UNION OF INDIA & ORS versus NORTH TELUMER COLLIERY & ORS.

Citation: [1989] 3 S.C.R. 455 · Decided: 19-07-1989 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Appeal(s) allowed

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

Judgment (excerpt)

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UNION OF INDIA & ORS 
v. 
NORTH TELUMER COLLIERY & ORS. 
JULY 19, 1989 
[E.S. VENKATARAMIAH, CJ, N.D. OJHA AND 
KULDIP SINGH, JJ.] 
Coal Mines (Nationalisation) Act, 1973: Sections 3, 17, 18, 24, 
24A and 26-lnterest accruing under the Act-Whether to be paid 
exclusively to owners or available along with principal amount for 
disbursement to claimants of owners. 
The Coking Coal ,Mines (Nationalisation) Act, 1972_ (Coke Act) 
and the Coal Mines (Nationalisation) Act, 1973 (Coal Act) divested the 
ownership rights in the mines from the owners to the Central Govern-
ment. The Acts provided for payment in lieu of take-over. The payment 
was to be made to the respective owners after discharging their 
liabilities. The Acts also provided for accrual of interest on the amount 
payable, for the procedural period. 
Some of the owners filed writ petitions before the High Court 
claiming that the interest accrued exclusively belonged to owners and 
the same was not available for disbursement to the claimants of the 
owners. The High Court allowed tbe writ petitions, and held that the 
interest accrued under the Coal Act cannot be made available to the 
Commissioner for meeting the claims of the creditors of the mine 
owners and It is to be exclusively given to the mine owners. 
The present appeals, by special leave, challenge the said decision 
of the High Court. 
Allowing the appeals, 
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HELD: 1. It is clear from the scheme and plain reading , of G 
the various provisions of the Coal Act that the interest amount has 
"-f to be made available to the Commissioner to meet the debts and liabilities. 
The Commissioner has to adjudicate the claims of creditors of the 
mine owners in accordance with the priorities. The claim, accepted by 
the Commissi_oner, are to be satisfied out of the amount payable to the 
mine owners and the balance left after meeting the claims of all the 
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455 
456 
SUPREME COURT REPORTS 
[1989] 3 S.C.'R. 
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secured and unsecured creditors, is to be paid to the owners of the coal ).-
mines. [462A, B] 
2.1. The High Court's conclusions are primarily based on the 
interpretation of Section 18(5) of the Coal Act. The High Court has 
quoted the meaning of the words "enure" and "benefit" from various 
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B dictionaries. No dictionary or any outside assistance is needed to under-
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stand the meaning of these simple words in the context and scheme of 
the Coal Act. The interest has to enure to the benefit of the owners of 
the coal mines. The claims before the Commissioner under the Coal Act 
are from the creditors of the owners and the liabilities sought to be 
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discharged are also of the owners of the coal mines. When the debts are 
c paid and the liabilities discharged, it is only the owners of coal mines 
who are benefited. Taking away the interest amount by the owners "'( 
without discharging their debts and liabilities would be unreasonable. 
They have only to adopt delaying tactics to postpone the disbursement 
of claims and consequently earn more interest. Due to such delay the 
owner would get huge amount of interest though ultimately he may not 
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get a penny out of principal amount on the final settlement of claims. It 
would amount to conferring unjust benefit on the owners which can 
never be the intention of the Parliament. [462D, E, FJ 
2.2. Section 24A of the Coal Act provided that interest shall be l, .. 
paid at such rate not exceeding the rate of interest accruing on any 
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amount deposited by the Commissioner under Section 18. Had the 
Parliament intended to give interest to the owners, there would have 
been no necessity for fixing the maximum limit of interest payable to the 
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claimant with reference to t.he rate of interest accruing to the scheduled 
amount. [464B] 
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3.1. A plain reading of Section 26 read with Section 18(5) of the ~ 
Coal Act makes it clear that moneys paid to the Commissioner in rela· 
lion to a coal niine are to be used for satisfying the debts and liabilities. 
Interest amount accrued under the Coal Act is undoubtedly money in 
relation to coal mine and as such it squarely comes within the ambit of 
Section 26 of the Coal Act. [463E] 
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3.2. The amended Section 18(5) of the Coal Act which escaped the )' 
notice of the High Court provides that the amount of interest accruing 
on the amounts standing to the credit of the deposit account is also 
payable to the Commissioner. Section 22(3) of the Coal Act makes the 
ass

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