PATNA HIGH COURT
S.C.Misra, G.N.Prasad, A.B.N.Sinha, K.B.N.Singh and S.Wasiuddin JJ.
Khas Karanpura Collieries Ltd.
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 992 of 1968 ; 1042 of 1968 ; 1088 of 1968 ; 1089 of 1968 ; 1096 of 1968 ; 1101 of 1968 ; 1146 of 1968 ; 1148 of 1968 ; 1150 of 1968 ; 1194 of 1968 ; 1244 of 1968 ; 1247 of 1968 ;
Decided On : SEPTEMBER 03, 1970
[MAIN LEGAL POINT] The provisions of Section 30A of the Mines and Minerals (Regulation and Development) Act, 1957, which temporarily barred the applicability of Section 9(1) of the Act to mining leases granted before October 25, 1949, in respect of coal, were not violative of Article 14 of the Constitution of India.
Fact of the Case:
The petitioners, holders of mining leases in respect of coal and other minerals, challenged the demand for royalty at the rate of 5% of the F.O.R. price of coal for the period from November 3, 1951, to December 31, 1965, made by the respondents, the State of Bihar and the District Mining Officer. The petitioners contended that the demand was illegal and unwarranted as the provisions of Section 30A of the Mines and Minerals (Regulation and Development) Act, 1957, barred the applicability of Section 9(1) of the Act, which prescribed the royalty rate, to mining leases granted before October 25, 1949, in respect of coal. The State of Bihar argued that Section 30A was violative of Article 14 of the Constitution and that the petitioners were liable to pay royalty at the rate specified in Section 9(1) read with the Second Schedule of the Act.
Finding of the Court:
The Court held that the provisions of Section 30A of the Mines and Minerals (Regulation and Development) Act, 1957, were not violative of Article 14 of the Constitution of India. The Court reasoned that the classification of mining leases into pre-1949 and post-1949 leases was founded on an intelligible differentia which distinguished the one class from the other and the differentia had a rational relation to the object sought to be achieved by the enactment in question. The Court further held that the statutory leases which had come into existence under Section 10(1) of the Bihar Land Reforms Act, 1950, were covered by the provisions of Section 30A and thus to them as well the applicability of Section 9(1) of the 1957 Act was barred until the Central Government had notified otherwise making the provisions of Section 9(1) applicable with or without modification.
Issues: 1. Whether the provisions of Section 30A of the Mines and Minerals (Regulation and Development) Act, 1957, were violative of Article 14 of the Constitution of India. 2. Whether the statutory leases which had come into existence under Section 10(1) of the Bihar Land Reforms Act, 1950, were covered by the provisions of Section 30A of the Mines and Minerals (Regulation and Development) Act, 1957.
Ratio Decidendi: 1. The classification of mining leases into pre-1949 and post-1949 leases was founded on an intelligible differentia which distinguished the one class from the other and the differentia had a rational relation to the object sought to be achieved by the enactment in question. 2. The statutory leases which had come into existence under Section 10(1) of the Bihar Land Reforms Act, 1950, were covered by the provisions of Section 30A of the Mines and Minerals (Regulation and Development) Act, 1957.
Final Decision: The Court allowed the petitions and quashed the demands for royalty made by the respondents. The Court also directed the respondents to forbear from taking any steps to realise the same. The Court further held that the demand notice dated October 15, 1968, issued by the respondents in C.W.J.C. No. 1146 of 1968, was wholly illegal and must be quashed, and directed the respondents to forbear from taking any steps to realise the said demand.
A.B.N.Sinha, J.
1. Except In C. W. J. C. No. 1146 of 1968, in all the rest of these applications under Article 226 of the Constitution of India, common questions of law arise for determination. Broadly speaking, the questions relate to the vires, true scope and construction of Sec.30A of the Mines and Minerals (Regulation and Development) Act 1957, (hereinafter referred to as the "1957 Act"). In all these cases the petitioners are holders of mining leases, either under a head-lease or under a sub-lease in respect of coal and have obtained a rule nisi calling upon the respondents to show cause why the demand through relevant letters and notices or certificate cases in respect thereof for royalty at the rate of five per cent. F. O. R, price of coal, less such amount as might have been paid already, in respect of coal removed by them as lessees or sub-lessees, either during the period 3rd November 1951 to the 31st December, 1965, or during the period the 29th December, 1961 to the 31st December, 1965, be not quashed as wholly illegal and appropriate writs or orders be not issued in that connection. In two cases only, namely, C. W. J. C. Nos. 1101 and 1194 of 1968, the period involved is the 27th October, 1964 to the 31st December 1965. In C, W. J. C. No. 1146 of 1968, however, different - considerations arise and that case will be, therefore, considered separately.
2. Circumstances which have led to the filing of these applications may now be briefly set out. Proprietors of Estates, like Raja of Ramgarh and Raja of Jharia. had granted mining leases in respect of coal of large areas of land situate in the district of Hazaribagh, Dhanbad or Singhbhum to different parties. In the permanently settled areas of Bengal and Bihar from which States come about 80% or more of the total coal production of the country, the Zamindars enjoyed an unfettered discretion in regard to granting mining leases for working and extracting different minerals including coal, and, thus no uniformity of policy or practice as to terms of the leases was possible. Yet, generally speaking, the mining leases were for a duration of 999 years, with stipulations as to payment of premiums and a certain fixed annual rental, but in regard to royalty either there was no stipulation for any such payment or it was at very low rates. With very few exceptions, the lessees of such mining leases did not work the mines themselves, they invariably granted sub-leases on more or less similar terms. It is in consequence of that trend that save in C. W. J. C. Nos. 1097, 1098, 1101 of 1968 and partly in C. W. J. C. Nos. 1244 of 1968 and 1722 of 1969, the rest are all cases of sub-leases. The one common feature in regard to all these mining leases or sub-leases was that they were all of dates earlier to the 25th October 1949, on which date, for the first time, as a result of the corning into operation of the Mines and Minerals (Regulation and Development) Act 1948 (hereinafter referred to as the 1948 Act) and the Mineral Concession Rules, 1949 made under Sec. 5 of the said Act, the granting of mining leases and development of minerals were made subject to statutory regulations and restrictions. The Mineral Concession Rules, 1949 , as per provisions of Sec. 5 of the 1948 Act were made for regulating the grant of mining leases or prohibiting the grant of such leases in respect of any mineral or in any area, and naturally did not apply to leases granted before the 25th October 1949 -- the date on which the 1948 Act as also those Rules had come into operation. The restrictions or provisions in those Rules regarding, for instance, areas, duration or rate of royalty payable did not apply to the leases or sub-leases of the petitioners. Even the Rules made in September 1956 under Section 7 of the 1949 Act known as "The Mining Leases (Modification of Terms) Rules 1956" providing for the modification or alteration of the terms and conditions of mining leases granted prior to the commen
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