TMI Blog1980 (5) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1977 are typical of cases in which the petitioners claim to be lessees of composite mines containing alternate seems of coal and fireclay. Most of the facts are undisputed and only a few of them are in controversy. In writ petitions 270 and 271 of 1977, petitioner No. 1 claims to be the sole proprietor of 'S.D. Coal Company' which is engaged in coal business and coal mining operations. Petitioner No. 2 is said to be the agent of the company. Both the surface and underground rights in Mouza Bundu in the District of Hazaribagh, Bihar, previously belonged to the Raja of Ramgarh from whom or whose successors-in-interest, the South Karanpura Coal Co. Ltd. appears to have obtained a lease of 242 Bighas of coal bearing lands in Mouza Bundu, called the 'Bundu Colliery'. After the enactment of the Bihar Land Reforms Act 30 of 1950, all rights of tenure-holders landlords and Zamindars, including the rights in mines and minerals, vested in the State of Bihar but, by virtue of Section 10 of that Act, subsisting leases of mines and minerals in any estate or tenure became leases under the State Government. It is alleged that on 12th June, 1975 the South Karanpura Coal Co. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment to consider the petitioners application for the grant of a mining lease in respect of fireclay. The dispute relating to the petitioner's application for a coal mining lease was brought to the Supreme Court, as a result of which the Central Government on April 1, 1972 directed the State Government to grant a coal mining lease to the petitioner. On October 17, 1973 a formal lease was executed by the State of Bihar in favour of the petitioner in respect of both coal and fireclay. The lease was registered on October 18. According to the petitioner, the Hesalong Colliery in respect of which he holds the mining lease for coal and fireclay is situated in an interior area of the hilly portion of the District of Hazaribagh which has its own peculiar nature, trait and character. The reserves of coal in the area are said to be in isolated small pockets and are not sufficient for scientific or economical development in a co-ordinated and integrated manner. The coal is ungraded and is not required to be transported by rail. On the composite nature of the mine, the petitioner has made a specific averment in paragraph 6 of his writ petition to the following effect : The coal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interveners. Before examining the contentions advanced before us by the various learned Counsel, it will be useful to trace briefly the history of laws bearing on the working of mines and exploitation of minerals, the taking over of management and the nationalisation of mines and finally the termination of certain leases under the impugned Act. According to India 1976 (Publications Division, Ministry of Information and Broadcasting, Government of India), coal mining was first started at Raniganj, West Bengal, in 1774. Coal is an important mineral as a source of energy and in India it constitutes a prime source of energy. On the attainment of independence, the importance of coal to industrial development was realised by the Planners and the problems of the coal industry were identified by the Planning Commission in its report on the First Five Year Plan. The Fifth Plan provided for a production target of 13.5 million tonnes of coal by 1978-79, which amounted to an increase of 5.7 million tonnes from the level of production of 7.79 million tonnes at the end of the Fourth Five Year Plan- In 1950, after coal mining was stepped up, the production was 32 million tonnes. In 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or for the prosecution of war. Entry 52, List I, enables Parliament to acquire legislative power in respect of Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public, interest . The Industries (Development and Regulation) Act, 65 of 1951,. which came into force on May 8, 1952 contains a declaration in Section 2 that it was expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. Item 2(1) of the First Schedule comprises coal, lignite, coke and their derivatives' under the heading 'Fuels' The Act provides for the establishment of a Central Advisory Council and Development Councils, registration and licensing of industrial undertakings, the assumption of management or control of industrial undertakings by the Central Government control of supply, distribution and price of certain Articles, etc. The Mines Act, 35 of 1952, which came into; force on July 1, 1952, was passed by the Parliament in order to amend and consolidate the law relating to the regulation of labour and safety in mines. That Act was evidently passed in the exercise of power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions were deemed to have come into force on May 1, 1972. Section 3(c) defines coking coal mine to mean-a coal mine in which there exists one or more seams of coking coal, whether exclusively or in addition to any seam of other coal. By Section 4(1) the right, title and interest of the owners in relation to the coking coal mines specified in the First Schedule shall stand transferred to, and shall vest absolutely in, the Central Government, free from all incumbrances. By Section 4(2), after the appointed day, that is May 1, 1972 if any other coal mine was found to contain coking coal the provisions of the Coking Coal Mines (Emergency Provisions) Act, 1971 were to apply to such mine until it was nationalised by an appropriate legislation. By Section 6(1), the Central Government becomes the lessee of the State Government where the rights of the owner under any mining lease granted in relation to a coking coal mine by the State Government or any other person, vest in the Central Government Under Section 4. Section 7(1) empowers the Central Government to direct that the right, title and interest of the owners in relation to coking coal mines or coke oven plants shall vest in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the Schedule. All contracts providing for the management of any coal mine made before the appointed day between the owner of the mine and any person in charge of the mine and any person in charge of the management thereof are to be deemed to have been terminated on the appointed day, Under Section 4, Section 6(1) empowers the Central Government to appoint Custodians for the purpose of taking over of the management of the mines. Section 7(1) provides that every owner of a coal mine shall be given by the Central Government an amount in cash for the vesting in it Under Section 3, of the management of such mine. Section 18(1)(a) excludes from the operation of the Act any coal mine owned, managed or controlled by the Central Government, or by a Government Company or by a corporation which is owned, managed or controlled by the Government. Clause (b) of Section 18(1) also excludes from the operation of the Act a coal mine owned by or managed by a company engaged in the production of iron and steel. The Coal Mines (Nationalisation) Act, 26 of 1973, was given retrospective operation with effect from May 1, 1973 except Sections 30 and 31 which came into force at once. This Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, instead of continuing to vest in the Central Government, vest in the Government company. Such company, Under Section 5(2), is to be deemed to have become the lessee of the coal mine as if the mining lease had been granted to it. By Section 6(1), the property which vests in the Central Government or in a Government company is freed and discharged from all obligations and incumbrances affecting it. The mortgagees and other holders of incumbrances are required by Section 6(2) to give intimation thereof to the Commissioner within the prescribed time. Section 7(1) provides that the Central Government or the Government company shall not be liable to discharge any liability of the owner, agent, manager or managing contractor of a coal mine in respect of any period prior to the appointed day. Section 8 requires that the owner of every coal mine or group of coal mines specified in the second column of the Schedule stiall be given by the Central Government in cash and in the manner specified in Chapter VI, for the vesting in it Under Section 3 of the right, title and interest of the owner, an amount equal to the amount specified against it in the corresponding entry in the fifth colu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of reserves in regard to quality and quantity of coal which could be made available after detailed exploration work was undertaken and results analysed. No scientific exploitation of these deposits could be undertaken in the nationalised sector without these details. It was, therefore, considered that it would not be appropriate either to nationalise these unauthorisedly worked mines after taking them over under the Coal Mines (Taking Over of Management) Act, 1973 or to get the concerned mining leases prematurely terminated and regranted to Government Companies under the Mining and Minerals (Regulation and Development) Act, 1957. In view of the policy followed by the Central Government that the Coal Industry is to be in the nationalised sector, it was decided that the Coal Mines Nationalisation Act, 1973 should be enacted to provide for termination of all privately held coal leases except those held by privately owned steel companies, so that it may be possible for the Central Government, Government company or Corporation to take mining leases where necessary, after the necessary exploration has been made as to the extent of the deposits of coal, etc. Sections 2 and 3 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al produced by the sub-lessee will not be required to be transported by rail. By Sub-section 4 of Section 3, where a mining lease stands terminated under Sub-section 3, it shall be lawful for the Central Government or a Government company or corporation owned or controlled by the Central Government to obtain a prospecting licence or mining lease in respect of the whole or part of the land covered by the mining lease which stands terminated Section 4 of the Amendment Act introduces an additional provision in Section 30 of the Principal Act by providing that any person who engages, or causes any other person to be engaged, in winning or mining coal from the whole or part of any land in respect of which no valid prospecting licence or mining lease or sub-lease is in force, shall be punishable With imprisonment for a term which may extend to two years and also with fine which may extend to ten thousand rupees. Section 5 of the Nationalisation Amendment Act repeals the Coal Mines (Nationalisation) Amendment Ordinance, 1976. As stated at the beginning of this Judgment, we are concerned in these writ petitions to determine the validity of the Coal Mines Nationalisation (Amendment) Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indeed it destroys all other contracts and all securities for moneys lent without even so much as making a provision for priorities for the payment of debts Since the Nationalisation Amendment Act terminates all leases, it is a complete negation of the integrated scheme of taking over the management of mines, acquisition of the rights of lease-holders and the running of the mines. (b) The word 'Regulation' in Entry 54 does' not include 'Prohibition'. 'Regulation' should not also be confused with the expression 'Restrictions' occurring in Article 19(2) to (6) of the Constitution. In the very nature of things, there cannot be a power to prohibit 'the regulation and development of mines and minerals'. Section 3(4) inserted by the Nationalisation Amendment Act imposes no obligation on the Central Government or and other authority to obtain a mining lease and work the mines, the leases in respect of Which stands terminated under the Act. The words it shall be lawful for the Central. Government to obtain a lease are Words of discretionary power which create no obligation. They only enable the Central Government to obtain a lease, making so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to run the mines. (e) The Nationalisation Amendment Act runs directly counter to the whole policy of the Coal Mines (Nationalisation) Act of 1973, to acquire and run the mines. The Parent Act becomes a dead letter in regard to several of its provisions as a result of the amendment Act It only adopts a colourable device to amend the Nationalisation Act while completely negativing it in fact. The Act therefore lacks legislative competence and is, in the sense indicated, a colourable piece of legislation. (f) Article 31(A)(1)(e) only lifts a restriction on the legislative competence in so far as violation of fundamental rights is concerned. The most benign motive cannot make a law valid if the legislative competence is lacking. In support of his submission that the provisions of the Nationalisation Amendment Act are not conceived in public interest and therefore they transgress the limitations of Entry 54, List I, learned Counsel relies on the circumstance that whereas the Coal Mines Management Act and the Coal Mines Nationalisation Act of 1973 contain elaborate preambles, the Amendment Act contains no preamble setting out the mischief to be remedied or the benefit to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Attorney-General for Ontario v. Attorney-General for Canada [1896] A.C. 348, 363 in which it was held that 'regulation' did not include 'prohibition', Gwyer, C.J. observed that he saw no reason to differ from the view expressed in those cases. The central theme of these diverse points is only one : that the laws made in the exercise of power conferred by Entry 54, List I, must stand the test of public interest since the very reason for the Parliament acquiring power under that Entry is that it is in the public interest that the regulation of mines and mineral development should be under the control of the Union. The contention is that since the Nationalisation Amendment Act does not impose upon the Government the duty to run the mines which are taken over or even to carry out prospecting and investigation but simply provides for the termination of mining leases, the Act is not in public interest. What is in public interest is the regulation and development of coal mines, not total prohibition of their working. On a careful consideration of this argument which was made plausible in its presentation, we see no substance in it. The. learned Attorney General and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er coal mine comes to the knowledge of the Central Government, the provisions of the Coal Mines1 (Taking Over of Management) Act, 1973, shall until that mine is nationalised by an appropriate legislation, apply to such mine. By Section 4, the Central Government became the lessee of the scheduled coal mines while, Section 5 empowers it to transfer its leasehold rights to a Government company. Chapter II of the Coal Mines (Nationalisation Act deals with acquisition of the rights of owners of coal mines, Chapter III with payment of amounts to owners of coal mines, Chapter IV with management of coal mines, Chapter V lays down provisions relating to employees of coal mines, Chapter VI contains provisions governing the payments of amounts to be made by the Commissioner of Payments and the last Chapter, Chapter VII, contains miscellaneous provisions. We have already set out the provisions of the Nationalisation Amendment Act in extenso, a little before enumerating the various points made out by Shri Seervai during the course of his argument It will now be enough to say by way of a summing-up of the provisions of the Nationalisation Amendment Act that : (1) by Section 3(3)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal notes to the sections of a statute and the titles of its chapters cannot take away the effect of the provisions contained in the Act so as to render those provisions legislatively incompetent, if they are otherwise within the competence of the legislature to enact. One must principally have regard to the object of an Act in order to find out whether the exercise of the legislative power is purposive, unless, of course, the provisions of the Act show that the avowed or intended object is a mere pretence for covering a veiled transgression committed by the legislature upon its own powers. Whether a particular object can be successfully achieved by an Act, is largely a matter of legislative policy. The Nationalisation Amendment Act needs no preamble, especially when it is backed up by a statement of objects and reasons. Generally, an amendment Act is passed in order to advance the purpose of the parent Act as reflected in the preamble to that Act. Acquisition of coal mines, be it remembered, is not an end in itself but is only a means to an end. The fundamental object of the Nationalisation Act as also of the Nationalisation Amendment Act is to bring into existence a state of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is true that the Entry is purposive, since the exercise of the power under Entry 54 has to be guided and governed by public interest. But neither the power to regulate mines nor the power to ensure mineral development postulates that no sooner is a mining lease terminated by the force of the statute, than the Central Government must begin to work the mine of which the lease is terminated. It is possible that after the Nationalisation Amendment Act came into force, there was a hiatus between the termination of existing leases and the granting of fresh ones. But, the Nationalisation Amendment Act does not provide that any kind or type of mine shall not be developed or worked. Conservation, prospecting and investigation, developmental steps and finally scientific exploitation of the mines and minerals is the process envisaged by the Nationalisation Amendment Act. It is undeniable that conservation of minerals, which is brought about by the termination of existing leases and sub-leases, is vital for the development of mines. A phased and graded programme of conservation is in the ultimate analysis one of the most satisfactory and effective means for the regulation of mines and the deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lok Sapha on May 17, 1976, the Minister of Energy said that : For proper scientific working of coal mines, you have to have the geological data; you have to have, mine plans; you have to know the size of the coal reserve, the quantity of coal that can be mined; the quality of coal etc. For this, the detailed exploration has to be undertaken. It is only after all this is done that the experts can decide whether it will be economically viable and technically feasible-technical feasibility comes first and then economic viability-to mine the coal in that particular area, No scientific exploration of coal is possible from these areas until all the facts are known, until investigation is done. The nationalised sector cannot step in unless all this information is gathered. (Lok Sabha Debates, 5th series, volume 61, May 17, 1976, columns 91-92.) Measures taken for judicious preservation and distribution of natural resources may involve restrictions on their use and even prohibition, upto a degree, of the unplanned working of the repositories of such resources. We may in this connection refer usefully to a passage at page 383 of the First Five Year Plan : Though a mining industry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power to frame by-laws but even then, the privy Council qualified the above statement of law by adding the clause, in the absence of an express power of prohibition . In support of his submission that under the Nationalisation Amendment Act there is no obligation on any person or authority to run a mine, Shri Seervai relies on a passage in Creep on Statute Law, 6th edition, page 284, to the following effect: Statutes passed for the purpose of enabling something to be done age usually expressed in permissible language, that is to say, it is enacted that 'it shall be lawful', etc. or that 'such and such a thing may be done', prima facie, these words import a discretion, and they must be construed as discretionary unless there be anything in the subject-matter to which they are applied, or in any either part of the statute, to show that they are meant to toe imperative. But the very passage, after enunciating this principle, refers to a decision in Julius v. Bishop of Oxford [1880] 5 Appeal Cases 214, 222 in which Lord Cairns said that though the words 'it shall be lawful' are words making that legal and possible which there would otherwise be no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Nationalisation Amendment Act. The argument is that leases of composite mines in which there are alternate seams of coal and fireclay do not fall within the scope of these Acts. The pleadings in this behalf are full and complete in Writ Petition No. 257 of 1977 argued by Shri Seervai and they are tolerably adequate in a few other petitions. It is expressly averred and not effectively traversed in Writ Petition 257 of 1977 that: The coal and fireclay deposits in the said area are so mixed up that one cannot work either for extraction of coal or for extraction of fireclay without disturbing each of the said two minerals. The deposits are such that at one layer there is coal, the next layer is fireclay, the other layer is coal, the next layer is again fireclay and so on. Nirode Baran Banerjee, who is the petitioner in that Writ Petition, holds a composite lease dated October 17, 1973 for mining coal as well as fireclay. It is urged by the learned Counsel that the Nationalisation Amendment Act terminates mining leases in respect of coal only and that the law terminating leases for mining coal cannot apply to a mine which contains not only coal but fireclay alp. The totali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of that definition, it makes no difference whether the mine has seams of fireclay also. The Attorney General says further that the definition of 'coking coal mine' in Section 3(c) of Act 36 of 1972 contains words of surplusage which ought rather to be ignored than be allowed to determine the scope of the definition contained in Section 2(b) of Act 26 of 1973. The contention, in other words, is that a coal mine is a mine in which there is at least one seam of coal, no matter whether there are seams therein of fireclay or any other mineral. The learned Solicitor General contends that the authority of Law extends to whatever is the necessary consequence of that which is authorised. In other words, authority to do a thing necessarily includes the authority to do all other things which are necessary for the doing of that which is authorised. If law authorises the termination of coal mining leases, it must be taken to authorise whatever is necessarily incidental to and consequential upon it. Therefore, composite leases cannot be excepted from the provisions of an Act which terminates coal mining leases. Section 3(3)(a) introduced by the Nationalisation Amendment Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided to nationalise coal mines on payment of amounts specified in the Schedules to the Nationalisation Acts of 1972 and 1973. Besides, even when something apart from coking coal mines was acquired, namely, 'coke oven plants', provision was separately made in Section 11 of the Nationalisation Act of 1972, read with the 2nd Schedule, for payment of amounts to owners of coke oven plants. Thus, whatever was intended to be acquired was paid for. This scheme is prima facie inconsistent with the Parliament intending to acquire lease-hold rights in other minerals like fireclay, without the payment of any amount. Coupled with this is the unambiguous wording of Section 3(3)(b) and Section 3(3)(c) of the Nationalisation Act of 1973, which were introduced therein by Section 3 of the Nationalisation Amendment Act. Section 3(3)(b) says that excepting the mining leases and sub-leases granted before the commencement of the Act in favour of or by certain bodies or authorities, all other mining leases and sub-leases in force before such commencement, shall in so far as they relate to the winning or mining of coal stand terminated. (emphasis supplied) Section 3(3)(c) provides that : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government free from all incumbrances on the appointed day. The same position obtained Under Section 5 of that Act in regard to coke oven plants specified in the Second Schedule. But in so far as coal mines are concerned, we have, willy-nilly, to proceed on the basis that by reason of the definition of coal mine contained in Section 2(b) of the Act of 1973, and the definition of coking coal mine in Section 3(c) of the Act of 1972 which presents a striking contrast to the definition in Section 2(b), composite coal mines, that is to say, coal mines in which there are seams of coal and fireclay (we are only concerned with fireclay in these petition), do not fall within the scope of the definition of 'coal mine' in Section 2(b) of the Act of 1973. To that extent Shri Seervai's contention must succeed. But what then is the sequitur? Can the lessees of composite mines (like the petitioners in Writ Petitions Nos. 257, 220, 111, 600, 1130-1134, 352, 221 and 178 of 1977) who hold composite mining leases for winning coal and fireclay, continue their mining operations unabated despite the provisions of the Nationalisation Amendment Act? We think not. It is one thing to say tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2(b) of the Nationalisation Act of 1973. The answer has to be in the negative on the basis of the very averments made by the petitioners in their Writ Petitions. For example, the petitioner in Writ Petition No. 257 of 1957 has stated in his petition, more particularly in paragraph 5 thereof that the seams of coal and fireclay are so situated in the mine of which he is a lessee, that it is not possible to mine fireclay without mining coal. This position was not only admitted but reiterated by Shri Seervai, both during the course of his oral argument and in his written brief. The conclusion is therefore inevitable that the lessees of composite mines will, for all practical purposes, have to nurse their deeds of lease without being able to exercise any of the rights flowing from them. On their own showing, they will be acting at their peril if they attempt to win fireclay. if they cannot win fireclay without winning coal, they cannot win fireclay either, even if they hold composite leases under which they are entitled to win coal and fireclay. This position fortifies the argument of the learned Solicitor General that though the Parliament provided for the payment of amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lisation Amendment Act affects in substance, two kinds of transfers : the transfer of the lease-hold interests of the lessees in favour of the lessor, namely the State; and the transfer of the mining business of the lessees in favour of the Central Government. Since these transfers amount to acquisition within the meaning of Article 31(2), the Act is open to challenge under Articles 14, 19(1)(g) and 31 of the Constitution. (2) The Nationalisation Amendment Act is open to challenge under Article 14 because lessees who fall within that Act are patently discriminated against in comparison with lessees of other mines, both coking and non-coking, who were paid compensation when their property was taken over, first for management under the Management Acts and then under the Nationalisation Acts. (3) The Nationalisation Amendment Act is open to challenge under Article 19(1)(g) because the prohibition against lessees from carrying on their business and the transfer of their business, in substance, to the Central Government or a Company is an unreasonable restriction on the right of the lessees to hold their lease-hold property and to carry on their business of mining. (4) The Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability. In the very nature of things, the list of mines in the Schedule could not be exhaustive because there were and perhaps even now there are, unauthorised mines worked by persons who did not possess the semblance of a title or right to do mining business. Persons falling within that category cannot cite the Constitution as their charter to continue to indulge in unauthorised mining which is unscientific, unsystematic and detrimental to the national interests by reason of its tendency to destroy the reserve of natural resources. But alongside these persons, there could conceivably be mine operators who may have been doing their business lawfully but who were not easily or readily identifiable. Section 3(2) of the Nationalisation Act, 1973 made provision for taking over the management of such mines by declaring for the removal of doubts that if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, the provisions of the Coal Mines (Taking Over of Management) Act, 1973, shall, until that mine is nationalised by an appropriate legislation, apply to such mine. Owners of mines whose mines were not included in the Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itle to the mines. The claims of lessees, holding or allegedly holding under such owners, would be as tenuous as the title of their putative lessOrs. The Nationalisation Amendment Act by Section 3(3)(b) undoubtedly terminates all existing leases and sub-leases except those already granted in favour of persons referred to in Clauses (i) to (iii) of Section 3 (3)(a). Similarly, Section 3 (3) (a) imposes an embargo on all future coal mining operations except in regard to the persons mentioned in Clauses (i) to (iii). But the generality of leases which are alleged to have remained outstanding despite the coming into force of the Management Act and the Nationalisation Act, were mostly precarious, whose holders could at best present the familiar alibi that the origin of their rights or of those from whom they derived title was lost in antiquity. Neither in law, nor i'n equity and justice, nor under the Constitution can these lessees be heard to complain of the termination of their lease-hold rights without the payment of any amount. The provision contained in Section 3(3)(b) of the Nationalisation Amendment Act was made ex majore cautela so as not to leave any lease of a coal mine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature resorted to the subterfuge of acquiring the raining business of the surviving lessees and sub-lessees by the device of terminating their leases and sub-leases. The legislative history leading to the termination of coal-mining leases points to one conclusion only that, by and large, every lawful interest which was acquired was paid for; the extinguishment of the interest which survived or which is alleged to have survived the passing of the Management Act and the Nationalisation Act was provided for merely in order to ensure that no loophole was left in the implementation of the scheme envisaged by those Acts. This will provide a short answer to Shri Sen's argument that persons whose leases and sub-leases are terminated without payment 0 any amount are discriminated against in comparison, with other lessees who were paid amounts when their property was taken over. The answer is that persons dealt with by Section 3(3)(b) of the Nationalisation Amendment Act are differently situated from those who were dealt with by the two earlier Acts. No violation of Article 14 is therefore involved. Likewise, we see no substance in the contention that no, public purpose is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of Article 31A, if all the rights in a property are extinguished the result would be nothing else than acquisition, because no property can remain in suspense without the rights therein being vested in some one or the other. These observations made by the learned Judge are not contrary to anything contained in the majority Judgment delivered by Sikri, J., and naturally therefore, great reliance is placed upon them by the petitioners. Even greater sustenance is drawn by the petitioners, from the judgment of a 7-Judge Bench of this Court in Madan Mohan Pathak v. Union of India and Ors. . In that case, a settlement which the Life Insurance Corporation had arrived at with its employees was substantially set at naught by the Life Insurance Corporation (Modification of Settlement) Act, 1976. It was held by this Court that the Act was violative of Article 31(2) since it did not provide for payment of any amount for the compulsory acquisition of the debts owed by the Life Insurance Corporation to its employees; that the direct effect of the impugned Act, was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lisation Amendment Act merely extinguishes the rights of the lessees and the sub-lessees. It does not provide for the acquisition of those rights, directly or indirectly, by the State. Article 31(2A) will therefore come into play, by which, Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property. The position in Madan Mohan Pathak (supra) was entirely different because the direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life Insurance Corporation; since the L.I.C. is a Corporation owned by the State, the impugned Act was held to be a law providing for compulsory acquisition of these debts by the State within the meaning of Clause (2A) of Article 31. Shri Sen's argument on the question of acquisition of the rights of lessees and sub-lessees by the State therefore fails. It follows that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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