Appeal No 226 of 1960
Appeal from the judgment and decree dated February 2 1956 of the Allahabad High Court in Special Appeal No 158 of 1954
MC Setalvad Attorney General for India Veda Vyasa R K Garg section C Agarwal Shiv Sastri and K K Jain for the appellant
ST Desai K section Hajela and C P Lal for respondent No 1
CK Daphtary Solicitor General for India Radhy Lal Agarwal and P C Agarwal for respondent No 2
764 1962
December 6
The Judgment of Das Kapur Sarkar and Hidayatullah was a delivered by Hidayatullah J Dayal J delivered a separate judgment
HIDAYATULLAHJ This is an appeal on a certificate granted by the High Court of Allahabad under Article 133 1 c of the Constitution against its judgment and order dated February 2 1956
By the judgment under appeal which was passed in a Letters Patent Appeal the Divisional Bench confirmed the order of a learned single judge dismissing the petition of the appellant under article 226 of the Constitution
Seth Banarsi Das the appellant before us was the petitioner in the High Court and the two respondents before us namely the Cane Commissioner U P Lucknow and the Cane Marketing Society Ltd Bijnor were the opposite parties
The petition asked for a number of writs in the alternative but its purport was to seek to prohibit the two respondents from continuing certain proceedings pending before the Cane Commissioner under rule 23 of the United Provinces Sugar Factories Control Rules 1938
That rule provides for arbitration in disputes touching agreements entered into by sugar cane factories and cane growers for supply of sugar cane as laid down by the United Provinces Sugar Factories Control Act 1938
The facts of the case are as follows The appellant was at the material time the lessee and Occupier of Shiva Prasad Banarsi Das Sugar Mills Bijnor for five years from the crushing season 1946 47 to 1950 51
The second respondent is the Cane Marketing Society Ltd Bijnor which is a society registered under the Uttar Pradesh Co operative Societies Act and one of its objects is to supply sugar cane grown by its members to the sugar mills
Before the control of 765 sugar cane cane growers whether they belonged to a co operative society or not sold sugar cane directly to the factories and made Supplies from any area as it suited them
The United Provinces Sugar Factories Control Act was passed for the purpose of licensing of sugar factories and for regulating the supply of sugar cane intended for use in such factories and the price at which it may be purchased and for such other matters as may be incidental thereto
The broad outline of the Act and the rules framed thereunder may be given here
Under the Act the control of sugar cane grown in the State was vested in an officer known as the cane Commissioner and Advisory Committees and Sugar Control Board were to be appointed to advise upon and effectuate control of sugar and sugar cane
There was a scheme for licensing of factories with which we are not concerned in this case
Chapter IV of the Act made provision for regulating the purchase of sugar cane
Under section 14 the State Government could require the Occupier  of any factory to submit to the Cane Commissioner an estimate in the prescribed form and manner of the quantity of sugar cane which would be required in his factory during a crushing season
This estimate was examined by the Cane Commissioner who after consulting the Advisory Committee in that area published it with such modifications if any as he
thought fit to make
Under section 15 the Cane Commissioner in consultation with the Advisory Committee if any and the Occupier  of the factory could issue an order declaring an area to be a reserved area  for the purpose of supply of sugar cane to a particular factory
Section 18 then provided as follows 18Purchase of cane in reserved area 1 A cane grower or a Cane growers  Co operative Society in a reserved area may offer in the form and by the date prescribed to supply to 766 the occupier of the factory for which the area is reserved cane grown by the cane grower or by the members of such Cane growers  Co operative Society as the case may be not exceeding the quantity if any prescribed for such grower or Cane growers  Co operative Society
2The Occupier or manager of a factory for which an area is reserved shall enter into an agreement in such form by such date and on such terms and conditions as may by prescribed to purchase the cane offered in accordance with sub section 1  Provided that he shall not enter into an agreement to purchase cane from a person who is a member of a Cane growers  co operative Society
3Except with the permission of the Provincial Government cane grown in a reserved area shall not be purchased in such area by a purchasing agent or by any person other than occupier of the factory for which such area has been reserved
4Cane grown in a reserved area shall not be sold by any person other than a cane grower or a Cane growers  Co operative Society Provided that a cane grower or a Cane growers  Co operative Society may deliver cane intended for use in a factory through another cane grower or through a carrier
5During the crushing season the Provincial Government may if it is satisfied that there is likely to be in the area reserved for a factory any quantity of cane available for sale to the occupier of the factory in excess of the quantity 767 for which he is required to enter into agree ments direct that cane shall not be purchased outside the reserved areas until the occupier of the factory enters into agreements to purchase all the cane offered to him in the reserved area  Provided that such prohibition shall not apply in respect of cane for the supply of which agreements in writing have been entered into before such direction was issued In addition to the reserved area section 19 provided for declaration of assigned area and purchase of sugar cane therein
The factory was authorised to take its supplies also from the assigned area
The important difference between the two areas was that the factory was bound to enter into agreements with cane growers or cane growers  co operative societies in an area reserved for the factory for the prescribed quantity of sugar cane but in an assigned area the Factory could enter into an agreement for a specified quantity of sugar cane as the factory desired
In other words in a reserved area if sugar cane of the prescribed quality was offered by the cane grower or cane growers  society the factory was bound to purchase that cane up to the prescribed quantity but in an assigned area the factory was at liberty to purchase cane as it needed subject to its entering into an agreement for the purpose
In addition to the reserved and assigned areas there was a third category namely areas which were neither reserved nor assigned
We are not concerned with such areas or the provisions dealing with the purchase of sugar cane from such areas
Section 27 provided for certain penalties
Sub section 3 b provided as follows 3 If the occupier or manager of a factory x x x x 768 b intentionally fails to enter into agree ments as required by section 2 of section 18 he shall be punishable with fine which may extend to two thousand rupees Section 30 gave power to the Government to make rules
The material portions of section 30 for our purpose are as follows 30 Power to make rules 1 The Provincial Government may make rules to carry out the provisions of this Act
2In particular and without prejudice to the generality of the foregoing power such rules may provide for x x x x uthe reference to the Cane Commissioner of disputes relating to the supply of cane for decision or if he so directs to arbitration the mode of appointing an arbitrator or arbitrators the procedure to be followed in proceedings before the Cane Commissioner or such arbitrator or arbitrators and the enforcement of the decisions of the Cane Commissioner or the awards of arbitrators In exercise of the powers conferred by the last quoted section the following rules among others were framed 15
Purchase of cane growing in a reserved area 1 The occupier or manager of a factory shall estimate or cause to be estimated by 30th September the quantity of sugarcane with each grower enrolled in the Growers  Register and shall submit the estimates to the Collector
The Collector may after such enquiries as he considers necessary modify the estimates and 769 cause them to be published in such manner as he may direct In framing these estimates sugarcane grown in more than one third of the area of land suitable for sugarcane cultivation in the holding of each grower may be excluded
2A cane grower or a cane grower s co operative society in a reserved area may offer in form 10 Appendix III by the 15th October each year to supply during the crushing season to the occupier or manager of the factory for which the area has been reserved cane not exceeding in the case of a cane grower the quantity estimated in accordance with subrule 1
3The occupier or manager of the factory for which the area is reserved shall enter into an agreement with the cane grower or the cane growers  co operative society as the case may be in forms 15 and 18 respectively or in any other form approved by the Cane Commissioner within a month of the offer mentioned in sub
rule 2
4The occupier or manager of a factory shall spread the purchase made in the reserved area in an equitable manner and shall in the case of cane grower of the reserved area make purchase of cane only after issuing requisition slips
In order to comply with this rule the occupier or manager shall cause identification cards to be distributed to all cane growers of the reserved area to whom requisition slips have been issued and shall maintain a record of the same
He will also keep a record of the requisition slips issued and distributed to the growers and returned by them
770 5Cane grown in a reserved area shall not except with the permission of the Cane Commissioner be purchased by any person with out the previous issue at convenient centres in the reserved area of requisition slips and identification cards to the growers by the occupier or manager of the factory for which the area is reserved
6Requisition slips and identification cards to members of a can growers  co operative society shall not be issued except by such society
7In case of a dispute whether a particular system adopted for the purchase of cane grown in the reserved area is equitable or not the dispute may be referred to the Cane Commissioner whose decision shall be final 23
Arbitration 1 Any dispute touching an agreement referred to in section 18 2 or section 19 2 of the Act shall be referred to the Cane Commissioner for decision or if he so directs to arbitration
No suit shall lie in a civil or revenue court in respect of any such dispute
2If the Cane Commissioner directs the reference of a suit to arbitration it shall be referred to a sole arbitrator acceptable to the parties concerned
In case no sole arbitrator is acceptable to both parties the dispute in question shall be referred to a Board of Arbitration consisting of one representative of each party and an umpire acceptable to both representatives
If the representatives or the parties are unable to elect such an umpire within a fortnight the Cane Commissioner shall either himself act as umpire or nominate one
The umpire shall be the President of the Board of 771 Arbitration and shall have a vote in case of disagreement between the representatives
3The sole arbitrator or the President of the Board of Arbitration shall have the full power of a court in respect of summoning the parties witnessess and records
4 The decision of the sole arbitrator or Board of Arbitration shall be final and binding on both parties and shall not be called in question in any civil or revenue court
5 The sole arbitrator or the Board of Arbitration shall give an award within the time fixed by the Cane Commissioner failing which the Cane Commissioner may decide the dispute himself or appoint another arbitrator or arbitrators for the purpose
6Any party considering himself aggrieved by an award may appeal to the Commissioner of the Division in which the factory is situated within one month of the date of the communication of the award and the Commi ssioner shall pass such order as he deems fit
7The Commissioner s order in appeal shall be final
8On application to the Civil Court having jurisdiction over the subject matter of the decision or award the decision of the Cane Commissioner or the award of the arbitrator or arbitrators or the Commissioner s order in a peal against an award shall be enforced by the Court as if such decision award or order in appeal were a decree of that Court
  25Penalties 1 Any person contravening any of the provisions of these rules for which no 772 penalty has been provided in the Act or not obeying a lawful order or direction conveyed to him in writing which the Cane Commissioner or a Collector or an Inspector is authorised to pass or issue shall be punishable with fine which may extend to Rs 750 Proviso omitted We are concerned with the crushing seasons of 1949 50 and 1950 51
In these two years the Cane Marketing Society offered sugar cane by Form 10
According to the appellant the Society should have offered 85 of its net estimated crop but it made an offer in both the years which was less than 85 and actually supplied a quantity which was still less
The relevant figures or the two years according to the appellant were as follows 1949 50 1950 51 In Lacs of Maunds Net estimated Crop 4582 5520 Less 15 682 828 85 which should have been offered 3900 4692 Opposite party No 2 offered to sell finally 3200 3200 Shortage in offer 700 1492 Actually supplied 231113129 7954 Actual shortage 1588869171246 The appellant therefore preferred a claim to the Cane Commissioner for compensation for the short supply calculated at one anna per maund of sugar cane by an application dated October 31 1950
This was preceded by a long correspondence 773 which began in June 1950
Of this correspondence a few of the letters have been printed in the record of the case
The first letter is by the appellant to the Cane Marketing Society Ltd Bijnor in which a claim for Rs 102116 13 0 as compensation on account of short supplies in the season 1949 50 was made
The next letter in August 1950 showed that the Society was claiming a sum of Rs 164094 4 6 as commission for the years 1948 49 and 1949 50 and that the appellant was setting up a counterclaim for Rs 104890 2 9 as compensation for short supply
On November 41950 the appellant wrote a final letter giving the accounts and sending a cheque for Rs 22628 13 0 in full satisfaction of the claim
This cheque was accepted by the Society but under protest
The real dispute was about the compensation for short supplies which the Society did not admit
According to the Society they had a claim for Rs 263624 2 6 and they also moved the Cane Commissioner under Rule 23 1 of the U P Sugar Control Act and Rules 1938 for arbitration
The Cane Commissioner who had not acted on the letter of the appellant then passed an order on July 26 1951 calling upon the parties to be present before him on August 18 1951 for the decision of the dispute
On September 3 1951 the appellant filed a petition under article 226 of the Constitution for a Writ of Certiorari to quash the proceedings pending before the Cane Commissioner for a Writ of Prohibition for restraining the Cane Commissioner from continuing the proceedings and for a writ of quo warranto for a declaration that the Cane Commissioner had no right to assume the office of arbitrator in the dispute
In support of the petition the appellant contended that there could be no arbitration in this dispute because the agreement was not a proper agreement as the Society had omitted to complete the prescribed form XII by leaving the Schedule the area of cultivation and the estimated yield blank and as the agreements were not signed 774 by the Mills who did not accept them in their incomplete state
In the alternative it was contended that Rule 23 offended against article 14 of the Constitution because it provided two different methods of decision of the disputes one by the Cane Commissioner and the other by arbitration leaving it to the arbitrary will of the Cane Commissioner to choose which it should be in a particular case and by providing an appeal in one case and not in the other
It was further contended that the provision in sub Rule 6 of Rule 23 which provided for an appeal went beyond the rule making power of the Provincial Government as no such power was conferred on it by section 30 of the Act and sub Rule 6 being unseverable the whole of Rule 23 must fail and that there could be no action by the Cane Commissioner
The petition was heard by Chaturvedi J and was dismissed
A special appeal under the Letters Patent was heard by Mootham C J and C B Agarwala J
Both of them concurred in dismissing the appeal but there was a difference as to sub Rule 6 between the learned judges
According to the learned Chief justice in making sub Rule 6 of Rule 23 the Provincial Government had exceeded its power and the Rule was invalid but the sub Rule was severable and the rest of the Rule was validly framed
According to Agarwala J the sub Rule was properly framed and there was a right of appeal both against the order of the Cane Commissioner as well as the award of the arbitra tors to the Commissioner of the Division
Both the learned judge held that the provisions of Rule 23 were not discriminatory and thus not void under article 14
In this appeal the same points which were urged before the High Court have been urged before us
The scheme of the Act and the Rules analysed above shows that the purchase of suger cane was 775 regulated
There were reserved areas assigned areas and other areas
Supplies from a reserved area were meant for a factory for which the area was reserved and forms were prescribed for offer agreements etcso that the scheme might not be defeated by parties contracting out of the scheme
We are not concerned with the merits of the rival contentions about short supply or unpaid commission
Those are matters for adjudication elsewhere
We are only con cerned with the legality of the proceedings before the Cane Commissioner
This dispute has been referred to him under Rule 23 not only by the Society but earlier also by the appellant
The appellant now says that he had made a mistake arid seeks to avoid a decision by the Cane Commissioner or by arbitrator and has set up two contentions
The first is that by reason of three defects in the agreement of 1949 50 season and two in the agreement of 1950 51 season there is no binding contract as is contemplated by section 182 and the agreement not having come into force the Commissioner has no power to act under Rule 23
The defects are  a Absence of signature for the mills in both agreements b Schedule left blank in both agreements c Two blanks left in the agreement for 1949 50 season where an area and a quantity had to be mentioned
The second contention is that Rule 23 enjoining arbitration is void under articles 13 and 14 of the Constitution as on its face it allows discrimination and sub Rule 6 of Rule 23 making provision for an appeal is beyond the rule making power conferred by section 30 of the Act and that sub Rule being unseverable Rule 23 as a whole fails
We shall deal with the first contention separately and the other two points in the second contention together
776 The first question thus to consider is whether there is a binding contract between the parties or not
Clause No 10 of the agreement which is in the prescribed form says that all disputes touching the agreement shall be decided by arbitration as provided for in the rules and no suit shall lie in a civil or revenue court in respect of any such dispute
The exclusion of the jurisdiction of courts is also provided in Rule 231
If the agreement were binding the matter would have to be referred to arbitration as laid down in Rule 23
The agreement was challenged in the petition under Article 226 on four grounds
Three of them deal with the facts in dispute with which we are not concerned
The last was that no agreement was entered into at all between the parties as contemplated under section 182 of the UP Sugar Factories Control Act and in the form No 12 as prescribed under the Rules made thereunder
The defects that are pointed out now it is said make out that there was no agreement at all
To begin with the agreement was accepted on both sides and was acted upon
The appellant himself moved the Cane Commissioner for the enforcement of the agreement on October 31 1950
He now says that this was under the erroneous belief that even without a written agreement Rule 23 app lied
Even in the proceedings before the Cane Commissioner the appellant caused an appearance to be made and asked for time
No objection that there was no valid agreement was taken
In his letters to the Society the appellant relied upon the agreements and calculated his compensation and the commission of the Society on its basis
The appellant sent requisitions for supplies for sugar cane in accordance with Rule 155 and 6 and the agreement
He accepted bills and paid for them
The appellant had the signed form 10 and also form 12 with him
He could have got the blanks filled in and also signed the agreement but evaded doing this
By his conduct 777 the appellant appears prima facie to have accepted the agreement though now he is relying on his own default and petty omissions in the form
Now it must be remembered that this form was prescribed so that the scheme of the Act and Rules should work smoothly and the purchase and sale of sugar cane should follow a particular pattern
The failure to enter into an agreement in the prescribed form was made an offence to compel the factories to keep to the scheme
Here the form in fact has been used
All the terms are included and none has been altered or new terms added
The agreement has also been acted upon
The question is whether the want of signature of the complaining party and the existence of the blanks render the contract void and non existing
There is no doubt that in the agreement for the season 1949 50 the area of the crop in one place and the approximate yield from that area in another have not been filled in the blank space provided for that purpose
The form in 1950 51 has no such blanks
The agreement was preceded by from No 10 which showed these particulars
That form was with the appellant and it supplied these two details namely the area under cultivation and the estimated yield Indeed the two forms between them contained all the particulars which are required to be entered in the body of the agreement
As regards the schedule to the agreement the headings read as follows Village Area under sugar Approximate Remarks cane Deal Ra yield in Mdstoon Plant If the appellant required this information it could have been furnished
The Schedule merely gives details village by village of the area under cultivation mentioned in form No 10 and the body of the agreement and also shows the quality grown 778 in each village
This is obviously to facilitate re quisitions being sent and the appellant if he has any complaint on this score can raise it in the proceedings
The banks in the body of the agreement for 1949 50 thus are insignificant
Those details were already mentioned in form 10
They do not bear upon the terms which are quite unaffected by the omissions
The form for 1949 50 season was therefore not invalid because of the omissions in the body of the agreement
The schedule was intended to record the details of the crop grown but those details were not an integral part of the agreement or its terms
The agreements for 1949 50 and 1950 51 season were therefore not invalid for this reason also
This leaves over the absence of the signature of the party who had the custody of the document and who is now complaining of its absence
It is somewhat odd that he should complain of the lack of his own signature because it is tantamount to his making a virtue of his own lapse
The argument is therefore attempted to be put on a legal foundation and it is that section 18 2 used mandatory language and attached penal consequences and the slightest deviation in a material respect and particularly the lack of signature of one of the contracting parties renders the agreement null and void
What the law requires is that the cane growers and the factories should in view of the scheme conform to certain terms and conditions which have been predetermined so that the scheme of rationalisation does not fail
For this purpose a form is prescribed and the form shows the place where the parties have to sign in token of their acceptance
Of course the terms could be accepted orally but the section requires that the contract should be in a particular form and hence in writing
As to signatures it was held by Duke L J as he then was in Ruf T A  Co vs Pauwels 1 as follows 1  670779 As to the suggestion which was made that the words contract in writing  imports a contract made by means of a writing or writings signed by both parties I do not think the words necessarily have that meaning
A document purporting to be an agreement may be an agreement in writing sufficient to satisfy the requirements of an Act of Parliament though it is only verified by the signature of one of the parties
Re Jones The learned Attorney General however contends that the prescriptions of section 182 being manda tory they had to be followed to the letter
He urges that in as much as the Act and the rules prescribe a penalty for breach the section cannot but be regarded as mandatory in all its parts
He assumes that the appellant may be guilty and punished but says he the mandatory provision not having been followed according to the letter there can be no resulting valid contract
A large number of rulings on how to distinguish between mandatory and directory provisions of law were cited before us in support of the contention
More cases were cited  to show that where a form is prescribed the form and must be used otherwise there is no contract
We shall only briefly refer to them
The general rule as to which provision of law can be regarded as mandatory and which directory is stated in Maxwell on the Interpretation of Statutes at page 364 It has been said that no rule can be laid down for determining whether the command of the statute is to be considered as a mere direction or instruction involving no invalidating consequence in its disregard or as imperative with an implied nullification for dig  obedience beyond the fundamental one that 780 it depends on the scope and object of the enactment
It may perhaps be found generally correct to say that nullification is the natural and usual consequence of disobedience but the question is in the main governed by considerations of convenience and justice R vs Ingall 2  per Lush J and when that result would involve general inconvenience or injustice to innocent persons or advantage of those guilty of the neglect without promoting the real aim and object of the enactment such an intention is not to be attributed to the legislature
The whole scope and purpose of the statute under consideration must be regarded
The general rule is that an absolute enactment must be obeyed or fulfilled exactly but it is sufficient if a directory enactment be obeyed or fulfilled substantially
 This rule has been applied in many cases both in India and in England
In State of U P vs Manbodhan Lal Srivastava 1 this Court observed that no general rule can be laid down but the object of the statute must be looked at and even if the provision be worded in a mandatory form if its neglect would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty and at the same time would not promote the main object of the Legislature it is to be treated only as directory and the neglect of it though punishable would not affect the validity of the acts done These observations have been followed in other cases and recently in Bhikraj vs Union of India 2 it was observed that where a statute requires that a thing shall be done in a particular manner or form but does not itself set out the consequences of non compliance the question whether the prescription of law shall be treated as mandatory or directory could only be solved by regarding the object purpose and scope of that law
If the statute 1  2 AIR 1962 113119781 is found to be directory a penalty may be incurred for noncompliance but the act or thing done is regarded as good
It is unnecessary to multiply these cases which are based upon the statement in Maxwell which is quoted over and over again
Now the prescription of the law in the present case was that the cane growers and the factory must enter into an agreement in a prescribed form
That form has in fact been used only there are certain blanks and the appellant has not signed where he was expected to do so
Reliance is placed by the appellant upon a decision of the House of Lords reported in Thomas vs Kelly 1 particularly the observations of Lord Macnaghten where a distinction was made between the words in accordance with the form and in the form
It is argued that the Act and the rules in the present case require the agreement to be in the form prescribed and not in accordance with the form
It is submitted that a substantial compliance may be permissible when the words of the statute are  in accordance with the form but that strict compliance is necessary when the words are in the form The form in Thomas vs Kelly 1 was in a different category from their form which we have
Under the statute which prescribed the form a bill of sale it was provided that a bill of sale given by way of security was void unless made in accordance with the form
 The form used there being not in accordance with the form prescribed was held to be void though there are observations to show that if this consequence had not been attached a departure from the statutory form in any thing which was not a characteristic of that form would not have been fatal
In the body of the bill of sale executed in that case there was no description of the things intended to be assigned and this portion was regarded as characteristic of the form prescribed
There are some cases of this Court in which the prescribed forms have been considered In two 1 782 cases under the Representation of the People Act1950 the form for making a security deposit which was prescribed was not strictly followed but it was held that it was merely a matter of form and as there was substantial compliance the penal consequences did not ensue
See Jagan Nath vs Jaswant Singh 1 and Kamaraja Nadar vs Kunju Thevar 2 In Hari Vishnu Kama the vs Syed Ahmed Ishaque 3 votes not given in the form prescribed were held to be invalid because the form prescribed was considered to be essential and an intention of the voter expressed otherwise than in the form prescribed was considered to be an intention not expressed at all
In Radhakisson Gopikisson vs Balmukund Ramchandra 4 a by law provided that contract between agents and their constituents shall be in the form prescribed
It was held by the Privy Council that a literal compliance with the forms was not essential if the contract contained all the terms and conditions set out in the form but it was otherwise if it did not
In the present case the form prescribed set out a number of conditions and these have all been incorporated in the agreement which has been executed by the society
In other words the form has been used
There is no deviation from the prescribed form except in respect of the three defects which we have mentioned earlier
We have pointed out that the failure to execute the agreement in the form is made an offence but no other consequence is indicated if the form is not followed
The utmost that can be said is that if the form which was used included conditions which were at variance with the conditions in the prescribed form a contract might not have resulted
But we need not express any opinion on this because in this case the terms as stated in the prescribed form are the terms in the form used
We have pointed out that no consequence attaches to the failure to observe the form except punishment by fine and section 18 2 is capable 1  2 3  4 1932 LR 60 1A 63783 of being read as directory
Even if it be read as mandatory we have shown already that the failure of the appellant to sign the form is not a matter of which he can take advantage regard being had to his own conduct
The blanks also do not matter in view of the existence of form No 10 which suppli ed the information accidentally omitted from the agreement
The form is also sufficiently identified by the signature on behalf of the Society and it has been acted upon not only by the Society but also by the appellant who is complaining of the want of signature
In our opinion the agreement was binding
It may be pointed out that the arbitration clause in the agreement was enforceable if agreed to even without the signature of the appellant as it is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties and it is sufficient if the terms are reduced to writing and the agreement of the parties thereto is established
See Jugal Kishore Rameshwardas vs Mrs Goolbai Hormusji 1
In our opinion even if the section be held to be mandatory to the extent that the terms as prescribed should appear in writing that is complied with in this case
There was thug a binding contract between the parties and the dispute was to be resolved as required by Rule 23
The appellant has an alternative argument by which he challenges the validity of Rule 23 itself
He says that Rule 23 permits the Cane Commissioner to follow two different methods for the adjudication of the disputes
One method is that the Cane Commissioner can himself hear and decide the dispute and the other is that he can direct the parties to have their dispute decided by arbitration
It is said that Rule 23 thus confers on the Cane Commissioner an arbitrary power to proceed with some cases in one way and in some cases in another because there is no 1  784 guiding principle
It is also contended that one of the procedures namely the decision by the arbitrators gives a right of appeal from the award to the Commissioner of the Division while there is no right of appeal in the other namely decision by the Cane Commissioner and there is thus discrimination between those persons whose case is decided by the Cane Commissioner and those whose case is decided by arbitration
It is contended that the Commissioner is given an arbitrary power to discriminate between one case and another in as much as he can decide one case himself and refer another to arbitration and the rule thus offends against the equal protection clause contained in article 14 of the Constitution
Reference is made to those cases in which this Court has ruled that in such circumstances the law is void
It is also contended that Rule 23 contains a provision for appeal but sub r6 providing for an appeal goes beyond the power conferred by section 30 which confers the rule making power on the Provincial Government
It is also said that sub r6 is not severable from the rest of the Rule because the Provincial Government would not have made a rule for arbitration in that form if it was not able to enact a rule giving a right of appeal to an aggrieved party when there was arbitration
It is thus contended that sub r6 allowing the right of appeal should be struck down as ultra vires the Provincial Government and the whole rule because sub r6 is not severable from the rest of the rule
The arguments are somewhat conflicting
If sub r6 was ultra vires the Provincial Government and must be struck down then one of the reasons on which the complaint of discrimination is based must disappear provided the sub ris severable because the decision in either case then would be final
It is only if it is unseverable that other considerations would arise
It is therefore necessary to see if section 30 of the Act confers power to provide for appeal from 785 the award of the arbitrators
An appeal is no doubt a creature of statute and does not lie in the nature of things
Under the general law relating to arbitration there is no appeal against an award
The power to provide for an appeal by a rule must therefore flow from section 30 of the Act
Section 30 first confers a general power to make rules and then enumerates as illustrative of the general power certain topics on which rules in particular may be made  The general power is conferred by the first sub section which reads The Provincial Government may make rules to carry out the provisions of this Act
 It is argued by the appellant that this sub section does not use the common formula carry out the purposes of this Act and the Provincial Government could only provide for an appeal if a provision enabling it to  do so existed in the Act and no such provision regarding appeals is to be found
The other side relies upon sub section2 which says that rules may provide for  u the reference to the Cane Commissioner of disputes relating to the supply of Cane for decision or if he so directs to arbitration the mode of appointing an arbitrator or arbitrators the procedure to be followed in proceedings before the Cane Commissioner or such arbitrator or arbitrators and the enforcement of the decisions of the Cane Commissioner or the awards of arbitrators
 It is contended that this clause confers on the rule making authority the power to make rules regarding disputes relating to the supply of cane for decision by arbitration and being itself a provision of the Act 
rules can be made to carry out this provision
The appellant however contends that 186 clause u mentions only four matters and the provision of an appeal is not one of them
In our opinion clause u conferred a general power to make rules for the resolving of disputes either by the Cane Commissioner or if he so directs by arbitration and to give effect to the latter part of this provision arbitration with an appeal from the arbitrator s decision would be giving effect to the provisions as a whole
In this sense sub r6 providing for an appeal against the decision of the arbitrators must be considered as a rule giving effect to the provision of section 30 2 u providing for the resolving of disputes by arbitration
Sub Rule 6 was thus within the rule making power of the Provincial Government and it is unnecessary to discuss whether it is severable or not from the rest of the rule
We shall now pass on to the main contention in this case that Rule 23 provides for two different types of procedures to be followed at the option of the Cane Commissioner
If it could be said that the rule as framed allows the Cane Commissioner to discriminate between one party and another then the rule must offend Article 14
We shall therefore see whether there is any room for discrimination at the hands of the Cane Commissioner
It is necessary in this connection to see first whether the Cane Commissioner can compel a party to go to arbitration against his will
The rule says that any dispute touching an agreement shall be referred to the Cane Commissioner for decision or if he so directs to arbitration
It also provides that no suit shall lie in a civil or revenue court in respect of any such dis pute
At first sight it does look as if the Cane Commissioner can pick and choose between two disputes of like nature keeping one two himself  and sending another for decision by a sale arbitrator or Board of arbitrators
But the purport of the first sub Rule is that an arbitration can be with the permission of the Cane Commissioner 787 and parties cannot go to arbitration without the permission of the Cane Commissioner
The rest of the rule shows that there can be no arbitration without the consent of the parties
If the reference to arbitration is purely on a voluntary basis then there can be no complaint that two different procedures are provided for the solution of the same kind of disputes
If parties cannot be compelled to go to arbitration and refuse to go to arbitration then the Cane Commissioner must decide the dispute himself
If this view was correct then there is but one mode of deciding disputes namely by the Cane Commissioner and an alternative mode no doubt under the direction of the Cane Commissioner but only if the parties agree by arbitration
Therefore the provisions regarding arbitration cannot be compared with the procedure before the Cane Commissioner and the provision for an appeal in the former but prima facie not in the latter loses all significance
The procedure of arbitration with the appeal included really applies only if both sides accept that procedure willingly
To determine whether the procedure involving arbitration is voluntary or not we shall have to examine Rule 23 in some detail but before we do so we shall advert to section 46 and three other sections of he Arbitration Act
That section provides  The provisions of this Act except sub section 1 of section 6 and sections 7 12 36 and 37 shall apply to every arbitration under any other enactment for the time being in force as if the arbitrations were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement except in so far as this Act is inconsistent with that other enactment or with any rules made thereunder
 It was admitted before us by the learned counsel for the appellant that section 46 in its first part does not apply but it was argued that section 8 9 and 10 of the 788 arbitration Act must be considered in deciding whether the arbitration is purely on a voluntary basis or not
We have thus to compare the provisions of Rule 23 with those of these sections to find out if the rule prevails over the sections
Rule 232 provides that when the Cane Commissioner directs the reference of the dispute to arbitration it shall be referred to a sole arbitrator acceptable to the parties concerned
It is thus clear that arbitration by a sole arbitrator can only be by consent of parties
New if the matter were governed by section 8 of the Arbitration Act it would be open to any party to serve the other party with a written notice to concur in the appointment and after a lapse of a fortnight the Court could be moved to make the appointment
This provision is clearly inconsistent with what happens in the same circumstances under the Rule
The Rule provides  in case no sole arbitrator is acceptable to both parties the dispute in question shall be referred to a Board of Arbitration consisting of one representative of each party and an umpire acceptable to both representatives
The Board is a three member board and this eliminates from consideration section 8
It also excludes section 9 of the Arbitration Act which deals with situations in which the reference is to two arbitrators and if one party fails to appoint his arbitrator the other party after appointing his own arbitrator can give a notice and the appointed arbitrator becomes the sole arbitrator
Under Rule 23 this cannot happen
Section 9 is thus inconsistent with a three member board which is the sine qua non of the Rule
The Rule provides that each party must appoint his own arbitrator and then the umpire is to be chosen by the two representatives
Tile Cane Commissioner comes into the picture again when the representatives are unable to agree regarding the umpire
But there is an initial stage at which any of the parties can frustrate the arbitration by declining in limine to 789 select his own arbitrator
The arbitration must therefore be by agreement or it cannot take place at all
It remains to mention section 10
That section has no relation to the appointment of arbitrators to begin with
It deals with the position of the third arbitrator chosen by two arbitrators appointed by the parties
That stage does not reach at all if one of the parties does not appoint his arbitrator
It is thus quite clear that sections 8 9 and 10 of the Arbitration Act do not apply being inconsistent with Rule 23
It is also quite clear that the decision by the Commissioner is the normal mode of disposing of disputes regarding the supply of sugar cane
The Cane Commissioner has the power to direct that the dispute be referred to arbitration but the rules show that there can be no arbitration unless the parties themselves agree
If it is to a sole arbitrator then the sole arbitrator must be acceptable to the parties concerned
If parties do not agree about the sole arbitrator the arbitration is by a Board of arbitrators consisting of one representative of each party and an umpire acceptable to both representatives
The Rule stops short of providing what is to happen if a party does not appoint his representative and the Arbitration Act furnishes no answer because it is inconsistent with the Rule
It is therefore obvious that the arbitration must be with the consent of parties and they must express this consent either by selecting an agreed sole arbitrator or by appointing their representative on the Board
This choice is entirely theirs If the parties do not agree thus far there can be no arbitration at all and the case must be disposed of by the Cane Commissioner himself
Where there are two procedures one for every one and the other if the disputants voluntarily agree to follow it there can be no discrimination because discrimination can only be 790 found to exist if the election is with someone alse who can exercise his will arbitrarily
It remains to consider an argument which was raised by Mr Veda Vyasa at the end of the hearing but which was not urged by the learned Attorney General and it is that there may be discrimination in as much as the Cane Commissioner may refer some disputes to arbitration and keep some to himself even though in all of them parties wish for arbitration
In other words the discrimination is said to exist the other way round that is to say not because there are two modes from which one may be selected arbitrarily but because parties in some cases may be deprived of their election to proceed by arbitration
As we have said the normal mode is decision by the Cane Commissioner with a possibility of arbitration by the agreement of parties
It is most unlikely that the Cane Commissioner would decline to refer a dispute to arbitration where the parties agree that it should be so referred
Where the Cane Commissioner declines to make a reference the question may arise whether he could not be compelled to do so and also whether his decision given against the wishes of the parties would be binding on the parties
But we cannot say that the rule offends Article 14 because the Cane Commissioner may himself decide a dispute which the parties wish to go to arbitration
In our opinion the agreement was a binding agreement and Rule 236 of the UP Sugar Factories Control Rules 1938 was not ultra vires the Provincial Government and the Rule as a whole does not offend Article 14 of the Constitution
This appeal must therefore fail
It is dismissed with costs
RAGHUBAR DAYAL J
I have had the advantage of perusing the judgment of my learned brother HidayatullahJ and I agree that there was a binding contract between the parties and in the view of 791 cl10 the dispute was capable of being referred to arbitration
1 however do not agree that r 23 of the U P Sugar Factories Control Rules 1938 is not discriminatory
Sub r1 of r 23 provides that the dispute be referred to the Cane Commissioner for decision orif he so directs for arbitration and thus gives discretion to the Cane Commissioner to direct that the dispute touching the agreement be referred to arbitration
There is nothing to guide his discretion
The procedure contemplated seems to be that when a party approaches the Cane Commissioner for the settlement of the dispute the Cane Commissioner may either proceed to decide the dispute himself or may direct the party to go to arbitration
There is nothing in this sub rule to suggest that the Cane Commissioner can refer the dispute to arbitration by arbitrators only when the parties agree to have the dispute so settled
In the absence of such a provision the discretionary power of the Cane Commissioner cannot be restricted
There seems to be no justification for taking the clause if he so directs  to be if he so directs on the parties agreeing to have the dispute settled by arbitrators 
Clause 10 of the agreement in Form 12 together with the direction of the Cane Commissioner amounts to the arbitration agreement
Once the Cane Commissioner has given the necessary direction the dispute is to go to the sole arbitrator acceptable to the parties concerned
This is what sub r2 provides
In case no sole arbitrator is acceptable to both the parties the dispute is to be referred to a Board of Arbitration
The parties can thus avoid arbitration by the sole arbitrator by their not agree ing to any particular person to act as sole arbitrator
If the parties do not accept any sole arbitrator each of the parties has to appoint one representative 792 to the Board of Arbitration and the representatives so appointed then appoint an umpire acceptable to them
It is suggested for the respondent that in case a party does not wish the matter to be referred to the Board of Arbitration it can easily avoid it by not appointing a representative and that in that contingency the Cane Commissioner will have to decide the dispute himself
If the parties agree to appoint a representative the reference of the dispute to the Board of Arbitration would be a reference with the consent of the parties and therefore no question of discrimination can arise even if the incidents of the dispute decided by the Cane Commissioner himself and by the Board of Arbitration be different
Sub r2 or any other sub rule of r23 does not provide what is to happen when any of the parties does not appoint a representative
It does not necessarily follow from the absence of such a provision that the dispute goes back to the Cane Commissioner for decision or that the Cane Commissioner is empowered to withdraw his direction of referring the dispute to arbitration
Rule 23 has no such express provision in this regard though sub r5 expressly provides for the Cane Commissioner to take charge of  the dispute afresh in another contingency
Once the Cane Commissioner has directed reference of the dispute to arbitration he in the absence of any provision in the rules empowering him to do so is not to withdraw that direction and take over the decision of the dispute himself
The omission to provide for such a contingency can only mean that the rule does not contemplate a party not nominating his representative
This appears to be more reasonable to suppose than to hold that the reference of the dispute reverts to the Cane Commissioner who had already decided not to decide the dispute himself
Further the party s nominating a representative would not make the reference to arbitration a 793 voluntary act
The parties have no choice
They had to enter into an agreement in Form 12
Their agreeing to cl 10 of the agreement is not voluntary but is due to statutory requirement
So is their agreement to nominate representative to the Board of Arbitration as they cannot go to a Civil Court for the decision of the dispute in view of sub r
There is nothing in r 23 to indicate that the decision of the dispute by the Cane Commissioner is the normal procedure contemplated by the rule
Of course the Cane Commissioner can act as an umpire if he so desires in case the two representatives appointed by the parties to the Board of Arbitration are unable to elect an umpire within a fortnight of the reference to them
In case the Board of arbitration does not give the award within a time fixed by the Cane Commissioner the dispute is to be deemed to have been freshly referred to the Cane Commissioner as sub r5 in these circumstances empowers the Cane Commissioner to decide the dispute himself or to appoint another arbitrator or arbitrators for the purpose
It is clear from the various provisions of r 23 that there is a difference in the procedure for the dispute being decided by the Cane Commissioner and the dispute being decided by the arbitrator or Board of Arbitration
In the former case the decision of the Cane Commissioner is final and enforcible by the Civil Court referred to in sub r
In the latter case the award of the sole arbitrator or the Board of Arbitration is appealable to the Commissioner of the Division in which the factory is situated and the Commissioner s order is final and enforcible by the Civil Court
It follows that the procedure provided by r 23 for decision of the dispute touching the agreement is such that parties similarly situated may have the dispute decided by different person an by different procedures according to the 794 inclination of the Cane Commissioner whose discretion in this matter is uncontrolled by any guiding principles
The rule therefore offends against article 14 of the Constitution and is void
It is also contended that sub r6 providing an appeal to the Commissioner against the order of the arbitrator or Board of Arbitration is void as the State Government had no power to make a provision about appeal
Sub section1 of section 30 of the U P Sugar Factories Control Act empowers the State Government to make rules to carry out the provisions of that Act There is nothing in the Act to the effect that provision be made for an appeal against the award of the arbitrator or arbitrators
A rule providing for appeal against the order of the arbitrator or arbitrators is therefore not a rule to carry out any provision of the Act
Clause u of sub section 2 of section 30 states that the State Government may make rules to provide for the reference to the Cane Commissioner of disputes relating to the supply of cane for decision or if he so directs to arbitration the mode of appointing arbitrator or arbitrators the procedure to be followed in proceedings before the Cane Commissioner and such arbitrator or arbitrators and the enforcement of the decisions of the Cane Commissioner or of the award of the arbitrators
It is true that these provisions relate to the settlement of disputes between the parties but that by itself does not mean that the State Government can provide for appeals against the orders of the arbitrator or arbitrators
These provisions of clu do not expressly state that the rule can provide for an appeal against the award of the arbitrator
Provisions of clu make no reference either for the provision of an appeal or for the procedure to be followed by the appellate Tribunal or for the enforcement of the order of the appellate Tribunal
The absence of such reference establishes that clu did neither contemplate nor empower the State 795 Government to make rules providing an appeal against the award of arbitrator or arbitrators
Further the order of the Commissioner is not an award and this is recognised by the language of sub r
8 of r 23 which refers to the decision of the Cane Commissioner to the award of the arbitrator or arbitrators and to the Commissioner s order in appeal
The provision for an appeal in sub r6 therefore is not to be treated as something ancillary to the provision for settling disputes between the parties by the Cane Commissioner for which object clu empowered the State Government to make rules with respect to certain matters
The right to appeal is a substantive right and is to be conferred on a party by or under the Act
The Act must either provide for the appeal or enact that the rules framed thereunder may provide for appeals against certain orders of decisions 
In the absence of such a provision in the Act the rules cannot provide for appeals
I am therefore of opinion that sub r6 is void
It is true that if sub r6 is struck down as void there would not be any substantial difference between the procedure to be followed by the Cane Commissioner or the Arbitrator or Board of Arbitrators in deciding the dispute but it does not necessarily follow from this that r 23 minus sub rule 6 and other incidental deleted provisions is valid
It is difficult to say that sub r6 is severable
The existence of sub r6 and other consequential provisions makes it clear that the State Government which made r 23 provided for the decision of the dispute by the arbitrator or arbitrators subject to an appeal against the award
It will be sheer speculation to say that the State Government would have made provision for the dispute to be settled by arbitrators if it had known that it could not make any provision for an appeal against that order
I am therefore of opinion that the entire r 23 is to be struck down both because in its present for it is 796 discriminatory and because sub r6 is void inasmuch as the State Government had no power to enact it and it is not servable from the rest of the rule
I would therefore allow the appeal with costs and order the issue of a writ quashing the proceedings pending before the Cane Commissioner and prohibiting him to continue those proceedings
By COURT  In accordance with the opinion of the majority this Appeal is dismissed with costs


Summary:
Certain disputes arose between the appellant and the Cane Marketing Society Ltd Bijnor
The appellant preferred a claim to the Cane Commissioner for compensation for short supply of Sugar cane
The Society also moved the Cane Commissioner for arbitration
The Commissioner passed an order calling upon the parties to be present before him for a decision of the dispute
It was then that the appellant filed a petition under article 226 of the Constitution of India for a writ of certiorari to quash the proceeding pending before the Cane Commissioner for a write of prohibitation for restraining the Cane Commissioner from continuing quo warranto for a declaration that the Cane the proceedings and a writ of Commissioner had no right to assume the office of arbitrator in the dispute
The appellant contended that there could be no arbitration because the claim was not a proper claim as the Society had omitted to complete the prescribed form XII by leaving the schedule the area of cultivation and the estimated yield blank and as the agreements were not signed by the Mills who did not accept them in their incomplete state
In the alternative it was contended that Rule 2 3 offended against article 14 of the Constitution
It was also contended that r 236 providing for an appeal went beyond the rule making power of the Provincial Government under section 30 of the Act
The writ petition was dismissed by the High Court
The Letters Patent appeal was also dismissed
The appellant came to this Court by a certificate
Held that the agreement was a binding agreement
The form prescribed set out a number of conditions and all of them have been incorporated in the agreement executed by the Society
There has been no deviation from the prescribed form except some minor omission
The failure to execute the 761 agreement in the form is made an offence but no other cons equence is indicated if the form is not followed
The utmost that can be said is that if the form that was used included conditions which were at variance with the conditions in the prescribed form a contract might not have resulted but in the present case the terms as stated in the prescribed form are the terms in the form used
No consequence attaches to the failure to observe the form except punishment by fine and section 182 is capable of being read as directory
Even if it be read as mandatory the failure of the appellant to sign the form is not a matter of which he can take advantage regard being bad to his own conduct
The blanks also do not matter in view of the existence of form 10 which supplied the information accidently omitted from the agreement
The arbitration clause in the form was enforceable if agreed to even without the signature of the appellant as it is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties and it is sufficient if the terms are reduced to writing an the agreement of the parties thereto is established
Even if section 182 be held to be mandatory to the extent that the terms as prescribed should appear in writing that is complied with in this case Held Raghubar Dayal J dissenting that section 302 of the Act conferred a general power to make rules for the resol ving of disputes either by the Cane Commissioner or if he so directs by arbitration and to give effect to the latter part of this provision arbitration with an appeal from the arbitrator s decision would be giving effect to the provisions as a whole
Rule 236 providing for an appeal against the decision of arbitrators must be considered as a rule giving effect to the provisions of section 302u providing for the resolving of disputes by arbitration
Sub rule 6 was thus within the rule making power of the Provincial Government
Sections 8 9 and 10 of the Arbitration Act do not apply being inconsistent with r 23
The decision by the Commis sioner is the normal mode of disposing of disputes regarding the supply of sugar cane
The Cane Commissioner has the power to direct that the dispute be referred to arbitration but the rules show that there can be no arbitration unless the parties themselves agree
If it is to a sole arbitrator then the sole arbitrator must be acceptable to the parties concerned
If the parties do not agree to the appointment of a sole arbitrator the arbitration is by a Board of Arbitrators consisting of one representative of each party and an Umpire acceptable to both the representatives
The Rule stops short of providing what is to happen if a party does not appoint his 762 representative and the Arbitration Act furnishes no answer because it is inconsistent with the Rule
It is therefore obvious that the arbitration must be with the consent of the parties and they must express their consent either by selecting an agreed sole arbitrator or by appointing their representative on the Board
This choice is entirely theirs
If the parties do not agree there can be no arbitration at all and the case must be disposed of by the Cane Commissioner himself
Where there are two procedures one for everyone and the other if the disputants voluntarily agree to follow it there can be no discrimination because discrimination can only be found to exist if the election is with some one else who can exercise his will arbitrarily
Rule 23 as a whole does not offend Art14 of the Constitution
Per Raghubar Dayal J It is true that the provisions of section 302u relate to the settlement of disputes between the parties but that by itself does not mean that the State Government can provide for appeals against the orders of the arbitrator or arbitrators
These provisions do not expressly state that the rule can provide for an appeal against the award of the arbitrator
They make no reference either for the provision of an appeal or for the procedure to be followed by the Appellate Tribunal or for the enforcement of the order of the Appellate Tribunal
The absence of such a reference establishes that cl
u did neither contemplate nor empowered the State Government to make rules providing an appeal against the award of arbitrator or arbitrators
Further the order of the Commissioner is not an award and this is recognised by the language of r 238 which refers to the decision of the Cane Commissioner to the award of the arbitrator or arbitrators and to the Commissioner s order in appeal
The provision for an appeal in r 236 therefore is not to be treated as something ancillary to the provision for settling disputes between the parties by the Cane Commissioner for which object cl
u empowered the State Government to make rules with respect to certain matters
The right to appeal is a substantive right and is to be conferred on a party by or under the Act
The Act must either provide for the appeal or enact that the rules framed thereunder may provide for appeals against certain orders or decisions
In the absence of such a provision in the Act the rules cannot provide for appeals
The result is that r 236 is void
It is clear from the various provisions of r 23 that there is a difference in the procedure for the dispute being decided by the Cane Commissioner and the dispute being decided by the arbitrator or a Board of Arbitration
In the former case 763 the decision of the Cane Commissioner is final and enforceable by the Civil Court referred to in r 238
In the latter case the award of the sole arbitrator or the Board of Arbitration is appealable to the Commissioner of the Division in which the factory is situated and the order of the Commissioner is final and enforceable by the Civil Court
It follows that the procedure provided by r 23 for decision of the dispute touching the agreement is such that parties similarly situated may have the dispute decided by different persons and by different procedures according to the inclination of the Cane Commissioner whose discretion in this matter is uncontrolled by any guiding principles
The rule therefore offends against article 14 of the Constitution and is void
The entire r 23 is struck down both because in its present form it is discriminatory and because sub r
6 is void inasmuch as the State Government had no power to enact it and it is not severable from the rest of the rule
Ruf T A  Co vs Pauwels  State of U P vs Manbodhan Lal Srivastava   Bhikraj vs Union of India A I R  Thomas vs Kelly 888 13 App
506 Jagan Nath vs Jaswant Singh   Kamaraja Nadar vs Kunju Thevar  Hari Vishnu Kamath vs Syed Ahmed Ishaque   Radhakinsson Gopikis8on vs Balmukund Ramchandra 1932 L R 60 I A 63 and Jugal Kishore Rameshwardas vs Mrs Goolbai Hormusji 1955 2 section C R 857 referred to