railway situated in the State of Bihar, from where there is a private light railway connecting with the factory. From the map filed by the parties, it is clear that the boundary of the district of Saran practically encircles the sugar factory on the southern, eastern and northern sides. On account of this peculiar geographical situation, the factory is dependent (partly, at any rate) for its supply of sugar-cane on some of the villages of Saran District adjacent to it. Since 1938, a compact block of 208 villages, forming a belt four miles wide and nine miles long, in Saran District, very close to the factory, was reserved for the supply of sugar-cane under the Bihar Sugar Factories (Control) Act, 1937. The petitioner has claimed that it used to advance large sums of money to cultivators of sugar-cane in the said villages, that various development activities in the villages were also performed by the petitioner after investing large sums of money, that prices for the sugar-cane supplied were also promptly paid, and that the sugar-cane growers of that area were very much satisfied with the treatment given to them by the petitioner. With a view to secure equitable distribution of sugar cane to those factories situated close to the border between the State of Bihar and Uttar Pradesh and also to create a forum for discussion of matters of mutual interest, a joint Sugar cane Board for Uttar Pradesh and Bihar was constituted, consisting of representatives of both the States. On or about the 3rd February, 1964, the Cane Commissioners of Uttar Pradesh and Bihar entered into an agreement to the effect that the said 208 villages would continue to be reserved for the petitioner's factory from 1964-65 (see Annexure B). Some of the sugar factories located in the State of Bihar, including the factory of respondent No. 5 (known as the New Savan Sugar Factory) were dependent for their supply of sugarcane on the cane-growing areas...in the district of Champaran, adjacent north of Saran and bordering on Uttar Pradesh; but, for the convenient transport of sugar-cane from Dhanbad area of Champaran to the factories in the district of Saran, there were two centres at the railway stations of Dudhai and Taraiya-Sujan which were both located in Deoria district of Uttar Pradesh. Hence, by way of reciprocal arrangement, the Uttar Pradesh authorities permitted these two centres to be operated exclusively by the Bihar factories, and also exempted the sugar-cane transported through those centres from payment of purchase tax in Uttar Pradesh. Thus, the agreement of 1964 between the two Cane Commissioners was on a reciprocal basis for mutual advantage of the factories situated in the bordering areas of Uttar Pradesh and Bihar. In pursuance of this agreement, in 1964-65 and 1965-66 also, the said 208 villages were reserved for the petitioner's factory; but respondent No. 5 wanted an altercation in the said reservation, and made a representation on the 17th February, 1966, which was, however, rejected.
2. In the meantime, on the 16th July, 1966, the Central Government made the well-known Sugar-Cane (Control) Order, 1966 (hereinafter referred to as the Order), in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955. Clause 6 of the Order conferred power on the Central Government to regulate distribution and movement of sugar-cane. The material paragraphs of that clause for our purpose are paragraphs (a), (b) and (c) of sub-clause (1) which are as follows:
6. (i) The Central Government may, by order notified in the official Gazette :
(a) reserve any area where sugar-cane is grown (hereinafter in this clause referred to as 'reserved area') for factory having regard to the crushing capacity of the factory, the availability of sugar cane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it;
(b) determine the quantity of sugar-cane which a factory will require for crushing during any year;
(c) fix, with respect to any specified sugar-cane grower or sugar-cane 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 sugar-cane growers operating in the reserved area, through such society, shall supply to the factory concerned;" Clause 11 of the Order authorised the Central Government to delegate their powers under the Order to the State Government or any officer or authority of State Government. On the 17th October, 1967, Clause 11 was amended by the insertion of a new sub-clause (2) by which the State Government were given power to amend, vary or rescind any original order passed by its subordinate authority in exercise of the power delegated under Clause 11. I shall deal with this amendment later on. In exercise of the power conferred by Clause 11(1) the Central Government, by a notification dated the 16th July, 1966 (Annexure A), delegated their power under Clause 6 of the Order, to various State Governments and also to the Cane Commissioner of Bihar and the Cane Commissioner of Uttar Pradesh. On the 30th December, 1966, the Cane Commissioner of Bihar, in exercise of power delegated to him, issued an order under Clause 6(1)(a) of the said Order, constituting the said 208 villages as the reserved area for Purtab-pore Sugar Factory Ltd. Mairwa, for the sugar cane season of, 1966-67 and 1967-68. This order (hereinafter referred to as the main order) is as follows, omitting the list of 208 villages:
OFFICE OF THE CANE COMMISSIONER, BIHAR.
ORDER The 30th December, 1966.
"No. 3088-In exercise of the power delegated to me by the Central Government under Clause 11 of Sugarcane (Control) Order 1966 in Ministry of Food Agriculture, Community Development and Co-operation (Department of Food) Notification No. G.S.R. 1127/ Ess. Com/Sugarcane dated the 16th July 1966 read with Clause 6(1)(a) of the said Order 1, Cane Commissioner, Bihar, hereby direct that the villages named in the list below shall constitute the reserved area of Purtabpur Sugar Factory Ltd., Mairwa, for the purpose of sugarcane during the sessions 1966-67 and 1967-68.
Sd. J. Prasad, Cane Commissioner, Bihar.
(208 villages in Saran District were included in the list appended to the Order).
3. Respondent No. 5 then filed a writ petition before this Court in Civil Writ Jurisdiction Case No. 63 of 1967, challenging the validity of that Order. That writ petition was ultimately with-drawn by respondent No. 5 on the 10th November, 1967, on the ground that, after considering the representations of the parties, the Cane Commissioner decided to reserve 99 villages for the factory of respondent No. 5 and the remaining 109 villages for the petitioner's factory. On the 14th November, 1967, the Cane Commissioner, Bihar, issued two orders (enclosures to Annexures G and H), by which, after superseding his own order, dated the 30th December, 1966, he reserved only 109 out of the said 208 villages for the petitioner's factory, and reserved the remaining 99 villages for the factory of respondent No. 5. As the validity of these two orders hereinafter referred to as the impugned orders) is under challenge, they may be quoted, excluding the list of villages :
OFFICE OF THE CANE COMMISSIONER: BIHAR.
ORDER The 14th November, 1967.
S.O. No. -In exercise of the powers delegated to me by the Central Government under Clause 11 of the Sugarcane (Control) order 1966 in the Ministry of Food, Agriculture, Community Development and Co-operative (Department of Food) notification No. G.S.R. 1126/Ess. Com, [Sugarcane, dated the 16th July, 1966, read with Clause 6(1)(a) of the said Order, I, Cane Commissioner, Bihar, hereby direct that the villages named in the list below shall constitute the reserved area of the Purtabpore Sugar Factory, Ltd. Mairwa, district Deoria (U.P.) for purchase of sugarcane during the season 1967-68.
2. This is in supersession of this office order No. 3088 dated the 30th December, 1966.
/BII-OII/67C Sd. Jitendra Prasad Cane Commissioner, Bihar.
"OFFICE OF THE CANE COMMISSIONER : BIHAR.
ORDER The 14th November, 1967.
S.O. No.-----/In exercise of the power delegated to me by the Central Government under Clause 11 of the Sugar Cane (Control) order, 1966 in the Ministry of Food, Agriculture, Community Development and Cooperation (Department of Food) Notification No. G.S.R. 1126/B Com./Sugarcane, dated the 16th July, 1966 read with Clause 6(1)(a) of the said order, I, Cane Commissioner, Bihar hereby direct that the villages named in the list below shall also constitute the reserved area of New Savan Sugar Mills, Siwan (Saran) for purchase of sugar-case during the season 1967-68 in addition to those already reserved to them under this office order No. 2283 dated the 19th October, 1966.
/BII-OII/66C Sd. Jitendra Prasad Cane Commissioner, Bihar.
4. The petitioner, feeling aggrieved by these modifications of the main order, filed a writ petition in the Allahabad High Court on the 14th November, 1967, being Civil Miscellaneous Writ No. 3841 of 1967. That petition was, however, eventually dismissed on the 1st January, 1968, on the preliminary question of jurisdiction, the Allahabad High Court holding that, inasmuch as no part of the cause of action arose within the territories of Uttar Pradesh, that Court had no jurisdiction. Being unsuccessful in the Allahabad High Court, the petitioner has moved this Court for quashing the two impugned orders and for other consequential reliefs.
5. The main grounds urged by the petitioner may be formulated as follows :
(i) The main Order was a quasi judicial order, and hence the Cane Commissioner, Bihar, had no jurisdiction to cancel the same, and issue the two impugned orders.
(ii) Even if it be assumed that the main order was not a quasi judicial order, the Cane Commissioner was bound, on the principle of natural justice to give the petitioner a reasonable opportunity of being heard before superseding the same, and that opportunity was not given.
(iii) In passing the two impugned orders, the Cane Commissioner practically abdicated his functions and mechanically implemented the order passed by the Chief Minister of Bihar.
(iv) The impugned orders were passed mala fide.
(v) The impugned orders were discriminatory against the petitioner, and were, therefore, hit by Article 14 of the Constitution.
6. Ground No. (1)-The first and the most important question for decision is whether the main order was a quasi judicial order, as urged by the petitioner, or a legislative or legislative cum administrative order, as urged by respondent No. 5. It is not necessary. to discuss at length the fine shades of distinction between judicial and quasi judicial orders on the hand and administrative and legislative orders on the other. As pointed out in S.A. de Smith on Judicial Review of Administrative Action, 1959, Second impression at page 50, this branch can be classified as a "highly acrobatic part of the law", where there is ample scope for verbal gymnasties, and "the Courts have, indeed, shown a remarkable dexterity in adapting their vocabulary to the requirements of particular situations". need only confine myself to the decision of their Lordships of the Supreme Court in Dwarka Nath v. Income-Tax Officer, Special Circle, D. Ward, Kanpur A.I.R. 1966 S.C. 81, where the three essential requirements to constitute a judicial or quasi judicial act have been laid down as follows:
(1) The body of persons must have legal authority;
(2) the authority should be given to determine questions affecting the rights of subject; and (3) that body should a duty to act judicially.
It is true that the duty to act judicially may not be expressly conferred by the statutory provision but may have to be inferred from the cumulative effect of the nature of the rights affected, the manner of the disposal provided, the objective criterion to be adopted, and the phraseology used in the nature of the power conferred and other indicia afforded by the statute.
7. Judged by the aforesaid tests, I am unable to accept the contention of the petitioner that the main Order is a quasi judicial order. In the first place, it does not purport to determine my pre-existing right either of the petitioner or of respondent No. 5. In fact, neither of them had any such right. It is true that, as owners of factories, they had a fundamental right to carry on their business or trade; but neither of them had any vested right to the exclusive use of sugar-cane from a particular area. Under normal circumstances, the cane-growers of any area would have equally the fundamental right to sell their cane to any one they chose. The right in favour of a factory to exclusive appropriation of cane from a particular area was conferred for the first time by the order passed by the competent authority under Clause 6 of the Order. Till then, there was no such right. Hence, while reserving an area for a factory under paragraph (a) of sub-clause (1) of Clause 6 of the order, the Cane Commissioner was not deciding on any pre-existing right but was conferring a new right for the first time. It is true, as urged by the learned Counsel for respondent No. 5. that, by merely reserving an area for a factory under the said paragraph (a), no right is conferred unless it if followed up by another order under paragraph (c) of the said Sub-clause by which the sugar-cane grower may be compelled to supply the sugar-cane grown by him to the factory concern ed. Here, admittedly, no order under paragraph (c) has been passed. The main order merely reserves an area for the petitioner's factory for the two crushing seasons of 1966-67 and 1967 68. Such reservation would have, at best, amounted to a conferment of a mere privilege, as rightly pointed out (if I may say so with respect) by the learned Judge of the Allahabad High Court in Civil Miscellaneous Writ No. 3841 of 1967. Hence, the essential function of a quasi judicial tribunal, viz., the declaration or determination of a pre-existing legal right, is totally wanting here.
8. Moreover, the statutory provision does not fully lay down certain objective standards to be adopted by the Cane Commissioner. It is true that Clause 6 of the Order shows that the Cane Commissioner shall have regard to (i) the crushing capacity of the factory, (ii) the availability of sugarcane in the reserved area, and (iii) the need for production of sugar. But it is well known that the words "have regard to", occurring in statutes are neither exhaustive nor absolutely mandatory. The leading decision is that given in Ryots of Gara-bandho v. Zamindar of Parlakimedi A.I.R. 1943 P. C. 164 at 180, where their Lordships upheld the view of the Madras High Court that these words only mean that the provisions must be taken into consideration but that the authority concerned was not strictly bound by those provisions. This judgment of the Privy Council was cited with approval in Mysore State Electricity Board v. Bangalore Woollen, Cotton, and Silk Mills Ltd. .
9. There can also be no doubt that, in passing the main Order, the appropriate authority will have to keep in view considerations of policy, specially where the order may affect factories situated in another State. An order which will have inter-State repercussions necessarily requires consultation with the authorities in the neighbouring State and considerations of policy such as reciprocal concessions, etc. The petitioner has clearly admitted that considerations of policy prevailed to a great extent by saying that there was a Sugar Board for Uttar Pradesh and Bihar from 1964 and that the Cane Commissioners of the two States met on or about the 3rd February, 1964, and decided, on the principle of reciprocity, that, while the petitioner's factory should get the benefit of reserved area of 208 villages in Bihar, the Bihar Sugar factories should get the privilege of exclusively operating in the two railway stations Dudhai and Taraiyasujan, situated in Uttar Pradesh. Apart from reciprocal arrangements with the neighbouring State for facility of transport, several important questions of policy, such as, tax concessions, labour problems and such allied matters, will have to be considered by the Cane Commissioner. To quote the petitioner's own words in the demi-official letter addressed by its Director to the Chief Minister on the 28th July, 1967 (Annexure VII) :
In border areas, Sir, between U. P. and Bihar, some mutual adjustments are 'must' for easy and convenient disposal of growers' cane of either side.
This passage may be taken as a clear admission by the petitioner that, apart from the matters which the authority is required to have regard to under Clause 6, many other vital matters relating to mutual adjustments between U. P. and Bihar will have to be given considerable weight. In my opinion, therefore, the main order cannot be characterised either as a judicial or quasi judicial order. The petitioner, by the admissions made in paragraph 22 of its petition and the passage from its demi-official letter to the Chief Minister dated the 28th July 1967 (quoted above), has practically conceded that important questions of policy and the views of the officials of Uttar Pradesh would vitally influence the making of the order. One of the main characteristics of a judicial or quasi judicial order is that it is passed after due investigation and deliberation on the basis of materials placed before the tribunal; but, where it is admitted that the order is passed on the basis of a prior agreement between two authorities and was merely by way of implementing that agreement, the judicial element is totally lacking in the order. Questions of. policy and reciprocal dealings between , two adjacent States Play a vital part. I may refer to Express News-paper (Private) Ltd. v. The Union of India where, while discussing the distinction between legislative and judicial functions, their Lordships referred to American and Australian decisions, and pointed out that, where the dispute is as to the relative rights of parties as they rest on the past and present circumstances, the order may be in exercise of judicial power; but, when the question is as to what in future shall be the rights of the parties, the determination will be essentially legislative in character. They also pointed out that, where all the three functions, viz. administrative, legislative and judicial, are combined, the question will be - what was the predominant function, and then determine its character accordingly. Here, it seems fairly clear that where the Cane Commissioner passes an order under Clause 6 of the Order in respect of a factory situated outside the State, the predominant question is one of policy depending on mutual understanding between the two States concerned. I have/therefore, no doubt that the main Order cannot, under any circumstances, be characterised as a judicial or quasi judicial order.
10. From this conclusion, it necessarily follows that the principle of construction embodied in Section 21 of the General Clauses Act would apply, and the Cane Commissioner will have jurisdiction to modify or annul the main Order on a subsequent occasion. It is true that, in terms, Section 21 of the General Clauses Act may not apply because the main Order cannot be characterised as an Act of Parliament; but it is now well settled that those provisions of the General Clauses Act which deal with principles of statutory construction would apply not only to what are known as the Acts of Legislature but also to statutory orders passed in exercise of the power conferred by subordinate legislation. Thus, in Kamla Prasad Khetan v. Union of India , it was held that Section 21 of that Act embodied a rule of construction, and, in Chief Inspector of Mines v. Karam Chand Thapar , it was pointed out that the said Act dealt with legal principles of interpretation of words. To similar effect is the observation in Harendra Nath Base v. Judge, 2nd Industrial Tribunal , In National Sewing Thread Co., Ltd. Chidambaram v. James Chad-wick and Bros. Ltd. , their Lordships observed that, though the provisions of the General Clauses Act and the Interpretation Act may not, in terms, apply for construction of charters. nevertheless there was "no justification for holding that the principles of construction enunciated in those provisions have no application in construing these charters." Banoari Lal Sharma v. Emperor A.I.R. 1943 Cal. 290 at 308 may also be seen in this connection.
11. Mr. Mishra for respondent No. 5 further contended that, apart from the principles of construction laid down in Section 21 of the General Clauses Act, the contents of the power conferred on the Cane Commissioner compel periodical revision and modification of an order passed under Clause 6. One of the factors to be considered by the Cane Commissioner is "the availability of sugar cane in the reserved area". Though sugarcane is ordinarily a biennial crop nevertheless rainfall, irrigation facilities, etc., cannot be anticipated two years ahead. In the petitioner's affidavit dated the 16th January, 1968 in paragraph 12, it is stated as follows:
So far as the cane position this year in the State of Bihar is concerned, I say that the fall in supplies have affected all sugar factories including the petitioner Company.
This statement supports the argument of Mr. Mishra for respondent No. 5 that the supply position of cane will necessarily vary from year to year, and any order reserving certain area for a sugar factory two years ahead will have to be modified later on. Hence, even though an order under Clause 6(1)(a) may have been passed for two years in succession, nevertheless, if, in the succeeding year, the availability of sugar-cane in the reserved area undergoes a change, the order will have to be revised. Moreover, interstate considerations, involving reciprocal facilities (mentioned earlier) may also affect the areas reserved for a factory outside the State of Bihar. Hence, I am inclined to accept the contention of Mr. Mishra that the very contents of the statutory power conferred by Clause 6(1)(a) compel reconsideration of the order after the expiry of each sugar-cane season, and that portion of the main order which dealt with the reservation of cane for 1967-68 must, in the circumstances, be held to be tentative, and the Cane Commissioner, had jurisdiction to modify and alter the same for the year 1967-68.
12. It is perhaps not necessary to further examine whether the main order is a legislative act or an administrative act. In S.A. de Smith's Judicial Review of Administrative Action at page 31, the distinction between these two acts has been pointed out as follows :
The distinction between legislative and administrative acts is usually expressed as being a distinction between the general and the particular. A legislative act is the creation and promulgation of a general rule of conduct without reference to particular; cases; an administrative act is the making and issue of a specific direction, or the application of a general rule to a particular case in accordance with the requirements of policy". I am inclined to take the view that, inasmuch as the main Order is intended to apply to only one factory, viz. the factory of the petitioner, it is essentially an administrative order and not a legislative order.
13. It was then urged that the principle of Section 21 of the General Clauses Act can be applied only in interpreting a legislative order and not an administrative order. For this purpose, reliance was placed on some observations in Bhola Pd. Singh v. Prof. U.A. Goswatni . But, in that judgment, the main controversy was whether the impugned order was a judicial or quasi judicial order on the one hand or legislative order on the other. It is true that, at the end of paragraph 15, the learned Judges linked up administrative orders with judicial and quasi judicial orders for the purpose of excluding the principle of Section 21 of the General Clauses Act. But the reference to an administrative order, at the end of the paragraph, seems to be of an incidental nature, and their Lordships were not discussing whether the principle of Section 21, General Clauses Act, would apply to such an order. On the other hand, in the Full Bench decision of the Patna High Court in Basanta Chandra Ghosh v. Emperor A.I.R. 1945 Pat. 44 at p. 52, it was observed in respect of an unchallenged statutory administrative order :
The power to make an order, in the absence of provision to the contrary, includes the power to rescind it. This has been expressly enacted in Section 21, General Clauses Act, 1897." In view of this decision of the Full Bench, I would not attach much importance to the somewhat incidental observation in in respect of administrative orders. I would, therefore, hold that the principle of Section 21 of the General Clauses Act can be invoked, in appropriate instance, to justify modification or cancellation of an administrative order by the same authority.
14. On the 17th October, 1967, the Government of India amended the Sugar (Control) Order, 1966 by inserting a new sub-clause (2) to Clause 11 in the following terms :
Where all or any of the powers conferred upon the Central Government by this order have been delegated in pursuance of sub-clause (1)(b) to any officer or any authority of a State Government, every order or direction issued by such officer or authority in exercise of that power may be amended, varied or rescinded by the State Government to whom the officer or authority is subordinate, either suo motu, or on application made within a period of thirty days from the date of the order or direction :
Provided that no order revoking a license or a permit issued to a person shall be made without giving such person an opportunity to make representation.
On the basis of this amendment, it was urged by Mr. Roy for the petitioner that, when express power was conferred on the State Government to modify, vary, or rescind an order passed by any subordinate officer (here the Cane Commissioner), the main order could be modified only in the manner indicated in the amendment, i.e. by the State Government, and that" the Cane Commissioner had no jurisdiction to modify the main order by the two impugned orders. This argument does not appeal to me. The special power conferred on the State Government by virtue of the said amendment cannot take away the power of the Cane Commissioner to vary or modify the order in the light of changed circumstances whether on the principle of Section 21 of the General Clauses Act or on the basis of the contents of the power conferred by Clause 6(1)(a) of the Order, as already discussed. The amendment only conferred an additional controlling power on the State Government over its subordinate officers, which was not in existence before.
15. Mr. Roy for the petitioner further urged that, though important matters of policy may affect the final decision of the competent authority while passing an order under Clause 6 of the Order, nevertheless he was bound to consider the three matter referred to in paragraph (a) of sub-clause (i) of Clause 6 of that order, and that there is no material on record to show that these matters were considered. There is no doubt about the correctness of his contention that, apart from other factors, the capacity of the factory, the availability of sugar-cane in the, reserved area and the need for production of sugar will have to be considered by the competent authority passing an order under Clause 6(1)(a); but there is nothing on record to justify the view that these matters were not considered by the Cane Commissioner. Clause 6 does not say that, while passing the order, the competent authority must give reasons as to why, having considered the three matters specified in paragraph (a) of Sub-clause (1) of Clause 6 he ultimately decided to base his order on other questions of policy. So long as reasons are not required to be given in the statutory provision, this Court cannot jump to the conclusion that the matters specified in paragraph (a) of sub-clause (i) of Clause 6 were not considered. Merely because the ultimate decision was, to a large extent, based on other questions of policy, this Court cannot, in the absence of any definite material, hold that the Cane Commissioner did not have regard to the three matters specified in paragraph (a) of sub-clause (i) of Clause 6 of the Order.
16. Ground No. (ii)-Turning to ground No. (ii), it was urged by Mr. Mishra for respondent No. 5, that, in respect of an administrative order of this type, the principle of giving hearing to all parties affected by the order cannot be mechanically applied. He rightly emphasised that, if this principle be accepted as urged by. the petitioner's Counsel, the main Order of the 30th December, 1966, will have to be struck down because it is not urged that, when the Cane Commissioner reserved 208 villages for the petitioner's factory, he gave an opportunity to all other sugar factories in Saran District, which might be affected by that order, an opportunity of being heard. As the petitioner's right or privilege is based entirely on the main Order of the 30th December, 1966, the application of the rule of audi alteram partem will mean that the very foundation on which the writ petition is based will disappear.
17. It is true that it cannot be laid down as a universal rule that a party, which is adversely affected by an administrative order, is not entitled to be heard. Their Lordships of the Supreme Court in State of Orissa v. Dr. (Miss) Binapani Dei pointed out that even administrative orders, which involve civil consequences, must be made consistently with the rules of natural justice and after giving an opportunity to the affected party to be heard. The well known decision of the House of Lords in Ridge v. Baldwin (1963) 2 All E.R. 66 may also be seen in this connection.
18. Assuming without deciding that, inasmuch as, by virtue of the main Order, some sort of privilege (less than a right) was conferred on the petitioner's factory to take sugarcane from the reserved area, that, by the two impugned orders, that privilege was materially impaired, and that, consequently, it ought to have been given an opportunity of being heard, I must hold, in the circumstances of this case, that that opportunity was fully given. The two impugned orders were not suddenly passed behind the back of the petitioner. As early as the 15th June, 1967, the petitioner had filed a representation to the Chief Minister, Bihar (Annexure III), in which a history of its factory leading to the reservation of the disputed 208 villages to the factory was fully given, and a short note was also attached to the said letter, pointing out the adverse effect on the working of the factory which would arise if these villages are taken away. In that note, the petitioner has mentioned that the Savan Sugar Factory of respondent No. 5 had challenged the Validity of the main Order, and that the labour unions in Siwan Subdivision had filed representations to the Bihar Government that the New Savan Sugar Factory might have to close down clue to shortage of sugar cane unless some more afcas were reserved for it. In paragraph 31 of the writ petition, it is admitted that this representation to the Chief Minister was necessitated mainly because the petitioner came to know that respondent No. 5 was agitating to re-open the question of reservation of the said 208 villages to the petitioner. This was followed up by a representation, addressed by the petitioner to the Cane Commissioner, Bihar (Annexure VIII), dated the 31st July, 1967, and also another letter to the Secretary, Department of Industries, Government of Bihar (Annexure IX) on the same date. The petitioner's Director, Shri K.K. Kanoria, had a personal discussion on the subject both with the Cane Commissioner and with the Chief Minister, Annexure X is a demi-official letter addressed to the Cane Commissioner which shows that, as late as the 24th October, 1967, he was pressing on the Cane Commissioner to reserve the said 208 villages for a period of five years more. Annexure XII is a similar prayer addressed to the Chief Minister. Along with that letter, a note (Annexure XII) was attached, in which once again the entire dispute between the petitioner and the New Savan Sugar Factory of respondent No. 5 was fully reviewed, and, in paragraphs 10 and 11 of that note, the objection raised by respondent No. 5 to the reservation of the area for the petitioner was met, and in paragraph 12, the problems which would arise if the reservation of the 208 villages was altered, were also fully discussed. Again, as late as the 3rd November, 1967, the petitioner's Director, Shri Kanoria, addressed another demi-official letter to the Chief Minister (Annexure XIII), placing further facts for consideration in connection with the reservation of the said 208 villages. Thus, the papers filed by the petitioner itself show clearly that, from June, 1967, it was fully aware of the attempts by respondent No. 5 for modification of the main Order, and it had tried both by written representations and personal discussions both with the Chief Minister of Bihar and the Cane Commissioner, Bihar, to convince them of the undesirability of making any such modification to the main Order. It is true that, ultimately, the petitioner was unsuccessful, and the Cane Commissioner by the two impugned orders, modified the main Order; but the requirements of natural justice must be deemed to have been fully complied with in this case. When all that could possibly be said in favour of the petitioner for not reducing the number of villages reserved for the petitioner and for not reserving any of those villages for respondent No. 5 was stated both in writing and by personal discussions with the authorities concerned, it is idle to contend that the impugned orders were passed . without giving the petitioner an opportunity of being heard. The impugned orders, therefore, cannot be struck down on this ground.
19. Ground No. (iii)-The next question for consideration is whether, in passing the impugned orders, the Cane Commissioner abdicated his statutory functions, and acted merely as a conduit pipe to transmit the order passed by the Chief Minister of Bihar. The Secretariat notings, dealing with the passing of the impugned orders, were called for, and a separate paper book was prepared at the request of the parties. Those notings, undoubtedly, show that as desired by the Chief Minister, all the facts connected with the reservation of 208 villages for the petitioner and the rival claims of respondent No. 5 were duly considered. The necessity arose on account of the action of the petitioner itself in moving the Chief Minister as early as June, 1967 (Annexure III), and its Director seeking personal interview with him on the 1st August, 1967. It is true that the Cane Commissioner was inclined to adhere to the main Order reserving 208 villages for the petitioner; but the Chief Minister had to consider many other factors which were overlooked by the Cane Commissioner. It is not necessary for the purpose of this reference to discuss at great length the merits of the various tentative views that were discussed in the notings in the Secretariat file by all concerned. The petitioner may be right in its contention that, ultimately, the Chief Minister ordered that, out of 208 villages, some villages should be reserved for New Savan Sugar Factory, but the actual list of villages reserved for respondent No. 5 was made in the Cane Commissioner's office. There is also the order of the Chief Minister dated the 7th November, 1967 to the following effect;
99 villages be left to the New Savan Mill and 109 villages to the Purtabpore Mill.
It was this order of the Chief Minister that was duly implemented. But the impugned orders purport to be the orders issued by the Cane Commissioner. The question for consideration is whether the orders can be said to be bad as having been passed under the dictation of the Chief Minister. Once it is held that the orders are not judicial or quasi judicial orders and that considerations of policy played a vital part, specially where the orders were known to have interstate repercussions, there can be no invalidity merely because all parties concerned, including the petitioner, moved the Chief Minister to look into the matter and redress their grievances. The Cane Commissioner cannot obviously be aware of all other relevant factors which have to be taken into consideration. The noting in the Secretariat file show that the loss of purchase tax in consequence of the reciprocal arrangement between Bihar and Uttar Pradesh, the labour problems and other matters were considered by the Chief Minister. As pointed out in Sri Krishna Khanna v. Additional District Magistrate, Kanpur 1964 A.L.J. 710 at 715, where administrative orders had to be passed there will be no illegality if directions are given by superiors, specially where important questions of policy are involved. Commissioner of Police, Bombay v. Gordhandas Bhanji , on which reliance was placed, is clearly distinguishable. There, the Commissioner of Police, Bombay, while purporting to pass a statutory order of cancellation of a cinema license, issued order in the following terms :
I am directed by Government to inform you that the permission to erect a cinema at the above site granted to you under this office letter.. . . dated 16th July, 1947 is hereby cancelled.
This order was rightly struck down because the authority concerned (The Commissioner of Police) stated that he was merely communicating the direction of the Government; but the learned Judges in paragraph 12 took care to point out :
We do not mean to suggest that it would have been improper for him to take into consideration the views and wishes of Government provided he did not surrender his own judgment and provided he made the order, but we hold on the material before us that the order of cancellation came from Government and that the Commissioner acted Only as a transmitting agent.
Such a conclusion, cannot, however, 3e made so far as the impugned orders are concerned. They were, undoubtedly, made by the Cane Commissioner, though the Secretariat notings show that he was guided by the views expressed by the Chief Minister. The petitioner, itself had sought the intervention of the Chief. Minister from July, 1967. It is strange indeed that the petitioner through its , Director should be moving the Chief Minister, the Cane Commissioner of Bihar and the Secretary of the Department concerned from July, 1967, not to disturb the earlier order by which 208 villages were reserved for the petitioner's factory, and yet contend here that the Cane Commissioner abdicated his functions. As already pointed out, in all matters which are likely to have interests repercussions, such as, purchase tax, transport facilities, labour problems, etc. the Chief Minister is in a better position to take an overall picture than the Cane Commissioner, and, if the latter listened to his advice or direction (Whatever may be the expression used), there can be no illegality in the order. The ultimate order was passed by the Cane Commissioner, and this distinguishes this case from the Bombay case, referred to above.
20. It, was, however, urged that the Cane Commissioner has riot come forward with an affidavit to show that, after receiving the advice of the Chief Minister, he applied his independent mind and then passed the two impugned orders. On these matters, the affidavit of the Cane Commissioner cannot have any value. The entire file is on record, and it is for the Court to draw its inference. In the aforesaid. Supreme Court case, their Lordships, in paragraph 9, observed :
Public orders, publicly made, in exercise of a statutory authority can not be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do.
No adverse inference can be drawn due to the omission of the Cane Commissioner to file an affidavit on this subject.
21. The argument that the Cane Commissioner's orders were bad as having been issued under the dictation of the Chief Minister, Bihar, if strictly applied, would destroy the petitioner's right altogether. It bases its right (or privilege) on the main order passed on the 30th December, 1966. But the petitioner has been repeatedly urging in the petition that the allotment of 208 villages was made by the Cane Commissioner solely by way of implementing an agreement between the Cane Commissioners of Bihar and Uttar Pradesh entered into on the 3rd February, 1964. At the end of paragraph 22 of the petition, it was further alleged that "this agreement was placed, discussed and ratified by the Joint Sugar-cane Board of U. P. and Bihar". Thus, according to the petitioner itself, the reservation of 208 villages in its favour was based not on the independent consideration of the question by the Case Commissioner, Bihar, but by way of implementing a prior agreement entered into between him and the Cane Commissioner, Uttar Pradesh, and ratified by the Joint Sugar-cane Board of Uttar Pradesh and Bihar, i.e. at the dictation of an outside body. Hence, on the argument of the petitioner, the main order of the 30th December, 1966, must also be struck down as bad.
22. Ground No. (iv) -Turning to the question as to whether the order was passed mala fide. I may point out that no personal malice is alleged either against the Chief Minister or the Cane Commissioner. It was, however, urged that there was malice in law. But the facts alleged are not sufficient to show that there was malice in law, I have already shown that, apart from the three factors mentioned in Clause 6(1)(a), many other relevant factors have to be considered, and they were duly considered by the authorities concerned. It was alleged that the impugned orders were conveyed secretly to respondent No. 5 before they were actually passed. Even if it be assumed that there was leakage of the proposed orders from the Secretariat sources, it does not necessarily follow that either the Cane Commissioner or the Chief Minister was a party to such leakage. It may be that the contents of the orders were ascertained by respondent No. 5 unauthorisedly from other subordinate-officials. It was also alleged that there was a complete change in the attitude of the Government compared to the attitude it had taken while filing a counter to the writ petition of respondent No. 5 in Civil Writ Jurisdiction Case No. 63 of 1967. But merely because there was a change in the attitude of the Government, no inference of mala fide can be made. On the other hand the notings in the Secretariat file show clearly that the whole question was fully discussed in all its aspects by the Cane Commissioner, the Secretary of the Department concerned and the Chief Minister, The fact that the only factories affected by the impugned orders were two, viz. the petitioner's factory and the factory of respondent No. 5, will not lead to any inference of mala fide. The petitioner's factory is the only factory situated outside Bihar for which sugar-cane area was reserved in the State of Bihar. Then again, it is admitted, though somewhat guardedly, in paragraph 11 of Annexure XII, which is the note submitted by the petitioner to the Cane Commissioner, that respondent No. 5 was not getting adequate quantity of cane from its reserved area, though the petitioner wanted to put the blame for such a situation on the fact that the growers of that area were not satisfied with the dealings of respondent No. 5. It was a matter for the authorities to consider whether this allegation against respondent No. 5 was true or not; but, once it is admitted that respondent No. 5 was facing a very difficult situation due to lack of adequate supplies of sugar-cane, the necessity for revising and reconsidering the main order of the 30th December, 1966, arose, and there can be no question of main fide on the part of the Cane Commissioner.
23. It was then urged that the reasons given by the Cane Commissioner for passing the two impugned orders, as disclosed in the counter affidavit filed on his behalf by one Shri Parini Sahai on the 12th January, 1968 (see paragraph 19), were not supported by the notings in the Secretariat file, and that, consequently, this Court should hold that the statements in that counter affidavit were false, and that, their falsity was itself one of the ingredients to prove mala fide. This argument is, in my opinion, too far-fetched. Though the Secretariat notings deal with some of the very important matters, on which the authorities concerned thought it necessary to express their views in writing, it does not necessarily follow that other matters were not considered at all. On the materials on record, I am not prepared to say that the statements made in paragraph 19 of the counter affidavit, of Shri Tarini Sahai must be held to be false merely because all the facts stated therein are not found to have been fully dealt with in the Secretariat notings,
24. Ground No. (v)--As regards the argument that the impugned orders were hit by Article 14 of the Constitution, I need only point out that there is absolutely no material to support the view that there was unfair discrimination against the petitioner. It has been urged on behalf of respondent No. 5, and not challenged by the petitioner, that the petitioner's factory is the only factory located outside the State of Bihar having reserved areas within the State of Bihar. Hence, the petitioner forms a class by itself, and there can be no question of discrimination between the petitioner on the one hand and the sugar, factories in Bihar on the other.
25. There is also reasonable nexus between the basis on which the petitioner was classified and the object intended to be achieved by the two impugned orders. It was then urged that the only factory in Bihar benefited by the two impugned orders is the factory of respondent No. 5. But no other factory in Bihar has challenged the two impugned orders on the ground that favouritism was shown to respondent No. 5. In the absence of any such contest, it must be held that, having considered the needs of all the factories, the authorities decided that there should be redistribution of- villages between the petitioner and respondent No. 5 only.
26. The aforesaid conclusions are sufficient for the disposal of this writ petition. I may, however, refer to a point raised by Mr. Khare for respondent No. 5. He urged that, inasmuch as the jurisdiction of the Cane Commissioner did not extend beyond the limits of the State of Bihar, the main Order passed by him on the 30th December, 1966, must be struck down, because it was passed in respect of the petitioner's factory situated in Ultar Pradesh, outside his jurisdiction. According to him, the primary object of reserving an area for a factory was for the purposes of the factory with a view to satisfy its need for production of sugar. Hence, where the factory is outside the territorial limits of the jurisdiction of the Cane Commissioner, he could not pass a valid order under Clause 6. Mr. Khare, therefore, urged that we should strike down the main Order passed on the 30th December, 1966, which will have the effect of removing the foundation on which this writ petition is based.
27. Though it is unnecessary to decide this point here, in view of holding that the two impugned orders are valid, nevertheless, as Counsel for both sides argued this question also, I may give my views on the same. It is well known that legislative vision may be ex-territorial, and the doctrine of territorial nexus, which was formerly restricted to taxing statutes, has been extended to non-taxing statutes also-see State of Bombay v. R.M. D. Chamarbaugwala and State of Bihar v. Smt. Charusila Dasi . Sufficiency of territorial connection for the purpose of legislation involves consideration of two elements viz. (1) the connection must be real and not illusory, and (2) the liability sought to be imposed must be pertinent to. that connection. Here, the heading of Clause 6 of the Order is "Power to regulate distribution and movement of sugarcane". The cane-growing areas sought to be affected by the impugned orders are all within the territorial jurisdiction of the Cane Commissioner. The liability sought to be imposed on the areas in the sense of reserving them for particular factory is also pertinent to the territorial connection. Merely because the beneficiary, viz., the petitioner's factory, is outside the the territorial jurisdiction of the Cane Commissioner, his order can not be said to have an ex-territorial operation. It was urged that, inasmuch as the factory was outside the jurisdiction of the Cane Commissioner, he would not compel the factory to furnish figures about its capacity, its need for production of sugar and other allied matters which he is required to take into consideration before reserving any area for the factory. It is the look out of the factory which wants the benefit of the reservation of an area in Bihar to furnish the necessary materials to the Cane Commissioner. But this cannot affect the jurisdiction of the Cane Commissioner to reserve an area in the State of Bihar for a factory wherever it may be located. His order, in essence, is in respect of sugar-cane and not in respect of a factory, though the latter may be either benefited or adversely effected by the order. It is true that I have held that the impugned orders are not legislative orders but merely administrative orders; but this cannot affect the validity of its ex-territorial operation because, on the principle of Article 162 of the Constitution, the executive power and the legislative power are co-extensive.
28. For these reasons, I would dismiss this writ petition with costs : hearing fee Rs. 500/-.
29. When this writ petition was admitted, stay of the operation of the impugned orders of the Cane Commissioner was passed by this Court on the 22nd December, 1967, on the petitioner furnishing Bank guarantee for Rs. 6,00,000/-. Mr. Mishra for the respondents urged that, if the writ petition is eventually unsuccessful, consequential orders may be passed by this Court on the lines of the order passed by their Lordships of the Supreme Court in C.S. Rowjee v. The Slate of Andhra Pradesh . Subsequently, however, Mr. Sanyal for the petitioner and Mr. L. M. Sharma for respondent No. 5 agreed that this consequential order might be passed separately after giving the parties a further opportunity to make their submissions on the same. Hence, in this judgment, it is not necessary, to pass any order on this subject.
B.N. Jha, J.
30. I agree.