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PETITIONER: RAJA SATYENDRA NARAYAN SINGH & ANR.

       Vs.

RESPONDENT: STATE OF BIHAR & ORS.

DATE OF JUDGMENT05/05/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) NATRAJAN, S. (J)

CITATION:  1987 AIR 1390            1987 SCR  (3) 224  1987 SCC  (3) 319        JT 1987 (2)   356  1987 SCALE  (1)1180  CITATOR INFO :  RF         1989 SC 682  (13)

ACT:     Bihar  Land  Reforms  Act,  1950:  ss.  3,  9,  10   and 25--Minerals  not  exploited by the ex-landlord on  date  of vesting  of  the  estate--Right of  ex-intermediary  to  get compensation for such minerals.     Interpretation        of       Statutes--Rules        of Construction--Statute to be read as a whole and in the  con- text--Statutory  rules  to be harmoniously read  with  Stat- ute--Statute providing for assumption and enforcement of  an existing  liability  not to be construed as  extending  that liability  or creating new one in absence of clear terms  to that effect.

HEADNOTE:     Section  3 of the Bihar Land Reforms Act, 1950  provides for vesting of an estate or tenure in the State by notifica- tion.  Under  s. 9 from the date of such vesting  all  mines comprised  in the estate or tenure, as were in operation  at the  commencement of the Act and were being worked  directly by  the intermediary were deemed to have been leased to  the intermediary and he was entitled to retain possession there- of. Section 10 provides for vesting of subsisting leases  of mines  and minerals. Section 25 provides for computation  of compensation  payable  to  the intermediary  in  respect  of royalties  on  account  of mines and  minerals  or  directly working  mines comprised in the estate or tenure. Rule  25-E of the Bihar Land Reforms Rules, 1951 deals with the  proce- dure  for  determination of the amount  of  compensation  or annuity.     The  estate of the ex-landlord comprising vast areas  of mineral bearing lands was vested in the State by virtue of a notification  under  s. 3 of the Act with  effect  from  4th November, 1951. Some part of the said area was being  worked by  the lessees under the leases granted to them,  who  paid royalty to him.     The  ex-landlord died in 1969. His  successors-in-inter- est,  the appellants herein, filed writ petition before  the High  Court  claiming compensation in respect  of  the  coal bearing  area having coal reserves vested in the State.  The

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High  Court came to the conclusion that the  ex-intermediary was  not entitled to the compensation as claimed,  and  dis- missed the petition. 225     In this appeal by certificate, it was contended for  the appellants  that  where there are minerals  which  were  not tapped and not exploited by the ex-intermediary, acquisition of the source of income for the intermediary would be acqui- sition of property, that there was no provision for  compen- sation  for  this purpose in the Act, and the  statute  was, therefore, exproprietary in nature. For the respondents,  it was  contended that there was no question of  expropriation. The property being not in existence, it was acquisition of a right  which might be a source or’ income and  property  it’ tapped, but it was not an existing right. Dismissing the appeal, the Court,     HELD  1. A statute must be read as a whole,  fairly  and reasonably.  It must be so read, if possible, and  warranted by the context to give effect to the manifest intent of  the framer.  So  read,  it cannot be said that  the  Bihar  Land Reforms  Act,  1950 provides for any  compensation  for  the minerals not exploited. That does not make the Act unconsti- tutional. [232D]     2.  The  Rules  and the sections  must  be  harmoniously construed. In the instant case, the legislature was  acquir- ing  the estate of an ex intermediary. For all the  existing sources  of his income and which were being exploited,  com- pensation has been provided for. But for a right which might become  a source of income which had not been exploited,  no compensation has been provided. Where a statute provides for the  assumption  and  enforcement of an  existing  right  or liability,  it will not be construed as extending  that  li- ability  or  creating a new one unless it does so  in  clear terms. [231F]     Halsbury’s  Laws of England, 4th Edition, Vol. 44,  page 556, paragraph 904, referred to.     In the instant case there is no question of interpreting any law which will expose the Act to constitutional infirmi- ty.  The right was not existing at the time of  vesting,  no question therefore, arises of depriving the  ex-intermediary of any right without compensation. [231G]     3. The basic principle of construction of every  statute is  to find out what is clearly stated and not to  speculate upon  latent imponderables. The scheme of the Act  does  not support  the appellant that it is exproprietary  in  nature. Section 25(1)(a) and (b) deal with independent items and  s. 25(1)(c) is a combination of the two. The other sub-sections make  it quite clear. Compensation for the acquisition of  a source which 226 when exploited might become property or income is not neces- sary.  Ownership is a bundle of rights and for the  existing bundle  of rights compensation has been provided  lot.  [231 H-232B]     4.  It is not for the court to provide for  compensation where legislature has thought it fit not to do so. The  fact that compensation for existing rights has been provided  for would not expose the statute to the vice of  unconstitution- ality  as exproprietary. Had there been such a  possibility, other considerations might have been there. The Act has been incorporated in Item 1 of the 9th Schedule of the  Constitu- tion.] [232C]

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JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  390  of 1981.     From  the  Judgment and Order dated 31.8.  1979  of  the Patna High Court in C.W.J.C. No. 262 of 1979 (R).     M.K. Ramamurthy, A.K. Nag and Mrs. Naresh Bakshi for the Appellants. Jaya Narayan and Pramod Swarup for the Respondents. The Judgment of the Court was delivered by     SABYASACHI MUKHARJI, J. This appeal is directed  against the  judgment and order of the High Court of Patna,  (Ranchi Bench) dated 3 1st August, 1979.     It  involves the question of the right of  ex-intermedi- aries  to get compensation for the minerals which  were  not exploited  by  the exlandlords on the date  of  vesting  the estate  under  Bihar  Land Reforms  Act,  1950  (hereinafter referred to as the ’Act’).     Raja  Nilkanth Narayan Singh of Sawagarh estate was  the exlandlord whose estate vested by virtue of the notification under  the  Act  with effect from 4th  November,  1951.  The petitioners before the High Court and the appellants  herein are  the successors-in-interest being the grandson  and  the daughter-in-law  of  the late Nilkanth  Narayan  Singh.  The estate of the ex-landlord comprised, inter alia, tauzi  Nos. 14 and 15 of the District Collectorate of Dhanbad within the aforesaid  tauzis. These were vast areas of  mineral-bearing lands owned by the ex-proprietor of the estate. Some part of the said area 227 was being worked by the lessees under the leases granted  to them who paid royalty to late Nilkanth Narayan Singh, afore- said,  who, it might be stated, died in November, 1969 in  a state of jointness with other appellants.     The  case  of  the appellants is  that  compensation  in respect  of the coal bearing area having coal reserves  i.e. minerals,  has not yet been paid by the State of  Bihar  al- though the estate had vested in it as early as in  November, 195 1. So far as the mines that were being worked out or the minerals which were the subject-matter of leases granted  by the  ex-landlord  are concerned, there was no  dispute.  The appellants are entitled to and have not been denied  compen- sation in respect thereof under the Act, and the Rules.     The controversy is only on the question whether the  ex- landlord or his successor-in-interest is entitled to compen- sation for the minerals which were not the subject-matter of any  lease  granted  in favour of any  lessee.  However,  it appears,  there is no dispute on the question that had  such minerals been the subject-matter of a lease, the ex-interme- diary  would have been entitled to compensation  in  respect thereof in the manner provided under the Act to be  computed as prescribed by the Rules.     The  High  Court after an exhaustive discussion  of  the different provisions of the Act came to the conclusion  that ex-intermediary  is  not  entitled to  the  compensation  as claimed  for  and as such dismissed  the  application  under Article 226 of the Constitution. Being aggrieved by the said decision, the appellants after obtaining a certificate under Article  133(1)  of the Constitution have come  up  to  this Court.     The  expression ’mines’ used in the Act or in the  Rules had  a distinct connotation namely those minerals that  were unworked and unexcavated reserves while excavated mines  had been worked. The question, therefore, involves, as the  High Court rightly pointed out not only the mines but with miner- als  located beneath the earth, and neither being worked  by

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ex-intermediary on the date of vesting nor being the subject matter of lease in favour of any third party.     The  fights of the parties have t.o be worked out  under the  provisions of the Act. The Act in question was  an  Act which  was  passed to provide for the  transference  to  the State of the interests of proprietors, and tenure-holders in land  and  of the mortgages and lessees  of  such  interests including interests in trees, forests, fisheries,  ’jalkars’ ferries, 228 ’hats’, ’bazars’ mines and minerals, and to provide for  the constitution  of  a Land Commission for the State  of  Bihar with  powers to advise the State Government on the  agrarian policy to be pursued by the State Government consequent upon such transference and for other matters connected therewith. On  an  analysis of the scheme of the Act, it  appears  that section  3 of the Act provides for the notification  vesting an  estate or tenure in the State. It provides, inter  alia, that the State Government may, from time to time, by notifi- cation  declare that the estates or tenures of a  proprietor or tenure-holder, specified in the notification, have passed to  and  become vested in the State. There  was  appropriate notification passed in this case. On issuance of the notifi- cation,  the estates become vested in the State.  Section  4 deals  with  the consequences of vesting. It  provides  that notwithstanding anything contained in any other law for  the time  being in force or in any contract, on the  publication of  the  notification notwithstanding anything to  the  con- trary, certain consequences, as mentioned in section 4 would follow. Such consequences are mentioned in clauses (a), (b), (c),  (d) and (e) and other sub-clauses of section 4 of  the Act.  Section 9 deals with the mines worked by  intermediary and  it provides that with effect from the date  of  vesting all such mines comprised in the estate or tenure as were  in operation  at  the commencement of the Act  and  were  being worked  directly by the intermediary shall,  notwithstanding anything contained in the Act, be deemed to have been leased by  the  appropriate Government to the intermediary  and  he shall  be entitled to retain possession of those mines as  a lessee  thereof. The terms and conditions of the said  lease would  be  such as would be agreed upon  between  the  State Government and the intermediary provided that all such terms and conditions shall be in accordance with the provisions of any  Central  Act for the time being in  force.  Section  10 deals  with the consequences of subsisting leases  of  mines and  minerals and provides for vesting of the same.  Section 23  deals with computation of net income for the purpose  of preparing compensation assessment-roll of the net income  of the intermediary. Section 24 deals with the rates of compen- sation,  and  provides that after the net  income  had  been computed  under section 23, the Compensation Officer  should for  the purpose of preparing  compensation  assessment-roll proceed  to determine the amount of compensation to be  pay- able  in  respect of the transference to the  State  of  the interests of each intermediary. The table is set out in  the section. Section 2.5. is important and deals with the compu- tation  of compensation payable for mines and minerals.  The relevant portion of it provides, inter alia, as follows:               "25.  Computation of compensation payable  for               mines and minerals.                229               (1) The Compensation Officer shall prepare  in               the  prescribed  form and  in  the  prescribed               manner compensation assessment-roll containing               in respect of every intermediary in receipt of

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             royalties on account of mines and minerals  or               directly working mines comprised in the estate               or tenure--               (a) his gross income and net income from  such               royalties;                    (b)  his gross income from  mines  worked               directly  by him and the amount deemed  to  be               his  net income from royalties in  respect  of               such mines;                    (c) the amount of compensation payable to               him under the provisions of this Act for mines               and minerals; and               (d)  such  other particulars as  may  be  pre-               scribed." Then  sub-section (2) of section 25 deals with the  prepara- tion of compensation roll for clause (a) of sub-section  (1) and sub-section (3) deals with the preparation of  compensa- tion roll for clause (b) of sub-section (1). Sub-section (4) deals with the question whether after net income from royal- ties have been computed under sub-sections (2) and (3),  the Compensation Officer should proceed to determine the  amount of  compensation  to be payable to the intermediary  in  the manner  and  in  accordance with the  principles  laid  down therein.     While we are on the provisions of the Act and the Rules, reference  may  be made to Bihar Land Reforms Rules,  195  1 (hereinafter  called the ’Rules’), and Rule 25-E deals  with the  procedure  for determining the  approximate  amount  of compensation or annuity. It provides as follows:               "25-E.   Procedure   for    determining    the               approximate amount of compensation or annuity.               (1) The approximate amount of compensation  in               respect  of the intermediary interests,  other               than  that  payable for  mines  and  minerals,               shall be the approximate net income arrived at               in  the manner laid down in rule  25-C  multi-               plied by the appropriate multiple referred  to               in  Sec. 24(1); and the approximate amount  of               annuity  shah be equal to the approximate  net               income.               (2) The approximate amount of compensation  or               annuity  payable for mines and  minerals  com-               prised in the estate or               230               tenures of an intermediary shall be worked out               after  considering the report to  be  obtained               from  the Mining Officer of the  existing  re-               serves in the mines or minerals and the proba-               ble income therefrom in the future.               (3)  The approximate amount of the total  com-               pensation or annuity payable to the intermedi-               ary shall be arrived at by adding the approxi-               mate amount of compensation or annuity payable               for  mines  and minerals  to  the  approximate               amount  of compensation or annuity in  respect               of his other interests:                          Provided that, if no such  informa-               tion  regarding the existing reserves  in  the               mines  or  minerals and  the  probable  income               therefrom  in  the future  is  available,  the               approximate amount of compensation or  annuity               shall  be calculated only on the basis of  the               net  income from the  intermediary  interests,               other  than mines or minerals,  in  accordance               with sub-rule (1):

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                        Provided further that the deduction               allowed  under clause (c) and (cc) of  Sec.  4               shall  be  recovered  by  deduction  from  the               approximate amount of compensation payable  to               the intermediary under this rule."      It  is  clear from the facts brought out  by  the  High Court  that all the mines comprised in the estate or  tenure of  ex-intermediary  which were worked out directly  by  him although vested as a result of the provisions of section  4A were  deemed by legal fiction to be subsequently settled  by the  State Government in favour of the  ex-intermediary  and that ex-intermediary should be deemed in law to be statutory lessee  under the State Government in respect of  the  mines which have been worked out by him. It is clear from  several provisions  of the Act including section 9 that there is  no section dealing with the minerals at all. In this connection sections 9 and 10 may be borne in mind.     Section  25  of  the Act envisages  compensation  to  be payable for mines and minerals and provides that ex-interme- diary  shall be paid for the payment to the  ex-intermediary who  is  in  receipt of royalties on account  of  mines  and minerals  or directly working mines in the estate or  tenure consisting of his gross income--namely, income of exinterme- diary,  gross  and  net income from royalty  and  his  gross income 231 from mines worked directly by ex-intermediary and the amount deemed  to  be the net income from royalties of  his  mines; under  clause  (c)  of sub-section (1) of  section  25,  the amount  of compensation payable to him under the  provisions of  the Act for mines and minerals. On behalf of  the  State Government it was contended that this item under clause  (c) of section 25(1) was nothing additional or extra than clause (a) plus clause (b) of sub-section (1) of section 25 and  he supported this submission by reference to sub-sections  (2), (3) and (4) of section 25.     According to the State, Rule 25-E of the Rules does  not carry the matter any further. On the other hand counsel  for the  appellants, Mr. Ramamurthy, submitted that where  there are minerals which were not tapped and not exploited by  the ex-intermediary,  acquisition  of source of income  for  the intermediary would be acquisition of property and no statute should  be  so  read as would amount to,  specially  in  the background  of the constitutional provisions  prevailing  in 1950  when  this  Act was passed, as taking  away  right  of property without payment of compensation. It was urged  that there was no provision for compensation for this purpose. If it  is so read as contended for by the respondent  for  this valuable property of the appellants, such construction which would amount to exproprietary legislation should be avoided. On the other hand, it was submitted that there was no  ques- tion of expropriation. The property was not in existence. It was acquisition of a right which might be a source of income and property if tapped but it was not an existing right.     The  Rules  and the sections must be  harmoniously  con- strued.  Here  the legislature was acquiring the  estate  of ex-intermediary. For all the existing sources of his  income and  which were being exploited, compensation has been  pro- vided  for.  But for fight which might become  a  source  of income  which  had not been exploited, no  compensation  has been  provided. Where a statute provides for the  assumption and enforcement of an existing right liability, it will  not be  construed as extending that liability or creating a  new one unless it does so in clear terms. See in this connection Halsbury’s Laws of England, 4th Edition, Vol. 44, page  556,

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paragraph 904. But here there is no question of interpreting any law which will expose the Act to constitutional infirmi- ty.  The right was not existing at the time  of  vesting--no question  therefore arises of depriving  ex-intermediary  of any right without compensation. The  basic principle of construction of every statute is  to find out 232 what  is  clearly stated and not to  speculate  upon  latent imponderables.  The scheme of the Act does not  support  the appellant.  Moreover section 25(1)(a) & (b) deal with  inde- pendent items and sec. 25(1)(c) is a combination of two. The other sub-sections make it quite clear. Compensation for the acquisition  of a source which when exploited  might  become property  or income is not necessary. Ownership is a  bundle of  rights--for all the elements of existing ingredients  of bundle  of  rights  and for the existing  bundle  of  rights compensation  has been provided for. The statute is not  bad on that ground.     It  is  not for the court to  provide  for  compensation where legislature has thought it fit not to do so. The  view which  we are taking in view of the fact  that  compensation for  existing rights has been provided for would not  expose this  statute  to  the vice of  the  unconstitutionality  as exproprietary.  Had  there been such  a  possibility,  other considerations  might  have  been there. The  Act  has  been incorporated in Item I of the 9th Schedule of the  Constitu- tion.  How the respondent authorities treated this  question in the initial stage is irrelevant. It is well settled  that a statute must be read as a whole, fairly and reasonably. It must  be so read, if possible, and warranted by the  context to give effect to the manifest intent of the framer. So read we find that the statute does not provide for any  compensa- tion for the minerals not exploited. That does not make  the Act unconstitutional. So be it.     In  that view of the matter, we are of the opinion  that the High Court was right and the appeal must therefore  fail and is accordingly dismissed. In the facts and circumstances of the case, however, we make no order as to costs. P.S.S.                                                Appeal dismissed. ?233