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PETITIONER: BIHAR MINES LTD.

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT: 03/10/1966

BENCH: DAYAL, RAGHUBAR BENCH: DAYAL, RAGHUBAR RAO, K. SUBBA (CJ) HIDAYATULLAH, M. SIKRI, S.M. BACHAWAT, R.S.

CITATION:  1967 AIR  887            1967 SCR  (1) 707  CITATOR INFO :  R          1973 SC 408  (7,8)  RF         1976 SC1978  (9,10)  R          1976 SC2520  (17,22)  D          1985 SC 107  (5)

ACT: Bihar  Land Reforms Act, 1950 (Act 30 of 1950), s.  10(1)  & (2)-Subsisting mining leases deemed after date of vesting to be  leases  by  the  State  Government-Such  leases  whether ’existing  mining leases’ as defined by Rule 2(c) of  Mining Leases  (Modification  of Terms)  Rules,  1956--Controller’s power  to  modify terms and conditions of leases  under  the Mines  and Minerals (Regulation and Development  Act,  1957) read  with  the 1956 Rules whether applies to  such  leases- Validity of 1957 Act and 1956 Rules.

HEADNOTE: A  lease  of certain lands in Palganj estate  in  Bihar  was granted  by the Zamindar in 1928 for a period of  49  years. The  lease  was for the mining of soap stone,  kaoline  etc. There were sub-leases in 1933, 1934, and 1954-the last being in  favour of the appellants.  Under the Bihar Land  Reforms Act,  1950  and the relevant notifications  thereunder,  the estate  of  Palganj  and the rights  of  intermediaries  and tenure-holders passed to the State of Bihar.  Section  10(1) of  the Reforms Act provided that mining  leases  subsisting immediately  before the date of vesting were, as  from  that date  to be deemed to be leases by the State  Government  to the same lessees.  The terms and conditions of such  leases, according  to s. 10(2) were to be the same as before  except for the power of modification to be found in the Central Act for  the  time being in force.  At the time of  vesting  the Central Act in force was the Mines and Minerals  (Regulation and Development) Act, 1948.  The Mining Leases (Modification of  Terms)  Rules, 1956 were framed under s. 7 of  the  1948 Act.  The latter Act was replaced by the Mines and  Minerals (Regulation  and  Development) Act, 1957; however  the  1956 Rules were continued under it. The 1956 Rules gave power  to the Controller of Mines to modify ’existing mining  leases’;

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these  according  to  r. 2(c)  were  leases  granted  before October 25, 1949.  No mining lease according to the 1957 Act could  be for a period of more than 20 years unless  it  was far  the  mining of coal,, iron ore or bauxite.   Since  the head  lease in the present case was granted in 1928  it  had according  to the Controller lasted more than 20  years;  by order dated July 1, 1961 he, therefore, terminated it.   The appellants went in revision to the Central Board of  Revenue and failing there, came by Special Leave to this Court.  The main  contention  on behalf of the appellants was  that  the lease  of 1928 was succeeded by a new statutory lease  under s. 10(1) of the Bihar Act, and the new lease was not subject to  modification by the Controller.  Other contentions  were that the 1957 Act was not protected by Act 31A(1)(e) of  the Constitution,  that the 1956 ’rules providing for  premature termination of leases without compensation went against  the terms  of the 1948 Act and were therefore invalid; and  that the period of 20 years for which the lease could last was to be reckoned from the date of commencement of the 1957 Act. HELD : Per Subba Rao C. J. and Sikri and Raghubar Dayal JJ.- The head lease of 1928 subsisted immediately before the date of  vesting of Palganj estate in the State.   Therefore  the whole or that part of 708 the  estate  or  tenure comprised in this  lease  was,  with effect  from the date of vesting, to be deemed to have  been leased  by the State Government to the holder of  the  lease i.e. the first lessee up to August 11, 1977, the lease being for 49 years.  This statutory lease held by the head  lessee from  the  State Government under S. 10 of  the  Bihar  Land Reforms Act., 1950 was a new lease granted after October 25, 1949. [713 C; 714 E-F] The  1956 rules provided for the modification of the  leases granted  before  October  25, 1949.   It  followed  that  in pursuance  of  the  provisions of s. 10  the  terms  of  the statutory lease could not be modified when the lease be held to be a new lease from the date of vesting. [713 B] When  the  head lease could not be modified  the  sub-leases also could not be modified.  They too would be deemed to  be new  leases  granted  by  the  new  lessee  from  the  State Government,  as the rights of the original lessor under  the original lease had ceased on the vesting of the estate,  and he is deemed to have got a new lease from the State. [714 F- G] [In  view of the above finding the other contentions of  the appellants  did not fall to be considered by the  majority.[ L714 G-H] Per Hidayatullah and Bachawat JJ. (i)The lease under s. 10(1) of the Bihar Act is not a  new lease; the subsisting lease is continued after  substituting the  State  Government  as  the  lessor  in  place  of  the. proprietor or tenure-holder. [718 B-C] The  opening  words of s. 10 are  ’Notwithstanding  anything contained  in the Act’, and therefore s. 10 holds the  field despite  provision  the Act by virtue of which  estates  and tenures were vested in the State. [718 A-B] The  new  leases  under  s. 9 of the  Act  as  well  as  the subsisting   leases  under  s.  10  were  intended  by   the legislature  to  be  in  conformity  with  the  Central  Act regulating mining leases.  The intention of the  Legislature would  be  completely  frustrated if it was  held  that  the leases  referred  to in s. 10(2) need not be  in  conformity with the laws regulating mining leases. [718 F-H] Section 10A which was enacted in 1965 is on the footing that the sub-leases continued to exist.  This could not be so  if

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the  leases  under s. 10(1) were new leases, for  the  State Government could not grant a new lease as well as sub-leases in respect of the same subject matter at the same time. [719 C-D] (ii)The period of 20 years for the life of the lease had to be  reckoned from the date of commencement of the lease  and not  from the date of commencement of the Act of 1957.  [719 F-H] (iii)The 1957 Act was protected by Article 31A(1)(b) of the  Constitution.   The words ’winning a  mineral’  in  the article were to be given a wide connotation so as to include extracting of minerals. [715 C-D] (iv)The  1956 Rules were framed under s. 7 of the 1948  Act and not under Entry 36 List II.  In so far as the said Rules did   not  provide  for  compensation  for   the   premature termination  of  a lease they were in  contravention  of  s. 7(2)(b)  of the 1948 Act, but they were deemed to  be  rules under  the 1957 Act and therefore their validity had  to  be considered in terms of the latter Act.  As they conformed to the 1957 Act they were valid. [715 H] 709

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 172-174 of 1963. Appeals  by special leave from the orders dated January  18, 1962  of the Government of India (Ministry of  Steel,  Mines and  Fuel  Department of Mines and Fuel) in Cases  Nos.   H. 317, H317A and H. 317B. A.K. Sen, G. L. Sanghi, S. N. Andley, Rameshwar Nath  and Mahinder Narain, for the appellant (in all the appeals). Niren  De, Addl.  Solicitor-General, R. Ganapathy  Iyer  and R.II.  Dhebar,  for  respondent Nos.  I and 2  (in  all  the appeals) M.K. Ramamurti, D. P. Singh and S. C. Agarwala, for  res- pondent No. 3 (in all the appeals). The Judgment Of SUBBA RAO, C. J., SIKRI and RAGHUBAR  DAYAL, JJ.  was delivered by DAYAL, J.  The dissenting  Opinion  of HIDAYATULLAH and BACHAWAT, JJ. was delivered by BACHAWAT, J. Raghubar  Dayal, J. These three appeals, by  special  leave, are  directed against the orders of the  Central  Government dated  January 18, 1962, on applications for revision  under r.  7  of the Mining Leases (Modification of  Terms)  Rules, 1956,  hereinafter called the 1956 rules, in respect of  the orders passed by the Controller of Mining Leases, Nagpur, on July 1, 1961, in Cases Nos.  H-317, H-317A and H-317B. The appeals arise thus.  On August 11,1928, Raja Ran Bahadur Singh of Palganj, in Bihar, executed a lease with respect to a  certain  area  of his estate in favour  of  Babu  Tribang Murari  Chakravarti of Asansol for a period of 49 years  for the  purpose of carrying out mining operations in  the  said area  for  soap stone, kaoline etc.  Chakravarti,  the  head lessee,  executed  a  sub-lease in favour  of  Deoji  Jairam Solanki  on May 18, 1933.  Solanki, in his turn,  granted  a sub-lease in respect of the same area in favour of M/s Hirji Premji  Parmar & Brothers on May 18, 1934.  On  October  18, 1954,  M/s  Hirji Premji Parmar & Brothers,  assigned  their right, title and interest in the said area in favour of  the appellants, the Bihar Mines Ltd., Calcutta, for a period  of 19 years and 7 months expiring on May 17, 1974. The  Bihar  Land Reforms Act, 1950 (Act 30 of  1950),  here- inafter called the Reforms Act, came into force on September 25, 1952.  On July 13, 1953, the Government of Bihar  issued

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a  notification under sub-s. (1) of s. 3 declaring that  the estate of Palganj passed to and became vested in the  State. On   January  26,  1955,  the  State  Government  issued   a notification  under s. 3A of the Reforms Act declaring  that the  intermediary  interests of all  intermediaries  in  the whole estate had passed to and become vested 710 in  the  State.   Chakravarti’s mining rights  in  the  area comprised  in the lease became subject to the provisions  of s.10 of the Reforms Act. In 1948, the Mines and Minerals (Regulation and Development) Act,  1948 (Central Act 53 of 1948), hereinafter called  the 1948 Act, was enacted for the regulation of Mines.   Section 4(1)  of this Act, provided that no mining leases  would  be granted after the -commencement of the Act otherwise than in accordance  with the rules made under that Act.  Sub-s.  (2) provided  that any mining leases granted contrary to  sub-s. (1) would be void and of no effect.  Section 5 empowered the Central Government to make rules for regulating the grant of mining  leases  in respect of any mineral or  in  any  area. Section 7 empowered the Central Government to make rules for the  purpose  of  modifying  and  altering  the  terms   and conditions  of  any  mining  leases  granted  prior  to  the commencement  of  the Act so as to bring  such  leases  into conformity with the rules made under s. 5. The  Mineral Concession Rules, 1949, hereinafter called  the 1949  rules,  were  made by the Central  Government  in  the exercise of its powers under s. 5 of the 1948 Act.  The 1956 rules were made by the Central Government in exercise of its powers  under s. 7. Rule 6 of the 1956 rules  empowered  the Controller of Mining Leases, after following the  prescribed procedure,  to  modify any existing mining lease  so  as  to bring it in conformity with the 1948 Act and the 1949 rules. The  Mines  and Minerals (Regulation and  Development)  Act, 1957  (Act  67 of 1957), hereinafter called  the  1957  Act, repealed the 1948 Act.  In view of its s. 29, the 1956 rules continued to be effective. The Controller of Mines took action for the modification  of the  head  lease dated August 11, 1928, and  the  sub-leases executed  in  favour of Solanki and Hirji  Premji  Parmar  & Brothers  in 1933 and 1934 respectively.  Notice was  issued to  the  appellants  of  the  proposed  modifications.   The appellants, however, do not admit having received the notice of  the  modifications of the sub-leases.   They  admit  the receipt  of  the  notice for the modification  of  the  head lease.   They  appeared  before the  Controller  and  raised objections  to the proposed modifications.  The  Controller, however, passed an order on July 1, 1961 to the effect  that the head lease and the subleases would terminate on July  1, 1961.  Against these orders of the Controller the  appellant had filed revisions before the Central Government which were rejected.  It is against those orders of the Controller  and the  Central Government that the present appeals  have  been filed. 711 The first and the main contention for the appellant is  that the head lease could not be modified under the 1956 rules as it  did  not  come within the  expression  ’existing  mining lease’  as  defined  in  cl. (c) of r.  2  of  those  rules. ’Existing mining lease’ means a mining lease granted  before October 25, 1949, and subsisting at the commencement of  the 1956  rules,  but does not include any leases  specified  in sub-clauses  (i)  to (iv) of cl. (c).  The  head  lease  was granted  in 1928 and would ostensibly come within  ’existing mining leases’.  The contention, however is that in view  of

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s. 10 of the Reforms Act, the head lease as such came to  an end  and  a new statutory lease under s.10 replaced  it  and that  therefore  this new statutory lease was  not  a  lease granted before October 25, 1949. The  contention for the respondent is that the effect of  s. 10  of the Reforms Act is that the old lease continued  with the State Government substituted as the lessor in the  place of the original lessor and that therefore the lease could be modified as an existing mining lease. We agree with the contention for the appellant. The preamble of the Reforms Act states that it was expedient to  provide  for  the  transference  to  the  State  of  the interests  of proprietors and tenure-holders in land and  of mortgagees and lessees of such interests including  interest in trees etc., mines and minerals.  Notifications under  ss. 3  and  3A of the Reforms Act passed to and  vested  in  the State  the  estates  or tenures of a  proprietor  or  tenure holder   and   also  the  intermediary  interests   of   all intermediaries.  No interest thus remains in the lessor, the original  proprietor of the land leased.  Section 4  of  the Reforms  Act  further  emphasized the  consequences  of  the vesting of the estate or tenure in the State.  Clause (a) of s. 4 mentions one of the consequences and states that on the publication  of the aforesaid notification, such  estate  or tenure,  including  the  interests  of  the  -proprietor  or tenureholder  in any building etc., in trees etc.,  as  also his  interest in all sub-soil including any rights in  mines and  minerals whether discovered or undiscovered or  whether being worked or not, inclusive of such rights of a lessee of mines and minerals comprised in such estate or tenure  other than  the interests of raiyats or underraiyats  shall,  with effect  from  the date of vesting, vest  absolutely  in  the State  free  from all encumbrances and  such  proprietor  or tenure-holder  shall  cease to have any  interests  in  such estate or tenure other than the interests expressly saved by or  under the provisions of the Act.  It is clear  therefore that  the  interest  of  the  proprietor  or   tenure-holder including  his  rights in mines and minerals,  inclusive  of rights of a lessee of mines and minerals come to an end  and vest  absolutely  in  the State.   Having  once  so  vested, certain rights were conferred by statute on the  proprietors and tenure-holders and the lessees.  Section 9 provides that the 6Sup.C.1.166-17 712 mines which were in operation at the commencement of the Act and were being worked directly by the intermediary shall  be deemed  to have been leased by the State Government  to  the intermediary  and he shall be entitled to retain  possession of  those  mines  as a lessee thereof.   The  mines  in  the present  case  were not worked by the  intermediary  lessor. The  lease  by  the State Government  to  the  intermediary, according to sub-s. (2) of s. 9, was to have such terms  and conditions  as be agreed upon between the  State  Government and  the intermediary or, in the absence of such  agreement, as may be settled by the Mines Tribunal appointed under.  s. 12  thereof,  provided that all such  terms  and  conditions shall  be in accordance with the provisions of  any  Central Act for the time being in force regulating the grant of  new mining  leases.  According to the proviso,  therefore,  such terms  and  conditions  were to be in  accordance  with  the provisions  of the 1948 Act which was in force at  the  time the estate vested in the State of Bihar. Section  10 deals with leases of mines and  minerals,  which subsisted on the date immediately before the date of vesting

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of the estate or tenure.  It reads: "Subsisting leases of mines and minerals- (1)Notwithstanding anything  contained in this Act,  where immediately  before  the date of vesting of  the  estate  or tenure  there  is a subsisting lease of  mines  or  minerals comprised  in the estate or tenure or any part thereof,  the whole  or that part-, of the estate or tenure  comprised  in such  lease shall, with effect from the date of  vesting  be deemed  to have been leased by the State Government  to  the holder of the said subsisting lease for the remainder of the term  of  that lease, and such holder shall be  entitled  to retain possession of the leasehold property. (2)  The terms and conditions of the said lease by the State Government shall mutatis mutandis be the same as the   terms and  conditions of the subsisting lease referred to in  sub- section  (1), but with the additional condition that, if  in the opinion of the State Government the holder of the  lease had  not, before the date of the commencement of  this  Act, done   any  prospecting  or  development  work,  the   State Government  shall be entitled at any time before the  expiry of  one  year from the said date to determine the  lease  by giving three months’ notice in writing: Provided that nothing in this sub-section shall be deemed to prevent  any  modifications  being made  in  the  terms  and conditions  of  the  said  lease  in  accordance  with   the provision  of  any Central Act for the time being  in  force regulating the modification of existing mining leases. 713 .lm15 (3)The  holder of any such lease of mines and minerals  as is  referred to in sub-section (1) shall not be entitled  to claim  any damages from the outgoing proprietor  or  tenure- holder on the ground that the terms of the lease executed by such  proprietor  or tenure-holder in respect  of  the  said mines  and minerals have become incapable of  fulfilment  by the operation of this Act. The  head  lease of 1928, subsisted immediately  before  the date  of  vesting  of  the  Palganj  estate  in  the  State. Therefore,  the whole or that part of the estate  or  tenure comprised  in this lease was, with effect from the  date  of vesting,  to  be  deemed to have been leased  by  the  State Government to the holder of the lease ie. the first  lessee, up  to August 11, 1977, the lease being for 49  years.   The holder of the lease could retain possession of the leasehold property  till  then.   We  may  mention  that  we  are  not concerned,  in  this  case,  with the  effect  of  S.  I  OA introduced  by  the Bihar Land Reforms Amendment  Act,  1964 (Act 4 of 1965). The  terms  and conditions of this statutory  lease  by  the State  Government  were  to be the same  as  the  terms  and conditions of the subsisting lease i.e., the lease of  1928, with  the addition of one condition to the effect  that  the State  Government  could  terminate the lease  at  any  time before  the  expiry  of one year, by  giving  three  months’ notice  in writing if it was of opinion that the  holder  of the lease had not before the date of commencement of the Act done any development work.  Any way, this condition was  not applicable  in the present case as the mine had been  worked all along. The  terms and conditions of the lease were also subject  to the  proviso to sub-s. (2) of S. 10 which said that  nothing in   that  subsection  would  be  deemed  to   prevent   any modifications being made in the terms and conditions of  the lease  in accordance with the provisions of any Central  Act for  the time being in force regulating the modification  of

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existing mining leases.  This means that the statutory lease could  be modified in accordance with the provisions of  the 1948  or  the  1957 Act.  The 1956 rules  provided  for  the modification of the leases granted before October 25,  1949. It  follows that in pursuance of the proviso to s.  10,  the terms of the statutory lease could not be modified when  the lease be held to be a new lease from the date of vesting. It has been urged for the respondent that while the  proviso to  sub-s. (2) of s. 9 states that the terms and  conditions of the lease would be-, in accordance with the provisions of any  Central Act for the time being in force regulating  the grant  of  new mining leases, the proviso to sub-s.  (2)  of s.10  does  not use the expression ’new mining  leases’  and that  therefore it should be held that the  statutory  lease under s. 10 is not a new mining lease.  A statutory 6SuP.C.I./66-18 714 lease granted to the intermediary under S. 9 is a new  lease and  its terms and conditions are to be in  accordance  with the  provisions of the Central Act regulating the  grant  of new  mining  leases.   As  a new lease,  it  had  to  be  in accordance  with the provisions regulating the grant of  new mining  leases.  The proviso to sub-s. (2) to s. 10  had  to use    the   expression   ’existing   mining   leases’    in contradistinction  to the expression ’new mining leases’  in proviso  to  S.  9(2)  as modifications  in  the  terms  and conditions of the statutory lease under s. IO might be  made only  in accordance with the provisions of the  Central  Act regulating   the  modifications  of  the  ’existing   mining leases’,  if  the expression ’existing  mining  leases’  was ultimately defined to include a statutory lease under s. 10. When the Reforms Act was passed the expression had not  been defined.  No help can therefore be derived by the respondent from the difference in Language in the proviso to  sub-s.(2) of s. 9 and the proviso to sub-s.(2) of S. 10. It has also been urged for the respondent that what is to be deemed  under s. 10(1), Reforms Act, is for the purposes  of the Reforms Act only, i.e., the estate is to be deemed to be leased  by the State Government for the purposes of the  Act only and not for the purposes of the Acts of 1948 and  1957. We  do not agree.  The effect of the estate being deemed  to be  leased  by the State Government is  that  the  erstwhile lessee  of the intermediary becomes actually the  lessee  of the  State Government for all purposes from the date of  the vesting of the estate in the State.  He cannot be deemed  to be  a lessee of the intermediary whose title is  lost  under the original lease. We  are  therefore of opinion that the statutory  lease  now held  by the head lessee from the State Government is a  new lease  granted after October 25, 1949.  It follows that  the Controller  had no jurisdiction to modify the terms  of  the lease  which is granted by the State Government to the  head lessee  in view of sub-s. (1) of s. 10. When the head  lease could  not  be  modified, it being not  an  existing  mining lease, the sub-leases could also not be modified.  They  too would  be deemed to be new leases granted by the new  lessee from the State Government, as the rights of the lessor under the  original  head lease had ceased on the vesting  of  the estate  and  he is deemed to have got a new lease  from  the State. We need not therefore, in these appeals, deal with the other points urged by Mr. Sen for the appellant.  In our view  the Controller  could not have modified the lease in suit  under the 1957 Act and the 1956 rules. We allow the appeals, set aside the order of the  Controller

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dated  July  1, 1961 and of the Government  of  India  dated January 18, 1962.  The respondents will pay the costs of the appellant. 715 Bachawat,  J.  Counsel for the appellant  submitted  that  a lease for extracting mineral from a mine is not a lease  for the purpose of winning a mineral within the purview of  Art. 31A(1)(e) of the Constitution, and as the Mines and Minerals (Regulation  and  Development) Act, 1957 (No.  67  of  1957) enables  the  compulsory  acquisition of  such  a  lease  by prematurely terminating it without payment of  compensation, it  contravenes  Art.  31  and  is  not  protected  by  Art. 31A(1)(e).   Relying  on  Lewis v.  Fothergill(1)  and  Lord Rokeby’s case(2), he submitted that a mineral is won when it is  reached  and is ready for continuous  working.   In  the collocation  of words "work and win", the  expression  "win" might be construed to mean some activity preparatory to  the working and extraction of the mineral.  But we see no reason for  giving this narrow meaning to the expression  "winning" in  Art. 31A(1)(e) of the Constitution or in S. 3(d) of  the Mines  and Minerals (Regulation and Development) Act,  1957. In  a  popular  sense, winning a mineral  means  getting  or extracting it from the mine.  This is one of its  dictionary meanings, see The Shorter Oxford Dictionary.  The plain  and popular import of the expression furnishes the true rule  of the  interpretation of Art. 31A(1)(e).  A law providing  for the  premature  termination  of  a  lease  for  getting   or extracting  a  mineral is protected by Art.  31A(1)(e),  and cannot  be attacked on the ground that it  contravenes  Art. 14, 19 or 3 1. The  Mining Leases (Modification of Terms) Rules, 1956  were made  on  September  6, 1956 under the  Mines  and  Minerals (Regulation  and  Development) Act, 1948.  By s. 29  of  the Mines  and Minerals (Regulation and Development) Act,  1957, all  rules  made or purporting to have been made  under  the 1948 Act are deemed to have been made under the 1957 Act  as if the latter Act had been in force on the date on which the Rules  were made.  Counsel for the appellant submitted  that the  1956  Rules  were invalid (a) as they  were  laws  with respect to acquisition of property for State purposes, which could be made by the State Legislature only under Entry  36, List  II,  as  it stood  before  the  Constitution  (Seventh Amendment)  Act, 1956, and (b) as they did not  provide  for payment of compensation in conformity with s.7(2)(b) of  the 1948   Act,  and  having  regard  to  the  observations   of Mudholkar, J. in Bharat Kala Mandir v. Municipal  Committee, Dhamangaon(3),  the invalid Rules could hot be  regarded  as purporting to have been made under the 1948 Act.  We  cannot accept this contention.  The Central Government professed to make  the Rules in exercise of its powers under s. 7 of  the pre-Constitution 1948 Act.  The power to make the Rules  was conferred on the Government by s. 7 of the 1948 Act and  not by Entry 36, List 11 of the Constitution.  As the Rules  did not provide for payment of compensation in cases 1) ph.  A. 103.               (2) 7 A.C. 43, 13 Ch.  D. 277; 9 Ch.  D. 685. (3)  [1965] 3 S.C.R. 498 at pp. 512-516. 716 of reduction of the term of the lease in conformity with  S. 7  (2)  (b) they might not have been originally  valid;  but they  purported, to have been made under the 1948  Act.   In view of s. 29 of the 1957 Act, the Rules must now be  deemed to  have been made under the 1957 Act as if that Act was  in force  when the Rules were made.  The validity of the  Rules must  now be judged with reference to the 1957 Act.  As  the

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Rules  are  in conformity with the 1957 Act,  they  must  be regarded as validly made under it. The  main contention of counsel for the appellant  was  that the leases were not existing leases within the meaning of r. 2(c)  -of the Mining Leases (Modification of  Terms)  Rules, 1956.   Under  r. 2(c), an ’existing mining lease’  means  a mining lease granted prior to the commencement of the  Mines and  Minerals (Regulation and Development) Act, 1948,  i.e., prior  to  October 25, 1949.  Counsel submitted  that  there were  grants  of new leases by force of S. 10 of  the  Bihar Land Reforms Act, 1950 (Bihar Act No. 30 of 1950), and these new leases could not be modified under the 1956 Rules. The  lease  by the Zamindar of Palganj is dated August  1  1 1928.  The sub-lease is dated May 18, 1933.  The under-lease granted by the sub-lessee is dated May 18, 1934.  The  Bihar Land Reforms Act was passed on September 11, 1950.  It  came into force on September 25, 1952.  Sections 3 and 3A provide for the issue of notifications vesting estates, tenures  and intermediary interests in the State of Bihar.  The estate of the  Zamindar vested in the State as from July 13,  1953  on the   issue  of  the  notification  under  s.   3(1).    The intermediary  interests vested in the State as from  January 26, 1955 on the issue of a notification under s. 3A.  By  s. 4, on the issue of the requisite notification the estate  or tenure  including  the rights of the proprietor  or  tenure- holder in mines and minerals and inclusive of such rights of a  lessee of mines and minerals comprised in the  estate  or tenure  vested  absolutely  in  the  State  free  from   all encumbrances subject to the subsequent provisions of Chap II of the Act.  Sections 9,10 and 11 are in Chapterll.  Section 9  contains a special provision with regard to mines  worked by a proprietor or tenure-holder, and is in these terms: "9. (1) With effect from the date of vesting, all such mines comprised  in the estate or tenure as were in  operation  at the commencement of this Act and were being worked  directly by   the   intermediary  shall,   notwithstanding   anything contained in this Act, be deemed to have been leased by  the State Government to the intermediary, and as the case may be and  such proprietor or tenure-holder shall be  entitled  to retain possession of those mines as a lessee thereof. 717 .lm15 (2)The  terms  and conditions’ of the said  lease  by  the State-Government shall be such as may be agreed upon between the  State Government and the intermediary as the  case  may be, or in absence of agreement as may be settled by a  Mines Tribunal appointed under section 12; Provided  that  all such terms and conditions  shall  be  in accordance  with the provisions of any Central Act  for  the time  being  in  force regulating the grant  of  new  mining leases." In  this  case,  we are not directly concerned  With  s.  9. Section  .10  specially provides for subsisting  leases  for mines  and minerals.  Section I I deals with  buildings  and lands  appurtenant  to mines referred to in ss.  9  and  10. Section 10 is in these terms: "10.  (1)  Notwithstanding anything contained in  this  Act, where  immediately before the date of vesting of the  estate or  tenure there is a subsisting lease of mines or  minerals comprised  in the estate or tenure or any part  thereof  the whole or that part of the estate or tenure comprised in such lease shall with effect from the date of vesting, be  deemed to have been leased by the State Government to the holder of the  said subsisting lease for the remainder of the term  of that  lease,  and such holder shall be  entitled  to  retain

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possession of the leasehold property. (2)The terms and conditions of the said lease by the State Government  shall mutatis mutandis be the same as the  terms and  conditions of the subsisting lease referred to in  sub- section  (1), but with the additional condition that, if  in the opinion of the State Government the holder of the  lease had  not  before the date of the commencement of  this  Act, done   any  prospecting  or  development  work,  the   State Government  shall be entitled at any time before the  expiry of  one  year from the said date to terminate the  lease  by giving three month’s notice in writing. Provided that nothing in this sub-section shall be deemed to prevent  any  modifications  being made  in  the  terms  and conditions  of  the  said  lease  in  accordance  with   the provisions  of any Central Act for the time being  in  force regulating the modification of existing mining leases. (3)The  holder of any such lease of mines and minerals  as is  referred to in sub-section (1) shall not be entitled  to claim  any damages from the outgoing proprietor  or  tenure- holder  .on the ground that the terms of the lease  executed by  such proprietor or tenure-holder in respect of the  said mines and minerals have become capable of fulfilment by  the operation of this Act." 718 Mark  the opening words of s. 10, "Notwithstanding  anything contained in this Act." Notwithstanding what is said in  ss. 3, 3A and 4 as to vesting of the estate, tenure intermediary interests and rights in mines and minerals, s. 10 holds  the field  with  regard  to  subsisting  leases  of  mines   and minerals.   If there is such a lease, the deeming clause  in sub-s.  (1) requires that certain consequences will  follow. Where  immediately before the date of vesting of the  estate or  tenure there is a subsisting lease of mines or  minerals comprised  in it, we have to imagine that with  effect  from the date of vesting, the whole or that part of the estate or tenure comprised in such lease has been leased by the  State Government  to the holder of the said subsisting  lease  for the remainder of the term of that lease.  How can we imagine this lease without imagining that with effect from the  date of   vesting,   the   subsisting   lease   continues   after substituting the State Government as the lessor in place  of the proprietor or tenure-holder?  How else can the estate be deemed  to have been leased to the holder of the  subsisting lease  for  the remainder of the term of that lease  ?  Sub- section (2) tells us the terms and conditions of this  lease by  the  State Government.  Lest our imagination  might  run riot,  the proviso to sub-s. (2) tells us that we must  keep our  fancy  in  check, and remember that this  lease  is  an existing and not a new lease. The proviso to sub-s. (2) of s. 10 indicates that the  lease referred  to  in the section may be modified  in  accordance with the provisions of any Central Act for the time being in force  regulating  the  modification  of  "existing   mining leases".  Contrast the language of the proviso to sub-s. (2) of  s. 9. The terms and conditions of the lease referred  to in  s.  9 must be in accordance with the provisions  of  any Central  Act  regulating "the grant of new  mining  leases". The two provisos forcefully indicate that s. 9 grants a  new lease, where as s.  10 continues an existing lease. The  legislature intended that the terms and  conditions  of the  mining leases referred to in ss. 9 and 10 should be  in accordance  with the Central Act regulating  mining  leases. For  this purpose, the leases under s. 9 are treated as  new leases  and the leases under s. 10 are treated  as  existing leases,  so  that  they  may  be  modified  and  brought  in

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conformity  with the Central Act.  Had s. 10 the  effect  of granting a new lease, the legislature would have treated the lease  referred  to in s. 10 also as a new  lease,  and  the language  of the proviso to sub-s. (2) of s. 10  would  have corresponded with that of the proviso to sub-s. (2) of s. 9. The  intention  of  the  legislature  would  be   completely frustrated if we are to hold that the leases referred to  in sub-s.  (2) of s. 10 need not be brought in conformity  with the laws regulating mining leases. Section  9 creates from the date of vesting a new  lease  in favour of the proprietor because before that date he was the owner of the 719 mines  and  minerals  and could not claim to  be  a  lessee. Section  10, on the other hand, continues a lease which  was subsisting on the date of vesting.  The terms and conditions of the lease are modified and the Government is  substituted the lessor in place of the proprietor or the  tenure-holder; in other respects, the old lease continues. One -other matter clinches the issue.  Though by s. 2 (2)  a lease  in  relation to mines and minerals  includes  a  sub- lease,   this  definition  cannot  apply  to  s.  10.    The subsisting  lease referred to in S. 10 (1) cannot include  a sub-lease.   Obviously, the State Government cannot grant  a lease and a sub-lease in respect of the same  subject-matter at  the  same time.  Section 10(1)continues  the  subsisting lease.    As  the  lease  continues,  the   sub-lease   also continues.   Had S. 10 (1) the effect of destroying the  old lease,  the  sub-lease also would fall along with  the  head lease.   The  grant  of a new lease would,  not  revive  the original sub-lease.  There can be no doubt that in spite  of s. 10 the sub-lease was continued.  Section 10 A was enacted by  Bihar Act No. 4 of 1965 on this footing.  In view of  s. 10-A,  the interest of the lessee now vests in  the  Govern- ment, and the last sub-lessee holds his lease directly under the State Government.  We are, therefore, satisfied that the lease and the sub-leases were existing mining leases  within the meaning of r. 2(c) of the Mining Leases (Modification of Terms) Rules, 1956 and could be modified under the Rules. Counsel  next  submitted that the Controller by  his  orders dated  July  1, 1961 could not terminate the  lease  and  he could  only scale down the period of the lease to  20  years from  the date when the Mines and Minerals (Development  and Regulation)  Act,  1957 came into force, i.e. from  June  1, 1958.   We are unable to accept this contention.  The  lease was a mining lease in respect of soapstone, kaolin and white earth.  Section 8 of the Mines and Minerals (Regulation  and Development)  Act, 1957 and R. 40 of the Mineral  Concession Rules,  1949  provide that the period of a mining  lease  in respect  of minerals other than coal, iron ore  and  bauxite shall  not exceed 20 years.  Section 16 of the 1957 Act  and R.4 (1) of the Mining Leases (Modification of Terms)  Rules, 1956  require  that  the  existing  leases  be  brought   in conformity with the 1957 Act and the 1949 Rules.  The period of  an  existing lease in respect of soapstone,  kaolin  and white  earth can be brought in conformity with the  Act  and the Rules only by an order directing that the period of  the lease shall be 20 years from the date of commencement of the lease.   How can the period of an existing lease  become  20 years unless this period is counted from the commencement of the  lease?   The Act and the Rules do not provide  for  the grant of a new lease for a period of 20 years from the  date of the commencement of the Act.  They require  modifications of the period of an existing lease 720

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so  as to bring it in conformity with the Act.  The  periods of  20  years from the leases expired long  before  July  1, 1961.   Accordingly,  by his order dated July 1,  1961,  the Controller properly terminated the leases. The  Controller passed three separate orders in  cases  Nos. H317,  H-317 A and H-317 B terminating the head lease  dated August  11, 1928 and the sub-leases dated May 18,  1933  and May  18, 1934.  The requisite notice of the modification  of the  head  lease under Rules 4 and 6 of  the  Mining  Leases (Modification  of Terms) Rules, 1956 was given to  the  head lessee  and the sub-lessees in case H-317, and the order  in that case cannot be assailed.  No notice to the head  lessee and sub-lessee was given in cases Nos.  H-317 A and H-318 B. The orders of modification of the subleases ’in the last two cases  were, therefore, irregularly passed and counsel,  for the  appellant asked us to set aside those orders.   But  as the head lease was properly terminated by the order in  Case No.   H-317,   the  two   sub-leases   automatically   stood terminated.  The defect or irregularity in the pasing of the orders in cases Nos.  H-317 A and H-317 B does not a  effect the  merits  of  these  cases, and  we  see  no  reason  for reversing those orders. The appeals are dismissed with costs.                            ORDER In  accordance  with  the opinion  of  the  majority,  Civil Appeals.  Nos. 172-174 of 1963 are allowed with costs, Civil Appeal  No. 113 of 1964 is allowed with costs, Civil  Appeal No. 114 of 1964 is dismissed with costs and Civil Appeal No. 428  of 1964 is partly allowed with the direction  that  the parties will bear their own costs. G.C. M16 SUP.C.1./66-2,500-2-5-67-GIPF.