ivil Appeal Nos
133179 and 426 of 1980
Appeals by Special Leave from the Judgment and order dated 16 4 1979 of the Delhi High Court in WP No 48976
M C Bhandare A C Gulati G section Chatterjee and B B Sawhney for the Appellants in CA No 133179 and for Respondent in CA 4261 80
Lal Narain Sinha Att
and Miss A Subhashini for the Appellants in CA No 426 and Respondents in CA No 133179
The Judgment of the Court was delivered by SEN J
These appeals by special leave from a judgment of the Delhi High Court
involve interpretation of section 2h of the  973 as amended by the Coal Mines Nationalisation Laws Amendment Act 1978 as well as of sub section
2 of section 18 read with sub sections
3 and 4 of section 19 of the Act
The importance of this case in its legal aspect consists in the question as to whether the Central Government has the power under sub section
3 of section 19 of the Act to receive up to the specified date ie June 30 1975 any money due to a coal mine notwithstanding that 411 the realisation pertains to a period prior to that date
even though A such amounts may not be the current assets by reason of Explanation to section 2hxii and to apply such realisations under sub section
4 thereof to discharge the liabilities of such coal mine which could not be discharged by the appointed day ie May 1 1973
The facts of the case are as follows Messrs Shethia Mining  Manufacturing Corporation Calcutta apparently owned three non coking coal mines two in the State of West Bengal viz New Satgram and New Jamuria coal mines and one in the State of Maharashtra viz New Majri coal mine
The concern also owned a workshop called the New Satgram Engineering Works
in short Engineering Unit built on a plot adjacent to the New Satgram coal mine in 1964
Outside the mining area but adjacent to it it had constructed a building known as the Technical Director s Bungalow built somewhere in 1957 58
In or about 1960 61 it had constructed another building on the same plot of land namely the Guest House used for the residence of officers and staff of the mines
The management of the aforesaid coal mines was first taken over under the Coal Mines Taking over of Management ordinance
1973 pending nationalisation of such mines and vested in the Central Government from the appointed day ie January 31 1973
The ordinance was replaced by the Coal Mines Taking over of Management Act 1973 hereinafter referred to as the Management Act
Thereafter Parliament enacted the Coal Mines Nationalisation Acts 1973 hereinafter referred to as the Nationalisation Act  providing for the acquisition and transfer of the rights title and interest of the owners in respect of the coal mines specified in the Schedule with a view to re organising and reconstructing such coal mines so as to ensure the rational
co ordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country
The Nationalisation Act provides by sub section
1 of section 3 that the right title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to and vest absolutely in the Central Government free from all incumbrances with effect from the appointed day ie May 1 1973
The mines in question were nationalised and have been mentioned at serial Nos 383 577 and 601 in the Schedule
The right title and interest of Messrs Shethia Mining  Manufacturing Corporation consequently vested in the Central Government and subsequently by a notification in the Government Company ie the Coal India Ltd 412 The management of the New Satgram Engineering hereinafter called the petitioners Works tried at first to challenge the validity of the Coal Mines Taking over of Management ordinance 1973 by a petition in this Court under article 32 of the Constitution being Writ Petition No 81 of 1973
On February 12 1973 they obtained rule nisi and an interim order restraining the taking over of the Engineering Unit
On May 4 1973 the Court made the stay absolute
Between the making of the two orders the Coal Mines Taking Over of Management Act 1973 was enacted on March 31 1973 with retrospective effect from January 31 1973
On May 17 1973 the Central Government took over possession of the Technical Director s Bungalow and the Guest House
On May 30 1973 the was enacted and came into force with retrospective effect from May 1
On August 30 1973 the Management filed another petition under article 32 of the Constitution being Writ Petition No 1673 No 1973 challenging the validity of the Act
On September 19 1473 the Court issued rule nisi and an ad interim order in terms of the earlier order
On August 10 1975 the Management Act and the Nationalisation Act were both placed in the Ninth Schedule by the Constitution Thirtyninth Amendment Act being item Nos 98 and 99 thereof on April 1 1976 the petitioners withdrew their Writ Petitions Nos 81 and 1673 of 1973 but two days after ie on April 3 1976 they presented a petition under article 226 of the Constitution before the Delhi High Court being Writ Petition No 489 which has given rise to these appeals
It is not unworthy of mention here that the main relief if rot the only substantial relief sought by the petitioners in their petition under article 226 of the Constitution was for the issue of a writ or direction in the nature of Mandamus in regard to the New Satgram Engineering Works but it appears that at the hearing in the High Court the submissions ranged over a much wider field
The petitioners alleged that until April 30 1973 ie prior to the appointed day Messrs Shethia Mining  Manufacturing Corporation were the owners of the two coal mines ie New Satgram and New Majri and as on that day
the outstanding dues from sundry debtors were Rs 6874 lacs further that from January 31 1973 to April 30 1973 ie during the period of management the Central Government had despatched coal from the aforesaid two mines worth Rs 5322 lacs and that a sum of Rs 72834254 was still outstanding as on April 30 1973 towards subsidy receivable from the erstwhile Coal Board 413 established under section 4 of the Coal Mines Conservation and Safety Act 1952 on account of hard rock mining and stowing operations
It was also asserted that between the years 1962 and 1967 the petitioners had advanced a sum of Rs 25159724 to the Eastern Railways for the construction of a railway siding but the project having been abandoned on January 18 1973 the amount had become due although no such claim was made in the writ petition
The High Court partly allowed the writ petition
It declined to go into the question as to whether the Engineering Unit
together with Shethia Bhavan and all its assets etc
 the Technical Director s Bungalow
and the Guest House were or were not covered by the definition of mine  in B 2hvi vii and xi of the Nationalisation Act but declared that the subsidy amounting to Rs 72834254 receivable from the erstwhile Coal Board and outstanding as on May 1 1973 did not vest in the Central Government under sub section
1 of section 3 being impressed with trust
It further held that any amount which could not be realised until June 30 1975 ie the specified date under sub section
3 of section 19 of the Act would be realisable by the erstwhile owners of the coal mines
As regards the amount of Rs 25159774 advanced by the petitioners to the Eastern Railways for construction of a railway siding it held that no such claim having been made in the writ petition they cannot be permitted to raise it
In these appeals three questions arise 1 whether the High Court having held that there was no special machinery provided in the Act for determining the question whether a particular asset fell within the definition of mine  contained in section 2h of the Act it ought to have on the facts and circumstances of the present case decided the said question in the exercise of its jurisdiction under article 226 of the Constitution 2 Whether on a true construction of sub section
3 of section 19 of the Act the Central Government was entitled to the exclusion of all other persons to receive up to the specified date any money due to the coal mines in question realised after the appointed day ie May 1 1973 notwithstanding that the realisation pertained to a period prior to that day and under sub section
4 thereof to discharge the liabilities of the coal mines which could not be discharged by the appointed day from out of such realisation up to the specified date ie June 30 1975 If that be so whether any amount which could not be realised until the specified date ie June 30 1975 would be realisable by the erstwhile coal mine owners directly 3 Whether the amount of subsidy receivable from the Coal Board established under section 4 of the Coal Mines Conservation and Safety Act 1952 with respect to any period before the appointed day did not fall within the purview 414 of the definition of mine  contained in section 2hxii being excluded from the expression current assets  by reason of the Explanation thereto
It will be convenient in the first instance to deal with the first point which involves a mixed question of Law and fact
The facts have still to be investigated but the parties seek a declaration of the Law in the light of which the issues may be determined
The contains no provision for determining the question whether a particular asset falls within the definition of mine  as defined in section 2h of the Act or not
In the Nationalisation Act mine  in section 2h is defined except What is immaterial in the following terms 2 Definitions
In this Act unless the context otherwise requires XXX XXX XXX h mine  means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on and includes vi all lands buildings works adits levels planes machinery and equipments instruments stores vehicles railways tramways and siding in or adjacent to a mine and used for the purposes of the mine vii all workshops including buildings machinery instruments stores equipment of such workshops and the lands on which such workshops stand in or adjacent to a mine and used substantially for the purposes of the mine or a number of mines under the same management XXX XXX XXX xi all lands and buildings other than those referred to in sub cl
x wherever situated if solely used for the location of the management sale or liaison offices or for the residence of officers and staff of the mine xii all other fixed assets
movable and immovable belonging to the owner of a mine wherever situate and current assets belonging to a mine whether within its premises or outside
Explanation
The expression current assets  does not include a dues representing the sale of coal and coal products effected at any time before the appointed day and outstanding immediately before the said day 415 b dues from the Coal Board established under section 4 of the  prior to the repeal of the said Act with respect to any period before the appointed day c dues from sundry debtors loans and advances to other parties and investments not being investments in the coal mines It will be seen that there is a difference in the language used in section 2hvii and xi
Sub clause vii uses the words in or adjacent to a mine and used substantially for the purposes of the mine or a number of mines under the same management in relation to workshops
The use of the word and  makes both the conditions conjunctive
Sub clause xi uses the words if solely used for the location of the management sale or liaison offices or for the residence of officers and staff of the mine in relation to lands and buildings
The difference in language between the two expressions used substantially and solely used is obvious
It is therefore possible to contend that lands and buildings appurtenant to a coal mine if not exclusively used for purposes of the colliery business would not come within the definition of mine in section 2h ie it would depend upon the nature of user and that the crucial date is the date of vesting
We are inclined to think that the distinction though apparent may not be real in the facts and circumstances of a particular case
A workshop or a building constructed initially for the purpose of a coal mine cannot by its being diverted to other purposes cease to belong to the mine
What is of the essence is whether the workshop or the building originally formed a part and parcel of the coal mine
The subsequent user may not in our opinion be very material
To illustrate a workshops which has come into existence for and because of the mine but which also comes to be used for purposes other than of the mine does not on that account alone cease to be a workshop used substantially for the purposes of the mine
Again a building which is constructed to locate the management offices of the mine but which is used to accommodate some other concern because of the availability of space does not on that account alone cease to be solely used for locating the management offices of the mine
By reason of sub section
1 of section 3 of the Act the right title and interest of the owners in relation to the coal mines specified in the Schedule stand transferred to and vest absolutely in the Central Government free from all incumbrances
Parliament instead of providing that the word mine  shall have the meaning assigned to it in the has given an enlarged definition of mine  in section 2h so that 416 not merely the colliery but everything connected with the mining industry should vest in the Central Government ie not only that part of the industry which consisted of raising winning and getting coal but also that part of it which consisted in the sale of coal and its supply to customers both of which are a part of an integrated activity
This is manifested by sub clauses i to xii of clause h of section 2 ie all the assets belonging to a mine vest in the Central Government
As against this the liabilities are not taken over
Section 7 of the Act provides that every liability of the owner agent manager or managing contractor of a coal mine in respect of any period prior to the appointed day shall be the liability of such owner agent manager or managing contractor as the case may be and shall be enforceable against him and not against the Central Government or the Government Company
Thus there was no question of setting up a Tribunal for adjudication of title to the properties vested
Parliament by an enlarged definition of mine as contained in section 2h of the Act has indicated the nature of the properties that vest and the question whether a particular asset is taken within the sweep of section 2h depends on whether it answers the description given therein
Where there is a dispute as to whether a particular property vests or not the dispute undoubtedly is a civil dispute and must therefore be resolved by a suit
It was contended that the High Court should have gone into the question of title of the parties with respect to the properties in dispute particularly when sufficient documentary evidence was placed on record as reflected in the judgment
We are afraid the matter is not as simple as is suggested
The documents on record merely tend to show that the engineering unit though adjacent to was situate on a different plot and there was an attempt to show that it was not a workshop in or adjacent to a mine
We are of the view that this hardly matters
Merely because the land on which a workshop of a coal mine is located bears a different plot number or even if there is a compound wall between the main office of the coal mine and the workshop it would not cease to be part of the mine
The question in such cases will always be whether the workshop is located in or adjacent to a mine  and was used substantially for the purposes of the mine under the same management 
These are but essentially questions of fact to be deter mined according to the facts and circumstances of each particular case
When the facts themselves are seriously controverted the High Court was justified in observing that the dispute relating to the properties in question raised a serious question of title  and the parties must get their rights adjudicated upon in a civil court
417 It was pressed upon the High Court that the two businesses of Messrs Shethia Mining  Manufacturing Corporation viz the colliery business and the engineering business were two separate and distinct businesses for they were governed by two different sets of laws
It was alleged that there were separate accounts kept with a separate profit and loss account and a separate balance sheet with respect to each
According to the management therefore the colliery business on the one hand and the engineering business on the other were treated severally for all purposes
It was alleged that between the years 1968 and 1971 the total sales billed by the engineering unit were to the magnitude of Rs 5079675
As against this the sales to the New Satgram Coal Mines were only to the tune of Rs 371384 representing the costs of light structurals supplied
With respect to the remaining sum of Rs 4708391 received by the engineering unit it was alleged to represent sales of light and medium structural works for which no licence under the Industries Development and Regulation Act 1951 was required to various public sector undertakings like Hindustan Steel Construction Co for Bokaro steel plant Fertilizers  Chemicals Travancore for Durgapur Fertilizer Project Hindustan Cables Kapper India Government of Nagaland etc
viz to parties altogether unconnected with the coal industry
The question whether a workshop is substantially  used for the purposes of a mine necessarily involves an enquiry as to whether it pertains to or in substance is part of the mine
The value of jobs executed for the mine as against those for others is not really determinative of the question
If a workshop is in fact a part of a coal mine it does not cease to be so merely because its utilisation Lies in the production of materials supplied to third parties
While a workshop may form part of a mine and is substantially used as such it may be utilised for turning out other products it all depends upon the circumstances of each case whether it forms part of a mine or not
The Union of India has joined issue by contending that not only the mine in question but also the workshop has vested in the Central Government
The assertions made by the management with regard to workshop are all denied
It is pleaded that the relationship and nexus of the said workshop is established by its being adjacent to the New Satgram Colliery and by the fact that the workshop was used substantially for the purposes of that mine and other mines under the same management as required by section 2hvii of the Nationalisation Act
It is asserted that the management has rested their case on a bald statement that the workshop is not situate in or adjacent to a mine with out supporting it with any documentary proof
It is alleged that as soon as information regarding passing of the law vesting management 418 of the mine was derived the management deliberately removed all the relevant books including the books of accounts which could have contradicted their present claim
Obviously the claim of the appellant that the workshop was not substantially used for purposes of the mine is only an afterthought
With regard to the Technical Director s Bungalow it is submitted by the Union of India that the said bungalow wherever situate is included in sub clause xi of clause h of section 2
It is urged that merely because that the land under such building is not one falling within the mining area  is wholly immaterial
Even otherwise the said bungalow in any case falls under sub clause xii of cl
h of section 2 of the Act
The said bungalow being a fixed asset belonging to the owners of the mine forms part of the mine as defined in section 2hxii
As such even assuming that the said bungalow was not used solely for the purpose of the residence of officers
it would still be included in the definition of mine under the Nationalisation Act
Reliance is also placed on the admission made by the management in para 11 of the writ petition that the workshop was closed down in July 1970 
The Management Act and the Nationalisation Act came into force in 1973
The said workshop was therefore admittedly closed down about 3 years earlier
As such it is urged that there could be no question of the Technical Director of the coal mine being in charge of the said workshop at the relevant time so as to justify the plea raised by the management
It is pointed out that the management have themselves admitted that the building in question was constructed in 1957 58 for the residence of the Technical Director whereas the workshop was constructed in 1964  as stated in para 9 of the petition
As regards the Guest House also it is urged by the Union of India that for similar reasons it would be covered by sub cl
xi or xii of cl
h of section 2 of the Act
The question whether the engineering unit was situate in or adjacent to  the New Satgram coal mine and was substantially  used for purposes of the mine as well as the question whether the Technical Director s Bungalow and the Guest House were solely  used for the residence of officers and staff of the mine and therefore fall within the definition of mine  as contained in section 2h of the Nationalisation Act cannot obviously be decided in proceedings under article 226 of the Constitution
The proper remedy is by way of a suit as rightly observed by the High Court
419 It is however urged that the filling of a suit would involve the parties into protracted litigation and inordinate delay in settling their claims
The parties request that their dispute with respect to the New Satgram Engineering Works including Shethia Bhawan together with its all assets Technical Director s Bungalow and the Guest House be referred to arbitration
This brings us to the main question namely as to the scope and effect of sub sections
3 and 4 of section 19 of the Nationalisation Act
On a construction of these provisions the High Court was of the view that the Central Government upto the specified day ie June 30 1975 were entitled to receive to the exclusion of all other persons
any money due to the coal mine after the appointed day notwithstanding that realizations pertained to the period prior to that day but with respect to any amounts which could not be realised until June 30 1975 it held that they would be realizable by the erstwhile owners of the coal mines directly
For a proper appreciation of the point involved it is necessary to set out the provisions of section 19 which read as follows 19
Statement of accounts in respect of the period of management by the Central Government etc 1 The Central Government or the Government Company as the case may be shall cause the books in relation to each coal mine the management of which has vested in it under the Coal Mines Taking over of Management Act 1973 to be closed and balanced as on the date immediately before the appointed day and shall cause a statement of accounts as on that day to be prepared wishing such time in such form and in such manner as may be prescribed in relation to each such mine in respect of the transaction effected by it during the period for which the management of such coal mine remained vested in it Provided that where two or more coal mines were owned before the commencement of this Act by the same owner a consolidated statement of accounts may be Prepared for all the coal mines owned by such owner
2 All amounts received by the Central Government or the Government company after the closure of such accounts shall where such accounts relate to transactions effected before the appointed day be included in the said statement of accounts in respect of the coal mine to which the said receipt relates
3 The Central Government or the Government company in which the right title and interest of coal mine stand vested shall 420 be entitled to receive up to the specified date to the exclusion of all other persons any money due to the coal mine
realised after the appointed day notwithstanding that the realizations pertain to a period prior to the appointed day
Provided that where such realizations have not been included in the statement of accounts as on the day immediately before the appointed day a supplementary statement of accounts shall be prepared and furnished at such intervals as may be prescribed by the Central Government or the Government company to the owner of the coal mine
4 The liabilities of the coal mine not being liabilities arising out of advances made by the Central Government or the Government company which could not be discharged by the appointed day may be discharged by the Central Government or the Government company up to the specified date and every payment so made shall be included in the statement of accounts as on the day immediately before the appointed day indicating therein the period in relation to which the payments were made Provided that the liabilities in relation to the period prior to the appointed day which have not been discharged on or before The specified date shall be the liabilities of the owner of the coal mine
 x x x x x In this context the provisions of sub section
2 of section 18 may also be read
It runs thus 18
Payment by the Central Government to the Commissioner
x x x x x 2 In relation to the sum referred to in sub section 1 the Central Government shall pay in cash to the Commissioner such amount as may become due to the owner of a coal mine in relation to the period during which the management of the coal mine remains vested in The Central Government
 It was said that by reason of the Explanation to section 2h inserted by the Coal Mines Nationalisation Laws Amendment Act 978 the expression current assets  used in sub clxii does not include a dues representing the sale of coal and coal products effected at any time before the appointed day and outstanding immediately before the said date and b dues from the Coal Board established under s4 of the prior to the repeal of the said Act with respect to any period before the 421 appointed day
It was accordingly urged that these two items do not fall within the purview of the definition of mine  as defined in s2hxii
and therefore they did not vest in the Central Government under sub s1 of s3 of the Act
It was urged that the erstwhile owners of coal mines and not the Central Government were entitled to deal with these assets as they belong to The owners of the coal mines and not to the Central Government
The submission proceeds on a complete misconception of the scheme of the Act
The learned Attorney General contends that according to the provisions of sub ss3 and 4 of section 19 the Central Government or the Government company was exclusively entitled to receive the moneys in question to the exclusion of other persons upto the specified date and to utilities the same in discharge of the liabilities of the coal mine which could not be discharged by the appointed day
It is urged that sub sections
3 and 4 are part of an integrated scheme and must be read along with sub s2 of s18
We are clearly of the opinion that the contention advanced by the learned Attorney General accords with the real legislative intent
Under the scheme of the Act the owner of the coal mine which has vested in the Central Government under sub s1 of s3 is entitled to receive besides the compensation amount as determined under s8 additional compensation amount under sub s1 of s9 simple interest thereon at 4 per annum for the period specified therein together with such amount as may become due  to the owner of the coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government as provided by sub s2 of s18
To understand the correlation of sub sections
3 and 4 of section 19 with sub s2 of s18 of the Act
it is necessary to refer to the provisions of Chapter VI entitled Commissioner of Payments  which provides for the computation of the amount of compensation and other amounts payable to the erstwhile owners of coal mines and for matters connected therewith or incidental thereto
The provisions of Chapter VI are brought into operation by the appointment of a Commissioner of Payments by the Central Government under sub s1 of s17
There is a statutory duty cast on the Central Government under sub s1 of s18 that it shall within 30 days from the specified date pay in cash to the Commissioner for payment to the owner of the coal mine an amount equal to the amounts specified against the coal mine in the Schedule and shall also pay to the Commissioner such sums as may be due to the owner of a coal mine under section 9
2 of section 18 quoted above enjoins that 422 in addition to the sum referred to in sub s1 the Central Government shall pay in cash to the Commissioner such amount as may become due to the owner of a coal mine  in relation to the period during which the management of the coal mine remained vested in the Central Government
It is then provided by sub s3 of s18 that a deposit account shall be opened by the Central Government in favour of the Commissioner in the Public Account of India and every amount paid under this Act to the Commissioner shall be deposited by him to the credit of the said deposit account and thereafter the said deposit account shall be operated by the Commissioner
Separate records are required to be maintained by the Commissioner under sub s4 of s18 in respect of each coal mine in relation to which payments have been made by him under the Act
Under sub s5 of section 18 interest accruing on the amounts standing to the credit of the deposit account referred to in sub s3 shall inure to the benefit of the owners of coal mines
Section 19 of the Act provides for the preparation by the Central Government of a statement of account in respect of the period of management
The Central Government is required under sub section
1 of s19 to cause the books of accounts in relation to each coal mine the management of which has vested in it under the Coal Mines Taking over of Management Act 1973 to be closed and balanced as on the date immediately before the appointed day ie April 30 1973 and to cause a statement of accounts as on that date to be prepared in relation to each such mine in respect of the transactions effected by it during the period for which the management of such coal mine remained vested in it
Under sub s2 of s19 all amounts received by the Central Government or the Government company after the closure of such accounts where such accounts relate to transactions effected before the appointed day to be included in the said statement of accounts in respect of the coal mine to which such receipts relate
Under sub s3 of s19 the Central Government is conferred power to receive up to the specified date ie June 30 1975 any amount due to the coal mine to the exclusion of all other persons realised after the appointed day notwithstanding that the realizations pertained to a period prior to the appointed day
Proviso to sub s3 enjoins that where such realizations have not been included in the statement of accounts as on the day immediately before the appointed day a supplementary statement of accounts shall be prepared and furnished at such intervals as may be prescribed by the Central Government or the Government company to the owner of the coal mine
By sub section
4 of section 19 a duty is cast on the Central Government to discharge
423 the liabilities of the coal mine which could not be discharged upto the specified date ie June 30 1975 and every payment so made is to be included in the statement of accounts as on the day immediately before the appointed day indicating the period in relation to which the payments were made
It is plain on a reading of these provisions that unless the requirements of s19 are fulfilled there can be no ascertainment of such amount as may become due  to the owner of a coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government as required under sub s2 of section 18
Any other construction would render sub section
2 of section 18 entirely otiose
The amounts collected on behalf of the erstwhile owners of coal mines represent the money of such owners without distinction and whether they were sale proceeds of coal or realizations from debtors the amounts were liable to be spent not only in the discharge of liabilities of the coal mine which could not be discharged by the appointed day but also were liable to be spent for the purposes of management
All the rights and liabilities arise from the provisions of the Acts and the net balance in relation to the management period means the difference between authorized collections and legitimate liabilities of the erstwhile owners
It is necessarily this balance which becomes due in relation to the period during which the management of the coal mines remained vested in the Central Government  within the meaning of sub s2 of s18
It would therefore be obvious that the various steps provided by s19 are to be taken for the compliance of the requirements of s18
When there is payment made by the Central Government under s18
the provisions of ss20 27 become attracted
Every person having a claim against the owner of a coal mine has to prefer such claim under sub s1 of s20 before the Commissioner of Payments within 30 days from the specified date
Proviso to sub s1 confers powers on the Commissioner of Payments to entertain such claim within a further period of 30 days but not thereafter on being satisfied that the claimant was prevented by sufficient cause from preferring the claim within the specified period
Under sub s2 of s20 claims in relation to a Provident Fund Pension Fund Gratuity etc established for the welfare of the persons employed by the owner of a coal mine may be filed on behalf of the persons so empowered by the Coal Mines Provident Fund Commissioner appointed by the Central Government under s3C of the Coal Mines Provident Fund Family Pension and Bonus Schemes Act 1948
By sub s3 of s20 the Commissioner of Payments is empowered to entertain claims not being a claim which was time barred on January 31 1973 but was rejected merely on the 424 ground that such claim was time barred and such claim should be deemed not to have been rejected and shall be restored on his file and shall be dealt with in the manner specified in s23
Section 21 provides for priority of claims in relation to arrears of Provident Fund Pension Gratuity etc
Section 22 provides for priority of certain debts in relation to every other claim viz a all sums due to the State Government including royalty and dead rent b all amounts due in respect of any compensation or liability for compensation under the Workmen Compensation Act 1923 etc
 c all sums deducted by the employer from the salary or wages of any workman or any other employee for credit to any Provident Fund or any other fund established for the welfare of the employees but not deposited to the credit of such fund
Sub section 3 of s22 provides that the debts specified in sub s2 shall rank equally among themselves and be paid in full unless the assets are insufficient to meet them in which case they shall abate in equal proportion and be paid accordingly
Admission or rejection of claims by the Commissioner of Payments is provided fol by section 23 disbursement of amounts by him to the claimants by section 24 payment of interest on admitted claims by s24A recovery of amounts advanced by the Central Government by s25
It is after meeting all these liabilities that the Commissioner of Payments is required to serve a notice on the owners of the coal mines the managing contractors and the owners of any machinery equipment or other property which has vested in the Central Government or a Government company under the Act and which does not belong to the owners of the coal mines may apply to him for payment
Under the scheme of the Act the owner of a coal mine is entitled to the payment by the Commissioner of Payments under s26 of the balance if any out of the total amount of money credited to the account of a coal mine  after he has gone through all the stages provided for in Chapter VI
Sub s1 of s26 of the Act reads 26
Disbursement of amounts to the owners of coal mines 1 If out of the monies paid to him in relation to a coal mine or group of coal mines specified in the second column of the Schedule there is a balance left after meeting the liabilities of all the secured and unsecured creditors the Commissioner shall disburse such balance to the owner of such coal mine or group of coal mines
 Such being the scheme there is no question of the owner of a coal mine who is divested of his right title and interest under sub s1 of s3 to realise from The Central Government any amount due to a coal 425 mine which remained to be realised until the specified date ie June 30 1975
The Commissioner of Payments is therefore required under s26 to pay to the owner of such coal mine the balance left if there is any out of the monies paid to him in relation to a coal mine after meeting the liabilities of all the secured and unsecured creditors
Sub section 5 of s26 makes a provision for apportionment of such amount between the owner of the coal mine and the owner of machinery equipment and other property which does not belong to the owner of the coal mine
Any amount which remains undisbursed or unclaimed for a period of three years has to be transferred by the Commissioner of Payments to the General Revenue Account of the Central Government under s27
In view of all these provisions of ss20 to 27 of the Act and particularly of sub s1 of s26 we fail to see the propriety of the claim made by the petitioners
The petitioners are certainly not entitled to recover any definite or ascertained sum
All that they are entitled to under sub s5 of s19 is that they should be furnished with a copy of each statement of accounts prepared under s19 to its being audited under sub s6 and to the audit being conducted in such manner as the Central Government may direct under sub s7 and to the payment under sub s1 of s26 of the balance if any out of the total amount of money credited to the account of a coal mine after all the liabilities have been discharged
The learned Attorney General makes a statement that this has all been done before a Commissioner of Payments was appointed under sub s1 of s17
Nevertheless the petitioners assert that the Central Government has not accounted for the realisation if any and the disbursement of two amounts of Rs 6874 lakhs and Rs 5822 lakhs representing the outstanding dues from sundry debtors as on the appointed day ie January 31 1973 and the value of coal despatched from the mines in question during the period of management ie from January 31 1973 and April 30 1973 respectively
In view of this assertion we direct the Central Government to appoint a Commissioner of Payments under sub s1 of section 17 of the to go into the dispute as to these items
There still remains the question whether the powers of the Central Government under sub ss3 and 4 of s19 of the Act extend only up to the specified date that is up to June 30 1975
In dealing with the question the High Court having regard to the provisions of ss20 to 27 of the Act rightly observes that the Nationalisation Act 426 provides for claims to be preferred and for disbursement after adjudication of such claims and if any balance is left after meeting the liabilities it is only then that the Commissioner of Payments can under sub s1 of s26 disburse it to the owner of the coal mine
It then goes on to say however any amount which could not be realised until June 30 1975 would be realisable by the erstwhile coal mine owners directly
 To put it conversely there is no duty cast on the Central Government to make realisation of any money due to a coal mine if it pertains to a period prior to the appointed day and to discharge the liabilities of the coal mine beyond the specified date that is June 30 1975
To understand the implications of this it is necessary to briefly deal with the different stages by which nationalisation of coal mines was brought about
There are three dates Appointed day  under s21 of the Management Act was January 31 1973 that under the Nationalisation Act was May 1 1973 while the specified date  for purposes of sub ss3 and 4 of s19 was June 30 1975
All that vested in the Central Government under sub s1 of s3 of the Management Act was the management of all coal mines as defined in s2g of the Act which included sundry debts etc
 pending nationalisation of such mines with effect from the appointed day ie January 31 1973
But this was only for the purposes of management the title all the time remaining in the erstwhile owners of the coal mines
In the course of management under that Act all the collections belonged to the owners and the liabilities also in relation to the mines were the liabilities of the owners
The Custodian appointed by the Central Government under s6 of the Management Act was liable for the net balance in relation to the management period
He had the right to collect and also the right to incur expenditure in relation to the management by reason of the provisions of that Act
The Nationalisation Act received the assent of the President on May 30 1973 but the provisions of sub s1 of section 3 were brought into force with retrospective effect that is with effect from the appointed day ie May 1 1973
It follows that although there was a complete extinction of all the rights title and interest of the owners of coal mines with effect from May 1 1973 there was a fictional extension of the period of management under the Management Act from May 1 to May 30 1973
There is therefore provision made in s9 that apart from the amount of compensation provided for by s8 as 427 mentioned in the Schedule the owners of every coal mine shall be entitled to receive additional compensation under sub s1 thereof
This was to be an amount equal to the amount which would have been but for the provisions of sections 3 4 and 5 payable to such owner for the period commencing on May 1 1973 and ending on the date on which the Act received the assent of the President that is May 30 1973
Under sub s1 of s11 the Central Government is entitled to exercise all such powers and to do all such things as the owner of the coal mine was authorised to do
The conferral of power upon the Central Government under sub ss3 and 4 of s19 to make realisation of monies due to the coal mines and from such realisations to discharge the liabilities as well as to incur expenses in relation to the management thereof was a necessary concomitant of the vesting of such coal mines under sub s1 of s3 of the Act
Sub section 1 of s3 provides that the right title and interest of the owners in relation to the coal mines shall vest in the Central Government free from all incumbrances
As set out above the definition of coal mine in s2hxii includes the current assets belonging to a mine but by reason of the Explanation inserted by the Goal Mines Nationalisation Laws Amendment Act 1978 the expression current assets appearing therein does not include amounts which had become due before the appointed day ie May 1 1973
Thus these dues did not vest in the Central Government
This exclusion of sundry debts under the Nationalisation Act does not apply to the Management Act because there was no similar explanation to s2gxii
The Management Act was to be followed by the Nationalisation Act and therefore the accountability of the Central Government in regard to the management period was provided for in s19 of the Nationalisation Act
Although there was vesting of the coal mines in the Central Government under sub s1 of s3 of the Act the accounts had still to be settled
Sub sections 3 and 4 of s19 therefore extended the period during which the Central Government was authorised to collect monies due to the coal mines and to discharge the liabilities of such coal mines which could not be discharged by the appointed day that is May 1 1973 till the specified date ie June 30 1975
As we have stated the liabilities of the coal mines were not taken over
Section 7 of the Act in terms provides that every liability of the owner agent manager or managing contractor of a coal mine in respect of any period prior to the appointed day shall be the liability of the owner agent manager or managing contractor as the case may 428 be and shall be enforceable against him and not against the Central Government or the Government company
It logically follows that after the specified date ie June 30 1975 the erstwhile owners of coal mines would have to meet all their liabilities which could not be discharged before the appointed day
It must result in the inevitable consequence as a necessary corollary that any amount which could not be realised by the Central Government until the specified date would be realisable by them directly in order to meet their pre existing liabilities
In Industrial Supplies Pvt Ltd  Anr
vs The Union of India  Ors
we have by our Judgment delivered on August 7 1980 held that the subsidy receivable from the erstwhile Coal Board established under s4 of the Coal Mines Conservation and Safety Act 1952 being a payment by way of reimbursement was like any other dues and therefore must be treated as any money due to the coking coal mine  within the meaning of sub s3 of 922 of the  and therefore it could be utilised for the discharge of liabilities of such coking coal mines under sub s4 thereof which provisions are in pari materia with sub sections
3 and 4 of s19 of the 
We accordingly set aside the direction made by the High Court requiring the Union of India to pay to the petitioners Rs 72834254 which it had recovered from the erstwhile Coal Board as subsidy
If the Commissioner of Payments finds that these two items of Rs 6874 lakhs and Rs 5822 lakhs and the subsidy amount of Rs 72834254 have been duly accounted for nothing further need be done
Obviously the Commissioner of Payments cannot make an award he can only enquire into the question and make the necessary directions if any
The parties will have their remedy of an appeal under sub s7 of s23 of the Act
The result therefore is that the appeal of the Union of India must succeed and is allowed and that of the New Satgram Engineering Works fails and is dismissed with costs throughout
The judgment and order of the High Court is accordingly modified by directing the appointment of a Commissioner of Payments under sub s1 of s17 of the  who shall proceed to adjudicate upon the disputes between the parties with advertence to the observations made above
In accordance with our order dated May 9 1980 we direct the Central Government to appoint Sri Salil Kumar Datta a retired Judge 429 of the Calcutta High Court as a Commissioner of Payments under sub s1 of s17 of the 
Sri Datta will also act as an Arbitrator to adjudicate upon the disputes as indicated in our judgment delivered today with advertence to the observations made therein
Sri Datta as a Commissioner of Payment cum Arbitrator shall be entitled to draw his last pay as a Judge of the Calcutta High Court
This order is made by consent of the parties
The learned Attorney General stated at the hearing that a retired Judge of the Calcutta High Court should be appointed as a Commissioner of Payments and he should also act as an Arbitrator
The learned counsel for the opposite party agreed to this course being adopted
They left the choice of the person to be appointed to the Court
Due to inadvertence certain typographical errors have crept in our order dated May 9 1980
We direct that the clerical errors be corrected
At p2 in the 5th line for the words and figures April 3 1973 the words and figures April 30 1973 be substituted
In the 6th line on that page for the words and figures June 30 1976 the words and figures June 30 1975 be inserted
It is regrettable that certain other errors have also crept in which we have rectified in our judgment delivered today
The order dated May 9 1980 stands corrected accordingly
It shall be read in the light of the judgment pronounced by us in these appeals
SR CA 133179 dismissed
CA 42680 allowed


Summary:
Ms Shethia Mining and Manufacturing Corporation Calcutta owned three non coking coal mines one of which was New Satgram Coal Mines
besides a workshop called the New Satgram Engineering Works built on a plot adjacent to the New Satgram Coal Mines in 1964 a building known as the Technical Director s Bungalow built somewhere in 1957 58 outside the mining area but adjacent to it and another building constructed in 1960 61 on the same plot of land namely the Guest House used for the residence of officers and staff of mines
The management of the New Satgram Coal Mines along with two other coal mines was taken over by the Central Government under the Coal Mines
Taking over of Management Act 1973 with effect from January 31 1973
Thereafter the was passed and by virtue of section 31 thereof the right title and interest of Ms Shethia Mining and Manufacturing Corporation vested in the Central Government with effect from May 1973 and subsequently by a notification in the Government company that is the Coal India Ltd
On May 17 1973 the Central Government took over possession of the Technical Director s Bungalow and the Guest House
The appellants who had filed two writ petitions challenging the taking over and the Nationalisation Act in the Supreme Court withdrew them and filed a petition under Article 226 of the Constitution in the Delhi High Court for the issuance of a writ or direction in the nature of mandamus in regard to the taking over of New
Satgram Engineering Works and the dues pertaining to the New Satgram Coal Mines and New Majri Coal Mines
The High Court partly allowed the petition but declined to go into the question as to whether the Engineering Unit together with Shethia Bhavan and all its assets etc the Technical Director s Bungalow and Guest House were or not covered by the definition
of the term mine in section 2hvi vii  xi of the Nationalisation Act
Hence the appeals by special leave one by New Satgram Engineering Works and the other by the Union of India
Allowing the Government s appeal and dismissing the appeal of the Engineering Works the Court  HELD 1 When the facts themselves are seriously controverted the dispute relating to the properties in question raise a serious question of title and the parties must get their rights adjudicated upon in a civil court and not 407 under article 226 of the Constitution
The question whether the engineering unit was situate in or adjacent to the new Satgram Coal Mines and was substantially used for the purposes of the mine as well as the question whether the Technical Director s Bungalow and the Guest House were solely used for the residence of officers and staff of the mine and therefore
fell within the definition of mine  as contained in section 2h of the Nationalisation Act cannot be decided in proceedings under article 226 of the Constitution
The proper remedy is by way of a suit
416H 418G H 2 Parliament instead of providing that the word mine  shall have the meaning assigned to it in the  has given an enlarged definition of mine  in section 2h so that not merely the colliery but everything connected with the mining industry should vest in the Central Government that is not only that part of the industry which consisted of raising winning and getting coal but also that part of it which consisted in the sale of coal and its supply to customers both of which are a part of an integrated activity
Parliament by an enlarged definition of mine as contained in section 2h of the Act has indicated the nature of the properties that vest and the question whether a particular asset is taken within the sweep of i 2h depends on whether it answers the description given therein
415 H 416 A D 3 The language used in section 2hvii and xi of the are different
Sub clause vii used the words in or adjacent to a mine and used substantially for the purposes of the mine or a number of mines under the same management in relation to workshops
The use of the word and  makes both the conditions conjunctive
Sub Clause xi used the words if solely used for the location of the management sale or liaison offices or for the residence of officers and staff of the mine in relation to lands and buildings
The difference in language between the two expressions used substantially and solely used is clear
A workshop cr a building constructed initially for the purpose of a coal mine cannot by its being diverted to other purposes cease to belong to the mine
What is of the essence is whether the workshop or the building originally formed a part and parcel of the coal mine
The subsequent user may not b very material
415 B E 4 Merely because the land on which a workshop of a coal mine is located bears a different plot number or even if there is a compound wall between the main office of the coal mine and the workshop it would not cease to be part of the mine
The question in such cases will always be whether the workshop is located in or adjacent to a mine and was used substantially for the purposes of the mine under the same management
Further the question whether a workshop is substantially used for the purposes of a mine necessarily involves an enquiry as to whether it pertains to or in substance is part of the mine
The value of jobs executed for the mine as against those for others is not really determinative of the question
If a workshop is in fact a part of a coal mine it does not cease to be so merely because its utilisation lies in the production of materials supplied to third parties
While a workshop may form part of a mine and is substantially used as such it may be utilised for turning out other products it all depends upon the circumstances of each case whether it forms part of a mine or not
416F G 417 D F 5 Sub sections 3 and 4 of section 19 of the Act are part of an integrated scheme and must be read with sub section 2 of section 18
According to the provisions of sub sections 3 and 4 of section 19 the Central 408 Government or the Government company was exclusively entitled to receive monies in question to the exclusion of other persons up to the specified ate and to utilise the same in discharge of the liabilities of the coal mine which could not be discharged by the appointed day
Under the scheme of the Act the owner of the coal mine which has vested in the Central Government under sub section 1 of section 3 is entitled to receive besides the compensation amount as determined under section 8 additional compensation amount under sub section 1 of section 9 simple interest thereon at 40 per annum for the period specified therein together with such amount as may become due to tho owner of the coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government 35 provided by sub section 2 of section 18
421 C E Provisions in sections 8 9 18 and 19 make it clear that unless the requirements of section 19 are fulfilled there can be no ascertainment of such amount as may become due to the owner of a coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government as required under sub section 2 of section 18
Anr other construction would render sub section 2 of section 18 entirely otiose
The amounts collected on behalf of the erstwhile owners of coal mines represent the money of such owners without distinction and whether they were sale proceeds of coal or realisations from debtors
the amounts were liable to be spent not only in the discharge of liabilities of the coal mine which could not be discharged by the appointed day but also were liable to be spent for the purposes of management
All the rights and liabilities arise from the provisions of the Acts and the net balance in relation to the management period means the difference between authorised collections and legitimate liabilities of the erstwhile owners
It is necessarily this balance which becomes due in relation to the period during which the management of the coal mines remained vested the Central Government within the meaning of sub section 2 of section 18
423 B E When there is a payment made by the Central Government under subs
2 of section 18 the elaborate procedure provided under sections 20 27 have to be followed
The owner of a coal mine is entitled to the payment by the Commissioner of Payments under section 26 of the balance if any out of the total amount of money credited to the account of the coal mine after he has gone through all the stages provided for in Chapter VI
Such being the scheme there is no question of the owner of a coal mine who is divested of his right title and interest under sub section 1 of section 3 to realise from the Central Government any amount due to a coal mine which remained to be realised until the specified date that is June 30 1975
In the instant case in view of all these provisions of sections 20 to 27 of the Act and particularly of sub section 1 of section 26 the claims made by the appellants Engineering Works are not proper
They are certainly not entitled to recover any definite or ascertained sum
All that they are entitled to under sub section 5 of section 19 is that they should be furnished with a copy of each statement of accounts prepared under section 19 to its being audited under sub section 6 and to the audit being conducted in such manner as the Central Government may direct under sub section 7 and to the payment under sub section 1 of section 26 of the balance if any out of the total amount of money credited to the account of a coal mine after all the liabilities have been discharged
423F 424F H 425A D E 6 There is no duty cast on the Central Government to make realisations 409 of any money due to a coal mine if it pertains to a period prior to the appointed day and to discharge the liabilities of the coal mine beyond the specified dated that is June 30 1975
The appointed day  under section 2a of the Management Act under the Nationalisation Act was January 31 1973 and May 1 1973 respectively while the specified date  for purposes of sub sections 3  4 of section 19 was June 30 1975
All that vested in the Central Government under sub section I of section 3 of the Management Act was the management of all coal mines as defined in section 2g of The Act which included sundry debts etc
 pending nationalisation of such mines with effect from the appointed day that is January 31 1973
But this was only for the purposes of management the title all the time remaining in the erstwhile owners of the coal mines
In the course of management under that Act all the collections belonged to the owners and the liabilities also in relation to the mines were the liabilities of the owners The Custodian appointed by the Central Government under section 6 of the Management Act was liable for the net balance in relation to the management period
He had the right to collect and also the right to incur expenditure in relation to the management by reason of the provisions of that Act
426 C F 7 The conferral of power upon the Central Government under subsections 3 and 4 of section 19 to make realisation of monies due to the coal mines and from such realisation to discharge the liabilities as well as to incur expenses in relation to the management thereof was a necessary concomitant of the vesting of such coal mines under sub section I of section 3 of the Act
The Nationalisation Act received the assent of the President on May 30 1973 but the provisions of sub section I of section 3 were brought into force with retrospective effect that is with effect from the appointed day that is May 1 1973
It follows that although there was a complete extinction of all the rights title and interest of the owners of coal mines with effect from May 1  1973 there was a fictional extension of the period of management under the Management Act from May 1 to May 30 1973
There is therefore provision made in section 9 that apart from the amount of compensation provided for by section 8 as mentioned in the Schedule the owners of every coal mine shall be entitled to receive additional compensation under sub section I thereof
This was to be an amount equal to the amount which would have been but for the provisions of sections 3 4 and S payable to such owner for the period commencing on May 1 1973 and ending on the date on which the Act received P the assent of the President that is May 30 1973
Under sub section 1 of section 11 the Central Government is entitled to exercise all such things as the owner of the coal mine was authorised to do
427C 426G 427B 8 The definitions of coal mine in section 2hxii includes the current assets belonging to a mine
but by reason of the explanation inserted by the Coal Mines Nationalisation Amendment Act 1978 the expression current assets appearing therein does not include amounts which had become due before the appointed day that is May 1 1973
Thus these dues did not vest in the Central Government
This exclusion of sundry debts under the Nationalisation Act does not apply to the Management Act because there was no similar explanation to section 2gxii of that Act
427 D E 9 The Management Act was to be followed by the Nationalisation Act and therefore the accountability of the Central Government in regard to the management period was provided for in section 19 of the Nationalisation Act
Although there was vesting of the coal mines in the Central Government under 410 sub section 1 of section 3 of the Act the accounts had still to be settled Sub sections 3 and 4 of section 19 therefore extended the period during which the Central Government was authorised to collect monies due to the coal mines and to discharge the liabilities of such coal mines which could not be discharged by the appointed day that is May 1 1973 till the specified date that is June 30 1975
The liabilities of the coal mines were not taken over under the Management Act
Section 7 of the Nationalisation Act implies that after the specified date that is June 30 1975 the erstwhile owners of coal mines would have to meet all their liabilities which could not be discharged before the appointed day
It must result in the inevitable consequence as a necessary corollary that any amount which could not be realised by the Central Government until the specified date would be realisable by the owners directly in order to meet their pre existing liabilities
427 F 428 B 10 Provisions of sub section 4 of section 19 of the are in part materia with sub section 3 of section 22 of the 
The subsidy receivable from the erstwhile Coal Board established under section 4 of the Coal Mines Conservation and Safety Act 1952 being a payment by way of reimbursement was like any other dues and therefore must be treated as any money due to the coking coal mine 
Therefore the directions made by the Court requiring the Union of India to pay to the Satgram Engineering Works Rs 728342 54 which is to be recovered by the erstwhile Coal Board as subsidy is incorrect
428C D Industrial Supplies Pvt Ltd  Anr
vs The Union of India  Ors
1981 1 SCR p 375 followed