Civil Appeal No 1083 of 1969
Appeal from the Judgment and Order dated 5 12 1967 of the Allahabad High Court in Special Appeal No 1068 of 1967
J P Goyal and Sobhagmal Jain for the Appellant
G N Dikshit and O P Rana for Respondents 1 3
Yogeshwar Prashad and Mrs section Bagga for Respondent No 4
The Judgment of the Court was delivered by TULZAPURKAR J
This appeal by certificate is directed against the judgment rendered by the Allahabad High Court on December 5 1967 in Special Appeal No 1068 of 1967 and raises a short question whether the appellant is entitled to the benefit of certain concessions deductions in the minimum price notified by the Cane Commissioner in his order issued on June 1 1955  The appellant Shri Janki Sugar Mills  Company is a partnership firm carrying on the business of manufacturing sugar
By an order passed on November 1 1954 under section 15 of the Uttar Pradesh Sugar Cane Regulation of Supply and Purchase Act 1953 the Cane Commissioner reserved certain sugarcane centres for the appellant s sugar 781 factory
On November 12 1954 ie within 14 days of the reservation of the sugarcane centres the respondent No 4 Laskar Co operative Cane Development Union Ltd made an offer for the 1954 55 crushing season for the supply of 6 lac maunds of sugarcane out of a total estimated yield of 12 lac maunds of sugarcane from certain centres
This offer was accepted by the appellant firm on November 27 1954 ie within 14 days of the receipt of the offer and an agreement in the prescribed Form C  was duly executed on February 9 1955
It contained the usual term that the appellant firm will pay for the sugarcane supplied to it at the minimum price notified by the Government subject to such deductions if any as may be notified by the Government from time to time
On March 22 1955 the respondent No 4 made another offer for supplying additional quantity of 2 lac maunds of sugarcane to the appellant firm which offer was also accepted on May 4 1955 and a composite agreement in prescribed Form C  was entered into on that very day for the supply of 8 lac maunds of sugarcane inclusive of the initial 6 lac maunds
This agreement also contained the usual term with regard to the payment being made at the minimum price subject to such deductions as may be notified by the Government from time to time
By a Press Note dated May 23 1955 the Government of India notified its decision that certain deductions in the minimum cane price on the basis of recovery of sugar from sugarcane will be allowed to sugarcane factories in Uttar Pradesh on the cane supplied to them on and after May 1 1955 but that the deductions will be allowed only on unbonded cane crushed by each factory and not on bonded cane the latter of which shall have to be purchased by each factory at the minimum cane price already fixed for the season
In exercise of the powers under section 3 of the  delegated to him by the Government of India under a Notification dated April 25 1955 the Cane Commissioner Uttar Pradesh issued a Notification on June 1 1955 whereunder the producers of sugar by vacuum pan process were allowed to make deductions as specified in the Schedule thereto from the minimum price of per maund of cane fixed for the season 1954 55 in respect of the unbonded sugarcane crushed on and after May 1 1955
The appellant firm taking advantage of this Notification granting concessions in the minimum price made payments to Respondent No 4 after making deductions in respect of the two lac maunds of sugarcane supplied to it in respect whereof the offer had been made to it on March 22 1955
However a Recovery Certificate under sections 17 and 18 of Uttar Pradesh Sugar Cane Regulation of Supply and Purchase Act 1953 against the appellant firm for a sum of Rs 5387810 being the amounts deducted by the 782 appellant firm while making payments to Respondent No 4
The appellant firm disputed the legality of the Recovery Certificate on the ground that it had the right to make the deductions in view of the Cane Commissioner s Notification dated June 1 1955
The said dispute was referred by the Cane Commissioner to the District Cane Officer Bulandshahr as the sole arbitrator under Rule 108 of the UP Sugarcane Regulation of Supply  Purchase Rules 1954
By his award dated May 30 1962 the District Cane Officer held that the appellant firm had wrongly made the deductions in respect of the supply of two lac maunds of sugarcane which was bonded cane and that the appellant firm was liable to pay the minimum price therefor
Aggrieved by the award the appellant firm preferred an appeal to the Divisional Commissioner Meerut under Rule 118 of the said Rules but the appeal was dismissed on March 30 1963
The appellant firm challenged the legality of the award of the District Cane Officer as also the appellate order of the Divisional Commissioner by means of a writ Petition in the Allahabad High Court being Civil Miscellaneous Writ No 2003 of 1963
The learned Single Judge who heard the writ petition dismissed the same by his judgment and order dated October 24 1967
A further Special Appeal No 1068 of 1967 carried by the appellant firm to the Division Bench of that Court also proved unsuccessful on December 5 1967
The appellant firm has come up in appeal to this Court
The only contention that was urged by counsel for the appellant firm before us in this appeal was that the supply of two lac maunds of sugarcane made by respondent No 4 to the appellant firm was not bonded sugarcane at all and as such the appellant firm was entitled to the concessions deductions in the minimum price payable in respect thereof to respondent No 4 in view of the Cane Commissioner s Notification dated June 1 1955
In support of this contention counsel relied upon sub cls
2 and 3 of cl 3 of the UP Sugarcane Supply and Purchase Order 1956 issued under section 16 of the Uttar Pradesh Sugarcane Regulation of Supply  Purchase Act 1953 and it was pointed out that under sub cl
2 within 14 days of issue of the reserving certain areas for a factory a cane grower or a Cane growers  Cooperative Society has to make an offer to supply cane grown in the reserved area to the occupier of the factory and under sub cl
3 it was obligatory upon the occupier of the factory for which such area has been reserved to accept the same within 14 days of the receipt of the offer and enter into an agreement in the prescribed form and it was urged that unless such offer was made within 14 days as prescribed 783 by sub cl
2 and was accepted within 14 days as prescribed by sub cl
3 the supply of sugarcane thereunder could not be regarded as supply of bonded sugarcane
Counsel pointed out that the offer of two lac maunds of sugarcane in the instant case was made by respondent No 4 long after the expiry of 14 days from the issuance of the order reserving certain areas for the appellant firm s factory and that offer had been accepted not within the limit prescribed in sub cl
3 and therefore the sugarcane so supplied by respondent No 4 to the appellant firm was not bonded sugarcane but ought to be classified as unbonded sugarcane  and as such the appellant firm was entitled to the concessions in the minimum price notified in the Cane Commissioner s Notification dated June 1 1955
It was further pointed out that though under sub cl
4 of cl 3 of the UP Sugarcane supply and Purchase Order 1954 the Cane Commissioner had the power to extend the date for making offers in respect of any reserved area no such extension had been granted by the Cane Commissioner in the instant case and therefore the offer of two lac maunds of sugarcane which was made by respondent No 4 on March 22 1955 long after the expiry of 14 days from the issuance of the order of the Cane Commissioner on November 1 1954 reserving certain sugarcane centres for the appellant s factory under section 15 of the Act could not culminate into an agreement under the statute or the UP Sugarcane Supply and Purchase Order 1954 that the agreement entered into between the parties on May 4 1955 in respect of the said supply must be regarded as an ordinary contract under the Indian Contract Act and that the sugarcane supplied under such ordinary contract must be regarded as unbonded sugarcane
In other words the contention was that only such sugarcane as would be supplied by a cane grower or a Cane growers  Cooperative Society under an agreement made in strict compliance of sub cls
2 and 3 of cl 3 of the UP Sugarcane Supply and Purchase Order 1954 could be regarded as bonded sugarcane
The question raised in the appeal really turns upon what is meant by the expression unbonded sugarcane occurring in the Cane Commissioner s Notification dated June 1 1955 and the true effect of sub cls
2 and 3 of cl 3 of the UP Sugarcane Supply and Purchase Order 1954
It must be stated however that neither the expression bonded sugarcane nor unbonded sugarcane has been defined either in the statute or in the UP Sugarcane Supply and Purchase Order 1954 and therefore regard must be had to the ordinary dictionary meaning of the said expressions
In Shorter Oxford English Dictionary the legal and technical meaning of the expression  bond 784 is given as a deed by which the Obliger binds himself his heirs executors or assigns to pay a certain sum to the obligee
In Stroud s Judicial Dictionary 4th Edn the expression bond is explained as an obligation by deed
It will thus be clear that the expression bonded sugarcane must mean sugarcane secured by a bond or deed
Under the Notification of the Cane Commissioner dated June 1 1955 certain deductions from the minimum price per maund of cane fixed for the season 1954 55 had been notified in respect of the unbonded sugarcane crushed on or after May 1 1955
In other words the concession is granted in respect of the supply of unbonded sugarcane  in contradistinction with supply of bonded sugarcane 
There is nothing in the Notification to suggest that any particular bond or a bond in accordance with the provisions of the UP Sugarcane Supply and Purchase Order 1954 was intended and therefore supply of bonded sugarcane  would mean supply of sugarcane which has been secured by a bond or an agreement and such supply will not be entitled to the concession
On a plain reading of the Notification in question therefore it will appear clear that since the supply of two lac maunds of sugarcane made by respondent No 4 to the appellant firm had been secured by the agreement that was entered into between the parties on May 4 1955 the said supply will have to be regarded as supply of bonded sugarcane and as such the appellant firm was not entitled to the concession in the minimum price payable in respect thereof to respondent No 4
Considering the question in the context of sub cls2 and 3 of cl3 of the UP Sugarcane Supply and Purchase Order 1954 also we are clearly of the view that the appellant firm was not entitled to the benefit of the Cane Commissioner s Notification dated June 1 1955
For this purpose it will be necessary to refer to section 15 of the UP Sugarcane Regulation of Supply and Purchase Act 1953 and set out Cl
3 of the UP Sugarcane Supply and Purchase Order 1954
Under s151 of the Act power has been conferred upon the Cane Commissioner after consulting the factory and the cane growerCanegrowers  Co operative Society to a reserve any area hereinafter called the reserved area or b assign any area hereinafter called an assigned area for the purpose of the supply of sugarcane to a factory in accordance with the provisions of s16 during one or more crushing seasons as may be specified
It was under this provision that the Cane Commissioner has passed order dated November 1 1954 reserving certain sugarcane centres reserved area for the appellant firm for the 1954 55 season
785 Clause 3 of the UP Sugarcane Supply and Purchase Order 1954 runs thus 3
Purchase of cane in reserved areas 1 The occupier of a factory shall estimate or cause to be estimated by the 31st day of October or such later date in a crushing season as on an application being made to the Cane Commissioner by the occupier of a factory may be fixed by the Cane Commissioner the quantity of cane with each grower enrolled in the Grower s Register and shall on demand submit the estimate to the Cane Commissioner and the Collector
2 A cane grower or a Cane growers  Co operative Society may within 14 days of the issue of an order reserving an area for a factory offer in Form A of the Appendix to supply cane grown in the reserved area to the occupier of the factory
3 The occupier of the factory for which an area has been reserved shall within fourteen days of the receipt of the offer enter into an agreement in Form B or Form C of the Appendix with the Cane grower or the Canegrowers  Cooperative Society as the case may be in respect of the cane offered Provided that any purchase of cane made before the execution of the prescribed agreement shall be deemed to have been made in accordance with such agreement
4 The Cane Commissioner may for reasons to be recorded in writing extend the date for making offers in respect of any reserved area
On a fair reading of the sub cls2  3 of cl 3 of the Order two or three things become at once clear
In the first place sub cl2 uses the expression may  and provides that a cane grower or Canegrowers  Co operative Society may within 14 days of the issue of an order reserving an area for a factory make an offer to supply the cane grown in the reserved area to the factory
That the period of 14 days mentioned in this sub clause is not imperative or mandatory is also clear from sub cl4 which confers power upon the Cane Commissioner to extend the date for making offer in respect of any reserved area
Secondly sub cl3 uses the expression shall  indicating that an imperative obligation is cast upon the factory to accept the offer 786 within 14 days from the receipt of the offer
Reading the two sub clauses together it becomes clear that if a cane grower or Canegrowers  Cooperative Society makes an offer within 14 days mentioned in sub cl2 it is obligatory upon the occupier of the factory to accept that offer within 14 days of the receipt of the offer this only means that if the offer is made by the cane grower or Cane growers  Cooperative Society beyond the period specified in sub cl2 or the extended time under sub cl4 it would not be obligatory but optional for the occupier of the factory to accept the said offer but if such offer made beyond the prescribed or extended period is accepted by the occupier of the factory a binding agreement comes into existence between the parties and sugarcane supplied thereunder would be bonded sugarcane  more so when the agreement is entered into in the prescribed form
Merely because the offer from the cane grower or Cane growers  Co operative Society emanates after the expiry of the period mentioned in sub cl2 it does not mean that the parties are prevented from entering into an agreement in the prescribed form and if they do enter into an agreement in the prescribed form as was the case here the sugarcane supplied thereunder would be bonded sugarcane 
It is not possible to accept the contention of learned counsel for the appellant that sugarcane supplied by the cane growers or Canegrowers  Cooperative Society could be regarded as bonded Sugar Cane  only if offer of the Cane grower or the Cane Growers  Co operative Society emanates within the period prescribed by sub cl2 and the same is accepted by the occupier within the period prescribed by sub cl
As stated earlier the true effect of sub cls
2 and 3 read together is that the compulsion or obligation to accept the offer on the part of the occupier of the factory arises only when the offer is made by the cane grower or Cane growers  Co operative Society within the time prescribed by sub cl2 or the extended time under sub cl4 but if the offer is made after the expiry of that period it is optional for the factory occupier to accept it or not but in cases where he accepts such offer a binding agreement comes into existence and the sugarcane supplied thereunder becomes bonded sugarcane
In the instant case the offer of additional quantity of two lac maunds of sugarcane was undoubtedly made long after the expiry of the period of sub cl2 but the same was accepted by the appellant firm and a binding agreement came into existence and what is more that a binding agreement was executed by the parties in the prescribed Form C 
Further the conduct on the part of the appellant firm in referring the dispute to arbitration and filing an appeal against the arbitrator s award under the relevant Rules clearly shows that the parties particularly the appellant firm treated the agreement dated May 4 1955 787 as one under the Act and the UP Sugarcane and purchase Order 1954
We are therefore of the view that the authorities below were right in coming to the conclusion that the said additional supply of two lac maunds of sugarcane by respondent No4 to the appellant firm was the supply of bonded sugarcane and therefore the appellant firm was not entitled to the benefit of the Cane Commissioner s Notification dated June 1 1955
In the result the appeal fails and is dismissed with costs
VDK Appeal dismissed


Summary:
The Government of India notified its decision that certain deductions in the minimum cane price on the basis of recovery of sugar from sugarcane will be allowed to sugarcane factories in UP on the cane supplied to them on and after May 1 1955 but that the deductions will be allowed only on unbonded cane crushed by each factory and not on bonded cane the latter of which shall have to be purchased by each factory at the minimum cane price already fixed for the season
In exercise of the powers delegated to him under section 3 of the  the Cane Commissioner UP issued a Notification on June 1 1955 whereunder the producers of sugar by vacuum pan process were allowed to make deductions as specified in the Schedule thereto from the minimum price of per maund of cane fixed for the season 1954 55 in respect of the unbonded sugarcane crushed on and after May 1 1955
The appellant firm taking advantage of this Notification granting concession in the minimum price made payment to Laskar Co operative Cane Development Union Ltd after making deductions in respect of 2 lac maunds of sugarcane supplied to it under an agreement entered into pursuant to the offer made to it on March 22 1955
However on December 21 1955 the Cane Commissioner issued a Recovery Certificate under Sections 17 and 18 of UP Sugarcane Regulation of Supply and Purchase Act 1953 against the appellant firm for a sum of Rs 5387910 being the amount deducted by the appellant firm while making payments to Laskar Co operative Union
On a challenge to legality of the Recovery Certificate the dispute was referred to the sole arbitrator the District Cane Officer under Rule 108 of the UP Sugarcane Regulation of Supply and Purchase Rules 1954
The arbitrator found that the supply of sugarcane was bonded cane and therefore gave an award that the appellant was not entitled to the concession and was liable to pay the minimum price therefor
An appeal to the Divisional Commissioner having been dismissed the appellant firm filed a Writ Petition in the Allahabad High Court which also was rejected
A further special appeal also proving unsuccessful the appellant firm appealed to the Supreme Court after obtaining a certificate of fitness
Dismissing the appeal the Court  HELD 1
Neither the expression bonded sugarcane nor unbonded sugar cane has been defined either in the Statute or in the UP Sugarcane Supply and Purchase Order 1954
Having regard to the ordinary dictionary 779 meaning of the said expressions the expression bonded sugarcane must mean Sugar Cane secured by a bond or deed
783 G H 784 A 2
Under the Notification of the Cane Commissioner dated June 1 1955 certain deductions from the minimum price per maund of cane fixed for the season 1954 55 had been notified in respect of the unbonded sugarcane crushed on or after May 1 1955
In other words the concession is granted in respect of the supply of unbonded sugarcane in contradistinction with supply of bonded sugarcane
There is nothing in the Notification to suggest that any particular bond or a bond in accordance with the provisions of the UP Sugarcane Supply and Purchase Order 1954 was intended and therefore supply of bonded sugarcane  would mean supply of sugarcane which has been secured by a bond or an agreement and such supply will not be entitled to the concession
On a plain reading of the Notification in question therefore it will appear clear that since the supply of two lac maunds of sugarcane made by respondent No 4 to the appellant firm had been secured by the agreement that was entered into between the parties on May 4 1955 the said supply will have to be regarded as supply of bonded sugarcane and as such the appellant firm was not entitled to the concession in the minimum price payable in respect thereof to respondent No 4 Laskar Co operative Cane Development Union
784 B E 3
On a fair reading of the sub cls
2 and 3 of cl 3 of the Order two or there things become at once clear
In the first place sub cl
2 uses the expression may  and provides that a cane grower or cane growers  cooperative Society may within 14 days of the issue of an order reserving an area for a factory make an offer to supply the cane grown in the reserved area to the factory
That the period of 14 days mentioned in this subclause is not imperative or mandatory is also clear from sub cl
4 which confers power upon the Cane Commissioner to extend the date for making offer in respect of any reserved area
Secondly sub cl
3 uses the expression shall  indicating that an imperative obligation is cast upon the factory to accept the offer within 14 days from the receipt of the offer
Reading the two sub clauses together it becomes clear that if a cane grower or cane growers  Co operative Society makes an offer within 14 days mentioned in sub cl
2 it is obligatory upon the occupier of the factory to accept that offer within 14 days of the receipt of the offer this only means that if the offer is made by cane grower or cane growers  Co operative Society beyond the period specified in sub cl
2 or the extended time under sub cl
4 it would not be obligatory but optional for the occupier of the factory to accept the said offer but if such offer made beyond the prescribed or extended period is accepted by the occupier of the factory a binding agreement comes into existence between the parties and sugarcane supplied thereunder would be bonded sugarcane  more so when the agreement is entered into in the prescribed form
Merely because the offer from the cane grower or cane growers  Co operative Society emanates after the expiry of the period mentioned in sub cl
2 it does not mean that the parties are preventive from entering in to an agreement in the prescribed form and if they do as was the case here the sugar cane supplied there under would be bonded sugarcane 
Therefore considering the question in the context of sub cl
2 and sub cl
3 of the UP sugarcane supply and Purchase Order 1954 also the appellant firm was not entitled to the benefit of the Cane Commissioner s Notification dated June 1 780 4
The contention that sugarcane supplied by the cane growers or cane growers  Co operative Society could be regarded as bonded sugarcane only if offer of the Canegrower or the Canegrowers Co operative Society emanates within the period prescribed by sub clause 2 and the same is accepted by the occupier within the period prescribed by sub cl
3 is not correct
786 D F 5
The true effect of sub clauses 2 and 3 read together is that the compulsion or obligation to accept the offer on the part of the occupier of the factory arises only when the offer is made by the cane grower or Cane growers  Co operative Society within the time prescribed by sub cl
2 or the extended time under sub cl
4 but if the offer is made after the expiry of that period it is optional for the factory occupier to accept it or not but in cases where he accepts such offer a binding agreement comes into existence and the sugarcane supplied thereunder becomes bonded sugarcane
786 E M
In the instant case the offer of additional quantity of two lac maunds of sugarcane was undoubtedly made long after the expiry of the period of sub cl
2 but the same was accepted by the appellant firm and a binding agreement came into existence and what is more a binding agreement was executed by the parties in the prescribed Form C 
Further the conduct on the part of the appellant firm in referring the dispute to arbitration and filing an appeal against the arbitrator s award under the relevant Rules clearly shows that the parties particularly the appellant firm treated the agreement dated May 4 1955 as one under the Act and the UP Sugarcane Supply and Purchase Order 1954
786 F H