PETITIONER:
RAJA SATYENDRA NARAYAN SINGH & ANR.
Vs.
RESPONDENT:
STATE OF BIHAR & ORS.
DATE OF JUDGMENT05/05/1987
BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
NATRAJAN, S. (J)
CITATION:
1987 AIR 1390 1987 SCR (3) 224
1987 SCC (3) 319 JT 1987 (2) 356
1987 SCALE (1)1180
CITATOR INFO :
RF 1989 SC 682 (13)
ACT:
Bihar Land Reforms Act, 1950: ss. 3, 9, 10 and
25--Minerals not exploited by the ex-landlord on date of
vesting of the estate--Right of ex-intermediary to get
compensation for such minerals.
Interpretation of Statutes--Rules of
Construction--Statute to be read as a whole and in the con-
text--Statutory rules to be harmoniously read with Stat-
ute--Statute providing for assumption and enforcement of an
existing liability not to be construed as extending that
liability or creating new one in absence of clear terms to
that effect.
HEADNOTE:
Section 3 of the Bihar Land Reforms Act, 1950 provides
for vesting of an estate or tenure in the State by notifica-
tion. Under s. 9 from the date of such vesting all mines
comprised in the estate or tenure, as were in operation at
the commencement of the Act and were being worked directly
by the intermediary were deemed to have been leased to the
intermediary and he was entitled to retain possession there-
of. Section 10 provides for vesting of subsisting leases of
mines and minerals. Section 25 provides for computation of
compensation payable to the intermediary in respect of
royalties on account of mines and minerals or directly
working mines comprised in the estate or tenure. Rule 25-E
of the Bihar Land Reforms Rules, 1951 deals with the proce-
dure for determination of the amount of compensation or
annuity.
The estate of the ex-landlord comprising vast areas of
mineral bearing lands was vested in the State by virtue of a
notification under s. 3 of the Act with effect from 4th
November, 1951. Some part of the said area was being worked
by the lessees under the leases granted to them, who paid
royalty to him.
The ex-landlord died in 1969. His successors-in-inter-
est, the appellants herein, filed writ petition before the
High Court claiming compensation in respect of the coal
bearing area having coal reserves vested in the State. The
High Court came to the conclusion that the ex-intermediary
was not entitled to the compensation as claimed, and dis-
missed the petition.
225
In this appeal by certificate, it was contended for the
appellants that where there are minerals which were not
tapped and not exploited by the ex-intermediary, acquisition
of the source of income for the intermediary would be acqui-
sition of property, that there was no provision for compen-
sation for this purpose in the Act, and the statute was,
therefore, exproprietary in nature. For the respondents, it
was contended that there was no question of expropriation.
The property being not in existence, it was acquisition of a
right which might be a source or' income and property it'
tapped, but it was not an existing right.
Dismissing the appeal, the Court,
HELD 1. A statute must be read as a whole, fairly and
reasonably. It must be so read, if possible, and warranted
by the context to give effect to the manifest intent of the
framer. So read, it cannot be said that the Bihar Land
Reforms Act, 1950 provides for any compensation for the
minerals not exploited. That does not make the Act unconsti-
tutional. [232D]
2. The Rules and the sections must be harmoniously
construed. In the instant case, the legislature was acquir-
ing the estate of an ex intermediary. For all the existing
sources of his income and which were being exploited, com-
pensation has been provided for. But for a right which might
become a source of income which had not been exploited, no
compensation has been provided. Where a statute provides for
the assumption and enforcement of an existing right or
liability, it will not be construed as extending that li-
ability or creating a new one unless it does so in clear
terms. [231F]
Halsbury's Laws of England, 4th Edition, Vol. 44, page
556, paragraph 904, referred to.
In the instant case there is no question of interpreting
any law which will expose the Act to constitutional infirmi-
ty. The right was not existing at the time of vesting, no
question therefore, arises of depriving the ex-intermediary
of any right without compensation. [231G]
3. The basic principle of construction of every statute
is to find out what is clearly stated and not to speculate
upon latent imponderables. The scheme of the Act does not
support the appellant that it is exproprietary in nature.
Section 25(1)(a) and (b) deal with independent items and s.
25(1)(c) is a combination of the two. The other sub-sections
make it quite clear. Compensation for the acquisition of a
source which
226
when exploited might become property or income is not neces-
sary. Ownership is a bundle of rights and for the existing
bundle of rights compensation has been provided lot. [231
H-232B]
4. It is not for the court to provide for compensation
where legislature has thought it fit not to do so. The fact
that compensation for existing rights has been provided for
would not expose the statute to the vice of unconstitution-
ality as exproprietary. Had there been such a possibility,
other considerations might have been there. The Act has been
incorporated in Item 1 of the 9th Schedule of the Constitu-
tion.] [232C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 390 of
1981.
From the Judgment and Order dated 31.8. 1979 of the
Patna High Court in C.W.J.C. No. 262 of 1979 (R).
M.K. Ramamurthy, A.K. Nag and Mrs. Naresh Bakshi for the
Appellants.
Jaya Narayan and Pramod Swarup for the Respondents.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. This appeal is directed against
the judgment and order of the High Court of Patna, (Ranchi
Bench) dated 3 1st August, 1979.
It involves the question of the right of ex-intermedi-
aries to get compensation for the minerals which were not
exploited by the exlandlords on the date of vesting the
estate under Bihar Land Reforms Act, 1950 (hereinafter
referred to as the ‘Act’).
Raja Nilkanth Narayan Singh of Sawagarh estate was the
exlandlord whose estate vested by virtue of the notification
under the Act with effect from 4th November, 1951. The
petitioners before the High Court and the appellants herein
are the successors-in-interest being the grandson and the
daughter-in-law of the late Nilkanth Narayan Singh. The
estate of the ex-landlord comprised, inter alia, tauzi Nos.
14 and 15 of the District Collectorate of Dhanbad within the
aforesaid tauzis. These were vast areas of mineral-bearing
lands owned by the ex-proprietor of the estate. Some part of
the said area
227
was being worked by the lessees under the leases granted to
them who paid royalty to late Nilkanth Narayan Singh, afore-
said, who, it might be stated, died in November, 1969 in a
state of jointness with other appellants.
The case of the appellants is that compensation in
respect of the coal bearing area having coal reserves i.e.
minerals, has not yet been paid by the State of Bihar al-
though the estate had vested in it as early as in November,
195 1. So far as the mines that were being worked out or the
minerals which were the subject-matter of leases granted by
the ex-landlord are concerned, there was no dispute. The
appellants are entitled to and have not been denied compen-
sation in respect thereof under the Act, and the Rules.
The controversy is only on the question whether the ex-
landlord or his successor-in-interest is entitled to compen-
sation for the minerals which were not the subject-matter of
any lease granted in favour of any lessee. However, it
appears, there is no dispute on the question that had such
minerals been the subject-matter of a lease, the ex-interme-
diary would have been entitled to compensation in respect
thereof in the manner provided under the Act to be computed
as prescribed by the Rules.
The High Court after an exhaustive discussion of the
different provisions of the Act came to the conclusion that
ex-intermediary is not entitled to the compensation as
claimed for and as such dismissed the application under
Article 226 of the Constitution. Being aggrieved by the said
decision, the appellants after obtaining a certificate under
Article 133(1) of the Constitution have come up to this
Court.
The expression ‘mines’ used in the Act or in the Rules
had a distinct connotation namely those minerals that were
unworked and unexcavated reserves while excavated mines had
been worked. The question, therefore, involves, as the High
Court rightly pointed out not only the mines but with miner-
als located beneath the earth, and neither being worked by
ex-intermediary on the date of vesting nor being the subject
matter of lease in favour of any third party.
The fights of the parties have t.o be worked out under
the provisions of the Act. The Act in question was an Act
which was passed to provide for the transference to the
State of the interests of proprietors, and tenure-holders in
land and of the mortgages and lessees of such interests
including interests in trees, forests, fisheries, ‘jalkars’
ferries,
228
‘hats’, ‘bazars’ mines and minerals, and to provide for the
constitution of a Land Commission for the State of Bihar
with powers to advise the State Government on the agrarian
policy to be pursued by the State Government consequent upon
such transference and for other matters connected therewith.
On an analysis of the scheme of the Act, it appears that
section 3 of the Act provides for the notification vesting
an estate or tenure in the State. It provides, inter alia,
that the State Government may, from time to time, by notifi-
cation declare that the estates or tenures of a proprietor
or tenure-holder, specified in the notification, have passed
to and become vested in the State. There was appropriate
notification passed in this case. On issuance of the notifi-
cation, the estates become vested in the State. Section 4
deals with the consequences of vesting. It provides that
notwithstanding anything contained in any other law for the
time being in force or in any contract, on the publication
of the notification notwithstanding anything to the con-
trary, certain consequences, as mentioned in section 4 would
follow. Such consequences are mentioned in clauses (a), (b),
(c), (d) and (e) and other sub-clauses of section 4 of the
Act. Section 9 deals with the mines worked by intermediary
and it provides that with effect from the date of vesting
all such mines comprised in the estate or tenure as were in
operation at the commencement of the Act and were being
worked directly by the intermediary shall, notwithstanding
anything contained in the Act, be deemed to have been leased
by the appropriate Government to the intermediary and he
shall be entitled to retain possession of those mines as a
lessee thereof. The terms and conditions of the said lease
would be such as would be agreed upon between the State
Government and the intermediary provided that all such terms
and conditions shall be in accordance with the provisions of
any Central Act for the time being in force. Section 10
deals with the consequences of subsisting leases of mines
and minerals and provides for vesting of the same. Section
23 deals with computation of net income for the purpose of
preparing compensation assessment-roll of the net income of
the intermediary. Section 24 deals with the rates of compen-
sation, and provides that after the net income had been
computed under section 23, the Compensation Officer should
for the purpose of preparing compensation assessment-roll
proceed to determine the amount of compensation to be pay-
able in respect of the transference to the State of the
interests of each intermediary. The table is set out in the
section. Section 2.5. is important and deals with the compu-
tation of compensation payable for mines and minerals. The
relevant portion of it provides, inter alia, as follows:
“25. Computation of compensation payable for
mines and minerals.
229
(1) The Compensation Officer shall prepare in
the prescribed form and in the prescribed
manner compensation assessment-roll containing
in respect of every intermediary in receipt of
royalties on account of mines and minerals or
directly working mines comprised in the estate
or tenure–
(a) his gross income and net income from such
royalties;
(b) his gross income from mines worked
directly by him and the amount deemed to be
his net income from royalties in respect of
such mines;
(c) the amount of compensation payable to
him under the provisions of this Act for mines
and minerals; and
(d) such other particulars as may be pre-
scribed.”
Then sub-section (2) of section 25 deals with the prepara-
tion of compensation roll for clause (a) of sub-section (1)
and sub-section (3) deals with the preparation of compensa-
tion roll for clause (b) of sub-section (1). Sub-section (4)
deals with the question whether after net income from royal-
ties have been computed under sub-sections (2) and (3), the
Compensation Officer should proceed to determine the amount
of compensation to be payable to the intermediary in the
manner and in accordance with the principles laid down
therein.
While we are on the provisions of the Act and the Rules,
reference may be made to Bihar Land Reforms Rules, 195 1
(hereinafter called the ‘Rules’), and Rule 25-E deals with
the procedure for determining the approximate amount of
compensation or annuity. It provides as follows:
“25-E. Procedure for determining the
approximate amount of compensation or annuity.
(1) The approximate amount of compensation in
respect of the intermediary interests, other
than that payable for mines and minerals,
shall be the approximate net income arrived at
in the manner laid down in rule 25-C multi-
plied by the appropriate multiple referred to
in Sec. 24(1); and the approximate amount of
annuity shah be equal to the approximate net
income.
(2) The approximate amount of compensation or
annuity payable for mines and minerals com-
prised in the estate or
230
tenures of an intermediary shall be worked out
after considering the report to be obtained
from the Mining Officer of the existing re-
serves in the mines or minerals and the proba-
ble income therefrom in the future.
(3) The approximate amount of the total com-
pensation or annuity payable to the intermedi-
ary shall be arrived at by adding the approxi-
mate amount of compensation or annuity payable
for mines and minerals to the approximate
amount of compensation or annuity in respect
of his other interests:
Provided that, if no such informa-
tion regarding the existing reserves in the
mines or minerals and the probable income
therefrom in the future is available, the
approximate amount of compensation or annuity
shall be calculated only on the basis of the
net income from the intermediary interests,
other than mines or minerals, in accordance
with sub-rule (1):
Provided further that the deduction
allowed under clause (c) and (cc) of Sec. 4
shall be recovered by deduction from the
approximate amount of compensation payable to
the intermediary under this rule.”
It is clear from the facts brought out by the High
Court that all the mines comprised in the estate or tenure
of ex-intermediary which were worked out directly by him
although vested as a result of the provisions of section 4A
were deemed by legal fiction to be subsequently settled by
the State Government in favour of the ex-intermediary and
that ex-intermediary should be deemed in law to be statutory
lessee under the State Government in respect of the mines
which have been worked out by him. It is clear from several
provisions of the Act including section 9 that there is no
section dealing with the minerals at all. In this connection
sections 9 and 10 may be borne in mind.
Section 25 of the Act envisages compensation to be
payable for mines and minerals and provides that ex-interme-
diary shall be paid for the payment to the ex-intermediary
who is in receipt of royalties on account of mines and
minerals or directly working mines in the estate or tenure
consisting of his gross income–namely, income of exinterme-
diary, gross and net income from royalty and his gross
income
231
from mines worked directly by ex-intermediary and the amount
deemed to be the net income from royalties of his mines;
under clause (c) of sub-section (1) of section 25, the
amount of compensation payable to him under the provisions
of the Act for mines and minerals. On behalf of the State
Government it was contended that this item under clause (c)
of section 25(1) was nothing additional or extra than clause
(a) plus clause (b) of sub-section (1) of section 25 and he
supported this submission by reference to sub-sections (2),
(3) and (4) of section 25.
According to the State, Rule 25-E of the Rules does not
carry the matter any further. On the other hand counsel for
the appellants, Mr. Ramamurthy, submitted that where there
are minerals which were not tapped and not exploited by the
ex-intermediary, acquisition of source of income for the
intermediary would be acquisition of property and no statute
should be so read as would amount to, specially in the
background of the constitutional provisions prevailing in
1950 when this Act was passed, as taking away right of
property without payment of compensation. It was urged that
there was no provision for compensation for this purpose. If
it is so read as contended for by the respondent for this
valuable property of the appellants, such construction which
would amount to exproprietary legislation should be avoided.
On the other hand, it was submitted that there was no ques-
tion of expropriation. The property was not in existence. It
was acquisition of a right which might be a source of income
and property if tapped but it was not an existing right.
The Rules and the sections must be harmoniously con-
strued. Here the legislature was acquiring the estate of
ex-intermediary. For all the existing sources of his income
and which were being exploited, compensation has been pro-
vided for. But for fight which might become a source of
income which had not been exploited, no compensation has
been provided. Where a statute provides for the assumption
and enforcement of an existing right liability, it will not
be construed as extending that liability or creating a new
one unless it does so in clear terms. See in this connection
Halsbury’s Laws of England, 4th Edition, Vol. 44, page 556,
paragraph 904. But here there is no question of interpreting
any law which will expose the Act to constitutional infirmi-
ty. The right was not existing at the time of vesting–no
question therefore arises of depriving ex-intermediary of
any right without compensation.
The basic principle of construction of every statute is to
find out
232
what is clearly stated and not to speculate upon latent
imponderables. The scheme of the Act does not support the
appellant. Moreover section 25(1)(a) & (b) deal with inde-
pendent items and sec. 25(1)(c) is a combination of two. The
other sub-sections make it quite clear. Compensation for the
acquisition of a source which when exploited might become
property or income is not necessary. Ownership is a bundle
of rights–for all the elements of existing ingredients of
bundle of rights and for the existing bundle of rights
compensation has been provided for. The statute is not bad
on that ground.
It is not for the court to provide for compensation
where legislature has thought it fit not to do so. The view
which we are taking in view of the fact that compensation
for existing rights has been provided for would not expose
this statute to the vice of the unconstitutionality as
exproprietary. Had there been such a possibility, other
considerations might have been there. The Act has been
incorporated in Item I of the 9th Schedule of the Constitu-
tion. How the respondent authorities treated this question
in the initial stage is irrelevant. It is well settled that
a statute must be read as a whole, fairly and reasonably. It
must be so read, if possible, and warranted by the context
to give effect to the manifest intent of the framer. So read
we find that the statute does not provide for any compensa-
tion for the minerals not exploited. That does not make the
Act unconstitutional. So be it.
In that view of the matter, we are of the opinion that
the High Court was right and the appeal must therefore fail
and is accordingly dismissed. In the facts and circumstances
of the case, however, we make no order as to costs.
P.S.S. Appeal dismissed. ?233