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PATNA HIGH COURT
S.N.P.Singh and S.K.Jha JJ.
Union Of India
Versus
Karanpura Development Co.Ltd.
Appeal From Original Order No. 26 of 1970 ; 32 of 1970 ;
Decided On : FEBRUARY 27, 1975
COAL BEARING AREAS (ACQUISITION AND DEVELOPMENT) ACT, 1957 - Sec.13(1)(i), 13(2)(i), 13(2)(ii), 13(2)(iii), 13(4), 13(5), 16 - Interpretation - Compensation for mining rights - Expenses incurred in obtaining license - Prospecting operations - Litigation expenses - Solatium - Compensation for bungalow and land - Interest on excess amount.
Fact of the Case:
The case pertains to two appeals challenging the award of compensation for mining rights acquired by the Central Government under the Coal Bearing Areas (Acquisition and Development) Act, 1957. The Karanpura Development Company (Karanpura Company) claimed compensation for various expenses incurred, including prospecting, lease acquisition, and litigation costs. The Central Government disputed the amounts claimed and offered a lower compensation.
Finding of the Court:
The Tribunal held that the Karanpura Company was entitled to compensation for expenses incurred in obtaining the license, preparing maps and documents, constructing roads, and other necessary operations for prospecting. However, the Tribunal disallowed the claim for prospecting expenses incurred before the date of the lease, litigation expenses, and solatium. The Tribunal also awarded compensation for the bungalow and land acquired.
Issues: 1. Whether the Karanpura Company is entitled to compensation for prospecting expenses incurred before the date of the lease? 2. Whether the Karanpura Company is entitled to compensation for litigation expenses? 3. Whether the Karanpura Company is entitled to solatium under Section 13(4) of the Act? 4. Whether the Karanpura Company is entitled to compensation for the bungalow and land acquired? 5. Whether the Karanpura Company is entitled to interest on the excess amount of compensation awarded?
Ratio Decidendi: 1. The Court held that the expression "the expenditure incurred in obtaining the license" in Section 13(1)(i) of the Act includes expenses incurred in obtaining the license by assignment or other means. Therefore, the Karanpura Company was entitled to compensation for prospecting expenses incurred before the date of the lease. 2. The Court held that the Karanpura Company was not entitled to compensation for litigation expenses incurred in defending its title to the property, as these expenses were not incurred in obtaining the lease. 3. The Court held that the Karanpura Company was not entitled to solatium under Section 13(4) of the Act, as this provision applies only when the leasehold right is suspended and ultimately not acquired. 4. The Court held that the Tribunal had awarded proper compensation for the bungalow and land acquired, considering the evidence and relevant factors. 5. The Court held that the Karanpura Company was entitled to interest at the rate of 5% per annum on the excess amount of compensation awarded from the date of notification till the date of payment.
Final Decision: The Court allowed the appeals in part. The Karanpura Company was held entitled to compensation for prospecting expenses incurred before the date of the lease and interest on the excess amount of compensation awarded. The claims for litigation expenses and solatium were dismissed. The compensation awarded for the bungalow and land was upheld.
S.N.P.SINGH, J.
1. These two appeals under Sec.20 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (hereinafter to be referred to as "the Act") are directed against the award dated the 20th of December, 1969, given by the Tribunal under Sec.14 (2) of the Act in Reference Case No. 24 of 1964. Miscellaneous Appeal No. 26 of 1970 is by the Union of India through the Managing Director, National Coal Development Corporation Ltd., Ranchi, Miscellaneous Appeal No. 32 of 1970 is by M/s. Karanpura Development Co. Ltd. (hereinafter to be referred to as "Karanpura Company"). Both the appeals have been heard together and they are being disposed of by this common judgment.
2. The relevant facts for the disposal of these two appeals are not in dispute and they may briefly be stated as follows. On the 26th of March, 1915, the Proprietor of Ramgarh Estate acting through the Court of Wards granted a prospecting licence of coal rights in respect of 49072 bighas of land known as Karanpura Fields including the land in dispute in favour of M/s. Bird and Company. Under the terms of the licence the Company was entitled to take lease in respect of different areas covered by the licence after prospecting. On the 30th of May, 1921, the Karanpura Company obtained a prospecting licence by a deed of assignment executed in its favour by M/s. Bird and Company. On the 17th of July, 1922, the Court of Wards granted a mining lease in respect of 3036 bighas of land in mouza Sayal in favour of the Karanpura Company. On the 20th of April, 1923, the Karanpura Company granted two sub-leases in favour of M/s. Andrew Yule and M/s. Villiers and Company for 2011 bighas and 1024 bighas respectively. On the 26th of March, 1929, M/s. Villiers and Co. executed a deed of surrender in favour of the Karanpura Company. M/s. Andrew Rule also executed a deed of surrender in favour of the Karanpura Company on the 6th December,1932. On the 3rd of November, 1951, the Ramgarh Estate vested in the State of Bihar under the Bihar Land Reforms Act. Under a notification dated the 29th of December, 1958, published under Section 9 of the Act in the issue of the Gazette of India dated the 9th January, 1959, the Central Government declared to have acquired the lands and mining rights in and over the lands specified in the said notification. By virtue of that notification the mining rights over an area of 2020 bighas of lands situated in mouza Sayal in the District of Hazaribagh were acquired. It appears that the Karanpura Company claimed as compensation Rs. 9,87,585.72 paise for mining rights only. The Central Government offered only an amount of Rupees 72,581.64 paise as compensation. The Karanpura Company accepted that amount under protest as to the sufficiency of the amount. As no agreement was reached between the Karanpura Company and the Central Government, a reference under Sec.14 of the Act was made to the Tribunal for the purpose of determining the amount of compensation.
3. Before the Tribunal the claimant submitted a claim for Rs. 9,87,585.72 paise as per Schedules A to L including a sum of Rs. 60,975.48 paise as solatium under Sec.13 (4) of the Act. Subsequently by an amendment Rs. 28,220.00 was added as compensation for bungalow and 6 bighas of land making the total claim at Rs. 10,15,805.72 paise. According to the Karanpura Company, the amount assessed, payable as compensation to it by the Central Government, was inadequate and arbitrary and was in clear disregard of the provisions of Sec.13 of the Act.
4. Before the Tribunal it was urged on behalf of the Central Government that the claimant was not entitled to any compensation for the expenses incurred prior to the 3rd of November, 1951, when the Ramgarh Estate vested in the State of Bihar. According to the Central Government, what was acquired by the notification dated the 29th of December, 1958, was the statutory lease which was deemed to have been granted to the claimant Karanpura Company by virtue o
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