TARA PRASAD SINGH ETC. ETC. versus UNION OF INDIA & OTHERS

TARA PRASAD SINGH ETC. ETC. v. UNION OF INDIA & OTHERS May 7, 1980 [Y. V. CHANDRACHUD, C.J., P. N. BHAGWATI, V. R .. KRISHNA IYER, R. S. SARKAR!A, N. L. UNTWALIA, P. S. KAILASAM AND

V. D. TULZAPURKAR, JJ.] Coal Mines (Nationalisation) Amendment Act, 67 of 1916-Legislative C – competence of the ParliamRnt to enact Nationalisation Amendment Act- Whether the Amending Act is violative oif the provisi"ons of Articles 14, 19,(1)(/), 19(1)(g) and 31 of the Constituti<>n of lndia-Applicability of the Act to leases of composite mines in which there are alternate seams of coal and fire clay.

Article 246(1) of the Constitution of Indiia confers upon the Parliament, notwithstanding anything contained in. clauses 2 and 3 pf that Article, the exclusive power to make laws with respect to any of the matters enumerated in List I of the Seventh Schedule, called the Union List, Clause 2 of Article 246 deals with thlj power of the Parliament and the State Legisla.tures to make laws with respect to any of the matters enumerated in the Concurrent Lisi, while clause 3 deals with the {X>Wer of the State Legislatures to make laws with respect to any of the matters enumerated in the State List. Entry 23 List II, Schedule VU of the Constitution read with Article 246(3) cOnfers legislative· power on the State Legis~atures in respect of "Regulatiol). of mines and mineral development" but that power is "subject to the provisions of List I with respect to regulation and development under the control of the Union". Entry 54 List I enables Parliament to acquire legislative power in respect of, "Regulation of mines and

mineral development to the extent to which suCh regulation and development under the control of the Union is dec- lared by Parliament by law to be expedient in the public interest". Entry 24 List II relates to "Industries subject to the provisions of entries 7 and 52 of List I". Entry 7, List I, relates to Industries declased by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. · Entry 52, List I, enables 'Parliament to acquire legislntive. power in respect of "Industries, the control' of which by the Union is declared by Parliament by law to be expedient in the pub1ic interest".

Pursuant to these powers the Parliament enacted the Industries (Develop- ment & Regulation) Act, 65 of 1951, the Mines Act 35 of 1952, the Mines and Minerals (Regulation and Development)

Act 67 of 1957, the Coking Coal Mines (EmCrgency Pfovisions) Act, 64· of 1971, the Coking Coal Mines {Nation- alisation) Act, 36 of 1972, the Coking Coal Mines (Nationalisation) Amend- ment -Act, 56 of 1972, the Coal Mines (Taking over of Management) Act, 15 of 1973 and the Coal Mines (Nationalisation) Act 26 of 1973. Thereafter the Coal Mines (Nationalisation) ,i\mendmcnt Ai:t 6i of 1976 woo p:isscd, the

objects and reasons being : . ):. \ .. .J l .-~' y ., 'i ·~–"'"""- . ;" TARA PRASAD V. UNION "After the nationalisation of coal mines, a number of persons holding .coal mining 1eases unauthorisedly

started mining of coal in the Dl06t reckless and unstientific manner without regard to considemtions of conservation, safety and welfare of workers. Not only were they resorting to slaughter mining by superficial working of outcrops and thereby destroy- ing a valuable national asset and creating problems of water-logging fires, etc. for the future d~elopment of the deeper deposits, their unsafe working also caused serious and fatal

a.ccidonts. They were making larger profits by paying very low wages, and by not providing any safety and welfare measures. Thefts of coal from adjacent nationalised mines were also reported after the commencement of these unauthOrised ope- rations which had shown an increasing trend of late. · Areas where ille- gal and unauthorised operations were carried

on, were without any assessment of reserves in regard to quality and quantity ol1 coal which could be made available after detailed exploration work was undertaken and results" analysed. No scientific exploitation of these deposits could be undertaken in the nationalised sector without these details. It was, therefore, considered that it would oot be appropriate either to nationalise these unauthorisedly worked mines after

taking them over under the Coal Mines (Taking Over of Management) Act, 1973 or to get the con- cerned rriining leases prematurely terminated and regranted to Govern· ment Companies under the Mining and Minerals ·(Regulation and Deve- Jopment) Act, 1957. In view of the policy followed by the Central Government that the Coal Industry is to be in the nationalised sector, it was decided that the Coal Mines Nationalisation Act, 1973 should be enacted to provide for termination of all privately held coal .leases, except those held by pfivately owned steel companies, so that it may be possi- ble for the Central Government, Government Company or Corporation to take mining leases where necessary, after necessary exploration has been made as to the extent of the deposits. of coal, etc." The petitioners who were the lessees of cool mines by the State Government, being aggrieved by the provisions of the Ameridment Aci 67 of .1976, ·challenged the competence of Parliament to enact the Amendment Act and also the validity of the Act and contended:

(a) Laws made in the exercise of power CO!llferred by Entry 54 must stand the test of public interest because the very reason for the Parliament acquiring power under that entzy is that it is in public interest that the regulation of – mines and minerals should be under the control of the Union: Jn other words,

Entry 54 confers· a legislative power which is purposive, that is to say, any law made in the exercise of the power under Entry 54 must be designed to secure the regulation an.d development of coal inines in public interest or else it must fail.

The Nationalisation Amendment Act is not such a law which Parliament can pass under Entry 54 because, that Act not only terininates all leases but it destrQys the contracts of service of thousands of Workmen, and indeed it des- troys all other contracts and all securities for moneys lent without even so much as making a provision for

priorities for the payn1ent of debts. Since the Nationalisation Amendment Act terminates aU leases, it is a complete negation of the integrated scheme of taking over the management of m~es; acquisition of the rights of lease-holders and the running of the mines. If

(b) The word 'Regulation' in Entry 54 does not include 'Prohibition'. 'Regulatiun' should not also be confused with the expression 'Restrictions' occur- .·.J c ring in Article 19 (2) to ( 6) of the Constitution. In the very nature of things, there cannot be a power to prohibit the regulation and development of mines and minerals'. Section 3(4) inserted by the Nationalisation Amendment Act impoees no obligation on the Central Government or any other authority to obtain a mining lease and work the mines, the leases in respect of which stand terminated under the Act. The words "it shall be lawful'' for the Central Gov- ernment to obtain a lease are words qf discretionary power which create no

obligation. They only enable the Central Government to obtain a lease, mal<ing something legal and po6Sible. for .which there would otherwise be no right or authority to do. Section 3(4) does not confer a power coupled with a dnty; it merely confers a faculty or power. No Court can by a Writ of Mandamus or otherwise compel the' Central Government to obtain a lease of a coal mine and to nm it under any of the provisions of the Nationalisation Amendmeiit Act. ( c) Where the Legislative power is distributed amoug different legislative bodies, the Legislature may transgress its

legislative power either directly or manifestly, or covertly or indirectly. In the instant case, the exercise of power by the Parliament is colourable because although in passing the Nationalisation Amendment Act it purported to act within the limits of its legislative power, in substance and in reality it transgressed that power, the transgression beiilg veiled by what appears on proper

examination to be a mere pretence or disguise. (d) In order to tear off the veil or disguise "1td in order to get at the subs- tance of the law behind the form, the Court must examine the effect of the legislation and take into consideration its object, purpose and design. Where the legislative entry is purposive, like Entry 54 of the Union List, it is the object or purpose of the legislation which requires consideration. The put'pose for which the Parliament is permitted to acquire legislative power of Regulation and Dev~lopment of mines must dictate the nature of law made in the exercise of that power because public intecest demands that power. Under the provi- sious of the Nationalisation Amendment Act, not ouly is there no obligation on the Central Government to run a mine, but there is no obligation imposed upon it .even to carry out prospecting or investigation in order to decide whether a particular mine should be worked at oil. Section 3.( 4) merely authorise$ the Central Government to apply for "a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands determined". A close examilµtion of the Act thus discloses that far from providing for regulation and development of cool mines, it totally probi- bits all minlng activity even if the State Government wants to run 3. mine. It does not impose proh.ibitioo! as a step towards running the mines since there is neither 3ny obligation to carry out the prospecting or investigation nor to run the mines.

(e) The Nationalisation Atri.endment Act runs directly counter to the whole policy of the Coal Mines (Nationalisation) Act of 1973, to acquire and run the mines. The Parent Act becomes a dead letter in regard to several of its provisions as a result of the Amendment

Act~ ~t only adopts a colourable device to amend the Nationalisation Act while completely negativing it in fact. 1'he Act therefore lacks legislative competence and is, in the sense indicated, a '-"Olourable piece of legislation.

• .. -.-!' TARA PRASAD V. UNION (f) Artlcle 31(A) (l)(e) only lifts a restriction on the legislative compe- tence in so far as violation of fundamental rights is concerned. The most benign motive cannot make a law valid if the legislative competence is lacking. (g) Under Article 31{1) of the Constitution, no person can be deprived of his property without the authority of law. Article 31A(l) >rtrlch exempts the Jaws mentioned in clauses (a) to (e) from invalidity under Articles 14, 19 and 31 does not dispense with the necessity of the authority of law for depriving a person of his property, because tho opening words of Article 3 IA(l) are " ….. . no law providing for …… " matters mentioned in clanses (a) to (e) shall be deemed· to be void as offending Articles 14, 19 and 31. (h) The Nationalisation Amendment Act confers no authority to terminate· a composite lease for mining coal and fire-clay. The right to mine fire-clay is given to the petitioner by law and it can only be taken away by law. (i) Though the Nationalisation Amendment Act does not in terms prohibit the petitioner from mining fireclay, the effect of the law, in a practical business sense;. is to prohibit the petitioner fronl mining fireclay and, therefore, the posi-.. tion is rhe same1 as th9ugh the Act had enacted the prohibition in express terms. The Court must look at the direct impact of the law on the right of the party, and if that impact prohibits him from exercising his right, the fact that there is no express prohibition in the Act is immaterial.

(j) The Nationalisation Amendment Act by m&king it punishahlei to mine coal, in substance and in a practical business sense, prohibits the petitioner from mining fireclay. For this prohibition the Amendment Act does not

provide, and therefore, there ~ no authority of law for it. Coal and :fireclay are two distinct minerals as shown by Schedule II to the Mines arul Minerals (Regula· c tion and Development) Act, 67 of 1957 wherein item I is coal and item IS is fireclay. The dictionary meanings of coal and fireclay also show that they are two distinct minerals.

(k) The Nationalisation Amendment Act affects, in substance, two kinds of transfers : the transfer of the lease>-hold inll:rests of the lessees in favour of the lessor, namely the State; and the transfer dfl the mining business of the lessees in favour of the Central Government

Sin.cc these transfers amount to acqui- sition within the meaning of Article 31(2), the Act is open to challenge under Articles 14, 19(1)(g) &nd 31 of the Constitution. (!) The Nationalisation Amendment Act is open to challenge under Article 14 because lessees who fall within that Act are patently discriminated against in comparison with lessees of other mines, both coking and non-coking, who

were paid compensation when their property was taken over first for manll@ec ment under the Management Acts and then under the Nationalisation Acts. (m) The Nationalisation Amendment Act is open challenge under Article 19(1)(g) because the prohibition against lessees from carrying on their business and the transfer of their business, in substance, to the Central Government or a Company is an unreasonable restriction on the right of the lessees to hold their lease-hold property and to carry on their business of mining. (n) The Act is open to challenge under Art:icle 31 because no provision is mad.• for_ the payment '>!- any amount wha~er to the lessees· whose mining busmess ts taken over wider the Act. No pubhc purpose is involved either in the 11980] 3 s.c.R

termination of the lessees' interest or in the acquisition of their business. Expro~ priation without payment of any amount requires a very heavy public purpose. (o) Since no provision whatsoever is made for the payment of any amount to the .lessees whose leases are terminated, the Nationalisation Amendment Act is not a 'Law' within the meaning of Article 31(2) and therefore Article l,9(1)(f) is attracted.

(p) The Act is not saved from the challenge of Articles 14, 19 and 31 by Article 31A (I) (e) because that Article provides for extinguishment which does not amount to acquisition by the State. If. extingµishment amounting to acquisition \\'as intended

to be saved under' Article 31A(l) (e), the subject IDJ.tter dealt with by clause (e) would have been included in clause (a.) of that Article. Dismissing all the \Vrit Petitions except Writ Petitions Nos. 111, 178, 220, 221, 257, 352, 600 & 1130-1134/77 which are allowed in part, the Court, HEID: (1) The provisions of the Amendment Act 67 of 1976 are not a mere facade for terminating mining leases without any obligation in the matter '\ of regulation of mines and mineral development. [1071H, 1072A] . D

Granting that Entry 54, List I is pur_posive since it qualifies the power to pass a law relating to "Regulation of Mines and Mineral Development" by the addition of a restrictive clause, "to the extent to which such regulation and deve- lopment under the control of the Union is declared by Parliament by law to be expedient in the public interest", the provisions of the NationalisatiOn Amen- dment Act show that they are designed to serve progressively the purpose of Entry 54. [1972 A-BJ

The Coal Mines (Nationalisation) Act was passed in order to provide for · ·the acquisition and transfer of the right, title and interest of the owners in .res- pect of the Coal mines specified in the Schedule to that Act. This was done with a view to re-organising and reconstructing such coal mines so as to ensure the rational, co-ordinated and scientific development and utilisation of coa~ re- sources consistent with the growing

requirements of the country. The high purpose of that Act was to ensnro that tho ownership and control of such re- sources are vested in the State and thereby so distributed as best to subserve the common ~ood. [1072 D-F]

The several provisions of the Nationalisation Amendment Act, are, (I) by section 3(3) (a) of .the Coal Mines (N~tionalisation) Act, 1973' which was introduced by the Nationalisation Amendment Act, no person other than those mentioned in clauses (i) to (iii) can carry on coal mining operations after 'April 29, 1976, being the date on which section 3 of the Nationalisation Amend- ment Act came into force; (2) by section 3 (3) (b) all mining leases and

sub-leases stood terminated except those granted before April 29, 1976 in favour Of the Central Government, a Government company or corporation owned, man- aged or controlled by the Central Government; (3) section 3(3) (c) prohibits the granting of a lease for winning or mining coal in favour of any person other than the Government, a Government company or a corporation of the above description provided that a sub-lease could be granted by these auth<>- rities to any-pefson if the two conditions mentioned in the proviso are satisfied; and (4) when a mining lease stands terminated under section 3(3), "it shall I r

\~ ' TARA PRASAD v. UNION be lawful'' for the Centrnl Governmen~ or the Government company or the corporation owned or controlled by the Central Government to obtain a pros~ pecting licence or a mining leatie in res~t of lheJ whole or part of the land covered by the mining lease which stands termiriated. Section 4 of the Nation· alisation Amendment Act introduced an additional pena.1 provision in the parent Act. The provisions of .Ss. 3 and 4 are noi a direct negation of the principles of the parent Act a.nd they do not destory the integral scheme of taking over the management of mines, of acquiring the rights of lease-holders and continu· ing to run the .mines.

On the contrary, the Nationalisation Amendment Act is manifestly in furtherance of the object of nationalisation mentioned in the preamble to· the wrent Act and effectuates the purpose mentioned in sections 3(1) and 3(2) of that Act by the addition of a new sub-section, sub-section (3), which terminates all coal mining leases and sub-leases except those referred in sub-section (3) (b). The circumstance that the marginal note to l!«'lion 3 and the title of Chapter II of the Nationalisation Act are not amended by the Nationalisation Amendment Act, despite the addition of a new sub-section, is of/ Jittle or no consequence. That sub-section is a logical extension of the scheme envisaged by the original sub-sections (I) and (2) of section 3. [1073 C-H. l074A·BJ

2. Besides, marginal notes to the sections of a statute and the titles of its i:hapters cannot take a\vay the effect of the provisions contained in the Act so as to render those provisions legisl.ativeJy incompetent, if they are otherwiSe

within the competence of the legislature to enact. One must principally have regard to the object of an Act in order to find out whether the exercise of· the legislative power is purposive, unless, of course, the provisions of the Act show that the a.vowed or intended objects is a mere pretence for covering a veiled transgression

committed by the legislature upon its o.wn powers. Whether. a particular object can be successfully achieved. by an Act, is largely a matter . of legislative policy. [1074 B-D] 3. The Nationalisation Amendment Act needs no preamble, especially when it is backed up by a statement of objects and reasons. Generally, an amend- ment Act is passed in order to advance the purpose of the parent Act as reflec- ted iD: the preamble to that Act.

Acquisition of cool mines, is not an end in itself but is only a means to an end. The fundamental object of the Nationa- lisation Act as also of the Nationalisation Amendment Act is to bring into ex- istence a state of affairs which will be congenial for regula~ mines and for mineral development. In regard to the scheduled

mines, that purpose was achieved by the means of acquisition. In regard' to mines which were not in- cluded in the Schednle, the same purpose was achieved by termination of leases and sub-leases M\d by taking over the right to work the mines·. Termination of leases, vesting of lease-hold properties in the State Governments and the grant of leases ID the Central Government or Government Companies are to- gether the means conceived in order to achieve the object of nationalisation of one of the vital material resources of the community. [1074 D-0] 4. Section 18 of the Mines and Mineral (Regulation and Development) Act 67, 1957 contains a statutory behest and projects a purposive legislative policy. The later Acts on the subject of regulation of mines and mineral development are linked up with the policy ennnciated in section

18. Therefore, nothing ff contained in the later analogous Acts can be construed as in derogation of the principle ennnciated in. section 18 of the Mines and Minerals (Regulation and Development) Act, 67 of 1957, which provid .. that it shall be the duty of the Central GoVeJ11DMlnt to take all such steps aa may be necessary for the conser- vation and development of minerals in India. Therefore,

even in regard to matters f&lling under the Nationalisation Amendment Act which terminates existing leases and makes it lawful for the Central Government to obtain fresh leases, the obligation of section 18 of the Act of 1957 will continue to apply in its full rigour.

[1074 G-H, 1075 A-BJ 5. Entry 54 refers to two .tirings: (1) regulation of mines and (2) mineral development. It is true that the Entry is purposive, since the exercise of the power under Entry 54 has to be guided and governed by public interest. But neither the power to regulate mines nor the power to ensure min.era) develop- ment postulates that no sooner is a mining lease terminated by the force of the statute, then the Central Government must begin to work the mine of which the lease is terminared. It is possible that after the Nationalisation Amendment Act came into force, there was a hiatus between the termination of eixisting "- leases and the granting of fresh ones.

But, the Nationa.Jisation Amendment Act does not provide that any kind of type of mine shall not be developed or worked. · Cooservation, prospecting and investigation, developmental steps and finally scientific exploitation of the mines and minerals is the process envisaged ·by . the Nationalisation Amendment Act. It is nndeniable that conservation of minerals, whk;.h is brought about by the termination of existing leases and sub- leases, is vital. for the development of mines. A phased and graded programme of conservation is in the ultimate analysis one of the most satisfactory and effective means for the regulation of mines and the development of minerals. [1075 D-GJ

6. The Nationalisation Amendment Act is not destructive of the prpvisions of the Parent Act The destruction which the Nationalisation An1endment Act brings about is of the· lease. or the sub-leHe and not of its 'subject matter, namely, the mine itself. In terminating the lease of a house one does not des- troy the house itself.

It may be arguable that p;phibiting the use of lhe house for any purpose whatsoever may, for practical purposes, amount to the destruc- tion of the house itself. The Nationalisation Amelldment Act neither contains provisions directed at prohibiting the working of mines, the leases in respect of which are terminated. A simple provision for granting sub-leases shows that tho object of the Nationalisation Amendment Act is to ensure that no mine will lie idle or unekplored. Interregnums can usefully be utilised for prospecting and investigation.

They do not lead to destructiog; of mines. In fact, . it is just as well that the Amendment Act does not require the new leases to undertake an adventure, reckless and thoughtless, which goes by the name of 'scratching of mines', which ultimately results in the slaughtering of mines. [1075H, 1976A-D] Nri:tural resources, however, large are not inexhaustible, which makes

it imperative to conserve them. Without a wise and planned conservation of such resources, there can neither be a systematic regulation of mines nor a scientific development of minerals. The importance of. conservation of natural resources in any scheme of, regulation and development of such resou~s can be seep

from the fact that the Parliament had to pass in August 1974 an Act called the Coal Mines (Conservation and Development) Act, 28 of 1974, in order, principally, to provide for the conservation 00" coal and deveiopment of coal mines, Section 4 (1) o£ that Act enables the Central Government, for the pnr- pose of conservation of coal and for the development of coal mines, to exercise such powers and take or cause to be taken such measures as it may be necessary or proper or as may be prescribed. By section 5 ( 1), a duty is cast on tho 4-

4~ t TARA PRASAD V, UNION O\\<uers. of coal mines to take such steps as may be· necessary to ensure' the con.. servation of coal and development of the coaJ. mines owned by them. l\ieasures'

taken for judicious preservation and distribution of natural resources may involve restrictions on their use and even prohibition, upto a degree, of the unplanned working of the repositories of such resources. [1076 D-F, 1077 BJ Altorney-General for Ontario v. Attorney-General for Canada [1896] A.C. 348, 363; Municipal Corporation of City of Toronto v. Virgo [1896J A.C. 88 expJain.ed and referred to.

7. Section 3(4) of the Act uses an enabling or petmissive expression in order that regulation of mines and mineral development may be ensured after a scientific prospecting, investigation and planning. It is doubtless that, in the. language of Lord Cairns in Julius (1880) 5 Appeal Cases 214, 222, there is

something in the nature of the things which the Nationalisation Ameridrnent Act empowers to be done, something in the object for which it is to be done and something in the conditions under which it iSi to be done which couplts the poVi·er conferred by the Act with a duty, the duty being not to act in hast0 but with reasonable promptitude depending upon the nature of the problem under investigation. An obligation to act does not cease to be so merely because

there is no obliga•tion to act in an ad-hoc or impromptu manner. It is in the context of a conglomeration of these diverse considerations that one must a pprew ciate why, in section 3(4) which was introduced by the Nationalisation Amend- ment Act, Parliament. used the permissive expression

"it shall be Jaw:ful". [1078 H, I 079 A-CJ A broad and. liberal approach to the field of legisla-tion demarcated by Entry 54, List L an objective :ind practical understanding of the provisions con· tained in the Nationalisation Amendment Act and a realistic perception of cons~ titutional principles will point to the conclusion that the Pa-rliament had the

legislative competence to enact the Nationalisation Amendment Act. f1079 C·D] Julius v. Bishop of Oxford [1880J 5 Appeal cases 214,222 referred to. 8. The Coking Coal Mines (Nationalisation) Act of 1972 and the

Coal Mines (Nationalisation) Act of 1973 cover the whole field of "Coal" which was intended to be nationalised. The titles of the two Acts and the various provi· sions contained therein show that what was being nationalised was three distinct categories of mines : mines containing seams of coking coal exclusively; mines containing seams of coking coal along with seams of other coal; and mines

containing seams of other coal. Though Parliament had power under Article 31A(l)(e) of the Constitution to terminate mining leases without payment of any compensation or 'amount', it decided to nationalise coal mines on payfilent of amounts specified in the Schedules to the Nationalisation Acts of 1972 and 1973. Besides, even when something apart from coking coal mines was acquiJ-. ed, namely, 'coke oven plants', provision was separately made, in section 11 of the Nationalisation Act of 1972, read with the 2nd Schedule, for payment of amounts to owners of coke oven plants. Thus, whatever was intended to be acquired was paid for.

This scheme is prima fade inconsistent with the Par· lian1ent intending to acquire leasehold rights in other minerals, like firec1ay, with· out the payment of any amount. [1082 B-EJ

Coupled with this is the unambigous wordin.g of section 3 (3) (b) and section 3 (3 )( c) of the Nationalisation Act Of 1973 which were introduced therein by 8-610SCI/80 SUPREME C!J.URT REPORTS

section 3 of the Na-tionalisation Amendment Act. These provisions carry the scl:cme of tha: Nationalisation Acts to their logical conclusion by emphasising tliat the target of those Acts is coal mines, pure and simple. What stands terminated under section 3(3)(b) is certain mining leases and sub~leases in so far as they relate to the winning or mining of coal. The embargo placed by section 3 ( 3) ( c) is on the granting of leases for winning or mining coal to per- sons other than those mentioned in section 3(3)(a). [1082 E-F, H, 1083-A] The definition of 'coal mine' in section 2(b) of the Coal Mines (Nationali- sation) Act, 1973 has an uncertain import and the schen1e of that Act and of the Coking Coa-l ·Mines (Nationalisation) Act, 1972 makes it plausible that

rights in minerals other than coke and coal were not intended to be acquired under the two Nationalisation Acts. A comparison of the definition of "coal mine" in section 2(b) of the Act of 1973 with the-definition cf "coking coal mine'' in section 3 (c) of the Coking Coal Mines (Nationalisation) .Act of 1972 makes it clear that whereas in regard to coking coal mines, the\ existence of any seam of other coal Vias regarded as inconsequential, the· existence· of any seam of another mineral was not considered as inconsequential in regard to a coal mine. The definition of coal mine in section 2(b) of the Act of 1973 scrupu- lously deleted the clause, "whether exclusively· or in addition to" any other seam. The same Legislature which added the particular clause in the definition of

'coking coa! mine' in; the 1972 Act, deleted it in the definition of 'coal mine' in the 1973 .Act. In so far as coal mines are concerned, b).- reason of the defini- tion of coal mine contained in section 2(b) of the Act of 1973, and the defini- tion of coking coal mine: in section 3(c) of the Act of 1972 which presents a. striking contrast" to the definition in section 2(b ), composite coal 1nines, that is to say, coal mines iR whlch there are Seams of .coal a-nd hreclay do. not .fall with- in the scope of the definition of "coal mine'' in section 2(b) of the Act of 1973. [1083 A-B, C-E, G-m

9. The lessees of composite mines, therefore, who hold composite 1nin1ng leases -of winning coal and fireclay, cannot continue their mining operations unabated despite the provisions of the Natlonalisation Amendment Act. It is one thing to say that a composite mine is outside the scope of the definition of coal mine in section 2(b) of the Nationalisation Act of 1972 and quite another to conclude therefrom that the other provisions introduced into that Act by the Nationalisation Amendment Act will have no impact on composite leases- for-

winning coal and fireclay. Section 3(3)(a) which was introduced into Hie parent Act by the, Nationalisation Amendment Act provides expressly that on and from the commencement of section 3 of the Amendment Act, that is, from Aptil 29, 1976, no person other than th_ose mentioned in clauses (i) to (iii) shall carry on "coal mining operation, in India, in any fonn". These

provi- sions of sections 3(3) (a-) and 30(2) of the parent Act will apply of their own force, whether or not the lessee holds a composite lease for winning coal and fireclay and whether or not the mine is a composite mine containing alternate seams of coal and fireclay. In other words, if a person holding a composite lease can do fireclay mining without mining coal, he may do so. But if. he

cannot win or mine fireclay without doing a coal mining operation, that is, without winning or mining coal, he cannot do any mining operation at all. If he does so, he will be. liable for the penal consequences provided for in section 30(2) of the NationaliSl>tion Act of 1973. The provision contained in section 3 (3) (a) totally prohibiting the generality of persons from carrying on c.oat

mining operation in India in any form and the penal provision of section 30(2} y TARA PRASAD V. UNION virtually leave with the lessees of composite mines the Jiusk of a mining interest., That they calUlot win or mine coal is conceded and, indeed, there, is no escape from that position in view of the aforesaid provisions. (1084 B-H, 1085 Al The lessees of composite mines cannot win or mine fireclay though their composite lease· is outside the scope -of section 2 (b) of the Nationalisatio11 Act of 1973. The lessees of composite mines will, for all practical purpeses, have to 1111rse their deeds of lease without being able to exercise any of the· rights :flowing from them.

On their own showing, they will be acting at their peril if they attempt to win fireclay. If they cannot win fireclay \vithout v.'inning coal, they cannot \.vin firecJay either, even if they hold composite leases under which they are entitled to win coal and fireclay. [1085 C-D] (10) Though the Parlia~nt provided for the payment of

amounts for acquisition of certain interests under the:. Nationalisation A<;:ts of 1972 and 1973. it did not intend to pay any compensation or amount for the termination of lease-hold rights in respect of composite mines. Mines which have alternate seaW of coa~ and fireclay are in a class by themselves and they appear to be far fe,ver in number a~ compared with the coking coal minesi and coal mines, properly so called.

The authority of law. for the termination of the righls of compor;ite lessees is. the provision contained in! section 3 (3) (a), -the violation of which attracts the penal provisions of section 30(2) of the Nationa·lisation Act of J.973.

The Par1iament has deprived composite lessees of their right to win fireclay because they canont do so without winning .coal. The winning of coal by the generality of people is prohibited by section 3(3)(a) of the Act of 1973. [1085 E-GJ

Th.is is, just as well, because Parliament could not b&ve intended that such islands of exception should swallow the main stream of the Nationalisation Acts. Obviously, no rights were intended to be left outstanding, once the rights in ·respect of coking coal mines and coal mines were brought to an end. [1085 G-HJ 11. A close and careful examinn·tion of the provisions of the Coal Ivline~

(Nationalisation) Act. 1973 and of the amendments made to that Act by Nationalisation Amendment Act makes it clear that by the Nationalisa-tion Amendn1ent Act, neither the petitioners' right to property has been acquired

c \\'ithout the payment of any amount nor they have been unreasonably deprived of their right to carry on the business of mining. [1087 E-F] TJ1e Coal Mines (N~tionaJisation) Act. ~~73 nationalised coal

mines by rroviding by section 3(1) that on the appointed day, that is on ~fay 1, 1973, the right, title and interest of the owners in relation! to the coal mines specified in the Schedule shall ~tand tr~mferred to, and shall vest absolutely in, the Cen- tral <Jovemment free from all incumbrances. 'Ibe scheduled mines, in

number oo.d situated in reputed coal bearing areas. were the ones which were engaged openly, lawfullv and uninterruptedly in doing coal mining business. Since it was possible· to riscertain and ·verify the relevant facts pertaining tO! these undertakings, t~y were taken over on payment of amounts mentioned in the Schedule to the Act, \\·hich varied from mine to mine depending upon

tbe· •al•c of their assets, their potential '"d their profitability. In the very nature of things, the list of mines in the Schedule oouid not be exhaustive because dlere were. and perhaps even now there are, unauthoric.ed mines worked by per- who did not JlOSSC&'! the semblance of a title or right to do mining business. ht.ons falling within that category cannot cite the Constitution as their charter c

(198,)j 3 S.t'.R. to continue to indulge in unauthorised mining which is unscientific, l)nsyste- matic and detrimental to the national interest by reason of its tendency to destroy the reserve of natural resources.

But alongside these persons, there couid conceivably be mine operators who may have been doing their business lawfully but who were not easily or readily identifiable. Section 3 (2) of the

Nationalisation Act, 1973 made provision for taking over the management of such mines by declaring for "the removal of doubts" that it, after the appointed day, the existence of.any other coal mine comes to the knowledge of the Central Government, the provisions of the Coal Mines (Taking Over of Management) Act, 1973, shall, until that mine is nationalised by an appropriate legislation, apply to such mine. Owners of mines whose mines were not included in the Schedule but whose right, title and interest was to vest eventually in the Central Government under "an appropriate legislati0n" envisaged by section 3 (2) of the Nationalisation Act were, by this method, placed on par with the owners of mines of which the management was taken over under the Coal Mines (Taking Over of Management) Ac~ 1973. That Act provides by section 7(1) that every owner of a coal mine shall be given by the Central Government an amount in cash for the vesting in it, under section 3, of the management of such mine.

By section 7(2), for every months during which the management of a coal mine remains vested in the Central Government, the amount referred to in sub-section (I) shall be computed at the rate of twenty paise per tonne . of coal on the highest monthly production of coal from such mine during any month in the years 1969, 1970, 1971 and 1972. The two provisos to that sub- section and the other sub-sections of section 7 provide for other matters relat .. ing to payment of amounts to the owners of coal mines of which the manage- m&nt was t~ken over. The Nationalisation Amendment Act carried the scheme of these two Acts to its logical conclusion by terminating the so-called lea8<!' and sub-leases which might have remained outstanding. [1087 G-H, 1088 A-G] Thus, the purpose attained by these Acts is (I) to vest in the Central . Government the right of management of aJ1 coal mines; (2) to nationalise the mines mentionell in the Schedule; (3) to provide for the taking over of manage- ment of coal mines the existence of which comes to the

knowledge of the Central Government after the appointed day and lastly (4) to terminate aJ1 mining leases. The Management Act and the Nationalisation Act provide for payment of amounts, by no means illusory, to the owners of coal mines whose rights were taken over.

In the normal course of human affairs, particularly business affairs, it is difficult to conceive that owners of coal mines who had even the vestige of a title thereto would not bring to the notice of the Central Government the existence of their mines, when such mines were not included in the Schedule to the Nationalisation Act. Those who did not care to bring the existence of their mines to the knowledge of the Central Government. even though amounts are pavable undet the Management Act for the extinguishment of the right of management did not evidently possess even the semblance of a titie to the mines. The claims of lessees, holding or allegedly holding under such owners, would be as tenuous as the title of their putative lessors. [1088 G-H, 1089 A-CJ

12. The Nationalisation Amendment Act by section 3(3)(b) undoubtedly terminates all existing leases a'nd sub-leases except those already granted in favour of persons referred to in clauses (i) to (iii) of section 3(3)(a) Simi~

la riv section 3(3) ra) imposes an embargo on all future coal mining operations except in regard to the persons mentioned. in clauses (i) to (iii). But the • .. y TARA PRASAD v. UNION

genefality of leases which are alleged to have rem.ained outstanding despite the coming into force of the Management Act and the Nationalisation Act, were mostly precarious, whose holders could at best present the familiar alibi that the origin of their rights or of those from whom they derived title was lost in antiquity. Neither in law, nor in equity and justice, nor under. the Constitution can these lessees be heard to complain of the termination of their lease-hold rights without the payment of any amount. The provision contained in section 3 (3) (b) of the Nationalisation Amendment Act was made ex maiore cautela so as not to leave any lease of a coal mine surviving after the- enactment of the Management Act and the Nationalisation Act. There was no reasonable possibility of a lawful lease surviving the passing of those Acts; but if, per chance, anyone claimed that he held a lease, that stood terminated under sec- tion 3(3)(b). [1089 C·G]

.K 13. Section 3(3) (b) of the Nationalisation Amendment Act brings about an extinguishment simpliciter of coal mining leases within the meaning of Article 31A(l)(e) of the Constitution. The termination of the mining leases and sub-leases brought about by section 3 (3 )(b) of the Nationalisation Amend- ment Act is not a mere pretence for the acquisition of the mining business of the IeSsees and sub-lessees. The true intent of the Nationalisation Amendment Act was not to "acquire" anyone's business. This would be so whether the word 'acquire' is understood in its broad popular sense or in the narrow technical sense which it has come to possess. Whatever rights were intended to be acquired were paid for by the fixation of amount or by the laying down of a formula for ascertaining amounts payable for acquisition. Having pro- vided .for payment of amounts for acquisition of management and oyvnership rights, it is unbelievable that the legislature resorted to the subterfuge of acquiring the mining business of the surviving lessees and sub-lessees by the device of terminating their leases and sub-leases. The legislative history lead- ing to the termination of coal-mining leases points to one conclusion only that, by and large, every lawful interest which was acquired· was paid for; the extin- guishment of the interest which survived or which is alleged to have survived the passing of the Management Act and the Nationalisation Act was provided for merely in order to ensure that no loophole was left in the implementation of the scheme envisaged by those Acts. Pen;ons dealt with by section 3(3)(b) of the Nationalisation Amendment Act are differently situated from those who were dealt with by the two earlier Acts, namely, the Management Act and th~ Nationalisation Act. No violation of Article 14 is, therefore, involved. [1089 G-1090 D·H, 1091 A·B]

14. The public purpose which informs the Nationalisation Amendment Act is the same which lies behind its two precursors, the Management Act and the National isatiOn Act. The purpose is to re-organise and re-structure coal n1ines so as to ensure the rational, co-ordinated and scientific development and utili- sation of coal re-..sources consistent with the growing requirements of the country. The Statement of Objects and Reasons of the Nationalisation Amendment Act points in the same direction. Public purpose runs like a continuous thread through the well-knit scheme of the three Acts under consideration. [1091 B-D]

· 15. Making every allowance in favour of the right to property which was available at the relevant time and having regard to the substance of the matter and not merely to the form adopted for terminating the interest of the lessees and the sub-lessees, the Nationalisation Amendment Act invol'ves no acquisition of the interest of the lessees and the sub-lessees. It merely brings abollt in c

[ 1980] 3 s.C.R. .'4 the language of Article 31A(l}(e) "the extinguishment" of their right, if any, to win coal. Whichever right, title and interest was lawful and identifiable was acquired by the Management

Act and the Nationalisation Act. And whichever interest was acquired was paid for. Tenuous and furtive interests which survived the passing of those Acts were merely extinguished b;.r the

Nationalisation Amendment Act. [1091 F-H, 1092 Al The interest of the lessees and sub-lessees which was brought to termination by· section 3(3)(b) oi the Nationalisation Amendment Act does not come to be vested in the State.

The Act provides that excepting a certain class of leases and sub-leases, all other leases and sub-leases shall stand terminated in so far as they relate to the winning or mining of coal. There is no provision in the Act by which the interest so terminated is vested in the State; Nor does such vesting flow as a necessary consequence of any of the provisions of the ·c

Act. Sub-section (4) of section 3 of .the Act provides that where a n1ining lease stands terminated under sub-section (3), it shall be la\vful frir the Central Government ot a Government Company or a corporation O\\'ned or controlled by the Central Government. to obtain a prospecting licence or a mining lease in respect of the whole or part of the land covered by the nlining lease which stands so terminated. The plain intendment of the Act, which. is neither a pretence nor a facade, is that once the· outstanding leases and sub-leases are 1 D

terminated, the -Central Government and the other authorities will be free to apply for a mining lease. Any lease-hold interest which the Central Govern- ment, for example, may thus obtain does not directly or

immediately flow from the termination brought about by section 3 (3 )(b). Another event has to intervene between the termination of existing leases and the. creation of new interests. The Central Government etc. have to take a positive step for obtaining a prospecting licence or a mining lease. WithOut it, the Act would be ineffec- tive to create of its own force any right or interest in favour of the Central Government, a Government Company or a CorpG\fation owned, managed or controlled by the Central

Government. The essential difference between "acquisition by the State" on the one hand and •''modificatjon or extinguish- ment of rights" on the other, is that in the first case the beneficiary is the State while in the second the beneficiary is not the State. The

Nationalisation Amendment Act merely extinguishes the rights of the lessees and the sub- (f lessees. It does not provide for the acquisition of those rights, directly or indirectly, by the State. Article 31Ai(2A) will therefore come into play. It follows that the Nationalisation Amendment Act must receive the protection of Article 31A(l)(e) of the Constitntion, that is to say, that the Act cannot be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Articles 14, 19 and 31. [1092 F-H, 1093 A-HJ

Ajit Singh '" State of Punjab [1967]1 2 SCR 143; Mad~n Mohan Pathak v. Union of India & Ors. [19781 3 SCR 334 discussed and distinguished. D1varkadas Shrinivas v. The Sholapur Spinning & Weaving Co. Ltd. [19)41 SCR 674, 733-734 applied.

ORIGINAL JURISDICTION: Writ Petitions Nos. 111, 150-151, 180, 205-210, 220, 226, 270-271, 346-352, 355, 403, 396-398, 599, 541, 543, 626, 635-639, 661, 687-692 and 758/77, 154, 178, 571-574, 600, 603, 605, 610, 611, 257, 221 and 1130-1134/77.

r t i) ,. TARA PRASAD v. UNION (Under Article 32 of the Constitution) A. K. Sen, S. C. Banerjee, Y. S. Chitale, K. K. Sinha, S. K. Sinha, Pradeep Hajela, S. K. Verma, A. K. Srivdstava, M. P. !ha, C. K. Ratna- parkhi, B. N. Lala, Surajdeo Singh, D. P. Mukherjee and A. K. Ganguli for the Petitioners in W.Ps. Nos. 111, 150-151, 154, 178, 610-611 661, 180, 270-271, 599, 220, 226, 205-210,. 396-398 and 600 of 1977.

H. M. Seervai, Kamal Nayan Choubey, A. K. Srivastava, B. P. Singh and Bimal Kumar Sinhaj for the Pe~tioners in WP Nos. 237, 571-574, 603, 605, 355, 346 of 1977. D. Goburdhan for the Petitioners in WP Nos. 687, 692, 635-639, 352, and Respondent No. 12 in WP Nos. 150-151/77.

A. K. Sen, S. C. Bannerjee, Y. S. Chitale, S. B. Sanyal;. A. K. Banerjee and A. K. Nag for the Petitioners in WP Nos. 626, 541, 543 and Respondent No. 15 in WP 154/77. S. V. Gupte, S. N. Kacker, U. R. Lalit, S. P. Nayar, R. N. Sachthey and Gobind"M'ukhoty for the Respondents Nos. 1; 9-12 in WP No. 111, RR. 1, 7, 11 in WP Nos. 150-151, RR. 1, 8 to 12 in WP. 154, RR. 1&7 in WP. 178, RR. 1&7 in WPs. 610-611RR.1,5,6&8 in WP. 661, RR. 1 & 7 in WP Nos. 270-271, RRJ & 7 in WP in 599, RR. 1, 8, 9-12 & 15 in WPs. Nos 571-574, RR. 1, 8-13 & 16 in WP No. 603. RR. 1, 2 & 9 in WP 605, RR. 1, 2, 10, 11, 14 & 15 in WP. 355, RR. 1, 8-12 in WP 346, RR. 1, 3-5, 8, 9 in WP No. 626, RR. 1, 6-10 & 14 in WP. 541, RR. 1-5 & 9 in WP. 543, RR. 1, 8 & 12 and 15 in WP. 758, RR l, 7 in WP. 257, RR. 1&7 in WPs. 220 and 226 RR. 1&8 in WP~. 205-210, RR. 1&8 in WP. 600, RR. 1, 3, 11-1,5 in WP 403, RR. 1, 9 & 10 in WP No. 180/77.

Lal Narain Sinha, U. P. Singh, Shambhu Nath !ha and U. S. Prasad for the Respondents Nos. 2-8 in WP Nos. 111, 2-7 in 154, 2-6 in 610-611, 2-4, 7 & 8 in 661, 2-8 in 180, 2~6, ,10-12 in 270-271, 2-6 and 10-13 in 599, 2-7 in 571-574, 2-7, 14-15, 17-20 & 23 in 603, 2-7 in 605, 3.,_8, 12, 13, 16-18.;in 335, 2-6 in 687-692, 2-6 in 635-637, 2-6 in 352, 2, 6, 7 & 10 in 62Q, 2-5, 11-13 in 541, 6-8 in 543, 2-6 ln 758/77, 2-7, 13, 14 & 16 in 257, 2-6 in 220 and 226, 2-6, 13, 14 in 205-210, 2-7 in 600, 2-6 in 638-639, 2, 4 to 10 in 403/77. c

:~<r Mr. P. ~- Khera for Intervener No. 1 in WP. 111/77. S. K. Verma for the Intervener No. 2 in WP. 111/77, A. P. Chatterjee and G. S. Chatterjee for Respondents 2 & 6 in II WPs. 150-151 & 2 to 6 in 396-398/77.

M. p. Iha for the Petitioner in WP. No. 758/77. c (1980] 3 S.C.R. The Judgment of the Court was delivered by CHANDRACHUD, C. J.-This is a group of 61 Writ Petitions under article 3 2 of the Constitution challenging the validity of the Coal

Mines (Nationalisation)" Amendment Act 67 of 1976, on the ground that it is violative of the provisions of articles 14, 19(1){f), 19(1) (g) and 31 of the Constitution. For understanding the basis of that challenge, it will be enough to refer to the broad facts of two repre- sentative groups of petitions. The facts of writ petitions 270 and 271 of 1977 are, by and large, typical of cases in which the petitioners claim to be lessees of coal mines, while the facts of writ petition 257 of 1977 are typical of cases in which the petitioners claim to be lessees of composite mines containing al!ernate seems of coal and fireclay. Most of the facts are undisputed. and only a few of them are in con- troversy.

In writ petitions 270 and 271 of 1977, petitioner No. 1 claims tci be the sole proprietor of 'S.D. Coal Company' which is ~ngaged in coal business and coal mining operations. Petitioner No. 2 is said to be the agent of the company. Both the surface and underground rights in Monza Bundu in the District of Hazaribagh, Bihar, previously belonged to the Raja of Ramgarh from whom or whose successors-in- interest, the South Karanpura Coal Co. Ltd. appears to have obtained a lease of 242 Bighas of coal bearing lands in Monza Bundu, called the 'Bundu Colliery'. After the enactment of the Bihar Land Reforms. Act 30 of 1950, all rights of tenure-holders landlords and Zamindars, including the rights in mines and minerals, vested in the

State of Bihar but, by virtue of section lO of that Act, subsisting leases of mines and minerals in any estate or tenure became leases under the State Government. It is alleged that on 12th June, 1975 the South Karanpura Coal Co. Ltd. entered into an agreement with the S. D. Coal Company or prospecting, developing, raising and

selling coal from the Bundu Colliery and .that on the strength of that agreement, petitioner No. 1 was put in possession of the entire area of 242 Bighas of coal be~ring land. The S. D. Coal Company is stated to have made large investments in the colliery and to have started paying rents and royalty to the S!'i\te of Bihar. The petitioners have cited various facts and figures in support of their contention that they have been in work- ing possession of the cpal mine area in question and that they were entitled to remove nearly 30,000 tonnes of coal raised by them at a heavy cost. It appears that in a proceeding under section 144 of the' Criminal Procedure Code, the Sub-divisional

Magistrate (Sadar), Hazaribagb, had made the rule absolute against the South Karanpura Coal Co. Ltd. as well as the S. D. Coal Company, on the ground that t y TARA PRASAD v. UNION (Chandrachud, C.l.)

105 7 the State Government had taken over the Bundu Colliery. But, in C.R. Case No. l83l8(W) of 1975, the High Court of Calcutta is stated to have set aside the order of the State Government cancelling the lease of petitioner 1 in respect of the Bundu Colliery. Since that

'lease stands terminated under the Coal, Mines (Nationalisation) Amendment Act 1976, the petitioners have filed writ petitions to challenge the validity of that Act. ' On the factual aspect, the contention of the State of Bihar is that the lease of the Bundu Colliery which was held by M/ s South Karan- , pura <;:oal Co. Ltd. was

terminated by the Bihar Government on November 24, 1975 on account of ,the violation of Rule 37 of the Mineral Concession Rules; 1960 and that, actual possession of the colliery was taken by the State Government on November 26, 1975 prior to the coming into force of the Amendment Act of 1976. In writ petition No. 257 of 1977, the petitioner Nirode Baran Banerjee made an application dated September 17, 1966 for the grant of a mining lease in respect of fireclay covering an area of 1640.60 acres of the Hesalong Colliery.

On September 19, 1966 he made a similar application in respect of the same area, for a coal mining lease. These applications were deemed to have been rejected since the State Government did not pass any order thereon within the prescribed period. In a Revision application preferred by the petitioner, the Central Government directed the State Government to consider the petitioner"s application for the grant of a mining lease in respect of fireclay.

The dispute relating to the petitioner's application for a coal mining lease was brought to the Supreme Court, as a result of which the Central Government on April 1, 1972 directed the State Govern- ment to grant a coal mining lease to the petitioner. On October 17, 1973 a formal lease was executed by the State of Bihar in favour of the petitioner in respect of both coal and fireclay.

The lease was registered on October 18. According to the petitioner, the Hesalong Colliery in respect of which he holds the mining lease for coal and fireclay is situated in an interior area of the hilly portion of the District of Hazaribagh which has its own peculiar nature, trait and character. The reserves of coal in the area are said to be in isolated small pockets and are net suffi- cient for ~cientific or economical development in a co-ordinated and integrated manner.

The coal is ungraded and is not required to be transported by rail. c On the composite nature of the mine, the petitioner has made a ~pecific averm·ent in paragraph 6 of his writ petition to the following effect :

c The coal and fireclay deposits in the said area are so mixed up that one cannot work either for extraction of coal or for extraction of fireclay without disturbing each of the said two minerals.

The deposits are such that at one layer there is coal, the next layer is fireclay, the other layer is coal, the next layer is again fireclay and so on. In paragraph 15 of his writ petition the petitioner has stated that in the Hesalong Mines, the deposit of fireclay is spread over the entir~' area of 1640.60 acres in the first layer and just beneath that, there is a deposit of coal in the second layer, so on and so forth. According to the petitioner, it 1s absolutely impossible to carry on mining opera- tions in coal without disturbing the fireclay and any such disturbance and inadvertent extraction of either coal or fireclay by different lessees, if the composite lease is split up, will amount to unauthorise mining. The petitioner contends that he employs about 9,000 workers, has invested a huge amount for making the colliery workable and that a large amount of coal, which

was lying exposed and unprotected, was ready for despatch. Since his composite lease too was in jeopardy under the Amendment Act, he filed a writ petition in t]lis Court to challenge the validity of the Act, contending in addition that the Act is not applicable to composite mines having alternate layers of fireclay and coal.

Some of the petitioners had filed writ petitions in the High Courts under article 226 of the Constitution challenging the validity of the Amendment Act of 1976. Rules were issued in those petitions and interim orders were passed under which the status quo was maintained on certain terms and conditions. After

the passing of the 42nd Constitution Amendment Act, the High Courts became incompetent to grant any relief in (hose petitions whereupon, writ petitions were filed in this Court. The petitions were argued on behalf of the

petitioners by Shri A. K. Sen, Shri H. M. Seervai, Shri Y. S. Chitale, Shri B. K. Sinha, Sbri D. Goburdhan and Shri A. K. N'ag. The Attorney General argued in support of the validity of the impugned Act and so did the Solicitor General, appearing on behalf of the Union of India.

Shri Lal Naraiq. Sinha and Shri A. P. Chatterjee argued respectively on behalf of the State of Bihar and the State of West Bengal. Shri P. S. Khera and Shri S. K. Verma appeared on behalf of the interveners.

Before examining the contenJions advanced before us by the yarious learned counsel, it will be useful to trace briefly the history of laws bearing on the working of mines and exploitation of ·minerals,' f·

y TARA PRASAD v. UNION (Chandrachud, C.J.) the taking over of management and the nationalisation of mines and ' :finally the termination of certain leases under the impugned Act. According to "India 1976" (Publications Division,_ Ministry of

Information and Broadcasting, Government of India), coal mining was first started at Raniganj, We§t Bengal, in 1774. Coal is an important mineral as a source of energy and in India it constitutes a prime il!lrce of energy. On the. attainment of independence, the importance d coal to industrial development was realised by the Planners and the problems of the coal industry were identified by the Planning Com- mission in its report on the First Five Year Plan.

The Fifth Plan provided for a production target of 13.5 million tonnes of coal by 1978-79, which amounted to an increase of 5.7 million tonnes from the level of production of 7.79 million tonnes at the' end of the Fourth Five Year Plan.

In ·1950, after coal mining was stepped up, the pro- <luction was 32 million tonnes. In 1974-75 it reached a record figure ·of 88.4 million tonnes. The overall reserves of coal, both coking and non-coking were estimated in 1976 at 8,095 crore tonnes.

But, howsoever high the coal reserves may be, they are not in- , exhaustible, which underlines the need for a planned development of the natural resources. ·The reckless and unscientific methods of min- ing whicl) were adopted by most of the colliery owners without regard to considerations of conservation of the mineral and safety and welfare ·of workers led the Parliament to pass various legislations on the subject in the light of its accumulated. experience. The coking coal mines were nationalised in

1972 and _the non-coking coal mines were nationalised in the following year. The production of coal in the country is now almost completely controlled by the public sector with the exception of isolated pockets wherein res.erves are not sufficient for scientific and economical development and the production is con- sumed locally.

The only important mines which are not nationalised are the captive coking coal mines of the two private sector Steel Com- panies coking coal being a vital ingredient in the production of Steel. c

·g The production of coal in the public sector is organised through three companies : the Coal Mines Authority Ltd., the Bharat Coking Coal Ltd., and the Singareni Collieries Company Ltd.

holding company, Coal India Limited, was formed in 1975 incorporating the ·Coal Mines Authority, the Bharat Coking Coal and the Coal Mines Planning and Design Institute as. separate Divisions, besides other

·subsidiaries. Entry 23 List II, Schedule VII of the Constitution read with article 246(3) confers legislative Power on the State legislatures in respect of c "Regulation of mines and mineral development" but that power is "sub:ject to the provisions of List I with respect to regulation and · development under the control of the Union".

Entry 54 List I enables Parliament to acquire legislative power in respect of "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parlia- ment by law to be expedient in the public interest".

Entry 24 List U relates to "Industries subject to the provisions of entries 7 and 52 of List I". Entry 7, List I, relates to Industries declared by Parliament by law to be necessary for the purpose of defence or for the prose- cution of war. Entry 52, List I, enables Parliament to acquire legis- lative power in respect of "Industries, the control of which by the·

Union is declared by Parliament by law to be expedient in the public interest". The Industries (Development and Regulation) Act, 65 of 1951,. which came into force on May 8, 1952 contains a declaration in sec- tion 2 that it was expedient in the public interest that the Union should take under its control the industries specified in the First Scliedule. Item 2( 1) of the First Schedule comprises 'coal, lignite, coke and their derivatives' under the heading 'Fuels'. The Act

provides for the establishment of a Central Advisory Council and Development Counci!_s, registration and licensing of industrial undertakings, the assumption ot managem\lllt or control of industrial undertakings by the Central GoV'- ernment control of supply, distribution and price of certain articles, etc. The Mines Act, 35 of 1952, which came into force on July 1,. 1952, was passed by the Parliament in order to amend and consolidate the law relating to the regulation of labour and safety in mines. That

Act was evidently p1ssed in the exercise ~f power under Entry 5 s·, '.List I, "Regulation of labour and safety in mines and oil fields". The Mi'nes and Minerals (Regulation and D~lopment) Act;

67 of 1957, which came into force on June 1, 1958 was passed in order to provide for the regulation of mines and the development of minerals under the control of the Union. Section Z of that Act con-

tains a declaratioh that it was expedient \n the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. The

Act provides, inter alia, for general restrictions on uhdertaking pro- specting and mining operations, the procedure for obtaining prospec- ting licences or mining leases in respect of lands in which. the minerals vest in the Government, the rule making power for

regulating the grant of prospecting licence-s and_ mining leases, special powers of f ' TARA PRASAD v. UNION (Chandrachud, C.l.) Central Government to undertake prospecting or mining operations in certain cases, and for devel<1>ment of minerals.

There was a lull in legislative activity in regard to the enactment of further regulatory measures for controlling mines and minera!B. The Coking Coal Mines (Emergency Provisions) Ordinance, 12 of 1971, was passed on October 16,

1971. It was replaced by the Coking Coal mines (Emergency Provisions) Act, 64 of 1971, which received the President's assent on December 23, 1971 but was given retrospective operation from the date of the Ordinance.

Tile Act was passed to provide for the taking over, in the public interest, of the management· of coking coal mines and coke oven plants, pending nationalisation of such mines and plants. By section

3 (1), the .management of all coking coal mines vested in the Central Govern- ment from the appointed day-October 17, 1971., Section 6(1) provided that every owner of coking coal mine shall be given by the Central Government an amount, in cash, for vesting in

it, under section 3, the management of such mine.. Such amount was tO be calculated in accordance with the provisions of section 6(2). The Coking Coal Mines (Nationalisation) Act, 36 of 1972, was passed

in order, inter aUa, to provide for the acquisition and transfer of the right, title and interest · of the owners of the coking mines and coke oven plants. Sections 30 and 31 ,of that Act dealing respectively with penalties, and offences by companies came into force at once but the remaimng provisions were deemed to have come into force on May 1, 1972. Section 3(c) defines "coking coal mine" to mean-

"a coal mine in which there exists one or more seams of coking coal, whether exclusively or in addition to any seam c of other coal". By section 4(1) the right, title and interest of the

owners in relation to the coking coal mines specified in the First Schedule shall stand transferred to, and shall vest absolutely in, the Central Govern- ment, free from all incumbrances. By section 4(2), after the appoint- ed day, that is May 1, 1972 if any other coal mine was found to contain coking coal the provisions of the Coking Coal Mines (Emer-

gency Provisions) Act, 1971 were to apply to snch mine until it was nationalised by an appropriate legislation. By section 6 (1), the Central Government becomes the lessee of the State Goxemment where the rights of the owner under any mining lease granted in relation to a coking coal mine by the State Government or any other person, vest in the Central Government under section 4. Section 7(1) empowers the Central Government to direct that the right, title and interest of (1980] .3 S.C.R.

the owners in relatiob to coking coal mines or coke oven · plants. shall vest in a government company. Sootions 10 and 11 of the Act provide for payment of the amonnts to owners of the coking

coaf mines and coke oven plants for the vesting of their right, title and · ibte1pt in the Central Government. c By an Amendment Act, 56 of 1972, which came into force on September 12, 1972, section 4A was added to the Mines and Mine- rals (Regulation and Development) Act 1957. That section provides for premature termination of mining leases and the grant of fresh leases to Government companies or Corporations owned or controlled by Government.

The Coal 1Mines (Taking Over of Management) Act, 15 of 1973, which received the assent of the President ob March 31, 1973 was given retrospective effect from January 30, 1973 except section S (2) which came into force at once.

The Act was passed in order "to provide for the taking over, in the public interest, of the manage- ment of coal mines, pending nationalisatio'n of such mines, with a • view to ensuring rational and co-ordinated development of coal. pro- duction and for promoting optimum utilisation of the coal resources consistent with the growibg requirements of the

country, and for matters connected therewith or incidental thereto." Section 2(b) of the Act defines a "coal mine" to mean a mine "in which there exists one or more seams of coal."

Section 3 ( 1) provides that on and from the appointed day (that is, January 31, 1973) the ma·nagement of all coal mines shall vest in the Central Government. By section 3(2), the coal mines

specified in the Schedule shall be deemed to be the coal mines the management of which shall vest in the Central Government under sub-section (1 ). Under the proviso to sectiob 3(2), if, after the

appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, it shall by a notified order make a declaration about the existence of such mine, upon which the management of such coal mine also vests ib the Central Government and the provisions of the Act become applicable thereto. Section 3(5) casts an obligation on every person in charge of the manage- ment of a coal mine, immediately before the date on which the Act received the assent of the President, to intimate the Cenkal Govern- ment within 30 days from the said date the name and location of the mine as. well as the name and the address of the owner, if the mine is not included or deemed to be included in the Schedule. All contracts providing for the management of any coal mine made be- fore the appointed day between the owner of the mine and any per- > 1

TARA PRASAD v. UNION (Chandrachud, C.J;) sen in charge of the mine and any person in charge of the management thereof are to be deemed to have been termlnatd on the appointed· day, under section 4, Section 6(1) empowers !he Central Govern- ment to appoint Custodians for the purpose of taking over of the management of the mines.

Sectidn 7(1) provides that every owner of a coal mine shall be given by the Central Government an amount in cash for the vesting in it under section 3, of the management of such mine. Section 18 (1) (a) excludes from the operation of the Act any coal mine owned, managed or controlled by the Central Govern- ment, or by a Government Company or by a corporation which is owned, managed or controlled by the Government. Clause · (b) of sectio'n 18 (I) also exclude5 from the operation of the Act a coal mine owned by or managed by a company engaged in the production of iron and steel.

The Coal Mines (Nationalisation) Act, 26 of 1973, was given retrospective operation with effect from May 1, 1973 except sections 30 and 31 which came into force at once. This Act was passed,

"to provide for the acquisition and transfer of the right, title and interest of the owners in respect of the coal mines specified in the Schedule with a view to re-organising and reconstructing such coal mines so as to ensure the

rational, co-ordinated and scientific development a'nd utili- sation of coal resources consistent with the growing require- ments of the country, in order that the ownership and con- trol of such resources are vested in the State and thereby so distributed as best to subserve the common good, and or

matters connected therewith cir incidental thereto." Section 2 (b) defines a coal mine in the same way as the corres- ponding provision of the Management Act viz., a mine "in which there exists one or more seams of coal,'' Section 3 ( 1) provides th~t on the appointed day (that is, May I, 1973) the right, title and interest of the owners· in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in the Central Government free from all incumbrances.

Section 4(1) pro- vides that where the rights of an owner under any mining lease grant- ed, or deemed to have been granted, in relation to a coal mine, by a State Government or any other person, vest in the Central Govern- ment under section 3, the Central Government shall, on and from the date of such vesting, be deemed to have become the lessee of the State Government or such other person, as the case may be, in relation to such coal mine as if a mining lease in relation to such coal mine had been grantee,! to the Central Government.

The period of such lease [1980] J S.C:R. is to be the entire period for which the lease could have been granted ·by the Central Government or such other person under the Mineral Concession Rules and thereupon all the rights under the mining lease granted to the lessee are to be deeme.d to have been transferred ~, and vested in, the Central Government. By section 4 (2), on the expiry of the term of any lease referred to in sub-section (I), the lease, at .B

the option of the Central Government, is liable to be renewed on the same terms a'nd conditions on which, it was held by the lessor for the maximum period for which it could be renewed under the Mineral Concession Rules.

Section 5 ( 1) empowers the Central Government under certain conditions to direct by an order in writi:ng that the right, title and interest of an owner in relation to a coal mine shall, ·c · instead of continuing to vest in the Central Government, vest in the Government company.

Such company, under section 5 (2), is to be deemed to have become the Jessee of the coal mine as if the mining lease had been granted to it. By section 6 ( 1), the property which vests in the Central Government or in a Government company is freed and discharged from all obligations and incumbrances !lffecting it. The mortgagees and other holders of incumbrances are required by section 6(2) to give intimation thereof to the Commissioner within the prescribed time.

Section 7 ( 1) provides that the Central Govern- me'nt or the Government company shall not be liab:~ to discharge any liability of .the owner, agent, manager or managing contractor of a coal mine in respect of any period prior to the appointed day. Sec- tion 8 requires that the owner of every coal mine or group of coal mines specified in the second column of the Schedule ~all be given by the Central Government in cash and in the manner specified in Chapter VI, for the vesting in it under section 3 of the right, title and interest of the owner, an amount equal to the amount specified 'F

against it in the corresponding entry in the fifth column of the Sche- dule. By secti0n 11 ( 1), the general superintendance, direction, con- trol and management of the affairs and business of a coal mine, the right, title and interest of an owner in relation to which have vested in the Central Government under section 3, shall vest in the Govern- ment compa'ny or in the Custodian as the case may be. For the ·G

purpose of disbursing the amount payable to the owner, the Central 1 Government is reqnired by section 17 (1 ) to appoint a Commissioner of Payments. By section 18 (1 ) , the Central Goverrnnent shall with- in thirty days from the specified date, pay, in cash, to the Commis- sioner for payment to the owner of a coal mine, an amount equal to the

amount specified against the coal mine in the Schedule and also ·n such sums as may be due to the owner under section 9. Section 26(1) provides that if out of the monies paid to the

Commissioner, any balance is left after meeting the liabilities of all the secured and un- f • ,.. y TARA PRASAD v. UNION (Chandrachud, C.J.) secured creditors of the coal mine, he shall disburse the same to the owner.

The Coal Mines (Nationalisation) Amendment Ordinance which was promnlgated on April 29, 1976 was replaced on May 27, 1976 by the Coal Mines (Nationalisation) Amendment Act, 67 of 1976. The Amendment Act consists of five sections by which certafu amend- ments were introduced into the Principal Act, namely, the Coal Mines (Nationalisation)

Act, 26 of 1973. The Statement of Objects and Reasons of the Nationalisation Amendment Act reads thus : "After the nationalisation of coal miries, a number of persons holding coal mining leases unauthorisedly started

mining of coal in the most reckless and unscientific manner without regard to considerations of conservation, safety and welfare of workers. Not only were they resorting to slaughter mining by superficial working of outcrops and thereby

destroying a valuable national asset and creating problems of water-logging fires, etc. for the future development of the deeper deposits, their unsafe working also caused serious

and fatal acc.idents. They were making larger profits by paying very low wages, and by not providing any safety and Welfare measures. Thefts of coal from adjacent nationalised mines were also reported after the commencement of these

un;mthorised operations which had shown an increasing trend of late. Areas where illegal and unauthorised opera- tions were carried on, were without any assessment of reserves in regard to quality and quantity of coal which

could be made available after detailed exploration work was undertaken and results analysed. No scientific exploitation of these deposits could be undertaken in the nationalised sector without these details.

It was, therefore, considered tljat it would not be appropriate either to nationalise these unauthorisedly worked mines after taking them over under the Coal Mines (Taking Over of Management) Act, 1973

or to get the concerned mining leases prematurely terminated · and regranted to Government Companies under the Mining and Minerals (Regulation and Development) Act, 1957. In view of the policy followed by the Central Government

that the Coal Industry is to be in the nationalised sector, it was decided that the Coal Mines Nationalisation Act, 1973 should be enacted to provide for termination of all privately held coal leases except those held by privately owned steel companies, so that it may be

possible for the Central Government, Government company or Corporation to take 9-610SCI/80 c [J 980] 3 S.C R. mining leases where necessary, after the necessary explora- tion has been made as to the extent of the deposits of coal, etc".

c Sections 2 and 3 of tl)e Nationalisation Amendment Act were brought into operation with effect from April 29, 1976. By section 2 of !he Amendment Act a new section, section IA, was introduced under Sub-section (I) of which it was declared that it was expedient in the public interest that the. Union should take under its control the regu- lation and development of coal mines to the extent provided in sub- sections 3 and 4 of section 3 of the Nationalisation Act and sub-

section 2 of section 30. By sub-section 2 of section IA, the declara- tion contained in sob-section (I) was to be in addition to and not in derogation of the declaration contained in section 2 of the Mines and Minerals (Regulation and Development) Act, 1957.

By section .3 of the Amendment Act a new sub-section, namely, sub-section 3, .was introduced in section 3 of the principal Act. Under clause (a) of the newly introduced sub-section 3 of section 3, on and from the com- mencement of section 3 of the Amendment Act no person other than (i) the Central Government or a Gove=ent company or a corpora- tion owned, managed or controlled by the Central Government, or (ii) a, person to whom a sub-lease, referred to in the proviso to clause ( c) has been granted by any such Government, company or corpora- tion, or (iii) a company eng;iged in the production of iron and steel, shall carry on coal mining operation, in India, in any form. Under

clanse (b) of sob-section 3, excepting the mining leases granted be- fore the Amendment Act in favour of the Government, company or corporation referred to in clause (a), and any sub-lease granted by any such Government, company or corporation, all

other mmmg leases and sub-leases in force imm~diately before such commence- ment shall in so far as they refate to the winning or mining of coal, stand terminated. Clause (c) of the newly introduced ·sub-section 3 of section 3· pro~des that no fease for winning or mining coal shall be granted in favour of any person other than the Government, com- pany or corporation referred to in clause (a). Under the proviso to cla,use ( c), the Government, the company or the corporation to whom a lease for winning or mining coal has been granted may grant a sub- lease to any person in any area if, (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientifu: and economical. development in a co~ordinated and integrated manner, and (ii) the coal produced by the sub-lessee will not be required to be transported by rail. By sub-section 4 of section 3, where a mining lease stands terminated under sub-section 3, it shall be lawful for the Central Government or a Government company or corporation owned .f

TARA PRASAD v. UNION (Chandrachud, C.J.) or controlled by the Central Government to obtain a prospecting licence or mining lease in respect of the whole or part of the land covered by the mining lease which

stands terminated. Section 4 of the Amendment Act introduces an additional provision in Section 30 of the Principal Act by providing that any person who engages, or causes any other person to be engaged, in winning or mining coal from the whole or part of any land in respect of which no valid prospecting licence or mining lease or sub-lease' is in force, shall be punishable with imprisonment for a term which may extend to two 'years and also with fine which may extend to ten thousand rupees.

Section 5 of the Nationalisation Amendment Act repeals the Coal Mines (Nationalisa- tion) Amendment Orditlance, 1976. As stated at the beginning of this Judgment, we are concerned in these writ petitions to determine the validity of the Coal Mines Nationalisation (Amendment) Act, 67 of 1976, to which we will refer as 'The Nationalisation Amendment Act'.

Shri Seervai, who appears on behalf of the petitioners in writ peti- tion No. 257 of 1977, challenges the legislative competence of the Parliament to enact the Nationalisation Amendment Act. Article 246 (1) confers upon the Parliament, notwithstanding anything contained in clauses 2 and 3 of that Article, the exclusive power to make laws with respect to any of the matters enumerated in List I of the Seventh Schedule, called the 'Union List'. Clause 2 of Article 246 deals with the power of the Parliament and the State Legislatures to make laws with respect to any of the matters enumerated in the Concurrent List, while clause 3 deals with the power of the State Legislatures to make laws with respect to any of the matters enumerated in the State List. The relevant entries in List I are Entries 52 and 54 which read th.us :

Entry 52 :-Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. Entry 54 :-Regulation of mines and mineral develop-

ment to the extent to. which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the pnblic interest. Entry 24 of the State List reads thus :

Entry 24 :-Industries subject ot the provisions of entries 7 and 52 of List I. c [1980] 3 $.C.R. We are not concerned here with Entry 7 of List I which relates to 'Industries declared by Parliament by law to be necessary for the pur- pose of defence or for the rrosecution of war'.

c p Shri Seervai's argument runs thus : (a) Laws made in the exercise of power conferred by Entry 54 must stand the test of public interest because the very reason for the Parliament acquiring power

under that entry is that it is in public interest that the regulation of mines and minerals should be under the control of the Union. In other words, Entry 54 con- fers a legislative power which is purposive, that is to

say, an:yi law made in the. exercise of the power under Entry 54 must be designed to secur.e the regulation and development of coal mines in public interest or else it must fail. The Nationalisation Amendment Act

is not such a law which Parliament can pass under Entry 54 because, that Act not only terminates all leases but it destroys the contracts of service of thousands of workmen, and indeed it destroys all other

contracts and all securities for moneys lent without even so much as making a provision for priorities for the payment of debts. Since the Nationalisation Amendment Act terminates all leases, it is a complete

negation of the integrated scheme of taking over the management of mines, acquisition of the rights of lease-holders and the running of the mines. (b) The word 'Regulation' in Entr:yi 54 does not include

'Prohibition'. 'Regulation' should not also be con- fused with the expression 'Restrictions' occurring in Article 19(2) to ( 6) of the Constitution. In the very nature of things, there cannot be a power to prohibit

'the regulation and development of mines and mine- rals'. Section 3( 4) inserted by the Nationalisation Amendment Act imposes no obligation on the Central Government or ai;zy other authority to obtain a mining

lease and work the mines, the leases in respect of which stands terminated under the Act. The words "it shall be fawful" for the Central Government to obtain a lease are words of discretionary power which

create no obligation. They only enable the Central Government to obtain a lease, making something legal and possible for _which there would otherwise be no TARA PRASAD v. UNION (Chandrachud, C.1.)

right or authority to do. Section 3 ( 4) does not con- fer a power coupled with a duty; it merely confers a faculty or power. No Court can by a Writ of Manda- mus or otherwise compel the Central Government to

obtain a lease of a coal miue and to run it under any of the provisions of the Nationalisation Amendment Act. ( c) Where the Legislative power is distributed among different legislative bodies, the Lel!islature may trans-

gress its legislative power either directly or manifestly, or covertly or indirectly. In the instant case, the exer- cise of power by the Parliament is colourable because although in passing tile Nationalisation Amendment

Act it purported to act within the limits of its legisla- tive power, in substance and in reality it transgressed that power, the transgression being veiled by what appears on proper examination to be a mere pretence

or dis~se. ( d) In order to tear off the veil or dis~se and in order to get at the substance of the law behind the form, the Court must examine the effect of the legislation and take into consideration its object, purpose and design,

Where the legislative entry is purposive, like Entry 54 of the Union List, it is the object or purpose of the legislation which requires consideration. The purpose for which the Parliament is

permitted to acquire legislative power of Regulation and Development of mines must dictate the nature of law made in the exercise of that power because public interest demands' that power. Under the provisions of the Nationalisa-

tion Amendment Act, not only is there no obligation on the Central Government to run a mine, but there is no ob'ligation imposed upon it even to carry out prospecting or investigation in order to decide whether

a particular mine should be worked at all. Section 3 ( 4) merely authorises the Central Government to apply for "a prospecting licence or a mining lease in respect of the whole or part of the land covered by the

mining lease which stands determined". A close examination of the Act thus discloses that far from providing for regulation and development of coal mines, it totally prohibits all mining activity even if

the State Government wants to run a mine. It does c c . 1070 Sill'JUIME COURT REPORTS not impose prohibition as a step towards running the mines since there is neither any obligation to carry out

the prospecting or inve~tigation nor to run the mines. (e) The . Nationalisation Amendment Act runs directly counter to the whole policy of the Coal Mines (Nationalisation) Act of 1973, to acquire and run the

mines. The Parent Act becomes a dead letter in regard to several of its provisions as a result of the amendment Act. It only adopts a colourable device to amend the Nationalisation Act while completely

, negativing it in fact. The Act therefore lacks legisla- tive competence and is, in the sense indicated, a colourable piece of legislation. (f) Article 3l(A)(l)(e) only lifts a restriction on the

legislative competence in so far as violation of funda- mental rights js concerned. The most benign motive cannot make a law valid if the legislative competence is lacking. In support of his submission that the provisions of the Nationalisa- tion Amendment Act are not conceive.ct in public interest and therefore they transgress the limitations of Entry 54, List I, learned counsel relies on the circumstance that whereas the Coal Mines Management Act and the Coal Mines Nationalisation Act of 1973 contain elaborate pre- ambles, the Amendment Act contains no preamble setting out the mischief to be remedied or the benefit to be secured, for which the parent ·Act had failed to provide.

At first blush, it is said, it would appear that the preamble to the parent Act . can be read into the Nationalisation Amendment. Act but that is impermissible since that preamble provides for acquisition and running: of the mines and can have no application to an Act which provides for termination sirnpli- citer of all mining leases. The preambles to the Management Act and the Nationalisation Act are said to be signific'lnt in that they show that those Acts were enacted in public interest with a view to rational and co-ordinated development of coal production and for promoting the · optimum utilisation of coal production consistently with the growing requirements of the country. Learned counsel has also compared and contrasted the provisions of these two Acts with the provisions of the Nationalisation Amendment Act for making good his point that the Iittter serves no public interest since it merely terminates all existing leases. The contrast, it is argued, is· also ·provided by section 4A of the Mines and Mineral Regulation and Development Act 1957 which, while providing for premature termination of mining leases, requires that y

TARA PRASAD v. UNION (Chandrachud, C.J.) such termination has to be followed by the granting of a fresh mining; lease so that the mines will continue to work. Reliance is placed byr counsel on the decision of this Court in K. C. Gajapati Narayan Deo & Ors. v. The State of Orissa( 1) to show how although the legislature in passing an Act purports to act within the limits of its legislative pow'er, in substance and in reality it can transgress that power, the transgression being veiled. by what appears on proper examination to be a mere pre- tence or disguise. Attention is then drawn to the decision in Attorney General of Alberta v. Attorney General of Canada(') as showing that – in order to tear off the veil or disguise or in order to get at the sub- stance of the law behind the form, the court can examine the effect of the legislation and take into consideration its object, purpose or design. In support of the submission that the word regulation in Entry 54 does not include prohibition, reliance is placed on the decision of the Federal Court in Bho]a Prasad v. The King Emperor(') wherein after setting out two decisions of the Privy Council in Municipal Corpora- tion of City of Toronto v. Virgo<') and Attorney-General for Ontario v. Attorney-General for Canada(') in which it was held that 'regula- tiQn' did not include 'prohib;tion', Gwyer, C.J. observed that he saw no reason to differ from the view expressed in those cases. The central theme of these diverse points is only one : that the Jaws made in the exercise of power conferred by Entry 54, List I, must stand the test of public interest since the very reason for the Parliament acquiring power under that Entry is that it is in the public interest that the regulation of mines and mineral development should be under the control of the Union.

The contention is that sine~ the Nationalisation Amendment Act does not impose upon the Govern- ment the duty to run the mines which are taken over or even to carry out prospecting and investigation but simply provides for the termina- tion of mining leases, the Act is not in public interest. What is in public interest is the regulation and development of coal mines, not total prohibition of their working.

On a careful consideration of this argument which was made plausible in its presentation, we see no substance in it. The. learned Attorney General and the learned Solicitor General have drawn our attention to various facts and circumstances and to the provisions of various Acts including th~ Nationalisation

Amendment Act which make it impossible to hold that the provisions of that Act are a mere (I) [1954] 1 SCR I, 11. (2) [1939] A. C. 117 130. (3) [1942] FCR, 17, 26-27. (4) [1896] A. C. 88.

(5) [1896] A. C. 348, 363. c ~UPREME COURT REPORTS facade for terminating mining leases without any oj)ligation in the matter of regulation of mines and mineral development. II c Granting that Entry 54, List I is purposive since it qna!ifies the power. to pass a law re]a!ing to "Regulation of Mines and Mineral Development" by the addition of a restrictive clause, "to the extent to which such regulation and development under the control of the Union is declared by Parliament by Yaw to be expedient in the public interest", the provisions of the Nationalisation Amendment Act show that they are designed to serve progressively the purpose of E!!try 54. The Nationalisation Amendment Act, as its very title shows, is an amending Act. It amended the Coal Mines (Nationalisa.tion) Act, 26 of 1973. One must primarily have regard to the object and purpose of that Act in order to find out whether the Nat10nalisation Amend- ment Act destroys the structure of that Act and is a mere pretence for acquiring new rights without providing for payment· of any amount for such acquisition.

The Coal Mines (Nationalisation) Act was passed in order to pro- vide for the acquisition and transfer of the right, title and interest of the owners in respect of the Coal mines specified in the Schedule to that Act.

This was done with a view to reorganising and reconstruct- ing such coal mine. so as to ensure the rational, co-ordinated and scientific development and utilisation or' coal resources consistent with the growing requirements of the country.

The high purpose of that Act was to ensure that the ownership and control of such resonrces are vested in the State and thereby so distribnted as best to subserve the common good. In order to achieve that purpose, the Nationalisation Act provides by secrion 3 (1) that :

On the appointed day, the right, title and interest of the f, owners in relation to the coal mines specified in the Schedule shall Stand tran_§ferred to, and shall vest absolutely in, the Central Government free from all incumbrances.

The appointed day is May 1, 1973. For the removal of doubts it was declared \JY section 3 ( 2) that : If, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Govern-

ment, the provisions of the Coal Mines (Taking Over of Management) Act, 1973, shall until that mine is nationalised by an appropriate legislation, apply to such mine. t TARA PRASAD v. UNION (Chandrachud, C.J.)

By section 4, the Central Government became the lessee of the scheditled coal mines while, section 5 empowers it to transfer its lease- hold rights to a Government company. Chapter II of the Coal Mines (Nationalisation Act deals with acquisition of the rights of owners of coal mines, Chapter III with payment of amounts to owners of coal mines, Chapter IV with management of coal mines, Chapter V Jays down provisions relating to employees of coal mines, Chapter VI eontains provisions governing the payments of amounts to be made by the Commissioner of Payments aud the last Chapter, Chapter VII, contain~ miscellaneous provisions.

We have already set out the provisions of the Nationalisation Amendment Act in extenso, a little before enumerating the various points made out by Shri · Seervai during the course of his argument. It will now he enough to say by way of a summing-up of the provi- sions of the Nationalisation Amendment Act that:

(1) by section 3(3) (a) of the Coal Mines (Nationalisation) Act, 1973 which was introduced by the Nationalisation Amendment Act, no person other than those mentioned in clauses (i) to (iii) can carry on coal mining operations after April 29, 1976, being the date on which section 3 of the Nationalisation Amendment Act came into force; (2) by section (3)(3)(b) all mining leases and sub-leases stood terminated except those granted before April 29, 1976 in favour of the Central Govern- ment, a Government company or corporation owned, managed or con- trolled by the Central Government; (3) section (3)(c) pro1'ibits the granting of a lease for winning or mining coal in favour of any person other than the Government, a Goverrµnent company or a cor- poration of the above description provided that a sub-lease could be granted by these authorities to any person if the two conditions men- tioned in the proviso are satisfied; and

( 4) when a mining lease stands terminated under section 3 (3), "it shall be lawful" for the Cen- tral Government or the Government company or the corporation ·owned or controlled by the Central Government to obtain a prospect- ing licence or a mining lease in respect of the whole or part of the land covered by the plining lease which stands terminated. Section 4 of the Nationalisation Amendment Act introduced an additional penal provision in the parent Act.

We are nnable to appreciate the argument so meticulously woven c t -' that these provisions are a direct negation of the principl~s of the parent Act and that they destroy the integral scheme of taking over the management of mines, of acquiring the rights of lease-holders and continuing to run the ,mines.

On the contrary, the Nationalisation a Amendment Act is manifestly in furtherance of the object of nationalisation mentioned in the preamble to the parent Act and effec- c 1G74 tuates the purpose_ mentioned in sections 3(1) and 3 (2) of that Act · by the addition of a new sub-section, sub-section ( 3), which terminates all coal mining leases and sub-leases except those referred in sub-section (3(b). The. circumstance that the marginal note to section 3 and the title of Chapter II of the Nationalisation Act are not amended by the Nationalisation Amendment Act, despite the addition of a new sub- section, is of little or no consequence.

That sub-section is a logical extension of the scheme envisaged by the original sub-sections ( 1) and (2) of section 3. Besides, marginal notes to the sections of a statute and the titles of its chapters cannot take away the effect of the provisions contained in the Act so as to render those provisions legislatively incompetent, if they are otherwise within tqe competence of the legisla- ture to enact. One must principally have regard to the object of an Act in order to find out whether the exercise of the leliislative power is pur- posive, unless, of course, the provisions of the Act show

that the avowed or intended object is a mere pretence _for covering a veiled transgression committed by the legislature upon its own powers. Whether a particular object can be successfully achieved by. an Act, is lai;gely a matter of legislative policy.

The Nationalisation Amendment Act needs no preamble, especially when it is backed up by a statement of objects and reasons. Gene- rally, an amendment Act is passed in order to adva!lce the purpose of the parent Act as reflected in the preamble to that Act.

Acquisition of coal mines, be it remembered, is not an end in itself but is only a means to an end. The fundamental object of the Nationalisation Act as also of the Nationalisation Amendment Act is to bring into existence a state of affairs which will be congenial for regulating mines and for mineral development.

In regard to the scheduled mines, that purpose was achieved by the mean~ of acquisition. In regard to mines which were .not included in the Schedule, the same purpose was achieved by termination of leases and sub-leases and by taking over the right to work the mines.

Termination of leases, vesting of lease-hold pro- perties in the State Governments and the grant of leases to the Central · Government or Government Companies are together the means con- ceived in order to achieve the object of nationalisation of one of the vital material resour~ of the community. An infirmity in Shri Seervai's argument is its inarticulate premise that mere acquisition of coal mines is the end of the Nationalisation Act.

It is also important to bear in mind while we are on the purposive- ness of the Nationalisation Amendment Act that nothing contained II in the later analogous Acts can be construed as in derogation of the principle enunciated in section 18 of the Mines and Minerals Regu- lation and (Development) Act, 67 of 1957, which provides !hat it f

i y TARA PRASAD v. UNION (Chandrachud, C.J.) shall be the duty of the Central Government to take all §_uch steps as may be necessary for· the conservation and development of minerals in India. Therefore, even in regard to matters falling

under the Nationalisation Amendment Act which terminates existing leases and makes it lawful for the Central Government to obtain fresh leases, the obligation of section 18 of the Act of 1957 will continue to apply in its full rigour.

As contended by the learned Solicitor General, section 18 contains a statutory behest and projects a pnrposive legislative policy. The later Acts on the subject of regulation of mines. and

mineral development are linked up with the policy enunciated in Sec- tion 18. Much was made by Mr. Seervai of the circumstance that the Nationalisation Amendment Act, While providing by section 3 ( 4) that "it shall be lawful" for the Central Government, etc., to obtain a prospecting licence oc a mining lease, did not impose an obligation on any one to work the mine of which the mining lease stood statutorily ter;rtinated. No mandamus, it was urged, could therefore issue to compel, for example the Central Government to work any particular mine.

This argument overlooks that Entry 54 refers to two things : (1) regulation of mines and (2) mineral development. It is true that the Entry is purposive, since the exercise of the power under Entry 54 has to be gQided and governed

by public interest. But neither the power to regulate mines nor the power to ensure mineral development postulates that no sooner is a mining lease terminated by the force of the statute, than the Central Government must begin to work the mine of which the lease is terminated. It is possible that · after the Nationalisation Amendment ~ct came into force, there was a hiatus between the termination of existing leases and the granting of fresh ones. But, the N ationalis.ation Amendment Act does not pro- vide that any kind or type of mine. shall noi be developed or worked. Conservation, prospecting and investigation, developmental steps and finally scientific exploitation of the mines and minerals is the process envisaged by the Nationalisation Amendment Act.

It is undeniable that conservation of minerals, which is brought about by the tennina- tion of existing leases and sub-leases, is vital foc the development of mines. A phased and graded programme of <:onservation is in the

ultimate analysis one of the most satisfactory and effective means for the regulation of mines and the development of minerals. .. Learned counsel contended that the Nationalisation Amendment Act is destrnctive of the provisions of the parent Act. This contention c

c is wholly unjustified. The destruction which the Nationalisation Amendment Act brings about is of the lease or the sub-lease and not of its subject matter, namely, the mine itself.

In terminating the lease of a house one does not destroy the house itself. It may be arguable that prohibiting the use of the house for apy purpose what- soever may, for practical purposes, amount to the destruction of the house itself. But we cannot accept the contention that the Nationalisa- tion Amendment Act contains provisions directed 11t prohibiting the working of mines, the leases in respect of which are terminated. simple provision for granting sub-leases shows that the object of the Nationalisation Amendment Act is to ensure that no mine will lie

idle or unexplored. Interregnums can usefully be utilised for pros· peeling and investigation. They do not lead to destruction of mines. In fact, it is just as well that the Amendment. Act does not require the new Jessee to undertake an adventure, reckless and thoughtless, which goes by the name of 'scratching of mines', which ultimately results in the slaughtering of mines.

Natural resources, howsoever large,. are not inexhaustible, which makes it imperative to conserve them. Without a wise and planned conservation of such resources, there can neither be a systematic regu- lation of mines nor a scientific development of minerals.

The impor- tance of conservation of natural resources in any scheme of regulation and development of such resources can be seen from the fact that the Parliament had to pass in August 197 4 an Act caJ1ed the Coal Mines (Conservation and Development) Act, 28 of 1974, in order, princi- pally, to provide for the conservation of coal and development of coal mines.

Section 4( 1) of that Act enables the Central Govermnent, for the purposes of conservation of ,coal and for the development of coal mines, to exercise such powers and take or cause to be taken such measures as it may be necessary or proper or as may be prescribed. By section 5 (1), a duty is cast on the owners of coal mines to take such steps as may be necessary to ensure the conservation of coal and development of the coal mines owlied by them.

While moving the Nationalisation Amendment Act in. the Lok Sabha on May 17, 1976, the Minister of Energy said that : for proper scientific working of coal mines, you have to have the geological data; you have to have mine plans; you have to know the size of the coal reserves, the 'Lu.antity of coal that can be mined; the quality of coal etc.

For this, the detailed exploration has to be undertaken. It is oniy after all this is done that the experts can decide. whether it will be economically viable and technically feasible-techni- cal feasibility comes first and then economic viability-to f

… • TARA PRASAD v. UNION (Chandrachud(C.J.) mine the coal in that particmar area. No scienitfic explora- tion of coal is possible from these areas until all the facts are known, until investigation is done. The nationalised

sector cannot step in unless all this information is gathered. (Lok Sabha Debates, 5th series, volume 61, May 17, 1976, columns 91-92.) Measnres taken for judicious preservation and

distribution of natnral resources may involve restrictions on their use and even prohibition, upto a degree, of the unplanned working of the reposi- tories of such resonrces. We may in this connection refer usefully

to a passage .it page 383 of the First Five Year Plan: "Though a mining industry has been in existence in this country for about half a century, only a comparatively small number of mines are· being worked in an efficient manner

under proper technical guidance. Many units are too small in size or too poorly financed for suclJ working. Lack of a conservation policy is also responsible for the present condition of the industry.

There is large wastage, especially in minerals of marginal grades, as these are either aban- doned in the mines or thrown away on the mine dumps. Ways and means must be devised for the

mining and recovery of these low grade materials. Ores which it is not possible to work economically under normal conditions should be left in the mines so that they may be extracted

at a later date without serious loss. The mine dumps all over the country have to be carefully examined and sampled so that their valuable mineral content may ·be recovered by methods of beneficiation now available. It should be a rule that selective mining of high grade minerals alone should not be undertaken and that all grades should be worked and

wherever possible, blended to produce marketable grades." It w.as observed in Attorney-General for Ontario (supra) that a power to regulate assumes, naturally if not necessarily, th.e conserva- c

tion of the thing which is to be made the subject of regulation. This position does not militate against what was observed by Lord Davey in Virgo (supra) that "there is marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or goverance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed". In the former case, the Canada Temperance Act, 1886 H was held ultra vires the Dominion as it pnrported to repeal the pro- hibitory clauses of a provincial Act, but its own provisions were held c

.F (1980] 3 S.C.R. valid when duly brought into operation in any provincial area· as relating to the peace, order, and good Government of Canada. In Virgo the question turned on the scope of power to frame by-laws and the decision of the Privy Council was that a statutory power conferred upon a municipal corporation to make by-laws for 'regu- lating and governing' a trade, "does not authorise the making it un- lawful to carry on a lawful trade in a lawful manner.,. It may be borne in mind that different considerations apply in the construction of power to frame by-laws but even then, the Privy Council qualified the above statement of law by adding the clause, "in the absence of an express power of prohibition".

In support of his submission that under the Nationalisation Amend- ment Act there is no obligation on any person or authority to run a mine, Shri Seervai relies on a passage in Craies on Statute Law, 6th edition, page '.!84, to the following effect :

Statutes passed for th_e purpose of enabling something to be done are usually expressed in permissible language, that is to say, it is enacted that 'it shall be lawful', etc. or that 'such and snch a thing may be done'.

Prima facie, tl:tese words import a discretion, and they must be construed as ·discretionary unless there be anything in the subject-matter to which they are applied, or in any other . part of the

statute, to show that they are meant to be imperative". But the very passage, after enunciating this principle, refers to a· decision in Julius v, Bishop of Oxford(!) in which Lord Cairns said that though the words 'it shall be lawful' are words making tl:iat legal and possible which there would otherwise be no right or authority to do and that though those words confer a faculty or power, _still "there may be something in the nature of the thing em-

powered to be done, so,mething in the object for which it is to be done, something _in the conditions under which it is to be done, something in the title of the persons for whose benefit the power is to be exercised, whic_h may couple the power with a duty, and make it the auty of the person in

whom the power is reposed to exe~cise that power when called upon to do so". It seems to us clear, and we have discussed that aspect at length, that section 3 ( 4) uses an enabling or permissive expression in order that regulation of mines and mineral development may be ensured after a scientific prospecting, investigation and planning. It is doubt- (!) (1880] 5 Appeal Ca.!es 214, 222.

… • y TARA PRASAD v. UNION (Chandrachud, C.J.) Jess that, in the language of Lord Cairns in Julius,(!) there is some- thing' in the nature of the thing which the Nationalisation Amendment Act empowers to be done, something in tJie object for which it is to be done and something in the conditions under which it is to be done which couples the power conferred by the Act with a duty, the duty being not to act in haste but with reasonable promptitude depending upon the nature of the problem under investigation· An

obligation to act does not cease to be so merely because there is no obligation to act in an ad-hoc or impromptu manner. It is in the context of a· conglomeration of these diversr considerations that one must appreciate why, in section 3 ( 4)

which was introduced by the Nationalisation Amendment Act, Parliament used the permissive expression "it shall be lawful". Thus, a broad and liberal approach to the field of legislation

.demarcated by Entry 54, List I, an objective and . pi;actical under- ·standing of the provisions contained in the Nationalisation Amend- ment Act and a realistic perception of constitutional principles will point to the conclusion that the Parliament had the legislative com- petence to enact the Nationalisat.ion Amendment Act.

The argument which we, have just disposed of is common to all the matters before us. The contention to which we will now turn is 1imited in its application to composite mines which contain layers of coal and some other mineral, usually fireday.

This branch of Shri Seervai' s argument relates to .!he construction of the Coal Mines (Nationalisation) Act,. 26 of 1973, and the Nationalisation Amend- ment Act. The argument is that leases of composite mines in which

there are altermrite seams of coal and fireclay do not fall within the scope of these Acts. The pleadings in this behalf are full and complete in Writ Petition No. 257 of 1977 argued by Shri Seervai and they are tolerably adequate in a few other petitions..

It is expressly averred and not effectively .traversed in Writ Petition 257 of 1977 that : the coal and fireclay depo~its in the said area are so mixed up that one cannot work either for extraction of coal or for extraction of fireclay without disturbing each of the said lwo minerals. The deposits are such that at one layer there is coal, the next layer is fireclay, the other layer is coal, the next layer is again fireclay and so on.

Nirode Baran Banerjee, who is the petitioner in that Writ Petition holds a composite lease dated October 17, 1973 for mining coal as H well as fireclay. {I) [1880] 5 Appeal Cases 214, 222·

c 10'80 [19801 3 S.C.R. It is urged by the learned counsel that the Nationalisation Amend- ment Act terminates mining leases in respect of coal only and that the Jaw terminating leases for mining coal cannot apply to a mine which contains not only coal but fireclay .also.

The totality of the submission on this point may be put thus : (a) Under Article 31(1) of the Constitution, no person can be deprived of his property without the authdrity of Jaw. Article 31A(l) which exempts the laws mentioned in

clauses (a) to (e) from invalidity under Articles 14, 19 and 31 does not dispense with the necessity of the authority of law for depriving a person his property, because the open- ing words of Article 31A(l) are " … no law providing for … " matters mentioned in clauses (a) to

(e) shall be deemed to be void as offending Articles 14, 19 and 31. (b) The Nationalisation Amendment Act confers no authority to terminate a composite lease for mining coal and fireclay. The right to mine fireclay is given to the petitioner by law and it can only be taken away by law.

(c) Though the Nationalisation Amendment Act does not in terms prohibit the petitioner from mining fireclay, the effect of the law in a practical business sense, is to prohibit the petitioner from mining fireclay aod, therefore, the position is the same as though the Act had enacted the prohibition in

express terms. The Court must look at the direct impact of the law on this right of the party, and if that impact prohibits him from exercising his right, the fact that there is no express prohibition in the Act is immaterial,

(d) The Nationalisation Amendment Act by making it punishable to mine coal, in substance and in a practical business sense, prohibits the petitioner from mining fireclay. For this prohibition the Amendment Act does not provide,

and therefore, there is no authority of law for it. Coal and fireclay are two distinct minerals as shown by Schedule II to the Mines and Minerals (Regulation and Development) Act,

67 of 1957, wherein item 1 is, coal and item 15 is fireclay. The dictionary meanings of coal and fireclay also show that they are two distinct minerals. In support elf these submissions Shri Seervai relies very strongly on the definition of 'coal mine' in section 2 (b) of the Coal Mines (Nationali- sation Act, 26 of 1973, and the definition, by contrast, of 'coking coal mine' in section 3(c) of the Coking Coal Mines (Nationalisation) Act, 36 of 1972.

• r y TARA PRASAD v. UNION (Chandrachud, C.1.) These submissions are met by the learned Attorney General with the answer that if a mine has a seam of coal it is a coal mine within the meaning of section 2(b) of Act 26 of 1973, and that, for the purposes of that definition, it makes no ,difference whether the mine has seams of fireclay also. The Attorney General says further that the definition of 'coking coal mine' in section 3 ( c) of Act g 6 of 1972 confllins words of surplusage which ought r!ither to be ignored than be allowed !O determine the scope of the definition contained in section 2(b) of Act 26 of 1973. The· contention, in other words, is that a cool mine is a mine in which thece is at least one seam of coal, no matter whether there are seams therein o,t fireclay or any other mineral.

The learned Solicitor General contends that the authority of Law extends to whatever is the necessary consequence of that which is autho- rised. In other words, authority to do a thing necessarily includes the authority to do all other things which are necessary for the doing of that which is authorised. If law authorises the termination of coal mining leaSe&, it must be taken to authorise whatever is necessarily incidental to and consequential upon it. Therefore, composite leases cannot be excepted from the provisions of an Act which terminates coal mining leases. Section 3(3) (a) introduced by the Nationalisation Amendment Act, it is contended, prohibits persons other· than those mentioned in clauses (i) to (iii) from carrying on coal mining operation in any form. If a person holdiog a composite lease can do jireclay mining without mining c%1, he may do so; otherwise section 3 (3) (a) is the authority of law to pre','ent him from mining fireclay. In other words, according to the learned· Solicitor General, the necessary implication of law is that though a composite lease for mining coal and fireclay may remain out- standing after the ·enactrn_ent of the Nationalisation Amendment Act, the lessee cannot work it, if it involves a coal-mining operation. The point raised by Shri Seervai is so nicely balanced that it is as difficnlt to rejecv it wholly as it is to accept it wholly. The contrast in definitions favours him.

The Coal Mines (Nationalisation) Act, 26 of 1973, defines a coal mine by section 2(b) thus : · uco'al mine" means a mine in which there exists one or more seams of coal If this definition is considered in isolation, the learned Attorney General could perhaps be right in his submission that any mine in which there is one seam of coal, at least one, is a coal mine. The definition takes no account of whether there are seams of other minerals and if so how ff many, in the mine. One seam of coal is enough to make a mine a coal mine. For reasons which we will presently mention, it is not easy to 10-610SCI/80

'1os2 stretch the definition as far as logic may talre it, for that will produce the result that just one seam of coal at the roof of a mine or at its base will be enough to bring a mine within the definition contained in section 2(b).

c The scheme of the Coal Nationalisation Acts on which Shri Seervai relies has a relevance of its own on this point. The Coking Coal Mines (Nationalisation) Act of 1972 and the Coal Mines (Nationalisation) Act of 1973 cover the whole field of 'Coal' which was intended to be nationalised.

The titles of the two Acts and the various provisiollS contained therein show that what was being nationalised was three distinct categories of mines : mines contaiJiing seams of coking coal exclusively; mines containing seams of coking coal along with seruns of other coal; and mines containing seams of other coal. Though Parlia· ment had power under Article 3 lA (1) ( e) of the Constitution to termi- nate mining leases without payment of any compensation or 'amount', it decided to nationalise coal mines on payment of amounts specified in the Scpedules to the Nationalisation Acts of 1972 and 1973. Beside5, even .when something apart from coking coal mines was

acquired, namely, 'coke oven plants', provision was separately made in.section 11 of the Nationalisation Act of 1972, read with the 2nd Schedule, for payment of amounts to owners of coke oven plants. Thus, whatever was intended to be acquired was paid for. 11iis scheme is prima facie in- consistent with the Parliament intending to acquire lease-hold rights in other minerals like fireclay, without the payment of any amount. Coupled with this is the unambiguous wording of section 3(3) (b) and section 3(3) (c) of the Nationalisa_tion Act of 1973, which were introduced therein by section 3 of the Nationalisation Amendment Act. Section 3 (3) (b) says that excepting the miuing leases and sub-leases granted before the commencement of the Act in favour of or by cer- tain bodies or authorities, all other mining leases and sub-leases in force before such commencement,

"shall in so far as they relate to the winning or mining of coal, stand terminated''. (emphasis supplied) Section 3(3)(c) provides that : "no lease for winning or mining coal shall be granted

in favour of any person other than the Gove=ent, com- pany or corporation, referred in clause (a)''. (emphasis supplied). The'3e provisions carry the scheme of the Nationalisation

Acts to their logical conclusion by emphasising that the target of those Acts is coal mines, pure and simple. What stands terminated under TARA PRASAD v. UNION (Chandrachud, CJ.) I 083

section 3(3) (b) is certain mining leases and snb-leases in so far as they relate to the winning or mining of coal. The embargo placed by Bection 3 (3) ( c) is on the granting of leases for winning or mining ~ coal to persons other than those mentioned in section 3(3) (a). Since the definition of 'coal mine' in section 2(b) of the Coal Mines (Nationalisation) Act, 1973 has an uncertain import

and the scheme of that Act and of the Coking Coal Mines (Nationalisa- tion) Act, 1972 makes it plausible that rights in minerals other than ..-. coke and coal were not intended to be acquired under the two :Nationalisation Acts, it becomes necessary to compare and contrast the definition of 'coal mine' in section 2(b) of the Act of 1973 with J the definition of 'coking' coal mine' in section 3 ( c) of the Coking · ""- Coal Mines (Nationalisation) Act of 1972. Section 3 ( c) of the latter Act says :

" 'coking coal mine' means a coal mine in which there exists one or more seams of coking coal, whether exclusively or in addition to any seam of other coal". (emphasis supplied). This definition justifies Shri Seervai's argument that whereas in regard to coking coal mines, the existence of ;my seam of otlier coal was regarded

as inconsequential, the existence of any seam of' another mineral was not considered as inconsequential in regard to a coal mine. The definition of coal mine in section 2 (b) of the Act r of 1973 scrupulously deleted the clause, "whether, exclusively or in addition to" any other seam. The same Legislature which added the particular clause in the definition of 'coking coal mine' in the 1972 Act, deleted it in the delinition of 'coal mine' in the 1973 Act. c

The position ih regard to tihe coking coal mines is crystal clear, ll'. namely, that by section 4(1) of the Act of 1972, the right, title and interest of owners in relation to the coking coal mines specified in ~ the First Schedule to the Act stood transferred to and vested absolu- 1 tely in the Central Government free from all incumbrances on the ap- pointed day. The same position obtained under section 5 of that Act Ir.

in regard to coke oven plants specified in the Second Schedule. But in so far as coal mines are concerned, we have, willy-nilly, to proceed on the basis that by reason of the definition of coal mine contained t" in section 2(b) of the Act of 1973, and the definition of coking coa1 mine ih section 3 ( c) of the Act of 1972 which presents a striking contrast to the definition in section 2(b), composite coal mines, that is to say, coal mines in which there are seams of coal and firec)ay (we are only concerned with fireclay in these petition), do not fall withih the scope of the definition of 'coal mine' in section 2 (b) of the Act of 1973.

To that extent Shri Seervai's contention roust succeed. But what then is the sequitur? Can the lessees of composite mines (like the petitioners in Writ Petitions Nos. 257, 220, 111, 600, ~ 1130-1134, 352, 221 and 178 of 1977) who hold composite mining leases for winhing coal and fireclay, continue their mining operations · unabated despite the provisions of the Nationalisation Amendment Act? We think not.

It is one thing to say that a composite mine is outside the scope of the definition of coal mine in section 2 (b) of the Nationalisation Act of 1973 and quite another to conclude there- from that the

other provisions introduecd into that Act by . the ) Nationalisation Amendment Act will have no impact on composite leases for winning coal and fireclay. Section 3 (3) (a) which was

introduced into the parent Act by the N atio'nalisation Amendment Act provides expressly that on and from the commencement of section 3 of the Amendment Act, that is, from April 29, 1976, no person other than those mentioned in clauses (i) to (iii) shall carry on "coal mining operation, in India, in any form".

Section 4 of the Nationalisation Amendment Act which introduced sub-section (2) in section 30 of the parent Act provides : "Any pen;on who engages, or causes any other person to be engaged in win'ning or mining coal from the whole or part of any land in respect of which no valid prospecting

licence or mining lease or sub-lease is in force, shall be punishable with imprisonment for a term which may extend to two years and also with fine which may extend to ten thousand rupees".

These provisions of sections 3(3) (a) and 30(2) of the parent Act will apply of their own force, whether or not the lessee holds a composite lease for winning coal and fireclay and whether or not the mine is a composite mine containing alternate seams of coal and l fireclay.

In other words, as contended by the learned Solicitor 1 General, if a pen;on holding a composite lease can do fireclay mining without mining coal, he may do so. But if he cannot win or mine fire- clay without doing a coal mining operation, that is, without winning or mining coal, he cannot do any mining operation at all. If he does so, he will be liable for the penal consequences provided for in sec-·…..;.,, lion 30.(2) of the Nationalisation Act of 1973.

The provision contained in section 3 ( 3 )(a) totally prohibiting the generality of persons from carrying on coal mining operation in India in any f<l!rlll and the penal provision of section 30(2) vii:tually TARA PRASAD v. UNION (Chiindrachud, C.l.)

leave with the lessees of composite mines the husk of a mining inte- rest. That t!iey cannot win or mine. coal is conceded and, indeed, · there is no escape from that position in view of the aforesaid provi- sions. The only surviving question · then is whether they can win or mi'.ne fireclay since their composite lease is outside the scope of section 2(b) of the Nationalisation A.ct of 1973. The answer has to be in the negative on the basis of the very averments made by the petitio- ners in their Writ Petitions. For example, the petitioner in Writ Petition No. 257 of 1957 has stated in his petition, more partcufarly in paragraph 5 thereof, that the seams of coal and fireclay are so situated in the mine of which he is a lessee, that it is not possible to mine fireclay without mining coal. This position was not only ad- mitted but reiterated by Shri Seervai, both during the course of his oral argument and in his written brief.

The conclusion is therefore inevitable that the lessees of composite mines will, for all practical purposes, have to nurse their deeds of lease without being able to exer- cise any of the rights flowing from them. On their own showing, they will be acting at their peril if they attempt to win fireclay. If they cannot win fireclay without winning coal, they cannot win firec- lay either, even if they hold composite leases under which they are entitled to win coal and fireclay.

This position fortifies the argument of the learned Solicitor ·General that though the Parliament pro'1ded for the payment of amounts for acquisition df certain interests uajer the Nationalisation Acts of 1972 and 1973, it did not intend to pay any compensation or amount for the termination of leasehold rights in respect of com- posite mines. Mines which have alternate seams of coal and fireclay are in a class by themselves and they appear to be far fewer in num- ber as compared with the coking coal mines and coal mines, properly so called. The authority of law for the termination of the rights of composite lessees is the' promion contained in section 3(3) (a), 1he '1olation of which attracts the penal . provisions of section 30(2) of the Nationalisation Act of 1973. The Parliament has de- prived composite lessees of their right to win fireclay because they cannot do so without winning coal.

The winning of coal by the gene- rality of people is prohibited by the section 3(3) (a) of the Act of 1973. This is just as well, becau&e Parliament could not have intended c that such islands of exception should swallow the main stream of the Nationalisation Acts. Ob\iously, no rights were intended to be left outstanding, once the rights in respect of coking coal mines and coal mines were brought to an eiid.

The petitioners in Writ Petitions Nos. 257, 220, 111, 600, 1130- 1134, 352, 221 and 178 of 1977 hold composite mining leases for mining fireclay and coal. In these Petitions we had pasied the follo- wing order on May 5, 1978 :

"These petitions are allowed partly in that the petitio- ners therein shall be entitled, for the duration of the unex- pired portion of their existing leases, to carry on mining operations for the purpose of winning fireclay so long as, and to the extent that, they do not carry on any coal mining operation or engage in winning or mining coal. In these

Writ Petitions there will be no order as to costs". As we have already stated, no tangible benefit will accrue to the petitioners from this order because, on their own showing, they can- not carry on mining operations for the purpose of winning fireclay without carrying on a coal mining operation or without engaging in winning or mining coal. That is how the ma_tter rests.

The only other arguments which requires consideration is the one made principally by Shri A. K. Sen which, like Shri Seervai's argu- ment of legislative competence, is common to all the writ petitions. Shri Sen's argument may be stated thus :

( 1) The N ationalisatiOD) Amendment Act alfects, in substance, two kinds of transfers : the transfer of the lease- • hold interests of the lessees in favour of the lessor, namely the State; and the transfer of the mining business of .the lessees in favour of the Central Gove=ent. Since these

transfers amount to acquisition within the meaning of Arti- cle 31 (2), the Act is open to challenge under Articles 14, 19(1) (g) and 31 of the Constitution. (2) The Nationalisation

Amendment Act is open to challenge under Article 14 becaUSe lessees who fall within that Act are patently discriminated against in comparison with lessees of other mines, both coking and non-coking,

wbo were paid compensation when their property was takeri over, first for management under the Management Acts and then under the Nationalisation Acts. ( 3) The Nationalisation Ammdment Act is open to

challenge under Articie 19(1) (g) because the prohibition against lessees from carrying on their business and the transfer of their business, in substance, to the Central Govern- ment or a Company_ is an unreaso!lable restriction on the

TARA PRASAD v. UNION (Chandrachud, C.J.) right of the lessees to hold their lease-hold property and to carry on their business of mining. ( 4) The Act is open to challenge under Article 31

because no provision is made for the payment of any amount whatsoever to the lessees whose mining busine_ss is taken over under the Act. No public purpose is involved either in the termination of the lessees' interest or in the acquisition of their business. Expropriation without payment of any amount requires a very heavy public purpose.

( 5) Since no provision whatsoever is made for the pay- ment of any amount to the lessees whose leases are termi- nated, the Nationalisation Amendment Act is not a 'Law' within the meaning of Article 31(2) and therefore Article

19(1) (f) is attracted. ( 6) The Act is not saved from the challenge of Articles c 14, 19 and 31 by Article 31A(l) (e) because that Article provides for extinguishment which does not

amount to acquisition by the State. If extinguishment amounting to acquisition was intended to be saved under Article 31A(1) ( e), the subject .matter dealt with by clause ( e) would

have been included in clause (a) ol that Article. It shall have been noticed that the entire argument hinges around the premise that, by the Nationalisation Amendment Act, the petitio- ned right to property has been :µ:quired without the payment of any amount and that they have been unreasonably deprived of their right to carry on the business of mining.

A close and careful examination of the provisions of the Coal Mineto (Nationalisation) Act, 1973 and of the amendments made to that Act by the Nationalisation Amendment Act will show that there is no substance in either of the1e contentions.

'The Coal Mines (Nationalisation Act, 1973) ootiona.lised coal minell by providing by section 3 ( 1) that on the appointed day, that is on May 1, 1973, the right, titlie and interest of the owners in rela- tion to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in, the Central Government free from all incumbrances. The Scheduled D?ines, 711 in numbe.r and situated/ in reputed coal bearing areas, were the ones which were engaged open- ly, lawfully and uninterruptedly in doing coal mining business. Since it was possible to ascertain and verify the relevant facts pertaining to these undertakings, they were taken over on payment of amounts c

mentioned in the Schedule to the Act, which varied from mine to. mine depending upon the value of their assets, their potential and their profitability. In the very nature of thiogs, the list of mines in the Schedule could not be exhaustive because there were and per- haps even now there are, unauthorised mines worked by persons who did not possess the semblance of a title or right to do mining busi- ness.

Pe,rsons falling within that category cannot cite the Constitu- tion as their charter to continue to indulge in unauthorised mining which is unscientific, unsystematic and detrimental to the national in- terests by reason of its tendency to destroy the reserve of natural resources.

But alongside these persons, there could conceivably be mine operators who may have been doing the\f business lawfully but who were not easily or readily identifiable. Section 3 (2) of the

Nationalisation Act, 1973 made provision for taking over the mana- gement of such mines by declaring for "the removal of doubts" that if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, the provisions of the Coal Mines (Taldng Over of Management) Act, 1973, shall, until that. mine is nationalised by an appropriate legislation, apply to such mine. Owners of mines whose mines were not included in the Sche- dule but whose right, title and interest was to vest eventually in the Central Government under "an appropriate legislation" envisaged by section 3(2) of the Nationalisation Act were, by this method, placed on par with the owners of mines of which the management was taken over under the Coal Mine8 (Taking Over of Management) Act, 1973. That Act provides by section 7(1) that every owner of a coal mine shall be given by the Central Government an amowit in cash for the vesting in it, under section 3, of the management of such mine.

By section 7 (2), for every month during which the manage- ment of a coal mine remains vested in the Central Government, the amount referred to in sub-section ( l) shall be computed at the rate of twenty paise per tonne of coal on the highest monthly production of coal from such mine during any month in the years 1969, 1970, 1971 and 1972. The two provisos to that sub-section and the other subi;ectfons of section 7 provide for other matters relating to payment of amounts to the owners of coal mines of which the management was l'aken ov.er.

The Nationalisation Amendment Act carried the scheme of these two Acts to its logical conclusion by \erminating the scrcalled leases and sub-leases which might have remained outstand- ing.

Thus, the purpose attained by these Acts is (1) to vest in the Central Government the right of management of all coal mines; (2) to nationalise the mines mentioned in the Schedule; ( 3) to provide for the taking over of management of coal mines the existence of which comes to -the knowledge· of the Central Government after the' appoint- v

TARA PRASAJ> v. UNION (Chandrachud, C.!.) ed day and lastly. ( 4) to terminate all mining leases. The Manage- ment Act and the Nationalisation Act provide for payment of amounts, by no means illusory, to the owners of coal mines whose rights were taken over. In the normal course of human affairs, particularly bus.i'ness affairs, it is difficult to conceive that owners of coal mines who had even the vestige of a title thereto would not bring to the notice of the Central Government the existence of their mines, when such mines were not included in the Schedule to the Nationalisation Act.

Thooe who did not care to bring the existence of their mines to the knowledge of the Central Government, even though amounts are payable under the Management Act for the. extingnishment o1 the right of management, did not evidently possess even the semblance of a title to the mines.

The claims of lessees, holdin2 or allegedly holding under such owners, would be as tenuous as the title of their c putative lessors. The Nationalisation Amendment Act by section 3(3)(b) undoub- tedly terminates all existi'ng leases and sub-leases except thooe already granted in favour of persons referred to in clauses (i) to (iii) of section 3 (3)(a). Similarly, section 3 (3)(a) imposes an embargo on all future coal mining operations except in regard to the persons mentioned in clauses (i) to (iii). But the generality of leases which are alleged to have remained outstanding despite the coming into force of the Management Act and the Nationalisation Act, were

mostly precarious, whose holders could at best present the familiar alibi that the origin of their rights or of those from whom they derived title was loot in· antiquity. Neither in law, nor In equity and justice, nor

under the Constitution can these lessees be heard to complain of the termination of their lease-hold rights without the payment of any amount. The provision contained in section 3(3) (b) of the Natio-

nalisation Amendment Act was made ex majore cautela so as not to leave any lease of a coal mine surviving after the enactment of the Management Act and the Nationalisation Act. There was no reason-

able possibility of ~ liiwful lease surviving the passing of those Acts; blit if, per chance, anyone claimed that he held a lease, that stood ter- minated under section 3 (3 )(b).

Once the real nature of the scheme envisaged by the Management Act the Nationalisa~on Act and the Nationalisation Amen4ment Act is appreciated, it will be easy to .see that section 3 (3 )(b) of the Nationalisation Amendment Act

brings about an extinguishment simpliciter of coal mining leases within the meaning of Article 31 A ff (1)(e) of the Constitution. That Article, as it stood prior to the 44th Amendment, read thus :

"3 lA. ( 1) Notwithstanding anything contain~ in c p Article 13, no law providing for ( e) the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence

for the purpose of searching for, or winning, any mineral or mineral oil, or the premature tennination or cancellation of any such agreement, lease or licence, shall be deemed to be void on the ground that it is inconsis- tent with, or takes away or abridges any of the rights con- f:erred by article 14, article 19 or wficle 31''.

We are not concerned with the amendment introduced by the 44th Arnenment Act which deleted the reference to Article 31, since that Amendment Act ca;me into force prospectively with effect from June 20, 1979.

We are unable to accept that the termination of the mining leeseil and sub-leases brought about by section 3(3) (b) of the Nationalisa.- tion Amendment Act is a mere pretence for the acquisition of the mining business of the lessees and the sub-lessees. We have already shown how, in the context of the scheme of the Management Act, the Nationalisation Act and the Nationalisation Amendment Ad., it is impossible to hold that the true intent of the last mentioned Act was to 'acquire' anyone's business., This would be so whether the word 'acquire' is understood in its broad popular sense or in the narrow technical sense which it has come to possess. Whatever 'rights were intended to be acqnired were paid for by the fixation of amounts or by the laying down of a formula for ascertaining amounts p!!jllble for acquisition. It is hard to believe that having provided for pay- ment of arnoul\ts for acquisition of management and ownership rights, the legislature resorted to . the subterfuge of acquiring the mining business of the survi:ving lessees and sub-lessees by the device of terminating their leases and sub-leases. The legislative history lead- ing to the terminatron of coal-mining leases points to one conclu· sion only that, by and large, every lawful interest which was acquired was paid for; the extinguishment of the interest which survived or which is alleged to have survived the passing of the Management Act and the Nationalisation Act was provided for merely in order to ensure that no loophole was left in the implementation of the scheme envi- saged by those Acts.

.. • ., .. .. "' TARA PRASAD v. UNION (Chandrachud,. C.J.) · This will provide a short answer to Shri Sen's argument that per- sons whose leases and sub-leases are terminated without payment ot any amount are discriminated against in comparison with other lessees who were paid amounts when their property was taken over.

The answer is that persons dealt with by section 3 (3 )( b) of the Nationa- li'1ltion Amendment Act are differently situated from those who were dealt with by the two earlier Acts. No violation of Article 14 ill tilerefore involved .

Likewise, we see no substance in the contention that no public P:1JfPOse is involved in the tenuination of the interest of the lessees and sub-lesseeS which was brought about by the Nationalisation Amend- ment Act. The public purpose which informs that Act is the same which lies behind its two precursors, the Management Act and the. Nationalisation Act. The purpose is to re-organise and re-structure coal mines so as to ensure the rational, co-ordinated and scientific development and utilisation of coal resources consistent with the grow- ing requirements of the country. The Statement of Objects and Rea- sons of the Nationalisation Amendment Act points in the direction. Public purpose runs like a continuous thread through the well-knit scheme of the three Acts under consideration.

'fl!is discussion is sufficient to meet the contention of the petitioners that the interest of the lessees and sub-lessees has been "acquired" under the Nationalisation Amendment Act by the termination of leases and sub-leases. But, we may examine that contention in the light of the relevant Constitutional provisions and principles.

It was observed in Dwarkadas Shrinivas v. The Sholapur Spinning &. Weaving Co. Lid. (1) that the provisions of the Constitution touching fundamental rights must be construed broadly and liberally in favour .of those on whom the rights have been conferred. "The form is unessential. It is the substance that we must seek". Making every allowance in favour of the right to property which was available at the relevant time and having regard to the substance of the matter and not merely to the form adopted for terminating the interest of the lessees and the sub- le11sees, we are of the opinion that the Nationalisation Amendment Act involves no acquisition of the interest of the lessees and the sub- lessees. It merely brings about in the language of Article 31A(l) (e) ''the extinguishment" of their right, if any, to win coal. Whichever right; title and interest was lawful and identifiable was acquired by c

the Marulgement Act and the Nationalisation Act. And whichever B lli.terest was acquired was paid for. Tenuous and furtive interests (!) [1954] SCR 674, 733-734. [1980] 3 s.c.it. which survi\'ed the passing of those Acts were merely extingµished by the Nationalisation Amendment Act.

c In Ajit Singh v. State of Punjab,(}.) it was observed by Hidayatullah, J. in the dissenting judgment which he gave on behalf of himself and Shela!, J., that in the case of extinguishment within the meaning of Article 31A, if all the rights in a property are extinguished the result would be nothing else than acquisition, because no property can remain· in suspense without the rights therein being vested in some one or the other. These observations made by the learned Judge are not cont- rary to anything contained in the majority iudgment delivered by Sikri, J., and naturally therefore, great reliance is placed upon them by the petitioners. Even greater sustenance is drawn by the petitioners frnm the judgment of a

7-Judge Bench of this Court in Madan Mohan Pathak v. Union of India & Ors.(') In that case, a settlement which the Life Insurance Corporation had arrived at with its employees was substantially set at naught by the Life Insurance Corporation (Modi- fication of Settlement) Act, 1976. It was held by ti1is Court that the Act was violative of Article 31 (2) since it did not provide for pay- ment of any amount for the compulsory acquisition of the debts owed by the Life Insurance Corporation to its employees; that the direct effect of the impugned Act. was to transfer ownership of the debts due and owing to Oass III and Class IV employees in respect of annua1 cash bonus to the Life Insurance Corporation and that, since the Cor- poration is owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of Article 31(2A).

These decisions have no application to the instant case becanse the interest of the lessees and sub-lessees which was brought to termi- nation by section 3(3)(b) of the Nationalisation

Amendment Act does not come to be vested in the State. The Act provides tha.t ex- cepting a certain cfass of leases and sub-leases, all other lea5es and sub-leases shall stand terminated in so far as they relate to the win- ning or minin!j of coal.

There is no provision in the Act by whii::h the interest so terminated is vested in the State; Nor does such vest- ing flow as a necessary c9nsequence of any of the provisions of the Act. Sub-section ( 4) of section 3 of the Act provides tliat where a mining lease stands terminated under sub-section (3), it shall be law- ful for the Central Government or a Government Company or a cor- poration owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands so terminated. (I) [1967) 2 SCR 143.

(2) [19781 3 SCR 334. .. • TARA PRASAD v. UNION (Chandrachud, C.l.) The plain intendment of the Act, which, may it be reiterated, is neither a pretence nor a facade, is that once the outstanding leases and sub- leases are terminated, the Central Government and the; other authori- ties will be free to apply for a mining lease. Any lease-hold interest which the Central Government, for example, may thus obtain does not directly or immediately flow from the termination brought about by section 3 ( 3 )(b) . Another event has to intervene between the termination of existing leases and the creation of new interests. The Central Government, etc. have to take a positive step for obtaining a prospecting licence or a mining lease. Without it, the Act would bi: ineffective to create of its own force any right or interest in favour of the Central Government, a Government Company or a Corporation owned, managed or controlled by the Central Government. As ob- served _by Sikri, J., in ,jjit Singh, (supra) the essential difference bet- ween "acquisition by the Sfate" on the 1one hand and "moclification or extinwshment of rights" on the other, is that in the first case the bene- ficiary is the Stat~ while in the second the beneficiary is not the State. The Nationalisation Amendment Act merely extinguishes the rights of the lessees and the sub-lessees. It does not provide for the acquisi- tion of those rights, directly or indiretly, by the State. Article 31 (2A) mil therefore come into play, by which,

"Where a law does not provide for the transfer· of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives an,y person of his property."

The position in Madan Mohan Pathak (supra) was entirely different because the direct effect of the inipugned Act was to transfer owner- ship of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life Insurance Corporation; since the L.I.C. is a Corporation owned by the State, the impugned Act was held to be a law providing for oompulsory acquisition of · these debts by the State within the meaning of clause (2A) of Article 31.

Shri Sen's argument on the question of acquisitron of the rights of lessees and sub-lessees by the State therefore fails. It follows that a c the Nationalisation Amendment Act must receive the protection · of Article 31A(l)(e) of the Constitution, that is to say, thaf the Act cannot be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Articles 14, 19 and 31.

These are our reasons for the order passed by us on May 5, 1978 c which reads thus : The stay orders passed in these Writ Petitions are vacat- ed except in those Writ Petitions, viz., Writ Petitions Nos. 257, 220, 1i1, 600, 1130-1134, 352, 221 and 178/77 in

which composite mining leases have been granted for mini.Ilg both fireclay and-t'oal. The stay orders in these latter peti- tions shall stand modified as from to-day on the lines of the order recorded below.

All the Writ Petitions are dismissed with costs except Writ Petitions Nos. 257, 220, 111, 600, 1130-1134, 352, 221 and 178/77 in each of which there is a composite mining for mining fireclay and coal. These Petitions are allowed partly in that the petitioners therein s:hall be entitled, for the duration of the unexpi'fed portion of their existing leases, to carry on mining operations for the purpose of winning fireclay so long as, and to the extent that, they do not carry on allj' coal mining operation or engage in winning or mining coal. In

these writ petitions there will be no order as to costs. We have already indicated how, though the petitioners holding com- posite leases were permitted to carry on mining operations for the purpose of winning fireclay, they, according to their own showing, cannot win or mine fireclay without doing a coal mining operation or wi>thout engaging in winning or mining coal. It is self-evident that in attempting to win fireclay, they will have to act at their own peril since they will run the risk of being prosecuted undei; section 30(2) of the Coal Mines (Nationalisation) Act, 1973.

Petition Nos. 111, 178, 220, 221, 257, 352, 600 and 1130-1134 partly allowed. Petition Nos. 150, 151, 180, 205-210, 226, 270-271, 346, 355, 403, 396-398, 599, 541, 543, 626, 635-639, 661, 687-692, 758/77 and 154, 571-574, 603, 605, 610 and 611/77 dismissed.

S.R .. ..