M/s. Bharat Coking Coal Ltd. Vs. State of Bihar & Ors.
EmailAppeal: Civil Appeal No. 4521 of 1986
Petitioner: M/s. Bharat Coking Coal Ltd.
Respondent: State of Bihar & Ors.
Apeal: Civil Appeal No. 4521 of 1986
Judges: K.N.SINGH & M.H.KANIA, JJ.
Date of Judgment: Aug 17, 1990
Appearances:
Mr.K.K. Venugopal, Senior Advocate and Mr.Kapil Sibal, Additional Solicitor General, Mr.Ranjit Kumar, Mr.P.Parmeshwaran, Mr.P.P. Singh, Mr.C.V. Subba Rao, Mr.S.B. Upadhyay, Mr.P.K. Jain and Mr. S.K. Sinha, Advocates for the parties.
Head Note:
MINES AND MINERAL (REGULATION AND DEVELOPMENT) ACT, 1957:
Section 2 – Declaration by Parliament – State Legislature denuded of its legislative power with respect to regulation of mines and mineral development.
MINES AND MINERAL (REGULATION AND DEVELOPMENT) ACT, 1957:
Section 3 – Mining operation – Mine – Washery is included within the definition of mine under the Act.
Held:
… Section 3 of the Act defines ‘mining operations’ which means any operation undertaken for the purpose of winning any mineral. The expression ‘mine’ is not defined by the Act instead Section 3(1) says that the expression ‘mine’ has the same meaning as assigned to it in the Mines Act 1952. ‘Mine’ as defined by Section 2(1) (j) of Mines Act 1952 means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on … The inclusive definition of mine is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale. There is no dispute between the parties that the coal as extracted from the coal mine is crushed into pieces and thereafter it is washed to remove its impurities and ash contents to make the coal fit for sale. After the coal is washed, it assumes the form of coke which is sold to consumers. The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for sale is an integral part of a mine as it involves ancillary process. Washery is included within the definition of mine under the Mines Act 1952. Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine. (Para 21)
Cases Reffered:
1. Kesari Mal Jain v. State of Bihar, AIR 1985 Patna 114.
2. State of Tamil Nadu v. Hind Stone, 1981 (2) SCR 742.
3. Tarkeshwar Sio Thakur Jiu v. B.D. Dey & Co. & Ors. AIR 1979 SC 1669.
4. Bhagwan Das v. State of U.P.& Ors, 1976 (3) SCR 869.
5. Baijnath Kedia v. State of Bihar & Ors, 1970 (2) SCR 100.
6. State of Madhya Pradesh & Anr. v. Thakur Bharat Singh, 1967 (2) SCR 454.
7. State of Orissa v. M.A. Tulloch & Co., 1964 (4) SCR 461.
8. The Hingir – Rampur Coal Co.Ltd. & Ors. v. The State of Orissa & Ors., 1961 (2) SCR 537.
9. Rai Sahib Ram Jawaya Kapur & Ors. v. The State of Punjab, 1955 (2) SCR 225.
2. State of Tamil Nadu v. Hind Stone, 1981 (2) SCR 742.
3. Tarkeshwar Sio Thakur Jiu v. B.D. Dey & Co. & Ors. AIR 1979 SC 1669.
4. Bhagwan Das v. State of U.P.& Ors, 1976 (3) SCR 869.
5. Baijnath Kedia v. State of Bihar & Ors, 1970 (2) SCR 100.
6. State of Madhya Pradesh & Anr. v. Thakur Bharat Singh, 1967 (2) SCR 454.
7. State of Orissa v. M.A. Tulloch & Co., 1964 (4) SCR 461.
8. The Hingir – Rampur Coal Co.Ltd. & Ors. v. The State of Orissa & Ors., 1961 (2) SCR 537.
9. Rai Sahib Ram Jawaya Kapur & Ors. v. The State of Punjab, 1955 (2) SCR 225.
JUDGEMENT:
SINGH, J. :
1. In these appeals a common question of law is involved whether the State of Bihar had legal authority to execute leases in favour of the respondents for collection of slurry on payment of royalty to it. Since the question involved in these appeals are common the same are being disposed of by a common judgment. Civil Appeal No. 4521 of 1986 and Civil Appeal Nos. 61-62 of 1987 are directed against the judgment of the Patna High Court while Civil Appeal Nos. 230-231 of 1987 are directed against the judgment of the Division Bench of the Calcutta High Court.
2. In order to appreciate the controversy in question it is necessary to recapitulate the facts. M/s. Bharat Coking Coal Ltd. – appellant in C.A. 4521 of 1986 is a Government Company which carries coal mining operations in village Sudamdih in the State of Bihar. There is a coal washery adjacent to the appellant’s coal mine in village Sudamdih. After the coal is extracted from the mines, it is crushed into pieces of different sizes for purposes of grading. Since the coal is mixed up with mud and other impurities, same is brought to the washery for washing and cleaning the same for reducing the ash percentage and for use by metallurgical consumers. In the process of washing small coal particles escape from the washery in the form of slurry along with water and the same are deposited in the slurry ponds constructed for their storage by the appellant company. But when the ponds are full, the slurry overflows the pond and flows down into the river Damodar. After the water is soaked by the soil the small particles of coal get deposited in the river bed. These coal particles are collected and formed into briquettes which are sold in market for energy and fuel purposes. The slurry coal has acquired high commercial value as it is of exceptional quality and high grade, it is used by steel plants and thermal power stations. The State of Bihar granted lease in favour of Ram Nath Singh-respondent No. 4 for collecting the coal particles settled in the Damodar river bed and other land including plot No. 370 of Mauza Sudamdih. The appellant claimed that plot No. 370 which formed part of river bed of Damodar belonged to it having been acquired under the Coal bearing Areas (Acquisition & Development) Act, 1957 for the purpose of mining of coal. Pursuant to the lease, respondent No. 4 has been collecting the coal particles from plot No. 370. The appellant company raised objection before the Revenue Authorities of the State of Bihar claiming property rights to collect and obtain slurry deposited in the river bed in plot No. 370, but its objections were over-ruled and respondent No. 4 was permitted to collect the coal particles from the aforesaid plot. The appellant thereupon filed a writ petition in the High Court of Patna challenging the State Government’s action in granting lease to respondent No. 4 for lifting slurry from the river bed, on the ground that the property belonged to the appellant company and the State Government had no authority in law to grant a mining lease without the prior approval of the Central Government under Section 5 of the Mines and Mineral (Regulation and Development) Act 1957.
3. Tata Iron & Steel Company Ltd.- the appellant in Civil Appeal Nos. 61-62 of 1987, is a company incorporated under the Companies Act. It owns steel plant at Jamshedpur and it also owns captive coal mines in the District of Hazari Bagh and Dhanbad. These coal mines are commonly known as West Bokaro Collieries. There is no dispute that large area of land in the District of Hazari Bagh and Dhanbad have been settled with the appellant company for purposes of mining operations and the company enjoys mineral rights in respect of the surface and sub-soil. It is not necessary to refer to the historical facts relating to the acquisition of mining rights by the appellant, as there is no dispute that under Section 10 of the Bihar Land Reforms Act the appellant’s existing mining leases became statutory leases in the State of Bihar. The appellant has established washery plant in the District of Hazari Bagh as well as in Jama Dhoba and Zora Pokhar in District Dhanbad for purposes of washing the coal after extraction from the coal mines and crushed into different sizes. In the process of washing the coal small particles of coal escape from the washery and over-flow from the plant and the same are deposited in the storage pond constructed by the appellant. But sometime they overflow from the storage pond and settle down in the Raiyati land and in the Bokaro river bed. The appellant has been claiming right that the slurry which escaped from the washery belonged to it and no other person had right to collect the same. The State Government did not accept the appellant’s claim instead it settled the rights of collection of slurry with the respondents under the indentures granted in their favour. Under the settlement the respondents have been authorised by the State Government to collect sludge and slurry which settles down in the Bokaro river bed or in the Raiyati land on payment of royalty to the State. The appellant filed two writ petition before the Patna High Court challenging the authority of the State Government’s action on the ground that slurry was a mineral being coal and as such its collection or mining was regulated by the provisions of the Mines and Mineral (Regulation and Development) Act, 1957 (hereinafter referred to as ‘the Act’) and the State Government had no authority to grant any lease for collection of sludge/slurry without the previous sanction of the Central Government.
4. The aforesaid petitions were heard and disposed of by a Full Bench of the Patna High Court (AIR 1986 Patna 242). The Full Bench dismissed the writ petitions on the findings that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine which was not regulated by the provisions of the Act. The collection of slurry did not involve any mining operations and the settlement made by the State Government in favour of the respondents for collecting the same was not a mining lease, therefore, the State Government was not under any legal obligation to obtain previous sanction of the Central Government under the Act. The High Court further held that after the slurry escaped into the river bed or to some other land, the same ceased to belong to the appellants and the State Government was entitled to execute lease for collection of the same.
5. Civil Appeal Nos. 230-231 of 1987 are directed against the judgment of a Division Bench of the Calcutta High Court (AIR 1985 Calcutta 143). The Central Coalfields Ltd. and the Coal India Ltd. the appellants are Government Companies which own coal mines in the District of Giridih in the State of Bihar. The appellants have set up coal washeries at Kathara, Kargali and Sawang in the District of Giridih for washing the coal extracted from its mines. In the process of washing, particles of coal escape from the washery along with water which ultimately flows into the river Damodar. The Mining Department of the State of Bihar granted lease to Industrial Fuel Marketing Company and Ors. – respondents for removing the slurry from the river bed on payment of royalty but the appellants resisted the collection of slurry from their land and they instituted criminal proceedings against the contractors. Thereupon, the respondents-contractors filed writ petitions before the Calcutta High Court for quashing the criminal case registered against them, and also for the issue of a direction permitting them to collect slurry under the lease granted to them by the State of Bihar. Before the High Court the appellants herein contended that the slurry belonged to them and the State of Bihar had no authority in law to grant any lease in respect of the same. A learned single Judge of the High Court dismissed the writ petitions on the findings that the appellants herein are the owner of the slurry and the State Government had no authority to grant any lease to the respondent contractors for removal of the same. On appeal by the contractors a Division Bench of the Calcutta High Court vide its judgment (AIR 1985 Calcutta 143) held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Act were not applicable to the grant of lease. On the question of appellants’ claim to the property rights for collecting slurry, the Bench held that the slurry deposited on the appellant’s land, belonged to them and the respondents had no right to collect the same but if the slurry settled down on others’ land the respondents have right to remove the same from the river bed. Aggrieved, the Central Coalfields Ltd. and Coal India Ltd. have challenged the correctness of the High Court’s view by these appeals.
6. The main question which falls for consideration is whether the State of Bihar has authority to grant lease/settlement to the respondents for collection/lifting of coal slurry deposited in the river bed or on any other land after its escape from the appellants’ washeries. Before the High Court the appellants contended that in view of the provisions of the Act the State of Bihar had no authority to grant any lease regarding collection of slurry without the prior approval of the Central Government. The State of Bihar and other respondents contended before the High Court that the slurry was not a mineral, and its collection or lifting from the river bed involved no mining operations, therefore, the Act did not apply and the State Government was free to grant leases for collection of the same. The appellants further pleaded before the High Court that since slurry after its escape from their washeries settled down in their own land, it continued to be their property and the State of Bihar had no authority to grant lease for collection of the same from their land. The Full Bench of the Patna High Court held that the slurry was neither coal nor a mineral instead it was a reject residue or waste of an industrial process consisting of mud, ash and oily substance having carbonaceous ingredients. Since collection of slurry did not involve any mining operations the provisions of the Act did not apply and the State Government had authority to settle the removal of slurry with private parties. With regard to the appellant’s claim of ownership of the slurry deposited on the appellants land, the Full Bench did not decide the question, on the ground that these issues involved disputed question of fact which could properly be adjudicated in a civil suit.
7. The Division Bench of the Calcutta High Court held that the lease granted by the State of Bihar was not a mining lease as the river bed or the land from where the slurry was collected was not a mine as no winning or mining operations were involved in collecting the same. The Bench further held that the lease granted by the State Government in favour of the respondents for collecting the slurry did not confer any right in them for carrying out coal mining operation nor such right relates to winning or mining of coal. However the Bench held that the slurry deposited on the appellants’ land belonged to them and the respondents-lessee had no right to collect slurry from the appellants’ land. But if the slurry was deposited on the land not owned by the appellants, the lessee was entitled to remove the same under the settlement made by the State of Bihar. Thus, both the High Courts held that the slurry which escaped form the washeries and deposited in the river bed or on other land did not constitute a mineral and it was not regulated by the Central Act, consequently, the State of Bihar had authority to settle the collection of slurry.
8. Learned counsel for the parties made elaborate submissions before us in support of their case. On behalf of the appellants it was urged that slurry/sludge the subject matter of dispute in the instant cases, in substance is coal, a mineral specified in the First Schedule to the Act. The State Government had no authority in law to grant any lease to the respondents for the collection or removal or lifting of the slurry coal deposited in the river bed or on any Raiyati land without obtaining the sanction of the Central Government under Section 5 of the Act. The counsel for the appellants further emphasised that slurry which escapes from washery of the coal mines, contains small particles of coal having carbonaceous character, and it is used for energy and fuel purposes. Assailing the findings of the Full Bench of the Patna High Court and the Division Bench of the Calcutta High Court, the appellants’ counsel submitted that slurry coal was not deposited in the river bed or other land by any artificial mode instead the same were deposited in the river bed and the land by natural process of flow of water discharged from the washeries. The process of collection or removal of the same from the river bed or Raiyati land by the respondent/lessees involved winning operations. Winning or mining operation according to the learned counsel did not always require excavation or extraction of a mineral from the bowels of the earth instead a mineral like sand or gravel may be deposited on the earth and removal of the same would also involve winning or mining operation. The appellants further urged that if the slurry which is the subject matter of the lease or settlement, is not a mineral, the State Government had no authority in law to authorise any other person to remove the same from the appellants’ land. There is no law made by the State Legislature authorising the State Government to interfere with the appellants property rights. In the absence of any law the State of Bihar had no authority to interfere with the appellants’ property rights by executive orders. In the alternative learned counsel for the appellants urged that on the admitted pleadings of the parties slurry discharged from the washeries of the appellants’ coal mines constituted waste and effluent of coal mines, its disposal was exclusively within the legislative competence of the Parliament. In view of the Parliament’s declaration under Section 2 read with Section 13 and 18 of the Act, the State Government was denuded of all its powers in the matter relating to the disposal of slurry which would include its removal or collection. Since the State Legislature is denuded of its legislative competence to make any law with regard to disposal of waste or effluent discharge of coal mines, the State Government has no executive power to deal with the same. Learned counsel for the State of Bihar and other respondents reiterated their stand as taken by them before the High Court that the slurry was not a mineral and its removal did not involve any mining operations, consequently the settlement deed was not a mining lease under the Act. On behalf of the State Government it was further contended that once the slurry escaped from the washery plants of the appellants it ceased to belong to them and as it polluted the river water and affected the fertility of Raiyati land the State Government was justified in providing for its collection and removal to prevent pollution. The appellants could not have any right in the goods which they abandoned. It was further urged that that the washeries do not form integral part of the mining operations, therefore the slurry could not be treated as a waste of coal mine. In the alternative learned counsel contended that even if slurry was a waste of a coal mine the State Government was competent to provide for its collection and removal as the Central Government had failed to make any rule under Section 18 of the Act regulating disposal of the slurry.
9. Before, we consider the contention of the parties, we think it necessary to briefly discuss the nature and characteristic of the slurry. There is no dispute that coal is found in seams mixed with mud and other impurities. After its extraction from the mines, it is crushed into different sizes, thereafter it is washed in the washeries of the coal mines for removing its impurities for purposes of making it fit for use for metallurgical purposes. In the washery plants, coal is washed with the medium of water mixed with pine oil and sand through mechanical process. In the process of washing, large quantity of water is discharged through pipes which carry the discharged water to storage ponds constructed for the purpose of retaining the slurry. Alongwith the discharged water, small particles of coal are carried away to the pond where the coal particles settle down on the surface of the pond, and the same is collected after the pond is de-watered. The coal particles so collected are of fine quality, ash free and the same is used as fuel. The slurry is a descriptive expression, it may be cement slurry or coal slurry depending upon the character or quality of the mixture of mineral in the liquid form. In Websters New 20th Century Dictionary, ‘slurry’ is defined as follows:
“A thin mixture of water and any of several fine, insoluble materials as clay, cement, soil etc.
In common parlance slurry is a liquid form mixed with some other material. In Encyclopaedia Britannica “slurry” is defined as under:
“Slurry – watery mixture or suspension of insoluble matter. In the manufacture of portland cement, a mixture of the raw materials with water is called a slurry. Cement may be piped as a slurry in building construction. Coal may be transported over long distances as a slurry via pipeline; this method of transmission is economical between large producing areas and markets where large tonnages are used at a fairly uniform rate. The shipment of iron ore as slurry, either by pipeline or by tanker, also has increased. When slurry reaches its destination, the material is separated from the water before use or further processing.”
10. Viewed in the light of the above meaning of slurry, there is no doubt that in the instant cases slurry is coal slurry, as admittedly small particles of coal escape from the washery plant alongwith water. After it overflows the storage pond the slurry flows into the river and is deposited on the river bed, which is later on collected and used as fuel after it is formed into briquettes. The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal. Thus, the slurry is coal in liquid form. A Division Bench of the Patna High Court in Kesari Mal Jain Vs.State of Bihar AIR 1985 Patna 114 placing reliance on Nelson’s Dictionary of Mining which defined ‘slurry’ as “slurry inter alia means fine carbonaceous discharge from a colliery washery” held that the carbonaceous particles so discharged from the coal washery is used for producing energy or heat therefore it was coal. The Bench further held that coal particles which flow out with the water from the coal washeries are formed into balls or briquettes for sale in the market for purposes of producing energy or heat, therefore, slurry was coal. The Division Bench’s view was not accepted by the Full Bench of the Patna High Court as it held that the slurry deposit did not constitute a mineral. We agree with the view taken by the Division Bench in Kesari Mal’s case (supra) as in our opinion the slurry coal deposited in the river bed or land, in substance as well as in its character continues to be coal.
11. If slurry is coal, the question is whether the leases in dispute granted by the State of Bihar constitute mine leases as contemplated by Section 5(2) (a) of the Act. “Mining lease” as defined by Section 3(c) means ” a lease granted for the purpose of undertaking mining operations and include a sub-lease granted for such purpose.” “Mining operations” as defined by Section 3(d) means “any operations for the purpose of winning any mineral.” Section 5(1) places restriction on the grant of mining leases by a State Government. Section 5(2) (a) lays down that except with the previous approval of the Central Government no prospecting licence or mining lease shall be granted in respect of any material specified in the First Schedule. The First Schedule to the Act specifies minerals as contemplated by Section 5(2) (a) and “coal” is specified therein at Item No.4. The Patna and Calcutta High Courts have held that the collection of slurry did not involve any mining operations, therefore, the lease in question was not a mining lease. Consequently, the State Government was not under any legal obligation to obtain approval of the Central Government before granting leases for collection of slurry.
1. In these appeals a common question of law is involved whether the State of Bihar had legal authority to execute leases in favour of the respondents for collection of slurry on payment of royalty to it. Since the question involved in these appeals are common the same are being disposed of by a common judgment. Civil Appeal No. 4521 of 1986 and Civil Appeal Nos. 61-62 of 1987 are directed against the judgment of the Patna High Court while Civil Appeal Nos. 230-231 of 1987 are directed against the judgment of the Division Bench of the Calcutta High Court.
2. In order to appreciate the controversy in question it is necessary to recapitulate the facts. M/s. Bharat Coking Coal Ltd. – appellant in C.A. 4521 of 1986 is a Government Company which carries coal mining operations in village Sudamdih in the State of Bihar. There is a coal washery adjacent to the appellant’s coal mine in village Sudamdih. After the coal is extracted from the mines, it is crushed into pieces of different sizes for purposes of grading. Since the coal is mixed up with mud and other impurities, same is brought to the washery for washing and cleaning the same for reducing the ash percentage and for use by metallurgical consumers. In the process of washing small coal particles escape from the washery in the form of slurry along with water and the same are deposited in the slurry ponds constructed for their storage by the appellant company. But when the ponds are full, the slurry overflows the pond and flows down into the river Damodar. After the water is soaked by the soil the small particles of coal get deposited in the river bed. These coal particles are collected and formed into briquettes which are sold in market for energy and fuel purposes. The slurry coal has acquired high commercial value as it is of exceptional quality and high grade, it is used by steel plants and thermal power stations. The State of Bihar granted lease in favour of Ram Nath Singh-respondent No. 4 for collecting the coal particles settled in the Damodar river bed and other land including plot No. 370 of Mauza Sudamdih. The appellant claimed that plot No. 370 which formed part of river bed of Damodar belonged to it having been acquired under the Coal bearing Areas (Acquisition & Development) Act, 1957 for the purpose of mining of coal. Pursuant to the lease, respondent No. 4 has been collecting the coal particles from plot No. 370. The appellant company raised objection before the Revenue Authorities of the State of Bihar claiming property rights to collect and obtain slurry deposited in the river bed in plot No. 370, but its objections were over-ruled and respondent No. 4 was permitted to collect the coal particles from the aforesaid plot. The appellant thereupon filed a writ petition in the High Court of Patna challenging the State Government’s action in granting lease to respondent No. 4 for lifting slurry from the river bed, on the ground that the property belonged to the appellant company and the State Government had no authority in law to grant a mining lease without the prior approval of the Central Government under Section 5 of the Mines and Mineral (Regulation and Development) Act 1957.
3. Tata Iron & Steel Company Ltd.- the appellant in Civil Appeal Nos. 61-62 of 1987, is a company incorporated under the Companies Act. It owns steel plant at Jamshedpur and it also owns captive coal mines in the District of Hazari Bagh and Dhanbad. These coal mines are commonly known as West Bokaro Collieries. There is no dispute that large area of land in the District of Hazari Bagh and Dhanbad have been settled with the appellant company for purposes of mining operations and the company enjoys mineral rights in respect of the surface and sub-soil. It is not necessary to refer to the historical facts relating to the acquisition of mining rights by the appellant, as there is no dispute that under Section 10 of the Bihar Land Reforms Act the appellant’s existing mining leases became statutory leases in the State of Bihar. The appellant has established washery plant in the District of Hazari Bagh as well as in Jama Dhoba and Zora Pokhar in District Dhanbad for purposes of washing the coal after extraction from the coal mines and crushed into different sizes. In the process of washing the coal small particles of coal escape from the washery and over-flow from the plant and the same are deposited in the storage pond constructed by the appellant. But sometime they overflow from the storage pond and settle down in the Raiyati land and in the Bokaro river bed. The appellant has been claiming right that the slurry which escaped from the washery belonged to it and no other person had right to collect the same. The State Government did not accept the appellant’s claim instead it settled the rights of collection of slurry with the respondents under the indentures granted in their favour. Under the settlement the respondents have been authorised by the State Government to collect sludge and slurry which settles down in the Bokaro river bed or in the Raiyati land on payment of royalty to the State. The appellant filed two writ petition before the Patna High Court challenging the authority of the State Government’s action on the ground that slurry was a mineral being coal and as such its collection or mining was regulated by the provisions of the Mines and Mineral (Regulation and Development) Act, 1957 (hereinafter referred to as ‘the Act’) and the State Government had no authority to grant any lease for collection of sludge/slurry without the previous sanction of the Central Government.
4. The aforesaid petitions were heard and disposed of by a Full Bench of the Patna High Court (AIR 1986 Patna 242). The Full Bench dismissed the writ petitions on the findings that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine which was not regulated by the provisions of the Act. The collection of slurry did not involve any mining operations and the settlement made by the State Government in favour of the respondents for collecting the same was not a mining lease, therefore, the State Government was not under any legal obligation to obtain previous sanction of the Central Government under the Act. The High Court further held that after the slurry escaped into the river bed or to some other land, the same ceased to belong to the appellants and the State Government was entitled to execute lease for collection of the same.
5. Civil Appeal Nos. 230-231 of 1987 are directed against the judgment of a Division Bench of the Calcutta High Court (AIR 1985 Calcutta 143). The Central Coalfields Ltd. and the Coal India Ltd. the appellants are Government Companies which own coal mines in the District of Giridih in the State of Bihar. The appellants have set up coal washeries at Kathara, Kargali and Sawang in the District of Giridih for washing the coal extracted from its mines. In the process of washing, particles of coal escape from the washery along with water which ultimately flows into the river Damodar. The Mining Department of the State of Bihar granted lease to Industrial Fuel Marketing Company and Ors. – respondents for removing the slurry from the river bed on payment of royalty but the appellants resisted the collection of slurry from their land and they instituted criminal proceedings against the contractors. Thereupon, the respondents-contractors filed writ petitions before the Calcutta High Court for quashing the criminal case registered against them, and also for the issue of a direction permitting them to collect slurry under the lease granted to them by the State of Bihar. Before the High Court the appellants herein contended that the slurry belonged to them and the State of Bihar had no authority in law to grant any lease in respect of the same. A learned single Judge of the High Court dismissed the writ petitions on the findings that the appellants herein are the owner of the slurry and the State Government had no authority to grant any lease to the respondent contractors for removal of the same. On appeal by the contractors a Division Bench of the Calcutta High Court vide its judgment (AIR 1985 Calcutta 143) held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Act were not applicable to the grant of lease. On the question of appellants’ claim to the property rights for collecting slurry, the Bench held that the slurry deposited on the appellant’s land, belonged to them and the respondents had no right to collect the same but if the slurry settled down on others’ land the respondents have right to remove the same from the river bed. Aggrieved, the Central Coalfields Ltd. and Coal India Ltd. have challenged the correctness of the High Court’s view by these appeals.
6. The main question which falls for consideration is whether the State of Bihar has authority to grant lease/settlement to the respondents for collection/lifting of coal slurry deposited in the river bed or on any other land after its escape from the appellants’ washeries. Before the High Court the appellants contended that in view of the provisions of the Act the State of Bihar had no authority to grant any lease regarding collection of slurry without the prior approval of the Central Government. The State of Bihar and other respondents contended before the High Court that the slurry was not a mineral, and its collection or lifting from the river bed involved no mining operations, therefore, the Act did not apply and the State Government was free to grant leases for collection of the same. The appellants further pleaded before the High Court that since slurry after its escape from their washeries settled down in their own land, it continued to be their property and the State of Bihar had no authority to grant lease for collection of the same from their land. The Full Bench of the Patna High Court held that the slurry was neither coal nor a mineral instead it was a reject residue or waste of an industrial process consisting of mud, ash and oily substance having carbonaceous ingredients. Since collection of slurry did not involve any mining operations the provisions of the Act did not apply and the State Government had authority to settle the removal of slurry with private parties. With regard to the appellant’s claim of ownership of the slurry deposited on the appellants land, the Full Bench did not decide the question, on the ground that these issues involved disputed question of fact which could properly be adjudicated in a civil suit.
7. The Division Bench of the Calcutta High Court held that the lease granted by the State of Bihar was not a mining lease as the river bed or the land from where the slurry was collected was not a mine as no winning or mining operations were involved in collecting the same. The Bench further held that the lease granted by the State Government in favour of the respondents for collecting the slurry did not confer any right in them for carrying out coal mining operation nor such right relates to winning or mining of coal. However the Bench held that the slurry deposited on the appellants’ land belonged to them and the respondents-lessee had no right to collect slurry from the appellants’ land. But if the slurry was deposited on the land not owned by the appellants, the lessee was entitled to remove the same under the settlement made by the State of Bihar. Thus, both the High Courts held that the slurry which escaped form the washeries and deposited in the river bed or on other land did not constitute a mineral and it was not regulated by the Central Act, consequently, the State of Bihar had authority to settle the collection of slurry.
8. Learned counsel for the parties made elaborate submissions before us in support of their case. On behalf of the appellants it was urged that slurry/sludge the subject matter of dispute in the instant cases, in substance is coal, a mineral specified in the First Schedule to the Act. The State Government had no authority in law to grant any lease to the respondents for the collection or removal or lifting of the slurry coal deposited in the river bed or on any Raiyati land without obtaining the sanction of the Central Government under Section 5 of the Act. The counsel for the appellants further emphasised that slurry which escapes from washery of the coal mines, contains small particles of coal having carbonaceous character, and it is used for energy and fuel purposes. Assailing the findings of the Full Bench of the Patna High Court and the Division Bench of the Calcutta High Court, the appellants’ counsel submitted that slurry coal was not deposited in the river bed or other land by any artificial mode instead the same were deposited in the river bed and the land by natural process of flow of water discharged from the washeries. The process of collection or removal of the same from the river bed or Raiyati land by the respondent/lessees involved winning operations. Winning or mining operation according to the learned counsel did not always require excavation or extraction of a mineral from the bowels of the earth instead a mineral like sand or gravel may be deposited on the earth and removal of the same would also involve winning or mining operation. The appellants further urged that if the slurry which is the subject matter of the lease or settlement, is not a mineral, the State Government had no authority in law to authorise any other person to remove the same from the appellants’ land. There is no law made by the State Legislature authorising the State Government to interfere with the appellants property rights. In the absence of any law the State of Bihar had no authority to interfere with the appellants’ property rights by executive orders. In the alternative learned counsel for the appellants urged that on the admitted pleadings of the parties slurry discharged from the washeries of the appellants’ coal mines constituted waste and effluent of coal mines, its disposal was exclusively within the legislative competence of the Parliament. In view of the Parliament’s declaration under Section 2 read with Section 13 and 18 of the Act, the State Government was denuded of all its powers in the matter relating to the disposal of slurry which would include its removal or collection. Since the State Legislature is denuded of its legislative competence to make any law with regard to disposal of waste or effluent discharge of coal mines, the State Government has no executive power to deal with the same. Learned counsel for the State of Bihar and other respondents reiterated their stand as taken by them before the High Court that the slurry was not a mineral and its removal did not involve any mining operations, consequently the settlement deed was not a mining lease under the Act. On behalf of the State Government it was further contended that once the slurry escaped from the washery plants of the appellants it ceased to belong to them and as it polluted the river water and affected the fertility of Raiyati land the State Government was justified in providing for its collection and removal to prevent pollution. The appellants could not have any right in the goods which they abandoned. It was further urged that that the washeries do not form integral part of the mining operations, therefore the slurry could not be treated as a waste of coal mine. In the alternative learned counsel contended that even if slurry was a waste of a coal mine the State Government was competent to provide for its collection and removal as the Central Government had failed to make any rule under Section 18 of the Act regulating disposal of the slurry.
9. Before, we consider the contention of the parties, we think it necessary to briefly discuss the nature and characteristic of the slurry. There is no dispute that coal is found in seams mixed with mud and other impurities. After its extraction from the mines, it is crushed into different sizes, thereafter it is washed in the washeries of the coal mines for removing its impurities for purposes of making it fit for use for metallurgical purposes. In the washery plants, coal is washed with the medium of water mixed with pine oil and sand through mechanical process. In the process of washing, large quantity of water is discharged through pipes which carry the discharged water to storage ponds constructed for the purpose of retaining the slurry. Alongwith the discharged water, small particles of coal are carried away to the pond where the coal particles settle down on the surface of the pond, and the same is collected after the pond is de-watered. The coal particles so collected are of fine quality, ash free and the same is used as fuel. The slurry is a descriptive expression, it may be cement slurry or coal slurry depending upon the character or quality of the mixture of mineral in the liquid form. In Websters New 20th Century Dictionary, ‘slurry’ is defined as follows:
“A thin mixture of water and any of several fine, insoluble materials as clay, cement, soil etc.
In common parlance slurry is a liquid form mixed with some other material. In Encyclopaedia Britannica “slurry” is defined as under:
“Slurry – watery mixture or suspension of insoluble matter. In the manufacture of portland cement, a mixture of the raw materials with water is called a slurry. Cement may be piped as a slurry in building construction. Coal may be transported over long distances as a slurry via pipeline; this method of transmission is economical between large producing areas and markets where large tonnages are used at a fairly uniform rate. The shipment of iron ore as slurry, either by pipeline or by tanker, also has increased. When slurry reaches its destination, the material is separated from the water before use or further processing.”
10. Viewed in the light of the above meaning of slurry, there is no doubt that in the instant cases slurry is coal slurry, as admittedly small particles of coal escape from the washery plant alongwith water. After it overflows the storage pond the slurry flows into the river and is deposited on the river bed, which is later on collected and used as fuel after it is formed into briquettes. The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal. Thus, the slurry is coal in liquid form. A Division Bench of the Patna High Court in Kesari Mal Jain Vs.State of Bihar AIR 1985 Patna 114 placing reliance on Nelson’s Dictionary of Mining which defined ‘slurry’ as “slurry inter alia means fine carbonaceous discharge from a colliery washery” held that the carbonaceous particles so discharged from the coal washery is used for producing energy or heat therefore it was coal. The Bench further held that coal particles which flow out with the water from the coal washeries are formed into balls or briquettes for sale in the market for purposes of producing energy or heat, therefore, slurry was coal. The Division Bench’s view was not accepted by the Full Bench of the Patna High Court as it held that the slurry deposit did not constitute a mineral. We agree with the view taken by the Division Bench in Kesari Mal’s case (supra) as in our opinion the slurry coal deposited in the river bed or land, in substance as well as in its character continues to be coal.
11. If slurry is coal, the question is whether the leases in dispute granted by the State of Bihar constitute mine leases as contemplated by Section 5(2) (a) of the Act. “Mining lease” as defined by Section 3(c) means ” a lease granted for the purpose of undertaking mining operations and include a sub-lease granted for such purpose.” “Mining operations” as defined by Section 3(d) means “any operations for the purpose of winning any mineral.” Section 5(1) places restriction on the grant of mining leases by a State Government. Section 5(2) (a) lays down that except with the previous approval of the Central Government no prospecting licence or mining lease shall be granted in respect of any material specified in the First Schedule. The First Schedule to the Act specifies minerals as contemplated by Section 5(2) (a) and “coal” is specified therein at Item No.4. The Patna and Calcutta High Courts have held that the collection of slurry did not involve any mining operations, therefore, the lease in question was not a mining lease. Consequently, the State Government was not under any legal obligation to obtain approval of the Central Government before granting leases for collection of slurry.
