# BHARAT COKING COAL LTD v. MADANLAL AGRA WAL

- **Citation:** [1996] Supp. 8 S.C.R. 886
- **Court:** Supreme Court of India
- **Decided:** 1996-11-20
- **Case number:** Civil Appeal No. 2463 of 1993
- **Bench:** A.M. Ahmadi, Suhas C. Sen, Sujata V. Manohar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bharat-coking-coal-ltd-v-madanlal-agra-wal-15023
- **Pages:** 24

## Headnote

Coal Mines (Nationalisation) Act, 1973: Sections 2(h) (xi), (o) 3
and 26.
'Mine '-Extended meaning-Explanation of-Held: all properties
which fell within the definition of 'mine' in S.2 (h) and which were used
over a period of time and not temporarily and which were required for
proper functioning of the mine, whether or not belonged to owner of mine,
would vest in the Central Government by virtue o/S.3-Hence, even though
D lands and buildings solely used/or purposes of office or residence of officers
and staff of mine which did not belong to owner of mine but be/dnged to
another person, right, title and interest therein, vested in Central
Government-Mines Act, 1952.
One M instituted a suit for eviction of the appellant from the
E land and buildings allegedly owned by him adjacent to the coal mine
which had vested in the Central Government by virtue of the Coal
Mines (Nationalisation) Act, 1973. The coal mine was owned by United
Mining Company. The case of M was that he had in his individual
capacity purchased certain properties together with structures thereon
by registered deeds of sale and built further structures and remodelled
F them. The United Mining Company took these structures on monthly
rent. The structures were utilised as office premises of the coal mine
as also staff quarters. Eviction was sought for non-payment of monthly
rent for several years. However, even before the Coal Mines
(Nationalisation) Act came into force the management of the coal
G mine along with the disputed properties were taken over by the Central
Government. No objection was taken thereto by the plaintiff. It was
only three years later that M filed the suit. In cross-examination before
trial court M stated that he was the director of the United Mining
Company and that the other director was his own brother.
H
The suit was dismissed by the Trial Court. In appeal the Division
886
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL
887
Bench of the High Court held that the appellant had defaulted in A
..
payment of rent, was liable to be evicted and that the suit premises
had not vested in the Central Government by virtue of the provisions
of the Coal Mines (Nationalisation) Act. Therefore, an eviction order
was passed against the appellant. Being aggrieved the appellant
preferred the present appeal.
B
The question before this Court was whether the right, title and
interest ofM in the suit premises had vested in the Central Government
by virtue of Section 3 of the Coal Mines (Nationalisation) Act, 1973.
Allowing the appeal, this Court
c
HELD : I.I. The suit premises fall within the ambit of the
definition of 'mine' in Section 2(h) of the Coal Mines (Nationalisation)
Act, 1973 and as such had vested in the Central Government on the
appointed day by virtue of the provision of Section 3 of the Act, even
though these premises might not have been in the ownership of the D
United Mining Company. (909 Df
1.2. The idea behind the Nationalisation Act appears to be that
the Government wanted to take over and run the coal mines so as to
ensure rational, co·ordinated and scientific development and E
utilisation of coal resources. The object of the Act was to subserve the
common good and for matters connected therewith or incidental
thereto. The Act should not be construed in a way to frustrate the
working of the coal mines altogether and thereby stop or bring down
production of coal by the nationalisation of coal mines. The extended
meaning given to 'mine' was to ensure that the activity of mining of F
coal could be carried on in an uninterrupted fashion to ensure that
after taking over of the mine, the Central Government is in a position
to operate the mine and extract coal and do everything that is needful
for the purpose of working the mine. (900 GU, 901 A)
2.1. Section 3 of the Act which deals with acquisition of the G
-
rights of owners of coal mines in relation to the coal mines, requires
to be interpreted in the light of the objects for which the Coal Mines

## Text

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A
B
c
BHARAT COKING COAL LTD.
v.
MADANLAL AGRA WAL
NOVEMBER 20, 1996
[A.M. AHMADI, CJ., SUHAS C. SEN
AND SUJATA V. MANOHAR, JJ.]
Coal Mines (Nationalisation) Act, 1973: Sections 2(h) (xi), (o) 3
and 26.
'Mine '-Extended meaning-Explanation of-Held: all properties
which fell within the definition of 'mine' in S.2 (h) and which were used
over a period of time and not temporarily and which were required for
proper functioning of the mine, whether or not belonged to owner of mine,
would vest in the Central Government by virtue o/S.3-Hence, even though
D lands and buildings solely used/or purposes of office or residence of officers
and staff of mine which did not belong to owner of mine but be/dnged to
another person, right, title and interest therein, vested in Central
Government-Mines Act, 1952.
One M instituted a suit for eviction of the appellant from the
E land and buildings allegedly owned by him adjacent to the coal mine
which had vested in the Central Government by virtue of the Coal
Mines (Nationalisation) Act, 1973. The coal mine was owned by United
Mining Company. The case of M was that he had in his individual
capacity purchased certain properties together with structures thereon
by registered deeds of sale and built further structures and remodelled
F them. The United Mining Company took these structures on monthly
rent. The structures were utilised as office premises of the coal mine
as also staff quarters. Eviction was sought for non-payment of monthly
rent for several years. However, even before the Coal Mines
(Nationalisation) Act came into force the management of the coal
G mine along with the disputed properties were taken over by the Central
Government. No objection was taken thereto by the plaintiff. It was
only three years later that M filed the suit. In cross-examination before
trial court M stated that he was the director of the United Mining
Company and that the other director was his own brother.
H
The suit was dismissed by the Trial Court. In appeal the Division
886
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL
887
Bench of the High Court held that the appellant had defaulted in A
..
payment of rent, was liable to be evicted and that the suit premises
had not vested in the Central Government by virtue of the provisions
of the Coal Mines (Nationalisation) Act. Therefore, an eviction order
was passed against the appellant. Being aggrieved the appellant
preferred the present appeal.
B
The question before this Court was whether the right, title and
interest ofM in the suit premises had vested in the Central Government
by virtue of Section 3 of the Coal Mines (Nationalisation) Act, 1973.
Allowing the appeal, this Court
c
HELD : I.I. The suit premises fall within the ambit of the
definition of 'mine' in Section 2(h) of the Coal Mines (Nationalisation)
Act, 1973 and as such had vested in the Central Government on the
appointed day by virtue of the provision of Section 3 of the Act, even
though these premises might not have been in the ownership of the D
United Mining Company. (909 Df
1.2. The idea behind the Nationalisation Act appears to be that
the Government wanted to take over and run the coal mines so as to
ensure rational, co·ordinated and scientific development and E
utilisation of coal resources. The object of the Act was to subserve the
common good and for matters connected therewith or incidental
thereto. The Act should not be construed in a way to frustrate the
working of the coal mines altogether and thereby stop or bring down
production of coal by the nationalisation of coal mines. The extended
meaning given to 'mine' was to ensure that the activity of mining of F
coal could be carried on in an uninterrupted fashion to ensure that
after taking over of the mine, the Central Government is in a position
to operate the mine and extract coal and do everything that is needful
for the purpose of working the mine. (900 GU, 901 A)
2.1. Section 3 of the Act which deals with acquisition of the G
-
rights of owners of coal mines in relation to the coal mines, requires
to be interpreted in the light of the objects for which the Coal Mines
(Nationalisation) Act, 1973 was enacted. The contention that Section
3 was limited application and only took away the rights of the owners
specified in the Schedule is not borne out of the scheme of the Act H
888
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A and also the wording of Section 3. Under Section 3 all ownership
rights not only of, but in relation to, the coal mines were being taken
over by the Central Government free from all encumbrances from
the appointed day. The Section also does not speak of the right, title
and interest of the owners specified in the Schedule. On the contrary,
it speaks of 'coal mines specified in the Schedule". The coal mines
B specified in the Schedule are being brought under the ownership of
the Central Government which will take in everything included in
the definition of 'mine'. The ambit of the coal mine has to be
understood in the sense as given in the Act. The fact that the name of
the company has been given as the owner and the amount of
compensation has also been fixed in the Schedule does not mean that
C t!te vesting was confined only to the assets of the company in the
mine. The Schedule contains a list of the mines which have vested in
the Central Government. In order to ascertain exactly what has vested
in the Central Government, the definition of 'mine' given in Section
2(h) will have to be taken into account. What the Schedule has done
is to give the names and location of the mines, the names and addresses
D of the owners of the mines and also the amounts of compensation to
be paid. (902-H,G,A-E)
2.2. The two key words for the purpose of interpreting Section 3
of the Act are 'mine' and 'owners'. The definition of a 'mine' under
E Section 2(h) is designed to cover at least two kinds of property: (i)
property which belong to the mine and (ii) properties which are used
by the mine for a proper functioning of the mine. The first category
of properties would be properties which are of the ownership of the
mining company. The second category of properties need not
necessarily be of the ownership of the mining company. These could
F also be properties which are Jiased by the mining company or in
possession of the mining company and used by it. Section 2(h)(xi) of
the Act provides that all other (other than those in sub-clause (x) )
lands and buildings wherever situated, if solely used for the location
of the management, sale or liaison offices or for the residence of officers
G and staff of the mine are also acquired. Unlike sub-clause (x), subclause (xi) does not contain the words 'belonging to the owners of the
mine'. (903 BC)
Serajuddin and Co. v. Workmen, AIR (1966) SC 921, referred to.
H
3.1. Regarding those properties which are not of the ownership
'-
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL
889
of the coal mine, it is clear from the definition of 'mine' that only A
properties which are required for a proper functioning of the mine
and which are covered by the definition would be acquired. Any and
every property belonging to another person which happens to be on
the surface of the mine or adjacent to it is not taken away. Only those
properties of another person which fall within the definition of a
mine and which are necessary for a proper functioning of the mine B
are to be taken away. The definition itself takes care of this aspect by
stipulating whereever necessary that such properties must be used
for a purpose of the mine, whether the purpose of specified or general.
(904 D-E(
Te/co Limited v. Bharat Mining Corporation, Ltd. and Ors., AIR C
(1980) Born. 168, overruled.
Valley Refractories Pvt. Ltd. and Anr. v. K.S. Garewal, AIR (1978)
Cal. 574 and Coal Mines Authority Ltd. and Ors. v. Associated Cement
Companies Ltd., AIR (1986) M.P. 241, approved.
D
3.2. In the light of the definition of 'owner' which also includes
a lessee or an occupier apart from the immediate proprietor, and the
definition of 'mine', one can conclude that even assets of which the
mine or the mining company may not be the proprietor, but which are
leased by the mine or which are in the possession of a mine over a period
of time are also acquired. A temporary acquisition, or a short-term E
lease, or even some special additional amenities which the mine may
provide but which are not required for the purposes of the mine may
not be covered. It will depend upon the facts of each case. (905-CD(
3.3. The provisions of Section 26 of the Act clearly show :
(I) Mere mention of the name of the owner of a coal
mine in 4th column is not conclusive of its right to get
the entire amount of compensation specified in the 5th
column. (908-D(
(2) There may be other claimants for the amount. The
dispute may be resolved by a court on reference by the
Commissioner. (908-E(
F
G
(3) Machinery, equipment or other property in a coal
mine which does not belong to the owners specified in H
A
B
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890
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
the 4th column may vest in the Central Government or
a Government Company. (908-FJ
(4) If such vesting takes place, then the owner of such
machinery, equipment or property may be compensated
out of amounts specified in the 5th column. (908-G(
(S) The claim of such owners as against the owners named
in the 4th column may be referred to a court and the
compensation money may be apportioned by the Court
between the owner of the coal mine and the owner of
machinery, equipment or other property. (908-H(
4.1 In the context of Section 3 and als<> Section 26, the
owner has to be understood as owner of a mine in the extended sense
given in Section 2(h). The limited definition of the word 'mine' given
in the Mines Act, I 952 has not been designedly adopted by the Coal
Mines (Nationalisation) Act. All these provisions go to show that it
D was not only the interest of the owners of the coal mine specified in
the fourth column, but also the ownership of all other persons in the
properties enumerated in Section 2(h) vested in the Central
Government by virtue of the provisions of Section 3 of the Act.
(909-A-B(
E
4.2. That means that things which did not belong to the mine
owners mentioned in column 4 of the Schedule but fall within subclauses (i) to (xii) of Section 2(h) of the Nationalisation Act will vest
in the Central Government free from all encumbrances. If the mine
owner had located staff quarters and officers on rented buildings,
F these will also vest in the Central Government. (909-CJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2463 of
1993 etc.
From the Judgment and Order dated 20.11.92 of the Patna High
G Court in Appeal from O.D. No. 722 of 1979.
V.R. Reddy, Additional Solicitor General, H.N. Salve, R.N. Sachthey,
Soli J. Sorabjee, M.L. Verma, S.C. Mullick, Ajit K. Sinha. Anip Sachthey,
C.D. Singh, H. Munthi, Ranjit Kumar, Ms. Anu Mohla, Ms. Binu Tamta,
B.A. tVlohanty, (Ms. Aruna Mathur, A. Mariarputham) for Arputham, Aruna
H and Co., Prabha Choudhary and S.B. Upadhyay for the appearing parties.
BHARAT COKING COAi. LTD. v. MADAN LAL AGRAWAL [SEN, J.) 891
The Judgment of the Court was delivered by
SEN, J. This appeal arises out of a suit instituted by one Madanlal
Agrawal for eviction of Bharat Coking Coal Limited from land and
buildings allegedly owned by him adjacent to the coal mine known as
Victory Colliery, which had vested in the Central Government by virtue
A
of the Coal Mines (Nationalisation) Act, 1973. Victory Colliery was owned B
by United Mining Company Private Limited. The case of the appellant is
that the company was practically a one man company. If the corporate veil
is lifted, it will be found that Madanlal Agrawal was de facto owner of the
company. Madanlal Agrawal's case is that he had in his individual capacity
purchased certain properties together with structures thereon by registered
deeds of sale dated 7.7.1949 and 24.3.1950 and built further structures C
and remodeled them. The United Mining Company Private Limited took
these structures on monthly rent. These structures were utilised as office
premises of Victory Colliery as also staff quarters. Eviction was sought
for non-payment of monthly rent for several years.
Bharat Coking Coal Limited in its written statement alleged that the
said properties were bought with the moneys belonging to the colliery and
as such the land and the structures really belonged to the company. The
alleged payment of rent by Victory Colliery to Madanlal Agrawal was
only a paper transaction and for tax benefit. All the purchases were made
D
by United Mining Company and sources of investment came from the E
funds of the said company.
It may be mentioned that even before the Coal Mines (Nationalisation)
Act came into force on 1.5.1973, the management of Victory Colliery
along with the disputed properties were taken over by the Central
Government on 1.1.1973. No objection was taken thereto by the plaintiff. F
It was only on 1.1.1976 the plaintiff issued a legal notice to the appellant
to vacate the suit premises and to pay arears of rent from January, 1973 till
the filing of the suit. Title Suit (T.S.No.7/6 of 1976) for eviction was
filed on 2.2.1976. On 21.5.1979, the 1st Additional Subordinate Judge
dismissed the suit with costs. The respondent preferred an appeal against G
the judgment and decree passed by the Trial Court. It was allowed by the
Division Bench of the Patna High Court. The High Court was of the view
that right, title and interest in the suit premises had not vested in the
Central Government. Bharat Cooking Coal Limited in respect of the suit
premises was a tenant under Madanlal Agrawal. Since it had defaulted in
payment of rent for the period from January, 1973, it was liable to be H
892
SUPREMECOURTREPORTS (1996] SUPP. 8 S.C.R.
A evicted from the suit premises. Therefore, the respondent's suit was decreed.
A further direction was given to pay the arrears of rent to the tune of Rs.
66,000 and mesne profits.
The Trial Court on examination of the facts came to the conclusion
that there was no relationship of landlord and tenant between the plaintiff
B and the defendant. 'ft found that Bharat Cooking Coal Limited was
maintaining the said premises since vesting of victory Colliery in the Central
Government. The cost of repairs, electricity and water charges in respect
of the suit premises were to be borne by the United Mining Company on
behalf of the colliery before its nationalisation. Madanlal Agrawal, the
plaintiff stated in cross-examination that he was the director of the United
C Mining Company. The other director was his own brother. He also stated
that he had got the account books to prove that he purchased the suit
premises out of personal funds but he did not file the same. He also stated
that the Company used to pay rent of the suit property but he did not
produce the rent receipts. He also admitted that he could not say when he
constructed the house and what was the total cost. The expenses of electricity
D and water connections in the suit properties were paid by the United Mining
Company. He admitted in the cross-examination that the employees of
United Mining Company were in occupation of the suit premises. The
office store, compressor room, garage etc. of the Victory Colliery were in
the suit properties. The suit premises were used by United Mining Company
E exclusively for the purpose of Victory Colliery. The Trial Judge observed
that "it appears that defendant No.2 is nobody but the family member of
the plaintiff'. The Trial judge came to the conclusion that in view of these
facts and also in view of the provisions of the Coal Mines (Nationalisation)
Act, the suit was not maintainable and the plaintiff was not entitled to any
of his claims.
F
In appeal, it was held by a Division Bench of the Patna High Court
that ihe plaintiff/appellant was the owner of the suit premises of which
Bharat Coking Coal Limited was the tenant and as it had defaulted in
payment of rent from January, 1973 onwards. It was liable to be evict.;d.
G The High Court came to the conclusion on the strength of a share certificate
that Madanlal Agrawal became a shareholder of United Mining Company
for the first time in 1951 but had purchased the suit properties in the year
1949.
That being the position, it was held that the suit premises had not
H vested in the Central Government by virtue of the provisions of the Coal
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN. J.] 893
Mines (Nationalisation) Act. Therefore, an eviction order had to be passed A
'
for non-payment of rent against Bharat Cooking Coal Limited.
Before this Court, the argument on behalf of Bharat Coking Coal
Limited, the appellant was confined to the scope of Coal Mines
(Nationalisation) Act, 1973. The validity of the finding of the High Court
that United Mining Company was a tenant of Madanlal Agrawal has not B
been challenged. Therefore, the only question that falls for determination
before us is whether the right, title and interest of Madanlal Agrawal in
the suit premises have vested in the Central Government by virtue of
Section 3 of the Coal Mines (Nationalisation) Act, 1973.
Even before the Nationalisation Act was passed, various legislations C
were passed in regard to coal mines for the purpose of preservation of coal ·
and safety of miners working in the coal mine.
In 1952, the Coal Mines (Conservation and Safety) Act, 1952 was
passed. The purpose of the Act was declared to be "it is expedient in the D
public interest that the Central Government should take under its control
the regulation of coal mines to the extent hereinafter provided". Under
this Act, the private ownership of coal mines was not disturbed, but. mining
operations were strictly regulated. ·A Board was set up for the purpose of
maintenance of safety in coal mines and for conservation of coal. "Mine"
was not separately defined in the Act but by Section 3(1) "Agent", "Mine" E
and "Owner" were given the same meaning as in Section 3 of the Indian
Mines Act, 1923.
The Mines Act, 1952 came into furce on !st July, 1952. It dealt with
mines generally. "Mine" was defined by Section 2(j) as under:
F
"20)
"mine" means any excavation where any operation for the
purpose of searching for or obtaining minerals has been or is
being carried on, and includes:
(i)
all borings, bore-holes and oil wells,
(ii)
all shafts in or adjacent to and belonging to a mine, whether
in the course of being sunk or not.
G
(iii)
all levels and inclined planes in the course of being driven. H
894
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F
G
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SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
(iv)
all open-cast workings,
(v)
all conveyers or aerial ropeways provided for the bringing
into or removal from a mine of minerals or other articles or
for the removal of refuse therefrom.
(vi)
all adits, levels, planes, machinery, works, railways, tramways,
and sidings in or adjacent to and belonging to a mine;
(vii)
all workshops, situated within the precincts of a mine and
under the same management and used solely for purposes
connected with that mine or a number of mines under the
same 1nanagement,
(viii) all power stations for supplying electricity solely for the
purpose of working the mine or number of mines under the
.•.
same management,
(ix)
any premises for time being used for depositing refuse from
a mine, or in which any operation in connection with such
refuse is being carried on, being premises exclusively occupied
by the owner of the mine.
(x)
unless exempted by the Central Government by notification
in the official gazette, any premises or part thereof, in or
adjacent to and belonging to a mine, on which any process
ancilliary to the getting, dressing or preparation for sale of
minerals or of coke is being· carried on";
"'Owner" was defined by Section 2(1) as under :
"2( 1) "o\vner" when used in relation to a mine, means any person
who is the immediate proprietor or lessee or occupier of the
mine or of any part thereof and in the case of a mine the
business whereof is being carried on by a liquidator or
receiver, such liquidator or receiver and in the case ofa mine,
owned by a company, the business whereof is being carried
on by a managing agent, such managing agent; but does not
include a person who merely receives a royalty, rent or fine
from the mine, or is merely the p1iiprietor of the mine, subject
•
---
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, I.) 895
to any lease, grant or licence for the working thereof, or is A
merely the owner of the soil and not interested in the minerals
of the mine; but any contractor for the working of a mine or
any part thereof shall be subject to this Act, in like manner as
if he were an owner but not so as to exempt the owner from
any liability;"
The limited nature of the definition of 'mine' in the Mines Act was
explained in the case of Serajuddin and Co. v. Workmen, AIR (1966) SC
921, where it was pointed out by this Court that 'mine' in Section 2U) of
B
the Mines Act clearly excluded an office of a mine which was separately
defined by Section 2(K) as meaning an office at the surface of the mine
concerned. The office of the mine, even though situated on the surface of C
the mine, did not fall within the definition of 'mine'.
A much more extended meaning of 'mine' was given in the Coal
Mines (Taking Over of Management) Act, 1973 by which the management
of coal mines in India was vested in the Central Government on and from
the appointed date, i.e., 30th January, 1973. The coal mines specified in D
the Schedule to the Act were deemed to be the mines of which the
management vested in the Central Government by virtue of the provisions
of Section 3(2). It was further provided that, if after the appointed day,
the existence of any other coal mine came to the knowledge of the Central
Government, whether after an investigation or in pursuance of an intimation E
given to it under sub-section (5) or otherwise, the Central Government
was empowered to issue an order making a declaration about the existence
of such mine on and from the date of such declaration. The management
of such mines was also deemed to have vested in the Central Government
and such mines were deemed to have been included in the Schedule. Subsections (3),(4), (5) and (6) of Section 3 provided as under:
F
"(3) If any error or omission is notified in the Schedule in
relation to the name or address of the owner of a coal mine,
the owner of such mine shall, within thirty days from the
date on which this Act receives the assent of the President, G
bring such error or omission to the notice of the Central
Gov~rnment.
(4) If, after the appointed day, the Central Government is
satisfied, whether from any information received by it or
otherwise, that there has been any error, omission or H
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896
SUPREME COURT REPORTS [I 996] SUPP. 8 S.C.R.
misdescription in relation to the particulars of a coal mine
included, or deemed to be included, in the Schedule or the
name and address of the owner of any such coal mine, it
may, by notified order, correct such error, omission or
misdescription, and on the issue of such notified order the
relevant entries in the Schedule shall stand corrected
accordingly:
Provided that no such correction in relation to ownership of
a coal mine shall be made where such ownership is in dispute.
(5) Every person in charge, immediately before the date on
which this Act receives the assent of the President, of the
management of any coal mine, being a coal mine not included
or deemd to be included on the said date in the Schedule,
shall within thirty days from the said date, intimate the Central
Government the name and location of such mine and the
name and address of the owner thereof
(6) Where there is a dispute with regard to the declaration
made by the Coal Board under the Coking Coal Mines
(Emergency Provisions) Act, 1971, to the effect that a coal
mine contains coking coal, the management of such coal mine
shall, notwithstanding anything contained in ·the said Act,
vest in the Central Government under this Act and nothing
contained in the first mentioned Act shall apply, or be deemed
ever to have applied to the said coal mine"
For the purpose of this case, it is important to note that the Schedule
F appended.to the Act was not treated as final and conclusive. Every person
incharge of management of coal mine which was not included in the
Schedule had a duty to intimate to the Central Government, the name and
location of such mine and the name and address of the owner thereof The
words specifically not defined in Section 2 were assigned the meanings
G given to them in Section 3 of the Mines Act, 1952. 'Mine', however, was
given a very wide meaning under Section 2(g).
The extended definition of 'mine' specifically included all lands,
buildings and equipments belonging to the owner of the mine and adjacent
to or situated on the surface of the mine where the washing of coal or
H manufacture of coke was carried on. It also included all lands and buildings
c:::
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BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.] 897
other than those referred to above whereever situated and were solely used A
for location of management as well as of liaison officer or the residence of
officers and staff of the mine. In other words, building used for the residence
of the officers and staff etc. had to be treated as 'mine' in spite of the fact
that such lands and buildings might not have belonged to the owner of the
'mine' in ordinary sense. It will also appear from the definition of 'mine'
that the phrase 'belonging to the owner of the mine' was only to be found B
in sub-clause (x) and sub-clause (xii) of Section 2(g). The legislative intent
obviously was to bring lands, buildings and equipments which did not
belong to the owners but were used in the running of the coal mine within
the ambit of the word 'mine'. The intention appears to be that the Central
Government after taking over of the mine must be in a position to run the
mine as it was being run previously with all the plants, equipments, C
machineries, lands and buildings. Even if some of the properties mentioned
in the definition did not belong to the owner, those will be available to the
Central Government for running the mine. As this provision might lead to
a conflict with other laws, it was expressly provided by Section 12 that the
provisions of this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law. In the Schedule annexed to the Act, D
names and addresses of the mines, management of which was taken over
as well as the names of the owners of the mines were given. "Victory P.O.
Dhansar" was mentioned at Serial No. 68 and United Mining Company
Limited has been shown as the owner of the mine. By virtue of Section 3
read with the extended definition of mine given in the Act, not only the
colliery, but the buildings which are being utilised for location of the E
managment and the office of the mine as also for residence of the officers
and staff of the mine were brought under the management of the Central
Government. If the office building belonged to a person other than the
Colliery Company which owued the mine, then it was his duty to draw the
attention of the Central Government to the fact that these building even
though included in the definition of 'mine', actually did not belong to F
United Mining Company Limited which was described generally as the
owner. In such a case, the description of the owner might have been
corrected. But even if such an error took place which required correction,
the owner of the lands and buildings falling within sub-clause (xi) of
clause (g) of Section 2 could not get back the management or control over G
these lands and buildings. It is of significance to note that Madanlal Agrawal
who is a Director of United Mining Company Limited did not raise ·any
objection to the description of United Mining Company Limited as the
owner of the coal mine at any point of time and did not seek for any
correction. It is not his case that he was unaware of the wide definition of
'mine' given in this Act.
H
898
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A
The Coal Mines (Taking Over of Management) Act, 1973 was
followed by the Coal Mines (Nationalisation) Act, 1973. The extended.
definition of 'mine' that was given under the Coal Mines (Taking Over of
Management) Act was retained in Section 2(h) of the Nationalisation Act
with some modification.
B
The object of the Nationalisation Act was stated to be-
"An Act to provide for the acquisition and transfer of the
right, title and interest of the owner in respect of the coal
mines specified in the schedule with a view to reorganising
a.'ld re-constructing such coal mines so as to ensure the rational,
C
co-ordinated and scientific development and utilisation of
coal resources consistent with the growing requirements of
the country, in order that the ownership and control of such
resources are vested in the state and thereby so distributed as
best to subserve the common good and for matters connected
therewith or incidental thereto."
D
E
F
G
H
A declaration was made in the Act in Section IA which is as under:-
"IA- Declaration as to expediency of Union control.-(1) It
is hereby declared that it is expedient in the public interest
that the Union should take under its control the regulation
and development of coal mines to the extent hereinafter
provided in sub-sections (3) and (4) of section 3 and subsection (2) of section 30."
"Mine" was defined by Section 2(h) of the Act as under:
"2(h) 'mine' means any excavation where any operation for
the purpose of searching for or obtaining minerals has been
or is being carried on, and includes-
(i) all borings and bore holes;
(ii) all shafts whether in the course of being sunk or not;
(iii) all levels and inclined planes in the course of being driven;
(iv) all open cast workings;
..
--
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.] 899
(v) all conveyers or aerial ropeways provided for bringing A
into or removal from a mine of minerals or other articles or ·
for the removal of refuse therefrom;
(vi) all lands, buildings, works, adits, levels, planes, machinery
and equipments, instruments, stores, vehicles, railways,
tramways and sidings in, or adjacent to a mine and used for B
the purposes of the mine;
(vii) all workshops (including buildings, machinery
instruments, stores equipments of such workshops and the
lands on which such workshops stand) in, or adjacent to, a
mine and used substantially for the purposes of the mine or a C
number of mines under the same management;
(viii) all coal belonging to the owner of the mine, whether in
stock or in transit, and all coal under production in a mine;
(ix) all power stations in a mine or operated primarily for
supplying electricity for the purpose of working the mine or
a number of mines under the same management;
D
(x) all lands, buildings and equipments, belonging to the
owners of the mine, and in adjacent to or situated on the E
surface of, the mine where the washing the coal obtained
from the mine or manufacture, therefrom, of coke is carried
on;
(xi) all lands and buildings other than those referred to in F
sub-clause (x) whereever situated, if solely used for the
location of the management, sale or liaison offices, or for
the residence of officers and staff, of the mine;
(xii) all other fixed assets, movable and immovable, G
belonging to the owner of a mine, wherever situate and
current assets, belonging to a mine whether within its premises
or outside.
Explanation-The expression "'current assets'' does not
includeH
A
c
D
900
SUPREME COURT REPORTS [I 996] SUPP. 8 S.C.R.
(a) dues representing the sale of coal and coal products effected
at any time before the appointed day and outstanding
immediately before the said day;
(b) dues from the Coal Board, established under section 4 of
the Coal Mines (Conservation Safety and Development) Act,
I 952 prior to the repeal of the said Act, with respect to any
period before the appointed day;
(c) dues from sundry debtors, Joans and advances to other
parties and investments, not being investments in the coal
mines;
(d) security deposits made by the owners with the Coal
Controller appointed by the Central Government or with
the Railways for the fulfilment of contracts or with a State
Electricity Board for the payment of bills;
(e) earnest money deposited by the owners with the Railways
for obtaining contracts;"
Sub-section (n) of Section 2 laid down that words and expressions
used but not defined in the Act will have the meanings assigned to them in
E the Coal Mines (Conservation and Safety) Act, 1952. Sub-section (o) of
Section 2 provided that words and expressions used in the Nationalisation
Act which have not been defined in the Coal Mines (Conservation and
Development) Act, 1974, but defined in the Mines Act, 1952, will have
the meanings assigned to them in the Mines Act.
F
By virtue of Section 3, the right, title and interest of owners in
r.elation to the coal mines specified in the Schedule stood transferred to
and vested absolutely in the Central Government free from all encumbrances
from the appointed day, !st May, 1973. The idea behind the Nationalisation
Act appears to be that the Government wanted to take over and run the
G coal mines so as to ensure rational, co-ordinated and scientific development
and utilisation of coal resources. The object of the Act was to subserve the
common good and for matters connected therewith or incidental thereto.
The Act should not be construed in a way to frustrate the working of the
coal mines altogether and thereby stop or bring down production of coal
by the nationalisation of coal mines. The extended meaning given to 'mine'
H was to ensure that the activity of mining of coal could be carried on in an
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.] 901
uninterrupted fashion. Not only the lands, buildings and equipments A
belonging to the owners of the mine but other lands and buildings which
were solely used for the purposes of office or residence of the officers and
staff of the mine also vested in the Central Government. The words of
sub-clause (xi) are very clear and there is no ambiguity in them.
Mr. Sorabjee appearing on behalf ofMadanlal Agrawal has contended B
that what has been taken over under Section 3 by the Central Government
is the "right, title and interest of the owners in relation to the coal mines
specified in the Schedule". Serial No, 204 in the Schedule mentions
"Victory" as the coal mine and its owner has been described as United
Mining Company Limited. The .compensation payable has also been
mentioned as a sum of Rs. 9,17,000. Jn other words, by virtue of Section C
3, the
United
Mining
Company was
being
divested of
its right, title and interest in the mine. The amount of compensation payable
to the company was also fixed by the statute. Section 3 read with the
Schedule leaves no room for doubt that only the interest of the company
and nobody else was being acquired under Section 3. The company may
have taken a house on lease, but the lessor was not divested of ownership D
of the house in any way by virtue of the provisions of Section 3.
If this argument is upheld, it will make the extended meaning given
to 'mine' in sub-section (h) of Section 2 nugatory and of no effect. "Coal
Mine' has been defined by Section 2(b) to mean a mine in which there E
exists one or more seams of coal. 'Mine' has been defined to include
amongst others all conveyers or aerial ropeways provided for the bringing
into or removal from a mine of minerals or other articles or for the removal
of refuse therefrom, all lands, buildings works, vehicles, railways, tramways
and sidings in, or adjacent to a mine and used for the purpose of the mine,
all workshops (including buildings, machinery, instruments, stores, F
equipment of such workshops and the lands on which such workshop
stands) in or, adjacent to, a mine and used substantially for the purposes of
the mine, all power stations in a mine or operated primarily for supplying
electricity for the purpose of working the mine. All these things may not
belong to the owner to come within the ambit of the Nationalisation Act.
The extended definition of mi~e has been given in order to ensure that G
after taking over of the mine, the Central Government is in a position to
operate the mine and extract coal and do everything that is needful for the
purpose of working the mine. In fact, the phrase "belonging to the owner
of the mine" is to be found only in sub-clauses (viii), (x) and (xii). That
clearly goes to show that the other assets, movable or immovable, which
were being actually used and utilised for operation of the mining H
902
SUPREME COURT REPORTS (1996] SUPP. 8 S.C.R.
A activity were all being taken over by the Central Government even though
these did not belong to the owners. There is no sense in giving this extended
meaning to 'mine' ifthe intention of the Act was not to acquire the right
of ownership in these assets falling within the definition of 'Mine'.
It is also of significance that Section 3 speaks of vesting of "right,
B title and interest of the owners in relation to the coal mines specified in the
Schedule". All ownership rights not only of, but in relation to, the coal
mines were being taken over by the Central Government free from all
encumbrances from the appointe~ day. The Section also does not speak of
the right, title and interest of the owners specified in the Schedule. On the
contrary, it speaks of "coal mines specified in the Schedule". In other
C words, the coal mines specified in the Schedule are being brought under
the ownership of the Central Government which will take in everything
included in the definition of mine. The ambit of the coal mine has to be
understood in the sense as given in the Act. The fact that the name of the
company has been given as the owner and the amount of compensation
has also been fixed in the ·schedule does not mean that the vesting was
D confined only to the assests of the company in the mine. The Schedule
contains a list of the mines which have vested in the Central Government.
In order to ascertain exactly what has vested in the Central Government,
the definition of 'mine' given in Section 2(h) will have to be taken into
account. What the Schedule has done is to give the names and location of
E the mines, the names and addresses of the owners of the mines and also the
amounts of compensation to be paid. It is not in dispute that United Mining
Company was named as the owner of Victory coal mine. From this,
however, it does not follow that all assets, lands, buildings and euipments
which fall within the ambit of the definition of mine as given in Section
2(h) will not vest in the Central Government unless they belong to the
F Company. If Section 3 is read with Section 2(h) and also sub-sections (3)
and (5) of Section 26, it will be clear that vesting under Section 3 was not
confined to the interest of the owner named in column 4 of the Schedule.
The contention that Section 3 was of limited application and only
G took away the rights of the owners specified in the Schedule is not borne
out of the scheme of the Act and also the wording of Section 3.
Section 3 of the Act which deals with acquisition of the rights of
owners of coal mines in relation to the coal mines, requires to be interpreted
in the light of the objects for which the Coal Mines (Nationalisation) Act,
H 1973 was enacted. As set out in the Preamble, the purpose is reorganising
... -
BHARAT COKING COAL LTD ' MADAN LAL AGRAWAL [SEN. J.] 903
and reconstructing such coal mines so as to ensure a rational, coordinated A
and scientific development and utilisation of coal resources.