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PETITIONER: THE MINERAL DEVELOPMENT LTD., CALCUTTA

       Vs.

RESPONDENT: THE UNION OF INDIA AND ANOTHER.

DATE OF JUDGMENT: 31/08/1960

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L. GAJENDRAGADKAR, P.B. SUBBARAO, K.

CITATION:  1960 AIR 1373            1961 SCR  (1) 445

ACT: Mining  lease-Whether includes sub-lease-Mines and  Minerals (Regulation and Development) Act, 1948 (53 of 1948), S. 3(d) Mineral Concession Rules, 1949.

HEADNOTE: The appellant, a limited company, which was the lessee of  a mining  lease granted a sub-lease in respect of two  of  the villages  comprised in its grant.  The secretary and two  of the  directors  of the company were  prosecuted  for  having contravened  the  provisions  of  the  Mines  and   Minerals (Regulation  &  Development)  Act,  1948,  and  the  Mineral Concession  Rules,  1949, which were framed under  it.   The appellant  contended,  firstly, that the sub-lease  was  not covered  by the definition of the term " Mining lease  "  of the  Act  and as such the Act and Rules did not apply  to  a sub-lease  at all ; and secondly, that as these  rules  were made  under ss. 5 and 6 of the Act and not under s.  7  they have no application to a sub-lease granted by a lessor, even after  the coming into force of the Act and the Rules  where the  lessor’s own lease was of date anterior to  the  coming into force of  the Act and the Rules. Held,  that the definition of " Mining lease " contained  in S.   3(d)   of  the  Mines  and  Minerals  (Regulation   and Development)  Act,  1048, does not require that  the  lessor must  be a proprietor and its plain language read with s.  5 of the Transfer of Property Act, 1882, makes it clear that a mining  lease includes one executed by a proprietor as  much as a lease executed by the lessee from such proprietor.  The facts  that  the  lessor  is  himself  a  lessee,  and   the transaction  between him and the person in whose  favour  he makes  the  transfer by way of lease is called  a  sub-lease does  not  in any way change the nature of the  transfer  as between them. Held, further, that the Rules made under ss. 5 and 6 of  the Act  would apply to a mining sub-lease if it is  made  after the Act and the Rules came into force.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 231/1955. Appeal from the Judgment and Decree dated February 16, 1954, of the Patna High Court in Title Suit No. 105/1953. 446 N.   C.  Chatterjee, Sanjeev Choudhuri and Ganpat  Rai,  for the appellant. C.   K.   Daphtary,  Solicitor-General  of  India,   P.   K. Chatterjee and T. M. Sen, for respondent No. 1. * Lal  Narayan  Sinha,  Bajrang Sahai and R.  C.  Prasad,  for respondent No. 2. 1960.   August 31.  The Judgment of the Court was  delivered by WANCHOO J.-This is an appeal from a decree of the Patna High Court.   The appellant is a Public Limited Company with  its registered  office at Calcutta.  A mining lease was  granted to  it  by the Raja of Ramgarh on December 29, 1947,  for  a period  of  999 years in respect of  3026  villages  situate within  the  Ramgarh  Estate and the appellant  was  put  in possession  thereof.   On February 1,  1950,  the  appellant granted a sub-lease of two of the villages comprised in  its grant  to one Bhagat Singh for a term of 15 years.   In  the meantime the Mines and Minerals (Regulation and Development) Act  (LIII of 1948), (hereinafter called the Act), had  come into  force  along with the Mineral Concession  Rules,  1949 (hereinafter called the Rules), in the area in which the two villages  lay.   Bhagat  Singh then applied  to  the  Deputy Commissioner, Hazaribagh, for the grant of a certificate  of approval   under   the   Rules.    Thereupon   the    Deputy Commissioner, taking the view that the sub-lease granted was in contravention of the Act and the Rules, filed a complaint on  September  25,  1951, before a  magistrate  against  two directors  and the secretary of the appellant charging  them with the breach of r. 45 of the Rules and also rr. 47 and 49 (now r. 51) read with r. 51 (now r. 53) and s. 9 of the Act. While the criminal case was going on, the appellant filed  a suit  challenging the validity and constitutionality of  the Act  and  the  Rules.  A number of  grounds  were  taken  in support of this challenge but it is not necessary now to set out  all of them, as learned counsel for the  appellant  has confined  his  arguments only to two points, namely,  (i)  a sub-lease  is  not covered by the definition of the  term  ’ mining lease’ in s. 3(d) of the                             447 Act  and therefore the Act and the Rules do not apply  to  a sub-lease  at all, and (ii) as these Rules were  made  under ss.  5  and  6 of the Act and not under s. 7  they  have  no application  to a sub-lease granted by a lessor, even  after the  coming into force of the Act and the Rules,  where  the lessor’s own lease was of a date anterior to the coming into force of the Act and the Rules. The  suit was resisted by the respondents and their  defence was  that the term ’ mining lease’ included a sub-lease  and that  the  Rules framed under Bs. 5 and 6 of  the  Act  were applicable  to all sub-leases granted after the Act and  the Rules had come into force. The  High  Court  repelled the  contentions  raised  by  the appellant against the validity and constitutionality of  the Act  and the Rules.  It further held that the  term  ’mining lease’ as defined in s. 3(d) of the Act included a sub-lease and  therefore the Act and the Rules applied  to  sub-leases granted  after the Act and the Rules came into force and  it was  immaterial that the lease granted to the appellant  was anterior in time to the coming into force of the Act and the

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Rules.  On this view, the suit was dismissed.  Thereupon the appellant  applied for a certificate which was  granted  and that is how the matter has come up before us. Re. (i). The  main question that falls for consideration  is  whether the  term  ’mining lease’ as defined in s. 3(d) of  the  Act includes  a  sub-lease.   Clause (d) of s.  3  is  in  these terms:- "  mining  lease’ means a lease granted for the  purpose  of searching    for,   winning,   working,   getting,    making merchantable, carrying away, or disposing of mineral oils or for purposes connected therewith, and includes an  exploring or a prospecting licence; ". There  is no specific mention of a sub-lease in it.  But  if one takes the plain meaning of the words used in s. 3(d), it is  clear  that the term ’mining lease’ means  any  kind  of lease  granted  for the purpose of searching  for,  winning, working, getting, making merchantable, 448 carrying  away  or  disposing of minerals  or  for  purposes connected therewith.  It is significant that the  definition does not require that the lessor must be the proprietor; and so  on a fair reading it would include a lease  executed  by the  proprietor  as much as a lease executed by  the  lessee from  such  a proprietor.  If we turn to the  definition  of ’lease ’ in s. 105 of the Transfer of Property Act, we  find that a lease of immovable property is a transfer of a  right to  enjoy such property made for a certain time, express  or implied or in perpetuity in consideration of a price paid or promised,  or  of money, a share of crops,  service  or  any other  thing  of  value to be rendered  periodically  or  on specified occasions to the transferor by the transferee  who accepts the transfer on such terms.  What a lease  therefore requires is a transferor and a transferee and a transfer  of immovable property on the terms and conditions mentioned  in s.  105.  How the transferor gets his title to make a  lease is immaterial so    long as the transaction is of the nature defined in s.  105.   Applying therefore the plain words  of s. 3(d)  of    the  Act  and  the  definition  of  lease  as contained in s.     105 of the Transfer of Property Act,  it is perfectly clear that there is a transferor in this  case, (namely,  the  appellant) and a transferee  (namely,  Bhagat Singh)  who  has accepted the transfer; the  transaction  is with  respect to immovable property and creates a  right  to enjoy such property for a certain term and for consideration on  the conditions mentioned in it.  Though, therefore,  the document may be termed a sub-lease in view of the fact  that the transferor is not the owner of the property transfer-red but  is  itself  a  lessee,  the  transaction  between   the appellant  and Bhagat Singh is nothing but a  mining  lease. The terms ’ sub-lease’, ’ under-lease’ and "derivative lease ’  are  used  conveniently to indicate  not  only  that  the transfer is a lease but also that the transferor is not  the owner of the property but is a lessee ; but the transfer  as between  a  lessee and a sub-lessee is nonetheless  a  lease provided it satisfies the definition of s. 105.  We may  add that  Ch.   V of the Transfer of Property Act,  which  deals with leases of immovable 449 property  has nowhere made any distinction between  a  lease and a sub-lease and all the provisions of that Chapter which apply to a lease also apply to a sublease.  It is only  when dealing  with the rights and liabilities of the lessee  that s. 108(j) of the Transfer of Property Act lays down that the lessee may transfer absolutely or by way of mortgage or sub-

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lease the whole or any part of his interest in the property, and that is where one finds mention of a sub-lease,  namely, that it is a lease by a person who is himself a lessee.  But the  fact  that  the  lessor is himself  a  lessee  and  the transaction  between him and the person in whose  favour  he makes  the  transfer by way of lease is called  a  sub-lease does  not  in any way change the nature of the  transfer  as between them.  Therefore on the plain words of s. 3(d)  read with s. 105 of the Transfer of Property Act there can be  no doubt that the term ’mining lease’ includes a sub-lease.’ Learned   counsel  for  the  appellant  referred   in   this connection  to a number of statutes wherein a sub-lease  has been  expressly stated to be included in the term   ’lease’. In the Mines and Minerals (Regulation and Development)  Act, LXVII of 1957, which has replaced the Act, the term  ’mining lease’  has  been  defined in s. 3(c)  as  meaning  a  lease granted for the purpose of undertaking mining operations and includes  a  sublease.  The 1957 Act was enacted  after  the judgment of the High Court in this case and the  legislature apparently thought it fit ex abundanti cautela to say that a sub-lease  is included within the term ’ mining lease’.   In the  corresponding English Act also as well as  the  English Law of Property, 1925, a lease has been defined to include a sub-lease.   The fact however that in some laws a  lease  is defined to include a sub. lease, does not mean that a  lease cannot  otherwise  include a sub-lease.  An example  to  the contrary  is  the   Transfer  of  Property  Act,  where  the definition  of  the word 1 lease’ clearly  includes  a  sub- lease.   Learned  counsel for the appellant also  relied  on certain decisions in which it was held that a lease did  not include a sub-lease.  Those decisions, however, turn on  the particular terms of the enactment there under 450 consideration  and are of no assistance in  determining  the question whether the term ’mining lease’ in the Act includes a mining sub-lease.  Ordinarily, a lease will include a sub- lease  unless  there  is anything to  the  contrary  in  the particular  law.   We may in this connection  refer  to  the observations  of  Jessel,  M. R., in  Camberwell  and  South London Building Society v. Holloway (1) at p. 759:- " The word ‘lease’ in law is a well-known legal term of well defined import.  No lawyer has ever suggested that the title of the lessor makes any difference in the description of the instrument, whether the lease is granted by a freeholder  or a  copyholder with the licence of the Lord or by a  man  who himself is a leaseholder.  It being well granted for a  term of years it is called a lease.  It is quite true that  where the  grantor  of  the lease holds for  a  term,  the  second instrument  is called either an under lease or a  derivative lease, but it is still a lease...........". We see nothing in the Act to indicate that the term ’ mining lease’ as defined in a. 3(d) does not include a mining  sub- lease.  On the other hand, looking to the purpose and object with  which the Act was passed, it seems to us  quite  clear that  a sub-lease must be included within the  term  ’mining lease’  as  it obviously is within the plain words of  s.  3 (d). That  the Act was passed in the public interest is shown  by the  fact that it provides for the regulation of  mines  and oil  fields  and  for  the  development  of  minerals.   The intention was that the mineral wealth of the country  should be conserved and should be worked properly without waste and by persons qualified in that kind of work.  With that object in view s. 5 inter alia provides for making rules as to  the conditions  on which mining leases may be granted and   the

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maximum or minimum area and the period ’for which such lease may  be  granted  as also the terms on  which  leases  in respect  of  contiguous areas may be  amalgamated,  and  the fixing of the maximum and minimum rent payable by a lessee (1) (1879) 13 Ch.  D. 754, 759 451 whether  the mine is worked or not.  Section 6 provides  for framing  of  rules for the conservation and  development  of minerals,  the  manner in which any mineral or any  area  as respects  which the grant of mining lease is prohibited  may be developed and the development of any mineral resources in any  area by prescribing or regulating the use  of  engines, machinery  or other equipment, and so on.  These  provisions for  the conservation, development and regulation of  mining areas  and  minerals  would  be  more  or  less   completely frustrated  if  a mining sub-lease was not included  in  the definition  of  the term ’mining lease’, for then  all  that would  be necessary for a per. son who wanted to  avoid  the law  would be to interpose an intermediary  between  himself and  the owner and get a sub-lease from him which  would  be free  from the regulatory control of the Act and the  Rules. ’We are therefore of opinion that looking at the plain words of s. 3(d) and the object and the purpose for which the  Act was passed, it is clear that a mining sub-lease is  included within the definition of the term  ’mining lease’ and  there is  nothing  in the Act which militates  against  this.   We therefore hold that a mining sub-lease made after the coming into force of the Act and the Rules is included in the  term ’mining lease’ as defined in s. 3 (d) and is subject to  the Act and the Rules. Be. (ii). The  argument  in this connection is that a. 4  of  the  Act provides  that  no mining lease shall be granted  after  the commencement  of the Act otherwise than in  accordance  with the rules framed under the Act and any mining lease  granted otherwise shall be void and of ’no effect.  Sections 5 and 6 give  power  to  the Central Government to  make  rules  for purposes  already set out above and refer to  mining  leases granted under s. 4 Then comes s. 7, which lays down that the Central  Government  may  by notification  in  the  official gazette make rules for the purpose of modifying or  altering the terms and conditions of any mining lease 58 452 granted prior to the commencement of the Act so as to  bring such lease into conformity with the rules framed under Be. 5 and  6.  It  is urged that where a  mining  lease  has  been granted before the Act and the Rules came into force, it  is only the rules framed under s. 7 which will affect any  sub- lease granted by such a lessee even though the sub-lease  is after  the  date on which the Act and the  Rules  came  into force.  Section 7 in our opinion was enacted for an entirely different  purpose, as sub-s. (2) thereof will show.  It  is however  not necessary to go into this matter  further,  for once  it is held that a, sub-lease is included in  the  term ’mining  lease  ’, the rules made under ss. 5  and  6  would apply  to such a sub-lease, if it is made after the Act  and the  Rules came into force.  In the present case,  the  sub- lease  was  granted after the Act and the  Rules  came  into force in the area with which the sub-lease is concerned  and therefore the sub-lease would be governed by the Act and the Rules.   There is no question in this case of  modifying  or altering  the  terms  and conditions  of  any  mining  lease granted  prior to the commencement of the Act, for  the  Act and the Rules are being enforced with respect to a sub-lease

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which is a mining lease, within the definition of that  term in  s.  3(d), made ’after the Act and the  Rules  came  into force.   No change is being made by the Rules in  the  terms and conditions of the mining lease granted to the  appellant and all that has happened is that the appellant’s  directors and secretary, are being prosecuted for granting a sub-lease (which is a mining lease) against the provisions of the  Act and  the Rules after the Act came into force.  There  is  no force  therefore in this contention of the appellant and  it must be repelled. There is no force in this appeal and it is hereby  dismissed with costs., One set of hearing costs only.                                   Appeal dismissed. 453