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PETITIONER:

BHARAT COKING COAL LTD. AND ANR.

Vs.

RESPONDENT:

STATE OF BIHAR AND ORS.

DATE OF JUDGMENT17/08/1990

BENCH:

SINGH, K.N. (J)

BENCH:

SINGH, K.N. (J)

KANIA, M.H.

CITATION:

1990 SCR (3) 744 1990 SCC (4) 557

JT 1990 (3) 533 1990 SCALE (2)256

ACT:

Mines and Minerals (Regulation and Development) Act,

1957: Sections 2, 3, 5, 13, 18--Coal slurry escaping from

coal mine washery--Deposited on river-bed and Raiyati

land--Lease for disposal thereof--Competence of State Gov-

ernment--Non-framing of Rules by Central Government--Whether

confers legislative competence on State Legislature-Extent

of executive power in the execution of lease--Coal

slurry--Whether constitutes mineral.

executive power--Whether co-extensive with legislative

power--State denuded of its legislative competence--Whether

State's executive power extends.

Articles 245 and 246 and Schedule VII List I Entry 54

and List II Entry 23--Subject matter falling under Union

list--Absence of Parliamentary legislation--Whether confers

power on State Legislature.

Practice & Procedure: Pleading--Party taking a particu-

lar stand throughout--Before the Courts--Deviation there-

from--Whether open to it--Operation of estoppel.

Words & Phrases: "Conservation"--"Mine"--Meaning of.

HEADNOTE:

The three appellant companies claimed their respective

right to the slurry that escaped from their washery

plant/pond and got deposited in the Bokaro and Damodar River

beds, as also in certain Raiyati land. The State Government

did not accept their plea and leased out the right to remove

the said slurry to the respondent on payment of royalty. The

first two appellants filed Writ Petitions before the Patna

High Court challenging the State Government's action in

leasing out the right to the Respondent's for removing the

slurry. The third company instituted criminal proceedings

against the contractors, who in turn filed Writ Petitions

before the Calcutta High Court for quashing the criminal

proceedings and for a direction permitting them to collect

slurry under the lease granted by the State Government.

745

The Full Bench of the Patna High Court dismissed the

Writ Petitions and held that slurry was neither coal nor

mineral; it was an industrial waste of coal mine which was

not regulated by the provisions of the Act. It also held

that collection of slurry did not involve any mining opera-

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tions and the settlement made by the State Government in

favour of the respondents was not a mining lease and so the

State Government was not under any legal obligation to

obtain previous sanction of the Central Government under the

Mines and Minerals (Regulation and Development) Act, 1957.

It further held that after the slurry escaped into the river

bed or to some other land, it ceased to belong to the appel-

lants and the State Government was entitled to execute the

lease for collection of the slurry.

The Writ Petitions filed by the Contractors before the

Calcutta High Court were dismissed by a Single Judge who

held that the third appellnat-company was 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 the Division' Bench held

that the lease granted by the State of Bihar in favour of

the contractors was not a mining lease and the provisions of

the Mines and' Minerals (Regulation and Development) Act,

were not applicable to the grant of lease. On the question

of appellants' claim to the property rights for collecting

slurry, the Bench held that the slurry deposited on the

appellants' land, belonged to them and the respondents had

nO right. to collect the same but if the slurry settled down

on other's land the respondents have right to remove the

same.

Against the above decisions of the two High Courts, the

appellant companies have preferred the present appeals.

On behalf of the appellants, it was inter alia contended

that the slurry/sludge was in substance coal, a mineral

specified in the First schedule to the Act; that the State

Government had no authority in law to grant any lease to the

respondents for the collection, removal Or' lifting of the

slurry coal deposited in the river bed or on any Raiyati

land without obtaining the sanction of the Central Govern-

ment under Section 5 of the Act; that the deposit of the

slurry in the river bed and the land was by natural process

of flow of water discharged from the washeries; that there

was no law made by the State Legislature authorising the

State Government to interfere with the appellants' property

right by way of executive orders; that slurry discharged

from the washeries of the appellants' coal mines constituted

waste and effluent of coal mines, its disposal was exclu-

sively within the legislative compe-

746

tence of the Parliament; and that in view of the Parlia-

ment's declaration under Section 2 read with Sections 13 and

18 of the Act, the State Government was denuded of all its

legislative competence to make any law with regard to dis-

posal of waste or effluent discharge of coal mines. and

hence the State Government had no executive power to deal

with the same.

The main contentions on behalf of the respondents were

that once the slurry escaped from the washery plants of the

appellant it ceased to belong to them and as it polluted the

river water and affected the fertility of Raiyati land the

State Government was justified in providing for its collec-

tion and removal to prevent pollution; that the appellants

could not have any right in the goods which they abandoned;

that the washeries do not form integral part of the mining

operations, and therefore the slurry could not be treated as

a waste of coal mine. Alternatively it was contended that

even if slurry was a waste of coal mine the State Government

was competent to provide for its collection and removal as

the Central Government had failed to make any rule under

Section 18 of the Act regulating the disposal of the slurry.

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Allowing the appeal, this Court,

HELD: 1. Slurry is a descriptive expression, it may be

cement slurry or coal slurry, depending upon the character

or quality of the mixture of mineral in the liquid form.

There is no doubt that in the 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 deposit-

ed 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, and slurry coal deposited in

the river bed or lands in substance as well as in its char-

acter continues to be coal. [757F; 758C-D]

Kesari MaI Jain v. State of Bihar, AIR 1985 Patna 114, ap-

proved.

Websters New 20th Century Dictionary; Encyclopaedia

Britannica, referred to.

2. The definition of "mining operation" and "mine" are

very wide. The expression "mining of mineral" in the defini-

tion of "mining operation" under Section 3(d) of the Mines

and Minerals (Regulation &

747

Development) Act, 1957 is spacious enough to comprehend

every activity by which a mineral is extracted or obtained

from the earth irrespective of whether such activity is

carried out on the surface or in the bowels of the earth. It

is not a requirement of the definition of "mining

operation", that the activity for winning the mineral must

necessarily be an underground activity. The essence of

'mining operation' is that it must be an activity for win-

ning a mineral whether under the surface or winning the

surface of earth. The slurry which is deposited on the river

bed is not dumped there artificially by any human agency

instead coal particles are carried to the river bed by the

flow of water through natural process. Therefore the view

taken by the High Court that the slurry which is deposited

in the river bed is dumped by the appellants by artificial

process is incorrect. Once the coal particles are carried

away by the water which is discharged from the washery and

the same are settled in the river bed, any operation for the

extraction of lifting of the coal particles from the river

bed would involve winning operations within the meaning of

Section 3(d) of the Act. However. in the instant cases, it

is not necessary to express any final opinion on this ques-

tion. [759D-G]

Tarkeshwar Sio Thakur Jiu v. B.D. Dey & Co. & Ors., AIR

1979 SC 1669. relied on.

Bhagwan Das v. State of U. P. & Ors., [1976] 3 SCR 869,

referred

3. The State Legislature is competent to enact law for

the regulation of mines and mineral development under Entry

23 of State List but this power is subject to the declara-

tion which may be made by Parliament by law as envisaged by

Entry 54 of Union List. Thus the legislative competence of

the State Legislature to make law on the topic of mines and

minerals is subject to Parliamentary Legislation. The Par-

liament has enacted the Mines and Minerals (Regulation and

Development) Act. 1957. By Section 2 of the Act the Parlia-

ment has declared that it is expedient in 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. In view of Parliamentary declaration as

made in section 2 of the Act, the State Legislature is

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denuded of its legislative power to make any law with re-

spect to the regulation of mines and mineral development to

the extent as provided by the Act. [760G-H; 761A]

4.1 An analysis of the provisions of the Act makes the

extent of

748

Parliamentary declaration clear that the disposal and dis-

charge of sludge or slurry emanating or coming from the

washery of a coal mine is exclusively within the legislative

power of Parliament. The Act further provides that the

Central Government has exclusive power to frame any rule

either under Section 13(2)(0) or under the amended Section

18(2)(k) of the Act regulating disposal of slurry. The

effect of the Parliamentary declaration as contained in the

Act is that the matters referred to in the declaration,

stand abstracted from List II and these become matters of

legislation in List I of the Seventh Schedule. As a result

of the declaration made by the Parliament, under Section 2

of the Act. the State Legislature is denuded of its legisla-

tive power with respect to the regulation of mines and

minerals development and the entire legislative field has

been taken over by Parliament. [763C-E]

4.2 The Central Government has not framed any rule

either under Section 13 or under Section 18 of the Act.

Prior to the Amending Act 37 of 1986 Section 13(2)(0) con-

ferred power on the Central Government to frame rules for

the purpose of granting prospecting licences and mining

leases including the disposal of discharge of any tailings,

slime or other waste products. Sub-clause (0) of Section

13(2) was transposed into Section 18(2) as sub-clause (k) by

the Amending Act 37 of 1986. Section 18 (1) confers general

power on the Central Government to frame rules and to take

all such steps as may be necessary for the conservation and

development of minerals in India. Section 18(2) does not

affect or restrict the generality or width of legislative

power under Section 18(I) as the matters specified in var-

ious sub-clauses of Section 18(2) are illustrative in na-

ture. Even in the absence of sub-section (2) or its various

sub-clauses, the Central Government was invested with the

power of subordinate legislation in respect of any matter

which could reasonably be connected with the purpose of

"conservation and development of minerals" by Section 18(1)

of the Act. Power to frame rules, regulating the discharge

or disposal of slime or slurry emanating from a coal mine

including its collection from the river bed or from Raiyati

land after its escape from the washery of the coal mines.

would clearly fall within the expression "conservation of

mineral". Slurry admittedly contain coal particles, its

collection from land or river is reasonably connected with

the 'conservation of mineral'. Section 18(2)(k) which ex-

pressly confers power on the Central Government to regulate

disposal or discharge of waste of a mine makes the Parlia-

mentary declaration apparent that the State Legislature is

not competent to regulate waste discharge of a coal mine.

Mere absence of any rule framed by the Central Government

under Sections 13 or 18 of the Act with regard to the dis-

posal of slime or waste of a coal mine does not

749

confer legislative competence on the State Legislature to

make any law or rule. Once a particular topic of legislation

is covered by the Parliamentary declaration, the State

Legislature is denuded of its power to make any law or rule

in respect of that topic or subject matter and the absence

of Rules would not confer legislative competence on the

State. [764A-G]

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4.3 Since Section 18 of the Act covers the field with

respect to disposal of waste of a mine. there is no scope

for the contention that until rules are framed the State

Legislature has power to make law or rules on the subject.

Once the competent legislature with a superior efficacy

expressly or impliedly evinces its legislative intent to

cover the entire field on a topic. the enactments of the

other legislature whether passed before or after would be

overborne. Mere absence of rules framed by the Central

Government. does not confer power on the State Legislature

to make law on the subject. Since the legislative field with

regard to the framing of rules relating to the disposal of

slime and waste of coal mine is fully covered by Section 18.

the State Legislature is denuded of its power of making any

law with regard to those mailers. [765B-C]

Baijnath Kedia v. State of Bihar & Ors. [1970] 2 SCR

100: Hingir-Rampur Coal Co. Ltd. & Ors. v. State of Orissa &

Ors., [1961] 2 SCR 537; State of Orissa v. M.A. Tulloch &

Co., [1964] 4 SCR 461 and State of Tamil Nadu v. Hind Stone,

[1981] 2 SCR 742. relied on.

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

extensive with the legislative power of the State Legisla-

ture. If the State Legislature has power to enact laws on a

matter enumerated in the State List or in the concurrent

list the State has executive power to deal with those mat-

ters subject to other provisions of the Constitution. If a

subject matter fails within the legislative competence of

State Legislature. the exercise of executive power by the

State Government is not confined, as even in the absence of

a law being made, the State Government is competent to deal

with the subject matter in exercise of its executive power.

In the absence of any law, the State Government or its

officers in exercise of executive authority cannot infringe

citizens rights merely because the State Legislature has

power to make laws with regard to subject, in respect of

which the executive power is exercised. No doubt under Entry

23 of List 1I, the State Legislature has power to make law

but that power is subject to Entry 54 of List 1 with respect

to the regulation and development of mines and minerals.

Since State Legislature's power to make law with respect to

the matter enumerated in Entry 23 of List II has been taken

away by the Parliamentary declaration, the State Government

ceased to have any executive power in the matter relating

750

to regulation of mines and mineral development. Moreover,

the proviso to Article 162 itself contains limitation on the

exercise of the executive power of the State. If Parliament

and the State Legislature both have power to make law in a

matter, the executive power of the State shall be subject to

the law made by the Parliament or restricted by the execu-

tive power of the Union expressly conferred on it by the

Constitution or any law made by Parliament. Since Parliament

has made the law as contemplated by Entry 54 of List I and

the law so made confers exclusive power on the Central

Government to frame rules regulating the disposal of waste

or industrial effluent of a mine, the State Legislature has,

therefore no power either to make law under Entry 23 of List

II or to exercise executive power to regulate the disposal

of slurry, a waste effluent discharge of a coal mine.

[765F-H; 766A-F]

Rai Sahib Ram Jawaya Kapur & Ors. v. State of Punjab, [1955]

2 SCR 225 and State of M.P. & Anr. v. Thakur Bharat Singh,

[1967] 2 SCR 454, referred to.

6. It is apparent that the State of Bihar itself has

been treating the 'slurry deposits' as mineral and on that

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assumption it has been executing leases conferring rights on

the respondents to collect the same on payment of royalty.

Hence it is not open to the State of Bihar and the lessees

to contend that slurry is not coal or mineral within the

meaning of the Act. [767F]

7. The inclusive definition of 'mine' as contained in

Section 2 of the Act is wide enough to include any premises

belonging to a mine where any ancillary process is carried

on for preparing the minerals or coke for sale. The washery,

wherein the process of washing coal is carried on, for the

purpose of preparing the coal for. sale is an integral part

of a mine as it involves ancillary process. Washery is

included within the definition of mine under the Mines Act

1952. Any waste discharge from the washery carrying small

particles of coal in the form of slurry is the waste slime

arising from operations carried out in a mine. Moreover, it

is not open to the respondents to contend that slurry is not

a waste discharged from the washeries of coal mines, since

they have all along pleaded that slurry is a waste dis-

charged from the washery of the appellants' coal mines.

[768C; D-E]

8. The slurry which escapes from the appellants' wash-

eries is mineral and its regulation is within the exclusive

jurisdiction of the Central Government. In view of the

Parliamentary declaration made by Section 2 of the Act and

having regard to Section 18 of the Act, the State

751

Government has no authority in law to make any settlement or

grant any lease to any person for the collection of slurry

deposits either from the river bed or other land. The im-

pugned settlements made in favour of the respondents by the

State Government are illegal and the respondent-lessees have

no right nor title to collect the slurry deposits and they

are restrained from lifting or collecting the same from the

land in dispute. [771H; 772A]

[This Court directed that the money deposited pursuant

to the interim orders passed by the High Court and this

Court will be paid to the successful party. [771C]

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4521 of

1986. etc. etc.

From the Judgment and Order dated 20.12.1985 of the

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

Ashok Desai, Solicitor General, Kuldip Singh, Kapil

Sibal, Additional Solicitor Generals, K.K. Venugopal, R.K.

Jain, Gobind Das, R.N Sachthey, Shanti Bhushan, Dr. L.M.

Singhvi, L.N. Sinha, M.L. Verma, Ranjit Kumar, K.K. Lahiri,

R.F. Nariman, S. Sukumaran, P.K. Jain, P. Saswidia, P.

Parmeshwaran, C.V. Subba Rao, P.P. Singh, D Goburdan, S.B.

Upadhyay, P.C. Kapoor, M.M Kashyap, A. Sharan, R.D. Upadh-

yay, S.K. Sinha, Apurb Lal, Anip Sachthey, C. Badri Nath

Babu, B.B. Singh, A.K. Mitra, O.C. Mathur, A.N. Dittia, Arun

Madan, Ms. A Subhashini, C.V. Subba Rao, Mrs. Sushma Suri

and A.M. Ditta for the Appearing Parties.

The Judgment of the Court was delivered by

SINGH, J. In these appeals a common question of law is

involved whether the State of Bihar had legal authority to

execute leases in favour of the respondents for collection

of slurry on payment of royalty to it. Since the question

involved in these appeals are 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

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against the judgment of the Patna High Court while Civil

Appeal Nos. 230-231 of 1987 are directed against the judg-

ment of the Division Bench of the Calcutta High Court.

In order to appreciate the controversy in question it is

necessary to recapitulate the facts. M/s. Bharat Coking Coal

Ltd.--appellant in

752

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 wash-

ing 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 col-

lected 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 parti-

cles settled in the Damodar fiber bed and other land includ-

ing 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 re-

spondent 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 fiber 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.

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 Collieties. There is no dispute

753

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

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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 fights of collec-

tion of slurry with the respondents under the indentures

granted in their favour. Under the settlement the respond-

ents 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 petitions 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 Develop-

ment) 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.

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 Gov-

ernment was not under any legal obligation to obtain previ-

ous 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

754

ceased to belong to the appellants and the State Government

was entitlement to execute lease for collection of the same.

Civil Appeal Nos. 230-231 of 1987 are directed against

the judgment of a Division Bench of the Calcutta High Court

(AIR 1985 Calcutta 143). The Central Coal fields 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

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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 other's land the respond-

ents have right to remove the same from the river bed.

Aggrieved, the Central Coal fields Ltd. and Coal India Ltd.

have challenged the correctness of the High Court's view by

these appeals.

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.

755

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 col-

lection or lifting from the river bed involved no mining

operations, therefore, the Act did not apply and the State

Government was-free to grant leases for collection of the

same. The appellants further pleaded before the High Court

that since slurry after its escape from their washeries

settled down in their own land, it continued to be their

property and the State of Bihar had no authority to grant

lease for collection of the same from their land. The Full

Bench of the Patna High Court held that the slurry was

neither coal nor a mineral instead it was a reject residue

or waste of an industrial process consisting of mud, ash and

oily substances having carbonaceous ingredients. Since

collection of slurry did not involve any mining operations

the provisions of the Act did not apply and the State Gov-

ernment had authority to settle the removal of slurry with

private parties. With regard to the appellants' claim of

ownership of the slurry deposited on the appellants' land,

the Full Bench did not decide the question, on the ground

that these issues involved disputed questions of fact which

could properly be adjudicated in a civil suit.

The Division Bench of the Calcutta High Court held that

the lease granted by the State of Bihar was not a mining

lease as the river bed or the land from where the slurry was

collected was not a mine as no winning or mining operations

were involved in collecting the same. The Bench further held

that the lease granted by the State Government in favour of

the respondents for collecting the slurry did not confer any

right in them for carrying out coal mining operation nor

such right relates to winning or mining of coal. However the

Bench held that the slurry deposited on the appellants' land

belonged to them and the respondents-lessee had no right to

collect slurry from the appellants' land. But if the slurry

was deposited on the land not owned by the appellants, the

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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 from the washeries and depos-

ited in the river bed or on other land did not constitute a

mineral and it was not regulated by the Central Act, conse-

quently, the State of Bihar had authority to settle the

collection of slurry.

Learned counsel for the parties made elaborate submis-

sions, before us in support of their case. On behalf of the

appellants it was '

756

urged that slurry/sludge the subject matter of dispute in

the instant cases, in substance is coal, a mineral specified

in the First Schedule to the Act. The State Government had

no authority in law to grant any lease to the respondents

for the collection or removal or lifting of the slurry coal

deposited in the river bed or on any Raiyati land without

obtaining the sanction of the Central Government under

Section 5 of the Act. The counsel for the appellants further

emphasised that slurry which escaped from washery of the

coal mines, contains small particles of coal having carbona-

ceous character, and it is used for energy and fuel pur-

poses. 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 dis-

charged 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 appel-

lants 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 admit-

ted 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

Sections 13 and 18 of the Act, the State Government was

denuded of all its powers in the matter relating to the

disposal of slurry which would include its removal or col-

lection. Since the State Legislature is denuded of its

legislative competence to make any law with regard to dis-

posal 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

757

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

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was further contended that once the slurry escaped from the

washcry plants of the appellants it ceased to belong to them

and as it polluted the river water and affected the fertili-

ty of Raiyati land the State Government was justified in

providing for its collection and removal to prevent pollu-

tion. The appellants could not have any right in the goods

which they abandoned. It was further urged that the washer-

ies 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.

Before, we consider the contentions of the parties, we

think it necessary to briefly discuss the nature and charac-

teristic 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. Along-

with 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 collect-

ed are of fine quality, ash free and the same is used as

fuel. The slurry is a descriptive expression, it may be

cement sluny 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 Encyclopedia 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

758

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."

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 deposit-

ed on the river bed, which is later on collected and used as

fuel after it is formed into briquettes. The deposit which

is collected from the river bed continues to be carbonaceous

in character having all the elements of coal. Thus, the

slurry is coal in liquid form. A Division Bench of the Patna

High Court in Kesari Mal Jain v. State of Bihar, AIR 1985

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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.

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 pur-

pose of winning any mineral." Section 5(1) places restric-

tion 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

759

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

leasses for collection of slurry.

These findings are assailed and the appellants contend

that mining operations need not always involve extraction of

mineral from the bowels of the earth, a mineral like sand,

gravel may be deposited on the surface of the earth, and

still its collection involves mining operations. It was

strenuously urged that it is wrong to assume that mines and

minerals must always be embedded under the sub-soil and

There can be no mineral on the surface of the earth. See:

Bhagwan Das State of U.P. & Ors., [1976] 3 SCR 869. The

definition of "mining operation" and "mine" are very wide.

The expression "mining of mineral" in the definition of

"mining operation" under s. 3(d) of the Act is spacious

enough to comprehend every activity by which a minerals

extracted or obtained from the earth irrespective of whether

such activity is carried out on the surface or in the bowels

of the earth. It is not a requirement of the definition of

"mining operation", that the activity for winning the miner-

al must necessarily be an underground activity. The essence

of 'mining operation' is that it must be an activity for

winning a mineral whether under the surface or winning the

surface of earth, vide: Tarkeshwar Sio Thakur Jiu v. B.D.

Dey & Co. & Ors., AIR 1979 SC 1669. The slurry which is

deposited on the river bed is not dumped there artificially

by any human agency instead coal particles are carried to

the river bed by the flow of water through natural process.

Therefore the view taken by the High Court that the slurry

which is deposited in the river bed is dumped by the appel-

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lants by artificial process is incorrect. Once the coal

particles are carried away by the water which is discharged

from the washery and the same are settled in the river-bed,

any operation for the extraction or lifting of the coal

particles from the river bed would involve winning opera-

tions within the meaning of Section 3(d) of the Act. We do

not think it necessary to express any final opinion on this

question as the appeals bound to succeed on the ground of

absence of legislative competence of the State Legislature.

Shri K.K. Venugopal learned counsel for the appellant

urged that the recovery of coal from slurry irrespective of

whether slurry is a mineral, or its collection involved

mining operations or not, the State

760

of Bihar has no authority in law to regulate disposal of

slurry. Under the Constitution 'conservation and development

of mines and minerals' is exclusively assigned to the Cen-

tral Government, and the State Legislature has no power to

make any lease with regard to the disposal of coal slurry

which is waste of coal mining. He referred to the provisions

of the Act and particularly to Sections 2 and 18 in support

of his contention that in view of Parliamentary Legislation,

the State Legislature has no legislative competence to enact

any law on the subject, consequently the State Government

has no executive authority to deal with the disposal of

slurry. In order to appreciate this submission it is neces-

sary to consider the Constitutional provisions and the Act.

Articles 245 and 246 of the Constitution read with

Seventh Schedule and the legislative lists therein prescribe

the extent of legislative competence of Parliament and,State

Legislature. Parliament has exclusive power to make laws

with respect to any of the matters enumerated in List I in

the Seventh Schedule. Similarly, State Legislature has

exclusive power to make laws with respect to any of the

matters enumerated in List II. Parliament and the State

Legislature both have legislative power to make laws with

respect to any matter enumerated in List III, the Concurrent

List. This is the legislative scheme under the Constitution,

but certain matters of legislation are overlapping which

present difficulty. The subject matter of legislation with

respect of regulation of Mines and Mineral development is

enumerated under Entry 23 of List II and Entry 54 of List I.

These Entries are as under:

"23. Regulation of mines and mineral development subject to

the provisions of List I with respect to regulation and

development under the control of the Union."

"54. Regulation of mines and mineral development to the

extent to which such regulation and development under the

control of Union is declared by Parliament by law to be

expedient in the public interest."

The State Legislature is competent to enact law for the

regulation of mines and mineral development under Entry 23

of State List but this power is subject to the declaration

which may be made by Parliament by law as envisaged by Entry

54 of Union List. Thus the legislative competence of the

State Legislature to make law on the topic of mines and

mineral is subject to Parliamentary Legislation. The Parlia-

ment has enacted the Mines and Minerals (Regulation and

761

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

has declared that it is expedient in 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. In view of Parliamentary declaration as made in

s. 2 of the Act, the State Legislature is denuded of its

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legislative power to make any law with respect to the regu-

lation of mines and mineral development to the extent as

provided by the Act. In order to ascertain the extent of

Parliamentary declaration, it is necessary to have a glance

at the provision of the Act. Section 3 of the Act defines

various expressions occurring in the Act. Sections 4 to 9

prescribe restrictions on undertaking, prospecting and

mining operations under licence or lease. Section 10 to 12

prescribe procedure for obtaining prospecting licences or

mining lease in respect of the land in which minerals vest

in Government. Sections 13 to 16 provide for framing of

rules for regulating the grant of prospecting licences or

mining leases. In particular s. 13 empowers the Central

Government to make rules for regulating the grant of pros-

pecting licences and mining leases in respect of minerals

and for the purposes connected therewith. Section 13(2) lays

down that rules may provide for all or any of the matters as

enumerated under various clauses therein. Clause (0) of s.

13(2) before its amendment by the Amending Act 37 of 1986

conferred power on the Central Government to frame rules for

the disposal or discharge of any tailings, slime or other

waste products arising from any mining or metallurgical

operations carried out in a mine. This provision empowered

the Central Government to frame rules for the disposal of

waste products or effluent discharge from mines including a

coal mine. Section 14 makes the provisions of ss. 4 to 13

inapplicable to minor minerals. Section 15 empowers the

State Government to make rules for regulating the grant of

quarry leases, mining leases and other mineral concessions

in respect of minor minerals and purposes connected there-

with. Since in the instant cases, we are not concerned with

the minor minerals, it is not necessary to deal with the

question in detail. Section 17 confers special powers on

Central Government to undertake prospecting or mining opera-

tions in certain lands. Section 18 and 18A relate to the

development of minerals. Sections 19 to 33 deal with miscel-

laneous matters.

Section 18(1) provides for mineral development, this

Section prior to its amendment by the Amending Act 37 of

1986 read as under:

"Sec. 18(1): It shall be the duty of the Central Government

to take such steps as may be necessary for the conservation

and development of minerals in India and for that

762

purpose the Central Government, by notification in the

Official Gazette, make such rules as it thinks fit."

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

reads as under:

"Sec. 18(1): It shall be the duty of the Central Government

to take such steps as may be necessary for the conservation

and systematic development of minerals in India and for the

protection of environment by preventing or controlling any

pollution which may be caused by prospecting or mine opera-

tions and for such purpose the Central Government may, by

notification in the Official Gazette, make such rules as it

thinks fit."

The amended and unamended sections both lay down that it

shall be the duty of the Central Government to take all such

steps as may be necessary "for the conservation and develop-

ment of minerals" in India and for that purpose it may make

such rules as it thinks fit. The expression "for the conser-

vation of minerals" occurring under s. 18(1) confers wide

power on the Central Government to frame any rule which may

be necessary for protecting the mineral from loss, and for

its preservation. The expression 'conservation' means "the

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act of keeping or protecting from loss or injury." With

reference to the natural resources, the expression in the

context means preservation of mineral; the wide scope of the

expression "conservation of minerals" comprehends any rule

reasonably connected with the purpose of protecting the loss

of coal through the waste of coal mine, such a rule may also

regulate the discharge of slurry or collection of coal

particles after the water content of slurry is soaked by

soil. In addition to the general power to frame rules for

the conservation of mineral, Sec. 18(2) confers specific

power for framing rules regulating disposal of waste of a

mine. The Amending Act 37 of 1986 deleted clause (0) of s.

13(2) and added the same as clause (k) to s. 18(2) of the

Act. After the amendment Sec. 18(2)(k) reads as under:

"18(2): In particular, and without prejudice to the general-

ity of the foregoing power, such rules may provide for all

or any of the following matters, namely:

(k): "the disposal or discharge of waste slime or tailing

763

arising from any mining or metallurgical operations carried

out in a mine."

Section 18(2)(k) confers express power on the Central Gov-

ernment for framing rules for the conservation and the

development of mineral including the disposal or discharge

of waste arising from any mining operations of a mine. Such

a rule may regulate disposal of slurry discharged from a

washery which is an integral part of mining operations.

The aforesaid analysis of the provisions of the Act

makes the extent of Parliamentary declaration clear that the

disposal and discharge of sludge or slurry emanating or

coming from the washery of a coal mine is exclusively within

the legislative power of Parliament. The Act further pro-

vides that the Central Government has exclusive power to

frame any rule either u/s 13(2)(0) or under the amended s.

18(2)(k) of the Act regulating disposal of slurry. The

effect of the Parliamentary declaration as contained in the

Act is that the matters referred to in the declaration,

stand abstracted from List II and those become matters of

legislation in List I of the Seventh Schedule. As a result

of the declaration made by Parliament, under s. 2 of the

Act, the State Legislature is denuded of its legislative

power with respect to the regulation of mines and mineral

development and the entire legislative field has been taken

over by Parliament. In Baijnath Kedia v. State of Bihar &

Ors., [1970] 2 SCR 100 this Court dealing with the extent of

Parliament's declaration made under s. 2 of the Act, ob-

served as follows:

"To what extent such a declaration can go is for Parliament

to determine and this must be commensurate with public

interest. Once this declaration is made and the extent laid

down, the subject of legislation to the extent laid down

becomes an exclusive subject for legislation by Parliament.

Any legislation by the State after such declaration and

trenching upon the field disclosed in the declaration must

necessarily be unconstitutional because that field is ab-

stracted from the legislative competence of the State Legis-

lature."

This Court has consistently taken this view in The

Hingir--Rampur Coal Co. Ltd. & Ors. v. The State of Orissa &

Ors., [1961] 2 SCR537; State of Orissa v. M.A. Tulloch &

Co., [1964] 4 SCR 461 and State of Tamil Nadu v. Hind Stone,

[1981] 2 SCR 742.

764

The Central Government has not framed any rule either

under Section 13 or under Section 18 of the Act. Does it

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affect the legal position as discussed earlier? The answer

must be in the negative. Prior to the Amending Act 37 of

1986 Section 13(2)(o) conferred power on the Central Govern-

ment to frame rules for the purpose of granting prospecting

licences and mining leases including the disposal or dis-

charge of any tailings, slime or other waste products. Sub-

clause (0) of S. 13(2) was transposed into S. 18(2) as sub-

clause (k) by the Amending Act 37 of 1986. As noted earlier,

S. 18(1) confers general power on the Central Government to

frame rules and to take all such steps as may be necessary

for the conservation and development of minerals in India.

Section 18(2) does not affect or restrict the generality or

width of legislative power under Section 18(1) as the mat-

ters specified in various sub-clauses of S. 18(2) are illus-

trative in nature. Even in the absence of sub-s. (2) or its

various sub-clauses, the Central Government was invested

with the power of subordinate legislation in respect of any

matter which could reasonably be connected with the purpose

of "conservation and development of minerals" by S. 18(1) of

the Act. Thus, power to frame rules, regulating the dis-

charge or disposal of slime or slurry emanating from a coal

mine including its collection from the river bed or from

Raiyati land after its escape from the washery of the coal

mines, would clearly fail within the expression "conserva-

tion of mineral". Slurry admittedly contain coal particles.

its collection from land or river is reasonably connected

with the 'conservation of mineral'. Section 18(2)(k) which

expressly confers power on the Central Government to regu-

late disposal or discharge of waste of a mine makes the

Parliamentary declaration apparent that the State Legisla-

ture is not competent to regulate waste discharge of a coal

mine. Mere absence of any rule framed by the Central Govern-

ment under ss. 13 or 18 of the Act with regard to the dis-

posal of slime or waste of a coal mine does not confer

legislative competence on the State Legislature to make any

law or rule. Once a particular topic of legislation is

covered by the Parliamentary declaration, the State Legisla-

ture is denuded of its power to make any law or rule in

respect of that topic or subject-matter and the absence of

Rules would not confer legislative competence on the State.

In Hingir--Rampur Coal Co. Ltd. & Ors. v. The State of

Orissa & Ors., this Court held:

"In order that the declaration should be effective it is not

necessary that rules should be made or enforced; all that

required is a declaration by Parliament that it was expedi-

ent in the public interest to take the regulation of devel-

opment of mines under the control of the Union. In

765

such a case the test must be whether the legislative decla-

ration covers the field or not."

Since Section 18 of the Act covers the field with respect to

disposal of waste of a mine, there is no scope for the

contention that until rules are framed the State Legislature

has power to make law or rules on the subject. Once the

competent legislature with a superior efficacy expressly or

impliedly evinces its legislative intent to cover the entire

field on a topic, the enactments of the other legislature

whether passed before or after would be overborne. Mere

absence of rules framed by the Central Government, does not

confer power on the State Legislature to make law on the

subject. Since the legislative field with regard to the

framing of rules relating to the disposal of slime and waste

of' coal mine is fully covered by s. 18, the State Legisla-

ture is denuded of its power of making any law with regard

to those matters.

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It was then urged that in the absence of a law being

made by the State Legislature, the State Government's action

in executing lease/ settlement in respondent's favour for

collection of slurry is relatable to exercise of its execu-

tive powers. Learned counsel for the appellants contended

that since Entry 23 of List II of the Seventh Schedule

confers legislative power on the State Legislature for

making laws regulating mines and minerals, the State Govern-

ment in the absence of any rule made by the Central Govern-

ment has power to regulate disposal and collection of slur-

ry. The State Government was justified in exercising its

executive power making arrangements for the collection or

removal of slurry which has been polluting the river water

and affecting the Raiyati land's fertility. Article 162

prescribes the extent of executive power of the State, it

lays down that the executive power of a State shall extend

to the matters with respect to which the Legislature of the

State has power to make laws. Thus, the executive power of

the State Government is co-extensive with the legislative

power of the State Legislature. If the State Legislature has

power to enact laws on a matter enumerated in the State List

or in the Concurrent List the State has executive power to

deal with those matters subject to other provisions of the

Constitution. If a subject matter falls within the legisla-

tive competence of State Legislature, the exercise of execu-

tive power by the State Government is not confined, as even

in the absence of a law being made, the State Government is

competent to deal with the subject matter in exercise of its

executive power. See: Rai Sahib Ram Jawaya Kapur & Ors. v.

The State of Punjab, [1955] 2 SCR 225. In the absence of any

law, the State Government or its officers in exercise of

executive authority cannot infringe citizens fights merely

because the

766

State Legislature has power to make laws with regard to

subject, in respect of which the executive power is exer-

cised. See: State of Madhya Pradesh & Anr. v. Thakur Bharat

Singh, [1967] 2 SCR 454, No doubt under Entry 23 of List II,

the State Legislature has power to make law but that power

is subject to Entry 54 of List I with respect to the regula-

tion and development of mines and minerals. As discussed

earlier the State Legislature is denuded of its power to

make laws on the subject in view of Entry 54 of List I and

the Parliamentary declaration made under Section 2 of the

Act. Since State Legislature's power to make law with re-

spect to the matter enumerated in Entry 23 of List has been

taken away by the Parliamentary declaration, the State

Government ceased to have any executive power in the matter

relating to regulation of mines and mineral development.

Moreover, the proviso to Article 162 itself contains limita-

tion on the exercise of the executive power of the State. It

lays down that in any matter with respect to which the

Legislature of a State and Parliament have power to make

laws, the executive power of State shall be subject to

limitation of the executive power expressly conferred by the

Constitution or by any law made by Parliament upon the Union

or authority thereof. The limitation as contained in the

proviso to Article 162 was necessary to avoid conflict in

the exercise of executive power of State and the Union

Government in respect of matters enumerated in List III of

the Seventh Schedule. If Parliament and the State Legisla-

ture both have power to make law in a matter, the executive

power of the State shall be subject to the law made by the

Parliament or restricted by the executive power of the Union

expressly conferred on it by the Constitution or any law

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made by Parliament. Parliament has made the law as contem-

plated by Entry 54 of List I and the law so made confers

exclusive power on the Central Government to frame rules

regulating the disposal of waste or industrial effluent of a

mine, the State Legislature has, therefore no power either

to make law under Entry 23 of List II or to exercise execu-

tive power to regulate the disposal of slurry, a waste

effluent discharge of a coal mine.

Learned counsel for the State of Bihar as well as for

the respondent contractors contended that the lease executed

by the State Government in their favour was not a mining

lease within the provisions of the Act, therefore, the

provisions of the Act are not applicable to it. This submis-

sion is rounded on the assumption that the slurry is not

coal. We have already discussed the characteristic of slurry

which shows that the coal can be transported in liquid form

of slurry. The slurry which gets deposited on the river bed

and on Raiyati land contains fine particles of coal, on its

resumption it is used for energy and

767

fuel purposes. It is, therefore, difficult to accept the

contention that the coal particles which escape from the

washery and get deposited in the river bed or in Raiyati

land do not have the character of mineral. It is not, howev-

er, open to the State to raise this contention as while

making settlement and granting lease in favour of the re-

spondents for lifting or collecting slurry deposits the

State itself proceeded on the assumption that the coal

particles as deposited in the river bed and in the Raiyati

land on its escape from the coal washeries constituted

'mineral'. Since under the Bihar Land Reforms Act the miner-

als vest in the State, it claimed right to grant lease in

favour of the respondents for collecting the same. In the

indenture of settlement dated 9.4.1975 granted in favour of

the M/s. Industrial Fuel Marketing Company and Ors. in Civil

Appeal No. 230-231 of 1987 the State Government itself

stated: "and whereas these rejects/sludge being a mineral

(emphasis supplied) the State Government is the owner of the

same by virtue of the entire State including the minerals

having vested in the State Government under the provisions

of Bihar Land Reforms Act." The indenture purported to

confer right on the lessee for lifting rejects also known as

sludge comprising fine particles of coal which are ejected

in the process of coal being washed in the coal washeries

and which flow into the nearby river or to the lands held by

the Raiyats. The lease was granted by the Mining Department

of the State Government dealing with minerals. Similarly,

the indenture of settlement dated 9.4.1981 granted in favour

of respondent No. 4 in Civil Appeal Nos. 61-62 of 1987

permitting him to collect slurry after it is deposited in

the river bed or in the land as specified in the lease, was

also executed by the State of Bihar on the premise that the

slurry as deposited in the river bed was a mineral, namely,

coal. Thus, it is apparent that the State of Bihar itself

has been treating the 'slurry deposits' as mineral and on

that assumption it has been executing leases conferring

rights on the respondents to collect the same on payment of

royalty. In this view, it is not open to the State of Bihar

and the lessees to contend that slurry is not coal or miner-

al within the meaning of the Act.

Learned counsel for the respondents attempted to justify

State's action on the ground that the slurry as settled down

in river bed or in Raiyati land was not waste or industrial

effluent of coal mines as the washeries are not part of coal

mines. We find no merit in the submission. Section 3 of the

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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

768

1952 means any excavation where any operation for the pur-

pose of searching for or obtaining minerals has been or is

being carried on and it includes:

(xii) "any premises in or adjacent to and belonging to a

mine on which any process ancillary to the getting, dressing

or preparation for sale of minerals or of coke 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 consum-

ers. The washery, wherein the process of washing coal is

carried on, for the purpose of preparing the coal for sale

is an integral part of a mine as it involves ancillary

process. Washery is included within the definition of mine

under the Mines Act 1952. Any waste discharge from the

washery carrying small particles of coal in the form of

slurry is the waste slime arising from operations carried

out in a mine.

Moreover, it is not open to the respondents to contend

that slurry is not a waste discharged from the washeries of

coal mines. The respondents have all along pleaded before

the High Court as well as before this Court that slurry is a

waste discharged from the washery of the appellants' coal

mines. In Civil Appeal No. 4521 of 1986 Ram Nath

Singh--respondent No. 4 has stated in paragraph 2 of his

affidavit before this Court that slurry/sludge is a waste

substance of Sudamdih coal washery and in order to keep the

river water clean and pollution free and to earn revenue the

State Government settled the collection of slurry from the

river bed in his favour. The State of Bihar also in its

affidavit filed before the High Court expressly stated that

the sludge/ slurry was rejected property from the coal

washery and the State of Bihar made settlement in favour of

the respondents for collection of the waste deposits from

the river bed and other land. The full Bench of the Patna

High Court also observed: "the sludge/slurry could not be

raised to the status of being coal, as it was the consequen-

tial wastes of coal mining process, therefore the true

nature of slurry was that it was a mere residue reject or

waste of an industrial process consisting of mud, ash, oily

substances water and carbonaceous ingredients." The respond-

ents have all along proceeded on the assumption that sludge/

769

slurry was an industrial waste arising out of the mining

operations of coal. The State of Bihar as well as the re-

spondents in whose favour the right of collection of

sludge/slurry has been settled have all along taken the

stand that the discharge of slurry/sludge by the appellant's

washcry into the river has been polluting the river and

affecting the fertility of land, therefore the State Govern-

ment, permitted the removal of the slurry/sludge with a view

to prevent pollution of the fiber and the land. On the

admitted facts the entire activity relating to disposal of

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the industrial waste, slime or tailing in the shape of

sludge/slurry escaping from the washeries of the appellant's

coal mines including the prevention of pollution of river

water or land is covered by Sec. 18 of the Act. The High

Courts confined themselves to the question whether sludge/

slurry was a mineral under the Act and failed to consider

the scope and effect of Section 18 of the Act. We are there-

fore of the opinion that in view of the admitted case of the

parties disposal of sludge/slurry coming out from the wash-

eries of appellants' coal mines is covered by the Act and

the State Government had, no authority in law to grant any

lease or settlement authorising collection of the same from

the five bed or from any other land. Consequently, the

respondents in whose favour settlements have been made by

the State Government have no right to authority to collect

sludge/slurry either from the five bed or from any other

land.

In Civil Appeal No. 4521 of 1986 the appellants' claim

that plot No. 370 situated in village Sudamdih belonged to

them and the sludge/ slurry discharged from their washery as

settled down on that land also belonged to them therefore

the State Government had no authority in law to permit

respondents to collect slurry coal from their land. The High

Court held that since the appellant's ownership fights in

respect of Plot No. 370 of village Sudamdih was seriously

disputed the question should be decided by the civil court.

Mr. Kapil Sibal learned counsel for the appellant urged that

the High Court committed serious error as there was no scope

for any dispute regarding the question of ownership of Plot

No. 370. We find force in his submission. There is suffi-

cient material on record to show that Bharat Coking Coal

Ltd. is the owner of the plot No. 370 situated at village

Sudamdih and the respondents have failed to place any mate-

rial before the court that the appellant is not owner of

Plot No. 370. A Notification was issued by the Central

Government on 6.8.1960 under sub-section (1) of Section 4 of

the Coal Beating Areas (Acquisition and Development) Act,

1957, for purpose of prospecting coal in the land specified

in the Schedule to the Notification included the entire land

of village Sudamdih District Dhanbad. By another Notifica-

tion dated August 30, 1961 issued under

770

Section 7 of the Coal Bearing Areas (Acquisition and Devel-

opment) Act, 1957 the Central Government declared its inten-

tion to acquire the lands measuring 778.45 acres specified

in Schedule A to the Notification Sudamdih village was

mentioned in the Schedule. Plot No. 370 of Sudamdih was

expressly specified therein. By another Notification dated

December 16, 1961 the Central Government declared under

Section 9 of the Coal Beating Areas (Acquisition and Devel-

opment) Act 1957 that the land measuring 778.45 acres de-

scribed in Schedule A and the rights to mine, quarry, bore,

dig and search for win work and carry away minerals in the

lands measuring 625.73 acres described in Schedule B are

acquired. The Schedule to the Notification clearly stated

that all rights in village Sudamdih were acquired and plot

No. 370 was expressly specified in the Schedule to the

Notification. On the issue of the aforesaid Notifications

the lands specified therein vested in the Central Govern-

ment. The Central Government by its order dated 27th January

1962 transferred the aforesaid lands including plot No. 370

situated in village Sudamdih to the National Coal Develop-

ment Corporation, a Government Undertaking. In 1975 the

Central Government reorganised the management structure of

the coal industry in the public sector and a central compa-

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ny, i.e. Coal India Limited, was constituted having Bharat

Coking Coal Limited as one of its subsidiary. The Bharat

Coking Coal Ltd. was incorporated for running and managing

the Sudamdih and Monidih coal mines of National Development

Corporation. Since then the Sudamdih coal mines and the land

in dispute have been under the control and management of the

Bharat Coking Coal Ltd. During the pendency of the appeal

before this Court proceedings were initiated against re-

spondent No. 4 for the violation of interim orders of this

Court. In the contempt proceedings Respondent No. 4 contend-

ed that plot No. 370 of village Sudamdih belonged to the

State of Bihar and the appellants had no ownership rights

therein. This Court held that since plot No. 370 of Sudamdih

has been acquired under Section 9(1) of the Coal Bearing

Areas (Acquisition and Development) Act 1957 the appellant

company was its owner, and it was idle to contend the con-

trary. We therefore hold that the appellant is the owner of

plot No. 370 of village Sudamdih and the State Government

had no authority in law to make any arrangement or to settle

any right with respondents for collecting slurry deposits

from that Plot No. 370 of Sudamdih.

In view of the above discussion, we hold that the slurry

which escapes from the appellants' washeries is mineral and

its regulation is within the exclusive jurisdiction of the

Central Government. We further hold that in view of the

Parliamentary declaration made by

771

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

Act the State Government has no authority in law to make any

settlement or grant any lease to any person for the collec-

tion of slurry deposits either from the river bed or other

land. The impugned settlements made in favour of the re-

spondents by the State Government are illegal and the re-

spondent-lessees have no right or title to collect the

slurry deposits, therefore, they are restrained from lifting

or collecting the same from the land in dispute. We, accord-

ingly, allow Civil Appeal No. 4521 of 1986 and Civil Appeal

Nos. 61-62 of 1987 and set aside the order of the High Court

of Patna and allow the writ petitions filed by the appel-

lants before the Patna High Court. We further allow Civil

Appeal Nos. 230-231 of 1987 and set aside the order of the

High Court of Calcutta and dismiss the writ petitions filed

by Industrial Fuel Marketing Company & Ors. We further

direct that the money deposited pursuant to the interim

orders passed by the High Court and this Court will be paid

to the successful party. There will be no order as to costs.

G.N. Appeal al-

lowed.

772