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CASE NO.: Appeal (civil)  8129 of 2003

PETITIONER: North Eastern Coalfields Coal India Ltd.

RESPONDENT: Mubarak Ali & Ors.

DATE OF JUDGMENT: 21/04/2005

BENCH: ASHOK  BHAN & A.K. MATHUR

JUDGMENT: J U D G M E N T  

A.K. MATHUR, J.

       This appeal  is directed against the order dated 27th September,  2002 passed by the Division Bench   of  the Gauhati High Court in  WA 355/1999  whereby the Division Bench set aside the Order  dated  7th  September, 1999 passed by the learned single Judge in Civil  Rule No. 3516/1997. Aggrieved against this Order, the present  appeal has been filed by the appellant. Brief facts which are necessary for  disposal of this appeal are:                   That the appellant is a successor-in-interest of the erstwhile  Assam Railways and Trading Company Ltd. (for short ARTC)  engaged in coal mining operation which was acquired by Central  Government under the provisions of the Coal  Mines (Nationalization)  Act, 1973 (hereinafter referred to as the Act).    The land involved in  the proceeding was covered by the Dag nos. 3042, 3043 and 3044   of Margherita town, Mouza- Makum.   It may be relevant to mention  here that  ARTC was the  erstwhile Company incorporated at London   and it was operating this coal mines but after the Coal Mines  (Nationalization) Act, 1973  coming into force the Central Government   by virtue of sub-section (1) of Section 5 Central Government directed  that right, title and interest of all mines referred to in Schedule under   Section 3 shall vest in Coal Mines Authority limited a Govt. Company  incorporated in Companies Act. The North Eastern Coalfields Coal  India Limited is its subsidiary therefore the appellants become its  patta holder of the land in question.   The dispute  in the present case  arose,  when the   Additional Deputy Commissioner,  Tinsukia made  the land ’Sarkari’ (Govt.)  by order dated 22nd May, 1996 and  Government settled  the area of 1 Bigha, 3 khattas, 10 Lachas  land  out of the  aforesaid land in favour of the  private individual Dr.  Mubarak Ali, Respondent No.1 on behalf of Munaf Memorial Hospital- cum-Research Centre by  letter dated 2nd June, 1997.  Therefore, this  was challenged by the appellant before the High Court  that the   declaration of the land of the appellant as a "Sarkari"  was ulta vires  and illegal. It was alleged that no notice was given to the appellant  before declaring the land as "Sarkari".  The learned Single Judge  after going through the matter came to the conclusion that  the   Appellant-Company is lessee  being the  successor of  the  ARTC &  the lease could not  be terminated without following proper  procedure.   Learned Single Judge  referred to the definition of  Mine   under Section 2(h)  of the Act and held that  all the land and property  used for the  operation of the  mine vests in the  Central Government  as a result of  the nationalization.   It was further observed that the   Appellant had already deposited  the  land Revenue   on local rates,  etc. in both of Makum and Tirap Mouza amounting  to Rs.2,01,267.74  and  cleared  all the arrears   of land  revenue    Therefore,  learned  Single Judge came to the  conclusion that the appellant had  

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deposited the land revenue and the Government had recognized it as  a  lessee, the  act of declaring the aforesaid land  as ’Sarkari’ by the  Govt. was not  legal.  Learned single Judge also held that the  respondent \026 state  failed to point out any provision which  empowered  the State Govt. to delete the name of the appellant as  recorded Pattadar for  non-payment of the land revenue.   It was  observed that the appellant had paid the land revenue therefore it  could not be declared faut, Ferrar,  the learned Single Judge by Order  dated 7th September, 1999 set aside the order of the Additional  Deputy Commissioner, Tinsukia and also  the  allotment in favour of   respondent No. 1.    A Letters Patent Appeal  was filed by State  before the  Division Bench and the Division Bench reversed the Order  of the learned Single Judge  holding that the land in question,  was  not covered under the definition  of the expression ’Mine’ under  Section 2(h)  of the Act and no land revenue was paid for a period of  five  years therefore  Govt. rightly declared this land as ’Sarkari’  (Govt.).  It was also  held by the  Division Bench  that the  appellant  was not lessee of Government & left it open to the appellant to  approach  a competent  Civil Court for  adjudication of its right in  accordance  with law.    Aggrieved against this Order, the present  Special Leave Petition was filed by the appellant.         At the outset,  it may be made clear that the Coal Industry was  nationalized  under the  Coal  Mines (Nationalization)  Act, 1973 and  a Notification was issued under this Act for the purposes of  acquisition  of rights of owners  in respect of coal mines mentioned in  schedule under Section 3; whereby the right, title and interest of the  owners  in respect of coal mines specified in the schedule stood  vested absolutely in Central Government  free from all   encumbrances and in that one of the  coal mines belonging to the   Assam Railway Trading Coal Company was included.  Therefore,  so  far as the rights, title of  the erstwhile company, i.e., Assam  Railway  Trading Coal Company are  concerned, all stood  vested in the  Central Govt.  Therefore, it is  clear that all  the assets of the  erstwhile company and  their land and buildings and all other mining  operation stood vested in the Central Govt.   

It is not under dispute that all the lands and appurtenant   building belonged   to the erstwhile mining company and it was  leased out to Assam Railway Trading Corporation.  Therefore,  after the  Nationalization  Act came into force, all the  property  belonging to the  erstwhile company stood vested in successor,  i.e. Central Govt. and the Order of Additional Deputy  Commissioner passed without making any reference to any  provision of law &  declaring  it  a  Fout Ferrar by order dated  22nd  May, 1996 cannot  be sustained.  In fact the order says that the   ARTC as per the  information given by the  SDO ) Margherita is  not in existence  and they have no objection  if the said land is  used for public utility  purposes by the District Administration.  Therefore, Additional Deputy Commissioner,  on information  received from SDO came to the conclusion that ARTC  be  declared as Fout Ferrar   and the land be  declared as ’Sarkari’.  This order has been passed by the  Additional Deputy  Commissioner in total ignorance  of the law.  After the  Nationalization Act came into force company’s  assets movable  and immovable stood vested in  the Central Govt.  If he had given  a notice to  the Coal India or its subsidiary,  things  would have  been clear.  In fact, the Govt.  of  India has passed the order on 9th  July, 1973   and vested all these properties of the  various private  mines in  a Govt. Company  under the Mines Act.  The order dated  9th  July, 1973 of  the Govt. of India,  Ministry of Steel & Mines,  Deptt,. Of Mines  reads as  under: "ORDER G.S.R. 345 (E) \026 In exercise of the powers conferred by  the Sub-Section (1) of Section 5 of the Coal Mines

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(Nationalization) Act, 1973 (26 of 1973),  the Central  Government  hereby directs that the right, title and  interest of the owners in relation to all the coal mines  referred to in Section 3 of the said Act,  except the coal  mines specified against serial numbers 45 to 219 (both  inclusive) 227, 235, 237, 260, 265, 275, 441, 483 and 583  of the Schedule to the  said Act, shall with effect from the  9th July, 1973,   vest in the Coal Mines Authority Limited,  Calcutta, a Government Company incorporated under the  Companies Act, 1956 (1 of 1956), and having its  registered  office at Calcutta, in the State of West  Bengal."

       A perusal of this order makes  it clear that all the companies  mentioned  in the schedule to the Act of  1973 were taken over by  the Central Govt. and all their right, title and interest of all the  private company stood vested in Central Government and Central  Govt. vested  it in its company Coal Mines Authority Limited,   Calcutta.  Therefore, the finding given by the Additional Deputy  Commissioner,  Tinsukia that since the ARTC is Faut Ferrar  i.e.  already, abandoned  and resumed the land to  the State was ex  facie illegal order de hors the provisions of the Act  and    notification of the Central Government.   Therefore, the order  passed by the Additional Deputy Commissioner declaring ARTC   as Faut Ferrar and resuming  land was absolutely illegal,  without  jurisdiction and the same is set aside.                 The  question  whether land revenue was paid or not,   as per material placed before us, it appears that land revenue upto  1996-97 was deposited by Challan in treasury.  Even if, some land  revenue was due to the State then too also a proper notice should  have been given to the  company to deposit  land revenue and  failing which it would  have been possible for  the govt. to take  appropriate action.  Neither the authorities nor the Division Bench   has made reference of  any provision of law whereby they can  take over the land vested in the Central Govt.  Next question is  whether whole of  area comprising  this area  leased out to ARTC come within the definition of ’Mine’ as defined  under Section 2(h) of the  Act or not?  This is secondary question.   The first question was whether the order of the Additional Deputy  Commissioner resuming this land was proper or not.  We have  already held above that the order of Additional Deputy  Commissioner  was illegal, then question arises how much area  will be covered for mining operation;  whether  whole or part is a  matter  of inquiry.   In fact,  High Court  has proceeded to examine  the matter assuming the order of  Additional Deputy Commissioner  being valid.  But that is not correct.  It is open to  authorities to  examine the question whether whole leased area which  has  vested in Central Government falls in definition of ’Mine’  as  defined in  Section 2(h) of  the Act or not.  This is  a matter of  inquiry and  if State  has any doubt then a proper inquiry be   conducted after notice to the  appellant . In this connection,  a reference may be made   to a decision of  this Court  in  Bharat Coking Coal Ltd. Vs.  Madan Lal Agrawal   Reported in  (1997) 1, SCC 177.  Wherein their Lordships has  interpreted the expression ’Mine’ as defined in Section 2(h) and  also  considered the effect of Section 3 and Section 26  and it was  observed  that :

"All properties or assets which fall within the  definition of  ’mine’ in Section 2(h)   and which  are used  for  over a period of time and not  temporarily, as necessary for proper functioning  of mine, irrespective of whether or not   belonging to owner of the mine, would  vest in  the Central Govt. by virtue of Section 3.  Hence,

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even though lands and buildings solely used for  the purposes of office or residence of officers  and staff of the mine did not belong to the owner  of the mine but belonged to a director of the   owner-company right, title and interest therein,   vested in the Central Govt."

                Therefore, the effect of Section 3 has  already been  considered by this Court and it had been held  by this Court that all  the properties  by virtue of this Section  vest  in the Central Govt.  and  the definition of mine as defined in Section 2(h)  is  wide   enough to include any land, building used for the purposes of  residence of officers, staff of mine shall  vest in the Central Govt.

       However, if there is any doubt about area,  State can make  inquiry after due  notice to appellant in the  light of  aforesaid  decision of this Court.  It will also be open for State to recover  lease money if it is due to State.

The view taken by the Division Bench is not correct,  we set  aside the Judgment and  order dated 27th September, 2002 of the  Division Bench of the Gauhati High Court  and affirm the order of  the learned Single Judge with no order as to costs.