KARANPURA DEVELOPMENT COMPANY Vs. UNION OF INDIA

JUDGEMENT

(1.) These appeals, by certificate, preferred against the judgment dated 18-4-1970 of the Patna High Court are by M/s. Karanpura Development Company Ltd. which held certain mining leases for working coal-mines in the State of Bihar and raise questions as to appellant's entitlement to compensation and the extent thereof under Section 13 of the Coal Bearing Area (Acquisition and Development) Act, 1957 (Act) in respect of the appellant's rights in and over the lands which vested in the Central Government pursuant to the publication of the declaration dated 15-1-1958 under Section 9(1) of the Act.

(2.) A brief reference to the material and necessary facts is necessary: On 26-3-1915, the Court of Wards representing the estate of Laxmi Narain Singh Bahadur of Ramgarh Raj granted to M/s. Bird and Co. certain prospecting-licences in respect of large extents of unworked coal bearing lands in Mauza Giddi and Kar Kutta of Hazaribagh District. On 30-5-1921, the grantee, M/s. Bird and Co. transferred the prospecting-licences in favour of the appellant. In the year 1937, Raja Bahadur Kamakhya Narain Singh, upon acquiring the age of majority, sought to repudiate the prospecting-licences granted by the Court of Wards. This controversy led to the institution of two suits; the first was title suit No. 28 of 1940 by the appellant against the Raja for specific-enforcement of the agreement of lease; and the other was title No. 82 of 1940 by the Raja himself for a declaration that the prospecting-licences granted by the Court of Wards were void and were not binding on the estate. Both suits were instituted in the court of subordinate Judge at Hazaribagh. It is not necessary to set-out in any great detail the vicissitudinous career of this litigation except to say that, ultimately, by the judgment of this court reported in (1956) SCR 325 appellant succeeded in its suit and the Raja lost. In the meanwhile, even during the pendency of the litigation and subject to its final result, the Raja granted in favour of the appellant a lease for 999 years under deed, dated 17-9-1948 in respect of 3645 Bighas of coal bearing lands. On 4-9-1948, appellant, in turn, granted a sub-lease in favour of M/s. East Karanpura Coal Company Ltd., said to be appellant's own subsidiary-company, respecting 3064 bighas, out of said 3645 Bighas. The sub-lease was for a term co-extensive with that under the main lease, less two days short of the original term. On 25-9-1950, Bihar Land Reforms Act, came into force. The Coal Bearing Areas; (Acquisition and Development) Act 1957 (Act for short) came into force with effect from 12-6-1957. After compliance with the necessary antecedent formalities, a declaration under Section 9(1) of the "Act" with respect to the lands covered by the appellant's lease was published on 15-1-1958 with the attendant statutory consequence that all rights in or over the land, as the case may be, stood vested absolutely in the Central Government free from all encumbrances.

(3.) On 25-8-1958 appellant lodged under Section 13 of the Act, its claim for compensation with the National Coal Development Corporation in the sum of Rs. 8,92,216.27 p. Appellant's claim included expenses said to have been incurred for obtaining the lease, such as, the premium or salami paid to the lessor, the expenses of litigation incurred in securing specific performance of the agreement of lease; expenses incurred on the prospecting-licences; payment toward dead rent, royalty etc. The sub-lessee, M/s. East Karanpura Coal Company Ltd. also filed its claim seeking compensation in the sum of Rs. 65,644. There was no conflict of interest between the two claimant-companies, inter se. Indeed the sub-leases conceded the claims of the appellant and had no objection to their grant. There having been no agreement between the Government and the Companies fixing the amount of compensation, the matter became referable, and was, indeed, referred to the Tribunal envisaged by and constituted under Section 14(2) of the Act. The Additional Judicial Commissioner, Ranchi constituted the Tribunal. The reference was. registered as Reference No. 25 of 1962. Appellant's claim was contested by the Government principally on the ground that as on the date of the publication of the declaration, the appellant had no subsisting interest in or over the lands constituting the subject-matter of the lease and could not, therefore, be considered a "person-interested" for purposes, and within the meaning of, Section 13 of the Act. The quantum of the individual claim was also contested. The tribunal overruled the objections of the Government and, on a consideration of the evidence before it, proceeded to determine and award a compensation of Rs. 7,54,629.49 p. in favour of the appellant. Two items of the claim, in the sum of Rs. 54,439 towards solatium and the sum of Rs. 55,932 claimed towards litigation-expenses were, however, disallowed by the tribunal.