Biswanath Prasad Vs. Union of India
& Ors [1964] INSC 173 (14 August 1964)
14/08/1964 SIKRI, S.M.
SIKRI, S.M.
GAJENDRAGADKAR, P.B. (CJ) HIDAYATULLAH, M.
SHAH, J.C.
DAYAL, RAGHUBAR
CITATION: 1965 AIR 821 1965 SCR (1) 49
ACT:
Mines and Minerals (Regulation and
Development) Act, 1948 (Act 53 of 1948), s. 5-Acquisition-Notification-Mala
fide-if delay evidence of-opening of mines-Rule 39 if valid and authorised by
s. 17'Grane in s. 5 if connotes transfer of property--constitutional validity
of r. 39-If could be challenged by person not having sufficient interest Coal
Mines (Conservation and Safety), Act, 1952 (Act 12 of 1952), v. 17-Coal Mines
(Conservation and Safety) Rules, 1954, r. 39--Mineral Concession Rules, 1948,
rr. 37, 48--Constitution of India, Arts. 14, 19.
HEADNOTE:
By notifications under s. 4(1) of the Coal
Bearing Areas (Acquisition and Development) Act (20 of 1957), the Central
Government gave notice of its intention to prospect for coal in the colliery of
the petitioner. The petitioner did not file any objection to the proposed
acquisition under a. 8 of the Act (20 of 1957). In reply to the intimation by
the Government that the area in question appears to have been notified, the
petitioner asserted that he was not bound in law by the aforesaid
notifications. According to him, he started working the colliery immediately
after purchasing it in 1956. This was denied by the respondents and on this
issue the High Court found against the petitioner. Under s. 4(4) of the Act (20
of 1957) the Union Government was prohibited from acquiring "that portion
of land in which coal mining operations are actually being carried on in
conformity with the provisions of any enactment, rule, or order for the time
being in force". The respondents relying on the provision, however, said
further that even if it be assumed that the petitioner worked the mines, this
was not done in accordance with law. On this point also the High Court held
against the petitioner. Against this the petitioner argued that r. 39 of the Coal
Mines (Conservation and Safety) Rules, 1954, under which the Coal Board refused
permission to open the colliery was ultra vires as the Union Government could
not make this rule under s. 17 of the Act (12 of 1952) and it was this illegal
refusal to open the mines that resulted in the colliery not being worked at the
time of the notifications. the petitioner further contended that even if r. 39
was valid permission was refused mala fide, with the ulterior object of
avoiding the prohibition laid down in s. 4(4) of the Act (20 of 1957). The
respondents objected that the petitioner had acquired the lease in
contravention of the law and therefore had no right to allege that r. 39 of the
Coal Mines (Conservation and Safety) Rules was violative of Art. 19 of the
Constitution.
To defeat this objection the petitioner
raised the point that rr. 37 and 48 of the Mines & Minerals (Regulation and
Development) Rules were ultra vires the Mines & Minerals (Regulation and
Development) Act, 1948.
HELD : (i) The notifications were not
vitiated on account of any mala fides. That there was delay in disposing of the
petitioner's representations is evident but delay, by itself, is hardly
evidence of mala fide, specially as the Coal Board had long ago declined to
revise its earlier decision not to give permission to reopen the mines. [54C-E]
(ii)Rule 39 was not invalid and it was authorised by s. 17 of the Act (12of
1952) [55C-D].
50 Rule 39 is designed, inter alia, to secure
conservation of coal. If a mine has to be opened or reopened the Coal Board has
to consider whether it is necessary to do so and it must take into
consideration the requirements of the country for the particular grade at that
time. [55B-C] (iii)The word 'grant' in the context of s. 5 of the Act (53 of
1948), inter alia, connotes transfer of property and mining leases are
property. The Parliament, while using the word 'grant' in s. 13(1) of the Act
67 of 1957 in s. 13(2)(1) specially provided for rules being made regarding the
manner in which and the conditions subject to which a prospecting licence or a
mining lease might be transferred.
If these rules were intra vires, the result
was that the petitioner acquired the colliery in transgression of these rules.
Consequently he had not sufficient interest in the property to raise question
about the constitutional validity of r. 39 of the Coal Mines (Conservation and
Safety) Rules, 1954. [56E-G] Mason, Herring and Brooks v. Harris [1921] 1 K.B.
653 distinguished.
(iv)Under the circumstances, there has not
been any discrimination in violation of Art. 14 of the Constitution.
Demand for Grade IIIB Coal can easily be
different after the lapse of five years, and the Coal Board was entitled to
decide the lease of the other colliery on the facts existing in 1959 and 1963.
[57C-D]
ORIGINAL JURISDICTION.-Writ Petition No. 14
of 1964.
Petition under Art. 32 of the Constitution of
India for the enforcement of Fundamental Rights.
WITH
Civil Appeal No. 143 of 1964.
Appeal by special leave from the judgment and
order dated May 23, 1963, of the Patna High Court in M.J.C. No. 1069 of 1962.
C. B. Agarwala and K. K. Sinha, for the
petitioner (in W. P. No. 14/1964) and appellant (in C.A. No. 143/1964).
S. V. Gupte, Additional Solicitor-General and
B. R. G. K. Achar, for the respondents (in W.P. No. 14/1964 and C. A. No.
143/1964).
The Judgment of the Court was delivered by
Sikri J. There are two matters before us for disposal. One is an appeal by
special leave against the judgment of the Patna High Court, dismissing an
application filed by Biswanath Prasad under Art. 226 of the Constitution. The
other is a petition filed under Art. 32 of the Constitution.
In the petition under Art. 32, some points
have been raised which were not debated before the High Court and some documents
which were not produced before the High Court have been filed in this Court. In
the circumstances It seems convenient to proceed to dispose of the petition
first, but we will, where appropriate, indicate the finding and reasoning of
the High Court on a particular point. To decide the points raised 51 by Mr. C.
B. Agarwala, the learned counsel for the petitioner, it is necessary to state
the facts somewhat in detail, for, inter alia, he submits that the action of
the Union Government in acquiring the petitioner's mines was mala fide.
The petitioner, by deed of sale dated
November 29, 1956, purchased a colliery, called Dhobidih Colliery, for Rs.
20,000 from the Bengal Coal Co. Ltd.,
Calcutta. He held a certificate of approval granted to him under r. 6 of Mineral
Concession Rules, 1949. According to him, he started working the colliery
immediately. This is denied by the respondents. This is one of the issues
debated before the High Court, which found it against the petitioner. This
point is of crucial importance for the Union Government is prohibited by sub-s.
(4) of s. 4 of the Coal Bearing Areas (Acquisition and Development) Act (20 of
1957) from acquiring "that portion of land in which coal mining operations
are actually being carried on in conformity with the provisions of any
enactment, rule, or order for the time being in force." The respondents
relying on this provision however, say further that even if it be assumed that
the petitioner worked the mines, this was not done in accordance with law. On
this point also the High Court held against the petitioner.
After acquiring the colliery, the petitioner,
according to him, started working the mine in earnest. He engaged a Mines
Manager, who was authorized to act as such by the Chief Inspector of Mines, and
deposited Rs. 2,000 with the Assistant Electrical Engineer, Giridih, to secure
an electric connection. He exploited the Hill Seam and had even two shifts in
the Mine. He duly submitted returns. He even paid Sales Tax and excise on coal
raised, which in the annual return for the year ending December 31, 1958, he
claimed, amounted to 4200 tons, including colliery consumption and coal used
for making coke. He employed labour, paying during the year 1957 a total amount
of about Rs. 41,000 for 1,103 man day's work. In this connection we were
referred to an affidavit filed before the Calcutta High Court on behalf of the
Coal Board wherein it is stated the petitioner had "commenced mining
operations in contravention of r. 39(1) of the Coal Mines (Conservation and Safety)
Rules, 1954, and further, coal was being dispatched in contravention of r.
39(4) of the aforesaid Rules on the basis of an old grade given by the Coal
Commissioner prior to the closure of the colliery in the year 1948. The said
grade was, however, withdrawn in February 1958." From these facts it
emerges that the petitioner did put up a show of raising coal but all these
operations do not add up to 52 carrying on coal mining operations within the
meaning of sub-s. (4) of S. 4 of the Coal Bearing Areas (Acquisition and
Development) Act, 1957. At any rate, argues the respondents counsel, the coal
was raised contrary to law, and at the time of the acquisition by the
Government no coal mining operations were being carried on. To this the
petitioner's counsel replies that r. 39 of the Coal Mines (Conservation and
Safety Rules) 1954, under which the Coal Board refused permission to open the
colliery was ultra vires as the Union Government could not make this rule under
s. 17 of the Coal Mines (Conservation and Safety) Act, 1952 (12 of 1952), and
it was this illegal refusal to reopen the mines that resulted in the colliery
not being worked at the time of the Notification. The learned counsel for the
petitioner further says that even if r. 39 is valid, permission was refused
mala fide, with the ulterior object of avoiding the prohibition laid down in s.
4(4) of the Coal Bearing Areas (Acquisition and Development Act) 1957. Now.
what are the facts which are relevant to this
part of the case ? The Bengal Coal Company, from whom the petitioner had
acquired the colliery, stopped working the colliery in 1949.
'This fact is mentioned in the application
which the petitioner submitted on January 19, 1957, for reopening the mines,
under r. 39 of the Coal Mines (Conservation and Safety) Rules 1954. It is
further stated in the application that the reasons for closure by previous
owner are not known but it appears that due to non-availability of power and
transport the risings were very poor and eventually closed.
It follows from the statements in the
application that when the petitioner acquired the colliery it had been closed
for more than eight years. The explanation subsequently given by the petitioner
that this application was made through clerical mistake cannot be believed. On
October 10, 1957, after some correspondence, the petitioner was informed that
the Coal Board had not granted permission to reopen the colliery " as
production of more coal of the quality expected from the Seams Proposed to be
worked by you is not now required for the Giridih area" In spite of this
refusal, the petitioner carried on correspondence with the Regional Inspector
of Mines, Dhanbad Inspection Region, regarding the working plan of the
colliery. This correspondence cannot advance the petitioner's case in any
manner. On February 24, 1958, the Coal Board withdrew the Grade IIIB fixed for
the colliery with immediate effect. The petitioner was further requested not to
despatch any coal from the colliery henceforth. From the above recital it is
quite clear that if it is assumed that the petitioner worked the mines, he did
it contrary to r. 39 and, therefore, the rule if valid, the prohibition 53 in.
s. 4(4) of the Coal Bearing Areas (Acquisition and Development) Act does not
come into operation.
After this, the petitioner started
representing to the Coal Board: for cancelling its orders. By its letter dated
March 24, 1958, the Coal Board firmly reiterated its stand and warned the
petitioner that he had raised and dispatched coal in contravention of Coal
Mines Conservation and Safety Rules, 1954. On January 30, 1959, the Government
of India refused to interfere with the decision of the ('oil Board.
On July 20, 1959, the Board declined to
revise its decision.
But the petitioner was not disheartened. He
started representing again and for some reason, not apparent on the record, the
Coal Board started showing a receptive mind. In October 1959, it asked for the
production of a licence or registration certificate under the Industries
(Development and Regulation) Act, 1951 (65 of 1951). Some letters were
exchanged on this topic. Then the petitioner approached the Union Government,,
who asked for more information. In the reply, the petitioner stated that 'on
receipt of several letters from the concerned department the working of the
colliery was stopped from August 1, 1958'. Later, more information was asked
for and supplied to the Union Government. Ultimately, the petitioner was
informed that it was not necessary for him to have a licence under Act 65 of
195 1. From now on the petitioner was time and again told by the Coal Board
that the matter was under consideration, while the petitioner continued to
press his case. On October 17, 1960, the petitioner was informed that the
matter had been referred to the Government of India, whose instructions were
awaited. From now on the scene shifts to the Ministry of Steel, Mines and Fuel,
which kept on acknowledging letters ad-dressed by the petitioner. Enqui- ries
were made in April 1961 whether the colliery was unworked. On July 1, 1961, the
Central Government issued a Notification, No. S.O. 15 8 1, under sub-s. ( 1 )
of s. 4 of the Coal Bearing Areas (Acquisition and Development) Act, 1957,
giving notice of its intention to prospect for coal in the colliery of the
petitioner. Another Notification No.
S.O. 484, under s. 4(1) of the Act of 1957,
was issued on February 6, 1962, in respect of another area of 25.15 acres.
The petitioner did not file any objections to
the proposed.
acquisition under s. 8 of the Act. It was
only on November 23, 1961, that the petitioner was informed by the Government
that the area in question appears to have been notified under sub-s. (1) of s.
4 of the Act 20 of 1957. In reply to this intimation ' the petitioner asserted
that he was not bound in law by the aforesaid notification.
54 In para 32 of the petition, the petitioner
alleged mala fides thus:"that, thus it is absolutely clear, the whole
intent and purpose of the orders of the respondent No. 2 (i.e. the Coal Board)
and the notification issued by respondent No. 1 (i.e. the Union Government) and
the subsequent lingering of the matter on one plea or another were quite mala
fide." In para 21 it is stated that the respondents and their authorities
colluded and conspired against the petitioner with ulterior motive and
collateral reasons and paid no heed to the petitioner's representations."
These allegations are quite vague and are not sufficient to allege a case of
conspiracy between the Coal Board and the Union ,Government to deprive the
petitioner of his colliery.
Apart from this, the above recital of the
facts does not lend any support to any conspiracy existing between the Coal
Board and the Union Government. That there was delay in disposing of the
petitioner's representations is evident but delay, by itself, is hardly
evidence of mala fide, specially as the Coal Board had as long ago as July 1959
declined to revise its earlier decision not to give permission to reopen the
mines. There was a proceeding under s. 147, ,Criminal Procedure Code, between
the petitioner and the Super- intendent of Giridih Collieries, worked by
Respondent No. 3, the National Coal Development Corporation (Pvt.) Ltd., and
this litigation is also called in aid for showing mala fides. We are unable to
see how the fact, assuming it to be true, that the said Superintendent was on
inimical terms with the petitioner, shows mala fide on the part of the Union
Government. Consequently, we hold that the Notifications Nos. S.O. 1581 and
S.O. 484 are not vitiated on account of any mala fides.
This takes us to the question whether r. 39
of the Coal Mines ,Conservation and Safety Rules, 1954, is ultra vires.
The said rule 39 and S. 17 of -the Coal
Mine-, (Conservation and Safety) ,Act, 1952, are in the following terms :-
"Rule 39--opening and reopening of Coal Mines.
(1) No coal mine or seam shall be opened and
no coal mine or seam the working whereof has been tinued for a period exceeding
six months shall be reopened and no operation shall be commenced without the
prior permission in writing of the Board and except in accordance with such
directions as the Board may give." "S. 17(1)-The Central Government
may, by notification in the Official Gazette and subject to the condition 55 of
previous publication, make rules to carry out the purposes of this Act."
Section 17(2) gives various specific matters on which rules can be made but
none of these covers r. 39. But in spite of this we are of the opinion that the
impugned rule is valid.
The object of the Act is to provide for the
conservation of coal and make further provision for safety in coal mines.
Section 7 empowers the Central Government to
exercise such powers and take or cause to be taken all such measures as it may
deem necessary or proper or as may be prescribed. We consider that r. 39 is
designed, inter alia, to secure conservation of coal. If a mine has to be
opened or re- opened the Coal Board has to consider whether it is necessary to
do so. It must take into consideration the requirements of the country for the particular
grade at that time. If a particular grade of coal is not required, it would
conserve it for future use, if it is not allowed to be raised. In the result,
we hold that r. 39 is not invalid and it is authorized by s. 17 of the Act (12
of 1952).
The next point that arises out of the
pleadings is whether rr. 37 and 48 of the Mineral Concession Rules, 1949, are
ultra vires the Mines and Minerals (Regulation and Development) Act, 1948. This
point is raised by the petitioner in his counter-affidavit to defeat the
objection of the respondents that the petitioner had acquired the lease of the
colliery in contravention of the law and, therefore, has not any right to
allege that r. 39 of the Coal Mine,, Conservation and Safety Rules, 1954 is
violative of Art. 19 of the Constitution. The Mineral Concession Rules, 1949,
were made in exercise of the powers conferred by s. 5 of the Mines and Minerals
(Regulation and Development) Act, 1948. Section 5(1), before it was amended by
Act 67 of 1957, reads thus "5. Power to make rules as respects mining
leases:
(1) 'Me Central Government may, by
notification in the official gazette make rules for regulating the grant of
mining leases or for prohibiting the grant of such leases in respect of any
mineral or in any area." Rules 37 and 48 are in the following terms
"37. Transfer of leave-The lessee may, with the previous sanction of the
State Government and subject to the conditions specified in the first proviso
to rule 35 and in rule 38, transfer his lease or any right, title or interest
therein, to a person holding a certificate of approval on payment of a fee of
Rs. 100 to the State Government.
56 Provided that no mining lease or any
right, title or interest therein in respect of any mineral specified in
Schedule IV shall be so transferred except with the previous approval of the
Central Government." "48. Transfer of assignment-No prospecting
licence or mining lease to which the provisions of this Chapter shall apply or
any right, title or interest in such license or lease shall be transferred
except to a person holding a certificate of approval from the State Government
having jurisdiction over the land in respect of which such concession is
granted.
Provided that no prospecting license or
mining lease or any right, title or interest in such license or lease in
respect of any mineral specified in Schedule IV shall be transferred except
with the previous approval of the Central Government." These rules
prohibit the transfer of a lease of a coal mine except With the previous
approval of the Central Government.
It is argued on behalf of the petitioner that
these rules do not regulate the grant of a mining lease for the word 'grant'
does not include transfer or assignment of a lease.
It is true that in a particular context, as
existed in the case of Mason, Herring and Brooks v. Harris(1), the word 'grant'
may not include an assignment. But we are not satisfied that the word 'grant'
in the context of S. 5 has this narrow meaning. The word 'grant', inter alia,
connotes transfer of property and mining leases are property.
Further, mining leases are usually of long
duration and it could not have been the intention not to regulate assignments
of such leases. We are fortified in this Conclusion by the fact that
Parliament, while using the word 'grant' in s. 13 (1) of Act 67 of 1957, in s.
13 (2) (1) specifically provides for rules being made regarding the manner in
Which and the conditions subject to which a prospecting licence or a mining
lease may be transferred.
If these rules are intra vires, the result is
that the petitioner acquired the colliery in transgression of these rules.
Consequently, he has not sufficient interest in the property to raise questions
about the constitutional validity of r. 39 of the Coal Mines Conservation and
Safety Rules, 1954.
One point urged on behalf of the petitioner
now remains, and that is the plea of discrimination. The plea is put in the
following terms, in para 31 of his petition:
(1) [1921] 1 K.B. 653.
57 .lm15 "That although the respondent No.
2 refused permission to the petitioner to open the colliery and withdrew the
grade on the plea that no more of the quality was required from the Giridih
area, it granted permission on June 6, 1959, for reopening of Kabari Bad
Colliery in the same area of Karhabaree for raising Grade IIIB coal which was
lying unworked for the last about 10 years although the colliery lies in the
midst of collieries being worked by respondent No. 3 due to which the latter
had to allow them to use its (N.C.D.C.'s) own road in the area." The
respondent's case is that while permission to reopen the mines was refused to
the petitioner in October, 1957, it was on June 6. 1959, that the Kabari Bad
Colliery was given permission. And more important is the allegation that the
grade was fixed for this colliery as IIIB on March 30, 1963, i.e. five years after this grade was withdrawn from the petitioner. Demand for Grade IIIB
coal can easily be different after the lapse of five years, and the Coal Board
was entitled to decide the case of Kabari Bad Colliery on the facts existing in
1959 and 1963. Under the circumstances, we are not satisfied that there has
been any discrimination in violation of Art. 14 of the Constitution.
In view of our findings above, we dismiss the
petition, but in the circumstances of the case, we order that the parties will
bear their own costs.
No other point arises in the appeal and we
dismiss the appeal with no order as to costs.
Appeal dismissed.
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