# THE MINERAL DEVELOPMENT LTD., CALCUTTA v. THE UNION OF INDIA AND ANOTHER

- **Citation:** [1961] 1 S.C.R. 445
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** B. P. Sinha, J. L. Kapur, P. B. Gajendragadkar, K. SuBBA RAo, K. N. Wancroo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-mineral-development-ltd-calcutta-v-the-union-of-india-and-another-2174
- **Pages:** 8

## Headnote

Mining lease-Whether includes su~-lease-Mines and Minerals .(Regulation and Development) Act. I948 (53 of I948), s. 3(d)-
Mineral Concession Rules, I949·
The appellant, a limited company, which was the Jessee ol'a
mining lease granted a sub·lease in respect of two of the villages
comprised in its grant. The secretary and two of the directors
of the company were prosecuted for having contravened the
provisions of the Mines and Minerals (Regulation & Development) Act, r948, and the Mineral Concession Rules, rg-19. which
were framed under it. The appellant contended, firstly, that
the sub-lease was not covered by the definition of the term
"Mining lease " of the Act and as such the Act and Rules did
not apply to a sub-lease at all; and secondly, that as these rules
were made under ss. 5 and 6 of the Act and not under s. 7 they
have no application to a sub-lease granted by a lessor, even
after the coming into force of the Act and the Rules where the
lessor's own lease was of date anterior to the coming into force
of the Act and the Rules.
Held, that the definition of "Mining lease" contained in
s. 3(d) of the Mines and Minerals (Regulation and Development)
Act, r948, does not require that the lessor must be a proprietor
and its plain language read with s. 5 of the Transfer of Property
Act, r882, makes it clear that a mining lease includes one executed by a proprietor as much as a lease executed by the Jessee from
such proprietor. The facts that the lessor is himself a lessee,
and the transaction between him and the person in whose favour
he makes the transfer by way of lease is called a sub-lease does
not in any way change the nature of the transfer as between
them.
Held, further, that the Rules made under ss. 5 and 6 of
the Act would apply to a mining sub-lease if it is made after
the Act and the Rules came into force.
CrvrL APPELLATE
JURISDICTION:
Civil Appeal
No. 231/1955.
Appeal from the Judgment and Decree dated February 16, 1954, of the Patn1l. High Court in Title Suit
No. 105/1953.
··
.
August 31.
446
St:PREME· COURT REPORTl:i
[1961]
N. C. Chatterjee, Sanjeev Chaudhuri and Gan pat Rai,
Miwal
for t·he appellant.
DeidvP"""' Lid.
C. K. Daphtary, Solicitor.General of India, P. K.
Chatterjee and T. M. Sen, for respondent No. I.
v.
l:ulon of /udia
IV1ouJio,, J.
Lal Narayan Sinha, Bajrang Sakai and R. C. Prasad,
for respondent No. 2.
1960. August 31. The Judgment of the Court was
delivered by
WANCHOO J.-This is an appeal from a decree of
the Patna High Court, The appellant is a Public
Limited Company with its registered. office at Calcutta..
A mining lease was granted to it by the Raja of Ha.mgarh on December 29, 1947, for a period of 999 years
in respect of 3026 villages situate within the Ra.mgarh Estate and the appellant was put in possession
thereof. On February 1, 1950, the appellant granted
a sub-lease of two of the villages comprised in its
grant to one Bhagat Singh for a t~rm of 15 years. In
the meantime the Mines and Minerals (Regulation
and Development) Act (Lill of 1948), (hereinafter
called the Act.), had come into force along with the
Mineral Concession Rules, 1949 (hereinafter ca.lied tho
Rules), in the area in which the two villages lay.
Bhagat Singh then applied to tho Deputy Commie.
sioner, Haza.riba.gh, for the grant of a certificate of
approval under the Rules.
Thereupon the Deputy
Commissioner, taking the view that the sub-lease
granted was in contravention of the Act and the
}{ules, filed a complaint on September 25, 1951, before
a magistrate against two directors and the secretary
of the appellant charging them with the breach of
r. 45 of the Rules and also rr. 47 and 49 (now r. 51)
read with r. 51 (now r. 153) and B. 9 of the Act. While
the criminal case was going on, the appellant filed a
suit challenging the validity and constitutionality of
the Act and the Rules. A number of grounds were
taken in support of t.his challenge but it is not neces-
!lB.rv now to set out a.II of them, aR learned counsel for
th

## Text

1 S.C.R. SUPREME COURT· REPORTS
445
THE MINERAL DEVELOPMENT LTD.,
CALCUTTA
v.
THE UNION OF INDIA AND ANOTHER.
(B. P. SINHA, c. J., J. L. KAPUR,
P. B. GAJENDRAGADKAR, K. SuBBA RAo
and K. N. WANCROO, JJ.)
Mining lease-Whether includes su~-lease-Mines and Minerals .(Regulation and Development) Act. I948 (53 of I948), s. 3(d)-
Mineral Concession Rules, I949·
The appellant, a limited company, which was the Jessee ol'a
mining lease granted a sub·lease in respect of two of the villages
comprised in its grant. The secretary and two of the directors
of the company were prosecuted for having contravened the
provisions of the Mines and Minerals (Regulation & Development) Act, r948, and the Mineral Concession Rules, rg-19. which
were framed under it. The appellant contended, firstly, that
the sub-lease was not covered by the definition of the term
"Mining lease " of the Act and as such the Act and Rules did
not apply to a sub-lease at all; and secondly, that as these rules
were made under ss. 5 and 6 of the Act and not under s. 7 they
have no application to a sub-lease granted by a lessor, even
after the coming into force of the Act and the Rules where the
lessor's own lease was of date anterior to the coming into force
of the Act and the Rules.
Held, that the definition of "Mining lease" contained in
s. 3(d) of the Mines and Minerals (Regulation and Development)
Act, r948, does not require that the lessor must be a proprietor
and its plain language read with s. 5 of the Transfer of Property
Act, r882, makes it clear that a mining lease includes one executed by a proprietor as much as a lease executed by the Jessee from
such proprietor. The facts that the lessor is himself a lessee,
and the transaction between him and the person in whose favour
he makes the transfer by way of lease is called a sub-lease does
not in any way change the nature of the transfer as between
them.
Held, further, that the Rules made under ss. 5 and 6 of
the Act would apply to a mining sub-lease if it is made after
the Act and the Rules came into force.
CrvrL APPELLATE
JURISDICTION:
Civil Appeal
No. 231/1955.
Appeal from the Judgment and Decree dated February 16, 1954, of the Patn1l. High Court in Title Suit
No. 105/1953.
··
.
August 31.
446
St:PREME· COURT REPORTl:i
[1961]
N. C. Chatterjee, Sanjeev Chaudhuri and Gan pat Rai,
Miwal
for t·he appellant.
DeidvP"""' Lid.
C. K. Daphtary, Solicitor.General of India, P. K.
Chatterjee and T. M. Sen, for respondent No. I.
v.
l:ulon of /udia
IV1ouJio,, J.
Lal Narayan Sinha, Bajrang Sakai and R. C. Prasad,
for respondent No. 2.
1960. August 31. The Judgment of the Court was
delivered by
WANCHOO J.-This is an appeal from a decree of
the Patna High Court, The appellant is a Public
Limited Company with its registered. office at Calcutta..
A mining lease was granted to it by the Raja of Ha.mgarh on December 29, 1947, for a period of 999 years
in respect of 3026 villages situate within the Ra.mgarh Estate and the appellant was put in possession
thereof. On February 1, 1950, the appellant granted
a sub-lease of two of the villages comprised in its
grant to one Bhagat Singh for a t~rm of 15 years. In
the meantime the Mines and Minerals (Regulation
and Development) Act (Lill of 1948), (hereinafter
called the Act.), had come into force along with the
Mineral Concession Rules, 1949 (hereinafter ca.lied tho
Rules), in the area in which the two villages lay.
Bhagat Singh then applied to tho Deputy Commie.
sioner, Haza.riba.gh, for the grant of a certificate of
approval under the Rules.
Thereupon the Deputy
Commissioner, taking the view that the sub-lease
granted was in contravention of the Act and the
}{ules, filed a complaint on September 25, 1951, before
a magistrate against two directors and the secretary
of the appellant charging them with the breach of
r. 45 of the Rules and also rr. 47 and 49 (now r. 51)
read with r. 51 (now r. 153) and B. 9 of the Act. While
the criminal case was going on, the appellant filed a
suit challenging the validity and constitutionality of
the Act and the Rules. A number of grounds were
taken in support of t.his challenge but it is not neces-
!lB.rv now to set out a.II of them, aR learned counsel for
the. appellant has confined his arguments only to two
points, namely, (i) a sub-lease iR not covered by the
definition of the term 'mining lca8e' in s. 3(d) of the
!
l S.C.R. SUPREME COURT REPORTS
447
Act and therefore the Act and the Hules do not apply
z96o
to a sub-lease at all, and (ii) as these Rules were made
.
.
d
7 h
Mineral
under ss. 5 and 6 of the Act and not un er s.
t ey Development Ltd.
have no application to a sub-lease granted by a lessor,
v.
even after the coming into force of the Act and the Union of India
Rules, where the lessor's own lease was of a date
anterior to the coming into force of the Act and the
Wanchoo J.
Rules.
The suit was resisted by the respondents and their
defence was that the term • mining lease ' included a
sub-lease and that the Hules framed under ss. 5 and 6
of the Act were applicable to all sub-leases granted
after the Act and the Rules had come into force.
The High Court repelled the contentions raised by
the appellant against the validity and constitutionality of the Act and the Rules. It further held that
the term 'mining lease' as defined in s. 3(d) of the Act
included a sub-lease and therefore the Act and the
Rules applied to sub-leases granted after the Act and
the Rules came into force and it was immaterial that
the lease granted to the appellant was anterior in
time to the coming into force of the Act and the
Rnles. On this view, the suit was dismissed.
Thereupon the appellant applied for a certificate which was
granted and that is how the matter has come up
before us.
l~e. (i).
The main question that foils for consideration i.s
whether the term 'mining lease' as defined in s. 3(d)
of the Act includes a sub.lease. Clause (d) of s. 3 is in
these terms :-
" 'mining lease ' means a lease granted for the
purpose of searching for, winning, working, getting,
making merchantable, carrying awa.y, or disposing of
mineral oils or for purposes connected therewith, and
includes an exploring or a prospecting licence; ".
There is no specific mention of a sub-lease in it. But
if one takes the plain meaning of the words used in
s. 3(d), it is clear that the term 'mining lease' means
any kind of lease granted.for the purpose of searching
for, winning, workiug, getting, making merchantable,
448
SUPREME COURT REPORTS
[ 1961 J
carrying away or disposing of minerals or for purposes
Jfowal
connrck·d therewith. It is significant that the dcfiniDmlnp"''"' 1.1,1. tion does not require that the lessor must be the prov.
Un1011 of India
H'ancl;oo ].
prietor; and so on a fair reading it would include a
lrase executed by the propriotor as much as a lease
executed by .tho lessee from such a proprietor. If we
turn to the definition of' lease' in s. 105 of tho Transfer of Property Act, we find that a lease <if immovable property is a transfer of a right to enjoy such
property made for a certain time, express or implied
or in perpetuity in consideration of a price paid or
promised, or of money, a share of crops, service or
any other thing of value to be rendered pniodically or
on Rpecitied occasion~ to the transferor by the transferee who accepts the transfer on such terms. What
a lease therefore rPqnires is a transferor and a transferee and a transfer of immoveable property on t.he
terms and conditions mentioned in s. 105.
How the
transferor gets his title t.o make a lease is immaterial
so long as the transaction is of t.he nature defined in
s. 105.
Applying therefore the plain words of s. 3(d)
of the Act and the definition of lease as contained in
s. 105 of the Transfer of Property Act, it is perfectly
clear that thcro is a transferor in this case, (namely,
the appellant) and a transferee (namely, Bhagat
Singh) who has accepted the transfer; the transaction
is with respect to immovable property and creates a
right to enjoy such propNty for a certain term and
for consideration on the conditions mentioned in it.
Though, therefore,· the document may be termed a
sub-lease in view of the fact that the transferor is not
the owner of the property transferred but is itself a
lessee, tho transaction between the appellant and
Bhagat Singh is nothing but a mining lease.
The
terms 'sub-lease', 'under-lease' and 'derivative
lease' are UHod conveniently to indicate not only that
the transfer is a lease but also that the transferor is
not. the owner of the property but. is a lessee; but the
transfer as between a lessee and a sub-lessee is nonethelosR a lease provided it satisfies the definition of
s. 105.
We may add that Ch. V of the Transfer of
P ropcrty Act, which deals with leases of immovable
I
'.
1" ,.,
:)
1 S.C.R. SUPREME COURT REPORTS
449
property has nowhere made any distinction between
r96•
a lease and a sub-lease and all the provisions of that
.
. .
1
)
]
I t
h
Mineral
Chapter w hwh a pp y to a ea:se a ~o a pp Y. o a su · D•velopment Ltd.
lease. It is only when dealmg with the rights and
v.
liabilities of the lessee that s. 108(j) of the Transfer of Union of India
Property Act lays down that the lessee may transfer
-
absolutely or by way of mortgage or subclease the
Wanchoo J.
whole or any part of his interest in the property, and·
that is where one finds mention of a sub-lease, namely, that it is a lease by a person who is himself a
lessee. But the fact that the lessor is himself a lessee
and the transaction between him and the person in
whose favour he makes the transfer by way of lease is
called a sub-lease does not in any way change t.he
nature of the transfer as between them. Therefore on
the plain words of s. 3(d) read with s. 105 of the
Transfer of Property Act there can be no doubt that
the term 'mining lease' includes a sub-lease.
Learned counsel for the appellant referred in this
connection to a number of statutes wherein a sub-lease
has been expressly stated to be included in the term
'lease '. In the Mines and Minerals (Regulation and
Development) Act, LXVII of 1957, which has replaced the Act, the term • mining lease ' has been defined
in s. 3(c) as meaning a lease· granted for the purpose
of undertaking mining operations and inelutles a sub.
lease.
The 1957 Act was enacted after the judgm'!mt
of the High Court in this case and the legislature
apparently thought it fit ex abundanti cautela to say
that a sub-lease is included within the term • mining
\ lease '. In the corresponding English Act 8.lso as well
as the English Law of Property, 1925, a lease has
been defined to include a sub-lease. The fact however
that in some laws a lease is defined to include a sublease, does not mean that a lease cannot otherwise include a sub'.lease. An example to the oontrary is the
the Transfer elf Property Act, where the definition of
the word 'lease' clearly includes a sub-lease: Learned
counsel for the appellant also relied on certain decisions in which it was held that a lease did not include
a sub-lease. Those. decisions, however, ·turn· on-the
particular terms of the . enactment there under
450
SUPREME COURT REPORTS
[1961]
r96o
consideration a,nd are of no assistance in determining
the question whether the term 'mining lease' in the
D
Ml Pineratl Ltd Act includes a mining sub-lease. Ordinarily, a lease
eve o men
.
"ll ,
v.
w1 rnclude a sub-lease unless there is anything to the
Union of India contrary in the particular law.
We may in this connection refer to the observations of Jessel, lVI. R., in
Wanchoo J.
Camberwell and South London Building Society v.
Holloway (1) at p. 759 :-
"The word 'lease' in law is a well-known legal term
of well defined import. No lawyer has ever suggested
that the title of the lessor makes any difference in the
description of the instrument, whether the lease is
granted by a freeholder or a copy holder with the licence
of the Lord or by a man who himself is a leaseholder.
It being well granted for a term of years it is called
a lease.· It is quite true that where the grantor of the
lease holds for a term, the second instrument is called
either an underlease or a derivative lease, but it is
still a lease ......... ".
We see nothing in the Act to indicate that the term
'mining lease' as defined ins. 3(d) does not include a
. mining sub-lease. On the other hand, looking to the
purpose and object with which the Act was passed, it
seems to us quite clear that a sub-lease must be included within the term 'mining lease' as it obviously
is within the plain words of s. 3 (d).
That the Act was passed in the public interest is
shown by the fact that it provides for the regulation
of mines and oilfields and for the development of
minerals. The intention was that the mineral wealth
of the country should be conserved and should be
worked properly without waste and by persons qualified in that kind of work. With that object in view
s. 5 inter alia provides for making rules as to the
conditions on which mining leases may be granted
and the maxiinum or minimum area and the
period for which such lease may be granted as also
the terms on which leases in respect of contiguous
areas may be amalgamated, and the fixing of the
maximum and minimum rent payable by a lessee,
(I) (1879) 13 Ch. D. 754, 759·
T
•
•
,
1 s.c.R: SUPREME COURT REPORTS
451
whether the mine is worked or not. ,Section 6 pr<rr96o
vides for framing of rules for the conservation and
M.
1
development of minerals, the manner in which any Develo;:;;~ Ltd.
mineral or any area as respects which the grant
·
v.
of mining lease is prohibited may be developed and Union of India
the development of any mineral resources in any area
by prescribing or regulating the use of engines, ma.chiWanchoo J.
nery or other equipment, and so on. These provisions for the conservation, development and regulation of mining areas and minerals would be more or
less completely frustrated if a mining sub-lease was
not included in the definition of the term ' mining
lease ', for then all that would be necessary for a person who wanted tq avoid the law would be to interpose an intermediary between himself and the owner
and get a sub-lease from him which would be free
from the regulatory control of the Act and the Rules.
We are therefore of opinion that looking at the plain
words of s. 3(d) and the object and t<_he purpose for
which the Act was passed, it is clear that a mining
sub-lease is included within the definition of the term
·'mining lease' and there is nothing in the Act which
militates against this. We therefore hold ·that a
mining sub-lease made after the coming into force of
the Act and the Rules is included in the term 'mining
lease' as defined in s. 3 (d) and is subject to the Act
and the Rules.
Re. (ii).
The argument in this connection is that s. 4 of the
Act provides that no mining lease shall be granted
after the commencement · of the Act otherwise than
in accordance, with the rules framed under the Act and
any mining lease granted otherwise shall be void and
of no effect. Sections 5 and ll give power to the Central Government to make rules for purposes already
set out above and refer to mining leases gran.ted under
s. 4. Then comes . s. 7, which lays down that the
Central Government may by notification in the official
gazette make rules for the purpose of modifying or
altering the terms and. conditions of any mining lease ·
58
452
SUPREME COURT REPORTS
[1961]
196o
granted prior to the commencement of the Act so a.s
M .
1
to bring such lease into conformity with the rules
ucera
d
.
Development Ltd. framed un er ss. 5 a.nd 6. It is urged tha.t where a.
v.
mining lease ha.a boon granted before the Act a.nd the
Union of India Rules ca.me into force, it is only the rules framed
under s. 7 which will affect a.ny sub-lease granted by
W••choo f.
such a. lessee even though the sub-lease is after the
da.te on which the Act a.nd the Rules ca.me into force.
Section 7 in our opinion was enacted for a.n entirely
different purpose, a.s sub-a. (2) thereof will show. It
is however not necessary to go into this matter fur.
ther, for once it is held tha.t a. sub-lease is included in
the term ' mining lease ', the rules made under as. 5
a.nd 6 would apply to such a sub.lease, if it is made
after the Aot a.nd the Rules came into force.
In the
present ca.se, the. sub-lease wa.s granted after the Act
a.nd the Rules ca.me into force in the a.res. with which
the sub-lease is concerned a.nd therefore the sub-lease
,would be governed by the Act a.nd the Rules. There
'is no question in this ca.so of modifying or altering
the terms a.nd conditions of a.ny mining lease granted
1prior to the commencement of the Act, for the Act
'a.nd the Rules a.re being enforced with respect to a.
.sub-lease which is a. mining lease, within the· defini-
'tion of tha.t term in s. 3(d), ma.de after the Act and
the Rules ca.me into force.
No change is being ma.de
by the Rules in the terms a.nd conditions of the
mining lease granted to the a.ppella.nt a.nd a.ll tha.t ha.a
happened is tha.t the a.ppella.nt's directors and secretary are being prosecuted for granting a. sub-lease
(which is a. mining !ease) a.gs.inst the provisions of the
Act and the Rules after the Act ca.me into force.
There is no force therefore in this contention of the
a.ppella.nt and it must be repelled.
There is no force in this a.ppea.l a.nd it is hereby
dismissed with costs. One set of bee.ring costs only.
Appeal di8111issed.
I
. ..