Judgement

R. N. MISRA, J. : One Mr. T.P. Yeoman obtained a mining lease for coal of about 1300 acres located in the District of Sambalpur, valid for a period of thirty years with effect from October 1, 1917 from the Secretary of State for India in Council. This came to be known as the Ib River Colliery. On 22-2-1920, Mr. Yeoman transferred a part of the lease-hold in favour of one Mr. M.H. Dutta and on June. 7, 1920 by an agreement between the Secretary of State for India in Council and Mr. Dutta the transfer was duly recognised. On August 21, 1931, the Hindu undivided family of Raisaheb Chandanmull Karnani carrying on business under the firm name and style of M/s. Chandanmull Indrakumar purchased the leasehold interest of Mr. Dutta in a court sale held by the High Court of Calcutta. On December 27, 1934, the Secretary of State for India in Council accepted M/s. Chandanmull Indrakumar as the transferee of the leasehold interest (Annexure-C). Raisaheb Chandanmull Karnani died on February 2, 1943, but the joint family firm continued as before.

In the lease of 1917 (Annexure-A) there was provision for renewal at the option of the lessee and such option was to be exercised six months prior to the expiry of the lease. Accordingly, on March 1, 1947, option was exercised and demand for renewal of the lease for a further period of thirty years was made. The joint family firm remained in possession as before and carried on mining operations on payment of rents and royalties and other charges as required under the contract. Title Suit No.1897 of 1949 was filed in the Calcutta High Court for partition of the Joint family properties by one of the coparceners. The leasehold in question was included in the hotchpot. On January 28, 1950, the suit was decreed upon compromise. The colliery along with certain other properties was however, not divided as it was found inconvenient and it was stipulated that a company by the name of Raisahab Chandanmull Indrakumar Private Limited would be constituted and these properlies including the leasehold would be taken as belonging to the said company, and shares commensurate to the interest that each of the coparceners had in the family assets would be allotted to each of them by the Company.

It is contended that the Company was a family concern of Raisahab Chandanmull Karnani and was brought about only to provide a convenient method of enjoying the properties of the family which remained undivided. Administration and management of the colliery was taken over by the company from January 30, 1950. The State Government and its officers started dealing with the petitioner Company qua the colliery and accented payment of rent, rovalty and other dues from the Company. On April 22, 1957, sanction of renewal of the mining lease (Annexure-G) was made in the name of the Hindu undivided family firm and was directed to date back and commence from October 1, 1947. A part of the lease-hold was being worked out but the maior portion remained virgin. The Company continued to pay rents, royalties etc.

Once in 1957 (Annexure-H) and again in April, 1963 (Annexure-L), notices were issued to the Company the first one by the Deputy Commissioner of Sambalpur and the second by the Deputy Secretary of the concerned Ministry of State Government to show cause as to why by operation of Rule 28-A of the Mineral Concession Rules of 1949 the renewal may not be taken to have become inoperative thus bringing about an end to the leasehold interest. The Company had showed cause and no further action had been taken. There was a criminal case against the Company and its officers for working the mines without a valid lease. That ended in acquittal. Thereafter rent royalties etc were accepted from the petitioner Company. On 6-2-70 the Secretary to Government in the Mining and Geology Department wrote to the Collector, Sambalpur saying.

"I am directed to say that the possession of the virgin area of the Ib River Colliery may be taken immediately as