Appeals Nos 705 724 1971
From the Judgment and Order dated 3 9 1970 of the Patna High Court in CWJC Nos 992 1042 1088 1096 1101 1148 1150 1194 1244 1247 172268 and 14669 re spectively
DP Singh SC Agarwal and V 1
Francis for the Appel lants
Sachin Chaudhary in CA
70571 for Respondent No 1
B Sen and section 1
Sorabjee in CA
70971 SB Sany al SC Banerjee DN Mukerjee and AK Nag for Respondent No 1 in CAs
705 713  718 and Respondents in 71471
DN Gupta for Respondents In CAs
715 71771
SN Prasad In CAs
70671 SP Nayar and Girish Chandra for Respondent No 2 in CA
706 708 71371
AK Sen B Sen DN Mukherjee and A K Nag for Respondent in CA
72471
The Judgment of the Court was delivered by JASWANT SINGH J
This batch of 20 Civil Appeals Nos 705 to 724 of 1971 by certificate under Article 1331a of the Constitution which are directed against the common judgment dated September 3 1970 of the High Court of Judicature at Patna and raise important questions relating mainly to interpretation and scope of section 30A of the Act 67 of 1957 hereinafter referred to as the 1957 Act shall be disposed of by this judgment
Circumstances leading to these appeals in so far as they would be helpful in appreciating the points involved are Prior to October 25 1949 proprietors of big estates like Rajas of Ramgarh and Jharia granted in exercise of their untramelled discretion mining leases of huge tracts of land in the districts of Hazaribagh Dhanbad and Singhbhum to various persons for winning and extracting coal for a period of 999 years in lieu of payment of premiums and fixed annual rental
There was in these leases either no stipulation for payment of royalty or the royalty stipulated for was very low
Except in a few cases the lessees of these mining leases did not work the mines them selves and granted sub leases thereof more or less or similar terms
On September 8 1948 the Central Legislature passed the Mines and Minerals Regulation and Development Act 1948 Act No 53 of 1948 hereinafter referred to as the 1948 Act  under Entry 36 of List I of Seventh Schedule to the Government of India Act 1935
The Act as declared in its Preamble was enacted as it was considered expedient in public interest to provide inter alia for the regulation of mines and for the development of minerals Sub section 1 of section 4 of the Act  prohibited the grant after the commencement of the Act of any mining lease otherwise than in accordance with the rules made under the Act
Sub section 2 of section 4 of the Act provided that any mining lease granted contrary to sub section1 would be void and of no effect
Section 5 of the Act empower 160 ed the Central Government to make rules for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area Section 7 of the Act empowered the Central Government to make rules for the purpose of modifying or altering the terms and conditions of any existing mining lease ie any mining lease granted prior to the commencement of the Act so as to bring such lease into conformity with the rules made under section 5
In exercise of the powers conferred on it by section 5 of the Act the Central Government made the Miner al Concession Rules 1949
Both the 1948 Act and the Mineral Concession Rules 1949 came into force on October 25 1949
Rule 41 of the Mineral Concession Rules which related to the conditions of mining leases made it compulsory for every mining lease to include a condition enjoining the lessee to pay royalty on the minerals at the rate specified in the First Schedule to the Rules which in case of coal was 5 of the FOR price
The 1948 Act was extended to Chhota Nagpur by a notifi cation dated January 16 1950 issued under section 92 of the Government of India Act 1935
The provisions of the Mineral Concession Rules 1949 did not apply to leases or sub leases granted anterior to October 25  1949
The Constitution of India came into force on January 26 1950
Articles 246 and 254 of the Constitution which relate to the distribution of legislative powers and Entry 54 of List I Union List and Entry 23 of List II State List of the Seventh Schedule to the Constitution read thus Article 246 1 Notwithstanding anything in clauses 2 and 3 Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule 2 Notwithstanding anything in clause 3 Parlia ment and subject to clause 1 the Legislature of any State also have power to make laws with respect to any of the matters enumerated in List III in the Seventh Sche dule3 Subject to clauses 1 and 2 the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumer ated in List II in the Seventh Schedule
4 Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List
Article 254 1 If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact or to any provi sion of an existing law with respect to one of the matters enumerated in the concurrent List then subject to the provisions of clause 2 the law made by Parliament whether passed before or after the 161 law made by the Legislature of such State or as the case may be the existing law shall prevail and the law made by the Legislature of the State shall to the extent of the repugnancy be void
2 Where a law made by the Legislature of a State with respect to one of the matters enumer ated in the Con current List contains any provi sion repugnant to the pro visions of an earlier law made by Parliament or an existing law with respect to that matter then the law so made by the Legislature of such State shall if it has been reserved for the consideration of the Presi dent and has received his as sent prevail in that State Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to amending varying or repealing the law so made by the Legislature of the State Entry 54 of List 1 Union List
Regulation of mines and mineral development to the extent to which such re gulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest Entry 23 of List II State List
Regulation of mines and subject to the provisions of List I with mineral development respect to regulation and development under the control of the Union
 The Constitution was followed by the Bihar Land Reforms Act 1950 Act XXX of 1950 hereinafter referred to as the Bihar Land Reforms Act  which though passed on September 11 1950 came into force on September 25 1950
This legislation as evident from its preamble was enacted as it was considered expedient to provide for transference to the State of the interests of proprietors and tenure holders in land and of mortgagees and les sees of such interests including interest in mines and minerals
On the publication of notifications under sections 3 and 3A of the Bihar Land Reforms Act the estates or tenures of proprietors or ten ure holder as also the intermediary interests of all intermediaries passed to and became vested in the State
Section 4 of the Bihar Land Re forms Act declared the consequences flowing from the vesting of the estate or tenure in the State
Clause a of section 41 provided that on publi cation of the aforesaid notifications such estate or tenure including the interests of the proprie tor or tenure holder in any building etc in trees etc
 as also his interest in all sub soil includ ing any rights in mines and minerals whether discovered or undiscovered or whether being worked or not inclusive of such rights of a lessee of mines and minerals comprised in such estate or tenure other than the interests of raiyats or under raiyats shall with effect from the date of vesting vest absolutely in the State free
from all encumbrances and such proprietor or tenure holder shall cease to have any interest in such estate or tenure other than the interests expressly saved by 162 or under the provisions of the Act
Thus the interest of the proprietor or tenure holder includ ing his rights in mines and minerals inclusive of rights of a lessee of mines and minerals came to an end and vested absolutely in the State
Having once so vested certain rights were conferred by statute on the proprietors and tenure holders and the lessees  Section 9 of the Bihar Land Reforms Act provided that mines which were in operation
at the commencement of the Act and were being worked directly by the
intermediary shall be deemed to have been leased by the State Government to the intermediary and he would be entitled to retain possession of those mines as a lessee thereof
The lease by the State Government to the interme diary according to sub section 2 of section 9 was to have such terms and conditions as might be agreed upon between the State Government and the intermediary or in the absence of such agreement as might be settled by the Mines Tribunal appointed under section 12 of the Act provided that all such terms and conditions had to be in accordance with the provisions of any Central Act for the time being in force regulating the grant of new mining leases
According to the proviso
such terms and conditions were to be in accordance with the provi sions of the 1948 Act which was in force at the time the estate vested in the State of Bihar
The mines in the present cases it may be mentioned were not worked by the intermediary lessees
Sec tion 10 of the Bihar Land Reforms Act which dealt with leases of mines and minerals which subsisted on the date immediately preceding the date of vesting of the estate or tenure provided 10
Subsisting leases of mines and minerals  1  Notwithstanding anything contained in this Act where immediately before the date of vesting of the estate or tenure there is a subsist ing lease of mines or minerals comprised the estate or tenure or any part thereof the whole or that part of the estate or tenure comprised in such lease shall with effect from the date of vest ing be deemed to have been leased by the State Government to the holder of the said subsisting lease for the remainder of the term of that lease and such holder shah be entitled to retain posses sion of  the leasehold property
2 The terms and conditions of the said lease by the State Government shall mutatis mutan dis be the same as the terms and conditions of the subsisting lease referred to in sub section 1 but with the additional condition that if in the opinion of the State Government the holder of the lease had not before the date of the commencement of this Act done any prospecting or development work the State Government shall be entitled at any time before the expiry of one year from the said date to determine the lease by giving three months  notice in writing Provided that nothing in this sub section shall be deemed to prevent any modifications being made in the terms and conditions of the said lease in accordance with the provision of any Central Act for the time being in force regulating the modifi cation of existing mining leases
163 3 The holder of any such lease of mines and minerals as is referred to in sub section  1  shall not be entitled to claim any damages from the outgoing proprietor or tenure holder on the ground that the terms of the lease executed by such proprietor or tenure holder in respect of the said mines and minerals have become incapable of fulfilment by the operation of this Act
 The consequence of the operation of sections 41a and 101 of the Bihar Land Reforms Act as held by this Court in Bihar Mines Ltd vs Union of India1 and reiterated in Chhatu Ram Horil Ram Private Ltd vs State of Bihar  Anr2 was not that the old original contractual leases of mines and minerals comprised in the estate and subsisting on the date of vesting continued with the Government substi tuted as lessor in place of original lessor but was that the original contractual leases came to an end on the date of vesting as a result of section 41a of the Act and for the remainder of the terms of those leases fresh statutory leases in favour of the lessees came into being under sec tion 101 of the Act
All the estates of Jharia Kajya within which the leases in question fell became vested in the State of Bihar on November 3 1951 Thenceforth ie from November 3 1951 the subsisting leases came to be treated as new statutory leases granted by the State Government in terms of section 101 of the Bihar Land Reforms Act in view of the decision of this Court in Bihar Mines Ltd vs Union of India supra
In 1956 the Mining Leases Modification of Terms Rules 1956 providing for the modification and alteration of the terms and conditions of the mining leases granted prior to the commencement of the 1948 Act so as to bring them in conformity with the terms and conditions of the mining leases granted after the commencement of the 1948 Act in accordance with the Mineral Concession Rules 1949 were promulgated under section 7 of the 1948 Act on Septem ber 4 1956
These Rules by virtue of the definition of the existing mining lease contained in rule 2c of the Mining Leases Modification of Terms Rules 1956 were made expressly inapplicable to mining leases in respect of coal granted before October 25 1959 the date of commencement of 1948 Act with the result that the mining leases or sub leases of the respondents were not affected by the provi sions of the 1948 Act or the rules made thereunder
The 1948 Act was replaced by the Act No 67 of 1957 hereinafter referred to as the 1957 Act  which though after being passed by the Parliament under Entry 54 of List I of the Seventh Schedule to the Constitution received the assent of the President on December 28 1957 came into force on June 1 1958
Section 9 of the 1957 Act provided  9
Royalties in respect of mining leases1 The holder of a mining lease granted before the commencement of this Act shall notwithstanding anything 1  2  AIR 1969 SC 177
164 contained in the instrument of lease or in any law in force at such commencement pay royalty in respect of any mineral removed by him from the leased area after such commencement at the rate for the time being specified in the Second Schedule in respect of that mineral
2 The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed by him from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral
3 The Central Government may by notifica tion in the official gazette amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be pay able in respect of any mineral with effect from such date as may be specified in the notification Provided that the Central Government shall not a fix the rate of royalty in respect of any mineral so as to exceed twenty per cent of the sale price of the mineral at the pit s head or b enhance the rate of royalty in respect of any mineral more than once during any period of four years
It will be noticed that sub section 1 of the above quoted section made it obligatory for the holder of a mining lease granted before the com mencement of the 1957 Act notwithstanding anything contained in the instrument of his lease or in any other law in force at the commencement of the 1957 Act to pay in respect of any mineral removed by him from the leased area after December 28 1957 royalty at the rate specified in the Second Sched ule of the 1957 Act which for coal was fixed at 5 of FOR price subject to a minimum of fifty NP per ton
Section 16 of the 1957 Act provided that mining leases granted before October 25 1949 would as soon as might be after the commencement of the 1957 Act be brought into conformity with the provisions of the 1957 Act and the rules made under sections 13 and 18 thereof
Section 29 of the 1957 Act provided for the effective continuance of the rules made or purport ed to have been made under the 1948 Act in so far as they related to matters provided for in the former Act and were not inconsistent therewith
The effect of section 9 of the 1957 Act as held by this Court in State of Madhya Pradesh  Anr
vs Dadabhoy s New Chirimiri Ponri Hill Colliery Co Pvt Ltd 1 was that the rate of royalty was enhanced in case of those lessees who under the leases obtained by them before the commencement of the Act were paying a rate lesser than 5 while the royalty payable by lessees similarly placed was reduced if they were paying royalty at a higher rate
As the enhancement envisaged by section 9 of the 1957 Act was apprehended to lead to an increase in the cost of production of coal which is a vital mineral for 1 972 2 SCR 609
165 the industrial development and occupies a basic position in the economy of the country various representations were made to the Government of India to reduce the royalty
Impelled by these representations the Central Government moved a Bill in March 1958 being Bill No 33 of 1958 and got by means of Mines and Minerals Regulation and Development Amendment Act 1958 section 30A inserted in the 1957 Act reading as follows  30A
Notwithstanding anything contained in this Act the provisions of sub section 1 of section 9 and of subsection 1  of section 16 shah not apply to or in relation to mining leases grant ed before the 25th day of October 1949 in respect of coal but the Central Government if it is satis fied that it is expedient so to do may by notifi cation in the official gazette direct shall all or any of the said provisions including any rules made under sections 13 and 18 shall apply to or in relation to such leases subject to such exceptions and modifications if any as may be specified in that or in any subsequent notification This section it would be seen consisted of two parts
Under the first part the provisions of sections 91 and 161 were expressly made inapplicable to or in relation to pre October 25 1949 mining leases for coal
The second part empowered the Central Government on being satisfied that it was expedient so to do to direct by notification that all or any of those provisions including the rules made under sections 13 and 18 would apply to or in relation to such leases subject to such exceptions and modifications if any as might be specified in that or any subsequent notification
The exceptions and modifications which could be so specified in the notification were obviously in regard to the application when such application was decided upon of sections 9  1  and 16  1  and the relevant rules
The aforesaid section 30 A was given a retrospective effect by virtue of section 2 of the Amendment Act 15 of 1958
Vide notification No GSR 432 dated May 29 1958 the 1957 Act was brought into force with effect from June 1 1958
By notification No SO 3094 dated December 29 1961 the Central Government in exercise of the powers conferred on it by the second part of section 30A of the 1957 Act directed the provisions of sub section 1 or section 9 to apply with immediate effect to or in relation tO mining leases in respect of coal granted before October 25 1949 subject to the modification that lessees were required to pay royalty at the rates specified in the agreements between them and the lessor or at the rate of 212 on FOR price of coal whichever was higher in place of the rate of royalty specified in respect of coal under the Second Sched ule
After the notification the  State Government started demanding royalty at 212 and initiated proceedings under the Public Demands Recovery Act to realize royalty at 212 for the period between 29121961 and 31121965
On October 26 1964 the Bihar Land Reforms Act was amended by insertion of section 10 A originally by the Bihar Amendment Ordi 166 nance No 3 of 1964 which was subsequently replaced by the Bihar Land Reforms Amendment Act 1954 Bihar Act 4 of 1965
Under this newly added section the lessees  interest in mines and minerals which were subject to sub leases also came to vest in the State of Bihar
Thus the State also acquired the right to sub lease
On October 27 1964 the interests of Chakroborty and Adhikaris from whom sub leases appear to have been taken in the beginning of the current century vested in the State of Bihar
On January 1 1966 a notification being SONo 81 of 1966 was issued by the Central Government under section 30A of the 1957 Act superseding the notification No SO 3094 dated December 29 1961 and applying the provisions of section 91 of the 1957 Act to leases granted prior to the commencement of the said Act
On October 3 1966 this Court pronounced judgment in Bihar Mines Ltd vs Union of India supra holding therein that the whole or that part of the estate or tenure com prised in an  lease of mines and minerals would with effect from the date of vesting be deemed to have been leased out by the State Government to the holder of the subsisting lease ie the first lessee for the remainder of the period of the lease and that the statutory lease thus held by the head lessee from the State Government under section 10 of the Bihar Land Reforms Act would be a new lease granted after October 25 1949 and that the sub leases would also be deemed to be new leases granted by the new lessee from the State Government as the rights of the original lessee under the original lease had ceased on the vesting of the estate and he was to be deemed to have got a new lease from the State
On December 22 1967 the Patna High Court held in Narendra Nath Mandal vs State of Bihar  Ors
1 that a lessee of a coal mine was liable to pay royalty for the period beginning from the date of vesting of an estate under the Bihar Land Reforms Act to May 31 1958 at 5 of FOR price of coal subject to a minimum of eight paise per ton by virtue of section 29 of the 1957 Ace read with Rule 41 and Schedule I of Mineral Concession Rules 1949 and at the same rate from the date on which the 1957 Act came into force by virtue of section 91 of the said Act read with Second Schedule thereto because neither section 30A nor the notification issued thereunder was applicable to the said lease in view of the effect of the vesting of estate in the State of Bihar and the coming into existence of a new lease by force of section 10 of the Act which could not be said to be a lease granted before October 25 1949 which alone was the subject matter of section 30A of the 1957 Act
In June 1968 demands were made by the District Mining Officer appellant No 2 herein for payment of royalty at the rate specified in the Mineral Concession Rules 1949 in respect of the period commencing from November 3 1951 the date of vesting of the estates of the head lessors under the Bihar Land Reforms Act till May 31 1958 and in respect of the period from June 1 1958 the date of coming into force of the 1957 Act to December 12 1965 at the rate C JC 653of 1965 Patna HC 167 specified in the Second Schedule to the 1957 Act after setting off 2112 already realised in view of the decision in Narendra Nath Mandal s case supra
Aggrieved by these demands the respondents filed petitions in the High Court of Patna for issue of writs of certiorari and mandamus quashing the demand notices and restraining the State from demanding royalty as indicated above
The case as set up by the respondents in the writ peti tions was that as Rule 41 of the Mineral Concessions Rules 1949 requiring royalty to be paid at the rate specified in Schedule 1 to the rules applied only to a  lease granted under the said Rules after the commencement of the 1948 Act and had no application to the leases and subleases of the respondents royalty could not be claimed on the basis of 5  of FOR price of coal in respect of the period between the date of vesting under the Bihar Land Reforms Act and May 31 1958the date immediately preceding the date on which the 1957 Act was brought into force that as regards the period between June 1 1958 and December 28 1961 royalty at con tractual rates alone was payable because the provisions of section 91 of the 1957 Act had no application to statuto ry leases deemed to
have come into existence under section 101 of the Bihar Land Reforms Act and alternatively be cause by virtue of the provisions of section 30A of the 1957 Act the provisions of section 91 of the said Act were not applicable to or in relation to the mining leases in respect of coal granted before October 25 1949 until the Central Government by notification decided otherwise that as regards the claim in respect of the period from December 29 1961 to December 31 1965 royalty at 212 of FOR price of coal had already been paid by the respondents as per notification of the Central Government issued in exer cise of the power under section 30A of the 1957 Act and having itself invited and accepted this payment in full discharge of the respondents  liability for royalty payable for the said period the State was not entitled to unilater ally revoke the aforesaid discharge or satisfaction and claim further royalty at 212 of FOR price of coal over and above what has already been paid
In reply the appellants herein submitted inter alia that the demands were lawful that the combined effect of sec tions 9 and 29 of the 1957 Act read with Second Schedule thereto and the Mineral Concession Rules 1949 was that the respondents who were lessees or sub lessees were liable to pay royalty at the rate of 5 of FOR price of coal from the date of vesting of the respective estates of the pro prietors who had granted head leases in the State of Bihar for the entire period in question that section 91 of the 1957 Act was very comprehensive and applied to all leases whether contractual or statutory which came into existence before the 1957 Act was brought into operation that section 30A of the 1957 Act applied only to leases in respect of coal which had been granted before October 25 1949 and not to the new statutory mining leases of the respondents deemed to have been granted by the State Government before the coming into operation of the 1957 Act under the provisions of section 10 of the Bihar Land Reforms Act and that the provisions of section 91 of the could not be taken to have been suspended by section 30A of the Act so far as the leases in question were concerned
All the writ petitions were heard by a Sepcial Bench of five Judges of the High Court
The said Bench by its judgment and order dated September 3 1970 allowed all the writ petitions filed by the respondents and quashed the impugned notices holding that Narendra Nath Mandal s case supra had been wrongly decided that rule 41 of the Mineral Concession Rules 1949 made under section 5 of the 1948 Act which was claimed by the appellants to have been continued in force by virtue of section 29 of the 1957 Act and to justify the demand for royalty for the period prior to June 1 1958 was applicable only to contractual grants envisaged by the said Rules and could have no application to statutory leases arising by virtue of section 10 of the Bihar Land Reforms Act that there was no warrant for pushing back section 9 of the 1957 Act by virtue of section 29 thereof to any date anterior to that on which the said Act came into force that as section 30A of the 1957 Act on its true interpretation imposed a temporary bar on the operation of the provisions of section 91 not only in respect of mining leases grant ed before October 25 1949 in respect of coal but also in relation to those leases which expression covered the statu tory leases of the respondents which must be deemed to have come into existence with effect from the date of vesting under the Bihar Land Reforms Act the demand for royalty for the period commencing from June 1 1958 to December 31 1965 was also unjustified and illegal
Aggrieved by the judgment and order of the Special Bench of the High Court the appellants filed a petition in the High Court under Articles 132 and 1331a of the Constitu tion for grant of certificate of fitness for appeal to this Court
The High Court by itsorder dated January 22 1971 granted the certificate of fitness under Article 1331 a of the Constitution enabling the appellants to prefer the aforesaid appeals to this Court
Counsel for the parties have reiterated before us the contentions urged on behalf of their clients before the High Court
Two important questions arise for determination by us in these appeals 1 whether the claim for royalty in regard to the period prior to June 1 1958 can be sustained 2 whether the claim for  royalty in regard to the period from June 1 1958 to December 31 1965 is justified
So far as the demand for royalty at 5 Of FOR price of coal for the period prior to June 1 1958 the date on which the 1957 Act came into force is concerned we are of opinion that it is not justified in view of the fact that Rule 41 of the Mineral Concession Rules 1949 applied only to contractual leases envisaged by Chapter IV of the said Rules which were made inter alia for regulating the grant of mining leases in respect of any mineral and not to the statutory leases which came into existence as a result of the deeming provision embodied in section 10 of the Bihar Land Reforms Act
This view is in accord with the decision of this Court in Chhatu Ram s case supra where dealing with Rule 40 of the Mineral Concession Rules 169 1949 which relates to the period of lease Shah J who delivered the judgment of the Court observed that the rule manifestly applied to grants made by the Government and had No application to statutory leases arising by reason of section 10 of the Bihar Land Reforms Act
We therefore find ourselves in complete agreement with the High Court that the claim for royalty for the period prior to June 1 1958 is wholly unfounded and cannot be supported
So far as the demand for royalty for the period beginning with June 1 1958 and ending with December 31 1965 is con cerned we are of the opinion that no exception can be taken to the view expressed in this behalf by the High Court in its judgment under appeal This becomes abundantly clear from a close scrutiny of section 30A supra of the 1957 Act the provisions whereof may usefully be recalled at this stage
Before examining however
section 30A it would be profitable to advert to section 9 supra of the Act
This section it would be seen consists of three parts
Sub section 1 casts a liability on the holder of a mining lease granted before June 1 1958 the date of the commencement of the Act to pay royalty in respect of any mineral removed by him from the leased area after that date at the rate for the time being specified in the Second Schedule notwithstanding anything contained in the instru ment of lease or in any law in force on the aforesaid date of the commencement of the Act
Sub section 2 makes also the holder of a mining lease granted on or after June 1 1958 liable to pay royalty in respect of any mineral removed by him from the leased area at the rate for the time being specified in the Second Schedule
Sub section 3 empowers the Central Government to amend the Second Schedule and enhance or reduce the rate of royalty in re spect of any mineral by issue of a notification subject to the restriction contained in the proviso to this sub sec tion
Section 30A which as is evident from its opening words has an overriding effect on the other provisions of the Act affords a temporary protection from applicability of section 91 and section 161 of the Act not only to the leases granted before October 25 1949 but also to the statutory leases which came into existence as a result of the operation of section 101 of the Bihar Land Reforms Act and replaced the former category of leases subsisting immediately before the date of vesting in the State of the estates or tenures on the publication of the notifications under sections 3 and 3A of the Bihar Land Reforms Act
This conclusion irresistibly flows from the words or in relation to occurring in section 30A of the 1957 Act after the words shall not apply to and before the words mining leases granted before the 25th day of October 1949 The aforesaid words which are of great significance of enlarge the scope of section 30A and bring within the umbrella of its protection the mining leases granted before October 25 1949 as also the statutory leases which sprang up in their place by virtue of the legal fiction contained in Section 101 of the Bihar Land Reforms Act on the resting in the State of the estates or tenures
As expressly ordained by sub sections 1  2 of section 10 of the Bihar Land Reforms Act not  only the  holder of a statutory lease had to be the same as the holder of a subsisting 13 1003 SCI76 170 lease for the remainder of the term of that lease but the terms and conditions of the statutory lease had also muta tis mutandis to be the same as the terms and conditions of the subsisting lease ie the original lease except to the extent mentioned in sub section 2
Thus the statutory lease being inextricably linked up with the aforesaid sub sisting lease which it replaced as a result of the aforesaid provisions of the Act came within the purview of section 30A of the 1957 Act
The interpretation sought to be placed by the appellants on the phraseology of section 30A of the 1957 Act cannot be accepted as
it would unduly re strict and limit the scope of that section and defeat the object which it was intended to effectuate viz to mitigate the rigour of liability for payment of royalty under section 9 of the 1957 Act at the rate specified in the Second Sched ule in respect of the coal removed from  the leased area after the commencement of the Act
If as contended by the appellants the protection envisaged by section 30A is restricted to leases granted before October 25 1949 sec tion 30A would be  rendered nugatory because on the coming into being of the statutory leases as a result of section 101 of the Bihar Land Reforms Act there would hardly be left any mining lease to which section 30A of the 1957 Act would be applicable
Thus there can be no room for doubt that the Legislature intended that section 30A of the 1957 Act should cover the aforesaid statutory leases as well
It will be apposite in this connection to refer to the following statement of objects and reasons given in the Bill which sought to introduce section 30A in the 1957 Act with retrospective effect which can be usefully resorted to for ascertaining the true scope of section 30A and the extent of the protection afforded by it   
It  is considered that these changes will have numerous undesirable consequences
The areas covered by these mining leases are principally in West Bengal and Bihar and they account for as much as 80 per cent of the total coal production in the country
The royal ties paid on this coal vary over a wide range but are gener ally much below the rate per ton prescribed in the Second Schedule
A sudden and uniform increase of these royalties is likely to have an unsettling effect in the industry and may retard the programme of coal production under the Second Five Year Plan    Thus the above discussion makes it crystal clear that the statutory mining leases in respect of coal which sprang up under section 101 of the Bihar Land Reforms Act also acquired a temporary immunity from the applicability of sections 91 and 161 of the Act until the Central Govern ment came out with a notification making the said provisions applicable with or without modification to these leases
Accordingly we have no hesitation in holding in agreement with the High Court that the further demand for royalty for the second period indicated above cannot also be sustained
For the foregoing reasons we find no force in these appeals which are dismissed
In the circumstances of the case the parties are left to pay and bear their own costs of these appeals PBR Appeals dis missed


Summary:
Prior to October 25 1949 the proprietors of big estates granted mine leases either without payment of royalty or at very low royalty
In most c the lessees granted sub leases on similar terms
The Mines and Mine Regulation and Development Act 1948 prohibited grant of any mine lease except in accordance with rules made under the Act
41 of Mineral Concession Rules 1949 which came into force on October 25 1 made it compulsory for every mining lease to include a condition regard payment of royalty on the minerals
The rule however did not apply leases or sub leases granted prior to October 25 1949
Under the Bihar Land Reforms Act 1950 passed by the State legislate the interest of a proprietor or tenure holder as
well as of the lessee including rights in mines and minerals came to an end and vested absolutely in State
Section 10 provided that the whole or part of the estate or term comprised in a subsisting lease shall be deemed to have been leased by State Government to the holder for the remainder of the term of lease
The w replaced the 1948Act came into force on June 1 1958
Section 91 of Act made it obligatory for the holder of a mining lease granted before commencement of the 1957 Act to pay in respect of any mineral removed him from the leased area after December 28 19 57 royalty at a specified Section 16 provided that a mining lease granted before October 25 194_9 w be brought into conformity with the provisions of the 1957 Act and the r Section 29 provided for the effective continuance of the rules made under 1948 Act in so
far as they related to
matters provided for in the 1957 and were not inconsistent therewith
Section 30A which was inserted in the 1957 Act provides that the proviso of section 91 and of section 161 shall not apply to or in relation to mining lease granted before October 25 1949 and empowered the Central Government direct by notifi cation that all or any of the provisions of sections 91 and 1
shall apply to or in relation to such leases subject to such exceptions and notifications if any as might be specified in that or in any subsequent notification Section 30A was given retrospective effect
In 1967 the High Court in Narendra Nath Mandal vs State of Bihar  held i that a lessee of a mine was liable to pay royalty for the period being from November 3 1951 date of vesting of an estate under the Bihar Reforms Act to
May 31 1958 by virtue of section 29 of 1957 Act read with and Schedule I of 1949 Rules and ii from June 1 1958 the date of col into force of the 1957 Act to December 31 1965 by virtue of section 91 of Act read with the second Schedule there to because neither section 30A nor notification was ap plicable to the lease in view of the effect of the vesting estate in the State and the coming into
existence of a new lease by fore section 10 of the Act
After this decision the State issued demand notices to respondents for payment of royalty in accordance with the decision of High Court
Allowing the respondents  Writ petitions the High Court quashed the der notices
The High Court held that Mandal s case had been wrongly decide On the question whether the claim for royalty 1 prior to June 1 and 2 from June 1 1958 to December 31 1965 could be sustained
158 Dismissing the appeals of the State HELD 1 The High Court was right in holding that the claim for yalty prior to June 1 1958 was wholly unfounded and cannot be supported
Bihar Mines Ltd vs Union of India this Court held that the consequence of the operation of sections 41a and 101 of the Bihar Act was that the original ntractual leases came to an end on the date of vesting and for the remainder the terms of those leases fresh statutory leases in favour of the lessees me into being under section 101 of the Act as a result of which from November 3 1951 the subsisting leases came to be treated as new statutory leases wanted by the State Government in terms of section 1D1 of the Bihar Act 1950
the 41 of the Mineral Concession Rules 1949 applied only to contractual cases envisaged by Chapter IV of the Rules and not to the statutory leases which came into existence as a result of the deeming provision in section 10 of e Bihar Land Reforms
169 B 163 B D Bihar Mines Ltd vs Union of India   AIR 1967 SC 7 followed
Chhatu Ram Horil Ram Private Ltd vs State of Bihar  Anr   applied
2 The High Court was also right in its view that the demand for payment of royalty for the period from June 1 1958 to December 31 1965 cannot sustained
168 G a Section 30A which has an over riding effect on the other provisions of Act affords a temporary protection from applicability of sections 91 and 1 of the Act not only to the leases granted before October 25 1949 but also the statutory leases which came into existence as a result of the operation of 101 of the Bihar Land Reforms Act and replaced the former category of ses subsisting immediately before the date of vesting in the State of the ates or tenures on the publication of the notifications under section 3 and 3A the Bihar Land Reforms Act
This conclusion irresistibly flows from the tds or in relation to occurring in section 30A after the words shall not apply and before the words mining leases granted before the 251h day of October 9
These words enlarge the scope of section 30Pt and bring within the umbrella its protection mining leases granted before October 25 1949 as also the utory leases which sprang up in their place by virtue of the legal fiction tained in section 101  of the Bihar
Reforms Act on the  vesting in the se of the estates or tenures
As expressly ordained by section 101 and 2 the Bihar Land Re forms Act not only the holder 017 a statutory lease had be the same as the holder of a subsisting lease for the remain der of the of that lease but the terms and conditions of the statutory lease had also aris mutandis to be the same as the terms and conditions of the subsisting e ie the original lease except to the extent in sub section
Thus the statu lease being inextricably linked up with the subsist ing_lease which it replacas a result of the aforesaid provi sions of the Act came within the purview s30A of the 1957 Act
The interpretation sought to be placed by the ellants on the phraseology of section 30A cannot be accepted as it would unduly lict and limit the scope of that section and defeat the object which it was nded to effectuate namely to mitigate the rigour of liability for payment of dty under section 9 of the 1957 Act after the commencement of the Act
If ontended by the appellants the protection envisaged by section 30A is restricted the leases granted before October 25 1949 section 30A would be rendered atory because on the
coming into being of the statutory leases as a result 101 of the Bihar Land Reforms Act there would hardly be left any ing lease to which section 30A would be applicable
There can be no room doubt that the Legislature
intended that section 30A of the 1957 Act should r the statutory leases as well
A B b Statutory mining leases in respect of coal which sprang up under 1 of the Bihar Land Reforms Act also acquired a temporary immunity the applicability of sections 91 and 161 of the Act until the Central Government came out with a notification making the said provisions applicable with without modification to these leases
170 G 159