The stipulation in the contract between the parties in regard to the price of sugarcane to be supplied by the defendant-Corporation to the plaintiff-company was clear and unambiguous in that the said stipulation in regard to price clearly provided that the price is to be fixed in accordance with the notifications issued by the Central Government, and there are notifications of the Central Government fixing the price of sugarcane. Extrinsic evidence would not be admissible for construing those words.

Headnote:
Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 - Section 28 - Interpretation - Agreement between plaintiff company and defendant corporation - Price of sugarcane to be supplied by defendant corporation to plaintiff company - Minimum price fixed by Central Government - Whether clear and unambiguous - Admissibility of extrinsic evidence - Proviso (6) to Section 92 of the Evidence Act.
Fact of the Case:

The plaintiff company, a sugar manufacturing company, owned a large area of agricultural lands which were contiguous to its factory and within a convenient distance from the same. Prior to the coming into force of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961, the plaintiff company used to cultivate sugarcane on the said lands which was used and consumed entirely by the plaintiff's sugar factory. Under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act 1961, however, all surplus lands of the plaintiff company, i.e. lands in excess of the ceiling fixed in the manner provided by the Act, vested in the State Government, subject, of course, to payment of compensation as therein provided. Section 28 of the said Act, which is important for the purpose of this case and which must, therefore, be quoted in extenso, enacts as follows: ""28. (1) Where any land held by an industrial undertaking is acquired by and vests in, the State Government under Section 21, such land being land which was being used for the purpose of producing or providing raw material for the manufacture or production of any goods, articles or commodities by the undertaking, the State Government shall take particular care to ensure that the acquisition of the land does not affect adversely the production and supply of raw material from the land to the undertaking. (2) Notwithstanding anything contained in Section 27, but subject to any rules made in this behalf, for the purpose of so ensuring the continuance of the supply of such raw material to the undertaking, and generally for the full and efficient use of the land for agriculture and its effect management, the State Government (a) may, if it is in the opinion of that Government necessary for the purpose aforesaid (such opinion being formed after considering the representation of persons interested therein) maintain the integrity of the area so acquired in one or more compact blocks; (b) may, subject to such terms and conditions (including in particular, conditions which are calculated to ensure the full and continued supply of raw material to the undertaking at a fair price) grant the land, or any part thereof, to a joint faring society (or a member thereof) consisting as far as possible, of (i) persons who had previously leased such land to the undertaking, (ii) agricultural labour (if any) employed by the undertaking on such land, (iii) technical or other staff engaged by the undertaking on such land, or in relation to the production or supply of any raw material, (iv) adjoining landholders who are small holders, (v) landless persons; Provided that, the State Government may: (a) for such period as is necessary for the setting up of joint farming societies as aforesaid, being not more than three years in the first instance (extensible to a further period not exceeding two years) from the date of taking possession of the land, direct that the land acquired. or any part thereof, shall be cultivated by one or more farms run or managed by the State, or by one or more corporations (including a company) owned or controlled by the State; (b) grant to the landlord so much of the surplus land leased by him to the undertaking, which together with any other land by him does not exceed the ceiling area (but if the landlord be a public trust and the major portion of the income from the land is being appropriated for purposes of education or medical relief, grant the entire land to the public trust) lease the land to a farm or corporation described in clause (a) aforesaid, and thereafter, in the case of a landlord (not being a public trust) that he becomes a member of the joint farming society, and in the case of a public trust, that it leases the land to a joint farming society. (3) The State Government may provide that: (a) for the breach of any term of condition referred to in clause (b) of sub-section (2), or (b) if the landlord to whom the land is granted fails to lease the land to the farm or corporation or to become a member of a joint farming society; or (c) if it considers after such inquiry as it thinks fit that the production and supply of raw material to the undertaking is not maintained at the level or in the manner which, with proper and efficient management it ought to be maintained, or (d) for any other reason it is undesirable in the interest of the full and efficient cultivation of the land, that the joint farming society should continue to cultivate the land, the grant shall, after giving three months notice of termination thereof and after giving the other party reasonable opportunity of showing cause, be terminated, and the land resumed. Thereafter, the State Government may make such other arrangements as it thinks fit for the proper cultivation of the land and maintenance of the production and supply of raw material to the undertaking."" On the 6th of March 1963, the Maharashtra State Farming Corporation Ltd., which is the defendant to the suit and the second respondent in both the Writ Petitions, was registered under the Companies Act in accordance with the provisions of proviso (a) to section 28(2) of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act; and it is not disputed that the entire share-holding of the said company was not only owned by the State Government, but its Board of Directors consisted wholly of nominees of the State Government, the Revenue Minister for the time being, being the Chairman of the Board of Directors of the said company.
Finding of the Court:

The Court held that the stipulation in the contract between the parties in regard to the price of sugarcane to be supplied by the defendant-Corporation to the plaintiff-company was clear and unambiguous in that the said stipulation in regard to price clearly provided that the price is to be fixed in accordance with the notifications issued by the Central Government, and there are notifications of the Central Government fixing the price of sugarcane. The Court further held that extrinsic evidence would not be admissible for construing those words.
Issues: 1. Whether the stipulation in regard to price quoted above, is clear in terms, as both sides have contended, and if so, what is it that it clearly expresses. 2. Whether the legal position would be the same, or as to what it would be, if and when there is more than one price fixed by the Central Government by notifications issued by it from time to time under orders made in exercise of powers under the Essential Commodities Act 1955.
Ratio Decidendi: The Court held that the stipulation in the contract between the parties in regard to the price of sugarcane to be supplied by the defendant-Corporation to the plaintiff-company was clear and unambiguous in that the said stipulation in regard to price clearly provided that the price is to be fixed in accordance with the notifications issued by the Central Government, and there are notifications of the Central Government fixing the price of sugarcane. The Court further held that extrinsic evidence would not be admissible for construing those words.
Final Decision: The Court held that the defendant Corporation is bound to supply sugar-cane to the plaintiff-company at the minimum price fixed by the Central Government by the notifications issued by it, so long as there is no other price fixed by the Central Government by its notifications.

Judgment-

1. The plaintiffs to the suit and the petitioners in both the Writ Petitions (hereinafter, for the sake of brevity, referred to only as ""the plaintiffs"") are a company registered under the Companies Act are carrying on the business of manufacturing sugar and allied products at their factory at Harigaton in Ahmednagar District since the last about 45 years. Prior to the coming into force of the Maharashtra agricultural Lands (Ceiling on Holdings) Act (Maharashtra Act XXVII of 1961) on the 26th of January 1962, the plaintiffs owned a large area of agricultural lands which were contiguous to the Plaintiffs factory and within a convenient distance from the same. The plaintiffs used to cultivate sugarcane on the said lands which was used and consumed entirely by the plaintiffs sugar factory. In fact, it was with a view to ensure an adequate and continuous supply of raw materials of good quality, without being subject to fluctuations in the prices of sugarcane that the plaintiffs were cultivating the said lands. Under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act 1961, however, all surplus lands of the plaintiffs, i.e. lands in excess of the ceiling fixed in the manner provided by the Act, vested in the State Government, subject, of course, to payment of compensation as therein provided. Section 28 of the said Act which is important for the purpose of this case and which must, therefore, be quoted in extenso, enacts as follows:

""28. (1) Where any land held by an industrial undertaking is acquired by and vests in, the State Government under Section 21, such land being land which was being used for the purpose of producing or providing raw material for the manufacture or production of any goods, articles or commodities by the undertaking, the State Government shall take particular care to ensure that the acquisition of the land does not affect adversely the production and supply of raw material from the land to the undertaking.

(2) Notwithstanding anything contained in Section 27, but subject to any rules made in this behalf, for the purpose of so ensuring the continuance of the supply of such raw material to the undertaking, and generally for the full and efficient use of the land for agriculture and its effect management, the State Government

(a) may, if it is in the opinion of that Government necessary for the purpose aforesaid (such opinion being formed after considering the representation of persons interested therein) maintain the integrity of the area so acquired in one or more compact blocks;

(b) may, subject to such terms and conditions (including in particular, conditions which are calculated to ensure the full and continued supply of raw material to the undertaking at a fair price) grant the land, or any part thereof, to a joint faring society (or a member thereof) consisting as far as possible, of

(i) persons who had previously leased such land to the undertaking,

(ii) agricultural labour (if any) employed by the undertaking on such land,

(iii) technical or other staff engaged by the undertaking on such land, or in relation to the production or supply of any raw material,

(iv) adjoining landholders who are small holders,

(v) landless persons;

Provided that, the State Government may:

(a) for such period as is necessary for the setting up of joint farming societies as aforesaid, being not more than three years in the first instance (extensible to a further period not exceeding two years) from the date of taking possession of the land, direct that the land acquired. or any part thereof, shall be cultivated by one or more farms run or managed by the State, or by one or more corporations (including a company) owned or controlled by the State;

(b) grant to the landlord so much of the surplus land leased by him to the undertaking, which together with any other land by him does not exceed the ceiling area (but if the landlord be a public trust and the major portion of the income from the land is being appropriated

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Judicial Analysis