1. Dispute over whether State of Bihar had legal authority to grant leases for collection of coal slurry without prior Central Government approval under Mines and Minerals Act. (Para 1 , 2 , 3 , 6 )
1990 Supreme(SC) 430
SUPREME COURT OF INDIA
K.N. SINGH AND M.H. KANIA, JJ.
Civil Appeal No. 4521 of 1986{From the Judgment and Order dated December 20, 1985 of the Patna High Court in C.W.J.C. No. 1133 of 1984(R)}
BHARAT COKING COAL LTD.
Versus
STATE OF BIHAR AND OTHERS
With
Civil Appeals Nos. 61-62 of 1987
TATA IRON AND STEEL CO. LTD.
Versus
STATE OF BIHAR AND OTHERS
With
Civil Appeals Nos. 230-231 of 1987
CENTRAL COALFIELDS LTD. AND ANOTHER
Versus
INDUSTRIAL FUEL MARKETING COMPANY AND OTHERS
Civil Appeals Nos. 4521 of 1986, 61-62 and 230-231 of 1987, decided on August 17, 1990
Advocates appeared :
Ashok Desai, Solicitor General, Kuldip Singh, Kapil Sibal, Additional Solicitor Generals, K.K. Venugopal, R.K. Jain, Gobind Das, R.N. Sachthey, Shanti Bhushan, L.M. Singhvi, L.N. Sinha and M.L. Verma, Senior Advocates (Ranjit Kumar, K.K. Lahiri, R.F. Nariman, S. Sukumaran, P.K. Jain, P. Saswidia, P. Parmeshwaran, C.V. Subba Rao, P.P. Singh, D. Goburdan, S.B. Upadhyay, P.C. Kapoor, M.M. Kashyap, A. Sharan, R.D. Upadhyay, S.K. Sinha, Apurb Lal, Anip Sachthey, C. Badri Nath Babu, B.B. Singh, A.K. Mitra, O.C. Mathur, A.N. Dittia, Arun Madan, Ms A. Subhashini, Ms Sushma Suri and A.M. Ditta, Advocates, with them) for the appearing parties.
A.C.Mittal, A.M.DITTA, A.N.Dittia, A.SHARAN, A.Subhashini, Anip Sachthey, APURAB LAL, ARUN MADAN, ASHOK DESAI, B.B.Singh, C.B.Balak, C.V.SUBBA RAO, D.GOVERDHAN CHARY, GOBIND DAS, K.K.LAHRI, K.K.VENUGOPAL, KAPIL SIBAL, Kuldip Singh, L.M.SINGHVI, L.N.Sinha, M.L.Verma, M.M.KASHYAP, O.C.MATHUR, P.C.KAPUR, P.K.JAIN, P.P.Rao, P.P.SINGH, P.SASWIDIA, R.D.UPADHYAY, R.F.NARIMAN, R.K.JAIN, R.N.SACH, RANJIT GHOSAL, S.B.Upadhyay, S.K.Sinha, S.SUTAIMARAN, SHANTI BHUSHAN, SUSHMA SURI
Headnote:Mines and Minerals (Regulation & Development) Act, 1957 - Section 3-"mineral" slurry, i.e, particles of coal escaping/overflowing from washery plant/storage ponds along with water and getting deposited in river bed land, continues to be carbonaceous in character having all the elements of coal and is a “mineral”-State Government has no authority in law to grant lease or settlement authorising collection of the same from the river bed/land as the competence therefore vests in the Central Government. AIR 1985 Pat 114-Approved; AIR 1986 Pat 242 (FB), AIR 1985 Cal 143 - Overruled. (Paras 10, 22 & 24)
Mines and Minerals (Regulation & Development) Act, 1957-Section 3 (d) read with Section 2(1) (j) of Mines Act. 1952-"mining operation"-means any operation undertaken for the purpose of winning any mineral - essence of ‘mining operation’ is that it must be an activity for winning a mineral under the surface or winning the surface of the earth-washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for sale is an integral part of a mine-any waste discharge from the washery carrying coal particles in the form of slurry is the waste slime arising from operations carried out in a mine, AIR 1979 SC 1669: 1979 (3) SCR 80-Followed; 1976 (3) SCR 869- Referred. (Paras 12 & 21)
Constitution of India-Articles 245, 246 and Schedule VII, List I, Entry 54 and List II, Entry 23 read with Section 2 of Mines and Minerals (Regulation & Development) Act, 1957 although the State legislature is competent to enact law for regulation of mines and mineral development under List I, Entry 23, the power is subject to the declaration which may be made by Parliament by law envisaged by Entry 54 of List - legislative competence of State Legislature to make law on the topic of mines and mineral is subject to Parliamentary legislation. 1955 (2) SCR 225, 1967 (2) SCR 454-Referred. [Paras 15, 17, 18 & 19)
Constitution of India-Articles 245, 246 and Schedule VII, Lists I and II read with Sections 2, 13 and 18 (2) (k) [as amended by Act 37 of 1986] of Mines and Minerals (R and D) Act-disposal or discharge of sludge or slurry emanating from the washery is exclusively with in the legislative power of Parliament-Parliament having made a declaration under section 2 in terms of Entry 54 of List I, the matter is beyond the legislative competence of State Legislature-State Govt. has no authority in law to make any settlement or grant any lease to any person for collection of slurry deposits from the river bed/land. 1981 (2) SCR 742, 1970 (2) SCR 100, 1961 (2) SCR 537, 1964 (4) SCR 461-Followed. (Paras 17, 22 & 24)
Mines and Minerals (Regulation & Development) Act, 1957-Sections 13 and 18-non framing of rules by Central Govt. for regulating discharge of slurry-does not confer State Legislature with competence to frame any rule or law. (Para 18)
Mines and Minerals (Regulation & Development) Act, 1957-Section 18 (1)-expression "conservation of mineral"-would include power to frame rules regulating the discharge or disposal of slime/slurry emanating from a mine including its collection from the river bed or from raiyati land after its escape from coal washery. 1961 (2) SCR 537-Relied Upon
Legal Category Hierarchy
- constitutional law
- mines and minerals law
- administrative law
Table of Contents
2. Appellants urged slurry is coal requiring Central approval for lease; respondents contended slurry is not mineral and its collection involves no mining operations. (Para 8 , 12 , 13 , 20 , 21 )
3. State Government lacked authority to grant leases or settlements for slurry collection; impugned settlements declared illegal; respondents restrained from collecting slurry; appeals allowed. (Para 22 , 23 , 24 )
4. Does slurry escaping from a coal washery constitute a mineral (coal) within the meaning of the Mines and Minerals (Regulation and Development) Act?
Yes. Slurry contains fine particles of coal, is carbonaceous in character, and upon resumption is used as fuel. It is coal in liquid form and qualifies as a mineral specified in the First Schedule to the Act. (Para 9 , 10 , 11 )
5. Does collection of slurry from river beds or land constitute mining operations under the Act?
Yes. Recovery of coal particles from deposited slurry involves winning a mineral. Collection from river bed or land amounts to mining operations as minerals can be on the surface and their removal constitutes winning. (Para 10 , 11 , 12 , 21 )
6. Can the State Government grant leases for collection of slurry without prior approval of the Central Government under Section 5 of the Act?
No. Parliamentary declaration under Section 2 and provisions of Section 18 cover disposal of waste from mining operations. The State legislature is denuded of legislative competence to regulate slurry disposal, and such leases require Central Government sanction. (Para 13 , 14 , 15 , 16 , 18 )
7. Does mere absence of rules framed by the Central Government permit the State legislature to legislate on slurry disposal?
No. Once Parliament declares a topic as within its exclusive competence, the absence of rules does not confer legislative competence on the State. Section 18 fully covers the field of waste disposal from mines. (Para 18 , 19 )
8. Can the State Government exercise executive power to regulate disposal of slurry from coal mines in absence of legislation?
No. State executive power is co-extensive with legislative power, which has been taken away by Parliamentary declaration. Article 162 proviso limits State executive power where Parliament has exclusive legislative competence on the subject. (Para 19 , 20 )
JUDGMENT
SINGH, J.- In these appeals a common question of law is involved whether the State of Bihar had legal authority to execute leases in favour of the respondents for collection of slurry on payment of royalty to it. Since the questions involved in these appeals are common the same are being disposed of by a common judgment. Civil Appeal No. 4521 of 1986 and Civil Appeal Nos. 61-62 of 1987 are directed against the judgment of the Patna High Court while Civil Appeal Nos. 230-231 of 1987 are directed against the judgment of the Division Bench of the Calcutta High Court.
2. In order to appreciate the controversy in question it is necessary to recapitulate the facts. M/s Bharat Coking Coal Ltd. - appellant in C.A. 4521 of 1986 is a Government Company which carries coal mining operations in village Sudamdih in the State of Bihar. There is a coal washery adjacent to the appellants coal mine in village Sudamdih. After the coal is extracted from the mines, it is crushed into pieces of different sizes for purposes of grading. Since the coal is mixed up with mud and other impurities, same is brought to the washery for washing and cleaning the same for reducing the ash percentage and for use by metallurgical consumers. In the process of washing small coal particles escape from the washery in the form of slurry along with water and the same are deposited in the slurry ponds constructed for their storage by the appellant company. But when the ponds are full, the slurry overflows the pond and flows down into the river Damodar. After the water is soaked by the soil the small particles of coal get deposited in the river bed. These coal particles are collected and formed into briquettes which are sold in market for energy and fuel purposes. The slurry coal has acquired high commercial value as it is of exceptional quality and high grade, it is used by steel plants and thermal power stations. The State of Bihar granted lease in favour of Ram Nath Singh - respondent 4 for collecting the coal particles settled in the Damodar river bed and other land including plot No. 370 of Mauza Sudamdih. The appellant claimed that plot No. 370 which formed part of river bed of Damodar belonged to it having been acquired under the Coal Bearing Areas (Acquisition and Development) Act, 1957 for the purpose of mining of coal. Pursuant to the lease, respondent 4 has been collecting the coal particles from plot No. 370. The appellant company raised objection before the revenue authorities of the State of Bihar claiming property rights to collect and obtain slurry deposited in the river bed in plot No. 370, but its objections were overruled and respondent 4 was permitted to collect the coal particles from the aforesaid plot. The appellant thereupon filed a writ petition in the High Court of Patna challenging the State Governments action in granting lease to respondent 4 for lifting slurry from the river bed, on the ground that the property belonged to the appellant company and the State Government had no authority in law to grant a mining lease without the prior approval of the Central Government under Section 5 of the Mines and Minerals (Regulation and Development) Act, 1957.
3. Tata Iron & Steel Company Ltd. - the appellant in Civil Appeal Nos. 61-62 of 1987, is a company incorporated under the Companies Act. It owns steel plant at Jamshedpur and it also owns captive coal mines in the District of Hazari Bagh and Dhanbad. These coal mines are commonly known as West Bokaro Collieries. There is no dispute that large area of land in the District of Hazari Bagh and Dhanbad have been settled with the appellant company for purposes of mining operations and the company enjoys mineral rights in respect of the surface and subsoil. It is not necessary to refer to the historical facts relating to the acquisition of mining rights by the appellant, as there is no dispute that under Section 10 of the Bihar Land Reforms Act and appellants existing mining leases became statutory