# BIHAR MINES LTD v. UNION OF INDIA

- **Citation:** [1967] 1 S.C.R. 707
- **Court:** Supreme Court of India
- **Decided:** 1966-10-03
- **Case number:** Civil Appeals Nos. 172-174 .of 1963
- **Bench:** K. SuBBA RAO, M. Hidayatullah, S. M. Sikri, R. S. Bachawat, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bihar-mines-ltd-v-union-of-india-3905
- **Pages:** 14

## Headnote

Bihar Land Reforms Act, 1950 (Act 30 of 1950), s. 10(1) & (2)-
Subsisting mining leases deemed after date of vesting to be leases by the
State Government-Such leases whether 'existing mining leases as defined by Rule 2(c) of Mining Leases (Modification
of
Terms)
Rules,
1956--Control/er's power to modify terms and conditions of leases under
the Mines and Minerals (Regulation and Development Act 1957) read
with the 1956 Rules whether applies to such leases-Validity of 1951 Act
and 1956 Rules.
A lease of certain lands in Palganj estate in Bibar was granted by the
Zamindar in 1928 for a period of 49 years. The lease was for the mining of soap stone, kaoline etc.
There were sub-leases
in 1933, 1934,
and 1954-tbe last being in favour of the appellants.
Under the Bihar
D
Land Reforms Act, 1950 and the relevant notifications thereunder, the
estate of Palganj and the rights of intermediaries and tenure-bolder. passed to the State of Bibar. Section 10( l) of the Reforms Act provided
that mining leases subsisting immediately before the date of vesting were,
as from that date to be deemed tb be leases by the State Government to
the same lessees. The terms and conditions of such
leases, according
to s. 10(2) were to be the same as before except for the power of modificatron to be found in the Central Act for the time being in force.
At
E
the time of vesting the Central Act in force was the Mines and Minerals
(Regulation and Development) Act, 1948. The Mining Leases (Modification of Terms) Rules, 1956 were framed under s. 7 of the 1948 Act.
The latter Act was replaced by the Mines and Minerals (Regulation and
Development) Act, 1957; however the 1956 Rules were continued under
it. The 1956 Rules gave power to the Controller of Mines to modify
'existing mining leases'; these according to r. 2(c) were leases granted
F
before October 25, 1949. No mining lease according to the 1957 Act
could be for a period of more than 20 yean unless it was for the mining
of coal. iron ore or bauxite. Since the head lease in the present case
was granted in 1928 it had according to the Controller lasted more than
20 years; by order dated July 1, 1961 he, therefore, terminated it. The
appelhlnts went in revision to the Central Bo~rd of Revenue and failing
there, came by Special Leave to this Court. The main
contention on
behalf of the appellants was that the lease of 1928 was succeeded by a
G
new statutory lease under s. 10(1) of the Bihar Act, and the new lease
H
- was not subject to modification
by
the Controller.
Other contentions
were that the 1957 Act was not
protected by Act 31A(l)(e) of the
Constitution, that the 1956 rules providin~ for premature termination of
leases without compensation went against the terms of the 1948 Act and
were therefore invalid; and that the period of 20 years for which the
lease could last was to be reckoned from the date of commencement of
the 1957 Act.
HELD: Per Subba Rao C. J. and Sikri and Raghubar Dayal· JJ.-
Tbe head lease of 1928 subsisted immediately before the date of vesting of Palganj estate in the State. Therefore the whole or that part of
708
SUPREME COURT REPORTS
(1967] l S.C.R.
the estate or tenure comprised in this lease was, with effect from the date
A
of vesting, lO be deemed to have been leased by the State Governmcm
to the holder of the lease i.e. the first Jessee up to August II, 1977, the
lease being for 49 years.
This statutory lease held by the head lessee
from the State Government under s. JO of the Bihar Land Reforms Act.,
1950 was a new lease granied
after October 25, 1949.
(713 C; 714
E-F)
The 1956 rules provided for the modification of the leases granted
h
before October 25, 1949. It followed that in pursuance of the provi·
sions of s. JO the terms of the statutory lease
could not be modified
when the lease be held to be a new lease from the date of vesting.
[713 BJ
When the head lease could not be modified the sub-leases abo could
not be modified.
They too would be deemed to be new leases granted
b

## Text

A
B
c
BIHAR MINES LTD.
v.
UNION OF INDIA
October 3, 1966
[K. SuBBA RAO, C. J., M. HIDAYATULLAH, S. M. SIKRI,
R. S. BACHAWAT AND RAGHUBAR DAYAL, JJ.]
Bihar Land Reforms Act, 1950 (Act 30 of 1950), s. 10(1) & (2)-
Subsisting mining leases deemed after date of vesting to be leases by the
State Government-Such leases whether 'existing mining leases as defined by Rule 2(c) of Mining Leases (Modification
of
Terms)
Rules,
1956--Control/er's power to modify terms and conditions of leases under
the Mines and Minerals (Regulation and Development Act 1957) read
with the 1956 Rules whether applies to such leases-Validity of 1951 Act
and 1956 Rules.
A lease of certain lands in Palganj estate in Bibar was granted by the
Zamindar in 1928 for a period of 49 years. The lease was for the mining of soap stone, kaoline etc.
There were sub-leases
in 1933, 1934,
and 1954-tbe last being in favour of the appellants.
Under the Bihar
D
Land Reforms Act, 1950 and the relevant notifications thereunder, the
estate of Palganj and the rights of intermediaries and tenure-bolder. passed to the State of Bibar. Section 10( l) of the Reforms Act provided
that mining leases subsisting immediately before the date of vesting were,
as from that date to be deemed tb be leases by the State Government to
the same lessees. The terms and conditions of such
leases, according
to s. 10(2) were to be the same as before except for the power of modificatron to be found in the Central Act for the time being in force.
At
E
the time of vesting the Central Act in force was the Mines and Minerals
(Regulation and Development) Act, 1948. The Mining Leases (Modification of Terms) Rules, 1956 were framed under s. 7 of the 1948 Act.
The latter Act was replaced by the Mines and Minerals (Regulation and
Development) Act, 1957; however the 1956 Rules were continued under
it. The 1956 Rules gave power to the Controller of Mines to modify
'existing mining leases'; these according to r. 2(c) were leases granted
F
before October 25, 1949. No mining lease according to the 1957 Act
could be for a period of more than 20 yean unless it was for the mining
of coal. iron ore or bauxite. Since the head lease in the present case
was granted in 1928 it had according to the Controller lasted more than
20 years; by order dated July 1, 1961 he, therefore, terminated it. The
appelhlnts went in revision to the Central Bo~rd of Revenue and failing
there, came by Special Leave to this Court. The main
contention on
behalf of the appellants was that the lease of 1928 was succeeded by a
G
new statutory lease under s. 10(1) of the Bihar Act, and the new lease
H
- was not subject to modification
by
the Controller.
Other contentions
were that the 1957 Act was not
protected by Act 31A(l)(e) of the
Constitution, that the 1956 rules providin~ for premature termination of
leases without compensation went against the terms of the 1948 Act and
were therefore invalid; and that the period of 20 years for which the
lease could last was to be reckoned from the date of commencement of
the 1957 Act.
HELD: Per Subba Rao C. J. and Sikri and Raghubar Dayal· JJ.-
Tbe head lease of 1928 subsisted immediately before the date of vesting of Palganj estate in the State. Therefore the whole or that part of
708
SUPREME COURT REPORTS
(1967] l S.C.R.
the estate or tenure comprised in this lease was, with effect from the date
A
of vesting, lO be deemed to have been leased by the State Governmcm
to the holder of the lease i.e. the first Jessee up to August II, 1977, the
lease being for 49 years.
This statutory lease held by the head lessee
from the State Government under s. JO of the Bihar Land Reforms Act.,
1950 was a new lease granied
after October 25, 1949.
(713 C; 714
E-F)
The 1956 rules provided for the modification of the leases granted
h
before October 25, 1949. It followed that in pursuance of the provi·
sions of s. JO the terms of the statutory lease
could not be modified
when the lease be held to be a new lease from the date of vesting.
[713 BJ
When the head lease could not be modified the sub-leases abo could
not be modified.
They too would be deemed to be new leases granted
by the new lessee from the State Government, as the rights of the original
C
lessor wider the original lease had ceased on the vesting of the estate,
and he is deemed to have got a new lease from the State. (714 F-0)
[In view of the above finding the other contentions of the appellants
did not fall to be considered by the majority.]
(714 G-H]
Per Hidayatullah and Bachawat JJ.
(i) The lease under s. 10( I) of the Bihar Act is not a new lease; tho
subsisting lease is continued after substituting
the State Government as
the lessor in place of. the proprietor or tenure-holder.
(718 B-C]
The opening words of s. JO are 'Notwithstanding anything contained
in the Act', and therefore s. JO holds the field despite the provisions of
the Act by virtue of which estates and tenures were vested in the State.
[718 A-Bl
The new leases under s. 9 of the Act as well as the subsisting leases
under s. 10 were intended by the legislature to be in conformity with the
Central Act regulating mining leases. The intention of the Legislature
would be completely frustrated if it was held that the leases referred to
in s. 10(2) need not be in conformity with the laws regulating mining
leases.
[718 F-H)
D
E
Section I OA which was enacted in 1965
is on the footing that the
F
sub-leases continued lo exist.
This could not be &0 if the leases 1111der
s. 10(1) were new leases, for the State Government could not grant a
· new lease as well as sub-leases in reopect of the same subject matter at
the same time.
(719 C-D]
(ii) The period of 20 years for the life of the lease had to bo m:koncd from the date of commencement of the lease and not from the date
of commencement of the Act of 1957. [719 F-H]
G
(iii) The 1957 Act wai protected by Article 31A(l)(b) of the Constitution.
The words 'winning a mineral' in the article were to be given
a wide connotation so as to include extracting of minerals. [715 CD)
(iv) The 1956 Rules were framed under s. 7 of the 1948 .Act and
not under Entry 36 Li-t JI.
In so far as the said Rules did not provide
for compensation for the premature termination of a lease they were in
contravention of s. 7(2)(b) of the 1948 Act, but th~ were deemed to
be rules under the 1957 Act and th~refore their validity had to be considered in terms of the •auer Act.
As they conformed to the 1957'Act
they were 'Valid. [715 HJ
·
H
A
B
c
D
E
F
G
H
BillAR MINES V; UNION (Dayal, /:)
709
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 172-174
.of 1963.
Appeals by special leave from the orders dated January}l8,
1962 of the Government oflndia (Ministry of Steel, Mines and FuelDepartment of Mines and Fuel) in Cases Nos. H. 317, H317A and
H. 317B.
A. K. Sen, G. L. Sanghi, S. N. Andley, Rameshwar Nath and
Mahinder Narain, for the appellant (in all the appeals).
Niren De, Addi. Solicitor-General, R. Ganapathy Iyer and
R. H. Dhebar, for respondent Nos. I and 2 (in all the appeals)
M. K. Ramamurti, D. P. Singh and S. C. Agarwala, for respondent No. 3 (in all the appeals).
The Judgment of SUBBA RAo, c. J., SIKRI and RAGHUBAR
DAYAL, JJ. was delivered by DAYAL, J. The dissenting Opinion of
HIDAYATULLAH and BACHAWAT, JJ. was delivered by BACHAWAT, J.
Raghubar _ Dayai, J. These three appeals, by special leave,
are directed against the orders of the Central Government ·dated.
January 18, 1962, on applications for revision under r. 7 of the
Mining Leases (Modification of Terms) Rules, 1956, hereinafter
called the 19 56 rules, in respect of the orders passed by the Controller
of Mining Leases, Nagpur, on July I, 1961, in Cases Nos. H-317,
H-317A and H-317B.
The appeals arise thus. On August 11, 1928, Raja Ran Bahadur
Singh of Palganj, in Bihar, executed a lease with respect to a certain
area of his estate in favour of Babu Tribang Murari Chakravarti
of Asansol for a period of 49 years for the purpose of carrying
out mining opeqttions in the said area for soap stone, kaoline etc.
Chakravarti, the head lessee, executed a sub-lease in favour of
Deoji Jairam
Solanki on May 18, 1933.
Solanki, in his turn,
granted a sub-lease in respect of the same area in favour of M/s
Hirji Premji Parmar & Brothers on May 18, 1934. On October
18, 1954, M/s Hirji Premji Parmar &
Brothers, assigned their
right, title and interest in the said area in favour of the appellants,
the Bihar Mines Ltd., Calcutta, for a period of 19 years and 7
months expiring on May 17, 1974.
The Bihar Land Reforms Act, 1950 (Act 30 of 1950), hereinafter called the Reforms Act, came into force on September
25, 1952. On July 13, 1953, the Government of Bihar issued a
notification under sub-s. (1) of s. 3 declaring that the estate of
Palganj passed to and became vested in the
State. On January
26, 1955, the State Government issued a notification under s. 3A
of the Reforms Act declaring that the intermediary interests of all
intermediaries in the whole estate had passed to and become vested
710
SUPREME COURT REPORTS
(1967) l ~.C.R.
in the State. Chakravarti's mining rights in the area comprised
in the lease b.:came subject to the provisions of s. 10 of the Reforms.
Act.
In 1948, the Mines and Minerals (Regulation and Development) Act, 1948 (Cent(al Act 53of1948), hereinafter called the 1948
Act, was enacted for the regulation of Mines. Section 4(1) of this
Act, provided that no mining leases would be granted after the
commencement of the Act otherwise than in accordance with the
rules made under that Act. Sub-s. (2) provided that any mining
leases granted contrary to sub-s., (I) would be void and of no
effect.
Section 5 empowered the Central Government to make
rules for regulating the grant of mining leases in respect of any
mineral or in any area. Section 7 empowered the Central Govern·
ment to make rules for the purpose of modifying and altering the
terms and conditions of any mining leases granted prior to the
commencement of the Act so as to bring such leases into conformity with the rules made under s. 5.
The Mineral Concession Rules, 1949, hereinafter called the
1949 rules, were made by the Central Government in the exercise
of its powers under s. 5 of the 1948 Act. The 1956 rules were
made by the Central Government in exercise of its powers under
s. 7.
Rule 6 of the 1956 rules empowered the Controller of Mining
Leases, after following the prescribed procedure, to modify any
existing miniug lease so as to bring it in conformity with the 1948
Act and the 1949 rules.
The Mines and Minerals (Regulation and Development)
Act, 1957 (Act 67 of 1957), hereinafter called the 1957 Act, repealed
the 1948 Act. In view of its s. 29, the 1956 rules continued to be
effective.
The Controller of Mines took action for the modification of
the head lease dated August II, 1928, and the sub-leases executed
in favour of Solanki and Hirji Premji Parmar & Brothers in 1933
A
B
c
D
E
F
and 1934 respectively.
Notice was issued to the appellants of the
proposed modifications. The appellants, however, do not admit
having received the potice of the modifications of the sub-leases.
G
They admit the receipt of the notice for the modification of the head
lease. They appeared before the Controller and raised objections
to the proposed modifications. The Controller, however, passed
an order on July I, 1961 to the effect that the head lease and the subleases would terminate on July I, 1961. Against these orders of
the Controller the appellant had filed revisions before the Central
H
Government which were rejected. It is against those orders of
the Controller and the Central Government that the present appeals
have heen filed.
'
A
B
c
D
E
F
G
H
B!HAR MINES v. UXION (Dayal, J.)
711
The first and the main contention for the appellant is that the
head lease could not be modified under the 1956 rules as it did not
come within the expression 'existing mining lease' as defined in
cl. (c) of r. 2 of those rules. 'Existing mining lease' means a mining
lease granted before October 25, 1949, and subsisting at the commencement of the 1956 rules, but does not include any leases specified
in sub-clauses (i) to (iv) of cl. (c). The head lease was granted in
1928 and would ostensibly come within 'existing mining leases'.
The contention, however is that in view of s. 10 of the Reforms
Act, the head lease as such came. to an end and a new statutory
lease under s. I 0 replaced it and that therefore this new statutory
lease was not a lease granted before October 25, 1949.
The contention for the respondent is that the effect of s. 10
of the Reforms Act is that the old lease continued with the State
Government substituted as the lessor in the place of the original
lessor and that therefore the lease could be modified as an existing
mining lease.
We agree with the contention for the appellant.
The preamble of the Reforms Act states that it was expedient
to provide for the transference to the State of the interests of proprietors and tenure-holders in land and of mortgagees and lessees
of such interests including interest in trees etc., mines and minerals.
Notifications under ss. 3 and 3A of the Reforms Act passed to and
vested in the State the estates or tenures of a proprietor or tenureholder and also the intermediary interests of all intermediaries. No
interest thus remains in the lessor, the original proprietor of the land
leased. Section 4 of the Reforms Act further emphasized the consequences of the vesting of the estate or tenure in the State. Clause
(a) of s. 4 mentions one of the consequences and states that
on
the
publication
of the
aforesaid
notification,
such
estate or tenure, including the interests of the proprietor or
tenureholder in any building etc., in trees etc., as also his interest
in all sub-soil including any rights in mines and minerals whether
discovered or undiscovered or whether being worked or not, inclusive of such rights of a lessee of mines and minerals comprised in
such estate or tenure other than the interests of raiyats or underraiyats shall, with effect from the date of vesting, vest absolutely
in the State free from all encumbrances and such proprietor or
tenure-holder shall cease to have any interests in such estate or
tenure other than the interests expressly saved by or under the
provisions of the Act. It is- clear therefore that the interest of the
proprietor or tenure-holder including his rights in mines and
minerals, inclusive of rights of a lessee of mines and minerals
come to an end and vest absolutely in the State. Having or.ce
so vested, certain rights were conferred by statute on the proprietors
and tenure-holders and the lessees. .Section 9 provides that the
M16Sup.C.L/66-17
712
SUPREME COURT REPORTS
(1967] l S.C.R.
mines which were in operation at the commencement of the Act
and were being worked directly by the intermediary shall be deemed
to have been leased by the State Government to the intermediary
and he shall be entitled to retain possession of those mines as a
lessee thereof. The mines in the present case were not worked
by the intermediary lessor. The lease by the State Government
to the intermediary, according to sub-s. (2) of s. 9, was to have
such terms and conditions as be agreed upon between the State
Government and the intermediary or, in the absence of such agreement, as may be settled by the Mines Tribunal appointed under
s. 12 thereof, provided that all such terms and conditions shall be
in accordance with the provisions of any Central Act for the time
being in force regulating the grant of new mining leases. According
to the proviso, therefore, such terms and conditions were to be in
accordance with the provisions of the 1948 Act which was in force
at the time the estate vested in the State of Bihar.
Section IO deals with leases of mines and minerals which
subsisted on the date immediately before the date of vesting of the
estate or tenure. It reads:
"Subsisting leases of mines and minerals-
( 1) Notwithstanding anything contained in this Act,
where immediately before the date of vesting of the estate
or tenure there is a subsisting lease of mines or minerals
comprised in the estate or tenure or any part thereof, the
whole or that part of the estate or tenure comprised in
'such lease shall, with effect from the date of vestine, be
deemed to have been learnd by the State Government to the
holder of the said subsisting lease for the remainder of the
term of that lease, and such holder shall be entitled to
retain possession of the leasehold property.
(2) The terms and conditions of the said lease by the
State Government shall mutatis mutandis be the same as the
terms and conditions of the subsisting lease referred to in
sub-section (I), but with the additional condition that, if in
the opinion of the State Government the holder of the
lease had not, before the date of the commencement of
this Act, done any prospecting or development work,
the State Government shall be entitled at any time before
the expiry of one year from the said date to determine the
lease by giving three months' notice in writing:
Provided that nothing in this sub-section shall be
deemed to prevent any modifications being made in the
terms and conditions of the said lease in accordance with
the provision of any Central Act for the time being in
force regulating the modification of existing mining leases.
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
BlllAR MINES v. UNION (Dayal, J.)
(3) The ho.Ider of any such lease of mines and minerals as is referred to in sub-section (I) shall not be entitled
to claim any damages from the outgoing proprietor or
tenure-holder on the ground that the terms of the lease
executed by such proprietor or tenure-holder in respect
of the said mines and minerals have become incapable of
fulfilment by the operation of this Act.
713
The head lease of 1928, subsisted immediately before the
date of vesting of the Palganj estate in the State.
Therefore, the
whole or that part of the estate or tenure comprised in this lease
was, with effect from the date of vesting, to be deemed to have
been leased by the State Government to the holder of the lease i.e.
the first lessee, up to August 11, 1977, the lease being for 49 years.
The holder of the lease could retain possession of the leasehold
property till then. We may mention that we are not concerned,
in this case, with the effect of s. !OA introduced by the Bihar Land
Reforms Amendment Act, 1964 (Act 4 of 1965).
The terms and conditions of this statutory lease by the State
Government were to be the same as the terms and conditions of
the subsisting lease i.e., the lease of 1928, with the. addition of one
condition to the effect that the State Government could terminate
the lease at any time before the expiry of one year, by giving three
months' notice in writing if it was of opinion that the holder of the
lease had not before the date of commencement of the Act done any
development work. Any way, this condition was not applicable
in the present case as the mine had been worked all along.
The terms and conditions of the lease were also subject to the
proviso to sub-s. (2) of s. 10 which said that nothing in that subsection would be deemed to prevent any modifications being made
in the terms and conditions of the lease in accordance with the
provisions of any Central Act for the time being in force regulating
the modification 'lf existing mining leases. This means that the
statutory lease could be modified in accordance with the provisions
of the 1948 or the 1957 Act. The 1956 rules provided for the
modification of the leases granted before October 25, 1949.
It
follows that in pursuance of the proviso to s. I 0, the terms of
the statutory lease could not be ,modified when the lease be held
to be a new lease from the date of .vesting.
It has been urged for the respondent that while the proviso
to sub-s. (2) of s .. 9 states that the terms and conditions of the lease
would be in accordance ·with the provisions of any Central Act
for the time being in force regulating the grant of new mining
H
leases, the proviso to sub-s. (2) of s.10 does not use the expression
'new mining leases' and that therefore it should be held that the
statutory lease under s. 10 is not a new mining lease. A statutory
M16Sup.C.L/66--18
714
SUPIU!MB COURT RJ!POl.TS
[1967] I S.C.R.
1ease granted to the intermediary under s. 9 is a new lease and its
terms and conditions are to be in accordance with the provisions of
the Central Act regulating the grant of new mining leases. As
a new lease, it had to be in accordance with the provisions regulating
the grant of new mining leases. The proviso to sub-s. (2) to s. 10 had
to use the expression 'existing mining leases' in oontradistinction to
the expression 'new mining leases' in proviso to s. 9(2) as modifications in the terms and conditions of the statutory lease under s.10
might be made only in accordance with the provisions of the Central
Act regulating the modifications of the 'existing mining leases',
if the expression 'existing mining leases' was ultimately defined
to include a statutory lease under s. IO.
When the Reforms Act
was passed the expression had not been defined.
No help can
therefore be derived by the respondent from the difference in language in the proviso to sub-s.(2) of s. 9 and the proviso to sub-s.(2)
ofs.10.
It has also been urged for the respondent that what is to be
deemed under s. 10( 1 ), Reforms Act, is for the purposes of the
Reforms Act only, i.e., the estate is to be deemed to be leased by
the State Government for the purposes of the Act only and not
for the purposes of the Acts of 1948 and 1957. We do not agree.
The effect of the estate being deemed to be leased by the State Government
is that the erstwhile lessee of the intermediary becomes
actually the lessee of the State Government for all purposes from
the date of the vesting of the estate in the State. He cannot be
deemed to be a lessee of the intermediary whose title is lost under
the original lease.
We are therefore of opinion that the statutory lease now held
by the head lessee from the State Government is a new lease
granted after October 25, 1949. It follows that the Controller
had no jurisdiction to modify the terms of the lease which is granted
by the State Government to the head lessee in view of sub-s. (I) of
s. IO.
When the head lease could not be modified, it being not an
existing mining lease, the sub-leases could also not be modified.
They too would be deemed to be new leases granted by the new
lessee from the State Government, as the rights of the lessor under
the original head lease had ceased on the vesting of the estate and
he is deemed to have got a new lease from the State.
We need not therefo.re, in these appeals, deal with the other
points urged by Mr. Sen for the appellant. In our view the Controller could not have modified the lease in suit under the 1957 Act and
the 1956 rules.
We allow the appeals, set aside the order of the Controller
dated July l, 1961 and of the Government of India dated January
18, 1962. The respondents will pay the costs of the appellant.
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
BIHAR MINBS v. UNION (Bachawat, /.)
7 15
Bachawat, J. Counsel for the appellant submitted that a
lease for extracting mineral from a mine is not a lease for the purpose of winning a mineral within the purview of Art. 31A(l)(e)
C)f the Constitution, and as the Mines and Minerals (Regulation and
Development) Act, 1957 (No. 67 of 1957) enables the compulsory
acquisition of such a lease by prematurely terminating it without
payment of compensation, it contravenes Art. 31 and is not protected
by Art. 31A(l)(e). Relying on Lewis v. Fothergill(') and Lord
Rokeby's case(2), he submitted. that a mineral is. won when it is
reached and is ready for continuous working. In the collocation
of words "work and win", the expression "win" might be construed
to mean some activity preparatory to the working and extraction
of the mineral. But we see no reason for giving this narrow meaning
to the expression "winning" in Art. 31A(l)(e) of the Constitution
or in s. 3( d) of the Mines and Minerals (Regulation and Development) Act, 1957. In a popular sense, winning a mineral means
getting or extracting it from the mine. This is one of its dictionary
meanings, see The Shorter Oxford Dictionary. The plain and
popular import of the expression furnishes the true rule of the interpretation of Art. 31A(l)(e). A law providing for the premature
termination of a lease for getting or extracting a mineral is protected
by Art. 31A(l)(e), and cannot be attacked on the ground that it
contravenes Art. 14, 19 or 31.
The Mining Leases (Modification of Terms) Rules, 1956 were
made on September 6, 1956 under the Mines and Minerals (Regulation and Development) Act, 1948. By s. 29 of the Mines and
Minerals (Regulation and Development) Act, 1957, all rules made
or purporting to have been made under the 1948 Act are deemed to
have been made under the 1957 Act as if the latter Act had been
in force on the date on which the Rules were made. Counsel
for the appellant submitted that the 1956 Rules were invalid (a)
as they were laws with respect to acquisition of property for State
purposes, which could be made by the State Legisl;iture only under
Entry 36, List II, as it stood before the Constitution (Seventh
Amendment) Act, 1956, and (b) as.they did not provide for payment
of compensation in conformity with s.7(2)(b) of the 1948 Act,
and having regard to the observations of Mudholkar, J. in Bharat
Kala Mandir v. Municipal Committee, Dhamangaon(3), the invalid
Rules could not be regarded as purporting to have been made
under the 1948 Act.' We cannot accept this contention. The
Central Government professed to make the Rules in exercise of
its powers under s. 7 of the pre-Constitution 1948 Act. The power
to make the Rules was conferred on the Government by s. 7 of the
1948 Act and not by Entry 36, List II of the Constitution. As
the Rules did not provide for payment of compensation in cases
(I) S Ch. A. 103.
(2) 7 A.C. 43, 13 Ch. D. 277; 9 Ch. D. 685.
(3) [196S] 3 S.C.R. 498 at pp. Sl2-Sl6.
716
SUPRBMB COURT RBPOllTS
[1967] l S.C.R.
of reduction of the term of the lease in conformity with s. 7 (2) (b)
they might not have been originally valid; but they purported,
to have been made under the 1948 Act. Jn view of s. 29 of the
1957 Act, the Rules must now be deemed to have been made under
the 1957 Act as if that Act was in force when the Rules were made.
The validity of the Rules must now be judged with reference to the
1957 Act. As the Rules are in conformity with the 1957 Act,
they must be regarded as validly made under it.
The main contention of counsel for the appellant was that
the leases were not existing leases within the meaning of r. 2(c)
of the Mining Leases (Modification of Terms) Rules, 1956.
Under
r. 2(c), an 'existing mining lease' means a mining lease granted
prior to the commencement of the Mines and Minerals (Regulation
and Development) Act, 1948, i.e., prior to October 25, 1949.
Counsel submitted that there. were grants of new lease; by force
of s. JO of the Bihar Land Reforms Act, 1950 (Bihar A<;t No. 30
of 1950), and these new leases could not be modified under the 1956
Rules.
The lease by the Zamindar of Palganj is dated August 11
1928. The sub-lease is dated May 18, 1933. The under-lease
granted by the sub-lessee is dated May 18, 1934.
The Bihar
Land Reforms Act was passed on September 11, 1950. It came
i.1to force on September 25, 1952.
Sections 3 and 3A provide for
the issue of notifications vesting estates, tenures and intermediary
interests in the State of Bihar. The estate of the Zamindar vested
in the State as from July 13, 1953 on the issue of the notification
under s. 3(1 ).
The intermediary interests vested in the State as
from January 26, 1955 on the issue of a notification under s. 3A.
Bys. 4, on the issue of the requisite notification the estate or tenure
including the rights of the proprietor or tenure-holder in mines
and minerals and inclusive of such rights of a lessee of mines and
minerals comprised in the estate or tenure vested absolutely in the
State free from all encumbrances subject to the subsequ~nt provisions of Chap. JI of the Act.
Sections 9, IO and 11 are in C'hapier II.
Section 9 contains a special provision with regard to min•:s worked
by a proprietor or tenure-holder, and is in these terms:
"9. (I) With effect from the date of vesting, all such
mines comprised in the estate or tenure as were in operation
at the commencemc.nt of this Act and were being worked
directly by the intermediary shall, notwithstanding anything contained in this Act, be deemed to have been 1 :ased
by the State Government to the intermediary, and 1 s the
case may be and such proprietor or tenure-holder sh 111 be
entitled to retain possession 0f those mines as a lessee
thereof.
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
BIHAR MINES v. UNION (Bachawat, J.)
7 I 7
(2) The terms and conditions of the said lease by
the State Government shall be such as may be agreed upon
between the State Government and the intermediary ·as the
case may be, or in absence of agreement as may be settled
by a Mines Tribunal appointed under section 12;
Provided that all such terms and conditions shall be in
accordance with the provisions of any Central Act for the
time being in force regulating the grant of new mining
leases."
In this case, we are not directly concerned with s. 9. Section
10 specially provides for subsisting leases for mines and minerals.
Section 11 deals with buildings and lands appurtenant to mines
referred to in ss. 9 and 10. Section 10 is in these terms:
"10. {I) Notwithstanding anything contained in this
Act, where immediately before the date of vesting of the
estate or tenure thereis a subsisting lease of mines or minerals
comprised in the estate or tenure or any part thereof
the whole or that part of the estate or tenure comprised
in such lease shall with effect from the datP of vesting,
be deemed to have been leased by the State Government
to the holder of the said subsisting lease for the remainder
of the term of that lease, and such holder shall be entitled
to retain possession of the leasehold property.
(2) The terms and conditions of the said lease by the
State Government shall mutatis mutandis be the same as
the terms and conditions of the subsisting lease referred to
in sub-section (! ), but with the additional condition that,
if in the opinion Of the State Government the holder of
the lease had not before the date of the commencement
of this Act, done any prospecting or development work,
the State Government shall be entitled at any time before
the expiry of one year from the said date to terminate the
lease by giving three month's notice in writing.
Provided that nothing in this sub-section shall be deemed to prevent any modifications being made in the terms
and conditions of the said lease in accordance with the
provisions of any Central Act for the time being in force
regulating the modification of existing mining leases.
(j) the holder of any such lease of mines and minerals
as is referred to in sub-section (I) shall not be entitled to claim
any damages from the outgoing prop1ietor or tenure-holder
on the gtound that the terms of the lease executed by such
jiroprietot or tenure-holder in respect of the said mines and
¥nerals have become capable of fillfilment by the operation of this Act.''
718
SUPlll!ME COURT lll!POR.TS
(1967) I S.C.R.
Mark the opening words of s. JO, "Notwithstanding anything
contained in this Act." Notwithstanding what is said in ss. 3,
3A and
4 as to vesting of the estate, tenure intermediary
interests and rights in mines and minerals, s. IO holds the field
with regard to subsisting leases of mines and minerals. If there
is such a lease, the deeming clause in sub-s. (I) requires that certain
consequences will follow.
Where immediately before the date
of vesting of the estate or tenure there is a subsisting lease of mines
or minerals comprised in it, we have to imagine that with effect
from the date of vesting, the whole or that part of the estate or
tenure comprised in such lease has been leased by the State Government to the holder of the said subsisting lease for the remainder
of the term of that lease.
How can we imagine this lease without
imaginingthat with effect from thedate ofvesting, the subsistinglease
continues after substituting the State Government as the lessor in
place of the proprietor or tenure-holder? How else can the estate
be deemed to have been leased to the holder of the subsisting lease
for the remainder of the term of that lease? Sub-section (2) tells
us the terms and conditions of this lease by the State Government.
Lest our imagination might run riot, the proviso to sub-s. (2) tells
us that we must keep our fancy in check, and remember that this
lease is an existing and not a new lease.
The proviso to sub-s. (2) of s. IO indicates that the lease referred
to in the section may be modified in accordance with the provisions
of any Central Act for the time being in force regulating the modification of "existing mining leases". Contrast the language of the
proviso to sub-s. (2) of s. 9.
The terms and conditions of the lease
referred to in s. 9 must be in accordance with the provisions of any
Central Act regulating "the grant of new mining leases". The
two provisos forcefully indicate that s. 9 grants a new lease, whereas
s. JO continues an existing lease.
The legislature intended that the terms and conditions of the
mining leases referred to in ss. 9 and IO should be in accordance
with the Central Act regulating mining leases. For this purpose,
the leases under s. 9 are treated as new leases and the leases under
s. JO are treated as existing leases, so that they may be modified
and brought in conformity with the Central Act. Had s. IO the
effect of granting a new lease, the legislature would have treated
the lease referred to ins. 10 also as a new lease, and the language
of the proviso to sub-s. (2) of s. JO would have corresponded with
that of the proviso to sub-s. (2) of s. 9. The intention of the legislature would be completely frustrated if we are to hold that the
leases referred to in sub-s. (2) of s. IO need not be brought in
conformity with the laws regulating mining leases.
Section 9 creates from the date of vesting a new lease in favour
of the proprietor because before that date he was the owner of the
A
B
c
D
E
F
G
-,
H
A
B
c
D
E
F
G
H
BillAR MINES v. UNION (Bachawat, I.)
719
mines and minerals and could not claim to be a lessee. Section 10,
on the other hand, continues a lease which was subsisting on the
date of vesting. The terms and conditions of the lease are modified and the Government is substituted the lessor in place of the
proprietor or the tenure-holder; in other respects, the old lease
continues.
One other matter clinches the issue. Though by s. 2 (2) a
lease in relation to mines and minerals includes a sub-lease, this
definition cannot apply to s. 10. The subsisting· lease referred to
in s.10 (1) cannot include a sub-lease. Obviously, the State Government cannot grant a lease and a sub-lease in respect of the same
subject-matterat the same time. Section 10 (I) continues the subsisting lease. As the lease continues, the sub-lease also continues.
Had s. 10 ( 1) the effect of destroying the old leas~, the sub-lease
also would fall along with the head lease. The grant of a new
lease would not revive the original sub-lease. There can be no
doubt that in spite of s. 10 the sub-lease was continued. Section
10 A was enacted by Bihar Act No. 4 of 1965 on this footing. In
view of s. 10-A, the interest of the lessee now vests in the Government, and the last sub-lessee holds his lease directly under the
State Government. We are, therefore,
satisfied that the lease
and the sub-leases were existing mining leases within the meaning
of r. 2(c) of the Mining Leases (Modification of Terms) Rules,
1956 and could be modified under the Rules.
Counsel next submitted that the Controller by his orders dated
July 1, 1961 could not terminate the lease and he could only scale
down the period of the lease to 20 years from the date when the
Mines and Minerals (Development and Regulation) Act, 1957
came into force, i.e. from June 1, 1958. We are unable to accept
this contention. The lease was a mining lease in respect of soapstone, kaolin and white earth. Section 8 of the Mines and Minerals
(Regulation and Development) Act, 1957 and R. 40 of the Mineral
Concession Rules, 1949 provide that the period of a mining lease
in respect of minerals other than coal, iron ore and bauxite shall
not exceed 20 years. Section 16 of the 1957 Act and R.4 (I) of the
Mining Leases (Modification of Terms) Rules, 1956 require that
the existing leases be brought in conformity with the 1957 Act and
the 1949 Rules. The period of an existing lease in respect of soapstone, kaolin and white earth can be ·brought in conformity with
the Act and the Rules only by an order directing that the period of
the lease shall be 20 years from the date of commencement of the
lease. How can the period of an existing lease become 20 years
unless this period is counted from the commencement of the lease?
The Act and the Rules do not provide for the grant of a new lease
for a period of 20 years from the date of the commencement of the
Act. They require modifications of the period of an existing lease
720
SUPllBMI! COURT REPORTS
[ 1967] I S.C.R.
so as to bring it in conformity with the Act. The periods of 20
years from the leases expired long before July l, 1961. Accordingly,
by his order dated July 1, 1961, the Controller properly terminated
the leases.
The Controller passed three separate orders in cases Nos. H317, H-317 A and H-317 B terminating the head lease dated August
I I, 1928 and the sub-leases dated May 18, 1933 and May 18, 1934.
The requisite notice of the modification of the head lease under
Rules 4 and 6 of the Mining Leases (Modification of Terms) Rules,
1956 was given to the head lessee and the sub-lessees in case H-317,
and the order in that case cannot be assailed.
No notice to the
head lessee and sub-lessee was given in· cases Nos. H-3 I 7 A and
H-318 B.
The orders of modification of the sub-leases in the
last two cases were, therefore, irregularly passed and counsel for
the appellant asked us to set aside those orders. But as the head
lease was properly terminated by the order in Case No. H-317,
the two sub-leases autc>matically stood terminated. The defect
or irregularity in the pa;sing of the orders in cases Nos. H-317 A
and H-317 B docs not affect the merits of these cases, and we see
no reason for reversing those orders.
The appeals are dismissed with costs.
ORDER
A
B
c
D
In accordance with the opinion of the majority, Civil Appeals
E
Nos. 172-174 of 1963 a:·e allowed with costs, Civil Appeal No.
I 13 of 1964 is allowed with costs, Civil Appeal No. 114 of 1964
is dismissed with costs and Civil Appeal No. 428 of 1964 is partly
allowed with the direction that the parties will bear their own
costs.
G.C.
Ml6 Sup.C.l./66-2,S00-2-5-67-0IPF.