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PETITIONER: UNION OF INDIA & ORS

       Vs.

RESPONDENT: NORTH TELUMER COLLIERY & ORS.

DATE OF JUDGMENT19/07/1989

BENCH: KULDIP SINGH (J) BENCH: KULDIP SINGH (J) VENKATARAMIAH, E.S. (CJ) OJHA, N.D. (J)

CITATION:  1989 AIR 1728            1989 SCR  (3) 455  1989 SCC  (3) 411        JT 1989 (3)   125  1989 SCALE  (2)54

ACT:     Coal Mines (Nationalisation) Act, 1973: Sections 3,  17, 18, 24, 24A and 26--Interest accruing under the Act--Whether to  be  paid exclusively to owners or available  along  with principal amount for disbursement to claimants of owners.

HEADNOTE:     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 Government. 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  be- longed  to  owners and the same was not available  for  dis- bursement  to  the claimants of the owners. The  High  Court allowed  the  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,     HELD:  1. It is clear from the scheme and plain  reading of the various provisions of the Coal Act that the  interest amount has to be made available to the Commissioner to  meet the  debts and liabilities. The Commissioner has to  adjudi- cate  the claims of creditors of the mine owners in  accord- ance with the priorities. The claim, accepted by the Commis- sioner, are to be satisfied out of the amount payable to the mine owners and the balance left after meeting the claims of all the 456 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

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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 dictionaries. No dictionary  or  any outside  assistance is needed to understand 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 discharged are also of the  owners of the coal mines. When the debts are paid and the  liabili- ties 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 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, F]     2.2. Section 24A of the Coal Act provided that  interest shall be paid at such rate not exceeding the rate of  inter- est  accruing  on any amount deposited by  the  Commissioner under Section 18. Had the Parliament intended to give inter- est  to the owners, there would have been no  necessity  for fixing the maximum limit of interest payable to the claimant with  reference  to  the rate of interest  accruing  to  the scheduled amount. 1464B]     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 relation to a coal mine are to be used  for satisfying  the debts and liabilities. Interest  amount  ac- crued 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]     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 Commis- sioner.  Section 22(3) of the Coal Act makes the assets,  in the hands of Commissioner available for satisfying the debts in  order of priorities. The assets of the  erstwhile  owner lying in the 457 hands  of  the  Commissioner of payment  would  include  the interest  which  has  been paid to  the  Commissioner  under Section  18(5).Similarly  Section 24 of the Coal  ,Act  says that  unsecured  creditors  will be paid out  of  the  money credited to the account of coal mine. Moneys credited to the account of coal mine also include interest. [463F, G]     3.3.  Under Section 18(5) of the Coal Act  the  interest accruing on the amount standing .to the credit of the depos- it  account  shall also be payable to  the  Commissioner  in addition  to the sum referred to in sub-section (1) of  Sec- tion 18. It cannot be disputed that the interest paid to the Commissioner  under  Section 18(5) is money paid to  him  in relation to a coal mine and as such it has to be utilised in meeting  the claims of the creditors of the mine owners  and their  other liabilities. Even otherwise interest amount  in the  present  context has no separate entity.  As  the  lamb belongs  to the owner of the sheep, the interest  goes  with the principal. The interest accrued under the Coal Act,  is, thus, part of the kitty out of which the claims and liabili- ties are to be met. [463A-D]

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   4.  The Coal Act and the Coke Act being identical,  this decision in the Coal Act is equally applicable to the Coking Act. [464C]

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.  1930-33 of 1989.     From  the Judgment and Order dated 24.9.87 of the  Patna High Court in C.W.C.  Nos. 489,501,502 and 1173 of 1982 (R).     G.  Ramaswamy,  Additional  Solicitor  General,   Girish Chandra and C.V.S. Rao for the Appellants.     M.C. Bhandare, R.S. Meratia, S.S. Johar and A. Mariarpu- tham for the Respondents. The Judgment of the Court was delivered by     KULDIP SINGH, J. The coal resources in the country  have been brought under State ownership and control by The  Cook- ing  Coal  Mines (Nationalisation)  Act,  1972  (hereinafter called  ’the Cooking Act’) and the Coal Mines  (Nationalisa- tion)  Act, 1973 (hereinafter called ’the Coal Act’).  These Acts  completely  divest the ownership rights in  the  mines from the owners to the Central Government. The Acts  provide for  payment  of specified amount to each of the  owners  in lieu of 458 take-over.  Out of the said amount the claims of the  credi- tors  of the owner and other liabilities against him are  to be  satisfied and the balance, if any, is to be paid to  the owner.  The Acts further provide for accrual of interest  on the payable amount for the procedural-period. Section  18(5) of the Coal Act and Section 21(5) of the Cooking Act provide that the interest accruing on the amount shall enure to  the benefit of the owners of coal mines.     The short question for consideration in these appeals is whether  the amount of interest which accrues under the  Act is  to be paid in its entirety to the owner or the  same  is also available along with the principal amount for disburse- ment to the claimants of the owner.     The  provisions of the Cooking Act and the Coal Act  are identical.  Both the Acts were enacted with the same  object and purport, one relating to the Cooking Coal mines and  the other to the coal mines.     The Learned Counsel at the hearing referred to the  Coal Act.  We  may  briefly notice the scheme of  the  said  Act. Section 2 gives definitions. Section 3 transfers the rights, title  and interest of owners in relation to the coal  mines and  vests  tile same in the Central Government.  Section  5 empowers  the Central Government to direct vesting  of  such rights in a Government company. Section 6 makes the  vesting of all properties in the Central Government free from  mort- gage,  charge,  lien  or any other  incumbrance.  Section  7 provides  that the Central Government or Government  company shall  not be liable for liabilities incurred by the  owners prior  to the take-over. Under Section 8 the owner of  every coal  mine shall be given by the Central Government in  cash and  in the manner specified under the Act the  amount  men- tioned in the Schedule to the Act. Section 9(2) provides for payment  of simple interest at the rate of 4% from the  date on  which the Coal Act received the assent of the  President upto the date when the amount is paid by the Central Govern- ment  to the Commissioner. Section 17 provides for  appoint- ment  of Commissioner of payments by the Central  Government for  the  purpose of disbursing the amounts payable  to  the owner  of each coal mine. Section 18(1) lays down  that  the

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Central  Government shall within 30 days from the  specified date  pay  in cash to the Commissioner for  payment  to  the owner  of a coal mine, an amount specified in  the  Schedule and also other amount payable to the owner under Section  9. Section  18(2) provides further amount due to the  owner  in lieu  of management of the coal mine by the Central  Govern- ment  and simple interest at the rate of 4% on such  amount. Under Section 18(3) a deposit account is to be opened by the Central Govern- 459 ment in favour of the Commissioner in the Public Account  of India and every amount paid under the Act to the Commission- er  has  to be deposited by him to the credit  of  the  said deposit account which is to be operated by the Commissioner. Section 18(4) directs the Commissioner to maintain  separate records  in respect of each coal mine in relation  to  which payments have been made to him under the Act. Section  18(5) provides  that interest accruing on the amounts standing  to the credit of the deposit account shall enure to the benefit of the owners of coal mines and shall also be payable to the Commissioner  in  addition to the sum referred  to  in  sub- section  (1). Under Section 20 every person having  a  claim against  the owner of a coal mine has to prefer  such  claim before  the Commissioner within thirty days from the  speci- fied  date.  Sections 21 and 22 give first priority  to  the claims  to arrears of wages, provident fund,  pension  fund, gratuity fund or any other fund established for the  welfare of  the persons employed by the owner of a coal  mine.  Next come  the secured creditors of the owners. Under Section  23 the  Commissioner adjudicates the claims and can  accept  or reject the same. Section 24A provides that where any  amount is payable in respect of a claim admitted under the Act, the interest  payable on such amount for any period shall be  at such rate not exceeding the rate of interest accruing on any amount  deposited  by  the Commissioner  under  Section  18. Finally  under Section 26 if out of the moneys paid  to  the Commissioner in relation to a coal mine, there is a  balance left  after .meeting the liabilities of all the secured  and unsecured  creditors, he shall disburse such balance to  the owner of such coal mine. Relevant provisions of the Coal Act are reproduced hereinaf- ter.               "Section 3--Acquisition of rights of owners in               respect  of coal mines--(1) On  the  appointed               day,  the  right, title and  interest  of  the               owners in relation to the coal mines specified               in  the Schedule shall stand  transferred  to,               and  shall  vest absolutely  in,  the  Central               Government free from all incumbrances. "               "Section  8--Payment  of amount to  owners  of               coal mines(1) The owner of every coal mine  or               group  of coal mines specified in  the  second               column of the Schedule, shall be given by  the               Central Government, in cash and in the  manner               specified  in Chapter VI, for the  vesting  in               it,  under Section 3, of the right, title  and               interest of the amount specified against it in               the corresponding entry in the fifth               460               column of the Schedule."               "Section  17--Commissioner of Payments  to  be               appointed-(1)  For the purpose  of  disbursing               the  amount payable to the owner of each  coal               mine  or  group  of coal  mines,  the  Central               Government shall appoint such person as it may

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             think fit to be the Commissioner of Payments."               "Section 18--Payment by the Central Government               to the Commissioner.--(1) The Central  Govern-               ment shall, within thirty days from the speci-               fied  date, pay, in cash, to the  Commissioner               for  payment to the owner of a coal  mine,  an               amount  equal to the amount specified  against               the  coal mine in the Schedule and shall  also               pay  to the Commissioner such sums as  may  be               due to the owner of a coal mine under  Section               9.                         (2) In addition to the sum  referred               to in sub-section (1), the Central  Government               shall pay, in cash, to the Commissioner,  such               amount  as  may become due to the owner  of  a               coal  mine  in relation to the  period  during               which the management of the coal mine  remains               vested  in the Central Government, and  simple               interest  at  the rate of four  per  cent  per               annum on such amount for the period commencing               on the 1st day of July, 1975 and ending on the               date of payment of such amount to the  Commis-               sioner.                         (3)  A  deposit  account  shall   be               opened by the Central Government, in favour of               the  Commissioner,  in the Public  Account  of               India, and every amount paid under this Act to               the Commissioner shall be deposited by him  to               the credit of the said deposit account in  the               Public  Account of India, and  thereafter  the               said deposit account shall be operated by  the               Commissioner.                         (4) Separate records shall be  main-               tained by the Commissioner in respect of  each               coal  mine in relation to which payments  have               been made to him under this Act.               Amended  (5) Interest accruing on the  amounts               standing to the credit of the deposit  account               referred to in sub-section (3) shall enure  to               the  benefit of the owners of coal  mines  and               shall  also be payable to the Commissioner  in               addition               461               to the sum referred to in sub-section (1).               Unamended (5) Interest accruing on the amounts               standing to the credit of the deposit  account               referred  to in subsection (3) shall enure  to               the benefit of the owners of the coal mines.                   (6) Reference in this section to the owner               of  a coal mine shall, in relation to a               group of coal mines specified in the Schedule,               be  construed  as references to the  owner  of               that group of coal mines."               "Section  24--Disbursement  of  money  by  the               Commissioner to claimants--Where, after  meet-               ing  the  claims admitted by him,  of  secured               creditors,  and  unsecured  creditors   having               priority under sub-section (2) of Section  22,               the total amount of claims of other  unsecured               creditors  admitted by the Commissioner,  does               not exceed the total amount of the money cred-               ited to the account of a coal mine, every such               admitted  claim shall be paid in full and  the               balance,  if any, shall be paid to the  owner,               but where such amount is insufficient to  meet

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             in  full  the  total amount  of  the  admitted               claims,  all such claims shall abate in  equal               proportions and be paid accordingly ."               "Section     24A--Interest     on     admitted               claims--Notwithstanding  any award, decree  or               order of any court, tribunal or other authori-               ty, passed before the appointed day, in  rela-               tion  to  any coal mine, where any  amount  is               payable  in respect of a claim admitted  under               this Act, the interest payable on such  amount               for  any period after the appointed day  shall               be  at  such rate not exceeding  the  rate  of               interest  accruing on any amount deposited  by               the Commissioner under Section 18."               "Section  26--Disbursement of amounts  to  the               owners of coal mines--(1) If out of the moneys               paid  to  him in relation to a  coal  mine  or               group  of coal mines specified in  the  second               column  of  the Schedule, there is  a  balance               left after meeting the liabilities of all  the               secured  and unsecured creditors, the  Commis-               sioner  shall  disburse such  balance  to  the               owner  of  such  coal mine or  group  of  coal               mines." 462 The  scheme  of  the Coal Act and the bare  reading  of  its provisions make it clear that the Commissioner has to  adju- dicate the claims of creditors of the mine owners in accord- ance with the priorities. The claims accepted by the Commis- sioner, are to be satisfied out of the amount payable to the mine owners and the balance left after meeting the claims of all  the secured and unsecured creditors, is to be  paid  to the owners of the coal mines.     The  High Court has accepted the contention of the  mine owners and has 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 owner or to  satisfy their  other liabilities. According to the High Court  whole of  the  interest amount is to be exclusively given  to  the mine owners and the claims and liabilities are to be  satis- fied  only out of the principal amount payable to the  mine- owners under the Coal Act. To support these conclusions  the High  Court has given three reasons which we  may  presently examine.     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 words "enure" and  "benefit" from  various  dictionaries. No dictionary or  any  out-side assistance  is  needed to understand 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  li- abilities sought to be discharged are also of the owners  of the coal mines. When the debts are 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 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.  We  do

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not  agree with the interpretation given by the  High  Court and  hold that the interest accruing under the Coal  Act  is the  money paid to the Commissioner in relation to the  coal mine and the same has to be utilised by the Commissioner  in meeting  the claims of the creditors and  discharging  other liabilities  in accordance with the provisions of  the  Coal Act. The High Court noticed that apart from providing  priorities for 463 claims  the Parliament has also indicated the accounts  from which such claims are to be satisfied. According to the High Court since no mention has been made therein with regard  to the recovery of any amount of claim out of the interest  the same  cannot be used for that purpose and has to  be  exclu- sively paid to the owners. We do not agree with the  reason- ing. Under Section 18(5) of the Coal Act the interest accru- ing  on  the amount standing to the credit  of  the  deposit account  shall also be payable to the Commissioner in  addi- tion  to the sum referred to in sub-section (1)  of  Section 18. Section 26 further provides that out of the moneys  paid to the Commissioner in relation to the coal mine if there is a  balance  left after meeting the liabilities  of  all  the secured  and  unsecured  creditors, such  balance  shall  be disbursed  to the owner of the coal mine. It cannot be  dis- puted  that  the  interest paid to  the  Commissioner  under Section  18(5)  is money paid to him in relation to  a  coal mine and as such it has to be utilised in meeting the claims of the creditors of the mine owners and their other liabili- ties. Even otherwise interest amount in the present  context has no separate entity. As the lamb belongs to the owner  of the sheep, the interest goes with the principal. The  inter- est  accrued under the Coal Act is thus, part of  the  kitty out of which the claims and liabilities are to be met.     The High Court has further held that under Section 26 of the Coal Act moneys paid to the Commissioner in relation  to a  coal  mine  do not include the money accrued  by  way  of interest.  There  is no basis for this  interpretation.  The plain  reading of Section 26 read with Section 18(5) of  the Coal Act makes it clear that moneys paid to the Commissioner in relation to a coal mine 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.     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 assets, in the hands of Commissioner, available for satisfying the debts in order of  priorities. The assets of the erstwhile owner  lying  in the  hands of the Commissioner of payment would include  the interest  which  has  been paid to  the  Commissioner  under Section  18(5).  Similarly Section 24 of the Coal  Act  says that  unsecured  creditors  will be paid out  of  the  money credited to the account of coal mine. Moneys credited to the account of coal mine also include interest. It is thus clear from  the scheme and plain reading of various provisions  of the 464 Coal  Act that the interest amount has to be made  available to the Commissioner to meet the debts and liabilities.     We may refer to Section 24A of the Coal Act which  fixes the maximum interest payable to the successful claimants. It

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is  provided  that interest shall be paid at such  rate  not exceeding the rate of interest accruing on any amount depos- ited  by the Commissioner under Section 18. Had the  Parlia- ment  intended to give interest to the owners,  there  would have  no necessity for fixing the maximum limit of  interest payable to the claimant with reference to the rate of inter- est accruing to the scheduled amount.     The two acts being identical whatever we have said about the Coal Act is equally applicable to the Cooking Act.     We,  therefore,  see no legal or  equitable  grounds  to sustain  the  judgment of the High Court.  The  appeals  are accepted,  judgment of the High Court is set aside  and  the writ  petitions of the respondents filed in the  High  Court are dismissed. There shall be no order as to costs. G.N.                                 Appeals allowed. 465