KATRAS JHARIA COAL CO LTD Vs. STATE OF WEST BENGAL
LAWS(CAL)-1960-1-15
HIGH COURT OF CALCUTTA
Decided on January 25,1960

KATRAS JHARIA COAL CO. LTD. Appellant
VERSUS
STATE OF WEST BENGAL Respondents

JUDGEMENT

Sinha, J. - (1.) The petitioner in this case is the Katras Jharia Coal Co. Ltd. a company incorporated under the Indian Companies Act. Mousas Seebpore and Koithi, Sub-registry Ranigunj, thana Ranigunj in the district of Burdwan, appertained to the zamindary of the Maharaja of Burdwan. In the year 1864-65 it was granted as a patni tenure to one Ram Krishna Chatterji by a patta. By the year 1895, after many devolutions, the interest came to be held by one Purno Chandra Daw. By an Indenture of Lease dated the 26th July, 1895 Purno Chandra Daw demised the lands and collieries mentioned in the said Indenture of Lease to the Katras Jharia Coal Co. Ltd., upon a permanent lease. The Indenture of Lease purports to demise to the petitioner company, the lands hereditaments and premises known as the "Seebpore and Koithi Collieries" together with all lands of every description and tenure, belonging to or held with, the Seebpore and Koithi Collieries, as also all mines beds and seams of coals and other mines and minerals whatsoever situated or lying in or under the said lands, and the other rights mentioned in the said Indenture of Lease. By an agreement dated 1st June, 1901 as modified by a further agreement dated 30th. March, 1955 the petitioner granted and demised by way of a sub-lease to the Seebpore Coal Co. Ltd. a part and parcel of the coal mining rights in Mouza Koithi comprising an area of 986 bighas. So far as the surface lands of the said collieries are concerned, the petitioner company created a large number of under-tenures and Ryoti interests. As regards the colliery rights, the position is that the petitioner company has leased out by way of sublease, a part of the Koithi Colliery to the Seebpore Coal Co. Ltd., who have since 1901 been working the same. The rest of the collieries are being worked by the petitioner company itself. It seems that in 1908, certain litigations started and on or about 28th August, 1917 the petitioner company acquired a confirmatory lease from the Maharaja of Burdwan. The reason why such a confirmatory lease became necessary is briefly as follows: Prior to the year 1910, the question as to whether a lease of lands granted by a Zamindar carried with it the underground rights, that is to say, rights in mines and minerals underneath the surface, was a disputed question. In some leases, there was an express grant by the Zamindar of such rights, but in other cases tile lessee claimed the under-ground rights by way of an implied grant. Upon this point there was a long stream of litigation culminating in the Privy Council decision, Kumar Hari Narayan Singh v. Sriram Chakravarti, 37 Ind App 136 (PC) more commonly known as the "petana" case. It was held by the Judicial Committee that where a village was shown to be a mal village of the plaintiff's zamindary estate, he must be presumed to be the owner of the under-ground rights as well. Where he has granted a lease, and has not expressly parted with the under-ground rights, he must be taken to have retained the same. After the law was thus clarified, lessees founded their claims upon an express grant or else took a confirmatory lease from the Zamindar, granting them such rights. In this case, such a confirmatory lease was taken by the petitioner company, so that no question arises about the petitioner being a lessee with regard to the under-ground rights. The position therefore was that the Seebpore Coal Co, Ltd., the sub-lessee, paid rent to the Katras Jharia Coal Co. Ltd. and the Katras Jharia Coal Co. Ltd. the lessee, paid rent to the Maharaja of Burdwan, the Zamindar ot the estate. The West Bengal Estates Acquisition Act, 1953 being West Bengal Act I of 1954 (hereinafter referred to as the "Act") came into operation on the 12th February, 1954. Under Section 4 of the Act, upon a notification being issued by the State Government, all estates and the rights of every intermediary in each such estate, situated in any district or part of a district specified in the notification, vested in the State free from all incumbrances. Such a notification was issued in respect of the lands in question on the 15th April, 1955, Under the Act as originally promulgated, the word "intermediary" was defined as follows: "Section 2(i) "Intermediary" means a proprietor, tenure-holder, under-tenure-holder or any other intermediary above a raiyat or a non-agricultural tenant".
(2.) The word, "estate" or "tenure" has not been defined, but under Sub-section (p) of Section 3, expressions used in the Act and not otherwise defined, would have, in relation to areas where the Bengal Tenancy Act, 1885 applied, the same meaning as in that Act. That the interest of the Maharaja of Burdwan, which was a zamindary interest, came within the definition of the word, "intermediary", is admitted. In other words, it is not disputed that the rights of the Zamindar, including his underground rights have passed to the State of West Bengal. The question that has been raised is as to the position of the lessee and the sub-lessee of mines and minerals. In other words, the question is as to whether the State has taken the property free from the rights of the lessee and sub-lessee, and if not, what are their present status in law. In order to ascertain this, it is necessary to consider a few more facts. On the 8th December, 1954 the Land Reforms Commissioner, Board of Revenue, West Bengal, wrote to Messrs. Andrew Yule and Co. Ltd. (Ex. 'B' to the petition) to the effect that the West Bengal Estates Acquisition Act did not provide tor the acquisition of the interests of lessee of a mine and that such a lessee was not an "intermediary" as defined in the said Act. The opinion was expressed that after the vesting of the rights of all intermediaries in the State, mining lessees will hold their leases directly under the State, and no return was required to be furnished by them under Rule 16 (1) of the Estates Acquisition Rules (Ext. "A" to the petition). On 11-4-1955 a communication was received from the Board of Revenue, by the Collector of Burdwan, being Order No. 4196 dated 11-4-55 to the effect that a lessee of mines was not an "intermediary" for the purpose of the Act and his status will not be altered even if he has granted any sub-lease for working mines, either in whole or in part. Such a lessee did not also become an intermediary by sub-letting any surface lands included in the mining lease. On 11-11-1955 a communication was received by the Additional Collector, Estate Acquisition, Burdwan from the Secretary, Board of Revenue, West Bengal (Ex. 'C' to the petition) to the effect that under Section 29 of the Estates Acquisition Act, leases of mines and minerals granted by an intermediary and subsisting immediately before the date of vesting, shall with effect from such date, be deemed to have been granted by the State, on the same terms and conditions as in the subsisting lease, with certain additional conditions mentioned therein. Thus, lessees of mineral rights were to pay royalty and other dues to the State Government, irrespective of the fact whether they have let out any part of the property by way of a sublease. On or about 3rd March, 1956 the Additional District Magistrate, Burdwan, issued a memorandum, the relevant part whereof runs as follows : "The question of payment of royalty by different mining interests has been raised before me from time to time. For the information of such interests I am giving below the correct position by citing an example. A. An intermediary within the meaning of Section 2 (1) of the Estates Acquisition Act B. Lessee C. Sub-lessee D. Sub-lessee actually working the mines. Royalty payable by B to A will, from the date ot vesting be payable to Government, Royalty by D to C and C to B will continue to be paid as before. This position will not in any way be affected if either B or C owns any other interest in land as an intermediary as defined in the Estates Acquisition Act, (Ext. 'D' to the petition)".
(3.) On the 23rd August, 1956 a memorandum was issued by the S.D.O. Asansole, Estate Acquisition Branch, addressed to the Indian Mining Federation, stating that all previous instructions were to be considered as superseded, because Government had decided that Section 29 of the Act clearly provided that the word 'intermediary' includes a lessee or a sub-lessee and that, retention as under a lease, or a sub-lease, was permissible in law in the case of persons actually holding land and working the mines. Therefore, such parties were thenceforth to pay royalty dues according to the terms of the lease or sub-lease, as the case may be, direct to the Government. It is clear therefore that after the passing of the Act it was at first considered that the lessee should pay rent and royalty to the State Government, but that the sub-lessee would continue to pay his rents and royalties to the lessee, witli which, the State Government will not be concerned,. By 1956, this view of Government came to be modified. A different construction came to be put upon the provisions of the Act, and briefly speaking, Government claimed the rents and royalties, not only from the lessee but also from the sub-lessee. Being conscious of the fact that such a stand might not be within the limits of the existing law, it was not long before the law itself was sought to be altered. On 16-1-1957 an Ordinance was passed, being the "West Bengal Ordinance No. 1 of 1957" altering the definition of the word, "intermediary" in. Section 2 of the said Act. This was followed by an amending Act, being West Bengal Act No. IV of 1957. The definition of the word, "intermediary", as amended, stands as follows: "Section 2(1)--"intermediary" means a proprietor, tenure-holder, under-tenure-holder, or any other intermediary above a raiyat or a non-agricultural tenant and includes a service tenure-holder, and in relation to mines and minerals, includes a lessee and sub-lessee". This definition was to be deemed as being contained in the Act from the very inception. There has been no consequential amendments effected in the body of the Act. After the issue of the Ordinance, the Subdivisional Land Reforms Officer, Asansole, demanded from all lessees and sub-lessees, the immediate payment of all arrears of rents and royalties, together with interest. So far as the lessees are concerned, the State Government does not propose to disturb their position so far as the collieries worked by them are concerned. Government however claims direct payment of the rents or royalties payable by the sub-lessees and the under-tenure-holders, direct and with retrospective effect. The difficulties confronting the, lessees are at once discernible. When the Act came into operation and the vesting took place on 15-4-1955 lessees and sub-lessees were not included within the definition of the word 'intenmediary". In their letters and departmental orders the Governmental authorities plainly took up the position that the lessees had become direct lessees under Government, but that the sub-leases were valid and Government had no concern with them. The sub-lessees therefore, continued to pay their rents and royalties to the lessees, which by 1957 amounted to a substantial sum. On or about 16-1-1957 the law was suddenly changed. Lessees and sub-lessces were included within the definition of the word, "intermediary" and the amendment was made (retrospective. If the date of vesting of the interests of lessees and sub-lessees was to relate back to the notification under Section 4 already issued in 1955, then Government became entitled to receive the rent and royalties from the sub-lessees as from the date ot the said notification. Therefore, the question arises as to how this would affect the rents and royalties already paid by sub-lessees to the lessees, and to whom they should make payment in future. In fact, this seems to be the real point in this case. As regards the under-tenure-holders of surface lands, no dispute has been canvassed before me. That being the position, it is necessary now to consider the position of lessees and sub-lessees of mineral Tights under the Act. I have already referred to the 'definition of the word "intermediary" in Section 2. The word, "incumbrance" has been defined in Sub-section (h) of Section 2 but it is a negative definition and net comprehensive. I have also referred to the vesting section namely, Section 4. The estate of an intermediary and all his right in each such estate, vested in the State on and from the date when the notification under Section 4 was issued in 1955. Section 5 of the Act lays down the effect of such a notification, the relevant part thereof runs as follows: "5. Effect of notiiication. -- Upon the due publication of a notification under Section 4, on and from the date of vesting- (a) the estates and the rights of intermediaries in the estates, to which the declaration applies, shall vest in the Stale free from all incumforances; in particular and without prejudice to the generality of the provisions of this clause, every one of the following rights which may be owned by an intermediary shall vest in the State, namely: (i)' rights in sub-soil, including rights in mines and minerals,;


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