S.S.Sandhawalia, J.

1. Whether a compulsory statutory sale of sugar by the producers under the Essential Commodities Act, 1955 , mandates the concurrent tender of price against the delivery of sugar, or merely a deferred payment therefor, is the significant question before this Full Bench.

2. The relevant facts are not in serious dispute and may be noticed with relative brevity. The petitioner, Messrs Vishnu Sugar Mills Limited is a company registered under the Companies Act, having its registered office at Calcutta, it owns a sugar factory, since more than 30 years in the District of Gopalganj, within the Municipal area of the said town, wherein sugar is produced through the vacuum pan process. It is common ground that the production and sale of the sugar are controlled by the provisions of the Sugar Control Order, 1966, issued Under Sec.3 of the Essential Commodities Act 1955 (hereinafter called the Act). In accordance with the Order aforesaid 65 per cent of the total production of sugar by the producers, including that of the petitioner company, is controlled by Government and is conveniently called as levy sugar, which the petitioner is bound in law to sell to the respondent Food Corporation of India (hereinafter called the Corporation) The remaining 35 per cent of sugar is called the free sugar, which is allowed to be sold in the open market by private negotiations, A grievance is made on behalf of the petitioner that grave delays on the part of the respondents to lift the levy sugar cause enormous financial losses to the petitioner as the entire sugar stock is pledged to the Banks on interest at the rate of 18 per cent, and, failure to take delivery of sugar by the respondents involves financial complications and heavy losses of interests and Bank charges to the petitioner.

3. The respondent Corporation is a company wholly owned by the Government of India and comes within the ambit of the State under Article 12 of the Constitution. It is the biggest buyer of sugar, having a monopoly to buy the levy sugar from the producers by compulsory purchase mandated by law and in turn supplies the sugar to different whole-sellers and fair-price-shop dealers. In the year 1974, after deep deliberations between the officers of the Corporation and the representatives of the sugar-factories in Bihar, as also the officers of the Central Government, a procedure for payment for purchase of levy sugar from the sugar factories by the Corporation was duly decided and communicated by the Corporation itself, vide its letter dated the 5th July, 1974, which is Annexure 10 to the writ petition. This procedure mandated that in cases of deliveries by road transport, full payment must be made to the producer for the quantity programmed and to be lifted each day and directed the District Manager of the Corporation at Muzaffarpur to tender the price thereof by demand drafts, etc., observing all formalities from the Banks concerned, where the Corporation is operating its accounts. The aforesaid payment procedure contained in Annexure 10 continued to be followed by the respondent Corporation as well as the sugar factories in Bihar for over a decade. The petitioners case is that the Corporation has now introduced a new procedure for payment, vide the impugned Annexure 5 dated the 30th April, 1985, unilaterally and entirely contrary to law According to this procedure, sugar has to be delivered first to the representatives of the respondent Corporation, thereafter a bill has to be presented to him, which he would later take to the District Manager of the Corporation at Muzaffarpur, who would thereafter prepare a cheque and send it to the producer, It is pointed out that so far as the petitioner company is concerned the distance from its factory and the office of respondent No. 1 at Muzaffarpur is more than 200 miles and even namely, it would take more than 4 days in procuring the cheques from Muzaffarpur, apart from creating other serious practical d