PETITIONER:
SONE VALLEY PORTLAND CEMENT CO. LTD.
Vs.
RESPONDENT:
THE GENERAL, MINING SYNDICATE PVT. LTD.
DATE OF JUDGMENT24/08/1976
BENCH:
SINGH, JASWANT
KHANNA, HANS RAJ
SARKARIA, RANJIT SINGH
CITATION:
1976 AIR 2520 1977 SCR (1) 359
1976 SCC (3) 852
ACT
Bihar Land Reforms Act, 1950- ss. 4(a) and 10--Lessee of
mines--If a tenure-holder or intermediary under the Act.
Interpretation--Amendment of a section--If could be
used to interpret an earlier provision in the Act.
HEADNOTE
The proprietor of large tracts of laud leased blocks of
land to. the lessees at a stipulated rate of royalty and
rent. The lessees sub-leased the land to the appellant who
undertook to pay the lessees the same royalty and rent.
payable by them to the proprietor. They also agreed to pay
an additional royalty to the head-lessee. The sub-lease
gave an option to the appellant to make payment of royalty
directly to the head lessor in terms of the head lease. The
lessees transferred their rights, title and interest in the
head lease and sub-lease to the respondent.
By virtue of a notification under s. 3 of the Bihar land
Reforms Act, 1950 the estate belonging to the head lessor
passed to and became vested in the State. Another notifica-
tion issued under s. 3A of the Act declared that all inter-
mediary interests in certain districts had passed to and
became vested in the State.
In exercise of its option under the sub-lease the appel-
lant paid rent a.nd royalty directly to the head lessor and
the additional royalty to the head lessee (respondent) but
stopped payment of additional royalty to the respondent in
terms of the sub-lease, from July 1, 19.58. On August 8,
1959 Controller of Mines and Leases for India passed an
order enhancing the royalty payable to the State and in
c1.(9) of the order it was stated that "royalty will be.
payable to State Government by the appellants in accordance
with s. 9 of the Mines and Minerals (Regulation & Develop-
ment) Act, 1957 and dead rent according to the order passed
in these proceedings." The respondent filed a suit claiming
arrears of additional royalty. The High. Court decreed the
suit.
In appeal to this Court, it was contended that (i) since
the respondent was merely a tenure-holder and all its
rights, title and interest as such extinguished alongwith
the interest of the erstwhile proprietor with the coming
into force of the 1950-Act it was the appellant as a sub-
lessee that became a direct lessee of the State and, there-
fore, the respondent was not entitled to claim additional
royalty. (ii) since the enhanced royalty was payable by the
respondent which was paid by the appellant, the appellant
was entitled to reimbursement to the extent it paid the
amount as agent of the respondent.
Dismissing the appeal,
HELD :(1)(a) A combined reading of ss..4(a) and 10 of
the 1950-Act leaves no room for doubt that the interests of
the head lessee were left unaffected by the notifications.
[369 D]
(b) The respondent could not be said to be a tenure-holder
as contemplated by the 1950-Act as it had neither acquired
from the head lessor by virtue of the lease a right to hold
the land for the purpose of collecting rent nor a right to
hold the land for bringing it under cultivation by estab-
lishing tenants on it. The right of the respondent as a
head lessee of the mines and minerals also did hot cease and
the appellant did not acquire the status
lessee. According to s. 4(a) of 1950-Act on the publication
of the notifications the interests of the proprietor or
tenure holder comprised in such estate or tenure inclu-
sive of such right of a lessee of mines and minerals com-
prised
7-- 1104--SC I/76
360
in such estate or tenure vest absolutely in the State free
from encumbrances and such proprietor or tenure-holder has
to cease to have any interest in such estate or tenure other
the interest expressly saved by or under the provisions of
the Act. The last words of s. 4(a) of the Act, namely,
"other than the interest expressly saved by or under the
provisions of the Act" unequivocally show that those inter-
ests which are expressly saved are= not’ affected or im-
paired by the notifications. According to 9.10 which itself
is in the nature of a non-obstante provision overriding
other provisions of the Act, every lease of mines and miner-
als comprised in the notified estate or tenure or any part
thereof which may be subsisting immediately before the date
of vesting has to be treated, with effect from the date of
vesting, as a lease from the State Government to the holder
of the said subsisting lease for the residue of the term of
that lease and such holder acquires the right to retain
possession oF the leasehold property for that period. In
other words, in place of every contractual lease which
might have been subsisting immediately before the date of
vesting of the estate or tenure a statutory lease on practi-
cally identical terms and conditions came into being. [368
F--H, 369 A--C]
Bihar Mines Ltd. v. Union of India [1967] 1 S.C.R. 707,
Chhatu Ram Horil Ram Private Ltd. v. State of Bihar & Anr.
[1968] 2 S.C.R. 881; A.I.R. 1969 S.C. 177, M/s. Hindustan
Steel Ltd., Rourkela v. Smt. Kalyani Banerjee & [1973] 3
S.C.R. 1 and State of Bihar& Anr. etc. v. Khas Karsmpura
Collieries Ltd. etc. [1977] I SCR. 157 followed.
(c) The introduction of s.10A in the 1950-Act indicates
that the law as it obtained prior to the amendment was not
intended to have the effect of divesting a lessee of his
interests in a lease of mines or minerals which subsisted
immediately before the vesting of a notified estate or
tenure. [369 F]
(2) In view of the order passed by the Controller that
the appellant agreed to say the enhanced royalty the burden
of payment is to be borne by the appellant and the question
of its being reimbursed by the respondent does not arise.
[371 D]
(3) The contention that it is not permissible to inter-
pret a statute by reference to what has been said in subse-
quent statutes with reference to the situation obtaining
before the introduction of the amendment is not well found-
ed. Sometimes light may be thrown upon the meaning of an
Act by taking into consideration ’Parliamentary expositions’
as revealed by the later Act which amends the earlier one
to clear up any doubt or ambiguity. This principle has to be
followed where, a particular construction of the earlier Act
will render the later incorporated Act ineffectual or otiose
or inept. [370 A]
Krikness v. John Hudson & Co., [1955] A.C. 696 (HL),
Yogendra Nath Naskar v.C.I.T. Calcutta, [1969] 3 S.C.R. 142,
Cape Brandy Syndicate v.I.R.C. 1921] 2 K.B. 403 referred to.
In the instant case resort can be had to the provisions
of s. 10A introduced in 964 while interpreting s. 10 of the
1950-Act with reference to the situation obtaining at the
relevant time before the introduction of s. 10A. The estate
comprised in the head lease which was assigned to the re-
spondent notionally stood leased by the State from the date
of vesting to the holder of the subsisting lease and the
respondent became entitled to retain possession of the
leasehold property. [370D]
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1250
of 1968.
(From the Judgment and Order dated 17-4-1967 of the
Calcutta High Court in Appeal from Original Decree No.
255/69).
D.V. Patel, H.K. Puri, S.K. Gupta, P. Dayal and M.C. Dhingra
for the Appellant.
P.K. Chatterjee, and G.S. Chatterjee, for the Respondent.
361
The Judgment of the Court was delivered by.
JASWANT SINGH, J.---This appeal by certificate granted
under Article 133(1)(a) and (c) of the Constitution which
is directed against the judgment and decree dated March 25,
1968 of the High Court of Calcutta in Appeal No. 255 of 1963
raises important questions relating to the interpretation of
certain provisions of the Bihar Land Reforms Act, 1950 (Act
XXX of 1950) (hereinafter referred to as ’the B.L.R. Act’)
as also of the Mining Leases (Modification of Terms) Rules,
1956 providing for the modification and alteration of terms
and conditions of the mining leases granted prior to the
commencement of the Mines and Minerals (Regulation and
Development) Act, 1948 (Act 53 of 1948) (hereinafter re-
ferred to as ’the 1948 Act’) and of the Mines and Minerals
(Regulation and Development) Act, 1957 (Act 67 of 1957)
(hereinafter referred to as ’the 1957 Act’) which replaced
the 1948 Act on June 1, 1958.
The facts and circumstances leading to this appeal are:
By an indenture of. lease dated July 31, 1927 (hereinafter
referred to as the ’head lease’), Raja Bishambharnath Sahi
(hereinafter referred to as the ’Raja’) who was the sole
proprietor of large tracts of land known as the Sonepura
estate in Paragana Rohtas in the district of Shahbad in
Bihar demised certain blocks of land situate in villages
Jaintipur, Nimhath Deodand and Dhanwanti, District Shahbad
together with quarries of lime stone (known as Chunhatta
Lime Stone Quarries) lying thereunder for a period of 40
years commencing from 1st day of August, 1927, and ending on
31st day of July, 1967, with an option to continue for a
further period of 25 years, in consideration of a ’salami
and fine’ of Rs. 8,200/- unto Karunaranjan Dutt and Jugal-
chandra Dutt (hereinafter referred to as ’Dutts’). By the
said indenture, the head lessees inter alia undertook to pay
to the Raja during the first 15 years of the said period of
40 years of the lease i.e., from the 1st day of August,
1927, to 31st day of July, 1942, royalty at the rate of
annas -/10/- (ten) ----62 paise for every 100 cubic feet
i.e., roughly at 15-1/2 paise per ton of solid lime stone,
quarried, raised, got, used or taken out from the demised
premises and for the remaining 25 years of the lease i.e.
from the 1st day of August, 1942, to 31st day of July, 1967,
royalty at the rate of annas -/15/- (fifteen) 94 paise
instead of annas -/10/- (ten) for every 100 cubic feet i.e.
roughly at 24 paise per ton of solid lime stone, quarried,
raised, got, used or taken out from the demised premises.
The aforesaid royalty was made payable quarterly i.e. after
every three months on the fixed dates specified in the
indenture of lease. The head lessees also undertook to pay
yearly rent of annas -/6/ (sux) per acre subject to the
maximum of Rs. 100/- for so much of the surface land as was
to be entered upon, used or occupied by them for the purpose
of placing, stocking and beeping stones or waste materials
and rubbish etc. The lease deed further provided as
follows .--
"That the ’LESSEES’ shall be at liberty ,red
competent without obtaining any further consent of
the "LESSOR" to
362
assign and transfer this lease or sublet or part
with the possession of the demised premises or any
part thereof to any person, firm or company whether
incorporated or otherwise and no mutation fee or
Nazarana or premium shall be charged by the ’LES-
SOR’ in case of such transfer or subletting for the
first time, but in case of subsequent transfer or
sub-letting a fee of Rupees five hundred (500/-)
shall be payable to the ’LESSOR’ for each such
occasion.
If the rents and royalties hereby reserved
or any part thereof or any other moneys hereunder
payable by the ’LESSEES’ to the ’LESSOR’ shall
remain unpaid for three months after the same shall
become due and payable the ’LESSEES’ shall pay
interest thereon at the rate of twelve (12) per
cent per annum calculated from the due date until
payment. If the same shall remain unpaid for three
years consecutively or if there be any breach of
any of the conveyants and agreements herein con-
tained and on the part of the ’LESSEE’ to be per-
formed and observed then this lease shall be liable
to be forfeited under an-order of a competent court
besides any other relief hereunder and under the
law then prevailing."
On October 12, 1928, the head lessees i.e. Dutts execut-
ed a sublease of the aforesaid blocks of land and quarries
of lime stone for the residue of the period of the aforesaid
indenture of lease dated July, 1927 except the last day
thereof for a consideration of Rs. 5,000/in favour of the
appellant. The appellant undertook to pay to Dutts the same
royalty and rent as were payable by Dutts to the Raja
during the period of the aforesaid head lease in respect of
lime stone quarried (except for ballast or building pur-
poses). In addition, the appellant undertook to pay to the
head lessees during residue of the first 15 years of the
said period of 40 years royalty of annas -/16/- (sixteen)
for every 100 cubic feet of solid lime stone quarried,
raised, got or used or taken out from the demised premises
and for the remaining 25 years thereafter of the said period
for each such quantity, royalty .of annas -/11/- (eleven).
The sub-lease gave option to the appellant to make payment
to the head lessor directly of royalties in terms of the
aforesaid head lease whether the head lessees were to make
default or not in making payment of the same. On February
15, 1929, Dutts transferred by a deed of assignment all
their rights, title and interest under and by virtue of the
aforesaid indenture of head lease and the sub-lease dated
October 12, 1928 to the respondent. The appellant had due
notice of the said assignment and accepted the respondent as
its lessor in place of Dutts.
On September 8, 1948, the Central Legislature passed the
1948 Act under Entry 36 of List I of Seventh Schedule to the
Government of India Act, 1935. Section 5 of the Act empow-
ered the Central Government to make rules for regulating the
grant of mining leases or for prohibiting the grant of such
leases in respect of any mineral or in any area. Section 7
of the Act empowered the Central Government to make rules
for the purpose of modifying or altering the terms and
conditions of any existing mining lease granted prior to the
commencement of the Act, so as to bring such lease into
conformity with the
363
rules made under section 5. In exercise of the powers
conferred on it by section 5 of the Act, the Central Govern-
ment made the Mineral Concession Rules, 1949. Both the 1948
Act and the Mineral Concession Rules, 1949, came into force
on October 25,’ 1949. The provisions of the Mineral Conces-
sion Rules, 1949, did not apply to leases or sub-leases
granted prior to October 25, 1949.
On September 25, 1950, the B.L.R. Act came into force.
This Act as apparent from its preamble was enacted for the
purpose transference to the State of the interests of the
proprietors and tenure holders’ in land and of mortgagees
and lessees of such interests in, eluding interest in mines
and mineral etc. Sections 3 and 3A of the B.L.R. Act which
dealt with vesting of estates or tenures in the State
provided as follows :--
"3.(1) The State Government may from time to
time, by notification declare that the estates or
tenures of a proprietor or tenure-holder, speci-
fied in the notification have passed to and become
vested in the State ......
3.A.(1) Without prejudice to the provision in
the last preceding section, the State Government
may, at any time, by notification, declare that the
intermediary interests of all intermediaries in the
whole of the State have passed to and become vested
in the State.
(2) It shall be lawful for the State Govern-
ment, if it so thinks fit, to issue, from time to
time, a notification of the nature mentioned in
sub-section (1) in respect of the intermediary
interests situate in a part of the State specified
in the notification and, on the publication of such
notification, all intermediary interests situate in
such part of the State shall have passed to and
become vested in the State ....... "
On November 14, 1951, the estate of Sonepura
belonging to the Raja passed to and became vested
in the State of Bihar by virtue of notification No.
83 IR/ZAN dated November 6, 1951 issued by the
Governor of Bihar in exercise of the power con-
ferred on him by sub-section (1) of the above
quoted section 3 of the B.L.R. Act.
On January 1, 1956, the Governor of Bihar issued
notification No. EVII-102/56-ILR reading as under
:-
"No. EVII-IO2-56-ILR.: Whereas a proclama-
tion announcing ’the .intention of the State
Government to take over all the intermediary
interest in the district of Shahbad Patna,
Saran, Muzafferpur, Bhagal-Sonthal Paraganas,
Ranchi, Singhbhum Manbhum and excluding Manbhum
Sadar Sub-Division was published under notifica-
tion No. 4381 LR dated the 18th August, 1955, as
required by subsection (1) of section 3(B) of
Bihar Land Reforms Act, 1950 (Bihar Act XXX of
1950).
Now, therefore, in exercise of the powers
conferred by sub-section (2) of section 3A of the
said Act, the Government of Bihar is pleased to
"declare that all such intermediary interests in
the said districts (excluding Manbhum Sadar
364
sub-Division) have passed to and become vested in
the State with effect from the date of this Notifi-
cation."
On September 4, 1956, the Government of India
made rules under section 7 of the 1948 Act for
modifying or altering the terms and conditions of
the existing leases, being Mining Leases (Modifica-
tion of Terms) Rules, 1956. Clause (c) of rule 2
of the Rules defined "existing mining lease" as
meaning a mining lease granted before October 25,
1949 and subsisting at the commencement of the 1956
Rules but not including any such lease in respect
of (i) natural gas, (ii) petroleum; (iii) coal, or
(iv) any minor mineral within the meaning of clause
(c) of section 3 of the Act.
The 1948 Act was replaced by the 1957 Act which
came into force on June 1, 1958. Section 9 of the
1957 Act provided as follows :--
"9. Royalties in respect of mining leases :--
(1 ) The holder of a mining lease granted
before the commencement of this Act shall, notwith-
standing anything contained in the instrument of
lease or in any law in force at such commencement,
pay royalty in respect of any mineral removed by
him from the leased area after such commencement,
at the rate for the time being specified in the
Second Schedule in respect of that mineral.
(2) The holder of a mining lease granted on
or after the commencement of this Act shall pay
royalty in respect of any mineral removed by him
from the leased area at the rate for the time being
specified in the Second Schedule in respect of that
mineral.
(3) The Central Government may, by notifica-
tion in the official gazette, amend the Second
Schedule so as to enhance or reduce the rate at
which royalty shall be payable in respect of any
mineral with effect from such date as may be speci-
fied in the notification:
Provided that the Central Government shall not--
(a) fix the rate of royalty in respect of any
mineral so as to exceed twenty per cent of the sale
price of ,the mineral at the pit’s head, or
(b) enhance the rate of royalty in respect of
any mineral more than once during any period of
four years."
This section was amended in 1972 by Act ’No. 56
of 1972. The amended section in so far as it is
relevant for our purpose runs as follows :--
"9.(1 ) The holder of a mining lease granted
before the commencement of this Act shall, notwith-
standing anything contained in the instrument of
lease or in any law in force at such commencement,
pay royalty in respect of any mineral removed or
consumed by him or by his agent, manager, employee,
contractor or sub-lessee from the leased area after
365
such commencement, at the rate for the time being
specified in the Second Schedule in respect of that
mineral.
(2) The holder of a mining lease granted on
or after the commencement of this Act shall pay
royalty in respect of any mineral removed or con-
sumed by him or by his agent, manager employee,
contractor or sub-lessee from the leased area at
the rate for the time being specified in the,
Second Schedule in respect of that mineral.
(2A) ..........
(3) The Central Government may, by notifica-
tion in the official Gazette, amend the Second
Schedule so as to enhance or reduce the rate at
which royalty shall be payable in respect of any
mineral with effect from such date as may be speci-
fied in the notification:
Provided that the Central Government shall
not enhance the rate of royalty in respect of any
mineral more than once during any period of four
years."
Section 29 of the Act provided for the effec-
tive continuance of the rules made or purporting to
have been made under the 1948 Act in so far as
they. related to matters provided for in the former
Act and were not inconsistent therewith.
By the Bihar Amendment Ordinance No. 3 of 1964
which was subsequently replaced by the Bihar Land
Reforms (Amendment) Act (Bihar Act 4 of 1965), the
B.L.R. Act was amended by introduction of section
10-A which runs as follows :--
"10-A. Vesting of interest of lessee of mines
or minerals which is Subject to a sub-lease.-(1)
The interest of every lessee of mines or minerals
which is subject to a sub-lease shall, with effect
from such date as may be notified in this behalf by
the State Government in the Official Gazette, vest
in the State and thereafter the sub-lessee whose
lease is not subject to any further sub-lease shall
hold his lease directly under the State Government
and the provisions of subsections (2) and (4) of
section 10 shall, ’mutatis mutandis’ apply to his
lease.
(2) No .sub-lessee of mines or minerals
holding under a lessee whose interest vests in the
State Government under sub-section (1 ) shah be
entitled to claim any damages from his lessor on
the ground that the terms of the lease in respect
of the mines or minerals have become incapable of
fulfilment by the operation of this section."
Purporting to act under the Mining Leases (Modification
of Terns) Rules, 1956, the Controller of Mining Leases, an
officer appointed by the Central Government for the purpose
of implementing the rules, by his order dated August 8, 1959
enhanced the royalties payable under the aforesaid lease
dated July 31, 1927 to 37 Naya Paise per ton.
366
In exercise of its option under the sub-lease dated
October 12,. 1928, the appellant paid rent and royalty
payable by the head lessee in respect of the aforesaid
Chunhatta quarries under the aforesaid indenture of lease
dated July 31, 1927, directly to the. Raja upto the date
immediately preceding the date of the aforesaid vesting of
the interest of the Raja in the State of Bihar under the
B.L.R. Act. After the date of the vesting of the interest
of the Raja in the State of Bihar the appellant started
paying directly to the State the said royalty at the rate of
24 paise per ton. The appellant also continued paying
additional royalty at the rate of 17 paise per ton to the
respondent in terms of the sub-lease dated October 12, 1928
but stopped doing so from July 1, 1958. The respondent
thereupon brought a suit on JUly 10, 1961 being suit No.
1104 of 1961 on the original side of the High Court at
Calcutta claiming a decree for (1) Rs. 25,181.27 as arrears
of royalty from July 1, 1958, to August 7, 1959 the date
immediately preceding the date on which the Controller
enhanced the royalty payable to the State to 37 paise; (2)
Rs. 32,223.64 as arrears of royalty at the rate of annas
-/11/- (eleven) from August 8, 1959 to March 31, 1961; (3)
Rs. 1,444.00 on account of deficit payment for the overdue
period in respect of royalty for the quarters ending June
30, 1957, September 30, 1957, December 31, 1957 and June 30,
1958. It also claimed interest on the aforesaid amounts at
the rate of 12 per cent per annum. The respondent based his
claim on the ground that notwithstanding the issues of the
aforesaid notification under section 3 of the B.L.R. Act,
its interest as a lessee under the lease which continued to
subsist did not vest in the State of Bihar and it became and
still continued to be a lessee under that State fro.m the
date of the aforesaid notification under section 3 of the
B.L.R. Act..
The appellant contested the suit averring inter alia
that while the position of Dutts in respect of the. mines
under the aforesaid blocks of land was that of the tenure
holders under the Raja, its own position was that of the
lessee in possession and that from November 14, 1951the date
of vesting of the Sonepura estate in the State of Bihar--the
proprietary right of the Raja in the aforesaid mine ceased
to exist and the respondent became an intermediary in re-
spect thereof directly Under the State of Bihar from the
said date and the appellant continued to be a lessee in
possession under the respondent. The appellant denied that
the interest of the respondent in the mine was that of the
lessee or that from the date of the aforesaid notification
under section 3 of’ the B.L.R. Act, the respondent became a
lessee of the said mine directly under the State and
averred that it continued to be the lessee in possession of
the said mine under the respondent as before. The appellant
further averred that in any event the respondent’s right to
receive additional royalty from the former in terms of the
aforesaid sub-lease dated October 12, 1928 ceased to exist
from January 1, 1956, when the interest of the latter as
tenure holder in the Chunhatta Lime Stone Quarries came to
vest in the State. The appellant Further averred that due
to ignorance of the publication of the notification dated
January 1, 1956 and bonafide mistake arising therefrom,. it
continued paying additional royalty to the respondent in
terms of the sub-lease dated October 12, 1928 for the period
beginning from. January 1, 1956, to the end of June, 1958,
which the latter had no-
367
right to receive and was refundable to it with interest
thereon at the rate of six per cent. The appellant alterna-
tively pleaded that assuming without admitting that the
interest of the respondent in the Chunhatta quarries did
not vest in the State of Bihar either by notification dated
November 14, 1951, or under notification dated January 1,
1956, and that the respondent continued to be a lessee under
the lease dated July 31, 1927, even then the appellant was,
under the sub-lease dated October 12, 1928, liable to pay
royalty only at the rate of annas -/15/- (fifteen) per 100
cubic feet as provided in the lease dated July 31, 1927, and
an additional royalty of annas ’/11/(eleven) per 100 cubic
feet aggregating Rs. 1/10/- per 100 cubic feet equal to 24
Naya Paise plus 17 Naya Paise per ton (calculating 100 cubic
feet as equivalent to 4 tons) for the period commencing
from August 1, 1942 to May 31, 1958 that the respondent
being a holder of the mining lease within the meaning of
section 9 of the 1957 Act was liable to pay royalty at the
rate of 37 Naya Paise per ton in respect of the minerals
removed from the said quarries from June 1, 1958, and since
payment to the tune of Rs. 61,684.40 on that account upto
March 31, 1961 had been made by the appellant as an agent
of the respondent to safeguard its position and enjoyment of
the leasehold property, the former was entitled to be reim-
bursed to that extent. In conclusion, the appellant aimed
to set off the aforesaid sum of Rs. 61,684.40 and subse-
quent payments of royalty against the royalty that might
be payable to the respondent under the sub-lease dated
October 12, 1928, in respect of the minerals removed from
the leased quarries from June 1, 1958 upto March 31, 1961
and thereafter. The appellant, however, admitted that it
had paid the additional royalty to the respondent as stipu-
lated in the sublease dated October 12, 1928, upto June 30,
1958 only.
By his judgment dated July 23, 1963, Sankar Prasad
Mitra, J. of the High Court of Calcutta to whom the suit
had been assigned passed a decree in favour of the
respondent to the extent of Rs. 47,944.10 as the princi-
pal sum, and Rs. 8,887.90 on account of interest, holding
inter alfa that the respondent was not an intermediary or
tenure holder in respect of the estate in suit under B.L.R.
Act’ and its interest did not vest in ,the State of Bihar as
a result of the aforesaid notification dated November 6,
:1951 or the notification dated January 1, 1956; that the
holder .of a mining. lease as envisaged by the B.L.R. Act
could be a lessee or a sub-lessee; that it was the lessee or
the sub-lessee who removed the minerals from the mine that
had to pay royalty at the rate specified in the Second
Schedule to the 1957 Act and as it was the appellant and not
the respondent that removed the minerals from the quarries
during the relevant period, the provisions of section 9 of
the 1957 Act could not be invoked for realization of royal-
ties from the latter; and that if the appellant had paid any
sum in excess of the sum stipulated in the indenture of
lease dated July 31, 1927, it did so entirely at its own
choice and risk.. The learned Single Judge further held that
section 69 of the Contract Act had no application to the
facts of the present case. The learned Judge, however,
disallowed the claim of the respondent so far as the item of
Rs. 1144/- was concerned. Aggrieved
368
by this judgment and decree, the appellant preferred an
,appeal before a Division Bench of the High Court which
proved abortive. While affirming the findings of the Single
Judge, the Division Bench held that the interest of the
respondent did not vest in the State Government at the
material time and the appellant continued to be sublessee
under the respondent bound by the terms of the sub-lease and
that the liability to pay royalty to the State at 37 paise
per ton from the date of coming into force of the 1957 Act
fell on the appellant. Dissatisfied with the judgment and
decree of the Division Bench of the High Court, the appel-
lant has, as already stated, come up in appeal to this
Court.
Appearing in support of the appeal, Mr. Patel has ad-
vanced two contentions. He has in the first instance invit-
ed our attention to the definitions of ’intermediary’,
’intermediary interest’ ’lease’, ’tenure’ and ’tenure-
holder’ contained in clauses (jj), (jjj), (1), (q) and (r)
respectively of section 2, as also sections 3, 3A, 4 and 9
of the B.L.R. Act and stressed that as the respondent was
merely a ’tenure holder’ and all his rights, title and
interest as such extinguished alongwith the interest of the
erstwhile proprietor of the suit land i.e. the Raja with the
coming into force of Notification No. 83 IR/ZAN (supra)
on November 14, 1951, and it was the appellant who being a
sub-lessee stepped in as a direct lessee of the mine in
question under the State, the respondent was not entitled to
claim with effect from November 14, 1951, the additional
royalty stipulated in the sub-lease dated October 12, 1928.
He has further urged that assuming that the respondent
enjoyed the status of a head lessee even then, its right,
title and interest as such having become extinct and vested
absolutely in the State without the encumbrance of the lease
at least from January 1, 1956 the date of Notification No.
EVII-102/56-ILR (supra), it could not claim the said addi-
tional royalty after December 31, 1955. These contentions
which appear to be based upon a misconception of the true
legal position cannot be accepted. The respondent could not
be said to be a tenure holder as contemplated by the afore-
said section 2(r) of the B.L.R. Act as he had neither ac-
quired from the Raja by virtue of the lease dated July 31,
1927 a right to hold the land mentioned therein for the
purpose of collecting rent nor a right to hold the land for
bringing it under cultivation by establishing .tenants on
it. The right of the respondent as a head lessee of the
mines and minerals also did not cease and the appellant did
not acquire the status of the lessee as contended by Mr.
Patel. The consequences of vesting of an estate or tenure in
the State are set out in section 4(a) of the B.L.R. Act.
According to this provision, on the publication of the
notification under sub-section (1) of section 3 or sub-
section (1) or (2) of section 3A of the B.L.R. Act, the
estate or tenure mentioned in the notification including
the interests of the proprietor or the tenure holder com-
prised in such estate or tenure and his interest in all
sub-soil including any right in mines and minerals inclusive
of such right of a lessee of mines and minerals comprised in
such estate or tenure vests absolutely in the State free
from all encumbrances and such proprietor or tenure holder
has to cease to have any interests in such estate or tenure,
other than
369
the interests expressly saved by or under the provisions ,of
the Act. The last words of section 4(a) of the B.L.R. Act
viz. "other than the interests expressly saved by or under
the provisions of the Act" are pregnant with the meaning.
They unequivocally show that those interests which are
expressly saved by or under the provisions of the Act are
not affected or impaired by the aforesaid notifications.
Now according to section 10 of the B.L.R. Act which itself
is in the nature of a non-obstante provision overriding
other provisions of the Act, every lease of mines and miner-
als comprised in the notified estate or tenure or any part
thereof ’which may be subsisting immediately before the
date of vesting has to be treated with effect from the date
of ’vesting’ as a lease from the State Government to the
holder of the said subsisting lease for the residue of the
term of that lease and such holder acquires the right to
retain .possession of the leasehold property for that peri-
od. In other words, in place of every contractual lease
which might have been subsisting immediately before the date
of vesting of the estate or tenure, a statutory lease on
practically identical terms and conditions comes into being.
Thus the combined reading of section 4(a) and section 10 of
the B.L.R. Act leaves no room for doubt that the interests
of the head lessee were left unaffected by the aforesaid
notifications to the extent indicated above. This view
receives support from a catena of decisions of this Court
where this position has been fully recognised and affirmed.
(See Bihar Mines Ltd. v. Union of India(1) Chhatu Ram Horil
Ram Private Ltd. v. State of Bihar & Anr.(2); M/s. Hindu-
stan Steel Limited Rourkela v. Smt. Kalyani Banerjee &
Ors.(a) and State Of Bihar & Anr. etc. v. Khas Karanpura
Collieries Ltd.(4).
The insertion of section 10-A in the B.L.R. Act by the
Bihar Amendment Ordinance No. 3 of 1964 which was subse-
quently replaced by the Bihar Land Reforms (Amendment) Act
(Bihar Act 4 of 1965) also indicates that the law as it
obtained prior to the aforesaid amendment was not intended
to have the effect of divesting a lessee of his interests in
a lease of mines or minerals comprised in the estate or
tenure or part thereof which subsisted immediately before
the vesting of a notified estate or tenure.
We must here deal with what has been tried to be im-
pressed upon us by Mr. Patel in regard to this aspect of the
matter by reading out to us a passage from Craies on Statute
Law. ’The counsel has strongly urged that since it is not
strictly permissible to interpret a statute by reference to
what has been said in subsequent statutes, resort cannot
be had to the provisions of section 10 A which was intro-
duced in the B.L.R. Act in 1964 while interpreting section
10 of before the introduction of the said section. We also
find ourselves unable to accept this contention and to
disregard the well settled canon
(1) [1967] 1 S.C.R. 707.
(2) [1968] 2 S.C.R. 881 :A.I.R. 1969 S.C. 177.
(3) [1973] 3 S.C.R. 1 .
(4) [1977] 1 S.C.R. 157.
370
that sometimes light may be thrown upon the meaning ’of an
Act by taking into consideration ’parliamentary expositions’
as revealed by the later Act which amends the earlier one
to clear up any doubt or ambiguity. This principle has to
be followed where, as in the instant case, a particular
construction of the earlier Act will render the later incor-
porated Act ineffectual, or otiose or inept. (See Krikness
v. John Hudson & Co.(1). This view also receives support
from the decision of this Court in Yogendra Nath Naskar
v.C.I.T. Calcutta(") where approving the authoritative
pronouncement in Cape Brandy Syndicate v. I.R.C.(3) that
the subsequent legislation may be looked at in order to see
the proper construction to be put upon an earlier Act where
that earlier Act is ambiguous, it was held that the language
employed in Income Tax Act, 1961 may be relied on as a
Parliamentary exposition of the earlier Act (I.T. Act, 1922)
even on the assumption that the language employed in Sec-
tion 3 of the earlier Act is ambiguous.
It follows from the above discussion that the estate
comprised in the head lease in the instant case which was
assigned to the respondent notionally stood leased by the
State from the date of vesting to the holder of the subsist-
ing lease for the remainder of the term of the lease and the
respondent became entitled to retain possession of the
leasehold property. The first contention of Mr. Patel is,
therefore, repelled.
Mr. Patel has next contended that as the royalty payable
to the lessor was enhanced under the provisions of the 1957
Act read with the Mining Leases (Modification of Terms)
Rules, 1956, which continued in force by virtue of section
29 of the 1957 Act and the enhanced royalty was payable by
the respondent who was the holder of the mining lease as
envisaged by section 9 of the 1957 Act, the appellant was
entitled to be reimbursed to the extent of Rs. 61,684.40
which was paid by him as an agent of the respondent. This
contention has to be examined with reference to two periods
viz. (i) from July 1, 1958 to August 7, 1959, and (ii)
August 8, 1959 to March 31, 1961. It is admitted by the
appellant that during the period intervening between the
date when the 1957 Act came into force and August 8, 1959
when the Controller passed the aforesaid order
enhancing .the royalty. payable to the State, ,it continued
to pay the said royalty at the old rate of 24 paise per ton
and was never required to pay the same at the enhanced rate
of 37 paise. No question of reimbursement for this
period can, therefore, arise.
The position, however, with regard to the second
period from August 8, 1959, to March 31, 1961,.is not free
from difficulty and has to be examined with reference to the
provisions of section 9 of the 1957 Act and of the Mining
Leases (Modification of Terms) Rules, 1956 as also of the
provisions of section 9 of the B.L.R. Act. Whereas according
to counsel for the appellant, it is the respondent which
being the holder of lease as contemplated by section 9 of
the 1957 Act that has to bear the burden of royalty payable
to the State in accordance with the requirements of Second
Schedule to the 1957
(1) [19551 A.C. 696 (H.L.)
(2) [1969] 1 S.C.C. 555. [1969] 3 S.C.R. 742.
(3) [1921] 2 K.B. 403.
371
Act, according to counsel for the respondent, as the expres-
sion "mining lease" used in section 9 of the 1957 Act has
been defined in section 3(c) of the Act as including a
’sub-lease’ and the mineral has actually been removed by the
appellant, the liability for payment of enhanced royalty
squarely falls on the appellant. There is yet another
aspect of the matter which may reasonably be urged in
accordance with the ratio of the decisions of this Court in
Bihar Mines Ltd. v. Union of India (supra) and M/s Hindustan
Steel Limited Rourkela v. Smt. Kalyani Banerjee & Ors.
(supra) where it was unequivocally laid down that a statuto-
ry lease held by a head lessee from the State Government
being a new lease granted after October 25, 1949, and not
being an existing lease, it could not be modified and when
the head lease not being an existing mining lease could not
be modified, the sub-lease could also not be modified as it
too would be deemed to be a new lease granted by the new
lessee from the State Government. In view, however, of the
fact that neither the Union of India nor the Controller of
Mining Leases is a party to the case before us and the
aforesaid order dated August 8, 1958 appears to have been
passed by tile Controller of Mining Leases with the agree-
ment of the parties here.to, we do not consider ourselves
called upon to resolve the conflicting contentions advanced
before us by counsel for the parties. For the purpose of
this appeal, it would suffice to observe that in view of
Exhibit ’L’ (reproduced at pages 280 to 282 of the Paper
Book), the burden of payment of the royalty for the second
period also is to be borne by the appellant and the question
of his being re-imbursed by the respondent cannot be counte-
nanced. The second contention raised by Mr. Patel also,
therefore, fails.
In the result the appeal fails and is dismissed. In the
peculiar circumstances of the case, the parties are left to
pay and bear their own costs of the appeal.
P.B.R. Appeal
dismissed.
372