KARANPURA DEVELOPMENT COMPANY LTD.versusUNION OF INDIA

A             KARANPURA DEVEWPMENT COMPANY LTD.
                                         v.
                               UNION OF INDIA

                              DECEMBER 14, 1995

B               [K. RAMASWAMY AND B.L. HANSARIA, JJ.]

         Coal Bearing Areas (Acquisition & Development) Act, 1957--
  Leasehold right--lmplementation of Bihar La11d Refonns Acl--Leasehold
  right coming to an e11d--Lessee entitled to compe11satio11--Qua11tification of
C compe11sation--State Govemment directed to constitute a tribunal u/s 14(2)
  for deciding quantum of compensation payable.

          The appellant got 999 years lease to execute mining licence in 1946
    but his lease hold came to an end due to the implementation of Land
D   Reforms Act, 1950. The question raised was whether by operation of
    section 4(i) of the Coal Bearing Areas (Acquisition and Development) Act,
    1957 and the notification issued u/s 7 thereof which was published on
    24.8.1963, the appellant was entitled to the compensation. The High Court
    held that since the appellant was only a lessee, he was not entitled for the
E   compensation. Hence this appeal.

          Allowing the appeal, this Court

          HELD : The lessee is entitled to compensation. The quantification
    was required to be done by a separate proceeding. The state Government
F   was directed to constitute a tribunal in that behalf u/s 14(2) of the Coal
    Bearing Areas Acquisition Development Act, 1957 which would go into the
    question of quantification of compensation according to law. [685-G, 686-A)

          Karanpura Development Company v. Union of India & Ors., [1988)
G Suppl. sec 488, relied on.

           CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2774-75
     of 1980.

          From the Judgment and Order dated 4.7.79 of the Patna High Court
H   in Misc.A. Nos. 216-17/71.
                                    684
                    KARANPURADEV. CO. LTD. v. U.0.1.                  685

         D.N. Gupta, Ms. Shipra G. Jain and R.A. Perumal for the Appel- A
!ants.

     V.C. Mahajan, Praveen Swarup, A.K. Sharma and C.V.S. Rao for the
Respondents.

         The following Order of the Court was delivered :                   B

       The appellant initially had a stint with the Raja of Ramgarh to
 execute mining licence, whereat he ultimately succeeded in getting 999
 years lease executed on August 30, 1946. But his lease was short lived due
 to the implementation of Land Reforms Act, 1950, which put an end to the C
lease hold right. The only question is whether it would be entitled for
 compensation in that behalf. Though the lessees in similar situation were
 unsuccessful, subsequently they succeeded in this Court. By operation of
Section 4(1) of the Coal Bearing Areas (Acquisition and Development)
Act, 1957 (for short, 'the Act') and the notification issued under Section 7 D
thereof which came to be published in the Gazette of Government of India
dated August 24, 1963, the question is whether the appellant is entitled to
the compensation. The High Court held that since the appellant is only
lessee the lessee is not entitled for the compensation. The controversy is
no longer res integra. This Court in Karanpura Development Company v.
Union of India & Ors., 1988 Suppl. SCC 488 held that the position as it E
stood prior to the change in the law, by the introduction of Section lOA of
the Bihar Land Reforms Act, was that the head lessee, notwithstanding the
sub lease, retains his position as such head lessee, with the State Govern-
ment becoming the lessor in place of the erstwhile grantor of the lease.
The idea of possession under Section 10(1) cannot be so strictly construed F
as to be equivalent to actual physical possessioIL A lessee in law is in
possession through a sub-lessee though possession of the sub lessee is
immediate and that of the lessee mediate. Consequently it was held that
the lessee is entitled to the compensation.

      How much compensation the lessee is entitled to have from lease
                                                                            G
hold interest held by the lessee was not determined by the High Court.
Therefore, the quantification is now required to be done by a separate
proceeding.

         The appeal is accordingly allowed and the order of the High Court H
    686                   SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R.

A   dated 4th July 1979 in Miscellaneous Petition No. 216/1971 and 217/1971
    stands set aside. The State Government is directed to constitute a tribunal
    in that behalf under Section 14(2) of the Act which would go into the
    question of quantification of compensation according to law and decide
    the same.
B          The appeal is accordingly allowed. No costs.

    R.A.                                                      Appeal allowed.