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1996 Supreme(SC) 1901

SUPREME COURT OF INDIA
K.Venkataswami : M.M.Punchhi
King Pal Singh
Versus
State Of U.P.
Case No. : .
Date of Decision : 11/8/96
Advocates Appeared: Agarwal B.D. : Chandra Satish : Mehta Raj Kumar : Mishra R.B. : Puri H.K. : Singh T.N. : Srivastava Ashok K. : Swarup Pramod

Headnote:

Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 – Section 6,4,7 and 107(2) - central Act, 1957 -Section 15 - Mines and Minerals (Regulation and Development) Act, 1957 – Section 7 - In all these appeals a common question of law arises for our consideration - Rights in mines and minerals -Royalty payable - A common argument was addressed by counsel concerned and that is why they are disposed of by this common judgment - U.P. Zamindari Abolition and Land Reforms Act, 1950(1 of 1951 came into force - On publication of a notification under Section 4 of Act all the estates stood transferred to and vested in State free from all encumbrances - Section 6 of the Act speaks of consequences of such vesting in the State - It says that on publication of notification under Section 4 all rights, title and interest of all intermediaries in every estate in such area including land and in all sub-soil in such estate including rights, if any, any mines and minerals whether being worked or not shall cease and be vested in State of Uttar Pradesh free from all encumbrance - In light of above provision, it appears the Collector, Agra issued notices to appellants staling that they should stop mining as they have lost all rights in mines and minerals - Collector, further took steps to auction the right to win minor minerals - At this stage, appellants challenged actions of Collector by moving the High court – Held, court is not an extreme case of prohibition but one of regulation, therefore, there is no force in arguments that terms and conditions of lease exceeds area of regulation contemplated under Section 15 of central Act - In this context in which these words find a place, it must be construed that the phase "for the time being in force" should be given a meaning that fulfils the object of provision, purpose being that at lime of settling terms Mines tribunal would take into account provisions of central Act - This was the view taken by High court and rightly too - Therefore, court do not find any substance in argument of the learned Senior Counsel on second point - Since dead rent and royalty are both a return to lessor in respect of area leased, looked at from one point of view dead rent can be described as minimum guaranteed amount of royalty payable to lessor but calculated on basis of the area leased and not on quantity of minerals extracted or removed - In fact, clause (ix) of Rule 3 of the Rajasthan Minor Mineral Concession Rules, 1977, defines dead rent as meaning minimum guaranteed amount of royalty per year payable as per rules or agreement under a mining lease - Stipulations providing for lessees liability to pay surface rent, dead rent and royalty to lessor are the usual covenants to be found in a mining lease - Regarding relaxation of rules, it is not for this court to give any direction in facts of these cases - In foregoing circumstances, court do not find any substance in all these cases - Appeals are dismissed.

JUDGMENT

K. VENKATASWAMI, J.

(1) IN all these appeals a common question of law arises for our consideration. A common argument was addressed by the counsel concerned and that is why they are disposed of by this common judgment

(2) THE U.P. Zamindari Abolition and Land Reforms Act, 1950(1 of 1951 (hereinafter called "the Act") came into force on and from 1/7/1952. On the publication of a notification under Section 4 of the Act all the estates stood transferred to and vested in the State free from all encumbrances. Section 6 of the Act speaks of consequences of such vesting in the State. It says that on the publication of notification under Section 4 all rights, title and interest of all the intermediaries in every estate in such area including land and in all sub-soil in such estate including rights, if any, any mines and minerals whether being worked or not shall cease and be vested in the State of Uttar Pradesh free from all encumbrances. In the light of the above provision, it appears the Collector, , Agra issued notices to the appellants staling that they should stop mining as they have lost all rights in the mines and minerals. The Collector, further took steps to auction the right to win the minor minerals. At this stage, the appellants challenged the actions of the Collector by moving the High court

(3) THE High court by an order dated 18/3/1955 held that the appellants were entitled to take advantage of the provisions of Ch. VI of the Act and consequently a direction was given to the State government and the Collector, Agra, for considering the applications of the appellants for grant of lease under S. 106-108 of the Act

(4) PURSUANT to the said judgment of the High court, the Collector, Agra, sent letters dated 8/1/1964 offering the terms and conditions of the proposed leases to the appellants. Along with those letters drafts of mining lease containing the details of terms and conditions were also enclosed. Inter alia, the lease was offered for a period of 15 years and the terms and conditions proposed were in the light of U.P. Minor Minerals (Concession) Rules, 1963 (hereinafter called "the Rules") as well as the rules framed under the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter called "the central Act"). The appellants raised objections regarding certain terms and conditions contained in the proposed leases. Initially the aggrieved parties moved the High court by filing writ petitions and the High court while dismissing the same on 9/2/1965 directed the parties to come to a settlement regarding the terms and conditions on which the leases have to be given to the appellants and in case they could not settle the terms, the differences can be referred to the Mines tribunal to be appointed under Section 110 of the Act. As the parties could not come to a settlement, the Collector on 12/10/1966 filed an application under Section 107(2 of the Act for settlement of the terms of the leases. Before the Mines tribunal, the following were placed as areas of controversy:

"(A) PERIOD OF LEASE



Proposal of State Government

Objection of Opposite Party


The lease shall be for a period of

The lease should be perpetual and


fifteen years with effect from

permanent.


1-7-1952.



(B) PAYMENT OF ROYALTY OR DEAD



RENT



The rate of royalty or dead rent shall

The question of making payment


be charged in accordance with the

of royalty or dead rent for the past


maximum rate prescribed under

years does not arise at all. The rate


First Schedule (Rule 22) of the U.P.

of dead rent indicated in the draft


Minor Mineral (Concession) Rules,

lease deed is excessive and there is


1963, with effect from 1-7-1952.

no guiding principle to determine


the same.


(C) COMMENCEMENT AND



EXECUTION OF THE LEASE



The lease shall be deemed to have

The terms and proposed lease deed


been executed with effect from 1-7-

should be prospective and not


1952.

retrospective."


(5) THE Mines tribunal, which was p


























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