LexM/S. KHAN SAHEB M. HASSANJI & SONS versus STATE OF MADHYA PRADESH
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- .- 2 S.C.R. SUPREME COURT 'REPORTS 235 M/S. KHAN SAHEB M. HASSANJI & SONS fl. ST ATE OF MADHYA PRADESH (B. P. SINHA, c. J., P. B. GAJENDRAGADKAR, K. N. WANCHOO, K. c. DAS GUPTA and J.C. SHAH, JJ.) Mining Leaae-Reali•alion of royally al enhanced rate under contracl-Oonatit1'tional Validity-Agreement, if void~ Mininy Rules, 1913, r. 50-Mines and Mineral• (Regulation a11d Development) Act, 1948 (LIII of 1948), s. 4-Mineral Ooncemon R·u!ea, 1949-0omtitution of India, Art. 31(1). The appellants took an assignment of a mining lease for extracting coal in respect of 189.76 acres of land. They were anxious to acquire other lands adjacent to the afores~id area from their respective owners. The transfers in favour of the appellants could not take place without the sanction of the State Government. After protracted corres- pondence and negotiations, the Government agreed to grant the necessary sanction subject to the condition that they took a consolidated lease in respect of the whole additional area ?t an enhanced rate of royalty, The appellants entered into an agreement with the Government on January II, 1949 by which the rate of royalty payable to Government was raised from Rs. 5/- to Rs. 10/- per ton. Though no formal lease-deed was executed, the· appellants worked the mines with the permission of the Government during the period October 27, 1947, to June 30, 1949 and paid a sum of R1. 40865/- includ- ing interest, by way of royalty. They paid the aforesaid sum under protest in February-March, 1960. The plailltifl's- appellants brought a suit before Additional District Judge for a declaration that they were not bound by the terms . of the agree- ment datep January ll,) 949 and were not liable to pay to Government any sum id excess of that fixed by the lease of 1923 and~by the lease of January 21, 1944, and also.claimed other consequential reliefs •. The suit was decreed on contest by she Government. On ap~ by the dcfendant-n:spondent, the High Court reversed tl;ie judgment and d~ of the trial court and dismissed the suit with costs. Held, that from the . agreement dated January 11, 1949, it is clear that the Governor was ill the pooition of the 1->r, 1962 1962 M /s. Khan Safrtb M. Hassanji & Sons v. Stal• of Madhya Prad6sh SinA., C. /, 236 SUPREME COURT REPORTS [1963] SUPP. hence, even assuming that the Mineral Rules of 1913 had statutory force and applied to the instant case, the Governor having been the grantor of the lease it must be presumed that he decided that the revised terms were in the interest of the State, and, therefore, the revised terms of the lease were binding on the parties; furth~r ultimately the appellants having conceded that the rules were not statutory, the agreement aforesaid was not void. The Mineral Concession Rules, 1949 came into effect on October 25, 1949, having no retrospective effect and the agree· ment in question was finalised inJanuary 1949. There were thus no such Rules in existence which could have been contra- vened. Held, further, that since the payment to the Government was realisable under the terms of the contract which is not vitiated, it could not be said that the State deprived them of any property within the meaning of Art. 31 (I) of the Constitution. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 645/1961. Appeal from the judgment and decree dated April 20, 1957, of the Madhya Pradesh High Court in First Appeal No. 181/52. HardayalHardy, S. N. Andley and Rameshwar Nath, for the appellant. B. Sen and I. N. Shroff, for the respondent. 1962. November 19. The Judgment of the Court was delivered by SINHA, C. J.-This appeal on a certificate granted by the High Court of Madhya Pradesh at Jabalpur on April 16, 1958, under Art. 133 of the Constitution, is directed against the judgmerit and decree of that Court in First Appeal No. 181 of 1962, reversing those of the Additional District Judge, Chindwara, in Civil Suit No. 3,A of 1951, decided on September 25, 1952, by which the trial Court had decreed the plaintiffs' claim for Rs. 40865/·and interest. 2 S.C.R. SUPREME COURT REP.ORTS 237 It is necessary to state the following facts in order to bring out the points in controversy between the parties. One Haji Syed Zahiruddin of Bhopal held a mining lease-Ex. P-2-dated .May 29, 1923 in respect of 189-76 acres of land in the . district of Chindwara, for extracting coal. The appellants too
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