# TARA PRASAD SINGH ETC. ETC v. UNION OF INDIA & OTHERS

- **Citation:** [1980] 3 S.C.R. 1042
- **Court:** Supreme Court of India
- **Decided:** 1980-05-07
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/tara-prasad-singh-etc-etc-v-union-of-india-others-7948
- **Pages:** 53

## Headnote

1042
A
TARA PRASAD SINGH ETC. ETC.
v.
UNION OF INDIA & OTHERS
I
May 7, 1980
8
[Y. V. CHANDRACHUD, C.J., P. N. BHAGWATI, V. R .. KRISHNA IYER,
R. S. SARKAR!A, N. L. UNTWALIA, P. S. KAILASAM AND
•
V. D. TULZAPURKAR, JJ.]
Coal Mines (Nationalisation)
Amendment
Act, 67 of 1916-Legislative
C - competence of the
ParliamRnt to enact Nationalisation
Amendment ActWhether the Amending Act is violative oif the provisi"ons of Articles 14,
19,(1)(/), 19(1)(g) and 31 of the Constituti<>n of lndia-Applicability of the
Act to leases of composite mines in which there are alternate seams of coal
and fire clay.
D
E
F
G
H
Article 246(1) of the Constitution of Indiia confers upon the Parliament,
notwithstanding anything
contained in. clauses 2 and 3 pf that Article,
the
exclusive power to make laws with respect to any of the matters enumerated
in List I of the Seventh Schedule, called the Union List, Clause 2 of Article
246 deals with thlj power of the Parliament and the State Legisla.tures to make
laws with respect to any of the matters enumerated in the Concurrent Lisi,
while clause 3 deals with the {X>Wer of the State Legislatures to make laws
with respect to any of the matters enumerated in the State List.
Entry 23 List II, Schedule VU of the Constitution read with Article 246(3)
cOnfers legislative· power on the State Legis~atures in respect of "Regulatiol). of
mines and mineral development" but that power is "subject to the provisions
of List I with respect to regulation and development under the control of the
Union". Entry 54 List I enables Parliament to acquire legislative power in
respect of, "Regulation of mines and
mineral development to the extent to
which suCh regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". Entry 24
List II relates to "Industries subject to the provisions of entries 7 and 52 of
List I". Entry 7, List I, relates to Industries declased by Parliament by law
to be necessary for the purpose of defence or for the prosecution of war.
· Entry 52, List I, enables 'Parliament to acquire legislntive. power in respect of
"Industries, the control' of which by the Union is declared by Parliament by
law to be expedient in the pub1ic interest".
'
Pursuant to these powers the Parliament enacted the Industries (Development & Regulation) Act, 65 of 1951, the Mines Act 35 of 1952, the Mines and
Minerals (Regulation and Development)
Act 67 of 1957, the Coking Coal
Mines (EmCrgency Pfovisions) Act, 64· of 1971, the Coking Coal Mines {Nationalisation) Act, 36 of 1972, the Coking Coal Mines (Nationalisation) Amendment -Act, 56 of 1972, the Coal Mines (Taking over of Management) Act, 15
of 1973 and the Coal Mines (Nationalisation) Act 26 of 1973. Thereafter the
Coal Mines (Nationalisation) ,i\mendmcnt Ai:t 6i of 1976 woo p:isscd,
the
objects and reasons being :
. ):.
"
\.
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., 'i
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. ;"
TARA PRASAD V. UNION
1043
"After the nationalisation of coal mines, a number of persons holding
A
.coal mining 1eases unauthorisedly
started mining of coal in the
Dl06t
reckless and unstientific
manner without regard to considemtions of
conservation, safety and welfare of workers. Not only were they resorting
to slaughter mining by superficial working of outcrops and thereby destroying a valuable national asset and creating problems of water-logging fires,
etc. for the future d~elopment of the deeper deposits, their unsafe
working also caused serious and fatal
a.ccidonts. They were making
B
larger profits by paying very low wages, and by not providing any safety
and welfare measures. Thefts of coal from adjacent nationalised mines
were also reported after the commencement of these unauthOrised operations which had shown an increasing trend of late. · Areas where illegal and unauthorised operations were carried
on,
were without any
assessment of reserves in regard to quality and quantity ol1 coal which
could be made available after detailed explo

## Text

_Characters 0–39,856 of 154,121. This is a partial read: ask again with offset=39856 for what follows._

1042
A
TARA PRASAD SINGH ETC. ETC.
v.
UNION OF INDIA & OTHERS
I
May 7, 1980
8
[Y. V. CHANDRACHUD, C.J., P. N. BHAGWATI, V. R .. KRISHNA IYER,
R. S. SARKAR!A, N. L. UNTWALIA, P. S. KAILASAM AND
•
V. D. TULZAPURKAR, JJ.]
Coal Mines (Nationalisation)
Amendment
Act, 67 of 1916-Legislative
C - competence of the
ParliamRnt to enact Nationalisation
Amendment ActWhether the Amending Act is violative oif the provisi"ons of Articles 14,
19,(1)(/), 19(1)(g) and 31 of the Constituti<>n of lndia-Applicability of the
Act to leases of composite mines in which there are alternate seams of coal
and fire clay.
D
E
F
G
H
Article 246(1) of the Constitution of Indiia confers upon the Parliament,
notwithstanding anything
contained in. clauses 2 and 3 pf that Article,
the
exclusive power to make laws with respect to any of the matters enumerated
in List I of the Seventh Schedule, called the Union List, Clause 2 of Article
246 deals with thlj power of the Parliament and the State Legisla.tures to make
laws with respect to any of the matters enumerated in the Concurrent Lisi,
while clause 3 deals with the {X>Wer of the State Legislatures to make laws
with respect to any of the matters enumerated in the State List.
Entry 23 List II, Schedule VU of the Constitution read with Article 246(3)
cOnfers legislative· power on the State Legis~atures in respect of "Regulatiol). of
mines and mineral development" but that power is "subject to the provisions
of List I with respect to regulation and development under the control of the
Union". Entry 54 List I enables Parliament to acquire legislative power in
respect of, "Regulation of mines and
mineral development to the extent to
which suCh regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". Entry 24
List II relates to "Industries subject to the provisions of entries 7 and 52 of
List I". Entry 7, List I, relates to Industries declased by Parliament by law
to be necessary for the purpose of defence or for the prosecution of war.
· Entry 52, List I, enables 'Parliament to acquire legislntive. power in respect of
"Industries, the control' of which by the Union is declared by Parliament by
law to be expedient in the pub1ic interest".
'
Pursuant to these powers the Parliament enacted the Industries (Development & Regulation) Act, 65 of 1951, the Mines Act 35 of 1952, the Mines and
Minerals (Regulation and Development)
Act 67 of 1957, the Coking Coal
Mines (EmCrgency Pfovisions) Act, 64· of 1971, the Coking Coal Mines {Nationalisation) Act, 36 of 1972, the Coking Coal Mines (Nationalisation) Amendment -Act, 56 of 1972, the Coal Mines (Taking over of Management) Act, 15
of 1973 and the Coal Mines (Nationalisation) Act 26 of 1973. Thereafter the
Coal Mines (Nationalisation) ,i\mendmcnt Ai:t 6i of 1976 woo p:isscd,
the
objects and reasons being :
. ):.
"
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\ .. .J
'
l
.-~'
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., 'i
.
"
'
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. ;"
TARA PRASAD V. UNION
1043
"After the nationalisation of coal mines, a number of persons holding
A
.coal mining 1eases unauthorisedly
started mining of coal in the
Dl06t
reckless and unstientific
manner without regard to considemtions of
conservation, safety and welfare of workers. Not only were they resorting
to slaughter mining by superficial working of outcrops and thereby destroying a valuable national asset and creating problems of water-logging fires,
etc. for the future d~elopment of the deeper deposits, their unsafe
working also caused serious and fatal
a.ccidonts. They were making
B
larger profits by paying very low wages, and by not providing any safety
and welfare measures. Thefts of coal from adjacent nationalised mines
were also reported after the commencement of these unauthOrised operations which had shown an increasing trend of late. · Areas where illegal and unauthorised operations were carried
on,
were without any
assessment of reserves in regard to quality and quantity ol1 coal which
could be made available after detailed exploration work was undertaken
C
and results" analysed. No scientific exploitation of these deposits could
be undertaken in the nationalised sector without these details. It was,
therefore, considered that it would oot be appropriate either to nationalise
these unauthorisedly worked mines after
taking them over under the
Coal Mines (Taking Over of Management) Act, 1973 or to get the concerned rriining leases prematurely terminated and regranted to Govern·
ment Companies under the Mining and Minerals ·(Regulation and DeveD
Jopment) Act, 1957. In view of the policy followed by the Central
Government that the Coal Industry is to be in the nationalised sector,
it was decided that the Coal Mines Nationalisation Act, 1973 should be
enacted to provide for termination of all privately held coal .leases, except
those held by pfivately owned steel companies, so that it may be possible for the Central Government, Government Company or Corporation
to take mining leases where necessary, after necessary exploration has
E
been made as to the extent of the deposits. of coal, etc."
The petitioners who were the lessees of cool mines by the State Government,
being aggrieved by the provisions of the Ameridment Aci 67 of .1976, ·challenged
the competence of Parliament to enact the Amendment Act and also the validity
of the Act and contended:
(a) Laws made in the exercise of power CO!llferred by Entry 54 must stand
F
the test of public interest because the very reason for the Parliament acquiring
power under that entzy is that it is in public interest that the regulation of -
mines and minerals should be under the control of the Union:
Jn other words,
Entry 54 confers· a legislative power which is purposive, that is to say, any law
made in the exercise of the power under Entry 54 must be designed to secure
the regulation an.d development of coal inines in public interest or else it must
fail.
The Nationalisation Amendment Act is not such a law which Parliament
G
can pass under Entry 54 because, that Act not only terininates all leases but it
destrQys the contracts of service of thousands of Workmen, and indeed it destroys all other contracts and all securities for moneys lent without even so much
as making a provision for
priorities
for the payn1ent of debts.
Since the
Nationalisation Amendment Act terminates aU leases, it is a complete negation
of the integrated scheme of taking over the management of m~es; acquisition
of the rights of lease-holders and the running of the mines.
If
(b) The word 'Regulation' in Entry 54 does not include 'Prohibition'.
'Regulatiun' should not also be confused with the expression 'Restrictions' occur-
.·.J
A
B
c
D
E
F
G
H
1044
SUPREME COURT REPORTS
[1980] 3 s.c.R.
ring in Article 19 (2) to ( 6) of the Constitution. In the very nature of things,
there cannot be a power to prohibit the regulation and development of mines
and minerals'. Section 3(4) inserted by the Nationalisation Amendment Act
impoees no obligation on the Central Government or any other authority to
obtain a mining lease and work the mines, the leases in respect of which stand
terminated under the Act. The words "it shall be lawful'' for the Central Government to obtain a lease are words qf discretionary power which create
no
obligation. They only enable the Central Government to obtain a lease, mal<ing
something legal and po6Sible. for .which there would
otherwise be
no right
or authority to do. Section 3(4) does not confer a power coupled with a dnty;
it merely confers a faculty or power. No Court can by a Writ of Mandamus
or otherwise compel the' Central Government to obtain a lease of a coal mine
and to nm it under any of the provisions of the Nationalisation Amendmeiit Act.
"
( c) Where the Legislative power is distributed amoug different legislative
bodies, the Legislature may transgress its
legislative power either directly or
manifestly, or covertly or indirectly.
In the instant case, the exercise of power
by the Parliament is colourable because although in passing the Nationalisation
Amendment Act it purported to act within the limits of its legislative power,
in substance and in reality it transgressed that power, the transgression beiilg
veiled by what appears on proper
examination to be a mere
pretence
or
disguise.
(d) In order to tear off the veil or disguise "1td in order to get at the substance of the law behind the form, the Court must examine the effect of the
legislation and take into consideration its object, purpose and design. Where
the legislative entry is purposive, like Entry 54 of the Union List, it is the
object or purpose of the legislation which requires consideration. The put'pose
for which the Parliament is permitted to acquire legislative power of Regulation
and Dev~lopment of mines must dictate the nature of law made in the exercise
of that power because public intecest demands that power. Under the provisious of the Nationalisation Amendment Act, not ouly is there no obligation
on the Central Government to run a mine, but there is no obligation imposed
upon it .even to carry out prospecting or investigation in order to decide whether
a particular mine should be worked at oil. Section 3.( 4) merely authorise$ the
Central Government to apply for "a prospecting licence or a mining lease in
respect of the whole or part of the land covered by the mining lease which
stands determined". A close examilμtion of the Act thus discloses that far
from providing for regulation and development of cool mines, it totally probibits all minlng activity even if the State Government wants to run 3. mine. It
does not impose proh.ibitioo! as a step towards running the mines since there is
neither 3ny obligation to carry out the prospecting or investigation nor to run
the mines.
(e) The Nationalisation Atri.endment Act runs directly counter to the whole
policy of the Coal Mines (Nationalisation) Act of 1973, to acquire and run
the mines. The Parent Act becomes a dead letter in regard to several of its
provisions as a result of the Amendment
Act~
~t only adopts a
colourable
device to amend the Nationalisation Act while completely negativing it in fact.
1'he Act therefore lacks legislative competence and is, in the sense indicated, a
'-"Olourable piece of legislation.
;
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TARA PRASAD V. UNION
1045
(f) Artlcle 31(A) (l)(e) only lifts a restriction on the legislative compeA
tence in so far as violation of fundamental rights is concerned. The most benign
motive cannot make a law valid if the legislative competence is lacking.
(g) Under Article 31{1) of the Constitution, no person can be deprived of
his property without the authority of law. Article 31A(l) >rtrlch exempts the
Jaws mentioned in clauses (a) to (e) from invalidity under Articles 14, 19 and
31 does not dispense with the necessity of the authority of law for depriving a
person of his property, because tho opening words of Article 3 IA(l) are " ..... .
no law providing for ...... " matters mentioned in clanses (a) to (e) shall
be deemed· to be void as offending Articles 14, 19 and 31.
•
(h) The Nationalisation Amendment Act confers no authority to terminate·
a composite lease for mining coal and fire-clay. The right to mine fire-clay is
given to the petitioner by law and it can only be taken away by law.
(i) Though the Nationalisation Amendment Act does not in terms prohibit
the petitioner from mining fireclay, the effect of the law, in a practical business
sense;. is to prohibit the petitioner fronl mining fireclay and, therefore, the posi-..
tion is rhe same1 as th9ugh the Act had enacted the prohibition in express terms.
The Court must look at the direct impact of the law on the right of the party,
and if that impact prohibits him from exercising his right, the fact that there
is no express prohibition in the Act is immaterial.
(j) The Nationalisation Amendment Act by m&king it punishahlei to mine
coal, in substance and in a practical business sense, prohibits the petitioner from
mining fireclay.
For this prohibition the Amendment Act does not
provide,
and therefore, there ~ no authority of law for it.
Coal and :fireclay are two
distinct minerals as shown by Schedule II to the Mines arul Minerals (Regula·
B
c
D
tion and Development) Act, 67 of 1957 wherein item I is coal and item IS is
E
fireclay. The dictionary meanings of coal and fireclay also show that they are
two distinct minerals.
(k) The Nationalisation Amendment Act affects, in substance, two kinds of
transfers : the transfer of the lease>-hold inll:rests of the lessees in favour of the
lessor, namely the State; and the transfer dfl the mining business of the lessees
in favour of the Central Government
Sin.cc these transfers amount to acquisition within the meaning of Article 31(2), the Act is open to challenge under
Articles 14, 19(1)(g) &nd 31 of the Constitution.
(!) The Nationalisation Amendment Act is open to challenge under Article
14 because lessees who fall within that Act are patently discriminated against
in comparison with lessees of other mines, both coking and non-coking,
who
were paid compensation when their property was taken over first for manll@ec
ment under the Management Acts and then under the Nationalisation Acts.
(m) The Nationalisation Amendment Act is open challenge under Article
19(1)(g) because the prohibition against lessees from carrying on their business
and the transfer of their business, in substance, to the Central Government or a
Company is an unreasonable restriction on the right of the lessees to hold their
lease-hold property and to carry on their business of mining.
F
G
(n) The Act is open to challenge under Art:icle 31 because no provision is
H
mad.• for_ the payment '>!- any amount wha~er to the lessees· whose mining
busmess ts taken over wider the Act. No pubhc purpose is involved either in the
1046
SUPREME COURT REPORTS
11980] 3 s.c.R
A
termination of the lessees' interest or in the acquisition of their business. Expro~
priation without payment of any amount requires a very heavy public purpose.
B
(o) Since no provision whatsoever is made for the payment of any amount
to the .lessees whose leases are terminated, the Nationalisation Amendment Act
is not a 'Law' within the meaning of Article 31(2) and therefore Article l,9(1)(f)
is attracted.
'
(p) The Act is not saved from the challenge of Articles 14, 19 and 31 by
Article 31A (I) (e) because that Article provides for extinguishment which
does not amount to acquisition by the State. If. extingμishment amounting to
acquisition \\'as intended
to be saved under' Article 31A(l) (e), the subject
IDJ.tter dealt with by clause (e) would have been included in clause (a.) of
that Article.
C
Dismissing all the \Vrit Petitions except Writ Petitions Nos. 111, 178, 220,
221, 257, 352, 600 & 1130-1134/77 which are allowed in part, the Court,
HEID: (1) The provisions of the Amendment Act 67 of 1976 are not a
mere facade for terminating mining leases without any obligation in the matter '\
of regulation of mines and mineral development. [1071H, 1072A]
. D
Granting that Entry 54, List I is pur_posive since it qualifies the power to
E
F
G
H
pass a law relating to "Regulation of Mines and Mineral Development" by the
addition of a restrictive clause, "to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to
be expedient in the public interest", the provisions of the NationalisatiOn Amendment Act show that they are designed to serve progressively the purpose of
Entry 54. [1972 A-BJ
The Coal Mines (Nationalisation) Act was passed in order to provide for
· ·the acquisition and transfer of the right, title and interest of the owners in .respect of the Coal mines specified in the Schedule to that Act. This was done
with a view to re-organising and reconstructing such coal mines so as to ensure
the rational, co-ordinated and scientific development and utilisation of coa~ resources consistent with the growing
requirements of the country.
The high
purpose of that Act was to ensnro that tho ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the
common ~ood. [1072 D-F]
The several provisions of the Nationalisation Amendment Act, are, (I) by
section 3(3) (a) of .the Coal Mines
(N~tionalisation) Act, 1973' which was
introduced by the Nationalisation Amendment Act, no person other than those
mentioned in clauses (i) to (iii) can carry on coal mining operations after
'April 29, 1976, being the date on which section 3 of the Nationalisation Amendment Act came into force; (2) by section 3 (3) (b) all mining leases
and
sub-leases stood terminated except those granted before April 29, 1976 in favour
Of the Central Government, a Government company or corporation owned, managed or controlled by the Central Government; (3) section 3(3) (c) prohibits
the granting of a lease for winning or mining coal in favour of any person
other than the Government, a Government company or a corporation of the
above description provided that a sub-lease could be granted by these auth<>-
rities to any-pefson if the two conditions mentioned in the proviso are satisfied;
and (4) when a mining lease stands terminated under section 3(3), "it shall
..
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TARA PRASAD v. UNION
1047
be lawful'' for the Centrnl Governmen~ or
the Government company or the
A
corporation owned or controlled by the Central Government to obtain a pros~
pecting licence or a mining leatie in res~t of lheJ whole or part of the land
covered by the mining lease which stands termiriated. Section 4 of the Nation·
alisation Amendment Act introduced an additional pena.1 provision in the parent
Act. The provisions of .Ss. 3 and 4 are noi a direct negation of the principles
of the parent Act a.nd they do not destory the integral scheme of taking over
the management of mines, of acquiring the rights of lease-holders and continu·
B
ing to run the .mines.
On the contrary, the Nationalisation Amendment Act is
manifestly
in furtherance of the object of nationalisation mentioned in the
preamble to· the wrent Act and effectuates the purpose mentioned in sections
3(1) and 3(2) of that Act by the addition of a new sub-section, sub-section (3),
which terminates all coal mining leases and sub-leases except those referred in
sub-section (3) (b). The circumstance that the marginal note to l!«'lion 3
and the title of Chapter II of the Nationalisation Act are not amended by the
C
Nationalisation Amendment Act, despite the addition of a new sub-section, is of/
Jittle or no consequence. That sub-section is a logical extension of the scheme
envisaged by the original sub-sections (I) and (2) of section 3. [1073 C-H.
l074A·BJ
2. Besides, marginal notes to the sections of a statute and the titles of its
i:hapters cannot take a\vay the effect of the provisions contained in the Act so
D
as to render those provisions legisl.ativeJy incompetent, if they are
otherwiSe
within the competence of the legislature to enact. One must principally have
regard to the object of an Act in order to find out whether the exercise of· the
legislative power is purposive, unless, of course, the provisions of the Act show
that the a.vowed or intended objects is a mere pretence for covering a veiled
transgression
committed by the legislature upon its o.wn powers. Whether.
a particular object can be successfully achieved. by an Act, is largely a matter
E
. of legislative policy. [1074 B-D]
3. The Nationalisation Amendment Act needs no preamble, especially when
it is backed up by a statement of objects and reasons. Generally, an amendment Act is passed in order to advance the purpose of the parent Act as reflected iD: the preamble to that Act.
Acquisition of cool mines, is not an end in
itself but is only a means to an end. The fundamental object of the Nationalisation Act as also of the Nationalisation Amendment Act is to bring into exF
istence a state of affairs which will be congenial for regula~ mines and for
mineral development. In regard to the scheduled
mines, that purpose was
achieved by the means of acquisition. In regard' to mines which were not included in the Schednle, the same purpose was achieved by termination of leases
and sub-leases M\d by taking over the right to work the mines·. Termination
of leases, vesting of lease-hold properties in the State Governments and the
grant of leases ID the Central Government or Government Companies are toG
gether the means conceived in order to achieve the object of nationalisation of
one of the vital material resources of the community. [1074 D-0]
4. Section 18 of the Mines and Mineral (Regulation and Development) Act
67, 1957 contains a statutory behest and projects a purposive legislative policy.
The later Acts on the subject of regulation of mines and mineral development
are linked up with the policy ennnciated in section
18. Therefore,
nothing
ff
contained in the later analogous Acts can be construed as in derogation of the
principle ennnciated in. section 18 of the Mines and Minerals (Regulation and
Development) Act, 67 of 1957, which provid .. that it shall be the duty of the
1048
SUPREME COURT REPORTS
[1980] 3 S.C.R.
A
Central GoVeJ11DMlnt to take all such steps aa may be necessary for the conservation and development of minerals in India. Therefore,
even in regard to
matters f&lling under the Nationalisation Amendment Act which
terminates
existing leases and makes it lawful for the Central Government to obtain fresh
leases, the obligation of section 18 of the Act of 1957 will continue to apply
in its full rigour.
[1074 G-H, 1075 A-BJ
5. Entry 54 refers to two .tirings: (1) regulation of mines and (2) mineral
B
development.
It is true that the Entry is purposive, since the exercise of the
power under Entry 54 has to be guided and governed by public interest. But
neither the power to regulate mines nor the power to ensure min.era) development postulates that no sooner is a mining lease terminated by the force of the
statute, then the Central Government must begin to work the mine of which
the lease is terminared. It is possible that after the Nationalisation Amendment
C
Act came into force, there was a hiatus between the termination of eixisting
"- leases and the granting of fresh ones.
But, the Nationa.Jisation Amendment
Act does not provide that any kind of type of mine shall not be developed or
worked. · Cooservation, prospecting and investigation, developmental steps and
finally scientific exploitation of the mines and minerals is the process envisaged
•
·by . the Nationalisation Amendment Act. It is nndeniable that conservation of
minerals, whk;.h is brought about by the termination of existing leases and subleases, is vital. for the development of mines. A phased and graded programme
I)
of conservation is in the ultimate analysis one of the most satisfactory and
effective means for the regulation of mines and the development of minerals.
[1075 D-GJ
E
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G
H
6. The Nationalisation Amendment Act is not destructive of the prpvisions
of the Parent Act The destruction which the Nationalisation An1endment Act
brings about is of the· lease. or the sub-leHe and not of its 'subject matter,
namely, the mine itself. In terminating the lease of a house one does not destroy the house itself.
It may be arguable that p;phibiting the use of lhe house
for any purpose whatsoever may, for practical purposes, amount to the destruction of the house itself. The Nationalisation Amelldment Act neither contains
provisions directed at prohibiting the working of mines, the leases in respect of
which are terminated. A simple provision for granting sub-leases shows that tho
object of the Nationalisation Amendment Act is to ensure that no mine will lie
idle or unekplored. Interregnums can usefully be utilised for prospecting and
investigation.
They do not lead to destructiog; of mines.
In fact, . it is just as
well that the Amendment Act does not require the new leases to undertake an
adventure, reckless and thoughtless, which goes by the name of 'scratching of
mines', which ultimately results in the slaughtering of mines. [1075H, 1976A-D]
Nri:tural resources, however, large are not inexhaustible, which
makes
it
imperative to conserve them. Without a wise and planned conservation of such
resources, there can neither be a systematic regulation of mines nor a scientific
development of minerals. The importance of. conservation of natural resources
in any scheme of, regulation and development of such resou~s can be
seep
from the fact that the Parliament had to pass in August 1974 an Act called
the Coal Mines (Conservation and Development) Act, 28 of 1974, in order,
principally, to provide for the conservation 00" coal and deveiopment of coal
mines, Section 4 (1) o£ that Act enables the Central Government, for the pnrpose of conservation of coal and for the development of coal mines, to exercise
such powers and take or cause to be taken such measures as it may be necessary
or proper or as may be prescribed. By section 5 ( 1), a duty is cast on tho
4-
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4~
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TARA PRASAD V, UNION
1049
O\\<uers. of coal mines to take such steps as may be· necessary to ensure' the con..
A
servation of coal and development of the coaJ. mines owned by them.
l\ieasures'
taken for judicious preservation and distribution of
natural
resources
may
involve restrictions on their use and even prohibition, upto a degree,
of the
unplanned working of the repositories of such resources. [1076 D-F, 1077 BJ
Altorney-General for Ontario v. Attorney-General for Canada [1896] A.C.
348, 363; Municipal Corporation of City of Toronto v. Virgo [1896J A.C. 88
B
expJain.ed and referred to.
7. Section 3(4) of the Act uses an enabling or petmissive expression
in
order that regulation of mines and mineral development may be ensured after
a scientific prospecting, investigation and planning. It is doubtless that, in the.
language of Lord Cairns in Julius (1880) 5 Appeal Cases 214, 222,
there is
something in the nature of the things which the Nationalisation
Ameridrnent
Act empowers to be done, something in the object for which it is to be done
C
and something in the conditions under which it iSi to be done which couplts the
poVi·er conferred by the Act with a duty, the duty being not to act in hast0 but
with reasonable promptitude depending upon the nature of the problem under
investigation. An obligation to act does not cease to be so merely
because
there is no obliga•tion to act in an ad-hoc or impromptu manner. It is in the
context of a conglomeration of these diverse considerations that one must a pprew
ciate why, in section 3(4) which was introduced by the Nationalisation AmendD
ment Act, Parliament. used the permissive expression
"it shall be Jaw:ful".
[1078 H, I 079 A-CJ
A broad and. liberal approach to the field of legisla-tion
demarcated
by
Entry 54, List L an objective :ind practical understanding of the provisions con·
tained in the Nationalisation Amendment Act and a realistic perception of cons~
titutional principles will point to the conclusion that the Pa-rliament had
the
E
legislative competence to enact the Nationalisation Amendment Act.
f1079 C·D]
Julius v. Bishop of Oxford [1880J 5 Appeal cases 214,222 referred to.
8. The Coking Coal Mines (Nationalisation) Act of 1972 and
the
Coal
Mines (Nationalisation) Act of 1973 cover the whole field of "Coal" which was
intended to be nationalised. The titles of the two Acts and the various provi·
sions contained therein show that what was being nationalised was three distinct
F
categories of mines : mines containing seams of coking coal exclusively; mines
containing seams of coking coal along with seams of other coal; and
mines
containing seams of other coal. Though Parliament had power under Article
31A(l)(e) of the Constitution to terminate mining leases without payment of
any compensation or 'amount', it decided to nationalise coal mines on payfilent
of amounts specified in the Schedules to the Nationalisation Acts of 1972 and
1973. Besides, even when something apart from coking coal mines was acquiJ-.
G
ed, namely, 'coke oven plants', provision was separately made, in section 11 of
the Nationalisation Act of 1972, read with the 2nd Schedule, for payment of
amounts to owners of coke oven plants. Thus, whatever was intended to be
acquired was paid for.
This scheme is prima fade inconsistent with the Par·
lian1ent intending to acquire leasehold rights in other minerals, like firec1ay, with·
out the payment of any amount. [1082 B-EJ
Coupled with this is the unambigous wordin.g of section 3 (3) (b) and section
H
3 (3 )( c) of the Nationalisation Act Of 1973 which were introduced therein by
8-610SCI/80
1
1050
SUPREME C!J.URT REPORTS
[1980] 3 s.c.R.
A
section 3 of the Na-tionalisation Amendment Act. These provisions carry the
scl:cme of tha: Nationalisation Acts to their logical conclusion by emphasising
tliat the target of those Acts is coal mines, pure and simple. What stands
terminated under section 3(3)(b) is certain mining leases and sub~leases in so
far as they relate to the winning or mining of coal. The embargo placed by
section 3 ( 3) ( c) is on the granting of leases for winning or mining coal to persons other than those mentioned in section 3(3)(a). [1082 E-F, H, 1083-A]
B
°'
The definition of 'coal mine' in section 2(b) of the Coal Mines (Nationalisation) Act, 1973 has an uncertain import and the schen1e of that Act and of
the Coking Coa-l ·Mines (Nationalisation) Act, 1972 makes it plausible
that
rights in minerals other than coke and coal were not intended to be acquired
under the two Nationalisation Acts.
A comparison of the definition of "coal
mine" in section 2(b) of the Act of 1973 with the-definition cf "coking coal
C
mine'' in section 3 (c) of the Coking Coal Mines (Nationalisation) .Act of 1972
makes it clear that whereas in regard to coking coal mines, the\ existence of any
seam of other coal Vias regarded as inconsequential, the· existence· of any seam
of another mineral was not considered as inconsequential in regard to a coal
mine. The definition of coal mine in section 2(b) of the Act of 1973 scrupulously deleted the clause, "whether exclusively· or in addition to" any other seam.
The same Legislature which added the particular clause in the
definition of
D
'coking coa! mine' in; the 1972 Act, deleted it in the definition of 'coal mine' in
the 1973 .Act. In so far as coal mines are concerned, b).- reason of the definition of coal mine contained in section 2(b) of the Act of 1973, and the definition of coking coal mine: in section 3(c) of the Act of 1972 which presents a.
striking contrast" to the definition in section 2(b ), composite coal 1nines, that is
to say, coal mines iR whlch there are Seams of .coal a-nd hreclay do. not .fall within the scope of the definition of "coal mine'' in section 2(b) of the Act of 1973.
E
[1083 A-B, C-E, G-m
F
G
H
9. The lessees of composite mines, therefore, who hold composite
1nin1ng
leases -of winning coal and fireclay, cannot continue their mining operations
unabated despite the provisions of the Natlonalisation Amendment Act. It is
one thing to say that a composite mine is outside the scope of the definition of
coal mine in section 2(b) of the Nationalisation Act of 1972 and quite another
to conclude therefrom that the other provisions introduced into that Act by the
Nationalisation Amendment Act will have no impact on composite leasesforwinning coal and fireclay.
Section 3(3)(a) which was introduced
into
Hie
parent Act by the, Nationalisation Amendment Act provides expressly that on
and from the commencement of section 3 of the Amendment Act, that is, from
Aptil 29, 1976, no person other than th_ose mentioned in clauses (i) to (iii)
shall carry on "coal mining operation, in India, in any fonn".
These
provisions of sections 3(3) (a-) and 30(2) of the parent Act will apply of their own
force, whether or not the lessee holds a composite lease for winning coal and
fireclay and whether or not the mine is a composite mine containing alternate
seams of coal and fireclay. In other words, if a person holding a composite
lease can do fireclay mining without mining coal, he may do so.
But if. he
cannot win or mine fireclay without doing a coal mining operation,
that
is,
without winning or mining coal, he cannot do any mining operation at all. If
he does so, he will be. liable for the penal consequences provided for in section
30(2) of the NationaliSl>tion Act of 1973. The provision contained in section
3 (3) (a) totally prohibiting the generality of persons from carrying
on c.oat
mining operation in India in any form and the penal provision of section 30(2}
"
y
TARA PRASAD V. UNION
1051
virtually leave with the lessees of composite mines the Jiusk of a mining interest.,
A
That they calUlot win or mine coal is conceded and, indeed, there, is no escape
from that position in view of the aforesaid provisions. (1084 B-H, 1085 Al
The lessees of composite mines cannot win or mine fireclay though their
composite lease· is outside the scope -of section 2 (b) of the Nationalisatio11 Act
of 1973. The lessees of composite mines will, for all practical purpeses, have
to 1111rse their deeds of lease without being able to exercise any of the· rights
:flowing from them.
On their own showing, they will be acting at their peril
if they attempt to win fireclay.
If they cannot win fireclay \vithout v.'inning
coal, they cannot \.vin firecJay either, even if they hold composite leases under
which they are entitled to win coal and fireclay. [1085 C-D]
(10) Though the Parlia~nt provided for the payment of
amounts
for
acquisition of certain interests under the:. Nationalisation A<;:ts of 1972 and 1973.
it did not intend to pay any compensation or amount for the
termination of
lease-hold rights in respect of composite mines. Mines which have alternate
seaW of coa~ and fireclay are in a class by themselves and they appear to be
far fe,ver in number a~ compared with the coking coal minesi and coal mines,
properly so called.
The authority of law. for the termination of the righls of
compor;ite lessees is. the provision contained in! section 3 (3) (a), -the violation of
which attracts the penal provisions of section 30(2) of the Nationa·lisation Act
of J.973.
The Par1iament has deprived composite lessees of their right to win
fireclay because they canont do so without winning .coal. The winning of coal
by the generality of people is prohibited by section 3(3)(a) of the Act of 1973.
[1085 E-GJ
Th.is is, just as well, because Parliament could not b&ve intended that such
islands of exception should swallow the main stream of the Nationalisation Acts.
Obviously, no rights were intended to be left outstanding, once the rights in
·respect of coking coal mines and coal mines were brought to an end. [1085 G-HJ
11. A close and careful examinn·tion of the provisions of the Coal
Ivline~
(Nationalisation) Act. 1973 and of the amendments made to that
Act
by
Nationalisation Amendment Act makes it clear that by
the
Nationalisa-tion
Amendn1ent Act, neither the petitioners' right to property has been
acquired
B
c
D
E
\\'ithout the payment of any amount nor they have been unreasonably deprived
F
of their right to carry on the business of mining. [1087 E-F]
TJ1e Coal Mines
(N~tionaJisation) Act. ~~73 nationalised coal
mines
by
rroviding by section 3(1) that on the appointed day, that is on ~fay 1, 1973,
the right, title and interest of the owners in relation! to the coal mines specified
in the Schedule shall ~tand tr~mferred to, and shall vest absolutely in, the Central <Jovemment free from all incumbrances. 'Ibe scheduled mines,
711
in
number oo.d situated in reputed coal bearing areas. were the ones which were
engaged openly, lawfullv and uninterruptedly in doing coal mining
business.
Since it was possible· to riscertain and ·verify the relevant facts pertaining tO! these
undertakings, t~y were taken over on payment of amounts mentioned in the
Schedule to the Act, \\·hich varied from mine to mine depending
upon
tbe·
•al•c of their assets, their potential '"d their profitability. In the very nature
of things, the list of mines in the Schedule oouid not be exhaustive because
dlere were. and perhaps even now there are, unauthoric.ed mines worked by per-
. -
who did not JlOSSC&'! the semblance of a title or right to do mining business.
ht.ons falling within that category cannot cite the Constitution as their charter
G
H
A
B
c
D
E
.,
G
H
1052
SUPREME COURT REPORTS
(198,)j 3 S.t'.R.
to continue to indulge in unauthorised mining which is unscientific,
l)nsystematic and detrimental to the national interest by reason of its
tendency to
destroy the reserve of natural resources.
But alongside these persons, there
couid conceivably be mine operators who may have been doing their business
lawfully but who were not easily or readily identifiable.
Section 3 (2) of the
Nationalisation Act, 1973 made provision for taking over the management of
such mines by declaring for "the removal of doubts" that it, after the appointed
day, the existence of.any other coal mine comes to the knowledge of the Central
Government, the provisions of the Coal Mines (Taking Over of Management)
Act, 1973, shall, until that mine is nationalised by an appropriate legislation,
apply to such mine. Owners of mines whose mines were not included in the
Schedule but whose right, title and interest was to vest eventually in the Central
Government under "an appropriate legislati0n" envisaged by section 3 (2) of
the Nationalisation Act were, by this method, placed on par with the owners
of mines of which the management was taken over under the Coal Mines
(Taking Over of Management) Ac~ 1973. That Act provides by section 7(1)
that every owner of a coal mine shall be given by the Central Government an
amount in cash for the vesting in it, under section 3, of the management of
such mine.
By section 7(2), for every months during which the management
of a coal mine remains vested in the Central Government, the amount referred
to in sub-section (I) shall be computed at the rate of twenty paise per tonne .
of coal on the highest monthly production of coal from such mine during any
month in the years 1969, 1970, 1971 and 1972. The two provisos to that subsection and the other sub-sections of section 7 provide for other matters relat ..
ing to payment of amounts to the owners of coal mines of which the managem&nt was t~ken over. The Nationalisation Amendment Act carried the scheme
of these two Acts to its logical conclusion by terminating the so-called lea8<!'
and sub-leases which might have remained outstanding. [1087 G-H, 1088 A-G]
Thus, the purpose attained by these Acts is (I) to vest in the Central .
Government the right of management of aJ1 coal mines; (2) to nationalise the
mines mentionell in the Schedule; (3) to provide for the taking over of management of coal mines the existence of which comes to the
knowledge of the
Central Government after the appointed day and lastly (4) to terminate aJ1
mining leases. The Management Act and the Nationalisation Act provide for
payment of amounts, by no means illusory, to the owners of coal mines whose
rights were taken over.
In the normal course of human affairs, particularly
business affairs, it is difficult to conceive that owners of coal mines who had
even the vestige of a title thereto would not bring to the notice of the Central
Government the existence of their mines, when such mines were not included
in the Schedule to the Nationalisation Act. Those who did not care to bring
the existence of their mines to the knowledge of the Central Government. even
though amounts are pavable undet the Management Act for the extinguishment
of the right of management did not evidently possess even the semblance of a
titie to the mines.