Holding

A subsisting lease of mines and minerals over the entire estate, even if a small portion is used for amenities, is deemed to be a lease by the State to the lessee under Sections 10(1) and 11 of the Bihar Land Reforms Act, 1950, and the lessee retains possession of the whole land.

Summary

Bharat Coking Coal Ltd (BCCL) succeeded East India Coal Co. and held a 999‑year mining lease over 627 bighas in Kenduadih, including surface land. A small part of the surface was used for a bazaar and a cinema for workers. The State of Bihar, invoking the Bihar Land Reforms Act, 1950, served a notice under Section 4 demanding possession, claiming the land had vested in the State. The trial court held that, under Sections 10(1) and 11 of the Act, the entire estate – even the bazaar and cinema – was deemed to be leased by the State to the mining lessee, allowing BCCL to retain possession. The Patna High Court modified this decree, excluding the bazaar and cinema from the protection of Sections 10 and 11. On appeal, the Supreme Court reversed the High Court, ruling that the original lease covered the whole village for mining purposes and, consequently, the State was deemed to have leased the entire estate to BCCL, which is entitled to retain possession of the whole land.

Issues considered

Whether surface land used for non‑mining purposes such as a bazaar and cinema falls within the protection of Sections 10(1) and 11 of the Bihar Land Reforms Act, 1950.
Whether a subsisting lease of mines and minerals automatically deems the entire estate, including ancillary surface structures, to be leased by the State to the lessee.

Legislation cited

Bihar Land Reforms Act, 1950s. 10(1), s. 11, s. 12, s. 4, s. 9
Coking Coal Mines (Nationalisation) Act, 1972
Indian Mines Act, 1923s. 14

Subjects

land reformsmining leasesubsisting leaseSection 10Section 11Bihar Land Reforms Actsurface landbazaarcinemapossessionpublic sector undertaking

Judgment

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

MAY 13, 1994
B
[KULDIP SINGHAND YOGESHWAR DAYAL, JJ.)

BihOJ' Land Refonns Act 1951>-Sections 10, 11, and 2(m)-Miniilg
lease-On a small portion of the suiface land, a bazaOJ' and cinema house
set up for benefit of colliery workers-Held, entire OJ'ea including land· on
C which bazaOJ' and cinema house located would be covered by mining lease
and hence deemed to have been leased by State Government by viltUe of
Section 10(1).

The appellant company had snbslsting leases In respect of an area
D of 627 blghas of land for a period of 999 years. The surface land had been
taken on lease from the tenure holders. Apart from bungalows, labour
quarters, pits, quarries, coal depots and other things connected with coal
mining operations no part of the surface land was used for agricultural
purposes. On a small portion of the land a small bazaar and a cinema
E house had also been set up.

A notice under section 4 of the Blhar Land Reforms Act, 1950 was
served on the Company asking It to deliver possession of the land on the
ground that it had been vested In the State of Bihar. The Trial Court on
the company's suit held that the whole estate In dispute had vested in the
p State and by virtue of Section 10(1) and 11 of the Act and the Company
became the mining lessee under the State of Bihar for the remainder of
the terms of the lease of999 years granted in 1894. The Trial Court decreed
the suit and restrained the State of Bihar from Interfering with the
possession of the Coinpany over the entire land.

G The Single Judge of the High Court in the State's Appeal however,
took the view that the cinema and bazaar portions of the land would not
get protection of Section 10 read with Section 11 of the Act and modified
the Trial Court decree to that extent.

H The company appealed to the Supreme Court by Special Leave.
112
BHARAT COKING COAL LTD. v. STATE OF BIHAR 113

Allowing the Appeal, A

HELD: 1. The original lease in favour of the plaintiffs is a subsisting
lease for extraction of mines and minerals comprised in the entire estate.
Merely because in a very small part of it by way of amenities to the
employees working at the mines, a portion is reserved by way of bazaar for B
purchase of daily needs of the employees and for a cinema house, it cannot
be said that the subsisting lease is being used for a purpose other than
those of mines and minerals. The term "mine" has been defined in Section
2(m) of the Bihar Land Reforms Act. It merely defines what "mine" is.
There is no definition of "subsisting lease of mines and minerals". The lease C
itself was for mining operations during the period of the lease. It does not
require that every area must be under actual mining operation. It was not
the case of the State that there were no minerals in the area where the
shops and cinema hall were there. The lease being a long-term lease of 999
years, it will take its own time for the lessee to work on different portions D
of the area. The purpose of Section 10 of the Act was to exclude subsisting
leases for purposes of mining or minerals. It contemplated that the land
should not be used for agricultural purposes or such like purposes to enjoy
the benefit of Sections 10 and 11 of the Act. [118-D-E-F-G]

E
2. The High Court erred in its interpretation of Section 10 of the Act
and in ignoring the full effect of Section 11 of the Act. The trial court was
in any case right in inclnding buildings and land which were appertaining
to the mines and which were not covered under Sections 9 and 10 of the
Act to be covered under Section 11 of the Act. But it is not a true
interpretation of Section 10(1) of the Act so long as the area is covered by
lease for mining. The estate or tenure comprised in such lease which vests
in the State would be deemed to have been leased by the State Government
to the holder oflease. Section 11 comes into operation when certain leases
do not include the buildings and land as part of the lease. On the facts of
·the present case the lease is such that everything in the area of the lease G
vests in the State Government and is deemed to be have been leased by the
> State Government to the lessee. The lease in the present case is of the
entire village for purposes of mining. Therefore, everything comprised in
the village on vesting in the State would be deemed to have been leased by
the State Government to the lessee. [119-A-B-C-D] H
114 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 840 of
1988.

From the Judgment and Order dated 20.8.87 of the Patna High Court
in Appeal from Original Decree No. 32 of 1976

B Altaf Ahmad, Additional Solicitor General R.N. Sachthey, Anip
Sachthey and Hemushi
., Munshi for the Appellant.

R.K. Khanna and R.P. Singh for Respondent No. 1.

H.L.
·,
Agarwal and Irshad Ahmad for the Respondent No. 2.
c
The Judgment of the Court was delivered by

YOGESHWAR DAYAL, J. The present appeal by M/s. Bharat
Coking Coal Limited, a public sector undertaking, is directed against the
judgment of the Single Judge of the Patna High Court, Ranchi Bench;
D Ranchi dated 20th August, 1987 whereby the Single Judge modified the
decree passed by the !st Additional Subordinate Judge, Dhanbad, dated
27th February, 1976 by which the suit filed by the plaintiff (predecessor-
in-interest of the appellant herein) was decreed. By the said order the state
of Bihar was restrained from interfering with the possession of the appel-
E !ant from the entire land of Khewat No. 11 of village Kenduadih.

The brief facts are - that M/s. East India Coal Company Limited
{hereinafter referred to as 'the Company'), a joint stock Company, had
filed the suit, out of which the present appeal has arisen. The Company
was carrying on coal mining operations in village Kenduadih in the district
F of Dhanbad. After the enactment of Coking Coal Mines {Nationalisation)
Act, 1972 a Notification was issued by the Central Government by which
the right, title and interest of the Company got vested in M/s. Bharat
Coking Coal Limited (in short 'BCCL') which is an undertaking under the
Central Government with effect from 1st May, 1972. Accordingly BCCL
G was substituted in place of the erstwhile Company as the plaintiff in the
suit.
'
The Company had taken a mining lease of an area of 627 bighas of
land from Brahmottardars Gouri Prasad Singh khawas and others on 14th
December, 1891 and was carrying on coal mining operations in the
H aforesaid area. Later, the Maharaja of Jharia disputed the said rights and
BHARATCOKINGCOALLTD. v.STATEOFBIHAR[DAYAL,J.] 115

the Company took a fresh mining lease from Maharaja of Jharia on 1st A
October. 1894. Later on in 1911 the Company got the entire surface land
of that village from three tenure holders on the basis of three registered
deeds for purposes of extraction of coal etc. The various mining leases were
for 999 years. The Company was recorded of those lands as Khewatdars
in Khewat No. 11 Tauzi No. 8.
B
The Company had several collieries, bunglows, staff quarters, labour
quarters, pits, inclines, quarries, pump-houses, workshops, coal depots,
railway sidings and other things connected with the coal mining operations.
No part of the surface land was used for agricultural purposes. However,
on a small portion of the surface land some shops had been set up by the C
shop-keepers and a small cinema house had also been set up for the benefit
and entertainment of the employees of the collieries on the condition that
they will have to vacate by removing the structures whenever required by
the Company for mining purposes on fifteen days notice.

D
It appears that the Bihar Land Reforms Act, 1950 (herein after
referred to as .'the Act') came into force on 25th September, 1950 and a
notice under Section 4 of the act asking the Company to deliver possession
of the land of Khewat No.11, as the same had been vested in the State of
Bihar, was served on it. The Company appeared before the Authority
under the Act and submitted that it was only a mining lessee and not a E
proprietor or intermediary and hence the land did not vest in the State.
The Company lost the case before the authorities and challenged their
decision before the f{igh Court by way of a writ petition but ultimately
withdrew the same on the directions of this Court asking the Company to
get the matter decided by a regular suit in a civil court. Thereafter the F
Company filed the suit out of which the present appeal has arisen.

· The question for determination is whether the right, title and interest
of°the Company Di respect of the surface land of the suit property had
vested in the State of Bihar or not ?
G
Since. the Company was not an intermediary within the meaning of
the Act, the whole question turns on the meaning and contents of Sections
10 and 11 of the Act. . .

Sections 10(1) and 11 of the Act provide as under : H
116 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A "10(1) - Subsisting leases of mines and minerals - Nothwithstanding
·anything contained in this Act, where immediately before the date
of vesting of the estate or tenure there is a subsisting lease of mines
o~ minerals comprised in the estate or tenure or any part thereof,
the whole or that part of the estate· or tenure comprised in such
lease shall, with effect from the date of vesting, be deemed to have
B been leased by the State Government to the holder of the said
subsisting lease for the remainder of the term of that lease, and
such holder shall be entitled to retain possession of the lease hold
property".

c "Section 11 - Buildings and lands appurtenant to mines - .Where
by virtue of Section 9 or Section 10, any lease of mines and minerals
comprised in an estate or tenure is deemed to be given by the State
all buildings and lands not included in such lease, whether com-
prised in that or any other estate or tenure, which vest in the State
by operation of this Act and are in the use and occupation of the
D
Jessee for purposes connected with the working or eXtraction of
the mines and minerals comprised in the lease, including the lands
upon which any works, machinery, tramways or sidings appertain-
ing to the mines are situate, shall be deemed to have been leased
by the State to that lessee with effect from the date of vesting of
E the estate or tenure and the Jessee shall be entitled to retain
possession of all such buildings and land subject to the payment
of such fair and equitable ground rent as may be agreed upon
between the State and the lessee, or in default of agreement as
~ay be fixed by a Mines Tribunal appointed under Section 12."
!
F
The trial court took the view that the whole estate in dispute had
vested in the State and by virtue of sections 10(1) and 11 of the Act the
estate is deemed to have been leased to the Company by the State Govern-
ment. The trial Court also took the view that under Section 10 of the Act
the Company became the mining lessee under the State of Bihar for the
G remainder of the terms of the lease of 999 years granted in the year 1894.

It. w~s contended on behalf of the plaintiff that since the Company
was the mining lessee, the entire lease hold land, including surface Jani!,
would be deemed to have been leased by the State Government within the
H meaning of Section 10 of the Act. The trial court, however, referred to the
>

BHARATCOKINGCOALLID. v.STATEOFBIHAR[DAYAL,J.] 117

definition of "mine" in.Section 2(m) of the Act which reads as under :- A

"2{m) "mine" means any excavation where any operation for the
purpose of searching for or obtaining minerals has been or is being
carried on, but does not include any works, machinery, tramways
or· sidings appertaining to a mine and a mine shall be deemed to B
be "in operation" if a notice of the commencement of its operation
has been given under section 14 of the Indian Mines Act, 1923 (4
of 1923) to the District Magistrate of the district in which such
mine is situated and the discontinuance of the operation thereof
has not been notified to the competent authority.'
c
After reading this definition the trial court took the view that the land
wherein actual excavation or mining operation is not going on, is excluded
form the mine. Therefore, Section 10 of the Act does not come to the
rescue of the plaintiff. It, however, took the view that Section 11 of the Act
lays down that where by virtue of Sections 9 and 10 of the Act any lease D
· of mines and minerals comprised in an estate or tenure is deemed to be
given by the State all buildings and lands not included in such lease,
whether comprised in that or any other estate or tenure, which vest in the
State by operation of this Act and are in the use and occupation of the
lessee for purposes connected with the working or extraction of mines and
minerals comprised in the lease, including the lands upon which any works, E
machinery appertaining to the mines are situate, shall be
deemed to have been leased by the State to the lessee with effect from the
date of vesting of the estate or tenure, and the lessee shall be entitled to
retain possession of all such buildings and land subject to the payment of
such fair and equitable ground rent as may be agreed ~pon betWeen the F
State and the lessee, or in default of agreement as the case may be, fixed
by the Mines Tribunal appointed under Section 12 of the Act.

It was the case of the plaintiff that the Company had taken a lease
of underground minings rights from the proprietor and that of surface land
from the tenure holders. It was also the case of the plaintiff that under G
Section 10 of the Act the mines comprised in the estate and leased to it by
the proprietor, and not the surface land which was separately Jeased to it
by the tenure holders. That is why Section 11 of the Act has been enacted
for covering all cases of surface land not included in the lease of mines
within the meaning of Section 10 of the Act. H
118 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A The trial court accepted this contention.

The Single Judge of the High Court, however, took the view that the
land where shops have been built or cinema house or such like things have
been built are not covered under Sections 10 or 11 of the Act. The trial
court. found, and it was not disputed before the High Court, that the
B plaintiff was carrying on operation extensively throughout the entire area
of the village and all over the surface of the village the company's office,
air shafts, inclines, quarries, pits and railway sidings etc. are scattered; that
i11 order to provide amenities to, and for catering the needs of, its labourers
and employees numbering about 5,000 to 6,000, the Company had estab-
C ) lished a bazar known as Kenduadih Bazar and had set up a cinema hall by
granting land to its owner.

The High Court took the view that the cinema and bazar portions of
.,
the.land would not get protection of Section 10 read with Section 11 of the
Act and had accordingly modified the trial court· decree to that extent.
D· ,
It will be noticed that the original lease in favour of the plaintiff is a
subsisting lease for extraction of mines and mineral< comprised in the
entire estate. Merely because in a very small part of it, by way of amenities.
to the employees working at the mines, a portion is reserved by way of
. bazar for piircbase of daily needs of the employees and for a cinema house,
E · it cailllot be said that the subsisting lease is being used for a purpose other
than those of mines and minerals. As stated earlier the term 'mine" has
been defined in Section 2(m) of the Act. It merely defines what "mine'' is.
There is ilo definition of "subsisting lease of mines and minerals". The lease
itself was for mining operations during the period of the lease. It does not
F reqiiire thai every area must be under actual mining operation. It was not
the case of the State that there was no minerals in the area where the shops ..
and cinema hall are there. The lease being a long term lease of 999 years,
it will take its own time for the lessee to work on different portions of the
area. Purpose of Section 10 of the Act was to exclude subsisting leases for
purposes of'mining or minerals. It contemplated that the land should not
be used for a'gricultural purposes or such like purposes to enjoy the benefit
of Sections 10 and 11 of the Act. · ·

, We are of the view that the High Court erred in its interpretation of
Section 10 of the Act and ignoring the full effect of Section 11 of the Act:
H; ,The trial court was in any case right in including buildings and land which
BHARAT COKING COAL LTD. v. STATEOFBIHAR(DAYAL,J.] 119

were appertaining to the mines and which were not covered under Sections A
9 or 10 of the Act to be covered under Section 11 of the Act. But we are
of the view that it is not a true interpretation of Section 10(1) of the Act
so long as the area is covered by lease for mining. The estate or tenure
comprised in such lease which vests in the State would be deemed to have
been leased by the State Government to the holder of lease. Section 11 B
comes into operation when certain leases do not include the buildings and
land as part of the lease. In our view, on the facts of the present case, the
lease is such that everything in the area of the lease vest in the State
Government and is deemed to have been leased by the State Government
to the lessee, namely the plaintiff - appellant.

The lease in the present case is of the entire village for purposes of
c
mining. Therefore, everything comprised in the village on vesting in the
State would be deemed to have been leased by the State Government to
the Jessee.

We accordingly set aside the judgment of the High Court dated 20th D
August, 1987 and hold that the plaintiff is entitled to the ·decree prayed for
and it is declared that the appellant is a lessee under the State of Bihar
and is entitled to retain possession of the entire surface land in dispute
under Section 10 of the Act itself and the order of defendant Nci. 2 in the
suit, as affirmed by the Deputy Collector, Dhanbad directing the plaintiff
to deliver possession of the land in dispute is illegal, void and without E
jurisdiction. Defendants/respondents are hereby permanently restrained
from interfering with the possession of the plaintiff over the entire land of
Khewat No. 11 of Village Kenduadih. There is, however, no order as to
costs of the present proceedings.

R.R. Appeal allowed.