Full Judgment Text
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PETITIONER:
NEW SATGRAM ENGINEERING WORKS & ANR.
Vs.
RESPONDENT:
UNION OF INDIA & ORS. AND VICE VERSA
DATE OF JUDGMENT14/08/1980
BENCH:
SEN, A.P. (J)
BENCH:
SEN, A.P. (J)
KRISHNAIYER, V.R.
REDDY, O. CHINNAPPA (J)
CITATION:
1981 AIR 124 1981 SCR (1) 406
1980 SCC (4) 570
CITATOR INFO :
D 1985 SC 192 (3,4,5)
RF 1986 SC1234 (40)
ACT:
Coal Mines (Nalionalisation) Act, 1973, Sections 2(h),
18(2) read with sub-sections (3) and (4) of section 19 of
the Act as amended, interpreation of- Disbursement of
amounts to the owners of coal mines, sections 20 to 27 of
the Coal Mines (Nationalisation) Act, scope of.
HEADNOTE:
M/s. Shethia Mining and Manufacturing Corporation,
Calcutta owned three non-coking coal mines one of which was
New Satgram Coal Mines. besides a workshop called the New
Satgram Engineering Works built on a plot adjacent to the
New Satgram Coal Mines in 1964, a building known as the
Technical Director’s Bungalow, built somewhere in 1957-58
outside the mining area but adjacent to it, and another
building constructed in 1960-61 on the same plot of land,
namely the Guest House used for the residence of officers
and staff of mines.
The management of the New Satgram Coal Mines along with
two other coal mines was taken over by the Central
Government under the Coal Mines. (Taking over of Management)
Act, 1973, with effect from January 31, 1973. Thereafter the
Coal Mines (Nationalisation) Act, 1973 was passed and by
virtue of section 3(1) thereof, the right title and interest
of M/s. Shethia Mining and Manufacturing Corporation vested
in the Central Government with effect from May 1973 and
subsequently by a notification in the Government company
that is, the Coal (India) Ltd. On May 17, 1973, the Central
Government took over possession of the Technical Director’s
Bungalow and the Guest House. The. appellants who had filed
two writ petitions challenging the taking over and the
Nationalisation Act in the Supreme Court withdrew them and
filed a petition under Article 226 of the Constitution in
the Delhi High Court for the issuance of a writ or direction
in the nature of mandamus in regard to the taking over of
New. Satgram Engineering Works and the dues pertaining to
the New Satgram Coal Mines and New Majri Coal Mines. The
High Court partly allowed the petition but declined to go
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into the question as to whether the Engineering Unit,
together with Shethia Bhavan and all its assets etc the
Technical Director’s Bungalow and Guest House were or not
covered by the definition. of the term "mine" in section
2(h)(vi), (vii) & (xi) of the Nationalisation Act. Hence the
appeals by special leave one by New Satgram Engineering
Works and the other by the Union of India.
Allowing the Government’s appeal and dismissing the
appeal of the Engineering Works, the Court
^
HELD: (1) When the facts themselves are seriously
controverted, the dispute relating to the properties in
question raise a "serious question of title" and the parties
must get their rights adjudicated upon in a civil court and
not
407
under Art. 226 of the Constitution. The question whether the
engineering unit, was "situate in, or adjacent to" the new
Satgram Coal Mines and was "substantially" used for the
purposes of the mine as well as the question whether the
Technical Director’s Bungalow and the Guest House were
"solely" used for the residence of officers and staff of the
mine and! therefore. fell within the definition of ’mine’ as
contained in s. 2(h) of the Nationalisation Act, cannot be
decided in proceedings under Art. 226 of the Constitution.
The proper remedy is by way of a suit. [416H; 418G-H]
(2) Parliament instead of providing that the word
’mine’ shall have the meaning assigned to it in the Mines
Act, 1952, has given an enlarged definition of ’mine’ in s.
2(h) so that not merely the colliery but everything
connected with the mining industry should vest in the
Central Government, that is, not only that part of the
industry which consisted of raising, winning and getting
coal but also that part of it which consisted in the sale of
coal and its supply to customers both of which are a part of
an integrated activity. Parliament by an enlarged definition
of mine as contained in section 2(h) of the Act has
indicated the nature of the properties that vest, and the
question whether a particular asset is taken within the
sweep of i. 2(h) depends on whether it answers the
description given therein. [415 H, 416 A-D]
(3) The language used in s. 2(h)(vii) and (xi) of the
Coal Mines (Nationalisation) Act, 1973 are different. Sub-
clause (vii) used the words "in, or adjacent to, a mine" and
"used substantially" for the purposes of the mine or a
number of mines under the same management, in relation to
workshops. The use of the word ’and’ makes both the
conditions conjunctive. Sub-Clause (xi) used the words "if
solely used" for the location of the management, sale or
liaison offices, or for the residence of officers and staff
of the mine, in relation to lands and buildings. The
difference in language between the two expressions "used
substantially" and "solely used" is clear. A workshop cr a
building constructed initially for the purpose of a coal
mine cannot by its being diverted to other purposes cease to
belong to the mine. What is of the essence is whether the
workshop or the building originally formed a part and parcel
of the coal mine. The subsequent user may not b. very
material. [415 B-E]
(4) Merely because the land on which a workshop of a
coal mine is located bears a different plot number, or even
if there is a compound wall between the main office of the
coal mine and the workshop, it would not cease to be part of
the mine. The question in such cases will always be whether
the workshop is "located in, or adjacent to, a mine" and was
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"used substantially for the purposes of the mine under the
same management". Further the question whether a workshop is
"substantially" used for the purposes of a mine necessarily
involves an enquiry as to whether it pertains to, or in
substance is, part of the mine. The value of jobs executed
for the mine as against those for others is not really
determinative of the question. If a workshop is, in fact a
part of a coal mine, it does not cease to be so merely
because its utilisation lies in the production of materials
supplied to third parties. While a workshop may form part of
a mine and is substantially used as such, it may be utilised
for turning out other products; it all depends upon the
circumstances of each case, whether it forms part of a mine
or not. [416F-G, 417 D-F]
(5) Sub-sections (3) and (4) of section 19 of the Act
are part of an integrated scheme and must be read with sub-
section (2) of section 18. According to the provisions of
sub-sections (3) and (4) of section 19 the Central
408
Government, or the Government company was exclusively
entitled to receive monies in question to the exclusion of
other persons up to the specified ate and to utilise the
same in discharge of the liabilities of the coal mine which
could not be discharged by the appointed day. Under the
scheme of the Act, the owner of the coal mine which has
vested in the Central Government under sub-section (1) of
section 3 is entitled to receive, besides the compensation
amount as determined under section 8, additional
compensation amount under sub-section (1) of section 9,
simple interest thereon at 40% per annum for the period
specified therein, together with "such amount as may become
due" to tho owner of the coal mine in relation to the period
during which the management of the coal mine remained vested
in the Central Government 35 provided by sub-section (2) of
section 18. [421 C-E]
Provisions in sections 8, 9, 18 and 19 make it clear
that unless the requirements of section 19 are fulfilled
there can be no ascertainment of "such amount as may become
due" to the owner of a coal mine, in relation to the period
during which the management of the coal mine remained vested
in the Central Government, as required under sub-section (2)
of section 18. Anr other construction would render sub-
section (2) of section 18 entirely otiose. The amounts
collected on behalf of the erstwhile owners of coal mines,
represent the money of such owners without distinction, and
whether they were sale proceeds of coal or realisations from
debtors. the amounts were liable to be spent not only in the
discharge of liabilities of the coal mine which could not be
discharged by the appointed day, but also were liable to be
spent for the purposes of management. All the rights and
liabilities arise from the provisions of the Acts, and the
net balance in relation to the management period, means the
difference between authorised collections and legitimate
liabilities of the erstwhile owners. It is necessarily this
balance which "becomes due in relation to the period during
which the management of the coal mines remained vested the
Central Government" within the meaning of sub-section (2) of
section 18. [423 B-E]
When there is a payment made by the Central Government
under subs. (2) of section 18, the elaborate procedure
provided under sections 20-27 have to be followed. The owner
of a coal mine is entitled to the payment by the
Commissioner of Payments, under section 26 of "the balance,
if any out of the total amount of money credited to the
account of the coal mine" after he has gone through all the
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stages provided for in Chapter VI. Such being the scheme,
there is no question of the owner of a coal mine, who is
divested of his right, title and interest under sub-section
(1) of section 3 to realise from the Central Government any
amount due to a coal mine, which remained to be realised
until the specified date, that is, June 30, 1975. In the
instant case, in view of all these provisions of sections 20
to 27 of the Act and particularly, of sub-section (1) of
section 26 the claims made by the appellants Engineering
Works are not proper. They are certainly not entitled to
recover any definite or ascertained sum. All that they are
entitled to under sub-section (5) of section 19 is that they
should be furnished with a copy of each statement of
accounts prepared under section 19, to its being audited
under sub-section (6) and to the audit being conducted in
such manner as the Central Government may direct under sub-
section (7), and to the payment under sub-section (1) of
section 26 of the balance, if any, out of the total amount
of money credited to the account of a coal mine after all
the liabilities have been discharged. [423F, 424F-H, 425A,
D-E]
(6) There is no duty cast on the Central Government to
make realisations
409
of any money due to a coal mine if it pertains to a period
prior to the appointed, day, and to discharge the
liabilities of the coal mine beyond the specified dated that
is, June 30, 1975. The ’appointed day’ under section 2(a) of
the Management Act under the Nationalisation Act was January
31, 1973 and May 1, 1973 respectively; while the ’specified
date’ for purposes of sub-sections (3) & (4) of section 19
was June 30, 1975. All that vested in the Central Government
under sub-section (I) of section 3 of the Management Act was
the management of all coal mines, as defined in section 2(g)
of The Act, which included sundry debts etc., pending
nationalisation of such mines, with effect from the
appointed day, that is, January 31, 1973. But this was only
for the purposes of management, the title all the time
remaining in the erstwhile owners of the coal mines. In the
course of management under that Act, all the collections
belonged to the owners, and the liabilities also in relation
to the mines were the liabilities of the owners. ’The
Custodian appointed by the Central Government under section
6 of the Management Act was liable for, the net balance in
relation to the management period. He had the right to
collect and also the right to incur expenditure in relation
to the management by reason of the provisions of that Act.
[426 C-F]
(7) The conferral of power upon the Central Government
under subsections (3) and (4) of section 19 to make
realisation of monies due to the coal mines and from such
realisation to discharge the liabilities as well as to incur
expenses in relation to the management thereof, was a
necessary concomitant of the vesting of such coal mines
under sub-section (I) of section 3 of the Act. The
Nationalisation Act received the assent of the President on
May 30, 1973 but the provisions of sub-section (I) of
section 3 were brought into force with retrospective effect,
that is, with effect from the appointed day, that is, May 1,
1973. It follows that, although there was a complete
extinction of all the rights, title and interest of the
owners of coal mines with effect from May 1. ; 1973, there
was a fictional extension of the period of management under
the Management Act from May 1 to May 30, 1973. There is,
therefore, provision made in section 9 that apart from the
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amount of compensation provided for by section 8, as
mentioned in the Schedule, the owners of every coal mine
shall be entitled to receive additional compensation under
sub-section (I) thereof. This was to be an amount equal to
the amount which would have been, but for the provisions of
sections 3, 4 and S payable to such owner for the period
commencing on May 1, 1973 and ending on the date on which
the Act received P the assent of the President that is, May
30, 1973. Under sub-section (1) of section 11 the Central
Government is entitled to exercise all such things as the
owner of the coal mine was authorised to do. [427C, 426G-
427B]
(8) The definitions of coal mine in section 2(h)(xii)
includes the current assets belonging to a mine. but by
reason of the explanation inserted by the Coal Mines
Nationalisation (Amendment) Act, 1978, the expression
"current assets" appearing therein does not include amounts
which had become due before the appointed day, that is, May
1, 1973. Thus these dues did not vest in the Central
Government. This exclusion of sundry debts under the
Nationalisation Act does not apply to the Management Act
because there was no similar explanation to section
2(g)(xii) of that Act. [427 D-E]
(9) The Management Act was to be followed by the
Nationalisation Act and, therefore, the accountability of
the Central Government in regard to the management period
was provided for in section 19 of the Nationalisation Act.
Although there was vesting of the coal mines in the Central
Government under
410
sub-section (1) of section 3 of the Act, the accounts had
still to be settled Sub-sections (3) and (4) of section 19,
therefore, extended the period during which the Central
Government was authorised to collect monies due to the coal
mines and to discharge the liabilities of such coal mines
which could not be discharged by the appointed day, that is,
May 1, 1973 till the specified date, that is, June 30, 1975.
The liabilities of the coal mines were not taken over under
the Management Act. Section 7 of the Nationalisation Act
implies that after the specified date, that is, June 30,
1975 the erstwhile owners of coal mines would have to meet
all their liabilities which could not be discharged before
the appointed day. It must result in the inevitable
consequence, as a necessary corollary that any amount which
could not be realised by the Central Government until the
specified date, would be realisable by the owners directly
in order to meet their pre-existing liabilities. [427 F-428
B]
(10) Provisions of sub-section (4) of section 19 of the
Coal Mines (Nationalisation) Act, 1973 are in part materia
with sub-section (3) of section 22 of the Coking Coal Mines
(Nationalisation) Act, 1972. The subsidy receivable from the
erstwhile Coal Board established under section 4 of the Coal
Mines (Conservation and Safety) Act, 1952, being a payment
"by way of reimbursement" was like any other dues, and,
therefore, must be treated as ’any money due to the coking
coal mine’. Therefore, the directions made by the Court
requiring the Union of India to pay to the Satgram
Engineering Works Rs. 7,28,342-54 which is to be recovered
by the erstwhile Coal Board as subsidy, is incorrect. [428C-
D]
Industrial Supplies Pvt. Ltd., & Anr. v. The Union of
India & Ors. [1981] 1 SCR p. 375, followed.
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JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1331/79
and 426 of 1980.
Appeals by Special Leave from the Judgment and order
dated 16-4-1979 of the Delhi High Court in W.P. No. 489/76.
M. C. Bhandare, A. C. Gulati, G. S. Chatterjee and B.
B. Sawhney for the Appellants in CA No. 1331/79 and for
Respondent in CA 4261 80.
Lal Narain Sinha, Att. Genl. and Miss A. Subhashini for
the Appellants in CA No. 426 and Respondents in CA No.
1331/79.
The Judgment of the Court was delivered by
SEN J.-These appeals by special leave from a judgment
of the Delhi High Court. involve interpretation of s. 2(h)
of the Coal Mines (Nationalisation) Act, ]973, as amended by
the Coal Mines Nationalisation Laws (Amendment) Act, 1978,
as well as of sub-s. (2) of s. 18 read with sub-ss. (3) and
(4) of s. 19 of the Act.
The importance of this case in its legal aspect
consists in the question as to whether the Central
Government has the power under sub-s. (3) of s. 19 of the
Act to receive up to the specified date, i.e., June 30, 1975
any money due to a coal mine notwithstanding that
411
the realisation pertains to a period prior to that date.
even though A such amounts may not be the "current assets",
by reason of Explanation to s. 2(h)(xii), and to apply such
realisations under sub-s. (4) thereof to discharge the
liabilities of such coal mine which could not be discharged
by the appointed day, i.e., May 1. 1973.
The facts of the case are as follows:
Messrs Shethia Mining & Manufacturing Corporation,
Calcutta apparently owned three non-coking coal mines, two
in the State of West Bengal viz., New Satgram and New
Jamuria coal mines, and one in the State of Maharashtra
viz.. New Majri coal mine. The concern also owned a workshop
called the New Satgram Engineering Works. in short,
"Engineering Unit", built on a plot adjacent to the New
Satgram coal mine in 1964. Outside the mining area, but
adjacent to it, it had constructed a building known as the
Technical Director’s Bungalow built somewhere in 1957-58. In
or about 1960-61, it had constructed another building on the
same plot of land, namely, the Guest House used for the
residence of officers and staff of the mines.
The management of the aforesaid coal mines was first
taken over under the Coal Mines (Taking over of Management)
ordinance. 1973 pending nationalisation of such mines and
vested in the Central Government from the appointed day
i.e., January 31, 1973. The ordinance was replaced by the
Coal Mines (Taking over of Management Act, 1973, hereinafter
referred to as the "Management Act". Thereafter, Parliament
enacted the Coal Mines (Nationalisation) Acts 1973,
hereinafter referred to as the ’Nationalisation Act’,
providing for the acquisition and transfer of the rights,
title and interest of the owners in respect of the coal
mines specified in the Schedule with a view to re-organising
and reconstructing such coal mines so as to ensure the
rational. co-ordinated and scientific development and
utilisation of coal resources consistent with the growing
requirements of the country.
The Nationalisation Act provides by sub-s. (1) of s. 3
that the right, title and interest of the owners in relation
to the coal mines specified in the Schedule shall stand
transferred to, and vest absolutely in, the Central
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Government free from all incumbrances with effect from the
appointed day, i.e., May 1. 1973. The mines in question were
nationalised and have been mentioned at serial Nos. 383, 577
and 601 in the Schedule. The right, title and interest of
Messrs Shethia Mining & Manufacturing Corporation
consequently vested in the Central Government and
subsequently by a notification in the Government Company,
i.e., the Coal (India) Ltd.
412
The management of the New Satgram Engineering
(hereinafter called the petitioners) Works tried at first,
to challenge the validity of the Coal Mines (Taking over of
Management) ordinance, 1973 by a petition in this Court
under Art. 32 of the Constitution being Writ Petition No. 81
of 1973. On February 12, 1973 they obtained rule nisi and an
interim order restraining the taking over of the Engineering
Unit. On May 4, 1973 the Court made the stay absolute.
Between the making of the two orders, the Coal Mines (Taking
Over of Management) Act, 1973 was enacted on March 31, 1973
with retrospective effect from January 31, 1973. On May 17,
1973, the Central Government took over possession of the
Technical Director’s Bungalow and the Guest House.
On May 30, 1973 the Coal Mines (Nationalisation) Act,
1973 was enacted and came into force with retrospective
effect from May 1. 1973. On August 30, 1973 the Management
filed another petition under Art. 32 of the Constitution
being Writ Petition No. 1673 No. 1973 challenging the
validity of the Act. On September 19, 1473 the Court issued
rule nisi and an ad interim order in terms of the earlier
order.
On August 10, 1975 the Management Act and the
Nationalisation Act were both placed in the Ninth Schedule,
by the Constitution (Thirtyninth Amendment) Act being item
Nos. 98 and 99 thereof on April 1, 1976 the petitioners
withdrew their Writ Petitions Nos. 81 and 1673 of 1973 but
two days after, i.e., on April 3, 1976 they presented a
petition under Art. 226 of the Constitution before the Delhi
High Court being Writ Petition No. 489 which has given rise
to these appeals.
It is not unworthy of mention here that the main
relief, if rot the only substantial relief, sought by the
petitioners in their petition under Art. 226 of the
Constitution, was for the issue of a writ or direction in
the nature of Mandamus in regard to the New Satgram
Engineering Works, but it appears that at the hearing in the
High Court the submissions ranged over a much wider field.
The petitioners alleged that until April 30, 1973, i.e.,
prior to the appointed day, Messrs Shethia Mining &
Manufacturing Corporation were the owners of the two coal
mines i.e., New Satgram and New Majri, and as on that day.
the outstanding dues from sundry debtors were Rs. 68.74
lacs, further that from January 31, 1973 to April 30, 1973
i.e., during the period of management, the Central
Government had despatched coal from the aforesaid two mines
worth Rs. 53.22 lacs and that a sum of Rs. 7,28,342.54 was
still outstanding as on April 30, 1973 towards subsidy
receivable from the erstwhile Coal Board
413
established under s. 4 of the Coal Mines (Conservation and
Safety) Act, 1952 on account of hard-rock mining and stowing
operations. It was also asserted that between the years 1962
and 1967 the petitioners had advanced a sum of Rs.
2,51,597.24 to the Eastern Railways for the construction of
a railway siding, but the project having been abandoned on
January 18, 1973 the amount had become due, although no such
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claim was made in the writ petition.
The High Court partly allowed the writ petition. It
declined to go into the question as to whether the
Engineering Unit. together with Shethia Bhavan and all its
assets etc., the Technical Director’s Bungalow. and the
Guest House, were or were not covered by the definition of
’mine’ in B. 2(h)(vi), (vii) and (xi) of the Nationalisation
Act, but declared that the subsidy amounting to Rs.
7,28,342.54 receivable from the erstwhile Coal Board and
outstanding as on May 1, 1973 did not vest in the Central
Government under sub-s. (1) of s. 3 being impressed with
trust. It further held that any amount which could not be
realised until June 30, 1975, i.e., the specified date,
under sub-s. (3) of s. 19 of the Act, would be realisable by
the erstwhile owners of the coal mines. As regards the
amount of Rs. 2,51,597.74 advanced by the petitioners to the
Eastern Railways for construction of a railway siding, it
held that no such claim having been made in the writ
petition, they cannot be permitted to raise it.
In these appeals, three questions arise; (1) whether
the High Court having held that there was no special
machinery provided in the Act for determining the question
whether a particular asset fell within the definition of
’mine’ contained in s. 2(h) of the Act, it ought to have, on
the facts and circumstances of the present case, decided the
said question in the exercise of its jurisdiction under Art.
226 of the Constitution? (2) Whether on a true construction
of sub-s. (3) of s. 19 of the Act, the Central Government
was entitled, to the exclusion of all other persons, to
receive up to the specified date, any money due to the coal
mines in question, realised after the appointed day, i.e.,
May 1, 1973 notwithstanding that the realisation pertained
to a period prior to that day, and under sub-s. (4) thereof
to discharge the liabilities of the coal mines which could
not be discharged by the appointed day, from out of such
realisation up to the specified date, i.e., June 30, 1975?
If that be so, whether any amount which could not be
realised until the specified date, i.e., June 30, 1975 would
be realisable by the erstwhile coal mine owners directly?
(3) Whether the amount of subsidy receivable from the Coal
Board established under s. 4 of the Coal Mines (Conservation
and Safety) Act, 1952 with respect to any period before the
appointed day did not fall within the purview
414
of the definition of ’mine’ contained in s. 2(h)(xii), being
excluded from the expression ’current assets’ by reason of
the Explanation thereto.
It will be convenient in the first instance to deal
with the first point which involves a mixed question of Law
and fact. The facts have still to be investigated but the
parties seek a declaration of the Law in the light of which
the issues may be determined.
The Coal Mines (Nationalisation) Act, 1973 contains no
provision for determining the question whether a particular
asset falls within the definition of ’mine’ as defined in s.
2(h) of the Act or not.
In the Nationalisation Act, ’mine’ in s. 2(h) is
defined, except What is immaterial, in the following terms:
"2. Definitions.-In this Act, unless the context
otherwise requires,
XXX XXX XXX
(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-
(vi) all lands, buildings, works, adits,
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levels, planes, machinery and equipments,
instruments, stores, vehicles, railways, tramways
and siding in, or adjacent to, a mine and used for
the purposes of the mine;
(vii) all workshops (including buildings,
machinery, instruments, stores, equipment of such
workshops and the lands on which 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;
XXX XXX XXX
(xi) all lands and buildings other than those
referred to in sub-cl. (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;
415
(b) dues from the Coal Board, established under
section 4 of the Coal Mines (Conservation, Safety and
Development) Act, 1952, prior to the repeal of the said
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;"
It will be seen that there is a difference in the
language used in s. 2(h)(vii) and (xi). Sub-clause (vii)
uses the words "in, or adjacent to, a mine" and "used
substantially" for the purposes of the mine or a number of
mines under the same management, in relation to workshops.
The use of the word ’and’ makes both the conditions
conjunctive. Sub-clause (xi) uses the words "if solely used"
for the location of the management, sale or liaison offices,
or for the residence of officers and staff, of the mine, in
relation to lands and buildings. The difference in language
between the two expressions "used substantially" and "solely
used" is obvious. It is, therefore, possible to contend that
lands and buildings appurtenant to a coal mine, if not
exclusively used for purposes of the colliery business,
would not come within the definition of mine in s. 2(h),
i.e., it would depend upon the nature of user, and that the
crucial date is the date of vesting. We are inclined to
think that the distinction though apparent may not be real
in the facts and circumstances of a particular case. A
workshop or a building constructed initially for the purpose
of a coal mine cannot by its being diverted to other
purposes cease to belong to the mine. What is of the essence
is whether the workshop or the building originally formed a
part and parcel of the coal mine. The subsequent user may
not, in our opinion, be very material. To illustrate, a
workshops which has come into existence for and because of
the mine but which also comes to be used for purposes other
than of the mine does not on that account alone cease to be
a workshop used substantially for the purposes of the mine.
Again, a building which is constructed to locate the
management offices of the mine but which is used to
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accommodate some other concern because of the availability
of space does not on that account alone cease to be solely
used for locating the management offices of the mine.
By reason of sub-s. (1) of s. 3 of the Act the right,
title and interest of the owners in relation to the coal
mines specified in the Schedule stand transferred to, and
vest absolutely in the Central Government free from all
incumbrances. Parliament instead of providing that the word
’mine’ shall have the meaning assigned to it in the Mines
Act, 1952 has given an enlarged definition of ’mine’ in s.
2(h) so that
416
not merely the colliery but everything connected with the
mining industry should vest in the Central Government, i.e.,
not only that part of the industry which consisted of
raising, winning and getting coal but also that part of it
which consisted in the sale of coal and its supply to
customers both of which are a part of an integrated
activity. This is manifested by sub-clauses (i) to (xii) of
clause (h) of s. 2, i.e., all the assets belonging to a mine
vest in the Central Government. As against this, the
liabilities are not taken over. Section 7 of the Act
provides that every liability of the owner, agent, manager
or managing contractor of a coal mine, in respect of any
period prior to the appointed day shall be the liability of
such owner, agent, manager or managing contractor, as the
case may be, and shall be enforceable against him and not
against the Central Government or the Government Company.
Thus, there was no question of setting up a Tribunal for
adjudication of title to the properties vested. Parliament
by an enlarged definition of mine as contained in s. 2(h) of
the Act has indicated the nature of the properties that
vest, and the question whether a particular asset is taken
within the sweep of s. 2(h) depends on whether it answers
the description given therein. Where there is a dispute as
to whether a particular property vests or not, the dispute
undoubtedly is a civil dispute and must, therefore, be
resolved by a suit.
It was contended that the High Court should have gone
into the question of title of the parties with respect to
the properties in dispute particularly when sufficient
documentary evidence was placed on record, as reflected in
the judgment. We are afraid the matter is not as simple as
is suggested. The documents on record merely tend to show
that the engineering unit though adjacent to, was situate on
a different plot, and there was an attempt to show that it
was not a workshop in, or adjacent to, a mine. We are of the
view that this hardly matters. Merely because the land on
which a workshop of a coal mine is located bears a different
plot number, or even if there is a compound wall between the
main office of the coal mine and the workshop, it would not
cease to be part of the mine. The question in such cases
will always be whether the workshop is ’located in, or
adjacent to, a mine’, and was ’used substantially for the
purposes of the mine under the same management’. These are
but essentially questions of fact to be deter mined
according to the facts and circumstances of each particular
case. When the facts themselves are seriously controverted,
the High Court was justified in observing that the dispute
relating to the properties in question raised a ’serious
question of title’ and the parties must get their rights
adjudicated upon in a civil court.
417
It was pressed upon the High Court that the two
businesses of Messrs Shethia Mining & Manufacturing
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Corporation viz., the colliery business and the engineering
business were two separate and distinct businesses, for they
were governed by two different sets of laws. It was alleged
that there were separate accounts kept, with a separate
profit and loss account and a separate balance-sheet with
respect to each. According to the management, therefore, the
colliery business on the one hand and the engineering
business on the other were treated severally for all
purposes. It was alleged that between the years 1968 and
1971, the total sales billed by the engineering unit were to
the magnitude of Rs. 50,79,675. As against this, the sales
to the New Satgram Coal Mines were only to the tune of Rs.
3,71,384 representing the costs of light structurals
supplied. With respect to the remaining sum of Rs. 47,08,391
received by the engineering unit it was alleged to represent
sales of light and medium structural works, for which no
licence under the Industries (Development and Regulation)
Act, 1951 was required, to various public sector
undertakings like Hindustan Steel Construction Co. for
Bokaro steel plant, Fertilizers & Chemicals Travancore for
Durgapur Fertilizer Project, Hindustan Cables, Kapper India,
Government of Nagaland etc. viz., to parties altogether
unconnected with the coal industry. The question whether a
workshop is ’substantially’ used for the purposes of a mine
necessarily involves an enquiry as to whether it pertains
to, or in substance is, part of the mine. The value of jobs
executed for the mine as against those for others is not
really determinative of the question. If a workshop is, in
fact, a part of a coal mine, it does not cease to be so
merely because its utilisation Lies in the production of-
materials supplied to third parties. While a workshop may
form part of a mine and is substantially used as such, it
may be utilised for turning out other products; it all
depends upon the circumstances of each case, whether it
forms part of a mine or not.
The Union of India has joined issue by contending that
not only the mine in question but also the workshop has
vested in the Central Government. The assertions made by the
management with regard to workshop are all denied. It is
pleaded that the relationship and nexus of the said workshop
is established by its being adjacent to the New Satgram
Colliery and by the fact that the workshop was used
substantially for the purposes of that mine and other mines
under the same management as required by s. 2(h)(vii) of the
Nationalisation Act. It is asserted that the management has
rested their case on a bald statement that the workshop is
not situate in, or adjacent to, a mine, with- out supporting
it with any documentary proof. It is alleged that as soon as
information regarding passing of the law vesting management
418
of the mine was derived, the management deliberately removed
all the relevant books including the books of accounts which
could have contradicted their present claim. Obviously the
claim of the appellant that the workshop was not
substantially used for purposes of the mine is only an
afterthought.
With regard to the Technical Director’s Bungalow, it is
submitted by the Union of India that the said bungalow,
wherever situate, is included in sub-clause (xi) of clause
(h) of s. 2. It is urged that merely because that the land
under such building is not ’one falling within the mining
area’ is wholly immaterial. Even otherwise, the said
bungalow, in any case, falls under sub-clause (xii) of cl.
(h) of s. 2 of the Act. The said bungalow being a fixed
asset belonging to the owners of the mine, forms part of the
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mine as defined in s. 2(h)(xii). As such, even assuming that
the said bungalow was not used solely for the purpose of the
residence of officers. it would still be included in the
definition of mine under the Nationalisation Act.
Reliance is also placed on the admission made by the
management in para 11 of the writ petition that the workshop
was ’closed down in July 1970’. The Management Act and the
Nationalisation Act came into force in 1973. The said
workshop was, therefore, admittedly closed down about 3
years earlier. As such, it is urged that there could be no
question of the Technical Director of the coal mine being in
charge-of the said workshop at the relevant time so as to
justify the plea raised by the management. It is pointed out
that the management have themselves admitted that the
building in question was constructed in 1957-58 for the
residence of the Technical Director, whereas the workshop
was ’constructed in 1964’, as stated in para 9 of the
petition.
As regards the Guest House also, it is urged by the
Union of India that for similar reasons it would be covered
by sub-cl. (xi) or (xii) of cl. (h) of s. 2 of the Act.
The question whether the engineering unit was ’situate
in, or adjacent to’, the New Satgram coal mine and was
’substantially’ used for purposes of the mine as well as the
question whether the Technical Director’s Bungalow and the
Guest House were ’solely’ used for the residence of officers
and staff of the mine and, therefore, fall within the
definition of ’mine’ as contained in s. 2(h) of the
Nationalisation Act, cannot obviously be decided in
proceedings under Art. 226 of the Constitution.. The proper
remedy is by way of a suit, as rightly observed by the High
Court.
419
It is, however, urged that the filling of a suit would
involve the parties into protracted litigation and
inordinate delay in settling their claims. The parties
request that their dispute with respect to the New Satgram
Engineering Works including Shethia Bhawan together with its
all assets, Technical Director’s Bungalow and the Guest
House be referred to arbitration.
This brings us to the main question, namely, as to the
scope and effect of sub-ss. (3) and (4) of s. 19 of the
Nationalisation Act. On a construction of these provisions,
the High Court was of the view that the Central Government,
upto the specified day, i.e., June 30, 1975 were entitled to
receive to the exclusion of all other persons. any money due
to the coal mine, after the appointed day, notwithstanding
that realizations pertained to the period prior to that day:
but with respect to any amounts which could not be realised
until June 30, 1975 it held that they would be realizable by
the erstwhile owners of the coal mines directly.
For a proper appreciation of the point involved, it is
necessary to set out the provisions of s. 19 which read as
follows:
"19. Statement of accounts in respect of the
period of management by the Central Government, etc.-
(1) The Central Government or the Government Company,
as the case may be, shall cause the books in relation
to each coal mine, the management of which has vested
in it under the Coal Mines (Taking over of Management)
Act, 1973, to be closed and balanced as on the date
immediately before the appointed day, and shall cause a
statement of accounts, as on that day, to be prepared,
wishing such time, in such form and in such manner as
may be prescribed, in relation to each such mine in
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respect of the transaction effected by it during the
period for which the management of such coal mine
remained vested in it:
Provided that where two or more coal mines were
owned, before the commencement of this Act, by the same
owner, a consolidated statement of accounts may be
Prepared for all the coal mines owned by such owner.
(2) All amounts received by the Central Government
or the Government company after the closure of such
accounts shall where such accounts relate to
transactions effected before the appointed day, be
included in the said statement of accounts in respect
of the coal mine to which the said receipt relates.
(3) The Central Government or the Government
company in which the right, title and interest of coal
mine stand vested shall
420
be entitled to receive, up to the specified date, to
the exclusion of all other persons any money, due to
the coal mine. realised after the appointed day
notwithstanding that the realizations pertain to a
period prior to the appointed day.
Provided that where such realizations have not
been included in the statement of accounts as on the
day immediately before the appointed day, a
supplementary statement of accounts shall be prepared
and furnished, at such intervals as may be prescribed,
by the Central Government or the Government company to
the owner of the coal mine.
(4) The liabilities of the coal mine (not being
liabilities arising out of advances made by the Central
Government or the Government company), which could not
be discharged by the appointed day, may be discharged
by the Central Government or the Government company up
to the specified date, and every payment so made shall
be included in the statement of accounts as on the day
immediately before the appointed day, indicating
therein the period in relation to which the payments
were made:
Provided that the liabilities in relation to the
period prior to the appointed day, which have not been
discharged on or before The specified date, shall be
the liabilities of the owner of the coal mine."
x x x x x
In this context, the provisions of sub-s. (2) of s. 18
may also be read. It runs thus:
"18. Payment by the Central Government to the
Commissioner.
x x x x x
(2) In relation to the sum referred to in sub-
section (1), the Central Government shall pay, in cash,
to the Commissioner such amount as may become due to
the owner of a coal mine in relation to the period
during which the management of the coal mine remains
vested in The Central Government."
It was said that by reason of the Explanation to s.
2(h) inserted by the Coal Mines Nationalisation Laws
(Amendment) Act, ]978, the expression ’current assets’ used
in sub-cl.(xii) 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 date, and (b) dues from the Coal Board, established
under s.4 of the Coal Mines (Conservation, Safety and
Development) Act, 1952 prior to the repeal of the said Act,
with respect to any period before the
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421
appointed day. It was, accordingly, urged that these two
items do not fall within the purview of the definition of
’mine’ as defined in s.2(h)(xii). and, therefore, they did
not vest in the Central Government under sub-s.(1) of s.3 of
the Act. It was urged that the erstwhile owners of coal
mines and not the Central Government were entitled to deal
with these assets, as they belong to The owners of the coal
mines and not to the Central Government. The submission
proceeds on a complete misconception of the scheme of the
Act.
The learned Attorney General contends that according to
the provisions of sub-ss.(3) and (4) of s. 19, the Central
Government or the Government company was exclusively
entitled to receive the moneys in question to the exclusion
of other persons upto the specified date and to utilities
the same in discharge of the liabilities of the coal mine
which could not be discharged by the appointed day. It is
urged that sub-ss. (3) and (4) are part of an integrated
scheme and must be read along with sub-s.(2) of s.18. We are
clearly of the opinion that the contention advanced by the
learned Attorney General accords with the real legislative
intent.
Under the scheme of the Act, the owner of the coal mine
which has vested in the Central Government under sub-s.(1)
of s.3 is entitled to receive, besides the compensation
amount as determined under s.8, additional compensation
amount under sub-s.(1) of s.9, simple interest thereon at 4%
per annum for the period specified therein, together with
’such amount as may become due’ to the owner of the coal
mine in relation to the period during which the management
of the coal mine remained vested in the Central Government
as provided by sub-s.(2) of s.18.
To understand the correlation of sub-ss. (3) and (4) of
s. 19 with sub-s.(2) of s.18 of the Act. it is necessary to
refer to the provisions of Chapter VI entitled ’Commissioner
of Payments’ which provides for the computation of the
amount of compensation and other amounts payable to the
erstwhile owners of coal mines, and for matters connected
therewith or incidental thereto.
The provisions of Chapter VI are brought into operation
by the appointment of a Commissioner of Payments by the
Central Government under sub-s.(1) of s.17. There is a
statutory duty cast on the Central Government under sub-
s.(1) of s.18 that it shall, within 30 days from the
specified date, pay, in cash, to the Commissioner for
payment to the owner of the coal mine an amount equal to the
amounts specified against the coal mine in the Schedule and
shall also pay to the Commissioner such sums as may be due
to the owner of a coal mine under s. 9. Subs. (2) of s. 18
quoted above enjoins that,
422
in addition to the sum referred to in sub-s.(1), the Central
Government shall pay, in cash to the Commissioner ’such
amount as may become due to the owner of a coal mine’ in
relation to the period during which the management of the
coal mine remained vested in the Central Government. It is
then provided by sub-s.(3) of s.18 that a deposit account
shall be opened by the Central Government in favour of the
Commissioner, in the Public Account of India, and every
amount paid under this Act to the Commissioner shall be
deposited by him to the credit of the said deposit account,
and thereafter the said deposit account shall be operated by
the Commissioner. Separate records are required to be
maintained by the Commissioner under sub-s.(4) of s.18 in
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respect of each coal mine in relation to which payments have
been made by him under the Act. Under sub-s.(5) of s. 18,
interest accruing on the amounts standing to the credit of
the deposit account referred to in sub-s.(3) shall inure to
the benefit of the owners of coal mines.
Section 19 of the Act provides for the preparation by
the Central Government of a statement of account in respect
of the period of management. The Central Government is
required under sub-s. (1) of s.19 to cause the books of
accounts in relation to each coal mine, the management of
which has vested in it under the Coal Mines (Taking over of
Management) Act, 1973 to be closed and balanced as on the
date immediately before the appointed day, i.e., April 30,
1973, and to cause a statement of accounts as on that date,
to be prepared in relation to each such mine in respect of
the transactions effected by it during the period for which
the management of such coal mine remained vested in it.
Under sub-s.(2) of s.19, all amounts received by the Central
Government or the Government company after the closure of
such accounts where such accounts relate to transactions
effected before the appointed day, to be included in the
said statement of accounts, in respect of the coal mine to
which such receipts relate.
Under sub-s.(3) of s.19, the Central Government is
conferred power to receive up to the specified date, i.e.,
June 30, 1975 any amount due to the coal mine, to the
exclusion of all other persons, realised after the appointed
day notwithstanding that the realizations pertained to a
period prior to the appointed day. Proviso to sub-s.(3)
enjoins that where such realizations have not been included
in the statement of accounts as on the day immediately
before the appointed day, a supplementary statement of
accounts shall be prepared and furnished, at such intervals,
as may be prescribed by the Central Government or the
Government company to the owner of the coal mine. By sub-s.
(4) of s. 19, a duty is cast on the Central Government to
discharge.
423
the liabilities of the coal mine, which could not be
discharged upto the specified date, i.e., June 30, 1975 and
every payment so made is to be included in the statement of
accounts as on the day immediately before the appointed day,
indicating the period in relation to which the payments were
made.
It is plain on a reading of these provisions, that
unless the requirements of s.19 are fulfilled there can be
no ascertainment of ’such amount as may become due’ to the
owner of a coal mine, in relation to the period during which
the management of the coal mine remained vested in the
Central Government, as required under sub-s.(2) of s. 18.
Any other construction would render sub-s. (2) of s. 18
entirely otiose. The amounts collected on behalf of the
erstwhile owners of coal mines, represent the money of such
owners without distinction and whether they were sale
proceeds of coal or realizations from debtors, the amounts
were liable to be spent not only in the discharge of
liabilities of the coal mine which could not be discharged
by the appointed day, but also were liable to be spent for
the purposes of management. All the rights and liabilities
arise from the provisions of the Acts, and the net balance
in relation to the management period means the difference
between authorized collections and legitimate liabilities of
the erstwhile owners. It is necessarily this balance which
’becomes due in relation to the period during which the
management of the coal mines remained vested in the Central
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Government’ within the meaning of sub-s.(2) of s.18.
It would, therefore, be obvious that the various steps
provided by s.19 are to be taken for the compliance of the
requirements of s.18. When there is payment made by the
Central Government under s.18. the provisions of ss.20-27
become attracted. Every person having a. claim against the
owner of a coal mine has to prefer such claim under sub-
s.(1) of s.20 before the Commissioner of Payments within 30
days from the specified date. Proviso to sub-s.(1) confers
powers on the Commissioner of Payments to entertain such
claim within a further period of 30 days but not thereafter,
on being satisfied that the claimant was prevented by
sufficient cause from preferring the claim within the
specified period. Under sub-s.(2) of s.20 claims in relation
to a Provident Fund, Pension Fund, Gratuity, etc.,
established for the welfare of the persons employed by the
owner of a coal mine may be filed on behalf of the persons
so empowered by the Coal Mines Provident Fund Commissioner
appointed by the Central Government, under s.3C of the Coal
Mines Provident Fund, Family Pension and Bonus Schemes Act,
1948. By sub-s.(3) of s.20 the Commissioner of Payments is
empowered to entertain claims, not being a claim which was
time-barred on January 31, 1973, but was rejected merely on
the
424
ground that such claim was time-barred, and such claim
should be deemed not to have been rejected and shall be
restored on his file and shall be dealt with in the manner
specified in s.23. Section 21 provides for priority of
claims in relation to arrears of Provident Fund, Pension,
Gratuity, etc.
Section 22 provides for priority of certain debts in
relation to every other claim, viz. (a) all sums due to the
State Government including royalty and dead rent, (b) all
amounts due in respect of any compensation or liability for
compensation under the Workmen Compensation Act, 1923 etc.,
(c) all sums deducted by the employer from the salary or
wages of any workman or any other employee for credit to any
Provident Fund, or any other fund established for the
welfare of the employees, but not deposited to the credit of
such fund. Sub-section (3) of s.22 provides that the debts
specified in sub-s.(2) shall rank equally among themselves
and be paid in full, unless the assets are insufficient to
meet them, in which case they shall abate in equal
proportion and be paid accordingly. Admission or rejection
of claims by the Commissioner of Payments is provided fol by
s. 23 disbursement of amounts by him to the claimants by s.
24 payment of interest on admitted claims by s.24A, recovery
of amounts advanced by the Central Government by s.25. It is
after meeting all these liabilities that the Commissioner of
Payments is required to serve a notice on the owners of the
coal mines, the managing contractors, and the owners of any
machinery, equipment or other property which has vested in
the Central Government or a Government company under the Act
and which does not belong to the owners of the coal mines,
may apply to him for payment.
Under the scheme of the Act the owner of a coal mine is
entitled to the payment by the Commissioner of Payments
under s.26, of the balance, if any, out of the total amount
of money credited to the account of a coal mine’, after he
has gone through all the stages provided for in Chapter VI.
Sub-s.(1) of s.26 of the Act reads:
"26. Disbursement of amounts to the owners of coal
mines.- (1) If out of the monies paid to him in
relation to a coal mine or group of coal mines
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specified, in the second column of the Schedule, there
is a balance left after meeting the liabilities of all
the secured and unsecured creditors, the Commissioner
shall disburse such balance to the owner of such coal
mine or group of coal mines."
Such being the scheme, there is no question of the owner of
a coal mine, who is divested of his right, title and
interest under sub-s.(1) of s.3 to realise from The Central
Government any amount due to a coal
425
mine, which remained to be realised until the specified
date, i.e., June 30, 1975.
The Commissioner of Payments is, therefore, required
under s.26 to pay to the owner of such coal mine the balance
left, if there is any, out of the monies paid to him in
relation to a coal mine, after meeting the liabilities of
all the secured and unsecured creditors. Sub-section (5) of
s.26 makes a provision for apportionment of such amount
between the owner of the coal mine and the owner of
machinery, equipment and other property which does not
belong to the owner of the coal mine. Any amount which
remains undisbursed or unclaimed for a period of three years
has to be transferred by the Commissioner of Payments to the
General Revenue Account of the Central Government under
s.27.
In view of all these provisions of ss.20 to 27 of the
Act, and particularly of sub-s.(1) of s.26, we fail to see
the propriety of the claim made by the petitioners. The
petitioners are certainly not entitled to recover any
definite or ascertained sum. All that they are entitled to
under sub-s.(5) of s.19 is that they should be furnished
with a copy of each statement of accounts prepared under
s.19, to its being audited under sub-s.(6) and to the audit
being conducted in such manner as the Central Government may
direct under sub-s.(7), and to the payment under sub-s.(1)
of s.26 of the balance if any, out of the total amount of
money credited to the account of a coal mine after all the
liabilities have been discharged.
The learned Attorney General makes a statement that
this has all been done before a Commissioner of Payments was
appointed under sub-s.(1) of s.17. Nevertheless, the
petitioners assert that the Central Government has not
accounted for the realisation, if any, and the disbursement
of two amounts of Rs. 68.74 lakhs and Rs. 58.22 lakhs,
representing the outstanding dues from sundry debtors as on
the appointed day, i.e., January 31, 1973 and the value of
coal despatched from the mines in question during the period
of management, i.e., from January 31, 1973 and April 30,
1973 respectively. In view of this assertion, we direct the
Central Government to appoint a Commissioner of Payments
under sub-s.(1) of s. 17 of the Coal Mines (Nationalisation)
Act, 1973 to go into the dispute as to these items.
There still remains the question whether the powers of
the Central Government under sub-ss.(3) and (4) of s.19 of
the Act extend only up to the specified date, that is, up to
June 30, 1975. In dealing with the question, the High Court
having regard to the provisions of ss.20 to 27 of the Act
rightly observes that the Nationalisation Act
426
provides for claims to be preferred and for disbursement
after adjudication of such claims, and if any balance is
left after meeting the liabilities, it is only then that the
Commissioner of Payments can under sub s.(1) of s.26
disburse it to the owner of the coal mine. It then goes on
to say:
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"however, any amount which could not be realised
until June 30, 1975 would be realisable by the
erstwhile coal mine owners directly."
To put it conversely, there is no duty cast on the Central
Government to make realisation of any money due to a coal
mine if it pertains to a period prior to the appointed day,
and to discharge the liabilities of the coal mine beyond the
specified date, that is, June 30, 1975. To understand the
implications of this it is necessary to briefly deal with
the different stages by which nationalisation of coal mines
was brought about.
There are three dates. ’Appointed day’ under s.2(1) of
the Management Act was January 31, 1973; that under the
Nationalisation Act was May 1, 1973 while the ’specified
date’ for purposes of sub ss.(3) and (4) of s.19 was June
30, 1975.
All that vested in the Central Government under sub-
s.(1) of s.3 of the Management Act was the management of all
coal mines, as defined in s.2(g) of the Act, which included
sundry debts etc., pending nationalisation of such mines,
with effect from the appointed day, i.e., January 31, 1973.
But this was only for the purposes of management, the title
all the time remaining in the erstwhile owners of the coal
mines. In the course of management under that Act, all the
collections belonged to the owners; and the liabilities also
in relation to the mines were the liabilities of the owners.
The Custodian appointed by the Central Government under s.6
of the Management Act was liable for the net balance in
relation to the management period. He had the right to
collect and also the right to incur expenditure in relation
to the management by reason of the provisions of that Act.
The Nationalisation Act received the assent of the
President on May 30, 1973 but the provisions of sub-s.(1) of
s. 3 were brought into force with retrospective effect, that
is, with effect from the appointed day i.e., May 1, 1973. It
follows that although there was a complete extinction of all
the rights, title and interest of the owners of coal mines
with effect from May 1, 1973, there was a fictional
extension of the period of management under the Management
Act from May 1 to May 30, 1973. There is, therefore,
provision made in s.9 that apart from the amount of
compensation provided for by s.8, as
427
mentioned in the Schedule, the owners of every coal mine
shall be entitled to receive additional compensation under
sub-s.(1) thereof. This was to be an amount equal to the
amount which would have been, but for the provisions of ss.
3, 4 and 5 payable to such owner for the period commencing
on May 1, 1973 and ending on the date on which the Act
received the assent of the President, that is, May 30, 1973.
Under sub-s.(1) of s.11 the Central Government is entitled
to exercise all such powers and to do all such things as the
owner of the coal mine was authorised to do. The conferral
of power upon the Central Government under sub-ss.(3) and
(4) of s.19 to make realisation of monies due to the coal
mines and from such realisations to discharge the
liabilities as well as to incur expenses in relation to the
management thereof, was a necessary concomitant of the
vesting of such coal mines under sub-s.(1) of s.3 of the
Act.
Sub-section (1) of s.3 provides that the right, title
and interest of the owners in relation to the coal mines
shall vest in the Central Government free from all
incumbrances. As set out above, the definition of coal mine
in s.2(h)(xii) includes the current assets belonging to a
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mine, but by reason of the Explanation inserted by the Goal
Mines Nationalisation Laws (Amendment) Act, 1978, the
expression "current assets" appearing therein does not
include amounts which had become due before the appointed
day, i.e., May 1, 1973. Thus, these dues did not vest in the
Central Government. This exclusion of sundry debts under the
Nationalisation Act does not apply to the Management Act
because there was no similar explanation to s.2(g)(xii).
The Management Act was to be followed by the
Nationalisation Act and, therefore, the accountability of
the Central Government in regard to the management period
was provided for in s.19 of the Nationalisation Act.
Although there was vesting of the coal mines in the Central
Government under sub-s.(1) of s.3 of the Act, the accounts
had still to be settled. Sub-sections (3) and (4) of s.19
therefore, extended the period during which the Central
Government was authorised to collect monies due to the coal
mines and to discharge the liabilities of such coal mines
which could not be discharged by the appointed day, that is,
May 1, 1973, till the specified date i.e., June 30, 1975.
As we have stated, the liabilities of the coal mines
were not taken over. Section 7 of the Act, in terms,
provides that every liability of the owner, agent, manager
or managing contractor of a coal mine in respect of any
period prior to the appointed day shall be the liability of
the owner, agent, manager or managing contractor, as the
case may
428
be, and shall be enforceable against him and not against the
Central Government or the Government company. It logically
follows that after the specified date, i.e., June 30, 1975
the erstwhile owners of coal mines would have to meet all
their liabilities which could not be discharged before the
appointed day. It must result in the inevitable consequence,
as a necessary corollary that any amount which could not be
realised by the Central Government until the specified date,
would be realisable by them directly in order to meet their
pre-existing liabilities.
In Industrial Supplies Pvt. Ltd. & Anr. v. The Union of
India & Ors. we have by our Judgment delivered on August 7,
1980 held that the subsidy receivable from the erstwhile
Coal Board, established under s.4 of the Coal Mines
(Conservation and Safety) Act, 1952, being a payment "by way
of reimbursement" was like any other dues, and, therefore,
must be treated as ’any money due to the coking coal mine’
within the meaning of sub-s.(3) of 9.22 of the Coking Coal
Mines (Nationalisation) Act, 1972, and, therefore, it could
be utilised for the discharge of liabilities of such coking
coal mines under sub-s.(4) thereof, which provisions are in
pari materia with sub-ss. (3) and (4) of s.19 of the Coal
Mines (Nationalisation) Act, 1973. We accordingly, set aside
the direction made by the High Court requiring the Union of
India to pay to the petitioners Rs. 7,28,342.54 which it had
recovered from the erstwhile Coal Board as subsidy.
If the Commissioner of Payments finds that these two
items of Rs. 68.74 lakhs and Rs. 58.22 lakhs and the subsidy
amount of Rs. 7,28,342.54 have been duly accounted for,
nothing further need be done. Obviously, the Commissioner of
Payments cannot make an award, he can only enquire into the
question and make the necessary directions, if any. The
parties will have their remedy of an appeal under sub-s.(7)
of s.23 of the Act.
The result, therefore, is that the appeal of the Union
of India must succeed and is allowed and that of the New
Satgram Engineering Works fails and is dismissed, with costs
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throughout.
The judgment and order of the High Court is,
accordingly modified by directing the appointment of a
Commissioner of Payments under sub-s.(1) of s.17 of the Coal
Mines (Nationalisation) Act, 1973, who shall proceed to
adjudicate upon the disputes between the parties, with
advertence to the observations made above.
In accordance with our order dated May 9, 1980, we
direct the Central Government to appoint Sri Salil Kumar
Datta, a retired Judge
429
of the Calcutta High Court, as a Commissioner of Payments
under sub-s.(1) of s.17 of the Coal Mines (Nationalisation)
Act, 1973. Sri Datta will also act as an Arbitrator to
adjudicate upon the disputes as indicated in our judgment
delivered today with advertence to the observations made
therein.
Sri Datta as a Commissioner of Payment-cum-Arbitrator
shall be entitled to draw his last pay as a Judge of the
Calcutta High Court.
This order is made by consent of the parties. The
learned Attorney General stated at the hearing that a
retired Judge of the Calcutta High Court should be appointed
as a Commissioner of Payments and he should also act as an
Arbitrator. The learned counsel for the opposite party
agreed to this course being adopted. They left the choice of
the person to be appointed to the Court.
Due to inadvertence, certain typographical errors have
crept in our order dated May 9, 1980. We direct that the
clerical errors be corrected.
At p.2, in the 5th line, for the words and figures
"April 3, 1973", the words and figures "April 30, 1973" be
substituted. In the 6th line on that page, for the words and
figures "June 30, 1976", the words and figures "June 30,
1975" be inserted.
It is regrettable that certain other errors have also
crept in, which we have rectified in our judgment delivered
today.
The order dated May 9, 1980 stands corrected
accordingly. It shall be read in the light of the judgment
pronounced by us in these appeals.
S.R. C.A. 1331/79 dismissed.
C.A. 426/80 allowed.
430