BHARAT COKING COAL LTD.versusMADANLAL AGRAWAL

A                      BHARAT COKING COAL LTD.
                                 v.
                         MADANLAL AGRA WAL

                             NOVEMBER 20, 1996

B                   [A.M. AHMADI, CJ., SUHAS C. SEN
                      AND SUJATA V. MANOHAR, JJ.]

         Coal Mines (Nationalisation) Act, 1973: Sections 2(h) (xi), (o) 3
    and 26.

c       'Mine '-Extended meaning-Explanation of-Held: all properties
  which fell within the definition of 'mine' in S.2 (h) and which were used
  over a period of time and not temporarily and which were required for
  proper functioning of the mine, whether or not belonged to owner of mine,
  would vest in the Central Government by virtue o/S.3-Hence, even though
D lands and buildings solely used/or purposes ofoffice or residence ofofficers
  and staff of mine which did not belong to owner of mine but be/dnged to
  another person, right, title and interest therein, vested in Central
  Government-Mines Act, 1952.

         One M instituted a suit for eviction of the appellant from the
E land and buildings allegedly owned by him adjacent to the coal mine
  which had vested in the Central Government by virtue of the Coal
  Mines (Nationalisation) Act, 1973. The coal mine was owned by United
  Mining Company. The case of M was that he had in his individual
  capacity purchased certain properties together with structures thereon
  by registered deeds of sale and built further structures and remodelled
F them. The United Mining Company took these structures on monthly
  rent. The structures were utilised as office premises of the coal mine
  as also staff quarters. Eviction was sought for non-payment of monthly
  rent for several years. However, even before the Coal Mines
  (Nationalisation) Act came into force the management of the coal
G mine along with the disputed properties were taken over by the Central
  Government. No objection was taken thereto by the plaintiff. It was
  only three years later that M filed the suit. In cross-examination before
  trial court M stated that he was the director of the United Mining
  Company and that the other director was his own brother.

H         The suit was dismissed by the Trial Court. In appeal the Division
                                      886
              BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL              887


    Bench of the High Court held that the appellant had defaulted in           A
.   payment of rent, was liable to be evicted and that the suit premises
    had not vested in the Central Government by virtue of the provisions
    of the Coal Mines (Nationalisation) Act. Therefore, an eviction order
    was passed against the appellant. Being aggrieved the appellant
    preferred the present appeal.
                                                                               B
          The question before this Court was whether the right, title and
    interest ofM in the suit premises had vested in the Central Government
    by virtue of Section 3 of the Coal Mines (Nationalisation) Act, 1973.

         Allowing the appeal, this Court
                                                                               c
          HELD : I.I. The suit premises fall within the ambit of the
    definition of 'mine' in Section 2(h) of the Coal Mines (Nationalisation)
    Act, 1973 and as such had vested in the Central Government on the
    appointed day by virtue of the provision of Section 3 of the Act, even
    though these premises might not have been in the ownership of the          D
    United Mining Company. (909 Df

           1.2. The idea behind the Nationalisation Act appears to be that
    the Government wanted to take over and run the coal mines so as to
    ensure rational, co·ordinated and scientific development and
    utilisation of coal resources. The object of the Act was to subserve the   E
    common good and for matters connected therewith or incidental
    thereto. The Act should not be construed in a way to frustrate the
    working of the coal mines altogether and thereby stop or bring down
    production of coal by the nationalisation of coal mines. The extended
    meaning given to 'mine' was to ensure that the activity of mining of       F
    coal could be carried on in an uninterrupted fashion to ensure that
    after taking over of the mine, the Central Government is in a position
    to operate the mine and extract coal and do everything that is needful
    for the purpose of working the mine. (900 GU, 901 A)

                                                                               G
-         2.1. Section 3 of the Act which deals with acquisition of the
    rights of owners of coal mines in relation to the coal mines, requires
    to be interpreted in the light of the objects for which the Coal Mines
    (Nationalisation) Act, 1973 was enacted. The contention that Section
    3 was limited application and only took away the rights of the owners
    specified in the Schedule is not borne out of the scheme of the Act        H
    888                   SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A and also the wording of Section 3. Under Section 3 all ownership
  rights not only of, but in relation to, the coal mines were being taken
                                                                                '-
  over by the Central Government free from all encumbrances from
  the appointed day. The Section also does not speak of the right, title
  and interest of the owners specified in the Schedule. On the contrary,
  it speaks of 'coal mines specified in the Schedule". The coal mines
B specified in the Schedule are being brought under the ownership of
  the Central Government which will take in everything included in
  the definition of 'mine'. The ambit of the coal mine has to be
  understood in the sense as given in the Act. The fact that the name of
  the company has been given as the owner and the amount of
  compensation has also been fixed in the Schedule does not mean that
C t!te vesting was confined only to the assets of the company in the
  mine. The Schedule contains a list of the mines which have vested in
  the Central Government. In order to ascertain exactly what has vested
  in the Central Government, the definition of 'mine' given in Section
  2(h) will have to be taken into account. What the Schedule has done
  is to give the names and location of the mines, the names and addresses
D of the owners of the mines and also the amounts of compensation to
   be paid. (902-H,G,A-E)

        2.2. The two key words for the purpose of interpreting Section 3
  of the Act are 'mine' and 'owners'. The definition of a 'mine' under
E Section 2(h) is designed to cover at least two kinds of property: (i)
  property which belong to the mine and (ii) properties which are used
  by the mine for a proper functioning of the mine. The first category
  of properties would be properties which are of the ownership of the
  mining company. The second category of properties need not
  necessarily be of the ownership of the mining company. These could
F also be properties which are Jiased by the mining company or in
  possession of the mining company and used by it. Section 2(h)(xi) of
  the Act provides that all other (other than those in sub-clause (x) )
  lands and buildings wherever situated, if solely used for the location
  of the management, sale or liaison offices or for the residence of officers
G and staff of the mine are also acquired. Unlike sub-clause (x), sub-
  clause (xi) does not contain the words 'belonging to the owners of the
  mine'. (903 BC)

          Serajuddin and Co. v. Workmen, AIR (1966) SC 921, referred to.

H         3.1. Regarding those properties which are not of the ownership
         BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL               889



of the coal mine, it is clear from the definition of 'mine' that only A
properties which are required for a proper functioning of the mine
and which are covered by the definition would be acquired. Any and
every property belonging to another person which happens to be on
the surface of the mine or adjacent to it is not taken away. Only those
properties of another person which fall within the definition of a
mine and which are necessary for a proper functioning of the mine B
are to be taken away. The definition itself takes care of this aspect by
stipulating whereever necessary that such properties must be used
for a purpose of the mine, whether the purpose of specified or general.
                                                               (904 D-E(

     Te/co Limited v. Bharat Mining Corporation, Ltd. and Ors., AIR C
(1980) Born. 168, overruled.

      Valley Refractories Pvt. Ltd. and Anr. v. K.S. Garewal, AIR (1978)
Cal. 574 and Coal Mines Authority Ltd. and Ors. v. Associated Cement
Companies Ltd., AIR (1986) M.P. 241, approved.
                                                                           D
      3.2. In the light of the definition of 'owner' which also includes
a lessee or an occupier apart from the immediate proprietor, and the
definition of 'mine', one can conclude that even assets of which the
mine or the mining company may not be the proprietor, but which are
leased by the mine or which are in the possession of a mine over a period
of time are also acquired. A temporary acquisition, or a short-term E
lease, or even some special additional amenities which the mine may
provide but which are not required for the purposes of the mine may
not be covered. It will depend upon the facts of each case. (905-CD(

     3.3. The provisions of Section 26 of the Act clearly show :
                                                                           F
             (I) Mere mention of the name of the owner of a coal
             mine in 4th column is not conclusive of its right to get
             the entire amount of compensation specified in the 5th
             column. (908-D(
                                                                           G
             (2) There may be other claimants for the amount. The
             dispute may be resolved by a court on reference by the
             Commissioner. (908-E(

             (3) Machinery, equipment or other property in a coal
             mine which does not belong to the owners specified in H
    890                    SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A                the 4th column may vest in the Central Government or
                 a Government Company. (908-FJ

                 (4) If such vesting takes place, then the owner of such
                 machinery, equipment or property may be compensated
                 out of amounts specified in the 5th column. (908-G(
B
                 (S) The claim of such owners as against the owners named
                 in the 4th column may be referred to a court and the
                 compensation money may be apportioned by the Court
                 between the owner of the coal mine and the owner of
                 machinery, equipment or other property. (908-H(
c
        4.1 In the context of Section 3 and als<> Section 26, the
  owner has to be understood as owner of a mine in the extended sense
  given in Section 2(h). The limited definition of the word 'mine' given
  in the Mines Act, I 952 has not been designedly adopted by the Coal
  Mines (Nationalisation) Act. All these provisions go to show that it
D was not only the interest of the owners of the coal mine specified in
  the fourth column, but also the ownership of all other persons in the
  properties enumerated in Section 2(h) vested in the Central
  Government by virtue of the provisions of Section 3 of the Act.
                                                              (909-A-B(

E       4.2. That means that things which did not belong to the mine
  owners mentioned in column 4 of the Schedule but fall within sub-
  clauses (i) to (xii) of Section 2(h) of the Nationalisation Act will vest
  in the Central Government free from all encumbrances. If the mine
  owner had located staff quarters and officers on rented buildings,
F these will also vest in the Central Government. (909-CJ

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2463 of
    1993 etc.

          From the Judgment and Order dated 20.11.92 of the Patna High
G Court in Appeal from O.D. No. 722 of 1979.

           V.R. Reddy, Additional Solicitor General, H.N. Salve, R.N. Sachthey,
    Soli J. Sorabjee, M.L. Verma, S.C. Mullick, Ajit K. Sinha. Anip Sachthey,
    C.D. Singh, H. Munthi, Ranjit Kumar, Ms. Anu Mohla, Ms. Binu Tamta,
    B.A. tVlohanty, (Ms. Aruna Mathur, A. Mariarputham) for Arputham, Aruna
H   and Co., Prabha Choudhary and S.B. Upadhyay for the appearing parties.
     BHARAT COKING COAi. LTD. v. MADAN LAL AGRAWAL [SEN, J.) 891


     The Judgment of the Court was delivered by                                 A

        SEN, J. This appeal arises out of a suit instituted by one Madanlal
Agrawal for eviction of Bharat Coking Coal Limited from land and
buildings allegedly owned by him adjacent to the coal mine known as
Victory Colliery, which had vested in the Central Government by virtue
of the Coal Mines (Nationalisation) Act, 1973. Victory Colliery was owned       B
by United Mining Company Private Limited. The case of the appellant is
that the company was practically a one man company. If the corporate veil
is lifted, it will be found that Madanlal Agrawal was de facto owner of the
company. Madanlal Agrawal's case is that he had in his individual capacity
purchased certain properties together with structures thereon by registered
deeds of sale dated 7.7.1949 and 24.3.1950 and built further structures         C
and remodeled them. The United Mining Company Private Limited took
these structures on monthly rent. These structures were utilised as office
premises of Victory Colliery as also staff quarters. Eviction was sought
for non-payment of monthly rent for several years.

      Bharat Coking Coal Limited in its written statement alleged that the
                                                                                D
said properties were bought with the moneys belonging to the colliery and
as such the land and the structures really belonged to the company. The
alleged payment of rent by Victory Colliery to Madanlal Agrawal was
only a paper transaction and for tax benefit. All the purchases were made
by United Mining Company and sources of investment came from the                E
funds of the said company.

      It may be mentioned that even before the Coal Mines (Nationalisation)
Act came into force on 1.5.1973, the management of Victory Colliery
along with the disputed properties were taken over by the Central
Government on 1.1.1973. No objection was taken thereto by the plaintiff.        F
It was only on 1.1.1976 the plaintiff issued a legal notice to the appellant
to vacate the suit premises and to pay arears of rent from January, 1973 till
the filing of the suit. Title Suit (T.S.No.7/6 of 1976) for eviction was
filed on 2.2.1976. On 21.5.1979, the 1st Additional Subordinate Judge
dismissed the suit with costs. The respondent preferred an appeal against       G
the judgment and decree passed by the Trial Court. It was allowed by the
Division Bench of the Patna High Court. The High Court was of the view
that right, title and interest in the suit premises had not vested in the
Central Government. Bharat Cooking Coal Limited in respect of the suit
premises was a tenant under Madanlal Agrawal. Since it had defaulted in
payment of rent for the period from January, 1973, it was liable to be          H
    892                      SUPREMECOURTREPORTS (1996] SUPP. 8 S.C.R.


A evicted from the suit premises. Therefore, the respondent's suit was decreed.
    A further direction was given to pay the arrears of rent to the tune of Rs.
    66,000 and mesne profits.

           The Trial Court on examination of the facts came to the conclusion
    that there was no relationship of landlord and tenant between the plaintiff
B   and the defendant. 'ft found that Bharat Cooking Coal Limited was
    maintaining the said premises since vesting of victory Colliery in the Central
    Government. The cost of repairs, electricity and water charges in respect
    of the suit premises were to be borne by the United Mining Company on
    behalf of the colliery before its nationalisation. Madanlal Agrawal, the
    plaintiff stated in cross-examination that he was the director of the United
C   Mining Company. The other director was his own brother. He also stated
    that he had got the account books to prove that he purchased the suit
    premises out of personal funds but he did not file the same. He also stated
    that the Company used to pay rent of the suit property but he did not
    produce the rent receipts. He also admitted that he could not say when he
    constructed the house and what was the total cost. The expenses of electricity
D   and water connections in the suit properties were paid by the United Mining
    Company. He admitted in the cross-examination that the employees of
    United Mining Company were in occupation of the suit premises. The
    office store, compressor room, garage etc. of the Victory Colliery were in
    the suit properties. The suit premises were used by United Mining Company
E   exclusively for the purpose of Victory Colliery. The Trial Judge observed
    that "it appears that defendant No.2 is nobody but the family member of
    the plaintiff'. The Trial judge came to the conclusion that in view of these
    facts and also in view of the provisions of the Coal Mines (Nationalisation)
    Act, the suit was not maintainable and the plaintiff was not entitled to any
    of his claims.
F
           In appeal, it was held by a Division Bench of the Patna High Court
    that ihe plaintiff/appellant was the owner of the suit premises of which
    Bharat Coking Coal Limited was the tenant and as it had defaulted in
    payment of rent from January, 1973 onwards. It was liable to be evict.;d.
G   The High Court came to the conclusion on the strength of a share certificate
    that Madanlal Agrawal became a shareholder of United Mining Company
    for the first time in 1951 but had purchased the suit properties in the year
     1949.

          That being the position, it was held that the suit premises had not
H vested in the Central Government by virtue of the provisions of the Coal
          BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN. J.]           893


    Mines (Nationalisation) Act. Therefore, an eviction order had to be passed     A
'   for non-payment of rent against Bharat Cooking Coal Limited.

          Before this Court, the argument on behalf of Bharat Coking Coal
    Limited, the appellant was confined to the scope of Coal Mines
    (Nationalisation) Act, 1973. The validity of the finding of the High Court
    that United Mining Company was a tenant of Madanlal Agrawal has not            B
    been challenged. Therefore, the only question that falls for determination
    before us is whether the right, title and interest of Madanlal Agrawal in
    the suit premises have vested in the Central Government by virtue of
    Section 3 of the Coal Mines (Nationalisation) Act, 1973.

         Even before the Nationalisation Act was passed, various legislations C
    were passed in regard to coal mines for the purpose of preservation of coal ·
    and safety of miners working in the coal mine.

          In 1952, the Coal Mines (Conservation and Safety) Act, 1952 was
    passed. The purpose of the Act was declared to be "it is expedient in the      D
    public interest that the Central Government should take under its control
    the regulation of coal mines to the extent hereinafter provided". Under
    this Act, the private ownership of coal mines was not disturbed, but. mining
    operations were strictly regulated. ·A Board was set up for the purpose of
    maintenance of safety in coal mines and for conservation of coal. "Mine"
    was not separately defined in the Act but by Section 3(1) "Agent", "Mine"      E
    and "Owner" were given the same meaning as in Section 3 of the Indian
    Mines Act, 1923.

         The Mines Act, 1952 came into furce on !st July, 1952. It dealt with
    mines generally. "Mine" was defined by Section 2(j) as under:             F

         "20)    "mine" means any excavation where any operation for the
                 purpose of searching for or obtaining minerals has been or is
                 being carried on, and includes:

          (i)    all borings, bore-holes and oil wells,                            G

          (ii)   all shafts in or adjacent to and belonging to a mine, whether
                 in the course of being sunk or not.

         (iii)   all levels and inclined planes in the course of being driven.     H
    894                      SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A         (iv)    all open-cast workings,

          (v)     all conveyers or aerial ropeways provided for the bringing
                  into or removal from a mine of minerals or other articles or
                  for the removal of refuse therefrom.
                                                                                     •
B         (vi)    all adits, levels, planes, machinery, works, railways, tramways,
                  and sidings in or adjacent to and belonging to a mine;

          (vii)   all workshops, situated within the precincts of a mine and
                  under the same management and used solely for purposes
                  connected with that mine or a number of mines under the
c                 same 1nanagement,

          (viii) all power stations for supplying electricity solely for the
                 purpose of working the mine or number of mines under the
                 same management,
                                                                    .•.
D
          (ix)    any premises for time being used for depositing refuse from
                  a mine, or in which any operation in connection with such
                  refuse is being carried on, being premises exclusively occupied
                  by the owner of the mine.

E         (x)     unless exempted by the Central Government by notification
                  in the official gazette, any premises or part thereof, in or
                  adjacent to and belonging to a mine, on which any process
                  ancilliary to the getting, dressing or preparation for sale of
                  minerals or of coke is being· carried on";
F
          "'Owner" was defined by Section 2(1) as under :

          "2( 1) "o\vner" when used in relation to a mine, means any person
                 who is the immediate proprietor or lessee or occupier of the
                 mine or of any part thereof and in the case of a mine the
G
                 business whereof is being carried on by a liquidator or
                 receiver, such liquidator or receiver and in the case ofa mine,
                 owned by a company, the business whereof is being carried
                 on by a managing agent, such managing agent; but does not
                 include a person who merely receives a royalty, rent or fine
H                from the mine, or is merely the p1iiprietor of the mine, subject
           BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, I.)              895


                   to any lease, grant or licence for the working thereof, or is      A
                   merely the owner of the soil and not interested in the minerals
                   of the mine; but any contractor for the working of a mine or
                   any part thereof shall be subject to this Act, in like manner as
                   if he were an owner but not so as to exempt the owner from
                   any liability;"
                                                                                      B
            The limited nature of the definition of 'mine' in the Mines Act was
      explained in the case of Serajuddin and Co. v. Workmen, AIR (1966) SC
      921, where it was pointed out by this Court that 'mine' in Section 2U) of
      the Mines Act clearly excluded an office of a mine which was separately
      defined by Section 2(K) as meaning an office at the surface of the mine
      concerned. The office of the mine, even though situated on the surface of       C
      the mine, did not fall within the definition of 'mine'.

            A much more extended meaning of 'mine' was given in the Coal
      Mines (Taking Over of Management) Act, 1973 by which the management
      of coal mines in India was vested in the Central Government on and from
      the appointed date, i.e., 30th January, 1973. The coal mines specified in       D
      the Schedule to the Act were deemed to be the mines of which the
      management vested in the Central Government by virtue of the provisions
      of Section 3(2). It was further provided that, if after the appointed day,
      the existence of any other coal mine came to the knowledge of the Central
      Government, whether after an investigation or in pursuance of an intimation     E
      given to it under sub-section (5) or otherwise, the Central Government
      was empowered to issue an order making a declaration about the existence
      of such mine on and from the date of such declaration. The management
      of such mines was also deemed to have vested in the Central Government
      and such mines were deemed to have been included in the Schedule. Sub-
      sections (3),(4), (5) and (6) of Section 3 provided as under:                   F
                   "(3) If any error or omission is notified in the Schedule in
                   relation to the name or address of the owner of a coal mine,
                   the owner of such mine shall, within thirty days from the
                   date on which this Act receives the assent of the President,       G

---                bring such error or omission to the notice of the Central
                   Gov~rnment.


                   (4) If, after the appointed day, the Central Government is
                   satisfied, whether from any information received by it or
                   otherwise, that there has been any error, omission or              H
    896                     SUPREME COURT REPORTS [I 996] SUPP. 8 S.C.R.


A                misdescription in relation to the particulars of a coal mine
                 included, or deemed to be included, in the Schedule or the
                 name and address of the owner of any such coal mine, it
                 may, by notified order, correct such error, omission or
                 misdescription, and on the issue of such notified order the
                 relevant entries in the Schedule shall stand corrected
B                accordingly:

                 Provided that no such correction in relation to ownership of
                 a coal mine shall be made where such ownership is in dispute.

                 (5) Every person in charge, immediately before the date on
c                which this Act receives the assent of the President, of the
                 management of any coal mine, being a coal mine not included
                 or deemd to be included on the said date in the Schedule,
                 shall within thirty days from the said date, intimate the Central
                 Government the name and location of such mine and the
                 name and address of the owner thereof
D
                 (6) Where there is a dispute with regard to the declaration
                 made by the Coal Board under the Coking Coal Mines
                 (Emergency Provisions) Act, 1971, to the effect that a coal
                 mine contains coking coal, the management of such coal mine
E                shall, notwithstanding anything contained in ·the said Act,
                 vest in the Central Government under this Act and nothing
                 contained in the first mentioned Act shall apply, or be deemed
                 ever to have applied to the said coal mine"

          For the purpose of this case, it is important to note that the Schedule
F appended.to the Act was not treated as final and conclusive. Every person
    incharge of management of coal mine which was not included in the
    Schedule had a duty to intimate to the Central Government, the name and          c::::
    location of such mine and the name and address of the owner thereof The
    words specifically not defined in Section 2 were assigned the meanings
G   given to them in Section 3 of the Mines Act, 1952. 'Mine', however, was
    given a very wide meaning under Section 2(g).

          The extended definition of 'mine' specifically included all lands,
    buildings and equipments belonging to the owner of the mine and adjacent
    to or situated on the surface of the mine where the washing of coal or
H   manufacture of coke was carried on. It also included all lands and buildings
          BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.] 897



    other than those referred to above whereever situated and were solely used        A
    for location of management as well as of liaison officer or the residence of
    officers and staff ofthe mine. In other words, building used for the residence
    of the officers and staff etc. had to be treated as 'mine' in spite of the fact
    that such lands and buildings might not have belonged to the owner of the
    'mine' in ordinary sense. It will also appear from the definition of 'mine'
    that the phrase 'belonging to the owner of the mine' was only to be found         B
    in sub-clause (x) and sub-clause (xii) of Section 2(g). The legislative intent
    obviously was to bring lands, buildings and equipments which did not
    belong to the owners but were used in the running of the coal mine within
    the ambit of the word 'mine'. The intention appears to be that the Central
    Government after taking over of the mine must be in a position to run the
    mine as it was being run previously with all the plants, equipments,              C
    machineries, lands and buildings. Even if some of the properties mentioned
    in the definition did not belong to the owner, those will be available to the
    Central Government for running the mine. As this provision might lead to
    a conflict with other laws, it was expressly provided by Section 12 that the
    provisions of this Act shall have effect notwithstanding anything inconsistent
    therewith contained in any other law. In the Schedule annexed to the Act,         D
    names and addresses of the mines, management of which was taken over
    as well as the names of the owners of the mines were given. "Victory P.O.
    Dhansar" was mentioned at Serial No. 68 and United Mining Company
    Limited has been shown as the owner of the mine. By virtue of Section 3
    read with the extended definition of mine given in the Act, not only the
    colliery, but the buildings which are being utilised for location of the          E
    managment and the office of the mine as also for residence of the officers
    and staff of the mine were brought under the management of the Central
    Government. If the office building belonged to a person other than the
    Colliery Company which owued the mine, then it was his duty to draw the
    attention of the Central Government to the fact that these building even
    though included in the definition of 'mine', actually did not belong to           F
    United Mining Company Limited which was described generally as the
    owner. In such a case, the description of the owner might have been
    corrected. But even if such an error took place which required correction,
    the owner of the lands and buildings falling within sub-clause (xi) of



-
    clause (g) of Section 2 could not get back the management or control over         G
    these lands and buildings. It is of significance to note that Madanlal Agrawal
    who is a Director of United Mining Company Limited did not raise ·any
    objection to the description of United Mining Company Limited as the
    owner of the coal mine at any point of time and did not seek for any
    correction. It is not his case that he was unaware of the wide definition of
    'mine' given in this Act.                                                         H
    898                     SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A         The Coal Mines (Taking Over of Management) Act, 1973 was
    followed by the Coal Mines (Nationalisation) Act, 1973. The extended.               ..
    definition of 'mine' that was given under the Coal Mines (Taking Over of
    Management) Act was retained in Section 2(h) of the Nationalisation Act
    with some modification.

B         The object of the Nationalisation Act was stated to be-

                 "An Act to provide for the acquisition and transfer of the
                 right, title and interest of the owner in respect of the coal
                 mines specified in the schedule with a view to reorganising
                 a.'ld re-constructing such coal mines so as to ensure the rational,
C                co-ordinated and scientific development and utilisation of
                 coal resources consistent with the growing requirements of
                 the country, in order that the ownership and control of such
                 resources are vested in the state and thereby so distributed as
                 best to subserve the common good and for matters connected
                 therewith or incidental thereto."
D
          A declaration was made in the Act in Section IA which is as under:-

                 "IA- Declaration as to expediency of Union control.-(1) It
                 is hereby declared that it is expedient in the public interest
                 that the Union should take under its control the regulation
E                and development of coal mines to the extent hereinafter
                 provided in sub-sections (3) and (4) of section 3 and sub-
                 section (2) of section 30."

          "Mine" was defined by Section 2(h) of the Act as under:
F
                  "2(h) 'mine' means any excavation where any operation for
                  the purpose of searching for or obtaining minerals has been
                  or is being carried on, and includes-

                  (i) all borings and bore holes;
G
                  (ii) all shafts whether in the course of being sunk or not;

                  (iii) all levels and inclined planes in the course of being driven;
                                                                                             --
H                 (iv) all open cast workings;
BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.]             899


      (v) all conveyers or aerial ropeways provided for bringing A
      into or removal from a mine of minerals or other articles or ·
      for the removal of refuse therefrom;

      (vi) all lands, buildings, works, adits, levels, planes, machinery
      and equipments, instruments, stores, vehicles, railways,
      tramways and sidings in, or adjacent to a mine and used for          B
      the purposes of the mine;

      (vii) all workshops (including buildings, machinery
      instruments, stores equipments 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        C
      number of mines under the same management;

      (viii) all coal belonging to the owner of the mine, whether in
      stock or in transit, and all coal under production in a mine;
                                                                           D
      (ix) all power stations in a mine or operated primarily for
      supplying electricity for the purpose of working the mine or
      a number of mines under the same management;

      (x) all lands, buildings and equipments, belonging to the
      owners of the mine, and in adjacent to or situated on the            E
      surface of, the mine where the washing the coal obtained
      from the mine or manufacture, therefrom, of coke is carried
      on;

      (xi) all lands and buildings other than those referred to in         F
      sub-clause (x) whereever 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,                 G
      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-                                                            H
    900                     SUPREME COURT REPORTS [I 996] SUPP. 8 S.C.R.


A                (a) dues representing the sale of coal and coal products effected
                 at any time before the appointed day and outstanding
                 immediately before the said day;

                 (b) dues from the Coal Board, established under section 4 of
                 the Coal Mines (Conservation Safety and Development) Act,
                 I 952 prior to the repeal of the said Act, with respect to any
                 period before the appointed day;

                 (c) dues from sundry debtors, Joans and advances to other
                 parties and investments, not being investments in the coal
                 mines;
c
                 (d) security deposits made by the owners with the Coal
                 Controller appointed by the Central Government or with
                 the Railways for the fulfilment of contracts or with a State
                 Electricity Board for the payment of bills;

D                (e) earnest money deposited by the owners with the Railways
                 for obtaining contracts;"

          Sub-section (n) of Section 2 laid down that words and expressions
    used but not defined in the Act will have the meanings assigned to them in
E   the Coal Mines (Conservation and Safety) Act, 1952. Sub-section (o) of
    Section 2 provided that words and expressions used in the Nationalisation
    Act which have not been defined in the Coal Mines (Conservation and
    Development) Act, 1974, but defined in the Mines Act, 1952, will have
    the meanings assigned to them in the Mines Act.

F         By virtue of Section 3, the right, title and interest of owners in
  r.elation to the coal mines specified in the Schedule stood transferred to
  and vested absolutely in the Central Government free from all encumbrances
  from the appointed day, !st May, 1973. The idea behind the Nationalisation
  Act appears to be that the Government wanted to take over and run the
G coal mines so as to ensure rational, co-ordinated and scientific development
  and utilisation of coal resources. The object of the Act was to subserve the
  common good and for matters connected therewith or incidental thereto.
  The Act should not be construed in a way to frustrate the working of the
  coal mines altogether and thereby stop or bring down production of coal
  by the nationalisation of coal mines. The extended meaning given to 'mine'
H was to ensure that the activity of mining of coal could be carried on in an
      BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.]            901


uninterrupted fashion. Not only the lands, buildings and equipments             A
belonging to the owners of the mine but other lands and buildings which
were solely used for the purposes of office or residence of the officers and
staff of the mine also vested in the Central Government. The words of
sub-clause (xi) are very clear and there is no ambiguity in them.

       Mr. Sorabjee appearing on behalf ofMadanlal Agrawal has contended        B
that what has been taken over under Section 3 by the Central Government
is the "right, title and interest of the owners in relation to the coal mines
specified in the Schedule". Serial No, 204 in the Schedule mentions
"Victory" as the coal mine and its owner has been described as United
Mining Company Limited. The .compensation payable has also been
mentioned as a sum of Rs. 9,17,000. Jn other words, by virtue of Section        C
3, the United Mining Company was being divested of
its right, title and interest in the mine. The amount of compensation payable
to the company was also fixed by the statute. Section 3 read with the
Schedule leaves no room for doubt that only the interest of the company
and nobody else was being acquired under Section 3. The company may
have taken a house on lease, but the lessor was not divested of ownership       D
of the house in any way by virtue of the provisions of Section 3.

       If this argument is upheld, it will make the extended meaning given
to 'mine' in sub-section (h) of Section 2 nugatory and of no effect. "Coal
Mine' has been defined by Section 2(b) to mean a mine in which there            E
exists one or more seams of coal. 'Mine' has been defined to include
amongst others all conveyers or aerial ropeways provided for the bringing
into or removal from a mine of minerals or other articles or for the removal
of refuse therefrom, all lands, buildings works, vehicles, railways, tramways
and sidings in, or adjacent to a mine and used for the purpose of the mine,
all workshops (including buildings, machinery, instruments, stores,             F
equipment of such workshops and the lands on which such workshop
stands) in or, adjacent to, a mine and used substantially for the purposes of
the mine, all power stations in a mine or operated primarily for supplying
electricity for the purpose of working the mine. All these things may not
belong to the owner to come within the ambit of the Nationalisation Act.
The extended definition of mi~e has been given in order to ensure that          G
after taking over of the mine, the Central Government is in a position to
operate the mine and extract coal and do everything that is needful for the
purpose of working the mine. In fact, the phrase "belonging to the owner
of the mine" is to be found only in sub-clauses (viii), (x) and (xii). That
clearly goes to show that the other assets, movable or immovable, which
were being actually used and utilised for operation of the mining               H
    902                      SUPREME COURT REPORTS (1996] SUPP. 8 S.C.R.


A activity were all being taken over by the Central Government even though
    these did not belong to the owners. There is no sense in giving this extended
    meaning to 'mine' ifthe intention of the Act was not to acquire the right
                                                                                     ...   -
    of ownership in these assets falling within the definition of 'Mine'.

          It is also of significance that Section 3 speaks of vesting of "right,
B title and interest of the owners in relation to the coal mines specified in the
    Schedule". All ownership rights not only of, but in relation to, the coal
    mines were being taken over by the Central Government free from all
    encumbrances from the appointe~ day. The Section also does not speak of
    the right, title and interest of the owners specified in the Schedule. On the
    contrary, it speaks of "coal mines specified in the Schedule". In other
C   words, the coal mines specified in the Schedule are being brought under
    the ownership of the Central Government which will take in everything
    included in the definition of mine. The ambit of the coal mine has to be
    understood in the sense as given in the Act. The fact that the name of the
    company has been given as the owner and the amount of compensation
    has also been fixed in the ·schedule does not mean that the vesting was
D   confined only to the assests of the company in the mine. The Schedule
    contains a list of the mines which have vested in the Central Government.
    In order to ascertain exactly what has vested in the Central Government,
    the definition of 'mine' given in Section 2(h) will have to be taken into
    account. What the Schedule has done is to give the names and location of
E   the mines, the names and addresses of the owners of the mines and also the
    amounts of compensation to be paid. It is not in dispute that United Mining
    Company was named as the owner of Victory coal mine. From this,
    however, it does not follow that all assets, lands, buildings and euipments
    which fall within the ambit of the definition of mine as given in Section
    2(h) will not vest in the Central Government unless they belong to the
F   Company. If Section 3 is read with Section 2(h) and also sub-sections (3)
    and (5) of Section 26, it will be clear that vesting under Section 3 was not
    confined to the interest of the owner named in column 4 of the Schedule.

          The contention that Section 3 was of limited application and only
G took away the rights of the owners specified in the Schedule is not borne
    out of the scheme of the Act and also the wording of Section 3.

          Section 3 of the Act which deals with acquisition of the rights of
    owners of coal mines in relation to the coal mines, requires to be interpreted
    in the light of the objects for which the Coal Mines (Nationalisation) Act,
H   1973 was enacted. As set out in the Preamble, the purpose is reorganising
      BHARAT COKING COAL LTD ' MADAN LAL AGRAWAL [SEN. J.] 903



and reconstructing such coal mines so as to ensure a rational, coordinated       A
and scientific development and utilisation of coal resources. Therefore,
all assets required for functioning of coal mines are to be acquired.

      The two key words for the purpose of interpreting Section 3 are
'mine' and 'owners'. lfwe look at the definition ofa 'mine' under Section
2(h), the definition is designed to cover:-                                      B

       (1) all properties "belonging to the mine" whatever be the nature of
these properties, as also specified properties ''belonging to the owner of
the mine". Thus, for example, Section 2(h)(xii) is an omnibus clause which
covers all fixed assets, moveable and immoveable, belonging to the owner
ofa mine whereever situate and current assets belonging to a mine whether        C
in its premises or outside. Section 2(h)(viii) covers all coal belonging to
the owner of the mine. Section 2(h)(x) covers all lands, buildings and
equipment belonging to the owners of a mine, and in adjacent to or situated
on the surface of the mine, where washing of coal or manufacture of coke
is carried on.
                                                                                 D
       (2) In addition, the definition of 'mine' also covers all those assets
which are required for a proper functioning of the mine irrespective of
whether these assets 'belong' to a mine or not. Thus, for example, Section
2(h)(vi) covers all lands, buildings, machinery and equipment, instruments,
stores, vehicles, railways, tramways etc. adjacent to a mine and used for        E
the purposes of the mine. Therefore, all these assets if they are lying
adjacent to a mine and are required for the proper functioning of the mine
would be acquired irrespective of whether they belong to the "owner of a
mine" or not. Similarly under Section 2(h)(ix) all power-stations in a
mine or operated primarily for supplying electricity for the purposes of
working the mine or a number of mines under the same management will             F
be acquired irrespective of whether the power-stations belonged to the
mine or owner of the mine, or not. Sub-clause (xi) of Section 2(h) provides
that all other [other than those in sub-clause (x)] lands and buildings
wherever situated, if solely used for the location of the management, sale
or liaison offices or for the residence of officers and staff of the mine are    G
also acquired. Unlike sub-clause (x), sub-clause (xi) does not contain the
words "belonging to the owners of the mine". Therefore, the definition
clause of'mine' covers at least two different kinds of property (i) properties
which belong to the mine and (ii) properties which are used by the mine
for a proper functioning of the mine. The first category of properties
would be properties which are of the ownership of the mining company.            H
    904                       SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A The second category of properties need not necessarily be of the ownership
    of the mining company. These could also be properties which are leased          ... .
    by the mining company or in possession of the mining company and used
    by it.

          That is why under Section 2(n) and 2(o) read together, the term
B   'owner' would carry a wider meaning assigned to that term under the
    Mines Act of 1952 which would cover, depending on the context, even the
    rights of a lessee or occupier of the mine or any part thereof. Thus the
    entire interest in the properties which are covered under the definition of
    a mine is to be acquired so that the mines can be reorganised and run
    efficiently.
c
          In this context, therefore, Section 3 refers to the acquisition of the
    rights of owners in respect of all the properties which are covered by the
    definition of a 'mine'.

          Regarding those properties which are not of the ownership of the
D coal mine, it is clear from the definition of 'mine' that only properties
    which are required for a proper functioning of the mine and which are
    covered by the definition would be acquired. Any and every property
    belonging to another person which happens to be on the surface of the
    mine or adjacent to it is not taken away. Only those properties of another
E   person which fall within the (lefinition of a mine and which are necessary
    for a proper functioning of the mine are to be taken away. The definition
    itself takes care of this aspect by stipulating whereever necessary that such
    properties must be used for the purpose of the mine, whether the purpose
    is specified or general.

F       The judgment of the Bombay High Court in Te/co Limited, v. Bharat
  Mining Corporation Ltd. and Ors., AIR (1980) Born. 168, has taken a
  very narrow view of Section 3(1) of the Coal Mine (Nationalisation) Act
  in holding that it is only the right, title and interest of those owners whose
  names appear in the Schedule against the respective coal mines that is
                                                                                            ;,.--
G intended  to be acquired and transferred to the Central Government. It                    4,.
  ignores both the definition of 'mine' as also the definition of 'owner'.
                                                                                     "1'
  The other two judgments Valley Refractories Pvt. Ltd. and Anr. v. K.S.
  Garewal, AIR(l978) Cal, 574, and Coal Mines Authority Ltd. and Ors. v.
  Associated Cement Companies Ltd., AIR (1986) M.P. 241, have basically
  examined the definition of 'mine' in order to see whether the asset in
H question which was under consideration before them, falls within the
      OHARA! COKING COAL LTD.,., MADAN LAL. AGRAWAL (SEN. J.] 905


definition of 'mine' under the said Act. That is the correct approach,          A
especially because of the extended definition ofa mine and the distinction
which the definition itself makes between properties belonging to the mine
or owner of the mine and prope1ties which are used for the purposes of the
mine. The two decisions also take into account the wider definition of an
'owner'. Such an interpretation would also be in consonance with Section
26(3) which takes care of the right of persons who are not described as         B
owners of the coal mines in the Schedule to claim compensation. If their
interests were not to be taken over under the Nationalisation Act, there
would be no need to provide for any compensation for them.

      In the light of the definition of an 'owner' which also includes a
lessee or an occupier apart from the immediate proprietor, and the definition   C
of 'mine', one can conclude that even assets of which the mine or the
mining company may not be the proprietor, but which are leased by the
1nine or which are in the possession of a 1nine over a period of ti1ne, are
also acquired. A temporary acquisition, or a short term lease, or even
some special additional amenities which the mine may provide but which
are not required for the purposes of the mine may not be covered. It will       D
depend upon the facts of each case. In the Madhya Pradesh case, for
example, the equipment in question was only temporarily in the possession
of the mine to meet certain exigencies. This was held to be not covered by
the definition of mine. In the Calcutta case, however, the weigh bridge
which was leased by the company was a necessary equipment for the proper        E
functioning of the mine and was installed in the mine fqr a period of time.
It was held as falling within the definition of a 'mine'. Thus it is quite
possible that property which is temporarily in or adjacent to a mine, and
which does not belong to the mine, or certain machinery and equipment
which does not belong to the mining company but may be temporarily
leased to meet some special temporary requirements, would not be covered        F
by the definition of a mine. But the present case is not such a case.

      The scheme of payment of compensation also goes to show that
apart from the owners named in the Schedule, other persons may have to
be compensated. Sections 8 of the Coal Mines (Nationalisation) Act lays         G
down that the "owner of every coal mine or group of coal mine.sspecified
in the second column of the Schedule shall be given by the Central
Government, in cash and in the manner specified in Chapter VI for the
vesting in it, under Section 3, of the right, title and interest of the owner
in relation to such coal mine or group of coal mines, an account equal to
the amount specified against it in the corresponding entry in the fifty         H
    906                     SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A column of the Schedule". The Commissioner of payments to be appointed
    under Section 17 for the purpose of disbursement of the amounts specified
    in the Schedule has to consider and investigate the claim of every person
    against the owner and decide the validity of the claim. The Commissioner
    may transfer the claim for settlement to an authorised person.

B         A claimant who is dissatisfied with the decision of the Commissioner
    may prefer an appeal. Provisions of Section 26 of Coal Mines
    (Nationalisation) Act are important for the purpose of this case:

                 "26. Disbursement of amounts to the owners of coal mines,
                 (I) If out of the monies paid to him in relation to a coal mine
c                or group of coal mines specified in the second column of the
                 Sechdule, 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.

D                (2) Before making any payment to the owner of any coal
                 mine or group of coal mines under sub-section (I), the
                 Comltlissioner shall satisfy himself as to the right of such
                 person to receive the whole or any part of such amount, and
                 in the event of there being a doubt or dispute as to the right
E                of the person to receive the whole or any part of the amount,
                 referred to in sections 8 and 9, the Commissioner shall refer
                 the matter to the Court and make the disbursement in
                 accordance with the decision of the Court.

                  (3) For the removal of doubts, it is hereby declared that the
F                 entries in the fourth column of the Schedule shall not be
                  deemed to be conclusive as to the right, title and interest of
                · any person in relation to any coal mine specified in the
                  corresponding entries in the second column of the
                  Schedule and evidence shall be admissible to establish the
                  right, title and interest of any person in relation to such coal
G                 mine.

                 (4) In relation to a coal mine the operations of which were
                 immediately before the taking over the management of such
                 coal mine under the coal Mines (Taking over of Management)
H                Act, 1973, under the control of a managing contractor, the
          BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN, J.] 907



                  amount specified in the fifth column of the Schedule against      A
-"                such coal mine shall be apportioned between the owner of
                  the coal mine and such managing contractor, in such
                  proportions as may be agreed upon by or between the owner
                  and such managing contractor, and in the event of there being
                  no such agreement, in such proportions as may be determined
                  by the Court on a reference made to it by the Commissioner.       B

                  (5) Where any machinery, equipment or other property in a
                  Coal Mine has vested in the Central Government, or a
                  Government company under this Act, but such machinery
                  equipment or other property does not belong to the owner of
                  such coal mine, the amount specified in the fifth column of       c
                  the Schedule against such coal mine shall, on a reference
                  made to it by the commissioner,be apportioned by the Court
                  between the owner of such coal mine and the owner of such
                  machinery, equipment or other property having due regard
                  to the value of such machinery, equipment or other property
                  on the appointed day.                                             D

                  (6) Where the amount specified in the fifty column of the
                  Schedule is relateable to a group of coal mines, the
                  Commissioner shall have power to apportion such amount
                  among the owners of such group, and in making such                E
                  apportionment, the Commissioner shall have regard to the
                  highest annual production in the coal mine during the three
                  years immediately preceding the appointed day."

           Sub-section (I) speaks of "monies paid to him in relation to a coal
     mine". The money payable to an owner shall be utilised first to pay to         F
     secured and unsecured creditors. If any balance is left thereafter, it shall
     be disbursed to the owners. Sub-section (2) provides that before making
     any payment to the owner, the Commissioner has further to satisfy himself
     as to the right of the person to receive "the whole or any part of such
     amount". In other words, merely because the name of a colliery owner is        G
 -   shown in the 4th column as the owner will not enable him to get the entire
     amount allocated in column 5. Other parties may claim a portion of that
     amount. In such a situation, the Commissioner has to refer the dispute to
     the court for decision. For the removal of doubts, sub-section (3) has
     declared that the entries in the 4th column of the Schedule shall not be
     deemed to be conclusive as to the right, title and interest of any person in   H
    908                     SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A relation to any coal mine. Any other claimant may adduce evidence to
    establish his right, title and interest in relation to such coal mine. These
    provisions clearly go to show that the colliery company named in the 4th
    column is not the only person who will be paid the compensation money.
    If plants, machinery and building which come within the definition of
    'mine' are not owned by the person named in the 4th column, then the
B   Commissioner will have to satisfy himself as to the right of any other
    person who owns such plants or machineries or buildings and divide the
    amount of compensation among such persons and the persons in the 4th
    column.

          The controversy has been put beyond any doubt by sub-section (5)
C of Section 26 which specifically provides for apportionment of the
    compensation money when any machinery, equipment or other property
    which does not belong to the owner of the mine has vested in
    the Central Government. The amount may be apportioned between
    the person named in the 4th column and the owner of machinery, equipment
D   or other property by a court. All these provisions clearly go to show:-

          ( I)   Mere mention of the name of the owner of a coal mine in 4th
                 column is not conclusive of its right to get the entire amount
                 of compensation specified in the 5th column.

E         (2)    There may be other claimants for the amount. The dispute
                 may be resolved by a court on reference by the Commissioner.

          (3)    Machinery, equipment or other property in a coal mine wh\ch
                 does not belong to the owners specified in the 4th column
F                may vest in the Central Government or a Government
                 Company.

          (4)    If such vesting takes placy,\then the own.er of such machinery
                 equipment or property may be compensated out of amounts
                 specified in the 5th column.
G
          (5)    The claim of such owners as against the owners named in the
                 4th column may be referred to a court and the compensation
                 money may be apportioned by the court between the owner
                 of the coal mine and the owner of machinery, equipment or
H                other property.
            BHARAT COKING COAL LTD. v. MADAN LAL AGRAWAL [SEN. J. J            909



...          In the context of Section 3 and also Section 26, the owner has to be
       understood as owner of a mine in the extended sense given in Section
       2(h). The limited definition of the word 'mine' given in the Mines Act,
                                                                                       A

       1952 has not been designedly adopted by the Coal Mines (Nationalisation)
       Act. All these provisions go to show that it was not only the interest of the
       owners of the coal mine specified in the fourth column, but also the
       ownership of all other persons in the properties enumerated in Section          B
       2(h) vested in the Central Government by virtue of the provisions of Section
       3 of the Act.

             That m<l!lns that things which did not belong to the mine owners
       mentioned in column 4 of the Schedule but fall within sub-clauses (i) to
       (xii~ of Section 2{h) of the Nationalisation Act will vest in the Central       c
       Government free from all encumbrances. If the mine owner had located
       staff quarters and offices on rented buildings, these will also vest in the
       Central Government.

              In view of the aforesaid, we hold that the suit premises fall within
       the ambit of the definition of 'mine' in Section 2{h) of the Coal Mines         D
       (Nationalisation) Act, 1973 and as such had vested in the Central
       Government on the appointed day by virtue of the provision of Section 3
       of the Acf, even though these premises might not have been in the ownership
       of the United Mining Company.
                                                                                       E
             The appeal is allowed. The impugned judgment under appeal dated
       20.1 1.1992 is set aside. There will be no order as to costs.

             C.A. Nos. 1727-1731 of 1990 and C.A. No. 4673 of 1994.

              In view of our judgment in C.A. No.2463 of 1993, the above appeals       F
       are also allowed. The judgments under appeal are set aside. No order as to
       costs.

       v.s.s .                                                    Appeals allowed.


 ...