Case: State of Bihar and Another Etc Vs. Khas Karanpura Collieries Limited Etc

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 instrument 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 spec ified 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 fro m applicability of section 9(1) and section 16(1) 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 s. 10(1) 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 notif ications 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 10(1) of the Bihar Land Reforms Act on the re: sting 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 lease for the remainder of the term of that lease but the terms and conditions of the statutory lease had also mutatis mutandis to be the same as the terms and conditions of the subsisting lease i.e. the original lease except to the extent mentioned in sub-section (2). Thus the statutory lease being inextricably linked up with the aforesaid subsisting 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 Schedule 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 se ction 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 10(1) of the Bihar Land Re forms 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 royalties paid on this coal vary over a wide range but are generally much below the rate per ton prescribed in the Second Schedule. A sudden and uniform increase of these royalties is likely to have an un settling effect in the industry and may retard the programme of coal production under the Second Five Year Plan ....... "14. Thus the above discussion makes it crystal clear that the statutory mining leases in respect of coal which sprang up under section 10(1) of the Bihar Land Reforms Act also acquired a temporary immunity from the applicability of sections 9(1) and 16(1) of the Act until the Central Government 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.15.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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 concerned, 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 instrument 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 spec ified 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 fro m applicability of section 9(1) and section 16(1) 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 s. 10(1) 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 notif ications 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 10(1) of the Bihar Land Reforms Act on the re: sting 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 lease for the remainder of the term of that lease but the terms and conditions of the statutory lease had also mutatis mutandis to be the same as the terms and conditions of the subsisting lease i.e. the original lease except to the extent mentioned in sub-section (2). Thus the statutory lease being inextricably linked up with the aforesaid subsisting 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 Schedule 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 se ction 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 10(1) of the Bihar Land Re forms 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 royalties paid on this coal vary over a wide range but are generally much below the rate per ton prescribed in the Second Schedule. A sudden and uniform increase of these royalties is likely to have an un settling effect in the industry and may retard the programme of coal production under the Second Five Year Plan .......the above discussion makes it crystal clear that the statutory mining leases in respect of coal which sprang up under section 10(1) of the Bihar Land Reforms Act also acquired a temporary immunity from the applicability of sections 9(1) and 16(1) of the Act until the Central Government 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.