BAWANY SUGAR MILLS LTD. Versus CANE COMMISSIONER AND DIRECTOR OF AGRICULTURE, EXTENSION, HYDERABAD, SINDH

1. KAMAL MANSUR ALAM, J.‑‑‑ This petition has been filed by the petitioner challenging the order, dated 20‑9‑1983 passed by the Cane Commissioner, respondent No.1, in proceeding under Rule 17 of the Sugar Factories Control Rules, 1950, whereby he has awarded a sum of Rs.77,500 to the respondent No.2.

2. Brief facts of the case are that the petitioner‑sugar mill used to purchase sugarcane from the respondent No.2 who was a cane grower in the District Badin. It is stated that the first order passed by respondent No.1 in exercise of powers under sections 10(l) and 14 of the Sugar Factories Control: Act, 1950, was on 13th November, 1972, whereby certain areas in District V Badin were reserved for supply of cane to the petitioner and such area included that of the respondent No.2 being Deh Kari Muhammad Ali. A fresh order under sections 10(1) and 14 of the said Act was passed by the respondent No.1 on 23‑10‑1982 whereby certain modification was made in the areas which were supplying cane to the petitioner, however, admittedly the area of the respondent No.1 continued to be reserved for the petitioner. The petitioner contends that its crushing season of 1982‑83 commenced from 3‑9‑1982 and ended on 14‑5‑1983. It appears that in the earlier part of the crushing season 1982‑83 very few indents were issued by the petitioner to the respondent No.2 with the result that about one hundred truck loads of cane were still lying in the field of respondent unlifted in March, 1983. Accordingly, the respondent No.2 made an application to the respondent No.1 on 12‑3‑1983 whereby he brought these facts to the notice of the respondent No.1 and prayed for compensation. It appears that the respondent No.1 issued notices of the application to the petitioner and after several adjournments passed the impugned order dated 20‑8‑1983 awarding a total amount of Rs.77,500 to the respondent No.2.

3. Mr. Rasheed A. Akhund, learned counsel for the petitioner, has challenged the impugned order mainly on three grounds. His first contention was that the order dated 23‑10‑1982 whereby the area of the respondent No.2 was reserved for or assigned to the petitioner was not a valid order for it was passed on 23‑10‑1982 when no such order could be passed after 1st October and for this he placed reliance on the case of Messrs Mirpurkhas Sugar Mill ‑A Limited v. Consolidated Sugar Mills Ltd. PLD 1987 Kar. 225. In the present case, however, we find that even prior to the issuance of the said order and; apparently since 1972 the area of the respondent No.1 fell within the zone: reserved for/assigned to the petitioner's mill and as such the said order dated 23‑10‑82 will not be of much relevance in so far as points involved in the present case are concerned. The next contention was that as no agreement was entered into between the petitioner and the respondent No.2 no arbitration could be invoked under Rule 17 of the Sugar Factories Control Rules, 1950 for under the said rule the condition precedent for the holding of arbitration was 8 that the dispute should be in respect of an agreement referred to in the rules. It was pointed out that the agreement referred to in the rule was the agreement mentioned in Rule 9 of the said Rules. It was submitted that under both the orders dated 13‑11‑1972 and 23‑10‑1982 passed by the respondent No.1 the area of the respondent No.2 was "reserved" for the petitioner and not "assigned" to it and as such it was contended that it was incumbent upon the respondent No.2 to make an offer in the prescribed form under Rule 9(2) in respect of the quantity of cane for sale and it was after such offer was made that the petitioner was to enter into an agreement with the respondent No.2. However, as in the present case no such offer was made no agreement was entered into between the parties and, therefore, the arbitration provided for under Rule 17 of the said Rules could not be invoked. We are not impressed by this argument for it appears from both the aforesaid orders dated 13‑11‑1972 and 23‑10‑1982 of the respondent No. that these were passed under 8 section 10(1)(2) as also under section 14 of the Sugar Factories Control Act, 1950, read with Rules 7(1)(2) and 10(1) of the Sugar Factories Control Rules, 1950. The aforesaid section 14 and the rule 10 relate to an order of the Cane Commissioner declaring an area to be assigned for a factory and, therefore, we are unable to agree that the order related merely to reservation of Zones for the sugar mills. We feel that the petitioner cannot be allowed to take advantage of its own failure to comply with the provisions of the said Act and the Rules by not entering into the prescribed agreement. But even otherwise we find from the impugned order that it has been passed in exercise of powers under rule 17(1) and rule 9(6) of the Sugar Factories Control Rules, 1950. Rule 9(6) reads as under:

4. "9(6). In case of a dispute where a particular system adopted for the purchase of grower in the reserved area is equitable or not the dispute may be referred to the Cane Commissioner whose decision shall be final."

5. The main grievance of the respondent No.2 appears to be with regard to the system adopted by the petitioner for the purchase of the crop of the respondent No.2 and inequitable issuance of the indent by the petitioner resulting in losses to him and, therefore, the impugned order would also appear to be covered under the above‑quoted sub‑rule (6) of Rule 9.

6. The last contention raised by the learned counsel for the petitioner was that the impugned order was passed by the respondent No.1 in utter f disregard of the principle of natural justice inasmuch as the petitioner was denied the opportunity of hearing. He submitted that on each date of hearing in response to the notices of the respondent No.1 the petitioner attended the office of the respondent No.1 but the case was adjourned on every date and, IC therefore, the contention of the said respondent that the petitioner remained absent on all the dates except one is not factually correct. In the affidavit filed by the Deputy Cane Manager of the petitioner he specifically stated in para. 4 that he appeared before the respondent No.1 but the said respondent used to adjourn the case. There is no rebuttal to this averment in the counter‑affidavit of the respondent No.2. As such we feel that the petitioner was not allowed opportunity of defence. The learned counsel also questioned the authority of the respondent No.1 to issue Notification dated 15‑6‑1983 prescribing the scale of compensation on the ground that no such power vested in the said respondent. The learned Advocate‑General appearing for the respondent No.1 failed to point out any provision of the said Act or the Rules empowering the respondent No.1 to issue such Notification. We are, therefore, of the view that the said Notification was issued by the respondent No.1 without lawful authority and is, therefore, of no legal consequence.

7. In the result, the impugned order dated 20‑9‑1983 passed by the respondent No.1 is set aside and the case is remanded to the said respondent for a decision afresh after giving opportunity of hearing to the parties. The parties will be entitled to adduce evidence, if any, before the respondent No.1. The petition is allowed in the above terms. The parties are left to bear their, own costs.

8. F.R./B‑233/K Petition accepted.