BHARAT COKING COAL LTD. AND ANR. versus STATE OF BIHAR AND ORS.

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

AUGUST 17, 1990

[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.

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.

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 right to remove the said slurry to the respondent on payment of royalty. The first two appellants filed Writ Petitions before the Patna High 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_ slurry under the lease granted by the State Government.

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

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The Full Bench of the Patna High Court dismissed the Writ Peli· 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· 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 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 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.

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 . 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 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

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tence of the Parliament; and that in view of the Parliament's declara· 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.

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 \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 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 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 to be carbonaceous in character having all the elements of coat. 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

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Kesari Mal Jain v. State of Bihar, AIR 1985 Patna 114, approved.

Websters New 20th Century Dictionary; Encyclopaedia Britannica,

referred to.

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2. The definition of "mining operation" and "mine" are very wide. The expression ''mining of mineral'' in the definition of ''mining operation'' under Section 3( d) of the Mines and Minerals (Regulation &

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BHARAT COKING COAL v. STATE OF BIHAR

747

Development) Act, 1957 is spacious enough to comprehend every activity 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 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 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

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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.

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 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 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)

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4.1 An analysis of the provisions of the Act makes the extent of H

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Parliamentary declaration clear that the disposal and discharge of 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

c legislative field has been taken over by Parliament. [763C-E)

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 .

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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 1

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 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 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 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

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BHARAT COKING COAL v . . STATE OF BIHAR

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confer legislative competence on the State Legislature to make any law ) 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 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 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]

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.

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5. The executive power of the State Government is co-extensive 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 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 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

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to regulation of mines and mineral development. Moreover, the proviso 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 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)

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.

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]

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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 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 >- 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]

[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.

--..__ --- High Court in C.W.J.C. No 1133 of 1984(R).

From the Judgment and Order dated 20.12.1985 of the Patna

Ashok Desai, Solicitor General, Kuldip Singh, Kapil Sibal, 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. Sharan, R.D. Upadhyay, S.K. Sinha, Apurb Lal, Anip Sachthey, C. 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

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 directed against the judgment of the Patna High Court while Civil Appeal Nos. 230-231 _of 1987 are directed against the judgment of the

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In order to appreciate the controversy in question it is necessary to recapitulate the facts. M/s. Bharat Coking Coal Ltd.-appellant in

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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, 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 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

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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

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

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that large area of land in the District of Hazari Bagh and Dhanbad 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 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 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 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 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 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.

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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 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

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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 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

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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.]

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Before the High Court the appellants contended that in view of the 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 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 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 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 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 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 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 authority to settle the collection of slurry.

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Learned counsel for the parties made elaborate submissions before us in support of their case. On behalf of the appellants it was

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urged that slurry/sludge the subject matter of dispute in the instant 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 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 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- - ' 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

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

757

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lease under the Act. On behalf of the State Government it was further 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 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.

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 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 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 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."

In common parlance slurry is a liquid form mixed with some. other material. In Encyclopaedia Britannica 'slurry' is defined as under:

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"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

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SUPREME COURT REPORTS

[1990] 3 S.C.R.

piped as a slurry m building construction. Coal may be 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 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 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, 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 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 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 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- ment no prospecting licence or mining lease shall be granted in respect of any material specified in the First Schedule. The First Schedule to

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

759

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the Act specifies minerals as contemplated by Section 5(2)(a) and "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.

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 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 ..__,___ -- - .,peration' 1 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 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 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 ' 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 are bound to succeed on the ground of absence of legislative compe tence of the State Legislature.

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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

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SUPREME COURT REPORTS

[1990] 3 S.C.R.

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of Bihar has no authority in law to regulate disposal of slurry. Under 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 necessary to consider the Constitutional provisions and the Act.

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Articles 245 and 246 of the Constitution read with Seventh 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 E enumerated under Entry 23 of List II and Entry 54 of List I. These

Entries are as under:

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"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."

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

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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 topic of mines and mineral is subject to Parliamentary Legislation. The H Parliament has enacted the Mines and Minerals (Regulation and

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

761

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Development) Act, 1957. By s. 2 of the Act the Parliament has >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 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 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 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 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 , 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.

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

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SUPREME COURT REPORTS

[1990] 3 S.C.R.

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

Section 18( 1) as amended by the Amending Act 37 of 1986 reads as under:

"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 such rules as it thinks fit."

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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:

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"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:

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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- charged from a washery which is an integral part of mining operations.

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~-· 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

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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 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.''

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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 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 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 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 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- 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 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 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 Co. Ltd. & Ors. v. The State of Orissa & Ors., this Court held:

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"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 development of mines under the control of the Union. In

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

765

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

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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 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 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 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

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 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 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- s J_ i e: Rai Sa ercise of its executive powe[r · ect matKter in ex e . ib Ram h 1 . In the 2 SCR 2 rs. v. The State of Punjab, 5 95 1 awaya apur & 1 5 2 0 absence of any law, the State Government or its officers in exercise of executive authority cannot infringe citizens rights merely because the

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SUPREME COURT REPORTS

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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 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 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- 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.

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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- tains fine particles of coal, on its resumption it is used for energy and

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BHARAT COKING COAL'· STATE OF BIHAR [SINGH, l.]

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fuel purposes. It is, therefore, difficult to accept the contention that 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 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 s on n e d s t ur of thde redsp tate, it claimed right to grant lease ifn favo 5 9 1 4 9 1 or co ecting the same. In the indenture o sett ement ate .. 1 1 7 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 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 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 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 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.

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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 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 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

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SUPREME COURT REPORTS

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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:

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

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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 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.

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Moreover, it is not open to the respondents to contend that 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 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 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 respondents have all along proceeded on the assumption that sludge/

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

769

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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 >-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. 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 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 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/ 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 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 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, 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

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770

SUPREME COURT REPORTS

· [1990] 3 S.C.R.

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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 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 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 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 any arrangement or to settle any right with respondents for collecting slurry deposits from that Plot No. 370 of Sudamdih.

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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 forther hold that in view of the Parliamentary declaration made by

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BHARAT COKING COAL 11. STATE OF BJHAR [SINGH, J.)

771

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Section 2 of the Act and having regard to Section 18 of the Act the 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 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.

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Appeal allowed.