20 November 1996
Supreme Court


Case number: /
Diary number: 1 / 7668






DATE OF JUDGMENT:       20/11/1996




JUDGMENT:      (With C.A. Nos.1727/1990,  1728/1990,  1729/1990,             1730/1990, 1731/1990 and 4673/1994)                       J U D G M E N T SEN, J.      This appeal  arises out  of a  suit instituted  by  one Madanlal Agrawal  for eviction of Bharat Coking Coal Limited from land  and buildings  allegedly owned by him adjacent to the coal mine known as Victory Colliery, which had vested in the  Central   Government  by   virtue  of  the  Coal  Mines (Nationalisation) Act,  1973.  Victory Colliery was owned by United mining  Company private  Limited.  The  case  of  the appellant is  that the  company was  practically a  one  man company. If  the corporate  veil is lifted, it will be found that Madanlal  Agrawal was  de facto  owner of  the company. Madanla Agrawal’s  case is  that he  had in  his  individual capacity  purchased   certain   properties   together   with structures  thereon   by  registered  deeds  of  sale  dated 7.7.1949 and  24.3.1950 and  built  further  structures  and remodelled them.  The United  Mining Company Private Limited took these structures on monthly rent. These structures were utiltised as  office premises  of Victory  Colliery as  also staff quarters.  Eviction  was  sought  for  non-payment  of monthly rent for several years.      Bharat Coking  Coal Limited  in its  written  statement aileged that the said properties were bought with the moneys belonging to  the colliery  and as  such the  land  and  the structures really  belonged  to  the  company.  The  alleged payment of  rent by Victory Colliery to Madanlal Agrawal was only a  paper transaction  and  for  tax  benefit.  All  the purchases were  made by United Mining Company and sources of investment came from the funds of the said company.      It may  be mentioned  that even  before the  Coal Mines (Nationalisation) Act  came  into  force  on  1.5.1973,  the management of  Victory  Colliery  along  with  the  disputed properties were  taken over  by the  Central  Government  on 1.1.1973. No  objection was  taken thereto by the plaintiff. It was  only on 1.1.1976 the plaintiff issued a legal notice to the  appellant to  vacate the  suit premises  and to  pay arrears of  rent from  January, 1973  till the filing of the suit. Title  Suit   (T.S. Non.7/6  of 1976) for eviction was



filed  on   2.2.1976.  On   21.5.1979,  the  Ist  Additional Subordinate  Judge   dismissed  the  suit  with  costs.  The respondent preferred  an appeal  against  the  judgment  and decree passed  by the  Trial Court.  It was  allowed by  the Division Bench  of the  Patna High Court. The High Court was of the  view that  right, title  and interest  in  the  suit premises had  not vested  in the  Central Government. Bharat Coking Coal  Limited in  respect of  the suit premises was a tenant under  Madanlal Agrawal.  Since it  had defaulted  in payment of  rent for  the period  from January, 1973, it was liable to  be evicted  from the suit premises. Therefore the respondent’s suit was decreed. A further direction was given to pay  the arrears  of rent to the tune of Rs. 66,000/- and mesne profits.      The Trial Court on examination of the facts came to the corclusion that  there was  no relationship  of landlord and tenant between  the plaintiff  and the  defendant. It  found that Bharat  Coking Coal  Limited was  maintaining the  said premises since  vesting of  Victory Colliery  in the Central Government. The  cost  of  repairs,  electricity  and  water charges in  respect of the suit premises were to be borne by the United  Mining Company  on behalf of the colliery before its notionalisation.  Madanlal Agrawal, the plaintiff stated in cross-examination  that he was the director of the United Mining Company.  The other  director was his own brother. He also stated  that he had got the account books to prove that he purchased  the suit premises out of personal funds but he did not  file the same. He also stated that the Company used to pay  rent of the suit property but he did not produce the rent receipts.  He also  admitted that he could not say when he constructed  the house  and what  was the total cost. The expenses of  electricity and  water connections  in the suit properties were  paid  by  the  United  Mining  Company.  He admitted in  the cross-examination  that  the  employees  of United  Mining  Company  were  in  occupation  of  the  suit premises. The  office store,  compressor room, garage etc. o the Victory  Colliery were  in the suit properties. The suit premises were  used by United Mining Company exclusively for the purpose  of Victory  Colliery. The  Trial judge observed that "it  appears that  plaintiff."  The Trial judge came to the conclusion  that in view of these facts and also in view of the  provisions of  the Coal Mines (Nationalisation) Act, the suit  was not  maintainable and  the plaintiff  was  not entitled to any of his claims.      In appeal, it was held by a Division Bench of the Patna High Court that the plaintiff/appellant was the owner of the suit premises  of which  Bharat Coking  Coal Limited was the tenant and  as it  had defaulted  in payment  of  rent  from January, 1973 onwards, it was liable to be evicted. The High Court came  to the  conclusion on  the   strength of a share certificate that  Madanlal Agrawal  became a  shareholder of United Mining  Company for  the first  time in  1951 but had purchased  the suit properties in the year 1949.      That being  the position,  it was  held that  the  suit premises had  not vested in the Central Government by virtue of the  provisions of  the Coal Mines (Nationalisation) Act. Therefore, an  eviction order  had to  be  passed  for  non- payment of rent against Bharat Coking Coal Limited.      Before this Court, the argument on behalf of Bharat Coking Coal Limited, the appellant was confined to the scope of Coal  Mines (Nationalisation)  Act, 1973. The validity of the finding of the High Court that United Mining Company was a tenant  of  Madanlal  Agrawal  has  not  been  challenged. Therefore, the  only question  that falls  for determination before us  is whether  the  right,  title  and  interest  of



Madanlal Agrawal  in the  suit premises  have vested  in the Central Government  by virtue of Section 3 of the Coal Mines (Nationalisation) Act, 1973.      Even before the Nationalisation Act was passed, various legislations were  passed in  regard to  coal mines  for the purpose of preservation of coal and safety of miners working in the Coal mine.      In 1952,  the Coal Mines (Conservation and Safety) Act, 1952 was  passed. The  purpose of the Act was declared to be "it is  expedient in  the public  interest that  the Central Government should take under its control the regulation." of coal mines  to the  extent hereinafter provided." Under this Act, the  private ownership of coal mines was not disturbed, but mining  operations were  strictly regulated. A Board was set up  for the  purpose of  maintenance of  safety in  coal mines  and   for  conservation   of  coal.  "Mine"  was  not separately defined  in the  Act but by Section 3(1) "Agent", "Mine" and "Owner" were given the same meaning as in Section 3 of the Indian Mines Act, 1923.      The Mines  Act, 1952 came into force on 1st July, 1952. It dealt with mines generally. "Mine" was defined by Section 2(j) as under:      "2(j)     ‘mine’     means      any      excavation where  any operation for      the purpose  of  searching  for  or      obtaining minerals  has been  or is      being carried on, and includes:      (i)  all borings, bore-holes and      oil well,      (ii) all shafts  in or  adjacent to      and belonging to a mine,    whether      in the course of being sunk or not,      (iii)     all levels  and  inclined      planes  in   the  course  of  being      driven,      (iv) all open-cast workings,      (v)  all   conveyors    or   aerial      ropeways provided  for the bringing      into or  removal  from  a  mine  of      minerals or  other articles  or for      the removal of refuse therefrom,      (vi) all  adits,   levels,  planes,      machinery,     works,     railways,      tramways,   and   sidings   in   or      adjacent  to  and  belonging  to  a      mine;      (vii)     all  workshops,  situated      within the  precincts of a mine and      under the  same management and used      solely for  purposes connected with      that mine ora number of mines under      the same management,      (viii)    all  power  stations  for      supplying  electricity  solely  for      the the purpose of working the mine      or number  of mines  under the same      management,      (xi) any premises  for  time  being      used for  depositing fefuse  from a      mine, or  in which any operation in      connection  with   such  refuse  is      being carried  on,  being  premises      exclusively occupied  by the  owner      of the mine,      (x)  unless exempted by the Central



    Government by  notification in  the      official gazette,  any premises  or      part thereof, in or adjacent to and      belonging to  a mine,  on which any      process ancilliary  to the getting,      dressing or preparation for sale of      minerals    or  of  coke  is  being      carried on;      "Owner" was defined by Section 2(1)      as under:      "2(1).    ‘owner",  when   used  in      relation  to   a  mine,  means  any      person   who   is   the   immediate      proprietor or lessee or occupier of      the mine or of any part thereof and      in the  case of a mine the business      whereof is  being being  carried on      by a  liquidator or  receiver, such      liquidator or  receiver and in  the      case of a mine, owned by a company,      the  business   whereof  of   being      carried on  by  a  managing  agent,      such managing  agent; but  does not      include   a   person   who   merely      receives a  royalty, rent  or  fine      from the  mine, or  is  merely  the      proprietor of  the mine, subject to      any lease, grant or licence for the      working   thereof, or is merely the      owner   of   the   soil   and   not      interested in  the minerals  of the      mine; but  any contractor  for  the      working  of  a  mine  or  any  part      thereof shall  be subject  to  this      Act, in  like manner  as if he were      an owner from any liability;      The limited  nature of  the definition of ‘mine’ in the Mines Act  was explained  in the case of Serajuddin & co. v. Workmen (A.I.R.  1966 SC  921), where  it was pointed out by this Court  that ‘mine’  in Section  2(j) of  the Mines  Act clearly excluded  an office  of a  mine which was separately defined by  Section 2(k) as meaning an office at the surface of the  mine concerned.  The office of the mine, even though situated on the surface of the wine, did not fall within the definition of ‘mine’.      A much more extended meaning of ‘mine’ was given in the Coal Mine (Taking Over of Management) Act, 1973 by which the management of  coal mines in India was vested in the Central Government on  and  from  the  appointed  date,  i.e.,  30th Janaury, 1973.  The coal  mines specified in the Schedule to the Act  were deemed  to be  mines of  which the  management vested in the Central Government by virtue of the provisions of Section  3(2). It was further provided that, if after the appointed day,  the existence of any other coal mine came to the knowledge  of the  Central Government,  whether after an investigation or  in pursuance  of an intimation given to it under sub-section  (5) or  otherwise, the Central Government was empowered  to issue  an order making a declaration about the existence  of such  mine on  and from  the date  of such declaration. The management of such mines was also deemed to have vested  in the  Central Government  and such coal mines were deemed  to have  been included  in the  Schedule.  Sub- sections (3), (4), and (6) of Section 3 provided as under:      "(3) If any  error or  omission  is      notified   in   the   Schedule   in



    relation to  the name or address of      the owner of a coal mine, the owner      of such  mine shall,  within thirty      days from  the date  on which  this      Act  receives  the  assent  of  the      president,  bring   such  error  or      omission  to   the  notice  of  the      Central Government,      (4)  If, after  the appointed  day,      the    Central     Government    is      satisfied,   whether    from    any      information  received   by  it   or      otherwise, that  there has  ben any      error, omission  or  misdescription      in relation to the particulars of a      coal   mine included,  or deemed to      be included, in the Schedule or the      name and  address of  the owner  of      any such  coal  mine,  it  may,  by      notified order, correct such error,      omission or  misdescription, and on      the issue  of such  notified  order      the   relevant   entries   in   the      Schedule  shall  stand    corrected      accordingly:           Provided    that    no    such      correction in relation to ownership      of a  coal mine shall be made where      such ownership is in dispute.      (5)  Every   person    in   charge,      immediately  before  that  date  on      which this  Act receives the assent      of the president, of the management      of any coal mine, being a coal mine      not  included   or  deemed   to   e      included on  the said  date in  the      Schedule, shall  within thirty days      from the  said date,  intimate  the      Central  Government  the  name  and      location of  such mine and the name      and address of the owner thereof.      (6)  Where is a dispute with regard      to the declaration made by the Coal      Board under  the Coking  Coal Mines      (Emergency Provisions)  Act,  1971,      to the  effect  that  a  coal  mine      contains    coking     coal,    the      management of such coal mine shall,      notwithstanding anything  contained      in the said Act vest in the Central      Government  under   this  Act   and      nothing  contianed   in  the  first      mentioned Act  shall apply,  or  be      deemed ever  to have applied to the      said coal mine"      For the  purpose of  this case, it is important to note that the  Schedule appended  to the  Act was  not treated as final and  conclusive. Every  person in charge of management of coal  mine which  was not  included in the schedule had a duty to  intimate to  the Central  Government, the  name and location of  such mine and the name and address of the owner thereof. The  words specifically  not defined  in Section  2 were assigned the meanings given to them in Section 3 of the Mines Act,  1952 ‘Mine’,  However, was  given  a  very  wide meaning under Section 2(g).



    The extended definition of ‘mine’ specifically included all lands,  buildings and  equipments belonging to the owner of the  mine and  adjacent to  or situated on the surface of the mine  where the  washing of  coal or manufacture of coke was carried  on. It  also included  all lands  and buildings other than  those referred  to above  wherever situated  and were solely  used for  location of  management as well as of liaison office or the residence of officers and staff of the mine. In  other words,  buildings used  for the residence of the officers  and staff  etc. had to be treated as ‘mine’ in spite of  the fact  that such  lands and buildings might not have belonged  to the owner of the ‘mine’ in ordinary sense. It will  also appear  from the definition of ‘mine’ that the phrase "belonging  to the  owner of the mine" was only to be found in  sub-clause (x)  and sub-clause  (xii)  of  Section 2(g). The  legislative intent  obviously was to bring lands, buildings and  equipments which did not belong to the owners but were  used in  the running  of the  coal mine within the ambit of  the word  ‘mine’. The intention appears to be that the Central Government after taking over of the mine must be in a position to run the mine as it was being run previously with all  the plants,  equipments,  machineries,  lands  and buildings. Even  if some  of the properties mentioned in the definition did  not belong  to  the  owner,  those  will  be available to the Central Government for running the mine. As this provision  might lead to a conflict with other laws, it was expressly  provided by Section 12 that the provisions of this  Act   shall  have   effect  notwithstanding   anything inconsistent therewith  contained in  any other  law. In the Schedule annexed  to the  Act, names  and addresses  of  the mines, management  of which  was taken  over as  well as the names of  the owners of the mines were given, "Victory. P.O. Dhansar" was  mentioned at  Serial No.68  and United  Mining Company Limited  has been shown as the owner of the mine. By virtue of  Section 3  read with  the extended  definition of mine given  in the  Act. not  only  the  colliery,  but  the buildings which  are being  utilised  for  location  of  the management and  the office of the mine as also for residence of the officers and staff of the mine were brought under the management of the Central Government. If the office building belonged to  a person  other than the Colliery Company which owned the  mine, then  it was his duty to draw the attention of the  Central Government  to the fact that these buildings even though  included in  the definition of ‘mine’, actually did not  belong to  United Mining  Company Limited which was described generally  as the owner might have been corrected. But  even  if  such  an  error  took  place  which  required correction, the   owner  of the  lands and buildings falling within sub-clasuse (xi) of clause (g) of Section 2 could not get back  the management  or control  over these  lands  and buildings. It  is of  significance  to  note  that  Madanlal Agrawal who  is a  Director of United Mining Company Limited did not  raise any  objection to  the description  of United Mining Company  Limited as the owner of the coal mine at any point of time and did not seek for any correction. It is not his case  that he  was unaware  of the  wide  definition  of ‘mine’ given in this Act.      The Coal Mines (Taking over of Management) Act. 1973 was followed  by the Coal Mines (Nationalisation) Act, 1973. The extended  definition of  ‘mine’ that was given under the Coal Mines (Taking  Over of  Management) Act was retained in Section  2(h)   of  the   Nationalisation  Act   with   some modification.      The object of the Nationalisation Act was stated to be-      "An  Act   to   provide   for   the



    acquisition  and  transfer  of  the      right, title  and interest  of  the      owner in  respect of the coal mines      specified in  the schedule  with  a      view  to   reorganising   and   re-      constructing such  coal mines so as      to   ensure   the   rational,   co-      ordinated      and       scientific      development and utilisation of coal      resources   consistent   with   the      growing reqirements  of the county,      in order  that  the  ownership  and      control  of   such  resources   are      vested in  the State and thereby so      distributed as best to subserve the      common   good   and   for   matters      connected therewith  or  incidental      thereto."      A  declaration was made in the Act in Section 1A which is as under:-      "1A-Declaration as to expediency of      Union  control.-(1)  It  is  hereby      declared that  it is  expedient  in      the public  interest that the Union      should take  under its  control the      regulation and  development of coal      mines  to  the  extent  hereinafter      provided in  sub-sections  (3)  and      (4) of  section 3  and  sub-section      (2) of section 30." "Mine" was defined by Section 2(h) of Act as under:      "2(h).    "mine"     means      any      excavation where  any operation for      the purpose  of  searching  for  or      obtaining minerals  has been  or is      being carried on, and includes-      (i)  all borings and bore holes;      (ii) all shafts, whether in the      course of being sunk or       not;      (iii)     all levels  and  inclined      planes  in   the  course  of  being      driven;      (iv) all open cast workings;      (v)  all   conveyors    or   aerial      ropeways provided for bringing into      or removal  from a mine of minerals      or  other   articles  or   for  the      removal of refuse therefrom;      (vi) all lands,  buildings,  works,      adits,  levels,  planes,  machinery      and    equipments,     instruments,      stores,     vehicles,     railways,      tramways   and   sidings   in,   or      adjacent to,  a mine  and used  for      the purposes of the mine;      (vii)     all workshops  (including      buildings, machinery,  instruments,      stores,    equipments    of    such      workshops stand)  in,  or  adjacent      to, a  mine and  used substantially      for the  purposes of  the mine or a      number  of  mines  under  the  same      management;      (viii)    all coal belonging to the      owner of the mine, whether in stock



    or in  transit, and  all coal under      production in a mine;      (ix) all power  stations in  a mine      or operated primarily for supplying      electricity  for   the  purpose  of      working the mine or number of mines      under the same management;      (x)  all   lands,   buildings   and      equipments, belonging to the owners      of the mine, and in, adjacent to or      situated on  the  surface  of,  the      mine  where  the  washing  of  coal      obtained   from    the   mine    or      manufacture, therefrom,  of coke is      carried on      (xi) all lands  and buildings other      than  those  referred  to  in  sub-      clause (x)  wherever  situated,  if      solely used for the location of the      management,   sale    or    liaison      offices, or  for the  residence  of      officers and staff, of the mine;      (xii)     all other  fixed  assets,      movable and immovable, belonging to      the  owner   of  a  mine,  wherever      situate   and    current    assets,      belonging to  a mine whether within      its premises or outside.      Explanation.-The         expression      "current assets" does not include,-      (a)  dues representing  the sale of      coal and  coal products effected at      any time  before the  appointed day      and outstanding  immediately before      the said day;      (b)  dues  from   the  Coal  Board,      established under  section 4 of the      Coal  Mines  (Conservation,  Safety      and Development)  Act, with respect      to any  period before the appointed      day;      (C)  dues  from   sundry   debtors,      loans and advances to other parties      and    investments,    not    being      investments in the coal mines;      (d)  security deposits  made by the      owners  with  the  Coal  Controller      appointed by the Central Government      or  with   the  Railways   for  the      fulfilment of  contracts or  with a      State  Electricity  Board  for  the      payment of bills;      (e)  earnest money deposited by the      owners  with   the   Railways   for      obtaining contracts;"      Sub-section (n)  of Section  2 laid down that words and expressions used  but not  defined in  the Act will have the meanings assigned  to them  in the  Coal Mines (Conservation and Safety) Act, 1952. Sub-section (o) of Section 2 provided that words  and expressions  used in the Nationalisation Act which have  not been defined in the Coal Mines (Conservation and Development)  Act. 1974,  but defined  in the Mines Act, 1952, will  have the  meanings assigned to them in the Mines Act.      By virtue  of Section  3, the right, title and interest



of owners  in relation  to the  coal mines  specified in the Schedule stood  transferred to  and vested absolutely in the Central Government  free  from  all  encumbrances  from  the appointed  day,   1st  May,   1973.  The   idea  behind  the Nationalisation Act appears to be that the Government wanted to take  over and  run  the  coal  mines  so  as  to  ensure rational,  co-ordinated   and  scientific   development  and utilisation of  coal resources. The object of the Act was to subserve the common good and for matters connected therewith or incidental  thereto. The Act should not be construct in a way to  frustrate the  working of  the coal mines altogether and thereby  stop or  bring down  production of  coal by the nationalisation of coal mines. The extended meaning given to ‘mine’ was  to ensure  that   the activity of mining of coal could be  carried on  in an  uninterrupted fashion. Not only the lands,  buildings and equipments belonging to the owners of the  mine but other lands and buildings which were solely used for the purposes of office or residence of the officers and staff of the mine also vested in the Central Government. The words  of sub-clause (xi) are very clear and there is no ambiguity in them.      Mr. Sorabjee  appearing on  behalf of  Madanlal Agrawal has contended  that what has been taken over under Section 3 by the  Central Government is the "right, title and interest of the owners in relation to the coal mines specified in the Schedule". Serial No. 204 in the Schedule mentions "Victory" as the  coal mine and its owner has been described as United Mining Company  Limited. The  compensation payable  has also been mentioned  as a sum of Rs.9,17,000/- In other words, by virtue of  Section 3,  the United  Mining Company  was being divested of  its right,  title and interest in the mine. The amount of compensation payable to the company was also fixed by the  statute. Section  3 read with the Schedule leaves no room for  doubt   that only  the interest of the company and nobody else  was being acquired under Section 3. The company may have  taken a  house on  lease, but  the lessor  was not divested of  ownership of  the house in any way by virtue of the provisions of Section 3.      If this  argument is  upheld, it will make the extended meaning given  to ‘mine’  in sub-section  (h) of  Section  2 nugatory and  of no  effect. "Coal mine" has been defined by Section 2(b)  to mean  a mine  in  which there exists one or more seams  of coal.  ‘Mine’ has  been  defined  to  include amongst others all conveyors or aerial ropeways provided for the bringing  into or  removal from  a mine  of minerals  or other articles  or for  the removal of refuse therefrom, all lands, buildings works, vehicles, railways tramways and sidings in,  or adjacent  to a mine and used for the purpose of the  mine, all workshops (including buildings, machinery, instruments, stores,  equipment of  such workshops  and  the lands on  which such  workshop stands) in or, adjacent to, a mine and  used substantially  for the  purposes of the mine, all power  stations in  a mine  or  operated  primarily  for supplying electricity  for the  purpose of working the mine. All these  things may not belong to the owner to come within the  ambit   of  the   Nationalisation  Act.   The  extended definition of  mine has  been given  in order to ensure that after taking  over of the mine, the Central Government is in a position  to operate  the mine  and extract  coal  and  do everything that  is needful  for the  purpose of working the mine. In  fact, the  phrase "belonging  to the  owner of the mine" is  to be  found only  in sub-clauses  (viii), (x) and (xii) That  clearly goes  to   show that  the other  assets, movable or  immovable, which  were being  actually used  and utilised for operation of the mining activity were all being



taken over  by the  Central Government even though these did not belong  to the  owners. There is no sense in giving this extended meaning  to ‘mine’  if the intention of the Act was not to  acquire the  right  of  ownership  in  these  assets falling within the definition of ‘Mine’.      It is  also of  significance that  Section 3  speaks of vesting of  "right, title  and interest  of  the  owners  in relation to  the coal  mines specified in the Schedule". All ownership rights  not only  of, but in relation to, the coll mines were  being taken  over by the Central Government free from all  encumbrances from  the appointed  day. The Section also does  not speak of the right, title and interest of the owners specified in the Schedule. On the contrary, it speaks of "coal  mines specified in the Schedule". On the contrary, if speaks  of   "coal mines  specified in  the Schedule". In other words,  the coal  mines specified  in the Schedule are being brought  under the ownership of the Central Government which will  take in everything included in the definition of mine. The ambit of the coal mine has to be understood in the sense as  given in  the Act.  The fact  that the name of the company has  been given  as the  owner  and  the  amount  of compensation has  also been  fixed in  the Schedule does not mean that the vesting was confined only to the assets of the company in  the mine.  The Schedule  contains a  list of the mines which  have vested in the Central Government. In order to  ascertain   exactly  what  has  vested  in  the  Central Government, the  definition of  ‘mine’ given in Section 2(h) will have  to be  taken into  account. What the Schedule has done is  to give  the names  and location  of the mines, the names and addresses of the owners of the mines and also the amounts of  compensation to  be paid.  It is  not in dispute that United Mining Company was named as the owner of Victory coal mine.  From this,  however, it does not follow that all assets, lands,   buildings  and equipments which fall within the ambit of the definition of mine as given in Section 2(h) and also  sub-sections (3) and (5) of Section 26, it will be clear that  vesting under  Section 3 was not confined to the interest of the owner named in column 4 of the Schedule.      The  contention   that  Section   3  was   of   limited application and  only took  away the  rights of  the  owners specified in  the Schedule is not borne out of the scheme of the Act and also the wording of Section 3.      Section 3  of the  Act which  deals with acquisition of the rights  of owners  of coal mines in relation to the coal mines, requires  to be  interpreted  in  the  light  of  the objects for which the Coal Mines (Nationalisation) Act, 1973 was enacted.  As set  out in  the Preamble,  the purpose  is reorganising and  reconstructing such  coal mines  so as  to ensure a  rational, coordinated  and scientific  development and utilisation  of coal  resources. Therefore,  all  assets required for functioning of coal mines are to be acquired.      The two  key words  for  the  purpose  of  interpreting Section 3  are ‘mine’  and  ‘owners’.  If  we  look  at  the definition of a ‘mine’ under Section 2(h), the definition is designed to cover:- (1)  all properties  "belonging to the mine" whatever be the nature of  these properties,  as also  specified  properties "belonging to  the owner  of the  mine". Thus,  for example, Section 2(h)(xii)  is an  omnibus clause  which  covers  all fixed assets,  moveable and  immoveable,  belonging  to  the owner  of   a  mine  wherever  situate  and  current  assets belonging to  a mine  whether in  its premises  or  outside. Section 2(h)(viii) covers all coal belonging to the owner of the mine.  Section 2(h)(x)  covers all  lands, buildings and equipment belonging  to  the  owners  of  a  mine,  and  in,



adjacent to  or situated  on the  surface of the mine. where washing of coal or manufacture of coke is carried on. (2)  In addition,  the definition  of ‘mine’ also covers all those assets  which are required for a proper functioning of the mine irrespective of  whether these assets ‘belong’ to a mine or  not. Thus, for example, Section 2(h)(vi) covers all lands,  buildings,  machinery  and  equipment,  instruments, stores, vehicles, railways, tramways etc. adjacent to a mine and used  for the purposes of the mine. Therefore, all these assets if they are lying adjacent to a mine and are required for the  proper functioning  of the  mine would  be acquired irrespective of whether they belong to the "owner of a mine" or not.  Similarly under Section 2(h)(ix) all power-stations in a  mine or  operated primarily  for supplying electricity for the  purpose of  working the  mine or  a number of mines under the  same management  will be acquired irrespective of whether the  power-stations belonged to the mine or owner of the mine,  or not.  Sub-clause (xi) of Section 2(h) provides that all  other [other  than those  in sub-clause (x)] lands and buildings  wherever situated,  if solely  used  for  the location of  the management,  sale or liaison offices or for the residence  of officers  and staff  of the  mine are also acquired. Unlike  sub-clause (x),  sub-clause (xi)  does not contain the  words "belonging  to the  owners of  the mine". Therefore, the  definition clause  of ‘mine’ covers at least two different kinds of property; (i) properties which belong to the  mine and  (ii) properties which are used by the mine for a  proper functioning of the mine. The first category of properties would be properties which are of the ownership of the mining company. These could also be properties which are leased by  the mining company or in possession of the mining company and used by it.      That is  why under Section 2(n) and 2(o) read together, the term  ‘owner’ would carry wider meaning assigned to that term  under  the  Mines  Act  of  1952  which  would  cover, depending on  the context,  even the  rights of  a lessee or occupier of  the mine  or any  part thereof. Thus the entire interest in  the properties  which  are  covered  under  the definition of a mine is to be acquired so that the mines can be reorganised and run efficiently.      In this  context, therefore,  Section 3  refers to  the acquisition of  the rights  of owners  in respect of all the properties which are covered by the definition of a ‘mine’.      Regarding  those   properties  which  are  not  of  the ownership of  the coal mine, it is clear from the definition of ‘mine’  that only  properties which  are required  for  a proper functioning  of the mine and which are covered by the definition  would   be  acquired.  Any  and  every  property belonging to  another person  which happens   to  be on  the surface of  the mine  or adjacent  to it  is not taken away. Only those  properties of  another person  which fall within the definition  of a  mine and  which are  necessary  for  a proper functioning  of the  mine are  to be  taken away. The definition itself  takes care  of this aspect by stipulating wherever necessary  that such  properties must  used for the purpose of  the mine,  whether the  purpose is  specified or general.      The judgment of the Bombay High Court in  Telco Limited v. Bharat mining Corporation Ltd. & Ors., AIR 1980 Bom. 168, has taken  a very  narrow view  of Section  3(1) of the Coal Mine (Nationalisation)  Act in  holding that  it is only the right, title and interest of those owners whose names appear in the  Schedule against  the respective  coal mines that is intended to  be acquired  and  transferred  to  the  Central Government. It ignores both the definition of ‘mine’ as also



the definition  of ‘owner’.  The other  two judgments Valley Refractories Pvt. Ltd. & Anr. v. K.S. Garewal, AIR 1978 Cal. 574, and  Coal Mines  Authority Ltd.  &  Ors.  v  Associated Cement Companies  Ltd., AIR  1986 M.P.  241, have  basically examined the  definition of  ‘mine’ in  order to see whether the asset  in question  which was under consideration before them, falls  within the  definition of ‘mine’ under the said Act. That  is the  correct approach.  especially because  of the extended  definition of a mine and the distinction which the definition  itself makes between properties belonging to the mine  or owner of the mine and properties which are used for the  purposes of  the mine.  The two decisions also take into account  the wider  definition of  an ‘owner’.  Such an interpretation would also be in consonance with Section 26(3) which  takes care  of the right of persons who are not described as  owners of  the coal  mines in  the Schedule to claim compensation.  If their interests were not to be taken over under  the Nationalisation  Act, there would be no need to provide for any commpensation for them.      In the light of the definition of an ‘owner’ which also includes a  lessee or  an occupier  apart from the immediate proprietor, and  the definition  of ‘mine’, one can conclude that even assets of which the mine or the mining company may not be  the proprietor,  but which are leased by the mine or which are in the possession of a mine over a period of time, are also  acquired. A temporary acquisition, or a short-term lease, or  even some  special additional amenities which the mine may provide but which are not required for the purposes of the  mine may  not be  covered. It  will depend  upon the facts of each case. In the Madhya Pradesh case, for example, the equipment  in  question  was  only  temporarily  in  the possession of  the mine to meet certain exigencies. This was held to  be not  covered by  the definition  of mine. In the Calcutta case, however, the weigh bridge which was leased by the  company  was  a  necessary  equipment  for  the  proper functioning of  the mine and was installed in the mine for a period of time. It was held as falling within the definition of a  ‘mine’. Thus  it is quite possible that property which is temporerily in or adjacent to a mine, and which does not belong to the mine, or certain machinery and equipment which does not belong to the mining company but may be temporarily leased to  meet some  special temporary  requirements, would not be  covered by  the definition  of  a  ‘mine’.  But  the present case is not such a case.      The scheme of payment of compensation also goes to show that apart  from the  owners named  in the  Schedule,  other persons may  have to  be compensated.  Section 8 of the Coal Mines (nationalisation)  Act lays  down that  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 owner  in relation  to such coal mine or  group of  coal mines, an amount equal to the amount specified against it in the corresponding entry in the fifth column of  the Schedule." The commissioner of payments to be appointed under  Section 17  for the purpose of disbursement of the amounts specified in the Schedule has to consider and investigate the  claim of every person against the owner and decide the  validity of  the  claim.  The  Commissioner  may transfer the claim for settlement to an authorised person.      A claimant who is dissatisfied with the decision of the Commissioner may  prefer an appeal. Provisions of Section 26 of Coal  Mines (Nationalisation)  Act are  important for the purpose of this case:



    "26. Disbursement of amounts to the      owners of coal mines. (1) If out of      the monies  paid to him in relation      to coal mine or group of coal mines      specified in  the second coloumn of      the Schedule,  there is  a  balance      left after  meeting the liabilities      of all  the secured  and  unsecured      creditors, the  Commissioner  shall      disburse such  balance to the owner      of such  coal mine or group of coal      mines.      (2)  Before making  any payment  to      the owner of any coal mine or group      of  coal  mines  under  sub-section      (1), the Commissioner shall satisfy      himself as  to the  right  of  such      person to  receive the whole or any      part of  such amount,  and  in  the      event of  there being   a  doubt or      dispute as  to  the  right  of  the      person to  receive the whole or any      part of  the amount, referred to in      sections 8  and 9, the Commissioner      shall refer the matter to the Court      and  make   the   disbursement   in      accordance with the decision of the      Court.      (3)  For the  removal of doubts, it      is hereby declared that the entries      in  the   fourth  column   of   the      Schedule shall  not be deemed to be      conclusive as  to the  right, title      and  interest   of  any  person  in      relation to any coal mine specified      in the corresponding entries in the      second column  of the  Schedule and      evidence  shall  be  admissible  to      establish  the   right,  title  and      interest of  any person in relation      to such coal mine.      (4)  In relation to a coal mine the      operations    of     which     were      immediately before  the taking over      the management  of such  coal  mine      under the  Coal Mines  (Taking Over      of Management) Act, 1973, under the      control of  a managing  contractor,      the amount  specified in  the fifth      column of the Schedule against such      coal  mine   shall  be  apportioned      between the  owner of the coal mine      and  such  managing  contractor  in      such proportions  as may  be agreed      upon by  or between  the owner  and      such managing  contractor,  and  in      the event  of there  being no  such      agreement, in  such proportions  as      may be determined by the court on a      reference  made   to  it   by   the      Commissioner.      (5)  Where any machinery, equipment      or other  property in  a Coal  Mine      has   vested    in   the    Central      Government or  a Government company



    under this Act, but such machinery,      equipment or  other  property  does      not belong  to the  owner  of  such      coal mine,  the amount specified in      the fifth  column of  the  Schedule      against such  coal mine shall, on a      reference  made   to  it   by   the      Commissioner, be apportioned by the      Court between  the  owner  of  such      coal mine  and the  owner  of  such      machinery,   equipment   or   other      property having  due regard  to the      value of  such machinery, equipment      or other  property on the appointed      day.      (6)  Where the  amount specified in      the fifth column of the Schedule is      relateable  to   a  group  of  coal      mines, to  Commissioner shall  have      power  to   apportion  such  amount      among the owners of such group, and      in making  such apportionment,  the      Commissioner shall  have regard  to      the highest  annual  production  in      the  coal  mine  during  the  three      years  immediately   preceding  the      appointed day."      Sub-section  (1)  speak  of  "monies  paid  to  him  in relation to  a coal  mine". The  money payable  to an  owner shall be  utilised first  to pay  to secured  and  unsecured creditors. If  any balance  is left  thereafter, it shall be disbursed to  the  owners.  Sub-section  (2)  provides  that before making any payment to the owner, the Commissioner has further to  satisfy himself as to the right of the person to receive "the  whole or  any part  of such  amount’. In other words, merely because  the name of a colliery owner is shown in the  4th column  as the  owner will not enable him to get the entire  amount allocated  in column  5 Other parties may claim a  portion of  that amount.  In such  a situation, the Commissioner has  to refer  the dispute  to  the  court  for decision. For  the removal  of doubts,  sub-section (3)  has declared that  the entries in the 4th column of the Schedule shall not  be deemed to be conclusive as to the right, title and interest of any person in relation to any coal mine. Any other claimant  may adduce  evidence to establish his right, title and  interest in  relation to  such coal  mine.  These provisions clearly  go to  show that   the  colliery company named in  the 4th  column is not the only person who will be paid  the  compensation  money.  If  plants,  machinery  and building which  come within the definition of "mine" are not owned by  the person  named in  the  4th  column,  then  the Commissioner will have to satisfy himself as to the right of any other  person who  owns such  plants or  machineries  or buildings and  divide the  amount of compensation among such persons and the persons named in the 4th column.      The controversy  has been  put beyond any doubt by sub- section (5)  of Section  26 which  specifically provides for apportionment of  the compensation money when any machinery, equipment or  other property  which does  not belong  to the owner of  the mine has vested in the Central Government. The amount may  be apportioned  between the  person named in the 4th column  and the  owner of  machinery, equipment or other property by  a court.  All these  provisions clearly  go  to show:- (1)  Mere mention of the name of the owner of a coal mine in



4th column is not conclusive of its rights to get the entire amount of compensation specified in the 5th column. (2)  There may  be  other  claimants  for  the  amount.  The dispute many  be resolved  by a  court on  reference by  the Commissioner. (3)  Machinery, equipment  or other  property in a coal mine which does  not belong  to the  owners specified  in the 4th column may  vest in  the Central  Government or a Government Company. (4)  If such  vesting takes  place, then  the owner  of such machinery, equipment  or property  may be compensated out of amounts specified in the 5th column. (5)  The claim of such owners as against the owners named in the  4th   column  may  be  referred  to  a  court  and  the compensation money  may be  apportioned by the court between the owner  of the  coal mine  and the  owner  of  machinery, equipment or other property.      In the  context of  Section 3  and also Section 26, the owner has  to be  understood as  owner  of  a  mine  in  the extended sense given in Section 2(h). The limited definition of the word ‘mine’ given in the Mines Act, 1952 has not been designedly adopted  by the Coal Mines (Nationalisation) Act. All these  provisions go  to show  that it  was not only the interest of  the owners  of the  coal mine  specified in the fourth column,  but also  the ownership of all other persons in the  properties enumerated  in Section 2(h) vested in the Central Government  by virtue of the provisions of Section 3 of the Act.      That means that things which did not belong to the mine owners mentioned in column 4 of the Schedule but fall within sub-clauses  (i)   to  (xii)   of  Section   2(h)   of   the Nationalisation Act will vest in the Central Government free from all  encumbrances. If  the mine owner had located staff quarters and  offices on  rented buildings,  these will also vest in the Central Government.      In view  of the  aforesaid,.  we  hold  that  the  suit premises fall  within the  ambit of the definition of ‘mine’ in Section  2(h) of  the Coal  Mines (Nationalisation)  Act, 1973 and as such had vested in the Central Government on the appointed day by virtue of the provision of Section 3 of the Act, even  though these  premises might not have been in the ownership of the United Mining Company.      The appeal  is allowed.  The  impugned  judgment  under appeal dated 20.11.1992 is set aside. There will be no order as to costs.      C.A. NOS.1727-1731 OF 1990 AND C.A.NO. 4673 OF 1994      In view  of our  judgment in  C.A. NO.2463 OF 1993, the above appeals  are also  allowed. The judgments under appeal are set aside. NO order as to costs.