Case: Bharat Coking Coal Limited Vs. S State Of Bihar

(2) IN order to appreciate the controversy in question it is necessary to recapitulate the facts. M/s Bharat Coking Coal Ltd.- appellant in C. A. 4521 of 1986 is a government Company which carries coal mining operations in village Sudamdih in the State of Bihar. There is a coal washery adjacent to the appellants coal mine in village Sudamdih. After the coal is extracted from the mines, it is crushed into pieces of different sizes for purposes of grading. Since the coal is mixed up with mud and other impurities, same is brought to the washery for washing and cleaning the same for reducing the ash percentage and for use by metallurgical consumers. In the process of washing small coal particles escape from the washery in the form of slurry along with water and the same are deposited in the slurry ponds constructed for their storage by the appellant company. But when the ponds are full, the slurry overflows the pond and flows down into the river Damodar. After the water is soaked by the soil the small particles of coal get deposited in the river bed. These coal particles are collected and formed into briquettes which are sold in market for energy and fuel purposes. The slurry coal has acquired highcommercial value as it is of exceptional quality and high grade, it is used by steel plants and thermal power stations. The State of Bihar granted lease in favour of Ram Nath Singh - respondent 4 for collecting the coal particles settled in the Damodar river bed and other land including plot No. 370 of Mauza Sudamdih. The appellant claimed that plot No. 370 which formed part of river bed of Damodar belonged to it having been acquired underthe Coal Bearing Areas (Acquisition and Development) Act, 1957 for the purpose of mining of coal. Pursuant to the lease, respondent 4 has been collecting the coal particles from plot No. 370. The appellant company raised objection before the revenue authorities of the State of Bihar claiming property rights to collect and obtain slurry deposited in the river bed in plot No. 370, but its objections were overruled and respondent 4 was permitted to collect the coal particles from the aforesaid plot. The appellant thereupon filed a writ petition in the High court of Patna challenging the State governments action in granting lease to respondent 4 for lifting slurry from the river bed, on the ground that the property belonged to the appellant company and the State government had no authority in law to grant a mining lease without the prior approval of the central government under S. 5 of the Mines and Minerals (Regulation and Development) Act, 1957.(3) TATA Iron and Steel Company Ltd.- the appellant in Civil Nos. 61-62 of 1987, is a company incorporated under the Companies Act. It owns steel plant at Jamshedpur and it also owns captive coal mines in the District of Hazari Bagh and Dhanbad. These coal mines are commonly known as West Bokaro Collieries. There is no dispute that large area of land in the District of Hazari Bagh and Dhanbad have been settled with the appellant company for purposes of mining operations and the company enjoys mineral rights in respect of the surface and sub soil. It is not necessary to refer to the historical facts relating to the acquisition of mining rights by the appellant, as there is no dispute that under S. 10 of the Bihar Land Reforms Act and appellants existing mining leases became statutory leases in the State of Bihar. The appellant has established washery plant in the District of Hazari Bagh as well as in Jama Dhoba and Zora Pokhar in District Dhanbad for purposes of washing the coal after extraction from the coal mines and crushed into different sizes. In the process of washing the coal small particles of coal escape from the washery and overflow from the plant and the same are deposited in the storage pond constructed by the appellant. But sometimes they overflow from the storage pond and settle down in the raiyati land and in the Bokaro river bed. The appellant has been claiming right that the slurry which escaped from the washery belonged to it and no other person had right to collect the same. The State government did not accept the appellants claim instead it settled the rights of collection of slurry with the respondents under the indentures granted in their favour. Under the settlement the respondents have been authorised by the State government to collect sludge and slurry which settles down in the Bokaro river bed or in the raiyati land on payment of royalty to the State. The appellant filed two writ petitions before the Patna High court challenging the authority of the State governments action on the ground that slurry was a mineral being coal and as such its collection or mining was regulated by the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the Act) and the State government had no authority to grant any lease for collection of sludge/slurry without the previous sanction of the central government.(4) THE aforesaid petitions were heard and disposed of by a full bench of the Patna High court. The full bench dismissed the writ petitions on the findings that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine which was not regulated by the provisions of the Act. The collection of slurry did not involve any mining operations and the settlement made by the State government in favour of the respondents for collecting the same was not a mining lease, therefore, the State government was not under any legal obligation to obtain previous sanction of the central government under the Act. The High court further held that after the slurry escaped into the river bed or to some other land, the same ceased to belong to the appellants and the State government was entitled to execute lease for collection of the same.(5) CIVIL Nos. 230-231 of 1987 are directed against the judgment of a division bench of the Calcutta High court. The central Coalfields Ltd. and the Coal India Ltd. the appellants are government Companies which own coal mines in the District of Giridih in the State of Bihar. The appellants have set up coal washeries at Kathara, Kargali and Sawang in the District of Giridih for washing the coal extracted from its mines. In the process of washing, particles of coal escape from the washery along with water which ultimately flows into the river Damodar. The Mining Department of the State of Bihar granted lease to Industrial Fuel Marketing Company and others - respondents for removing the slurry from the river bed on payment of royalty but the appellants resisted the collection of slurry from their land and they instituted criminal proceedings against the contractors. Thereupon, the respondents contractors filed writ petitions before the Calcutta High court for quashing the criminal case registered against them, and also for the issue of a direction permitting them to collect slurry under the lease granted to them by the State of Bihar. Before the High court the appellants herein contended that the slurry belonged to them and the State of Bihar had no authority in law to grant any lease in respect of the same. A learned Single Judge of the High court dismissed the writ petitions on the findings that the appellants herein are the owner of the slurry and the State government had no authority to grant any lease to the respondent contractors for removal of the same. On appeal by the contractors a division bench of the Calcutta High court vide its judgment held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Act were not applicable to the grant of lease. On the question of appellants claim to the property rights for collecting slurry, the bench held that the slurry deposited on the appellants land, belonged to them and the respondents had no right to collect the same but if the slurry settled down on others land the respondents have right to remove the same from the river bed. Aggrieved, the central Coalfields Ltd. and Coal India Ltd. have challenged the correctness of the High courts view by these appeals.

Reasoning:
(10) VIEWED in the light of the above meaning of slurry, there is no doubt that in the instant cases slurry is coal slurry, as admittedly small particles of coal escape from the washery plant along with water. After it overflows the storage pond the slurry flows into the river and is deposited on the river bed, which is later on collected and used as fuel after it is formed into briquettes. The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal. Thus, the slurry is coal in liquid form. A division bench of the Patna High court in Kesari Mal Jain v. State of Bihar placing reliance on Nelsons Dictionary of Mining which defined Slurry as "slurry inter alia means fine carbonaceous discharge from a colliery washery" held that the carbonaceous particles so discharged from the coal washery is used for producing energy or heat therefore it was coal. The bench further held that coal particles which flow out with the water from the coal washeries are formed into balls or briquettes for sale in the market for purposes of producing energy or heat, therefore, slurry was coal. The Division benchs view was not accepted by the full bench of the Patna High court as it held that the slurry deposit did not constitute a mineral. We agree with the view taken by the division bench in Kesari Mat case" as in our opinion the slurry coal deposited in the river bed or land, in substance as well as in its character continues to behave already discussed the characteristic of slurry which shows that the coal can be transported in liquid form of slurry. The slurry which gets deposited on the river bed and on raiyati land contains fine particles of coal, on its resumption it is used for energy and fuel purposes. It is, therefore, difficult to accept the contention that the coal particles which escape from the washery and get deposited in the river bed or in raiyati land do not have the character of mineral. It is not, however, open to the State to raise this contention as while making settlement and granting lease in favour of the respondents for lifting or collecting slurry deposits the State itself proceeded on the assumption that the coal particles as deposited in the river bed and in the raiyati land on its escape from the coal washeries constituted mineral. Since under the Bihar Land Reforms Act the minerals vest in the State, it claimed right to grant lease in favour of the respondents for collecting the same. In the indenture of settlement dated 9/04/1975 granted in favour of the M/s Industrial Fuel Marketing Company and others in Civil Nos.of 1987 the State government itself stated: "and whereas these rejects/sludge being a mineral (emphasis supplied) the State government is the owner of the same by virtue of the entire State including the minerals having vested in the State government under the provisions of Bihar Land Reforms Act". The indenture purported to confer right on the lessee for lifting rejects also known as sludge comprising fine particles of coal which are ejected in the process of coal being washed in the coal washeries and which flow into the nearby river or to the lands held by the raiyats. The lease was granted by the Mining Department of the State government dealing with minerals. Similarly, the indenture of settlement dated 9/04/1981 granted in favour of respondent 4 in Civil Appeal Nos.of 1987 permitting him to collect slurry after it is deposited in the river bed or in the land as specified in the lease, was also executed by the State of Bihar on the premise that the slurry as deposited in the river bed was a mineral, namely, coal. Thus, it is apparent that the State of Bihar itself has been treating the Slurry deposits as mineral and on that assumption it has been executing leases conferring rights on the respondents to collect the same on payment of royalty. In this view, it is not open to the State of Bihar and the lessees to contend that slurry is not coal or mineral within the meaning of theLEARNED counsel for the respondents attempted to justify States action on the ground that the slurry as settled down in river bed or in raiyati land was not waste or industrial effluent of coal mines as the washeries are not part of coal mines. We find no merit in the submission. S. 3 of the Act defines mining operations which means any operation undertaken for the purpose of winning any mineral. The expression mine is not defined by the Act instead S. 3 (i) says that the expression mine has the same meaning as assigned to it inthe Mines Act, 1952. mine as defined by S. 2 (l) (j) of Mines Act, 1952 means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on and it includes: (XII) "any premises in or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is being carried on. "the inclusive definition of mine is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale. There is no dispute between the parties that the coal as extracted from the coal mine is crushed into pieces and thereafter it is washed to remove its impurities and ash contents to make the coal fit for sale. After the coal is washed, it assumes the form of coke which is sold to consumers. The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for sale is an integral part of a mine as it involves ancillary process. Washery is included within the definition of mine underthe Mines Act, 1952. Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine.(22) MOREOVER, it is not open to the respondents to contend that slurry is not a waste discharged from the washeries of coal mines. The respondents have all along pleaded before the High court as well as before this court that slurry is a waste discharged from the washery of the appellants coal mines. In Civil No. 4521 of 1986 Ram Nath Singh respondent 4 has stated in paragraph 2 of his affidavit before this court that slurry/sludge is a waste substance of Sudamdih coal washery and in order to keep the river water clean and pollution free and to earn revenue the State government settled the collection of slurry from the river bed in his favour. The State of Bihar also in its affidavit filed before the High court expressly stated that the sludge/slurry was rejected property from the coal washery and the State of Bihar made settlement in favour of the respondents for collection of the waste deposits from the river bed and other land. The full bench of the Patna High court also observed: "the sludge/slurry could not be raised to the status of being coal, as it was the consequential wastes of coal mining process, therefore the true nature of slurry was that it was a mere residue reject or waste of an industrial process consisting of mud, ash, oily substances, water and carbonaceous ingredients. " The respondents have all along proceeded on the assumption that sludge/slurry was an industrial waste arising out of the mining operations of coal. The State of Bihar as well as the respondents in whose favour the right of collection of sludge/slurry has been settled have all along taken the stand that the discharge of slurry/sludge by the appellants washery into the river has been polluting the river and affecting the fertility of land, therefore the State government, permitted the removal of the slurry/sludge with a view to prevent pollution of the river and the land. On the admitted facts the entire activity relating to disposal of the industrial waste, slime or tailing in the shape of sludge/slurry escaping from the washeries of the appellants coal mines including the prevention of pollution of river water or land is covered by S. 18 of the Act. The High courts confined themselves to the question whether sludge/slurry was a mineral under the Act and failed to consider the scope and effect of S. 18 of the Act. We are therefore of the opinion that in view of the admitted case of the parties disposal of sludge/slurry coming out from the washeries of appellants coal mines is covered by the Act and the State government had no authority in law to grant any lease or settlement authorising collection of the same from the river bed or from any other land. Consequently, the respondents in whose favour settlements have been made by the State government have no right or authority to collect sludge/slurry either from the river bed or from any other land.(23) IN Civil No. 4521 of 1986 the appellants claim that plot No. 370 situated in village Sudamdih belonged to them and the sludge/slurry discharged from their washery as settled down on that land also belonged to them therefore the State government had no authorityin law to permit respondents to collect slurry coal from their land. The High court held that since the appellants ownership rights in respect of plot No. 370 of village Sudamdih was seriously disputed the question should be decided by the civil court. Mr Kapil Sibal learned counsel for the appellant urged that the High court committed serious error as there was no scope for any dispute regarding the question of ownership of plot No. 370. We find force in his submission. There is sufficient material on record to show that Bharat Coking Coal Ltd. is the owner of the plot No. 370 situated at village Sudamdih and the respondents have failed to place any material before the court that the appellant is not owner of plot No. 370. A Notification was issued by the central government on 6/08/1960 under Ss. (1 of S. 4 ofthe Coal Bearing Areas (Acquisition and Development) Act, 1957, for purpose of prospecting coal in the land specified in the Schedule to the notification included the entire land of village Sudamdih District Dhanbad. By another Notification dated 30/08/1961 issued under S. 7 ofthe Coal Bearing Areas (Acquisition and Development) Act, 1957 the central government declared its intention to acquire the lands measuring 778. 45 acres specified in Schedule A to the notification Sudamdih village was mentioned in the Schedule. Plot No. 370 of Sudamdih was expressly specified therein. By another Notification dated 16/12/1961 the central government declared under S. 9 ofthe Coal Bearing Areas (Acquisition and Development) Act, 1957 that the land measuring 778. 45 acres described in Schedule A and the rights to mine, quarry, bore, dig and search for win work and carry away minerals in the lands measuring 625. 73 acres described in Schedule B are acquired. The Schedule to the notification clearly stated that all rights in village Sudamdih were acquired and plot No. 370 was expressly specified in the Schedule to the notification. On the issue of the aforesaid notifications the lands specified therein vested in the central government. The central government by its order dated 27/01/1962 transferred the aforesaid lands including plot No. 370 situated in village Sudamdih to National Coal Development Corporation, a government undertaking. In 1975 the central government reorganised the management structure of the coal industry in the public sector and a central company, i. e. Coal India Limited, was constituted having Bharat Coking Coal Limited as one of its subsidiaries. Bharat Coking Coal Ltd. was incorporated for running and managing the Sudamdih and Monidih coal mines of National Development Corporation. Since then the Sudamdih coal mines and the land in dispute have been under the control and management of the Bharat Coking Coal Ltd. During the pendency of the appeal before this court proceedings were initiated against respondent 4 for the violation of interim orders of this court. In the contempt proceedings respondent 4 contended that plot No. 370 of village Sudamdih belonged to the State of Bihar and the appellants had no ownership rights therein. This court held that since plot No. 370 of Sudamdih has been acquired under S. 9 (1 ofthe Coal Bearing Areas (Acquisition and Development) Act, 1957 the appellant company was its owner, and it was idle to contend the contrary. We therefore hold that the appellant is the owner of plot No. 370 of village Sudamdih and the State government had no authority in law to make any arrangement or to settle any right with respondents for collecting slurry deposits from that plot No. 370 of Sudamdih.(24) IN view of the above discussion, we hold that the slurry which escapes from the appellants washeries is mineral and its regulation is within the exclusive jurisdiction of the central government. We further hold that in view of the Parliamentary declaration made by S. 2 of the Act and having regard to S. 18 of the Act and State government has no authority in law to make a settlement or grant any lease to any person for the collection of slurry deposits either from the river bed or other land. The impugned settlements made in favour of the respondents by the State government are illegal and the respondent-lessees have no right or title to collect the slurry deposits, therefore, they are restrained from lifting or collecting the same from the land in dispute.