The High Court observed : "In our view, the true construction and effect of the notification dated 29th December 1961 is that in regard to coal mining leases granted before 25th October 1949 if the rate of royalty stipulated in the lease was higher than 5% of f.o.r. price per ton, then the royalty payable from 29th December 1961 in respect of coal removed from the leased area after that date would be the one specified on that date in the Second Schedule, namely, 5 per cent of f.o.r. price per ton; in relation to leases where the rate of royalty stipulated in less than 5 per cent but more than 2 1/2 per cent of f.o.r. price per ton, the rate of royalty would be the one specified in the lease agreement; and in respect of leases where the rate of royalty specified was less than 2 1/2 per cent of f.o.r. price per ton, the rate would be 2 1/2 per cent of f.o.r. price per ton from 29th December 1961.