Statutory discretion and natural justice govern reservation-area modifications; orders dictated by unauthorised authority are invalid.

The SC stated that a statutory power to reserve or alter reserved areas must be exercised personally by the authority on whom it is conferred, and cannot be abdicated to the Chief Minister or another executive authority. An order made in the name of the statutory authority but actually dictated by an unauthorised authority is invalid. The Court also treated the modification of a reserved area, which affected rival claims and civil interests, as quasi-judicial in nature. Because the affected party was not given disclosure of the rival proposal and a fair chance to respond, the procedure breached natural justice and the impugned action was vitiated.

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Issues: (i) Whether the impugned reservation orders were valid when the statutory authority acted under the direction of the Chief Minister; (ii) Whether the proceeding for modifying the reserved area was quasi-judicial in nature and required compliance with natural justice.

Issue (i): Whether the impugned reservation orders were valid when the statutory authority acted under the direction of the Chief Minister.

Analysis: The power to reserve or alter reserved areas under the Sugar Cane (Control) Order, 1966 was a statutory power vested in the Cane Commissioner, and could not be exercised by an unauthorised executive authority. The materials showed that the Chief Minister dictated the division of the reserved villages and the Cane Commissioner merely carried out that direction. A statutory discretion cannot be surrendered or abdicated to another authority, even to the State Government or the Chief Minister, unless the statute expressly permits binding instructions. An order made in the name of the statutory authority but in truth made by another authority is invalid.

Conclusion: The impugned orders were invalid because they were not made by the prescribed statutory authority.

Issue (ii): Whether the proceeding for modifying the reserved area was quasi-judicial in nature and required compliance with natural justice.

Analysis: The dispute concerned the taking away of part of a reserved area already allotted to the appellant and its allotment to another mill, on the basis of objective statutory criteria. The alteration directly prejudiced the appellant's business interests and arose after rival claims had crystallised into a lis. Applying the settled tests for quasi-judicial action, the authority was required to act judicially. Since the substance of the rival proposals, especially the proposed division of the area, was not disclosed to the appellant for effective representation, the procedure denied a fair opportunity of hearing. The requirements of natural justice were therefore breached.

Conclusion: The proceeding was quasi-judicial and the impugned action was vitiated for breach of natural justice.

Final Conclusion: The reservation orders could not stand, as they were both unauthorised in source and procedurally defective in their making.

Ratio Decidendi: A statutory discretion must be exercised personally by the authority on whom it is conferred, and where a decision affecting civil rights is taken on rival claims, the authority must act judicially and afford a fair opportunity of hearing.

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