Holding

Coal slurry is a mineral (coal in liquid form) and its disposal and collection are exclusively within the legislative jurisdiction of Parliament, so the State of Bihar had no authority to grant leases for its collection.

Summary

Three coal companies (Bharat Coking Coal Ltd., Tata Iron & Steel Co. Ltd., Central Coalfields Ltd. & Coal India Ltd.) claimed ownership of coal slurry that escaped from their washery plants and settled on river beds and raiyati lands. The State of Bihar granted leases to private contractors to collect the slurry without obtaining prior approval from the Central Government under the Mines and Minerals (Regulation and Development) Act, 1957. The High Courts held that the slurry was not a mineral and that the State could grant such leases. The Supreme Court held that the slurry is essentially coal, a mineral, and that its disposal and collection fall within the exclusive legislative competence of Parliament under the Act, rendering the State's leases illegal. Consequently, the Court set aside the State's settlements and restrained the respondents from collecting the slurry, allowing the appeals of the coal companies.

Issues considered

The nature of coal slurry: whether it constitutes a mineral within the meaning of the Mines and Minerals (Regulation and Development) Act, 1957.
Whether the State of Bihar had authority to grant leases for collection of slurry without Central Government approval under Section 5 of the Act.
Whether the State Legislature retained legislative and executive competence to regulate disposal of mine waste after the parliamentary declaration under Section 2 of the Act.
Whether the absence of rules framed by the Central Government under Sections 13 or 18 of the Act affected the State's power to regulate slurry disposal.

Legislation cited

Coal Bearing Areas (Acquisition and Development) Act, 1957s. 4, s. 7, s. 9
Mines Act, 1952s. 2
Mines and Minerals (Regulation and Development) Act, 1957s. 13, s. 18, s. 2, s. 3, s. 5

Subjects

Mines and Minerals (Regulation and Development) ActCoal slurryMining leaseLegislative competenceState executive powerParliamentary declarationConservation of mineralsProperty rightsEnvironmental pollution

Judgment

A BHARAT COKING COAL LTD. AND ANR.
v.
STATE OF BIHAR AND ORS.

AUGUST 17, 1990
B
[K.N. SINGH AND M.H. KANIA, JJ.]

Mines and Minerals (Regulation and Development) Act, 1957:
Sections 2, 3, 5, 13, 18--Coal slurry escaping from coal mine washery-
Deposited on river-bed and Raiyati /and-Lease for disposal thereof-· --=r _
Competence of State Government-Non-framing of Rules by Central
C Government-Whether cunfers legislative competence on State Legisla-
ture-Extent of executive power in the execution of lease-Coal
slurry-Whether constitutes mineral.

Constitution of India, 1950: Article 162-State's executive
D power-Whether co-extensive with legislative power-State denuded of
its legislative competence-Whether State's executive power extends.

Articles 245 and 246 and Schedule Vll List I Entry 54 and List II
Entry 23-Subject matter falling under Union list-Absence of Parlia-
mentary legislation-Whether confers power on State Legislature.
E
Practice & Procedure: Pleading-Party taking a particular stand
throughout-Before the Courts-Deviation therefrom-Whether open "'
to it-Operation of estoppel.

Words & Phrases: "Conservation"-"Mine"-Meaningof.
F
The three appellant companies claimed their respective right to
the slurry that escaped from their washery plant/pond and got deposi-
ted in the Bokaro and Damodar River beds, as also in certain Raiyati
land. The State Government did not accept their plea and leased out the .i,
right to remove the said slurry to the respondent on payment of royalty.
The first two appellants filed Writ Petitions before the Patna High
G Court challenging the State Government's action in leasing out the right
to the Respondent's for removing the slurry. The third company
instituted criminal proceedings against the contractors, who in turn
filed Writ Petitions before the Calcutta High Court for quashing the
criminal proceedings and for a direction permitting them to collect l_
H slurry under the lease granted by the State Government.

744
BHARAT COKING COAL v. STATE OF BIH/\.R 745

The Full Bench of the Patna High Court dismissed the Writ Peli·
A
lions and held that slurry was neither coal nor mineral; jt was an
industrial waste of coal mine which was not regulated by the provlslC)ns
of the Act. It also held that collection of slurry did not lnvo.lve a·ny
mining operations and the settlement made by the State Government In
favour of the respondents was not a mining lease and so the State
Government was not under any legal obligation to ubtain previous S8J1C· B
lion of the Central Government under the Mines and Minerals (l!.egula-
tion and Development) Act, 1957. It further held that after the slurry
escaped into the river bed or to some other land, it ceased to belong to
the appellants and the State Government was entitled to execute the
lease for collection of the slurry.

The Writ Petitions filed by tbe Contractors before the Calcutta
c
High Court were dismissed by a Single Judge who held that tJte third
appellnat-company was the owner of the slurry and the State Govern.
ment had no authority to grant any lease to the respondent-contractors
for removal of the same. On appeal by the contractors the Division
Bench held that the lease granted by the State of Bihar in favour of the p
contractors was not a mining lease and the provisions of the Mines and
Minerals (Regulation and Development) Act, were not applicable to the
grant of lease. On the question of appellants' claim to the property
rights for collecting slurry, the Bench held that the slurry deposited on
the appellants' land, belonged to them and the respondents had no right
to collect the same but if the slurry settled down on other's I.and the
respondents have right to remove the same.

Against the above decisions of the two High Courts, the appella11t-
companies have preferred the present appeals.

t"' On behalf of the appellants, it was inter alia contended ·lbat the F
slurry jSludge was in substance coal, a mineral specified in the First .
f, schedule to the Act; that the State Government had no authority In law
to grant any lease to the respondents for the collection, remov.al .or
lifting of the slurry coal deposited in the river bed or on any l!.aiyati
land without obtaining the sanction of the Centra.1 Government u11der
Section 5 of the Act; that the deposit of the slurry in the .river bed ;!lid G
the land was by natural process of flow of water discharged from the
washeries; that there was no law made by the State Legislature authoris-
ing the State Government to interfere with the appellants' property
J right by way of executive orders; that slu.rry .discharged ·from the
washeries of the appellants' coal mines constituted waste and effiue11t of
coal mines, its disposal was exclusively within the legislative compe· H
746 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

tence of the Parliament; and that in view of the Parliament's declara·
A
tion under Section 2 read with Sections 13 and 18 of the Act, the State
Government was denuded of all its legislative competence to make any ~
law with regard to disposal of waste or effiuent discharge of coal mines,
and hence the State Government had no executive power to deal with
the same.
B
The main contentions on behalf of the respondents were that once
the slurry escaped from the washery plants of the appellant it ceased to
belong to them and as it polluted the river water and affected the
fertility of Raiyati land the State Government was justified in providing
for its collection and removal to prevent pollution; that the appellants
could not have any right in the goods which they abandoned; that the
c \vasheries do not form integral part of the mining operations, and there·
fore the slurry could not be treated as a waste of coal mine. Alterna·
tively it was contended that even if slurry was a waste of coal mine the
State Government was competent to provide for its collection and
removal as the Central Government had failed to make any rule under
D Section 18 of the Act regulating the disposal of the slurry.

Allowing the appeal, this Court,

HELD: 1. Slurry is a descriptive expression, it may be cement
slurry or coal slurry, depending upon the character or quality of the
E mixture of mineral in the liquid form. There is no doubt that in the "'
i!lstant cases, slurry is coal slurry, as admittedly small particles of coal
escape from the washery plant alongwith water. After it overflows the
storage pond the slurry flows into the river and is deposited on the river
bed, which is later on collected and used as fuel after it is formed into
briquettes. The deposit which is collected from the river bed continues ,...
F to be carbonaceous in character having all the elements of coat. 'II
Thus, the slurry is coal in liquid form, and slurry coal deposited in
the river bed or lands in substance as well as in its character con· ---(
tinues to be coat. [757F; 758C·D I

Kesari Mal Jain v. State of Bihar, AIR 1985 Patna 114, approved.
G
Websters New 20th Century Dictionary; Encyclopaedia Britannica,
referred to.

2. The definition of "mining operation" and "mine" are very l.
wide. The expression ''mining of mineral'' in the definition of ''mining
H operation'' under Section 3(d) of the Mines and Minerals (Regulation &
BHARAT COKING COAL v. STATE OF BIHAR 747

Development) Act, 1957 is spacious enough to comprehend every activity
A
by which a mineral is extracted or obtained from the earth irrespective
>· of whether such activity is carried out on the surface or in the bowels of
the earth. It is not a requirement of the definition of "mining opera·
lion", that the activity for winning the mineral must necessarily be an
underground activity. The essence of 'mining operation' is that it must
be an activity for winning a mineral whether under the surface or B
winning the surface of.earth. The slurry which is deposited on the river
bed is not dumped there artificially by any human agency instead coal
j>·~ particles are carried to the river bed by the flow of water through
• natural process. Therefore the view taken by the High Court that the
slurry which is deposited in the river bed is dumped by the appellants
by artificial process is incorrect. Once the coal particles are carried
away by the water which is discharged from the washery and the c
same are settled in the river bed, any operation for the extraction
of lifting of the coal particles from the river bed would involve wino-
- - ·-· ing operations within the meaning of Section 3(d) of the Act. However.
in the instant cases. it is not necessary to express any final opinion on
this question. [759D·Gl D

Tarkeshwar Sio Thakur Jiu v. B.D. Dey & Co. & Ors., AIR 1979
SC 1669. relied on.

Bhagwan Das v. State of U.P. & Ors., [1976) 3 SCR 869, referred
to. E

3. The State Legislature is competent to enact law for the regula-
tion of mines and mineral development under Entry 23 of State List but
this power is subject to the declaration which may be made by Parlia-
ment by law as envisaged by Entry 54 of Union List. Thus the legislative
competence of the State Legislature to make law on the topic of mines F
and minerals is subject to Parliamentary Legislation. The Parliament
has enacted the Mines and Minerals (Regulation and Development) Act,
1957. Ry Section 2 of the Act the Parliament has declared that it is
expedient in public inter~st that the Union should take under its
control the regulation of mines and the development of minerals to
the extent provided in the Act. In view of Parliamentary declaration G
as made in section 2 of the Act, the State Legislature is denuded
of its legislative power to make any law with respect to the regula-
tion of mines and mineral development to the extent as provided hy the
Act. [760G·H; 76IA)

4.1 An analysis of the provisions of the Act makes the extent of H
748 SUPREME COURT REPORTS [1990) 3 S.C.R.

Parliamentary declaration clear that the disposal and discharge of
A
sludge or slurry emanating or coming from the washery of a coal mine is
exclusively within the legislative power of Parliament. The Act further _....._
provides that the Central Government has exclusive power to frame any
rule either under Section 13(2)(0) or under the amended Section
! 8( 1 )( k) of the Act regulating disposal of slurry. The effect of the
B Parliamentary declaration as contained in the Act is that the matters
referred to in the declaration, stand abstracted from List II and these
become matters of legMation in List I of the Seventh Schedule. As a
result of the declaration made by the Parliament, under Section 2 of the
Act, the State Legislature is denuded of its legislative power with respect - }
to the regulation of mines and minerals development and the entire
legislative field has been taken over by Parliament. [763C-E)
c
4.1 The Central Government has not framed any rule either
under Section 13 or under Section 18 of the Act. Prior to the Amending
Act 37 of 1986 Section 13(2)(0) conferred power on the Central Govern-
men! to frame rules for the purpose of granting prospecting licences
-··
D and mining leases including the disposal of discharge of any tailings.
slime or other waste products. Sub-clause (o) of Section 13(2) was trans-
posed into Section 18(2) as sub-clause (k) by the Amending Act 37 of
1986. Section 18 (I) confers general power on the Central Government
to frame rules and to take all such steps as may be necessary for the
conse.rvation and development of mJnerals in India. Section 18(2) does
E not affect or restrict the generality or width of legislative power under .'<
Section 18(1) as the matters specified in various sub-clauses of Section
18(2) are illustrative in nature. Even in the absence of sub-section (2) or
its various sub-clauses, the Central Government was invested with the
power of subordinate leJ!islation in respect of any matter which could
reasonably be connected with the purpose of "conservation and
F development of minerals" by Section 18(1) of the Act. Power to frame
rules, regulating the discharge or disposal of slime or slurry emanating
1
from a coal mine including its collection from the river bed or from
Raiyati land after its escape from the washery of the coal mines. would
clearly fall within the expression "conservation of mineral". Slurry
'""
admittedly contain coal particles, its collection from land or river is
G reasonably connected with the 'conservation of miner~l'. Section
I 8(2)(k) which expressly confers power on the Central Government to
regulate disposal or discharge of waste of a mine makes the Parlia-
mentary declaration apparent that the State Legislature is not compe-
tent to regulate waste discharge of a coal mine. Mere absence of any ..l._
rule framed by the Central Government under Sections 13 or 18 of the
H Act with regard to the disposal of slime or waste of a coal mine does not
BHARAT COKING COAL v. .STATE OF BIHAR 749

confer legislative competence on the State Legislature to make any law
A
) or rule. Once a particular topic of legislation is covered by the
· - - Parliamentary declaration. the State Legislature is denuded of its power
to make any law or rule in respect of that topic or subject matter and the
absence of Rules would not oonfer legisb\tive competm<e on the Stale. [764A-G]

4.3 Since Section 18 of the Act covers .the field with respect to B
disposal of waste of a mine. there is no scope for the contention that
until rules are framed the State Legislature has power to make law or
rules on the subject. Once the competent legislature with a superior
efficacy expressly or impliedly evinces its legislative intent to cover the
entire field on a topic. the enactments onhe other legislature whether
passed before or after would be overborne. Mere absence of rules
framed by the Central Government. does not confer power on the State
c
Legislature to make law on the subject. Since the legislative field with·
regard to the framing of rules relating to the disposal of slime and waste
of coal mine is fully covered b) Section 18. the State Legislature is
denuded of its power of making any law with regard to those matters. [7658-C]
D
Baijnath Kedia v. State of Bihar & Ors .. [1970] 2 SCR JOO:
Hingir-Rampur Coal Co. Ltd. & Ors. v. State of Orissa & Ors., [1961]
2 SCR 537; State of Orissa v. M.A. Tulloch & Co., [1964] 4 SCR 461
and State of Tamil Nadu v. Hind Stone, [ 1981] 2 SCR 742 0 relied on.

5. The executive power of the State Government is co-extensive E
with the legislative power of the State Legislature. If the State Legisla-
ture has power to enact laws on a matter enumerated in the State List or
in the. concurrent list the State has executive power to deal with those
matters subject to other provisions of the Constitution. If a subject
matter fallswithin the legislative competence of State Legislature. the
exercise of executive power by the State Government is not confined, as F
even in the absence of a law being made, the State Government is
competent to deal with the subject matter in exercise of its executive
power. In the absence of any law, the State Government or its officers
in exercise of executive authority cannot infringe citizens rights merely
because the State Legislature has power to make laws with regard to
subject, in respect of which the executive power is exercised. No doubt G
under Entry 23 of List II, the State Legislature has power to make law
but that power is subject to Entry 54 of List I with respect to the regula-
tion and development of mines and minerals. Since State Legislature's
l power to make law with respect to the matter enumerated in Entry 23 of
List II has been taken away by the Parliamentary declaration, the State
Government ceased to have any executive power in the matter relating H
750 SUPREME COURT REPORTS [1990) 3 S.C.R.

to regulation of mines and mineral development. Moreover, the proviso
A
to Article 162 itself contains limitation on the exercise of the executive
power of the State. If Parliament and the State Legislature both have
power to make law in a matter, the executive power of the State shall be
subject to the law made by the Parliament or restricted by the executive
power of the Union expressly conferred on it by the Constitution or any
B law made by Parliament. Since Parliament has made the law as contem-
plated by Entry 54 of List I and the law so made confers exclusive power
on the Central Government to frame rules regulating the disposal of
waste or industrial effiuent of a mine, the State Legislature has, there-
fore no power either to make law under Entry 23 of List II or to exercise
executive power to regulate the disposal of slurry, a waste effiuent
discharge of a coal mine. [765F-H; 766A-F)
c
Rai Sahib Ram Jawaya Kapur & Ors. v. State of Punjab, [1955] 2
SCR 225 and State of M.P. & Anr. v. Thakur Bharat Singh, [1967] 2
SCR 454, referred to.

D 6. It is apparent that the State of Bihar itself has been treating the
'slurry deposits' as mineral and on that assumption it has been execut-
ing leases conferring rights on the respondents to collect the same on
payment of royalty. Hence it is not open to the State of Bihar and the
lessees to contend that slurry is not coal or mineral within the meaning
of the Act. [767F]
E
7. The inclusive definition of 'mine' as contained in Section 2 of
the Act is wide enough to include any premises belonging to a mine
where any ancillary process is carried on for preparing the minerals or
coke for sale. The washery, wherein the process of washing coal is
carried on, for the purpose of preparing the coal for· sale is an integral
f part of a mine as it involves ancillary process. Washery is included
within the definition of mine under the Mines Act 1952. Any waste
discharge from the washery carrying small particles of coal in the form
of slurry is the waste slime arising from operations carried out in a
mine. Moreover, it is not open to the respondents to contend that slurry
is not a waste discharged from the washeries of coal mines, since they
G have all along pleaded that slurry is a waste discharged from the
washery of the appellants' coal mines. [768C; D-E]

8. The slurry which escapes from the appellants' washeries is
mineral and its regulation is within the exclusive jurisdiction of the
Central Government. In view of the Parliamentary declaration made by
H Section 2 of the Act and having regard to Section 18 of the Act, the State
BHARAT COKING COAL >. STATE OF BIHAR [SINGH, J.I 751

Government has no authority in law to make any settlement or grant A
>- any l~ase to any person for the c~llection of slurry deposits eit.her from
. · the river bed or other land. The impugned settlements made m favour
of the respondents by the State Government are illegal and the res-
pondent-lessees have no right nor title to collect the slurry deposits and
they are restrained from lifting or collecting the same from the land in
dispute. [77JH; 772A] B

[This Court directed that the money deposited pursuant to the
interim orders passed by the High Court and this Court will be paid to
the successful party.] [771 C]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4521
of 1986. etc. etc.
c

--..__ --- From the Judgment and Order dated 20.12.1985 of the Patna
High Court in C.W.J.C. No 1133 of 1984(R).

Ashok Desai, Solicitor General, Kuldip Singh, Kapil Sibal, D
Additional Solicitor Generals, K.K. Veuugopal, R.K. Jain, Gobind
Das, R.N Sachthey, Shanti Bhushan, Dr. L.M. Singhvi, L.N. Sinha,
M.L. Verma, Ranjit Kumar, K.K. Lahiri, R.F. Nariman, S. Sukuma-
ran, P.K. Jain, P. Saswidia, P. Parmeshwaran, C.V. Sobba Rao, P.P.
Singh, D Goburdan, S.B. Upadhyay, P.C. Kapoor, M.M Kashyap, A.
y
Sharan, R.D. Upadhyay, S.K. Sinha, Apurb Lal, Anip Sachthey, C. E
Badri Nath Babu, B.B. Singh, A.K. Mitra, O.C. Mathur, A.N. Dittia,
Aron Madan, Ms. A Subhashini/C.V. Subba Rao, Mrs. Sushma Suri
and A.M. Ditta for the Appearing Parties.
-.. The Judgment of the Court was delivered by
F
SINGH, J. In these appeals a common question of law is
' involved whether the State of Bihar had legal authority to execute
leases in favour of the respondents for collection of slurry on payment
-
of royalty to it. Since the question involved in these appeals are com-
mon the same are being disposed of by a common judgment. Civil

- Appeal No. 4521 of 1986 and Civil Appeal Nos. 61-62 of 1987 are G
directed against the judgment of the Patna High Court while Civil
Appeal Nos. 230-231 _of 1987 are directed against the judgment of the
Division Bench of the Calcutta High Court.
J
In order to appreciate the controversy in question it is necessary
to recapitulate the facts. M/s. Bharat Coking Coal Ltd.-appellant in H
752 SUPREME COURT REPORTS (1990] 3 S.C.R.

A C.A. 4521 of 1986 is a Government Company which carries coal min-
ing operations in village Sudamdih in the State of Bihar. There is a
coal washery adjacent to the appellant's coal mine in village Sudam-
dih. After the coal is extracted from the mines, it is crushed into pieces
of different sizes for purposes of grading. Since the coal is mixed up
with mud and other impurities, same is brought to the washery for
B washing and cleaning the same for reducing the ash percentage and for
use by metallurgical consumers. In the process of washing small coal
particles escape from the washery in the form of slurry along with
water and the same are deposited in the slurry ponds constructed for
their storage by the appellant company. But when the ponds are full,
the slurry overflows the p~nd and flows down into the river Damodar.
After the water is soaked by the soil the small particles of coal get
C deposited in the river bed. These coal particles are collected and
formed into briquettes which are sold in market for energy and fuel
purposes. The slurry coal has acquired high commercial value as it is of
exceptional quality and high grade, it is used by steel plants and ther-
mal power stations. The State of Bihar granted lease in favour of Ram
D Nath Singh-respondent No. 4 for collecting the coal particles settled
in the Damodar river bed and other land including plot No. 370 of
Mauza Sudamdih. The appellant claimed that plot No. 370 which
formed part of river bed of Damodar belonged to it having been
acquired under the Coal Bearing Areas (Acquisition & Development)
Act, 1957 for the purpose of mining of coal. Pursuant to the lease,
E respondent No. 4 has been collecting the coal particles from plot No.
370. The appellant company raised objection before the Revenue Au-
thorities of the State of Bihar claiming property rights to collect and
obtain slurry deposited in the river bed in plot No. 370, but its objec-
tions were over-ruled and respondent No. 4 was permitted to collect
the coal particles from the aforesaid plot. The appellant thereupon
F filed a writ petition in the High Court of Patna challenging the State
Government's action in granting lease to respondent No. 4 for lifting
slurry from the river bed, on the ground that the property belonged to
the appellant company and the State Government had no authority in
law to grant a mining lease without the prior approval of the Central

-
Government under Section 5 of the Mines and Mineral (Regulation
G and Development) Act 1957.

Tata Iron & Steel Company Ltd.-the appellant in Civil Appeal
Nos. 61-62 of 1987, is a company incorporated under the Companies
Act. It owris steel plant at Jamshedpur and it also owns captive coal
mines in the District of Hazari Bagh and Dhanbad. These coal mines
H are commonly known as West Bokaro Collieries. There is no dispute
I
BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.[ 753

that large area of land in the District of Hazari Bagh and Dhanbad
A
f have been settled with the appellant company for purposes of mining
operations and the company enjoys mineral rights in respect of the
surface and sub-soil. It is not necessary to refer to the historical facts
relating to the acquisition of mining rights by the appellant, as there is
no dispute that under Section 10 of the Bihar Land Reforms Act the
appellant's existing mining leases became statutory leases in the State B
of Bihar. The appellant has established washery plant in the District of
Hazari Bagh as well as in Jama Dhoba and Zora Pokhar in District
--r- Dhailbad for purposes of washing the coal after extraction from the
coal mines and crushed into different sizes. In the process of washing
the coal small particles of coal escape from the washery and over-flow
from the plant and the same are deposited in the storage pond
• constructed by the appellant. But sometime they overflow from the c
storage pond and settle down in the Raiyati land and in the Bokaro
river bed. The appellant has been claiming right that the slurry which
escaped from the washery belonged to it and no other person had right
to collect the same. The State Government did not accept the appel-
lant's claim instead it settled the rights of collection of slurry with the D
respondents under the indentures granted in their favour. Under the
settlement the respondents have been authorised by the State Govem-
men_t to collect sludge and slurry which settles down in the Bokaro
river bed or in the Raiyati land on payment of royalty to the State. The
appellant filed two writ petitions before the Patna High Court chal-
lenging the authority of the State Government's action on the ground E
that slurry was a mineral being coal and as such its collection or mining
was regulated by the provisions of the Mines and Mineral (Regulation
and Development) Act, 1957 (hereinafter referred to as 'the Act') and
the State Government had no authority to grant any lease for collec-
tion of sludge/slurry without the previous sanction of the Central
·- Government. F
)-
The aforesaid petitions were heard and disposed of by a Full
Bench of the Patna High Court (AIR 1986 Patna 242). The Full Bench
dismissed the writ petitions on the findings that the slurry was neithe_r
coal nor mineral instead it was an industrial waste of coal mine which-·
was not regulated by the provisions of the Act. The collection of slurry G
did not involve any mining operations and the settlement made by the
State Government in favour of the respondents for collecting the same
_l "was not a mining lease, therefore, the State Government was not
under any legal obligation to obtain previous sanction of the Central
Government under the Act. The High Court further held that after the
slurry escaped into the river bed or to some other land, the same H
754 SUPREME COURT REPORTS [1990] 3 S.C.R.

A ceased to belong to the appellants and the State Government was
entitlement to execute lease for collection of the same.

Civil Appeal Nos. 230-231 of 1987 are directed against the judg-
ment of a Division Bench of the Calcutta High Court (AIR 1985
Calcutta 143). Tue Central Coalfields Ltd. and the Coal India Ltd. the
B appellants are Government Companies which own coal mines in the
District of Giridih in the State of Bihar. The appellants have set up
coal washeries at Kathara, Kargali and Sawang in the District of
Giridih for washing the coal extracted from its mines. In the process of
washing, particles of coal escape from the washery along with water
which ultimately flows into the river Damodar. The Mining Depart-
C ment of the State of Bihar granted lease to Industrial Fuel Marketing
Company and Ors.-respondents for removing the slurry from the
river bed on payment of royalty but the appellants resisted the collec-
tion of slurry from their land and they instituted criminal proceedings
against the contractors. Thereupon, the respondents-contractors filed
writ petitions before the Calcutta High Court for quashing the criminal
D case registered against them, and also for the issue of a direction
permitting them to collect slurry under the lease granted to them by
the State of Bihar. Before the High Court the appellants herein con-
tended that the slurry belonged to them and the State of Bihar had no
authority in law to grant any lease in respect of the same. A learned
single Judge of the High Court dismissed the writ petitions on the
E findings that the appellants herein are the owner of the slurry and the
State Government had no authority to grant any lease to the respon-
dent contractors for removal of the same. On appeal by the contractors
a Division Bench of the Calcutta High Court vide its judgment (AIR
1985 Calcutta 143) held that the lease granted by the State of Bihar in
favour of the contractors was not a mining lease and the provisions of
F the Act were not applicable to the grant of lease. On the question of
appellants' claim to the property rights for collecting slurry, the Bench
held that the slurry deposited on the appellant's land, belonged to
them and the respondents had no right to collect the same but if the
slurry settled down on other's land the respondents have right to
remove the same from the river bed. Aggrieved, the Central Coalfields
G Ltd. and Coal India Ltd. have challenged the correctness of the High
Court's view by these appeals.

The main question which falls for consideration is whether the
State of Bihar has authority to grant lease/settlement to the respon-
dents for collection/lifting of coal slurry deposited in the river bed or
H on any other land after its escape from the appellants' washeries.
BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.] 755

Before the High Court the appellants contended that in view of the
A
provisions of the Act the State of Bihar had no authority to grant any
.> lease regarding collection of slurry without the prior approval of the
Central Government. The State of Bihar and other respondents con-
tended before the High Court that the slurry was not a mineral, and its
collection or lifting from the river bed involved no mining operations,
therefore, the Act did not apply and the State Government was.free to B
grant leases for collection of the same. The appellants further pleaded
before the High Court that since slurry after its escape from their
washeries settled down in their own land, it continued to be their
property and the State of Bihar had no authority to grant lease for
collection of the same from their land. The Full Bench of the Patna
High Court held that the slurry was neither coal nor a mineral instead
it was a reject residue or waste of an industrial process consisting of c
mud, ash and oily substances having carbonaceous ingredients. Since
collection of slurry did not involve any mining operations the provi-
~-~- sions of the Act did not apply and the State Government had authority
to settle the removal of slurry with private parties. With regard to the
appellants' claim of ownership of the slurry deposited on the appel- D
lants' land, the Full Bench did not decide the question, on the ground
that these issues involved disputed questions of fact which could pro-
perly be adjudicated in a civil suit.

The Division Bench of the Calcutta High Court held that the
lease granted by the State of Bihar was not a mining lease as the river E
bed or the land from where the slurry was collected was not a mine as
no winning or mining operations were involved in collecting the same.
The Bench further held that the lease granted by the State Government
in favour of the respondents for collecting the slurry did not confer any
right in them for carrying out coal mining operation nor such right
relates to winning or mining of coal. However the Bench held that the F
slurry deposited on the appellants' land belonged to them and the
',. respondents-lessee had no right to collect slurry from the appellants'
land. But if the slurry was deposited on the land not owned by the
appellants, the lessee was entitled to remove the same under the settle-
ment made by the State of Bihar. Thus, both the High Courts held that
the slurry which escaped from the washeries and deposited in the river G
bed or on other land did not constitute a mineral and it was not
regulated by the Central Act, consequently, the State of Bihar had
l authority to settle the collection of slurry.

Learned counsel for the parties made elaborate submissions
before us in support of their case. On behalf of the appellants it was H
756 SUPREME COURT REPORTS [1990] 3 S.C.R.

urged that slurry/sludge the subject matter of dispute in the instant
A
cases, in substance is coal, a mineral specified in the First Schedule to
the Act. The State Government had no authority in law to grant any """
lease to the respondents for the collection or removal or lifting of the
slurry coal deposited in the river bed or on any Raiyati land without
obtaining the sanction of the Central Government under Section 5 of
B the Act. The counsel for the appellants further emphasised that slurry
which escaped from washery of the coal mines, contains small particles
of coal having carbonaceous character, and it is used for energy and
fuel purposes. Assailing the findings of the Full Bench of the Patna ·-.,"
High Court and the Division Bench of the Calcutta High Court, the ~' -
appellants' counsel submitted that slurry coal was not deposited in the
river bed or other land by any artificial mode instead the same were
r C deposited in the river bed and the land by natural process of flow of
water discharged from the washeries. The process of collection or
removal of the same from the river bed or Raiyati land by the
respondent/lessees involved winning operations. Winning or mining
operation according to the learned counsel did not always requite
D excavation or extraction of a mineral from the bowels of the earth
instead a mineral like sand or gravel may be deposited on the earth and
removal of the same would also involve winmng or mining operation.
The appellants further urged that if the slurry which is the subject
matter of the lease or settlement, is not a mineral, the State Govern-
ment had no authority in law to authorise any other person to remove
E the same from the appellants' land. There is no law made by the State ""
Legislature authorising the State Government to interfere with the
appellants' property rights. In the absence of any law the State of
Bihar had no authority to interfere with the appellants' property rights
by executive orders. In the alternative learned counsel for the appel-
lants urged that on the admitted pleadings of the parties slurry dis- - '
F charged from the washeries of the appellants' coal mines constituted
waste and effluent of coal 111ines, its disposal was exclusively within the
legislative competence of the Parliament. In view of the Parliament's .\
declaration under Section 2 read with Sections 13 and 18 of the Act, the
State Government was denuded of all its powers in the matter relating
to the disposal of slurry which would include its removal or collection.
G Since the State Legislature is denuded of its legislative competence to
make any law with regard to disposal of waste or effluent discharge of
coal mines, the State Government has no executive power to deal with
the same. Learned counsel for the State of Bihar and other respon-
dents reiterated their stand as taken by them before the High Court .J.
that the slurry was not a mineral and its removal did not involve any
H mining operations, consequently the settlement deed was not a mining
.BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.[ 757

lease under the Act. On behalf of the State Government it was further
A
contended that once the slurry escaped from the washery plants of the
>- appellants it ceased to belong to them and as it polluted the river water
and affected the fertility of Raiyati land the State Government was
justified in providing for its collection and removal to prevent pollu-
tion. The appellants could not have any right in the good~ which they
abandoned. It was further urged that the washeries do not form integ- B
ral part of the mining operations, therefore the slurry could not be
treated as a waste of coal mine. In the alternative learned counsel
contended that even if slurry was a waste of a coal mine the State
Government was competent to provide for its collection and removal
as the Central Government had failed to make any rule under Section
18 of the Act regulating disposal of the slurry.
c
Before, we consider the contentions of the parties, we think it
necessary to briefly discuss the nature arid characteristic of the slurry.
There is no dispute that coal is found in seams mixed with mud and
other impurities. After its extraction from the mines, it is crushed into
different sizes, thereafter it is washed in the washeries of the coal D
mines for removing its impurities for purposes of making it fit for use for
metallurgical purposes. In the washery plants, coal is washed with the
medium of water mixed with pine oil and sand through mechanical
process. In the process of washing, large quantity of water is dis-
charged through pipes which carry the discharged water to storage
ponds constructed for the purpose of retaining the slurry. Alongwith E
the discharged water, small particles of coal are carried away to the
pond where the coal particles settle down on the surface of the pond,
and the same is collected after the pond is de-watered. The coal parti-
cles so collected are of fine quality, ash free and the same is used as
fuel. The slurry is a descriptive expression, it may be cement slurry or
coal slurry, depending upon the character or quality of the mixture of F
mineral in the liquid form. In Websters New 20th Century Dictionary,
'slurry' is defined as follows:

"A thin mixture of water and any of several fine, insoluble
materials as clay, cement, soil etc."
G
In common parlance slurry is a liquid form mixed with some. other
material. In Encyclopaedia Britannica 'slurry' is defined as under:

1 "Slurry-watery mixture or suspension of insoluble matter.
In the manufacture of portland cement, a mixture of the
raw materials with water is called a slurry. Cement may be H
758 SUPREME COURT REPORTS [1990] 3 S.C.R.

piped as a slurry m building construction. Coal may be
A
transported over long distances as a slurry via pipeline; this
method of transmission is economical between large pro- ~
ducing areas and markets where large tonnages are used at
a fairly uniform rate. The shipment of iron ore as slurry,
either by pipeline or by tanker, also has increased. When
B slurry reaches its destination, the material is separated
from the water before use or further processing."

Viewed in the light of the above meaning of slurry, there is no _) _
doubt that in the instant cases slurry is coal slurry, as admittedly small
particles of coal escape from the washery plant alongwith water. After
it overflows the storage pond the slurry flows into the river and is
c deposited on the river bed, which is later on collected and used as fuel
after it is formed into briquettes. The deposit which is collected from
the river bed continues to be carbonaceous in character having all the
elements of coal. Thus, the slurry is coal in liquid form. A Division
Bench of the Patna High Court in Kesari Mal Jain v. State of Bihar,
D AIR 1985 Patna 114 placing reliance on Nelson's Dictionary of Mining
which defined 'slurry' as 'slurry inter alia means fine carbonaceous
discharge from a colliery washery" held that the carbonaceous parti-
cles so discharged from the coal washery is used for producing energy
or heat therefore it was coal. The Bench further held that coal particles
which flow out with the water from the coal washeries are formed into
E balls or briquettes for sale in the market for purposes of producing · '<
energy or heat, therefore, slurry was coal. The Division Bench's view
was not accepted by the Full Bench of the Patna High Court as it held
that the slurry deposit did not constitute a mineral. We agree with the
view taken by the Division Bench in Kesari Mal's case (supra) as in our
opinion the slurry coal deposited in the river bed or land, in substance ,-
F as well as in its character continues to be coal.

If slurry is coal, the question is whether the leases in dispute "'
granted by the State of Bihar constitute mine leases as contemplated
by Section 5(2)(a) of the Act. "Mining lease" as defined by Section
3(c) means "a lease granted for the purpose of undertaking mining
G operations and include a sub-lease granted for such purpose. "Mining
operations" as defined by Section 3(d) means "any operations for the
purpose of winning any mineral." Section 5(1) places restriction on the
grant of mining leases by a State Government. Section5 (2)(a) lays
down that except with the previous approval of the Central Govern- ..l
ment no prospecting licence or mining lease shall be granted in respect
H of any material specified in the First Schedule. The First Schedule to
I
BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.] 759

the Act specifies minerals as contemplated by Section 5(2)(a) and
A
) "coal" is specified therein at Item No. 4. The Patna and Calcutta High
. Courts have held that the collection of slurry did not involve any
mining operations, therefore, the lease in question was not a mining
lease. Consequently, the State Government was not under any legal
obligation to obtain approval of the Central Government before grant-
ing le asses for collection of slurry. B

These findngs are assailed and the appellants contend that min·
,~ ~~ing operations need not always involve extraction of mineral from
the bowels of the earth, a mineral like sand, gravel may be deposited·
on the surface of the earth, and still its collection involves mining
operations. It was strenuously urged that it is wrong to assume that
mines and minerals must always be embeded under the sub-soil and
c
t\1ere can be no mineral on the surface of the earth. See: Bhagwan Das
State of U.P. & Ors., [1976] 3 SCR 869. The definition of "mining
1
..__,___ -- - .,peration' and "mine" are very wide. The expression "mining of
mineral" in the definition of "mining operation" under s. 3(d) of the
Act is spacious enough to comprehend every activity by which a D
mineral is extracted or obtained from the earth irrespective of whether
such activity is carried out on the surface or in the bowels of the earth.
It is not a requirement of the definition of "mining operation", that
the activity for winning the mineral must necessarily be an under-
ground activity. The essence of 'mining operation' is that it must be an
Y activity for winning a mineral whether under the surface or winning E
the surface of earth, vide: Tarkeshwar Sio Thakur Jiu v. B.D. Dey &
Co. & Ors., AIR 1979 SC 1669. The slurry which is deposited on the
river bed is not dumped there artificially by any human agency instead
coal particles are carried to the river bed by the flow of water through
~- natural process. Therefore the view taken by the High Court that the
slurry which is deposited in the river bed is dumped by the appellants F
' by artificial process is incorrect. Once the coal particles are carried
' away by the water which is discharged from the washery and the same
are settled in the river bed, any operation for the extraction or lifting
of the coal particles from the river bed would involve winning opera-
tions within the meaning of Section 3(d) of the Act. We do not think it
necessary to express any final opinion on this question as the appeals G
are bound to succeed on the ground of absence of legislative compe-
tence of the State Legislature.
l Shri K.K. Venugopal learned counsel for the appellant urged
that the recovery of coal from slurry irrespective of whether slurry is a
mineral, or its collection involved mining operations or not, the State H
7fJJ SUPREME COURT REPORTS [1990] 3 S.C.R.

of Bihar has no authority in law to regulate disposal of slurry. Under
A the Constitution 'conservation and development of mines and mine-
rals' is exclusively assigned to the Central Government, and the State ~
Legislature has no power to make any lease with regard to the disposal
of coal slurry which is waste of coal mining. He referred to the provi-
sions of the Act and particularly to Sections 2 and 18 in support of his
B contention that in view of Parliamentary Legislation, the State Legisla-
ture has no legislative competence to enact any law on the subject,
consequently the State Government has no executive authority to deal
with the disposal of slurry. In order to appreciate this submission it is -·)
7

necessary to consider the Constitutional provisions and the Act.

Articles 245 and 246 of the Constitution read with Seventh
c Schedule and the legislative lists therein prescribe the extent of legisla-
tive competence of Parliament and.State Legislature. Parliament has
exclusive power to make laws with respect to any of the matters
enumerated in List I in the Seventh Schedule. Similarly, State Legisla-
ture has exclusive power to make laws with respect to any of the
D matters enumerated in List II. Parliament and the State Legislature
both have legislative power to make laws with respect to any matter
enumerated in List III, the Concurrent List. This is the legislative
scheme under the Constitution, but certain matters of legislation are
overlapping which present difficulty. The subject matter of legislation
with respect of regulation of Mines and Mineral devlopment is
enumerated under Entry 23 of List II and Entry 54 of List I. These .,,
E
Entries are as under:

"23. Regulation of mines and mineral development sub-
ject to the provisions of List I with respect to regulation
and development under the control of the Union."
,- ~

F
"54. Regulation of mines and mineral development to the
extent to which such regulation and development under the , J.
control of Union is declared by Parliament by law to be
expedient in the public interest."

G The State Legislature is competent to enact law for the regula-
tion of mines and mineral development under Entry 23 of State List ~·
but this power is subject to the declaration which may be made by
Parliament by law as envisaged by Entry 54 of Union List. Thus the
legislative competence of the State Legislature to make law on the .l
topic of mines and mineral is subject to Parliamentary Legislation. The
H Parliament has enacted the Mines and Minerals (Regulation and
BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.] 761

Development) Act, 1957. By s. 2 of the Act the Parliament has
A
>declared that it is expedient in public interest that the Union should
· fake under its control the regulation of mines and the development of
minerals to the extent provided in the Act. In view of Parliamentary
declaration as made ins. 2 of the Act, the State Legislature is denuded
of its legislative power to make any law with respect to the regulation
of mines and mineral development to the extent as provided by the B
Act. In order to ascertain the extent of Parliamentary declaration, it is
.... necessary to have a glance at the provision of the Act. Section 3 of the
~-Act defines various expressions occurring in the Act. Sections 4 to 9
prescribe restrictions on undertaking, prospecting and mining opera-
tions under licence or lease. Section 10 to 12 prescribe procedure for
obtaining prospecting licences or mining_ lease in respect of the land in
which minerals vest in Government. Sections 13 to 16 provide for
c
• framing of rules for regulating the grant of prospecting licences or
mining leases. In particulars. 13 empowers the Central Government to
···--·make rules for regulating the grant of prospecting licences and mining
leases in respect of minerals and for the purposes connected therewith.
Section 13(2) lays down that rules may provide for all or any of the D
matters as enumerated under various clauses therein. Clause (o) of
s. 13(2) before its amendment by the Amending Act 37 of 1986 confer-
red power on the Central Government to frame rules for the disposal
or discharge of any tailings, slime or other waste products arising from
any mining or metallurgical operations carried out in a mine. This
>provision empowered the Central Government to frame rules for the E
disposal of waste products or effluent discharge from mines includin~ a
coal mine. Section 14 makes the provisions of ss. 4 to 13 inapplicable
to minor minerals. Section 15 empowers the State Government to
• make rules for regulating the grant of quarry leases, mining leases and
....... · other mineral concessions in respect of minor minerals and purposes
connected therewith. Since in the instant cases, we are not concerned F
, with the minor minerals, it is not necessary to deal with the question in
~tail. Section 17 confers special powers on Central Government to
undertake prospecting or mining operations in certain lands. Section
18 and 18A relate to the development of minerals. Sections 19 to 33
deal with miscellaneous matters.
G
Section 18(1) provides for mineral development, this Section
prior to its amendment by the Amending Act 37 of 1986 read as under:
J "Sec. 18(1): It shall be the duty of the Central Govern-
ment to take such steps as may be necessary for the conser-
vation and development of minerals in India and for that H
762 SUPREME COURT REPORTS [1990] 3 S.C.R.

purpose the Central Government, by notification in the
A
Official Gazette, make such rules as it thinks fit."

Section 18( 1) as amended by the Amending Act 37 of 1986 reads as
under:
'
B "Sec. 18(1): It shall be the duty of the Centrai Govern-
ment to take such steps as may be necessary for the conser-
vation and systematic development of minerais in India and
for the protection of environment by preveniing or control-
ling any pollution which may be caused by prospecting or
mine operations and for such purpose the Central Govern- .-
ment may, by notification in the Official Gazette, make
c such rules as it thinks fit."
'
'
The amended and unamended sections both lay down that it shall be
the duty of the Central Government to take all such steps as may be
necessary "for the conservation and development of minerals" in India
D and for that purpose it may make such rules as it thinks fit. The
expression "for the conservation of minerals" occurring under s. 18(1)
confers wide power on the Central Government to frame any rule
which may be necessary for protecting the mineral from loss, and for
its preservation. The expression 'conservation' means "the act of
keeping or protecting from loss or injury." With reference to the
E natural resources, the expression in the context means preservation of "'
mineral; the wide scope of the expression "conservation of minerals"
comprehends any rule reasonably connected with the purpose of pro-
tecting the loss of coal through the waste of coal mine, such a rule may
also regulate the discharge of slurry or collection of coal particles after
the water content of slurry is soaked by soil. In addition to the general ·
F power to frame rules for the conservation of mineral. Sec. 18(2) confers
specific power for framing rules regulating disposal of waste of a mine.
The Amending Act 37 of 1986 deleted clause (o) of s. 13(2) and added -"'
the same as clause (k) to s. 18(2) of the Act. After the amendment
Sec. 18(2)(k) reads as under:

G "18(2): In particular, and without prejudice to the genera-
lity of the foregoing power, such rules may provide for all
or any of the following matters, namely:
···············································~

....................................................
.
. . .. . . . .. . . . . . . . . . . .. . . . . . . . .. . . . .. . .. . . . .. . ... . ...
H (k): "the disposal or discharge of waste slime or tailing
BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.] 763

arising from any mining or metallu~gical operations carried .~
out in a mine."

Section 18(2)(k) confers express power on the Central Government for
framing rules for the conservation and the development of mineral
including the disposal or discharge of waste arising from any.!'linil)g
operations of a mine. Such a rule may regulate disposal of slurry dis- ,B
charged from a washery which is an integral part of mining operations.

~-· The aforesaid analysis of the provisions of the Act makes th_e
· extent of Parliamentary declaration clear that the disposal and dis-
charge of sludge or slurry emanating or coming from the washery of a
coal mine is exclusively within the legislative power of Parliament. The .C
Act further provides that the Central Government has exclusive power
to frame any rule either u/s 13(2)(0) or under the amended s. 18(2)(k)
of the Act regulating disposal of slurry. The effect of the Par!iamen-
-~--- tary declaration as contained in the Act is that the matters refeqed to
in the declaration, stand abstracted from List II and those become
matters of legislation in List I of the Seventh Schedule. As a result of p
the declaration made by Parliament, under s. 2 of the Act, \he State
Legislature is denuded of its legislative power with respect to the.regu-
lation of mines and mineral development and the entire legislative
field has been taken over by Parliament. In Baijnath Kedia v. State of
Bihar & Ors., [1970] 2 SCR 100 this Court dealing with the extent of
" Parliament's declaration made under s. 2 of the Act, observed as ;E
follows:

"To what extent such a declaration can go is for Parliament
to determine and this must be commensurate with public
interest. Once this declaration is made .and the extent laid
;f
down, the subject of legislation to the extent laid do.wn
becomes an exclusive subject for legislation by Parliament.
Any legislation by the State after such declaration and
trenching upon the field disclosed in the declaration must
necessarily be unconstitutional b~cause that field is abs-
tracted from the legislative competence of the State G
Legislature.''

This Court has consistently taken this view in The Hingir-Rampur
l Coal Co. Ltd. &Ors. v. TheStateofOrissa&Ors., [1961]2SCR537;
State of Orissa v. M.A. Tulloch & Co., [1964] 4 SCR 461 and State of
Tamil Nadu v. Hind Stone, [1981] 2 SCR 742.
764 SUPREME COURT REPORTS [1990] 3 S.C.R.

The Central Government has not framed any rule either under
A
Section 13 or under Section 18 of the Act. Does it affect the legal -\-.
position as discussed earlier? The answer must be in the negative.
Prior to the Amending Act 37 of 1986 Section 13(2)(0) conferred
power on the Central Government to frame rules for the purpose of
granting prospecting licences and mining leases including the disposal
B or discharge of any tailings, slime or other waste products. Sub-clause
( o) of S. 13(2} was transposed into S. 18(2) as sub-clause (k) by the
Amending Act 37 of 1986. As noted earlier, S. 18(1) confers general
power on the Central Government to frame rules and to take all such
steps as may be necessary for the conservation and development of
minerals in India. Section 18(2) does not affect or restrict the genera-
lity or width of legislative power under Section 18(1) as the matters
c specified in various sub-clauses of S. 18(2) are illustrative in nature.
Even in the absence of sub-s. (2) or its various sub-clauses, the Central
Government was invested with the power of subordinate legislation in
respect of any matter which could reasonably be connected with the
purpose of "conservation and development of minerals" by S. 18(1) of
D the Act. Thus, power to frame rules, regulating the discharge or dis-
posal of slime or slurry emanating from a coal mine including its
collection from the river bed or from Raiyati land after its escape from
the washery of the coal mines, would clearly fall within the expres-
sion "conservation of mineral". Slurry admittedly contain coal particles,
its collection from land or river is reasonably connected with the 'con-
E servation of mineral'. Section 18(2)(k) which expressly confers power "
on the Central Government to regulate disposal or discharge of waste
of a mine makes the Parliamentary declaration apparent that the State
Legislature is not competent to regulate waste discharge of a coal
mine. Mere absence of any rule framed by the Central Government
under ss. 13 or 18 of the Act with regard to the disposal of slime or
F waste of a coal mine does not confer legislative competence on the
State Legislature to make any law or rule. Once a particular topic of ..J.
legislation is covered by the Parliamentary declaration, the State
Legislature is denuded of its power to make any law or rule in respect
of that topic or subject-matter and the absence of Rules would not
confer legislative competence on the State. In Hingir-Rampur Coal
G Co. Ltd. & Ors. v. The State of Orissa & Ors., this Court held:

"In order that the declaration should be effective it is not
necessary that rules should be made or enforced; all that J
required is a declaration by Parliament that it was expe-
dient in the public interest to take the regulation of
H development of mines under the control of the Union. In
J

BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.J 765

such a case the test must be whether the legislative declara-
A
tion covers the field or not."

Since Section 18 of the Act covers the field with respect to disposal of
waste of a mine, there is no scope for the contention that until rules are
framed the State Legislature has power to make law or rules on the
subject. Once the competent legislature with a superior efficacy ex- B
pressly or impliedly evinces its legislative intent to cover the entire
field on a topic, the enactments of the other legislature whether passed
~ ·{- before or after would be overborne. Mere absence of rules framed by
the Central Government, does not confer power on the State Legisla-
ture to make law on the subject. Since the legislative field with regard
to the framing of rules relating to the disposal of slime and waste of' coal
mine is fully covered by s. 18, the State Legislature is denuded of its c
power of making any law with regard to those matters.

It was then urged that in the absence of a law being made by the ·
State Legislature, the State Government's action in executing lease/
settlement in respondent's favour for collection of slurry is relatable to D
exercise of its executive powers. Learned counsel for the appellants
contended that since Entry 23 of List II of the Seventh Schedule con-
fers legislative power on the State Legislature for making laws regulat-
ing mines and minerals, the State Government in the absence of any
rule made by the Central Government has power to regulate disposal
'> and collection of slurry. The State Government was justified in exer- E
cising its executive power making arrangements for the collection or.
removal of slurry which has been polluting the river water and affect-
ing the Raiyati land's fertility. Article 162 prescribes the extent of
executive power of the State, it lays down that the executive power of a
State shall extend to the matters with respect to which the Legislature
of the State has power to make laws. Thus, the executive power of the F
State Government is co-extensive with the legislative power of the
~-
.State Legislature. If the State Legislature has power to enact laws on a
matter enumerated in the State List or in the Concurrent List the State
has executive power to deal with those matters subject to other provi-
sions of the Constitution. If a subject matter falls within the legislative
competence of State Legislature, the exercise of executive power by G
the State Government is not confined, as even in the absence of a law
being made, the State Government is competent to deal with the sub-
J_ i·ect matKter in ex ercise of its executive powe[r . see: Rai Sah ib Ram
1 awaya apur & 0 rs. v. The State of Punjab, 195 5 12 SCR 225 . In the
absence of any law, the State Government or its officers in exercise of
executive authority cannot infringe citizens rights merely because the H
766 SUPREME COURT REPORTS [1990] 3 S.C.R.

A State Legislature has power to make laws with regard to subject, in
respect of which the executive power is exercised. See: State of ~
Madhya Pradesh & Anr. v. Thakur Bharat Singh, (1967] 2 SCR 454.
No doubt under Entry 23 of List II, the State Legislature has power to
make law but that power is subject to Entry 54 of List I with respect to
the regulation and development of mines and minerals. As discussed
B earlier the State Legislature is denuded of its power to make laws on
the subject in view of Entry 54 of List I and the Parliamentary declara-
tion made under Section 2 of the Act. Since State Legislature's power
to make law with respect to the matter enumerated in Entry 23 of List
II has been taken away by the Parliamentary declaration, the State
Government ceased to have any executive power in the matter relating
to regulation of mines and mineral development. Moreover, the pro-
c viso to Article 162 itself contains limitation on the exercise of the
executive power of the State. It lays down that in any matter with
-
respect to which the Legislature of a State and Parliament have power
to make laws, the executive power of State shall be subject to limita-
tion of the executive power expressely conferred by the Constitution
D or by any law made by Parliament upon the Union or authority
thereof. The limitation as contained in the proviso to Article 162 was
necessary to avoid conflict in the exercise of executive power of ~.ate
and the Union Government in respect of matters enumerated in List
III of the Seventh Schedule. If Parliament and the State Legislature
both have power to make law in a matter, the executive power of the
E State shall be subject to the law made by the Parliament or restricted by
the executive power of the Union expressly conferred on it by the
Constitution or any law made by Parliament. Parliament has made the
law as contemplated by Entry 54 of List I and the law so made confers
exclusive power on the Central Government to frame rules regulating
the disposal of waste or industrial effluent of a mine, the State Legisla-
F ture has, therefore no power either to make law under Entry 23 of List
II or to exercise executive power to regulate the disposal of slurry, a
waste effluent discharge of a coal mine.

Learned counsel for the State of Bihar as well as for the respon-
dent contractors contended that the lease executed by the State
G Government in their favour was not a mining lease within the provi-
sions of the Act, therefore, the provisions of the Act are not applicable
to it. This submission is founded on the assumption that the slurry is
not coal. We have already discussed the characteristic of slurry which
shows that the coal can be transported in liquid form of slurry. The
slurry which gets deposited on the river bed and on Raiyati land con-
H tains fine particles of coal, on its resumption it is used for energy and
BHARAT COKING COAL'· STATE OF BIHAR [SINGH, l.] 767

fuel purposes. It is, therefore, difficult to accept the contention that A
the coal particles which escape from the washery and get deposited in
)- the river bed or in Raiyati land do not have the character of mineral. It
is not, however, open to the State to raise this contention as while
making settlement and granting lease in favour of the respondents for
lifting or collecting slurry deposits the State itself proceeded on the
assumption that the coal particles as deposited in the river bed and in B
the Raiyati land on its escape from the coal washeries constituted
'mineral'. Since under the Bihar Land Reforms Act the minerals vest
_ .'t-· fin the state, it claimed right to grant lease ifn favo ur of thde redsponde nts
or co11ecting the same. In the indenture o sett1ement ate 9.. 4 197 5
granted in favour of the M/s. Industrial Fuel Marketing Company and
Ors. in Civil Appeal No. 230-231 of 1987 the State Government itself
stated: "and whereas these rejects/sludge being a mineral (emphasis
c
supplied) the State Goverment is the owner of the same by virtue of
the entire State including the minerals having vested in the State
---- ------- Government under the provisions of Bihar Land Reforms Act." The
indenture purported to confer right on the lessee for lifting rejects also
known as sludge comprising fine particles of coal which are ejected in D
the process of coal being washed in the coal washeries and which flow
into the nearby river or to the lands held by the Raiyats. The lease was
granted by the Mining Department of the State Government dealing
with minerals. Similarly, the indenture of settlement dated 9.4.1981
granted in favour of respondent No. 4 in Civil Appeal Nos. 61-62 of
1987 permitting him to collect slurry after it is deposited in the river E
bed or in the land as specified in the lease, was also executed by the
State of Bihar on the premise that the slurry as deposited in the river
bed was a mineral, namely, coal. Thus, it is apparent that the State of
2

- Bihar itself has been treating the 'slurry deposits' as mineral and on
that assumption it has been executing leases conferring rights on the
respondents to collect the same on payment of royalty. In this view, it
is not open to the State of Bihar and the lessees to contend that slurry
is not coal or mineral within the meaning of the Act.
F

Learned counsel for the respondents attempted to justify State's
action on the ground that the slurry as settled down in river bed or in
Raiyati land was not waste or industrial effluent of coal mines as the G
washeries are not part of coal mines. We find no merit in the submis-
sion. Section 3 of the Act defines 'mining operations' which means any
J_ operation undertaken for the purpose of winning any mineral. The
expression 'mine' is not defined by the Act instead Section 3(1) says
that the expression 'mine' has the same meaning as assigned to it in the
Mines Act 1952. "Mine" as defined by Section 2(l)(j) of Mines Act H
768 SUPREME COURT REPORTS [1990) 3 S.C.R.

A 1952 means any excavation where any operation for the purpose of
searching for or obtaining minerals has been or is being carried on and
it includes: ~

(xii) "any premises in or adjacent to and belonging to a
mine on which any process ancilliary to the getting, dres-
B sing or preparation for sale of minerals or of coke is being
carried on.''

The inclusive definition of mine is wide enough to include any pre-
mises belonging to a mine where any ancillary process is carried on for
preparing the minerals or coke for sale. There is no dispute between
C the parties that the coal as extracted from the coal mine is crushed into
pieces and thereafter it is washed to remove its impurities and ash
contents to make the coal fit for sale. After the coal is washed, it
assumes the form of coke which is sold to consumers. The washery,
wherein the process of washing coal is carried on, for the purpose of
preparing the coal for sale is an integral part of a mine as it involves
D ancillary process. Washery is included within the definition of mine
under the Mines Act 1952. Any waste discharge from the washery
carrying small particles of coal in the form of slurry is the waste slime
arising from operations carried out in a mine.

Moreover, it is not open to the respondents to contend that
E slurry is not a waste discharged from the washeries of coal mines. The "
. respondents have all along pleaded before the High Court as well as
before this Court that slurry is a waste discharged from the washery of
the appellants' coal mines. In Civil Appeal No. 4521of1986 Ram Nath
Singh-respondent No. 4 has stated in paragraph 2 of his affidavit
before this Court that slurry /sludge is a waste substance of Sudarndih
F coal washery and in order to keep the river water clean and pollution
free and to earn revenue the State Government settled the collection
of slurry from the river bed in his favour. The State of Bihar also in its
affidavit filed before the High Court expressly stated that the sludge/
slurry was rejected property from the coal washery and the State of
Bihar made settlement in favour of the respondents for collection of
G the waste deposits from the river bed and other land. The full Bench of
the Patna High Court also observed: "the sludge/slurry could not be
raised to the status of being coal, as it was the consequential wastes of
coal mining process, therefore the true nature of slurry was that it was
a mere residue reject or waste of an industrial process consisting of
mud, ash, oily substances water and carbonaceous ingredients." The
H respondents have all along proceeded on the assumption that sludge/
BHARAT COKING COAL v. STATE OF BIHAR [SINGH, J.[ 769

slurry was an industrial waste arising out of the mining operations of
coal. The State of flihar as well as the respondents in whose favour the A
>-right of collection of sludge/slurry has been settled have all along taken
the stand that the discharge of slurry/sludge by the appellant's washery
into the river has been polluting the river and affecting the fertility of
land, therefore the State Government, permitted the removal of the
slurry /sludge with a view to prevent pollution of the river and the laud. B
On the admitted facts the entire activity relating to disposal of the
industrial waste, slime or tailing in the shape of sludge/slurry escaping
_ ~-·-f~om the washeries of the appellant's c.oal mines including the preven-
. t10n of pollution of nver water or land 1s covered by Sec. 18 of the Act.
The High Courts confined themselves to the question whether sludge/
slurry was a mineral under the Act and failed to consider the scope and
effect of Section 18 of the Act. We are therefore of the opinion that in c
view of the admitted case of the parties disposal of sludge/slurry com-
ing out from the washeries of appellants' coal mines is covered by th.,
--·-~- Act and the State Government had, no authority in law to grant any
lease or settlement authorjsing collection of the same from the river
bed or from any other land. Consequently, the respondents in whose D
favour settleme.nts have been made by the State Government have no
right to authority to collect sludge/slurry either from the river bed or
from any other land.

In Civil Appeal No. 4521 of 1986 the appellants' alaiiu that plot
No. 370 situated in village Sudamdih belonged to them and the sludge/ E
slurry discharged from their washery as settled down on that land also
belonged to them therefore the State Government had no authority in
law to permit respondents to collect slurry coal from their land. The
High Court held that since the appellant's ownership rights in respect
of Plot No. 370 of village Sudamdih was seriously disputed the ques-
tion should be decided by the civil court. Mr. Kapil Sibal learned F
counsel for the appellant urged that the High Court committed serious
error as there was no scope for any dispute regarding the question of
ownership of Plot No. 370. We find force in his submission. There is
sufficient material on record to show that Bharat Coking Coal Ltd. is
the owner of the plot No. 370 situated at village Sudamdih and the
respondents have failed to place any material before the court that the G
appellant is not owner of Plot No. 370. A Notification was issued by
the Central Government on 6.8.1960 under sub-section (1) of Section 4
of the Coal Bearing Areas (Acquisition and Development) Act, 1957,
J_ for purpose of prospecting coal in the land specified in the Schedule to
the Notification included the entire land of village Sudamdih District
Dhanbad. By another Notification dated August 30, 1961 issued under H
770 SUPREME COURT REPORTS · [1990] 3 S.C.R.

A, Section 7 of the Coal Bearing Areas (Acquisition and Development)
Act, 1957 the Central Government declared its intention to acquire
the lands measuring 778.45 acres specified in Schedule A to the Notifi- "·
cation Sudamdih village was mentioned in the Schedule. Plot No. 370
of Sudamdih was expressly specified therein. By another Notification
dated December 16, 1961 the Central Government declared under
B Section 9 of the Coal Bearing Areas (Acquisition and Development)
Act 1957 that the land measuring 778.45 acres described in Schedule
A'and the rights to mine, quarry, bore, dig and search for win work
and carry away minerals in the lands measuring 625. 73 acres described
in Schedule B are acquired. The Schedule to the Notification clearly
stated that all rights in village Sudamdih were acquired and plot
No. 370 was expressly specified in the Schedule to the Notification. On
C the issue of the aforesaid Notifications the lands specified therein
vested in the Central Government. The Central Government by its
order dated 27th January 1962 transferred the aforesaid lands includ-
ing plot No. 370 situated in village Sudamdih to the National Coal
Development Corporation, a Government Undertaking. In 1975 the
D Central Government reorganised the management structure of the
coal industry in the public sector and a central company, i.e. Coal
India Limited, was constituted having Bharat Coking Coal Limited as
one of its subsidiary. The Bharat Coking Coal Ltd. was incorporated
for running and managing the Sudamdih and Monidih coal mines of
National Development Corporation. Since then the Sudamdih coal
E mines and the land in dispute have been under the control and
rnanagement of the Bharat Coking Coal Ltd. During the pendency of
the appeal before this Court proceedings were initiated against respon-
dent No. 4 for the violation of interim orders of this Court. In the
contempt proceedings Respondent No. 4 contended that plot No. 370
of village Sudamdih belonged to the State of Bihar and the appellants
F had no ownership rights therein. This Court held that since plot No.
370 of Sudamdih has been acquired under Section 9( 1) of the Coal
Bearing Areas (Acquisition and Development) Act 1957 the appellant
company was its owner, and it was idle to contend the contrary. We
therefore hold that the appellant is the owner of plot No. 370 of village
Sudamdih and the State Government had no authority in law to make
G any arrangement or to settle any right with respondents for collecting
slurry deposits from that Plot No. 370 of Sudamdih.

In view of the above discussion, we hold that the slurry which
escapes from the appellants' washeries is mineral and its regulation is
within the exclusive jurisdiction of the Central Government. We
H forther hold that in view of the Parliamentary declaration made by
BHARAT COKING COAL 11. STATE OF BJHAR [SINGH, J.) 771

Section 2 of the Act and having regard to Section 18 of the Act the A
State Government has no authority in law to make any settlement or
) -·- grant any lease to any person for the collection of slurry deposits either
from the river bed or other land. The impugned settlements made in
favour of the respondents by the State Government are illegal and the
respondent-lessees have no right or title to collect the slurry deposits, B
therefore, they are restrained from lifting or collecting the same from
the land in dispute. We, accordingly, allow Civil Appeal No. 4521.of
1986 and Civil Appeal Nos. 61-62 of 1987 and set aside the order ohbe
·" ;_ High Court of Patna ancf" allow the writ petitions filed by the appellants
....., ' before the Patna High Court. We further allow Civil Appe-alNos.
230-231 of 1987 and set aside the order of the High Court of Caieutta
and dismiss.the writ petitions filed by Industrial Fuel Marketing Com- c
pany & Ors. We further direct that the money deposite_d pursuantto
the interim orders passed by the High Court and this Court will be paid
to the successful party. There will be no order as to costs.

G.N. Appeal allowed.