1962 (12) TMI 73 - SC - Indian Laws

Court upholds agreement, Rule 23 valid. Dissent on discrimination and power limits.

SETH BANARSI DAS Versus THE CANE COMMISSIONER & ANOTHER

The court held that the agreement between the parties was binding, Rule 23 did not contravene Articles 13 and 14 of the Constitution, and sub-Rule (6) of ... - Issues Involved:1. Binding nature of the agreement between the parties.2. Validity of Rule 23 under Articles 13 and 14 of the Constitution.3. Validity of sub-Rule (6) of Rule 23 under the rule-making power conferred by Section 30 of the Act.Comprehensive, Issue-wise Detailed Analysis:1. Binding Nature of the Agreement:The appellant contended that there was no binding contract as the agreements for the seasons 1949-50 and 1950-51 had defects, including the absence of signatures, blanks in the schedule, and missing details. However, the court found that the agreement was accepted and acted upon by both parties. The appellant had moved the Cane Commissioner for enforcement, sent requisitions, and paid for supplies based on the agreement. The court held that the agreement, though not signed by the appellant, was binding as it was acted upon and the terms were in writing, fulfilling the requirement of Section 18(2). The court also noted that the arbitration clause in the agreement was enforceable even without the appellant's signature, as long as the terms were reduced to writing and agreed upon by the parties.2. Validity of Rule 23 under Articles 13 and 14 of the Constitution:The appellant argued that Rule 23 was discriminatory as it allowed the Cane Commissioner to choose between deciding disputes himself or referring them to arbitration, leading to unequal treatment. The court examined whether the Cane Commissioner could compel arbitration without the parties' consent and found that arbitration could only occur with the parties' agreement. The court concluded that Rule 23 did not offend Article 14 as it provided for arbitration only if both parties agreed, thus maintaining a single mode of dispute resolution by the Cane Commissioner as the default.3. Validity of sub-Rule (6) of Rule 23 under the Rule-Making Power Conferred by Section 30 of the Act:The appellant contended that sub-Rule (6), which provided for an appeal against the arbitrators' award, was beyond the rule-making power of the Provincial Government. The court determined that Section 30(2)(u) of the Act conferred a general power to make rules for resolving disputes, including arbitration, and that sub-Rule (6) was within this power as it facilitated the resolution of disputes by arbitration. The court held that sub-Rule (6) was valid and severable, and thus, the whole of Rule 23 did not fail.Separate Judgment by Raghubar Dayal, J.:Justice Raghubar Dayal dissented, arguing that Rule 23 was discriminatory as it gave the Cane Commissioner uncontrolled discretion to choose between deciding disputes himself or referring them to arbitration. He also found that sub-Rule (6) was void as the State Government lacked the power to provide for appeals against arbitrators' awards, and this sub-Rule was not severable from the rest of Rule 23. He concluded that the entire Rule 23 should be struck down.Conclusion:The majority opinion held that the agreement was binding, Rule 23 did not violate Article 14, and sub-Rule (6) was within the rule-making power of the Provincial Government. The appeal was dismissed with costs. Justice Raghubar Dayal dissented, finding Rule 23 discriminatory and sub-Rule (6) void, and would have allowed the appeal.