EAST INDIA COAL COMPANY LIMITED versus EAST BULLIAREE KENDWADIH COLLIERY CO. P. LIMITED AND OTHERS

Citation: [1987] 2 S.C.R. 484 · Decided: 03-03-1987 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Dismissed

Judgment (excerpt)

A 
EAST INDIA COAL COMPANY LIMITED 
v. 
EAST BULLIAREE KENDWADIH COLLIERY CO. 
P. LIMITED AND OTHERS 
B 
MARCH 3, 1987 
[O. CHINNAPPA REDDY & V. KHALID, JJ.] 
Coking Coal Mines (Nationalisation) Act, 1972: Sections 3, 4, 5, 
_. 
12A, 23 & 24-'0wner'-Who is-Compensation-Claim for--Appor-
c tionment of share-Guidelines for apportionment indicated. 
·~ • 
Respondent Nos. 1 and 2 were carrying on bnslness as raising 
contractors and selling agents of Col<lng Coal of working coal mines. 
Pursnant to an agreement with the appellant-company appointing them 
~· 
as contradors to raise and sell coal and manufacture hard coke In 
D respect of the unworked mines, they installed valuable machinery, 
utensils and coke ovens al a heavy cost. 
On the nationalisation of the coal mines by the Coking Coal Mines 
(Nationalisation) Act, 1972 all the mines vested In the Government. 
Respondent Nos. 1 and 2 filed a claim under s.26 of the Act before the 
E 4th respondent, the Commissioner of Payment, the statutory authority 
} 
constituted under the Act and also moved the High Court by way of a 
writ petition contending that they were also owners of some of the mines 
in dispute and were entitled to their shares in the compensation and 
k 
prayed for a direction that they be paid compensation at the market 
value for machinery, plant, equipment, building, stores etc. A Division 
F 
Bench of the High Court allowed the writ petition and hdd that respon-
?--
dent Nos. 1 and 2 were owners under the Act and directed respondent 
No. 4 to proceed with the claim according to law. 
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Dismissing the appeal by the appellant, this Court, 
G 
HELD: 1. A combined reading of ss.4 and S of the Act makes it 
abundantly clear that the right, title, Interest of the owners in relation 
to the mines and the coke oven plants prescribed in the First Schedule 
and the Second Schedule vests in the Central Government free from all 
encumbrances on the appointed day. [49IH; 492A] 
H 
2.1. The term 'owner' has been defined in section 3(a). It is clear 
484 
EAST INDIA COAL. COMP. v. E.B.K.C.C. 
485 
from the def"mition that it takes within its ambit, occupier of the mine or A 
1 
any part thereof. The definition of the word 'owner' clearly indicates 
that there may he more than one 'owner' within the meaning of s.3(n) in 
relation to a mine. Each or them would he entitled to a portion or the 
amount shown in column 5 of the First Schedule. Raising contractors 
will also come within the ambit or the expression 'owner' in the Act. 
Therefore, they are also entitled to pro-rata distribution of the compen· B 
~ 
sation deposited. [497G·H] 
In the instant case, it cannot he disputed that respondent Nos. 1 
c 
~· . and 2 admittedly a raising contractors, were in occupation or at least 
part of the mines for their operation and thus an occupier within the 
definition. They do ·not come within the exclusion clause in the defini· c 
tion section. Therefore, respondent Nos. 1and2 are 'owners' within the 
~ definition of section 3(n) of the Act. [490C·D] 
Industrial Supplies Private Limited v. Union of India, [1980] 4 
sec 341, relied upon. 
D 
2.2. Sections 20(1) and 21(1) to (5) of the Act occurring in Chapter 
VI of the Act have deliberately avoided the expression 'the owners in 
the First Schedule' so as to achieve the object of the definition 'owner' 
-+ 
in the Mines Act, 1952, which definition has been bodily borrowed by 
this Act. If the owner whose name Is mentioned in column 4 is alone 
entitled to the compensation, then there was no need for the remaining E 
sections in Chapter IV for apportionment of the amount. [ 494E· F] 
-
---: 
3.1. Section 12·A makes the owner, who has employed the wor· 
kers, liable for their wages and other dues and contains the procedure 
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for making the claim, its proof and determination. The important fact 
to he noted regarding these dues is, as provided in suh-section(6) that F 
the payment under this section shall have priority over all other debts 
whether secured or unsecured. This is made further clear by Section 
23(2) also. [496C·D] 
3(ii) Secured creditors come next in priority, and will have priority 
regarding their dues subject to the amounts payable to the workers. [496D] 
G 
~ 
3(ili) The amount of compensation payable under the Act is kept 
at the disposal of the Commissioner of Payment by the Central Govern· 
ment. Section 23 provides that every person who has a claim against the 
owner may prefer the same before the C

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