STATE OF BIHAR & ANR. ETC. versus KHAS KARANPURA COLLIERIES LTD. ETC.

Citation: [1977] 1 S.C.R. 157 · Decided: 06-08-1976 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

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

Judgment (excerpt)

157 
STATE OF BIHAR & ANR..ETC. 
v. 
KHAS KARANPURA COLLIERIES LTD. ETC. 
August 6, 1976 
[A. N. RAY; C.J., M. H. BEG AND JASWANT SINGH, JJ.] 
Mines & Minerals (Regulation & Development) Act, 1951-s. 30A 
Scope 
of. 
Prior to October 25, 1949, the proprietors' of big estates granted m1n1ng 
leases either without payment of royalty or at very low royaltY. 
In most cases 
the lessees granted sub.leases on similar terms. The Mines 
and 
Minerals 
(Regulation and Development) Act, 1948, prohibited grant of any mining 
lease except in accordance with rules made under the Act. 
Rule 41 of the 
Mineral Concession Rules, 19491 which came into force on October 25, 1949, 
made it compulsory for every mining lease to include a condition regarding 
payment of royalty on the m.ineralB. The rule, however, did not apply to 
leases or sub-leases granted prior to October 25, 1949. 
Under the Bihar Land Reforms Act, 1950 passed by the State legislature, 
the interest of a proprietor or tenure-holder as well as of the Jessee' including hfa 
rights in mines ahd minerals, came to an end and vested absolutely in the 
State. 
Section 10 provided that the whole or part of the estate or tenure 
comprised in a subsisting lease shall be deemed. to have been leased by the 
State 
Government to the holder for the remainder of \he 
term of that 
l~ase. 
The Mines and Minerals (Regulation and Development) Act, 1957 which 
replaced the 1948,Act came into force on June 1, 1958. Section 9( I) of the 
Act made it obliQ0tory for the holder of a mining lease granted before the 
commencement of the 1957 .Act to pay in respect of any mineral removed by 
him from the leased area after December 28, 1957, royalty at a specified rate. 
Section 16 provided that a mining lease granted before October 25, 19149, wonJd, 
be brought into conformity with the provisions of the 1957-Act and the mies'. 
·'Sectioh 29' provided for the effective' continuance of the rule~ made under the 
1948-Act in w far as they related to matters provided for in the 1957-Act 
·and were not inconsistent therewith. 
Siection 30A which was inserted in the 1957 Act provides that the provisions 
'Of s. 9(1) and of s. 16(1) "shalJ not apply to or in relation to minihg leases 
granted before October 25, 1949" and empowered the Central Government to 
direct by notification that all or any of the provision~ of ss. 9'(1) and 16(1) 
shall apply to or in relatioh to such leases subject to such exceptions and modi· 
fications if any, as might be specified in that or in any subsequent notification. 
Section 30A was given ret:ros,pective effect, 
' 
· 
In .1967, the High Court, ,in Narendra Na.th Manda/ v, ISltate of B;har & Ors. 
!ield (1) that a lessee of a mme was liable to pay royalty for the period begihn-
mg from November 3, 19•51 (date of vesting of an estate under rhe Bihar Land 
Reforms Act) to May 31, 1958 by virtue of s. 29' of 1957-Act read with r. 41 
:~nd Schedule I of 1949-Ru!es and (ii) from June l, 1958 (the date of coming 
mto force of the 19'57 Act) to December 31, 1965 by virtue of s. 9(1) of that 
l'\ct read with the second Schedule thereto because neither s. 30A nor the 
notification was applicable to the lease ih view of the effect of the vestin" of 
,estate in the State and the coming into existence of a new lease by for~ of 
•s. 10 of the Acl After thi> decision the State issued demand notices to the 
,respondents for payment of royalty in accordance with the decisioh of the 
Hi~h Court. 
~llowing the. respondents' Writ petitions, the High 'Court quashed the demand 
11ot1ces. 
The High Court held ~bat Mandal's case had been wrongly decided. 
On the question whether the claim fm royalty (1) prior to Juhe 1, 1958; 
and (2) from June 1, 19·5~ tg Pe~mber 31, 1965 could be sustained. 
A 
B 
c 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
ff 
15 8 
SUPREME COl.JRT REPORTS 
[1977] 1 S.C.R. 
Dismis>ing the appeals of the State, 
HELD : ( 1) The H}gh Court was rigbt in hOJding that the claim 
for 
royalty prior to June 1, 1958 was wholly unfounded and cannot be suppor,ed. 
In Bilwr Mines Ltd. v. Union of India this Court held that 1he consequence of 
the operation of ss. 4(1) (a) and 10(1) of the Bihar Act was that the or:ginal 
contractual leases came to an end on the date of vesting and for the remainder 
of the terms of those leases fresh statutory leases in favour of the lessees 
came into being .under s. 1()(1) of the Act as a result of which from Novem· 
ber 3, 1951, the subsisting Jease8 ca

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