TMI Blog1976 (8) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1948 (Act 53 of 1948) (hereinafter re- ferred to as 'the 1948 Act') and of the Mines and Minerals (Regulation and Development) Act, 1957 (Act 67 of 1957) (hereinafter referred to as 'the 1957 Act') which replaced the 1948 Act on June 1, 1958. The facts and circumstances leading to this appeal are: By an indenture of. lease dated July 31, 1927 (hereinafter referred to as the 'head lease'), Raja Bishambharnath Sahi (hereinafter referred to as the 'Raja') who was the sole proprietor of large tracts of land known as the Sonepura estate in Paragana Rohtas in the district of Shahbad in Bihar demised certain blocks of land situate in villages Jaintipur, Nimhath Deodand and Dhanwanti, District Shahbad together with quarries of lime stone (known as Chunhatta Lime Stone Quarries) lying thereunder for a period of 40 years commencing from 1st day of August, 1927, and ending on 31st day of July, 1967, with an option to continue for a further period of 25 years, in consideration of a 'salami and fine' of ₹ 8,200/- unto Karunaranjan Dutt and Jugal- chandra Dutt (hereinafter referred to as 'Dutts'). By the said indenture, the head lesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this lease shall be liable to be forfeited under an-order of a competent court besides any other relief hereunder and under the law then prevailing. On October 12, 1928, the head lessees i.e. Dutts execut- ed a sublease of the aforesaid blocks of land and quarries of lime stone for the residue of the period of the aforesaid indenture of lease dated July, 1927 except the last day thereof for a consideration of ₹ 5,000/in favour of the appellant. The appellant undertook to pay to Dutts the same royalty and rent as were payable by Dutts to the Raja during the period of the aforesaid head lease in respect of lime stone quarried (except for ballast or building pur- poses). In addition, the appellant undertook to pay to the head lessees during residue of the first 15 years of the said period of 40 years royalty of annas -/16/- (sixteen) for every 100 cubic feet of solid lime stone quarried, raised, got or used or taken out from the demised premises and for the remaining 25 years thereafter of the said period for each such quantity, royalty .of annas -/11/- (eleven). The sub-lease gave option to the appellant to make payment to the head lessor directly of royalties in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Govern- ment, if it so thinks fit, to issue, from time to time, a notification of the nature mentioned in sub-section (1) in respect of the intermediary interests situate in a part of the State specified in the notification and, on the publication of such notification, all intermediary interests situate in such part of the State shall have passed to and become vested in the State ....... On November 14, 1951, the estate of Sonepura belonging to the Raja passed to and became vested in the State of Bihar by virtue of notification No. 83 IR/ZAN dated November 6, 1951 issued by the Governor of Bihar in exercise of the power con- ferred on him by sub-section (1) of the above quoted section 3 of the B.L.R. Act. On January 1, 1956, the Governor of Bihar issued notification No. EVII-102/56-ILR reading as under :- No. EVII-IO2-56-ILR.: Whereas a proclama- tion announcing 'the .intention of the State Government to take over all the intermediary interest in the district of Shahbad Patna, Saran, Muzafferpur, Bhagal-Sonthal Paraganas, Ranchi, Singhbhum Manbhum and excluding Manbhum Sadar Sub-Division was published under notifica- tion No. 4381 LR dated the 18th August, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than once during any period of four years. of 1972. The amended section in so far as it is relevant for our purpose runs as follows :-- 9.(1 ) The holder of a mining lease granted before the commencement of this Act shall, notwith- standing anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or con- sumed by him or by his agent, manager employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the, Second Schedule in respect of that mineral. (2A) .......... (3) The Central Government may, by notifica- tion in the official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted paying directly to the State the said royalty at the rate of 24 paise per ton. The appellant also continued paying additional royalty at the rate of 17 paise per ton to the respondent in terms of the sub-lease dated October 12, 1928 but stopped doing so from July 1, 1958. The respondent thereupon brought a suit on July 10, 1961 being suit No. 1104 of 1961 on the original side of the High Court at Calcutta claiming a decree for (1) ₹ 25,181.27 as arrears of royalty from July 1, 1958, to August 7, 1959 the date immediately preceding the date on which the Controller enhanced the royalty payable to the State to 37 paise; (2) ₹ 32,223.64 as arrears of royalty at the rate of annas -/11/- (eleven) from August 8, 1959 to March 31, 1961; (3) ₹ 1,444.00 on account of deficit payment for the overdue period in respect of royalty for the quarters ending June 30, 1957, September 30, 1957, December 31, 1957 and June 30, 1958. It also claimed interest on the aforesaid amounts at the rate of 12 per cent per annum. The respondent based his claim on the ground that notwithstanding the issues of the aforesaid notification under section 3 of the B.L.R. Act, its interest as a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober 12, 1928, liable to pay royalty only at the rate of annas -/15/- (fifteen) per 100 cubic feet as provided in the lease dated July 31, 1927, and an additional royalty of annas '/11/(eleven) per 100 cubic feet aggregating ₹ 1/10/- per 100 cubic feet equal to 24 Naya Paise plus 17 Naya Paise per ton (calculating 100 cubic feet as equivalent to 4 tons) for the period commencing from August 1, 1942 to May 31, 1958 that the respondent being a holder of the mining lease within the meaning of section 9 of the 1957 Act was liable to pay royalty at the rate of 37 Naya Paise per ton in respect of the minerals removed from the said quarries from June 1, 1958, and since payment to the tune of ₹ 61,684.40 on that account upto March 31, 1961 had been made by the appellant as an agent of the respondent to safeguard its position and enjoyment of the leasehold property, the former was entitled to be reim- bursed to that extent. In conclusion, the appellant aimed to set off the aforesaid sum of ₹ 61,684.40 and subse- quent payments of royalty against the royalty that might be payable to the respondent under the sub-lease dated October 12, 1928, in respect of the minerals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has, as already stated, come up in appeal to this Court. Appearing in support of the appeal, Mr. Patel has ad- vanced two contentions. He has in the first instance invit- ed our attention to the definitions of 'intermediary', 'intermediary interest' 'lease', 'tenure' and 'tenure- holder' contained in clauses (jj), (jjj), (1), (q) and (r) respectively of section 2, as also sections 3, 3A, 4 and 9 of the B.L.R. Act and stressed that as the respondent was merely a 'tenure holder' and all his rights, title and interest as such extinguished alongwith the interest of the erstwhile proprietor of the suit land i.e. the Raja with the coming into force of Notification No. 83 IR/ZAN (supra) on November 14, 1951, and it was the appellant who being a sub-lessee stepped in as a direct lessee of the mine in question under the State, the respondent was not entitled to claim with effect from November 14, 1951, the additional royalty stipulated in the sub-lease dated October 12, 1928. He has further urged that assuming that the respondent enjoyed the status of a head lessee even then, its right, title and interest as such having become extinct a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the date of 'vesting' as a lease from the State Government to the holder of the said subsisting lease for the residue of the term of that lease and such holder acquires the right to retain .possession of the leasehold property for that peri- od. In other words, in place of every contractual lease which might have been subsisting immediately before the date of vesting of the estate or tenure, a statutory lease on practically identical terms and conditions comes into being. Thus the combined reading of section 4(a) and section 10 of the B.L.R. Act leaves no room for doubt that the interests of the head lessee were left unaffected by the aforesaid notifications to the extent indicated above. This view receives support from a catena of decisions of this Court where this position has been fully recognised and affirmed. (See Bihar Mines Ltd. v. Union of India([1967] 1 S.C.R. 707.) Chhatu Ram Horil Ram Private Ltd. v. State of Bihar Anr.( [1968] 2 S.C.R. 881 :A.I.R. 1969 S.C. 177.); M/s. Hindu- stan Steel Limited Rourkela v. Smt. Kalyani Banerjee Ors.( [1973] 3 S.C.R. 1 .) and State Of Bihar Anr. etc. v. Khas Karanpura Collieries Ltd.( [1977] 1 S.C.R. 157.). The in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased by the State from the date of vesting to the holder of the subsist- ing lease for the remainder of the term of the lease and the respondent became entitled to retain possession of the leasehold property. The first contention of Mr. Patel is, therefore, repelled. Mr. Patel has next contended that as the royalty payable to the lessor was enhanced under the provisions of the 1957 Act read with the Mining Leases (Modification of Terms) Rules, 1956, which continued in force by virtue of section 29 of the 1957 Act and the enhanced royalty was payable by the respondent who was the holder of the mining lease as envisaged by section 9 of the 1957 Act, the appellant was entitled to be reimbursed to the extent of ₹ 61,684.40 which was paid by him as an agent of the respondent. This contention has to be examined with reference to two periods viz. (i) from July 1, 1958 to August 7, 1959, and (ii) August 8, 1959 to March 31, 1961. It is admitted by the appellant that during the period intervening between the date when the 1957 Act came into force and August 8, 1959 when the Controller passed the aforesaid order enhancing .the royalty. payable to the State, ,it continued to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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