BIHAR MINES LTD. versus UNION OF INDIA

Citation: [1967] 1 S.C.R. 707 · Decided: 03-10-1966 · Supreme Court of India · Bench: K. SUBBA RAO

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
BIHAR MINES LTD. 
v. 
UNION OF INDIA 
October 3, 1966 
[K. SuBBA RAO, C. J., M. HIDAYATULLAH, S. M. SIKRI, 
R. S. BACHAWAT AND RAGHUBAR DAYAL, JJ.] 
Bihar Land Reforms Act, 1950 (Act 30 of 1950), s. 10(1) & (2)-
Subsisting mining leases deemed after date of vesting to be leases by the 
State Government-Such leases whether 'existing mining leases as defin-
ed by Rule 2(c) of Mining Leases (Modification 
of 
Terms) 
Rules, 
1956--Control/er's power to modify terms and conditions of leases under 
the Mines and Minerals (Regulation and Development Act 1957) read 
with the 1956 Rules whether applies to such leases-Validity of 1951 Act 
and 1956 Rules. 
A lease of certain lands in Palganj estate in Bibar was granted by the 
Zamindar in 1928 for a period of 49 years. The lease was for the min-
ing of soap stone, kaoline etc. 
There were sub-leases 
in 1933, 1934, 
and 1954-tbe last being in favour of the appellants. 
Under the Bihar 
D 
Land Reforms Act, 1950 and the relevant notifications thereunder, the 
estate of Palganj and the rights of intermediaries and tenure-bolder. pass-
ed to the State of Bibar. Section 10( l) of the Reforms Act provided 
that mining leases subsisting immediately before the date of vesting were, 
as from that date to be deemed tb be leases by the State Government to 
the same lessees. The terms and conditions of such 
leases, according 
to s. 10(2) were to be the same as before except for the power of modi-
ficatron to be found in the Central Act for the time being in force. 
At 
E 
the time of vesting the Central Act in force was the Mines and Minerals 
(Regulation and Development) Act, 1948. The Mining Leases (Modifi-
cation of Terms) Rules, 1956 were framed under s. 7 of the 1948 Act. 
The latter Act was replaced by the Mines and Minerals (Regulation and 
Development) Act, 1957; however the 1956 Rules were continued under 
it. The 1956 Rules gave power to the Controller of Mines to modify 
'existing mining leases'; these according to r. 2(c) were leases granted 
F 
before October 25, 1949. No mining lease according to the 1957 Act 
could be for a period of more than 20 yean unless it was for the mining 
of coal. iron ore or bauxite. Since the head lease in the present case 
was granted in 1928 it had according to the Controller lasted more than 
20 years; by order dated July 1, 1961 he, therefore, terminated it. The 
appelhlnts went in revision to the Central Bo~rd of Revenue and failing 
there, came by Special Leave to this Court. The main 
contention on 
behalf of the appellants was that the lease of 1928 was succeeded by a 
G 
new statutory lease under s. 10(1) of the Bihar Act, and the new lease 
H 
- was not subject to modification 
by 
the Controller. 
Other contentions 
were that the 1957 Act was not 
protected by Act 31A(l)(e) of the 
Constitution, that the 1956 rules providin~ for premature termination of 
leases without compensation went against the terms of the 1948 Act and 
were therefore invalid; and that the period of 20 years for which the 
lease could last was to be reckoned from the date of commencement of 
the 1957 Act. 
HELD: Per Subba Rao C. J. and Sikri and Raghubar Dayal· JJ.-
Tbe head lease of 1928 subsisted immediately before the date of vest-
ing of Palganj estate in the State. Therefore the whole or that part of 
708 
SUPREME COURT REPORTS 
(1967] l S.C.R. 
the estate or tenure comprised in this lease was, with effect from the date 
A 
of vesting, lO be deemed to have been leased by the State Governmcm 
to the holder of the lease i.e. the first Jessee up to August II, 1977, the 
lease being for 49 years. 
This statutory lease held by the head lessee 
from the State Government under s. JO of the Bihar Land Reforms Act., 
1950 was a new lease granied 
after October 25, 1949. 
(713 C; 714 
E-F) 
The 1956 rules provided for the modification of the leases granted 
h 
before October 25, 1949. It followed that in pursuance of the provi· 
sions of s. JO the terms of the statutory lease 
could not be modified 
when the lease be held to be a new lease from the date of vesting. 
[713 BJ 
When the head lease could not be modified the sub-leases abo could 
not be modified. 
They too would be deemed to be new leases granted 
by the new lessee from the State Government, as the rights of the original 
C 
lessor wider the original lease had ceased on the vesting of the estate, 
and he is deemed to have got a new lease from the State. (714 F-0) 
[In view of the above finding t

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