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PETITIONER: PURTABPORE CO. LTD.

       Vs.

RESPONDENT: CANE COMMISSIONER OF BIHAR & ORS.

DATE OF JUDGMENT: 21/11/1968

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. SIKRI, S.M.

CITATION:  1970 AIR 1896            1969 SCR  (2) 807  1969 SCC  (1) 308  CITATOR INFO :  D          1973 SC 258  (5)  R          1978 SC 597  (87,99)  D          1982 SC1407  (18)

ACT: Sugar  Cane  (Control) Order,  1955---Central   Government’s power  under cl. 6 of Order to 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 direction  given  by  Chief Minister  such  order  is invalid--An order  under  s.  6(1) modifying  a  reservation in favour of a  factory  is  quasi judicial--Requirement of natural justice must be satisfied.

HEADNOTE: 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  el.  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 appellant 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 neighboring 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 order-sought  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 el. 6(1) of 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 resportdent  made  representations to  the  Chief  Minister. Acting  on  directions given by the Chief Minister the  Cane Commissioner,  Bihar  passed orders on  November  14,  1967, whereby  by a notification in the Bihar  Government  Gazette 121  of  the  aforesaid  villages  were  reserved  for   the

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appellant  and  99  villages for  the  5th  respondent.  The appellant  filed  a  writ petition      in  the  High  Court challenging  this  order of the Cane  Commissioner  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 cl. 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 law; (iii) Even if 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, [1967] 2 S.C.R. 625.     HELD:   (i)  From  the  material  on  record  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 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 interfered with the 808 functions of  the Cane Commissioner.  In this case what  had happened  was  that the power of the Cane  Commissioner  had been  exercised  by  the Chief Minister,  an  authority  not recognised   by  el.  (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  may  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  given binding instructions by a superior. [816]     Commissioner  of  Police, Bombay v.  Gordhandas  Bhanji, [1952]  S..C.R.  135  and State of  Punjab  v.  Hari  Kishan Sharma, A.I R. 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 lis 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 el. 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 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 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  & Ors., [1962] 3 Supp. S.C.R. 36.  New Zealand  Dairy Board  v.  Okitu  Co-operative Dairy Co.  Ltd.,  (1953)  New

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Zealand  Law  Reports.  p. 366, and James  Edward  Jeffs   & Ors.  v. New  Zealand Dairy Production & Marketing  Board  & Ors., [1967] A.C.p. 551, referred tO.     (iii) In the present case both the appellant and the 5th respondent were making repeated representations to the Chief Minister   as  well  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  which 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   Kerala  & Ors., [1969] 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 cls. 6(c) and (d) of the  ’order’  the appellant could not be  considered  as  an aggrieved party. was not correct. [823 A] 809     [The  Court did not consider it necessary to decide  the questions  (a) whether the impugned orders could  have  been validly  made in an administrative 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]

JUDGMENT: 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. Maheshwari, for the appellant. M.C. Chagla and R.C. Prasad, for respondents Nos. 1 and 2.     M.C. Chagla, D.P. Singh, S.C. Agarwal, Uma Dutta and  S. Chakravarti, for respondent No. 5. Sobhugmal 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, 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 villages 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  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 neighboring  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

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to  reserve those villages for it.  The appellant claims  to have  spent  huge  amount in the  development  of  sugarcane growing  areas  in the said 208 villages in  the  course  of years.   It also claims to have advanced large sums  to  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 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 area among the sugar factories  situated near the Bihar U.P. border.  In that meeting it was  decided inter  alia that the aforementioned 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  orders  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 cls. 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 el. 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 Court.  The appellant filed its counter affidavit in  that proceeding on March 21, 1967. The  application  was heard  in  part  on Aprii 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 811 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

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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 Taring  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 into 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.     208  villages of Bihar are reserved for Pratabpur  mill. They are divided as follows:      (a) Mirganj police station            ..  87      (b) Siwan police station              ..  106       (c) Darauli police station           ..  15                                     Total .    208 ", - 812     In  the note submitted by the Cane Commissioner  to  the Chic 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.  According 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 villages               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

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             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               page 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 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  Commissioner 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 mala-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  affording  the  appellant   reasonable opportunity  for representing its case they are bad in  law; (3)  Even  if  the  said  proceeding  is  considered  as  an administrative proceeding, the impugned orders are 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  and Ors.  (1), and ( 4 ). The impugned modifications  contravene

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Art. 301 of the Constitution.     Shri  Sen  did  not address any arguments  on  the  last ground formulated by him.  Therefore we shall not deal  with the same.     The contentions of Shri M.C. Chagla, learned Counsel for the  State  of Bihar as well as the 5th respondent  were  as follows:     Though  the  Cane Commissioner had consulted  the  Chief Minister,  the  impugned  orders were  really  made  by  the former,  hence it cannot be said that he had  abdicated  his statutory func- (1) [1967] 2 S.C.R. 625. 814 tions.   According  to him, the proceeding before  the  Cane Commissioner  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  was  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 Commissioner.     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 deals  with  the  power  to  regulation,  distribution   and movement of sugarcane reads as under:     (1) 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 production 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               sugarcane    growers’   cooperative    society               supplying  sugarcane  to a  factory,  and  the               factory  concerned to enter into an  agreement               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;                    (f)  prohibit  or restrict  or  otherwise               regulate the export of sugarcane from any area               (including a reserved               815

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             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  to  supply  or purchase,  as the case  may  be,  that quantity of sugarcane covered by the agreement entered  into under  the paragraph and any wailful failure on the part  of the sugarcane growers’ cooperative 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 Government;                      (b)  a State Government or any  officer               or authority of a State Government."     As  seen earlier, the Central Government  had  delegated its power under 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  Government  and  the  Cane   Commissioner   are concurrent  authorities. Their jurisdiction is  co-ordinate. There  was  some  controversy  before  us  whether  a   Cane Commissioner  who had reserved an area for a  sugar  factory for a particular period can alter, amend, or modify the area reserved in the middle of the period fixed.  As seen earlier 208  villages With which we are concerned in this case  were reserved for the appellant for two seasons i.e. 1966-67  and 1967-68.   The  contention  was that the  Cane  Commissioner could not have interfered with that reservation within  that period.  The High Court has come to the conclusion that  the Cane Commissioner who had the power to make the  reservation in  question must be held to have had the power to alter  or modify that reservation.  But it is not necessary for us  to pronounce on this question as we are of the opinion that the 816 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

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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 interfered 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) 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  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  of   Police,  Bombay  v.   Gordhandas Bhanji(1)  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. 817 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  consideratiing.  This Court reiterated that  rule  in State of Punjab v. Hari Kishan Sharma(1). Therein this Court held that the State Government was not justified in assuming jurisdiction  which  had  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.     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 el. 6(1) of the ’order’ is a quasi-judicial proceeding.   It 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  lis  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   lis

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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 (1) A.I.R. 1966. S.c. 1081. 818 in this case we are called upon to deal with a privilege and not  right.   As observed by S.A. De Smith in  his  Judicial Review 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 enhanced 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   those               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 proceeding before an authority or a tribunal .’is  a  quasi- judicial proceeding :--                    (i)   that  if  a  statute  empowers   an               authority,  not being 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 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; ,’red                   (ii)  that  if a statutory  authority  has               power  to do any act which will  prejudicially               affect  the subject, then although  there  are               not  two parties apart from the authority  and               the contest is between the authority proposing               to do the act and the subject opposing it, the

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             final determination of the authority will  yet               be a quasi-judicial act provided the authority               is required by the statute to act judicially.     These  tests  were  adopted  by  this  Court  in  Shivji Nathubhai v.  The Union  of India and Ors.(2).  Therein this Court was (1) [1950] S.C.R. 621 at  p. 725. (2) [1960] 2, S.C.R. 775. 819 considering  the validity of cancellation in review  by  the Central  Government  a  mining lease granted  by  the  State Government.   In 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 lessee 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 lis between him and the lessee 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 Board of High  School  and  Intermediate Education U.P, Allahabad v. Ghanshyam Das Gupta and  Ors.(1) held that where the statute in question is silent as to  the manner  in which the power conferred should be exercised  by the  authority acting under it, the exercise of  power  will depend  on  the  express  provisions  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 indicate 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 whet-   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 Board v. Okitu Co-operative Dairy  Co., Ltd.(2).   We  are  referring to that decision  because  the facts of that case bear a close resemblance to the facts  of the  present  case.  Therein as a result of a  Zoning  Order made  by  the Executive Commissioner of Agriculture  in  May 1937, the respondent dairy company, carrying on business  in Gisborne  and the surrounding district, and the Kia Ora  Co- operative   Dairy  Co.  Ltd.  became  entitled  to   operate exclusively  in  a defined area in  the  Gisborne  district. They  were excluded from operating outside that  area.   The zoning  conditions so established continued to  exist  until 1950,  when  the appellant Board issued  the  zoning  orders which were impugned in that case.  It may be noted that  the zoning  orders  were made in the exercise of  the  statutory power conferred on the appellant board. (1). [1962] Supp. 3 S.C.R. 36. (2). (1953) New Zealand Law Reports p. 366. 820 Before 1942, the respondent Co. was approached by the Health Department  with a request that it undertakes the  treatment

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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 A 90,000 as against pound 43,000 in  its  butter  department.  In March, 1950,  the  Kia  era 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  cream 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 1, 1950 assigning  to  the Kia Ora company the cream collection area over which the two companies  then  operated.   On August  29,  the  respondent company  wrote to the Board protecting against its  proposal and asking for recession of the Board’s resolution and  ,for an  opportunity of being heard.  On September 2,  1950,  the appellant  Board in exercise of the power conferred upon  it by  Regulation 716 of the Dairy Factory Supply  Regulations, 1936 and in terms of its resolution of August 3, 1950,  made Zoning Order No./20 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 jointly collect cream produced in  supplying dairies situated in that area, and’ to prohibit the res- 821 pondent dairy company after October 1, 1950 from  collecting or  receiving  any  cream so produced for  the  purposes  of manufacture 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 1,  1951, the date of the coming  into operation  of  Zoning  Order  No.  120  already  made,   but otherwise  confirming  that order.  The  respondent  company

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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 exercising  any  jurisdiction in accordance with  the  same. The action was heard by Mr. Justice Hay, who found that,  in the  conduct  of  the  inquiry  instituted  by  the   Board, following the application made to it by the Kia Ora Company, there  was,  in  the  various  respects  mentioned  in   the judgment,   a  departure from those  principles  of  natural justice   which  were  incumbent  on  the  Board;   and   in particular,  the plaintiff company was denied a  hearing  on the crucial issue as to whether or not a zoning order should be made.  The learned Judge held that the plaintiff  company was entitled to succeed in the action in respect of all  the reliefs  it claimed and he gave the judgment in  its  favour with costs against the Board.  The Court of Appeal  affirmed by  majority the judgment of the learned trial  judge.   The Court  held that the New Zealand Dairy Board in  making  its zoning order No. 120 on September 1, 1950 was determining  a question affecting the rights of the respondent company  and further that the order of the Board was that of a body  that was,  at  least primarily, an administrative  body  and  the question  whether  such  a  body was under  a  duty  to  act judicially  in the course of arriving at  an  administrative decision  was to be determined on the true  construction  of the  authorising legislative provisions and  the  conditions and   circumstances   under  which,  and   in   which,   the jurisdiction  fell  to be exercised.  It held  that  on  the facts  and circumstances of the case the power exercised  by the Board vitiated as the Board had failed to conform to the principles of natural justice in making the zoning order  in question and hence the same is unsustainable.  The decision 822 Of the Privy Council in James Edward Jeffs and  Ors. v.  New Zealand  Dairy Production and Marketing Board and  Ors.  (1) proceeded  on the basis that the aforementioned decision  of the Court of Appeal is correct.     Shri  Chagla contended that even if we are to hold  that the  power  exercised  by  the  authorities  in  making  the impugned orders had to be exercised judicially, on the facts of his case we must hold that there was no contravention  of the  principles  of  natural justice.  He  took  us  to  the various representations made by the appellant.  According to him  the appellant had stated in its representations to  the authorities  all  that it could have said  on  the  subject. Therefore   we   should  not  hold  that   there   was   any contravention  of the principles of natural justice.  It  is true as observed by this Court in Suresh Koshy George v. The University     Kerala and Ors.(2) that "the rules of natural justice  are not embodied rules.  The question  whether  the requirements  of  natural  justice  have  been  met  by  the procedure  adopted  in a given case must depend to  a  great extent on the facts and circumstances of the case in  point, the constitution of the tribunal  and  the rules under which it functions."  In this case what has happened is that  both the  appellant  as welt as the 5th  respondent  were  making repeated representations to the Chief Minister as well 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  which  it  was

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proposed to be split was not made known to the appellant and his  objections  invited  in  that  regard.   The  appellant complains that the manner in which the area had been divided had caused great prejudice to it.  Its grievance may or  may not be true but the fact remains that it had no  opportunity to  represent  against  the same.  Hence  the  appellant  is justified  in  complaining that the  principles  of  natural justice had been contravened.     In  view  of  our  finding  that  the  proceeding  which resulted  in  the  making  of  the  impugned  orders  was  a quasi˜judicial  proceeding,  it  is  unnecessary  to  decide whether  the  impugned  orders could have been validly  made in  an  administrative proceeding. We see no  merit  in  the contention advanced on behalf of the 5th respondent that the Cane  Commissioner was not competent to reserve the area  in question  for  the  appellant as its mill is  in  U.P.   The reserved  area is in Bihar.  The Cane Commissioner of  Bihar had  power to reserve that area for any sugar  mill  whether situated in Bihar or not. (1). [1967] A.C. 551.   (2) [1969] 1 S.C.R. 317 823     The contention of Shri Chagla that as no orders had  yet been  passed  under  cls. 6(c) and (d) of  the  ’order’  the ,appellant cannot be considered as an aggrieved party is not correct.  As soon as a portion of the area reserved for  the appellant  was  ordered to be taken away and  added  to  the reserved  area  of  the  5th  respondent,  the   appellant’s interest was adversely affected.  Therefore it is immaterial for the appellant what orders are passed under sub-cls.  (c) and (d) of el. 6 of the ’order’, because it can no more  get any  sugarcane  from the area in question.  What  hurts  the appellant is the impugned orders and not the further  orders that may be passed.     For  the reasons mentioned above this appeal is  allowed and the orders impugned quashed.  The State of Bihar as well as  the      5th  respondent  shall pay  the  costs  of  the appellant both in this.  Court as well as in the High Court. G.C.                                        Appeal allowed. 824