Letters Patent Appeal No.285 of 2000 (Against the Judgment and Order dated 11th January, 2000 passed in C.W.J.C. No. 7897/96) M/S RIGA SUGAR CO. LTD. --------------(Appellant) --Versus-- THE STATE OF BIHAR & ANR. ---------(Respondents) --- For the Appellant : Dr. S.P. Thakur For the Respondent : Mr. Badyanath Thakur, J.C. to S.C. 18. ----- P R E S E N T THE HON'BLE MR. JUSTICE BARIN GHOSH AND THE HON'BLE MR. JUSTICE JAYANANDAN SINGH J U D G M E N T Barin Ghosh & J.N. Singh, J.J. Sub section (1) of Section 16 of the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 makes it abundantly clear that a sugarcane grower has a recognized right of utilizing sugarcane grown by him for manufacture of rab and khandsari, sugar or gur, shakkar, gur or jagari rab from sugarcane juice to be obtained by use of power crusher. The said sub section of the said Section makes it also clear that if anyone 2 through power crusher intends to crush sugarcane for the purpose of producing cane juice to be utilized for manufacture of Khandsari, sugar or gur, shakkar, gur or jaigari, etc., and for that purpose would be required to go to the market to purchase/obtain sugarcane from outsiders, he would require a licence. Sub section (2) of Section 16 of the Act makes it absolutely clear that before a licence is granted under sub section (1) of Section 16 of the Act, the Cane Commissioner, i.e. the Licensing authority, is required to give an opportunity of hearing to the occupier of a sugar factory who may be interested to purchase sugarcane proposed to be purchased by the licence seeker. The said sub section of the said Section makes it further clear that the licencing authority may refuse to grant a licence, as applied for by the licence seeker, only when he is satisfied that grant of such licence will unduly impair production by the sugar factory concerned. Section 31 of the Act authorizes the Cane Commissioner to declare any area growing sugarcane as reserved area for the purpose of supply of cane to a particular factory. Section 32 of the Act 3 provides that the growers of sugarcane in the reserved area are obliged to supply sugarcane produced in the reserved area to the extent earmarked by the Cane Commissioner to the sugar factory for whose benefit the area in question has been declared as reserved area. In the background of this law, with which we are concerned in the instant appeal, the respondent- writ petitioner approached the Cane Commissioner seeking a licence under Sub section (1) of Section 16 of the Act. In the application, he disclosed that he has 32 acres of land which produces sugar-cane. He stated that in view of the area in which the said land is situate, having been declared as the reserved area for effecting supply of sugar-cane to the appellant sugar factory, he cannot utilize any part of sugarcane produced by him on the said 32 acres of land for manufacture of rab, khandsari sugar or gur, shakkar, gur or jaigari, etc. He stated that in addition to the said 32 acres of land, he has land outside the area reserved for the appellant sugar factory, wherefrom he produces 10,000 quintals of sugarcane. He stated that in the unit to be installed by 4 him for which he is seeking licence, he would utilize the said 10,000 quintals of sugar-cane and with that, he would purchase 40,000/- quintals of sugar-cane from outside for the purpose of manufacture of rub and khandsari, sugar or gur, shakkar, gur or jaigari. He made it clear that such purchase would be effected from outside the area reserved for the appellant sugar factory. Upon notice of hearing being given to the appellant sugar factory, it contended before the Cane Commissioner that a proposal mooted by it to increase its production capacity has been forwarded by the State Government to the Central Government with appropriate vetting and accordingly, grant of licence under Sub section (1) of Section 16 of the Act in favour of the petitioner- respondent would impair production of sugar by the appellant. The fact remains that permission to expand capacity of the appellant sugar factory was by then not accorded by the Central Government. Nothing has been brought to our knowledge that such permission was granted even thereafter. The fact remains that before the Cane Commissioner it was not urged by the appellant 5 sugar factory that sugarcane produced in the area reserved for the appellant sugar factory is insufficient to achieve the licence capacity of the appellant factory and accordingly, the appellant factory is forced to purchase sugar from outside the area reserved for it. In such situation, although the Cane Commissioner by an order refused to grant licence to the petitioner-respondent as was applied for by him, but he could not record in the order that grant of such licence would unduly impair production of sugar by the appellant sugar factory. The petitioner-respondent took recourse to statutory appeal challenging the order of the Cane Commissioner refusing to accord licence, as was applied for by him under Sub Section (1) of Section 16 of the Act. The statutory appeal was dismissed. Even at that stage, no new fact had been brought on record. The appellate authority could not also, in the facts and circumstances of the case and on the pleadings of the parties and substantiation thereof by proof, come to the conclusion that grant of such licence in favour of the petitioner-respondent would unduly impair production of sugar by the appellant sugar 6 factory. The petitioner-respondent, therefore, was compelled to challenge the said decisions of the Cane Commissioner and of the statutory Appellate Authority, refusing to accord licence to the petitioner-respondent, as had been applied for by him, in the writ petition. The same having been allowed by the Judgment and Order under appeal on the ground that refusal to grant depended upon satisfaction that such grant would unduly impair production of sugar by the appellant and there being no such satisfaction by any of the authorities, those orders are bad in law and as such, refusal to grant licence as had been applied for was a mala fide exercise of power by the authorities concerned and contrary to the provisions of the statute, the appellant is before us. In the present appeal, the appellant is seeking to contend that the availability of cane in its reserved area had all through out been less than the Cane required by it. Certain figures have been furnished in the memo of appeal, but from where those figures have been culled out, however, has not been indicated. Be that as it may, before the Cane Commissioner as well as before 7 the Appellate Authority such contention, as appears from the orders of the Cane Commissioner and of the Appellate Authority, had not been put forward. The objection of the appellant, which objection succeeded by refusal to grant licence, had been and still is to prevent any purchaser to purchase sugarcane grown outside the area reserved for the appellant, as is available in the market, in order to create a monopoly in favour of the appellant. Such an attempt on the part of the appellant is barred by the Constitution of India. The right to trade and commerce no doubt can be restricted by putting reasonable restrictions but such right cannot be curbed for the purpose of creating a monopoly in favour of anyone. The reasonable restriction in the instant case had been to reserve an area for effecting exclusive supply to the appellant. Beyond that also there was a restriction, but in order to make the same reasonable, the legislature had to come out with a scheme and expressed that in order to bring the same within the scope of such reasonable restriction, the Cane Commissioner must be satisfied that the grant of licence would unduly impair 8 production of sugarcane by the appellant sugar factory. In absence of satisfaction, as regards impairment of production, by the authorities concerned, which alone is the ground for refusal to grant licence, the authorities concerned not only acted mala fide but permitted the appellant to have a monopoly even beyond the area reserved for it. We add the above reasons with the reasons given by the learned Judge in the Judgment and Order under appeal and accordingly, dismiss the appeal. Patna High Court, 8th July, 2008, S.B.P./N.A.F.R. (Barin Ghosh, J.) (J.N. Singh, J.)