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HIGH COURT OF CALCUTTA
B.N. BANERJEE, S.A. MASUD, JJ.
Sone Valley Portland Cement Co Ltd - Appellant
Versus
General Mining Syndicate P Ltd – Respondent
Decided On : Apr 17, 1967 ]
LAND REFORMS ACT - VESTING OF ESTATES - INTEREST OF LESSEE OF MINES AND MINERALS - BIHAR LAND REFORMS ACT, 1950 (BIHAR ACT 30 OF 1950), SECS. 2, 3, 4, 9, 10, 25, 31 - MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957 (CENTRAL ACT 67 OF 1957), SECS. 2(C), 9, 16.
Fact of the Case:
The Raja of Sonepur, the proprietor of Chunahatta Lime and Stone Quarries, vested in the State of Bihar with effect from November 14, 1951, under the Bihar Land Reforms Act, 1950. The defendant company, Sone Valley Portland Cement Co. Limited, was the sub-lessee of the quarries. The plaintiff, who was the lessee of the quarries, claimed royalty from the defendant for the period from July 1, 1958 to March 31, 1961. The defendant contended that the interest of the plaintiff vested in the State of Bihar and that the plaintiff's right to receive additional royalty from the defendant ceased from January 1, 1956. The defendant also claimed that it was liable to pay royalty to the State of Bihar at the rate of 37 np. per ton under the lease dated July 31, 1927, on and after July 1, 1958, and that it was entitled to set off the sum of Rs. 61,684.40 paid as royalty to the State of Bihar against the royalty payable to the plaintiff.
Finding of the Court:
The court held that the interest of the plaintiff did not vest in the State of Bihar as a result of the notification dated November 6, 1951 or the notification dated January 1, 1956. The court also held that the plaintiff was not an intermediary in respect of the estate in suit under the State of Bihar as alleged in paragraph 4 of the written statement. The court further held that the defendant was liable to pay to the plaintiff the royalties under the sub-lease dated October 12, 1928. The court also held that the defendant was not liable to pay royalty to the State of Bihar at the rate of 37 np. per ton under the lease dated July 31, 1927, on and after July 1, 1958. The court also held that the defendant was not entitled to set off the sum of Rs. 61,684.40 paid as royalty to the State of Bihar against the royalty payable to the plaintiff.
Issues: 1. Whether the interest of the plaintiff vested in the State of Bihar as a result of the notification dated November 6, 1951 or the notification dated January 1, 1956? 2. Whether the plaintiff was an intermediary in respect of the estate in suit under the State of Bihar as alleged in paragraph 4 of the written statement? 3. Whether the defendant was liable to pay to the plaintiff the royalties under the sub-lease dated October 12, 1928? 4. Whether the defendant was liable to pay royalty to the State of Bihar at the rate of 37 np. per ton under the lease dated July 31, 1927, on and after July 1, 1958? 5. Whether the defendant was entitled to set off the sum of Rs. 61,684.40 paid as royalty to the State of Bihar against the royalty payable to the plaintiff?
Ratio Decidendi: 1. The Bihar Land Reforms Act, 1950, contemplated the vesting of mines and minerals in the State. However, the interest of the plaintiff as a mining lessee did not vest in the State of Bihar because the plaintiff was not a tenure holder within the meaning of the Act. 2. The defendant was not an under-tenure holder, the plaintiff not being a tenure holder. The defendant was thus not an intermediary under the definition in section 2(ii) or the interpretation clause, section 2a of the Bihar Land Reforms Act. Since the defendant was not working the mines as an intermediary, section 9 of the Act was not attracted to the case of the defendant. On the other hand, the plaintiff, being a subsisting lessee immediately before the vesting became a direct lessee under the State Government. 3. The defendant was the holder of a mining lease within the meaning of section 9 of the Mines and Minerals (Regulation and Development) Act, 1957. The liability to pay royalty under section 9 of the Act was that of the defendant, who removed the minerals.
Final Decision: The court decreed the plaintiff's claim for royalty with costs.
1. THIS is an appeal against a judgment of S. P. Mitra, J. decreeing certain claims of royalty with interest. According to the plaintiff, Raja bishumbar Nath Sahi was the sole proprietor of 663 acres of land, in the district of Sahabad, in the State of Bihar, known as "chunahatta Lime Stone quarries". The estate of the Raja, of which the quarries formed a part, was otherwise known as Sonepur Estate. By an indenture of lease, dated July 31, 1927, the Raja demised the said quarries to karuna Ranj an Dutta and Jugal chandra Dutta, for the purpose of undertaking mining operation of lime stone for a period of 40 years from august 1, 1927, with option to continue for a further period of 25 years. This lease provided inter alia that : (a) Royalty at the rate of -|10|-par 100 Cubic feet would be paid for the first 15 years, that is to say, up to July 31, 1942. (b) Thereafter, royalty at the rate of -/15/- per 100 Cubic feet shall be paid from August 1, 1942 for the next 25 years i.e. up to 1967. The royalties were payable quarterly.
2. ON October 12, 1928, Karuna ranjan and Jugal Kishore Dutt executed a sub-lease in favour of the defendant, Sone Valley Portland Cement Co. Limited, for the residue of the period of lease in their favour. The sub-lease inter alia provided : "to hold unto the Company and its assigns on the terms thereof for the residue of the period of the said Indenture of Lease being forty years from the first day of August one thousand nine hundred and twenty seven (renewable as therein provided) except the last day thereof subject to the performance and observance by the Company of the Lessee's covenants under the said Indenture of Lease (other than the covenants for payment of royalties and rents thereunder) paying therefor unto the Lessors during the period of the said Indenture of Lease the same royalties and rent as were made payable thereunder in respect of the said premises such royalties and rents to be paid at the times and in manner thereby provided and also paying unto the lessors during the period hereof in respect of limestone quarried (except for ballast or building purposes) during the residue of the first fifteen years of the said period as from the date here of for every hundred cubic feet of solid limetone quarried raised got used or' taken out from the demised premises a royalty of annas sixteen and during the remaining twenty-five years thereafter of the said period for each such quantity a royalty of annas eleven such royalty to be paid at the times when royalty has to be paid under the said indenture of Lease provided that until the thirty first day of July one thousand nine hundred and thirty-two such royalty to the Lessors shall be paid on the actual quantity of limestone quarried (except as aforesaid) and thereafter such minimum royalty shall be paid on a fixed quantity of four lakhs cubic feet in each calender year subject to the terms hereof but irrespective of the quantity actually quarried in each such year being less than the said minimum quantity or whether any limestone has actually been quarried or not".
We need concern ourselves with a further provision in the said sublease which was couched in the follow language:-
"4 (a) That the Lessors will during the period hereof pay all royalties and rents under the said Indenture of Lease and all cesses and money payable by by the Lessors as Lessees thereunder with power for the Company if the Lessors shall at any time refuse or neglect to make such payments or to produce to the Company on demand the receipts therefor to make such payments at the Lessors expense for and in the name of the Lessors or otherwise with further power for the Company at its option at any time whether the Lessors shall have made such default or not or make such payments to the persons entitled thereto direct. "
3. ON 5th February 1929, Karuna and Jugal abovenamed transferred by a deed of assignment, all their right, title and interest under the lease, dated the 3
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