HINDUSTAN STEEL LIMITED ROURKELA Vs. KALYANI BANERJEE

JUDGEMENT

(1.) This appeal with leave is directed against a judgment and order of the High Court of Patna in connection with a writ petition of respondents Nos. 1 to 3 (who will hereinafter be referred to as the "petitioners") by which the High Court quashed and cancelled two leases granted by the State of Bihar in favour of M/s. Bharat Marble Company, a partnership firm and the present appellant M/s. Hindustan Steel Limited. The facts and circumstances out of which the petition arose are as follows.

(2.) By a registered document dated 11 July 1919 one Kumar Amardeyal Singh, who was the proprietor of Ladi Estate at the relevant time granted a lease in favour of one Pran Kristo Chatterjee. The lease which gave a perpetual Mokarari Settlement was in respect of various minerals including iron ore and related to a large tract of land in District Palamau covering an area of 2227 acres in village Adar and 1303 acres in village Gore. Both the two villages Adar and Gore appertained to Kumar Amardeyal Singh's estate, bearing Touzi No. 130, Survey No. 143 and Touzi No. 161, Survey No. 91 respectively of the Collectorate of Palamau. In 1937 the heirs of the original lessee under the document of 11 July 1919 assigned and transferred their interest under the lease to one Vyomkesh Mukherjee. In 1949, Vyomkesh Mukherjee died leaving behind the petitioners as his heirs and successors. On 21 September 1951 the petitioners granted a sub-lease under the aforesaid lease of 11 July 1919 to one Madan Gopal Rungta. The latter, however, was obstructed in his working of the mines under the Sub-lease by the Deputy Commissioner of Palamau in December, 1952. On 16 April 1953 Madan Gopal Rungta entered into an agreement by which he agreed to pay royalty to Government of Bihar for working the mining rights covered by the sub-lease. In January, 1955 the whole of Ladi Estate vested in the State of Bihar under the Bihar Land Reforms Act, 1950. In 1959 the Controller of Mining Leases initiated a case for the modification of the terms of the lease dated 11 July 1919. On 28 September 1959 after hearing the petitioners and also after hearing Madan Gopal Rungta who held a power of attorney on behalf of the said petitioners, the said Controller in purported exercise of his powers under Rule 6 of the Mining Lease (Modification of Terms) Rules, 1956 modified the lease under the aforesaid registered document of 11 July 1919 and made it terminable with effect from 20 September 1961. It is stated on behalf of the appellant that this order of termination was made at the instance of Madan Gopal Rungta who pleaded that the lease should be made terminable after the expiry of the sub-lease granted in his favour. On 11 December 1961 the Government of Bihar invited applications for grant of mining leases in respect of Gore in the Official Gazette. On 10 September 1962 Madan Gopal Rungta and his son Tribeni Prasad Rungta both applied for grant of a mining lease of the area. Certain other parties had also applied for mining lease in the area prior to this stage. On 13 November 1962 a notice was issued to Tribeni Prasad Rungta under S. 7 of the Bihar and Orissa Public Demands Recovery Act demanding a sum of Rupees 66,317.93 by way of dead rent and royalties which are alleged to have accrued during the period when Madan Gopal Rungta was working the mines under the aforementioned sub-lease. On 1 April 1963 the appellant M/s. Hindustan Steel Limited applied for the grant of mining lease for an area of 67.26 acres within the area. Some time in 1963 Tribeni Prasad Rungta made an application under Art. 226 of the Constitution of India challenging the certificate proceedings mentioned before and the High Court allowed the application and quashed the proceedings on 23 November 1964. On 22 July 1965 the Government of Bihar acting with the approval of the Central Government granted a mining lease to the appellant in respect of 67.26 acres. On 17 October 1966 a lease was granted in favour of Bharat Marble Company. On 2 September 1968 one S. K. Jain purporting to act on behalf of the petitioners filed a writ petition in the High Court of Patna in which it was prayed that the two leases in favour of the appellant and Bharat Marble Company should be quashed and cancelled. Soon after this writ petition had been filed, in April 1970, one of the petitioners died. On 17 September 1971 the High Court granted a writ in favour of the petitioners before them and cancelled the two leases. M/s. Hindustan Steel Ltd. have now come on appeal against the judgment and order of the Patna High Court by which the two leases were cancelled.

(3.) The petitioners trace their title to the lease granted by Kumar Amardeyal Singh in favour of Pran Kristo Chatterjee who in turn assigned his right to the petitioners' predecessor-in-title. They claim that their predecessor-in-title Vyomkesh Mukherjee had exercised his right under the deed of assignment and had in fact raised iron ore until 1949 when he died. The petitioners claim to have remained in possession of the lease-hold property when the interest of the proprietor vested in the State of Bihar under the Bihar Land Reforms Act, 1950 and they became the lessee under the State of Bihar on the same terms and conditions as were contained in the original lease of 1919. The order of the Controller of Mining Leases is, according to the petitioners, completely illegal and null and void. The Government of Bihar, they contend, acted illegally in inducting the present appellant as lessee of the property which forms a part of the original lease-hold property of 1919. It was on this basis that the petitioners asked the High Court to quash the two leases granted by the Government of Bihar and also to protect them in their possession and enjoyment of the lease-hold property. The only defence that was put up by the State of Bihar before the High Court of Patna was that the petitioners before the Patna High Court had defaulted in the payment of rents and royalties with effect from the date of vesting. The present appellant, however, put up a strong defence on the following grounds:-