1978 (12) TMI 192 - SC - Indian Laws

Summary

Issues Involved:
1. Entitlement to concessions (deductions) in the minimum price of sugarcane.
2. Classification of sugarcane as "bonded" or "unbonded."
3. Interpretation of sub-clauses (2) and (3) of clause 3 of the U.P. Sugarcane Supply and Purchase Order, 1954.
4. Legality of the Recovery Certificate issued against the appellant.

Issue-wise Detailed Analysis:

1. Entitlement to Concessions (Deductions) in the Minimum Price of Sugarcane:
The primary issue in this appeal was whether the appellant was entitled to certain concessions (deductions) in the minimum price of sugarcane as notified by the Cane Commissioner on June 1, 1955. The appellant argued that they were entitled to these concessions for the sugarcane supplied by respondent No. 4, as it was "unbonded sugarcane." The appellant relied on the Cane Commissioner's Notification, which allowed deductions for "unbonded cane" but not for "bonded cane."

2. Classification of Sugarcane as "Bonded" or "Unbonded":
The appellant contended that the two lac maunds of sugarcane supplied by respondent No. 4 should be classified as "unbonded sugarcane" because the offer and acceptance did not comply with the time limits prescribed in sub-clauses (2) and (3) of clause 3 of the U.P. Sugarcane Supply and Purchase Order, 1954. The court, however, clarified that the terms "bonded sugarcane" and "unbonded sugarcane" were not defined in the statute or the Order, and their ordinary dictionary meanings should be considered. "Bonded sugarcane" was interpreted as sugarcane secured by a bond or agreement. Since the supply of two lac maunds was secured by an agreement executed on May 4, 1955, it was classified as "bonded sugarcane," making the appellant ineligible for the concessions.

3. Interpretation of Sub-clauses (2) and (3) of Clause 3 of the U.P. Sugarcane Supply and Purchase Order, 1954:
The court examined the provisions of sub-clauses (2) and (3) of clause 3. Sub-clause (2) allowed a cane-grower or Cane-growers' Cooperative Society to offer to supply cane within 14 days of the issuance of a reserving order, while sub-clause (3) mandated the factory to accept the offer within 14 days of receipt. The court noted that sub-clause (2) used the term "may," indicating that the 14-day period was not mandatory, especially since sub-clause (4) allowed the Cane Commissioner to extend this period. However, sub-clause (3) used "shall," making it obligatory for the factory to accept the offer within 14 days of receipt. The court concluded that even if the offer was made beyond the prescribed period, the factory could still accept it, creating a binding agreement and classifying the sugarcane as "bonded."

4. Legality of the Recovery Certificate Issued Against the Appellant:
The appellant challenged the Recovery Certificate issued under sections 17 and 18 of the Uttar Pradesh Sugar Cane (Regulation of Supply and Purchase) Act, 1953, arguing that they had the right to make deductions based on the Cane Commissioner's Notification. The court upheld the decisions of the District Cane Officer, the Divisional Commissioner, and the Allahabad High Court, which had all concluded that the appellant had wrongly made deductions for "bonded sugarcane." The court found that the appellant's conduct in referring the dispute to arbitration and appealing the arbitrator's award indicated that the parties treated the agreement as one under the Act and the Order.

Conclusion:
The Supreme Court dismissed the appeal, concluding that the additional supply of two lac maunds of sugarcane by respondent No. 4 was "bonded sugarcane," and thus, the appellant was not entitled to the benefit of the Cane Commissioner's Notification dated June 1, 1955. The court affirmed the legality of the Recovery Certificate issued against the appellant. The appeal was dismissed with costs.