AGARWALA, J. :- The appellant Seth Banarsi Dass was the lessee of a sugar mill at Bijnor known as Shiva Prasad Banarsi Das Sugar Mills. The Cane Marketing Society Limited, Bijnor, (hereinafter called the Society) supplied to the appellant sugar cane for the years 1949-50 and 1950-51. The price of the cane was duly paid but there was a dispute between the appellant and the Society with regard to the commission payable to the latter.

2. The supply of sugarcane to the mills is controlled by the U.P. Sugar Factories Control Act (Act 1 of 1938) and the Rules made thereunder. Under S. 14 of the Act and the order of the State Government made thereunder an occupier of a sugarcane crushing factory is required to submit to the Cane Commissioner, on or before the prescribed date, an estimate, in the prescribed form and manner, of the quantity of cane which will be required in the factory during a particular crushing season.

The Cane Commissioner thereupon examines the estimate and publishes the same with such modifications, if any as he thinks fit to be made therein after consultation with an advisory committee. Thereafter he declares a certain area to be a reserved area for the purpose of the supply of cane to that factory. Then under S. 18(1) a cane-grower or a Cane-growersCo-operative Society in such reserved area has to offer, in the form and by the date prescribed, to supply to the occupier of the factory for which the area is reserved, cane grown in that area not exceeding the quantity prescribed by the Cane Commissioner.

The occupier or manager of the factory is then required under S. 18(2) of the Act to enter into an agreement "in such form, by such date and on such terms and conditions as may be prescribed" to purchase the cane so offered. The Rules framed under the Act prescribe a form for the offer of a supply of cane by a cane grower or a Cane-GrowersCooperative Society under S. 18(1). This is Form No. 10.

The Rules also prescribe another form, Form No. 12, for an agreement for the purchase of cane as required by S. 18(2). The important point to note here is that the agreement form shows that the signatures of both the parties, the sellers and the buyers, are to be appended to the agreement. Section 27 of the Act prescribes the penalty for certain acts done in contravention of the provisions of the Act. Sub-Section (3) of that section provides that if the occupier or manager of a factory "intentionally fails to maintain correctly the register mentioned in Sub-S. (1) of S. 17, or intentionally fails to enter into an agreement as required by Sub-S. (2) of S. 18........ he shall be punishable with fine which may extend to two thousand rupees."

Section 30 empowers the State Government to frame rules to carry out the provisions of the Act. Rule 23 of these rules provides for arbitration in case of a dispute arising touching an agreement entered into under S. 18(2) of the Act.

3. In accordance with the provisions of S. 18(1) of the Act, the Society offered to the appellant the supply of cane in the area reserved for the aforesaid mills in Form No. 10 for the years 1949-50 and 1950-51. For the year 1949-50, the Society offered to sell 36.25 lakh maunds of cane and for the year 1950-51 it offered 32 lakh maunds. According to the appellant the Society should have offered 39 lakh maunds of cane for the year 1949-50 and 46.92 lakhs for the year 1950-51.

Agreements in Form No. 12, signed by the Society, were also sent by the Society for the signature of the appellant, but the appellant failed to sign them. In spite of his failure to sign them, the cane was supplied by the Society to the appellant in both the years according to the offers made by the Society in Form No. 10.

4. The appellants case was that the Society failed to supply a certain quantity which ought to have been supplied over and above what was offered by it. The appellants case further was that he did not enter into any agreements for the purchase of cane because of the d