1984 JTR(SC) 345
1985 AIR(SC) 192 ; 1985 1 CurCC(SC) 615 ; 1985 50 FLR 166 ; 1984 2 Scale 899 ; 1985 1 SCC 305 ; 1985 2 SCR 209 ; 1985 1 UJ 522
SUPREME COURT OF INDIA
O. CHINNAPPA REDDY; A.P. SEN AND E.S. VENKATARAMIAH, JJ.
Union of India and others, Appellants
Versus
United Collieries Ltd. and others, Respondents.
Civil Appeal No. 4512 of 1984 (Arising out of S.L.P. (Civil) No. 1345 of 1981), D/-3-12-1984.
Act Referred :COAL MINES NATIONALISATION ACT : S.3(1), S.2(h)(xii)
(A) The Coal Mines (Nationalization) Act, 1973, operating w.e.f. May 1, 1973, nationalized the coal mines owned by respondent entity, and upon vesting, all rights, title and interest in the mine and its assets passed to the Central Government free from encumbrances under sub-s. (1) of S. 3. The definition of 'mine' in S. 2(h)(xii) encompasses all fixed and current assets belonging to the owner of the mine wherever situated, extending to vehicles and staff cars used in connection with or available to the mine, irrespective of the user's nature, thereby bringing the staff car within the scope of the transferred property.
(B) Key legal principles include: statutory vesting under the nationalization Act operates as a complete transfer free from encumbrances; the definition of 'mine' is exhaustive and includes all assets belonging to the owner and used for or appurtenant to the mine; the subsequent user or personal use of an asset by an officer does not remove it from the definition if it remains a fixed asset of the mine; and questions of fact as to user do not preclude legal determination when the asset's status as a mine asset is clear.
Facts of the case:
A staff car (Ambassador No. MHX 3771) owned by United Collieries Limited, the owner of the North Chirimiri Collieries, was used as the staff car of the Technical Advisor to the colliery. On and from May 1, 1973, the colliery was nationalized under the Coal Mines (Nationalization) Act, 1973. Post-nationalization, the Deputy Custodian required the car to be handed over, but it was withheld on the ground that it was used for multifarious activities of the Thapar Group. A petition under Article 226 was filed, and the High Court directed that the matter be resolved by a civil suit.
Findings of Court:
The Supreme Court held that the staff car was a fixed asset belonging to the owner of the mine and fell within the definition of 'mine' under S. 2(h)(xii), irrespective of the nature of its use. The High Court erred in directing the parties to approach a civil court, as the legal question of vesting was clear and did not depend on the user of the vehicle.
Issues:
Whether a staff car owned by the mine owner and used by the Technical Advisor was covered by the definition of 'mine' and therefore vested in the Central Government upon nationalization.
Ratio Decidendi:
The car being a fixed asset belonging to the mine owner and used in connection with the mine operations falls within S. 2(h)(xii) of the Act, and consequently vested in the Central Government on the appointed day, rendering the High Court's direction to file a civil suit incorrect.
Result:
The appeal is allowed, the High Court judgment and order are set aside, and the writ petition is dismissed.
(A) The Coal Mines (Nationalization) Act, 1973, operating w.e.f. May 1, 1973, nationalized the coal mines owned by respondent entity, and upon vesting, all rights, title and interest in the mine and its assets passed to the Central Government free from encumbrances under sub-s. (1) of S. 3. The definition of 'mine' in S. 2(h)(xii) encompasses all fixed and current assets belonging to the owner of the mine wherever situated, extending to vehicles and staff cars used in connection with or available to the mine, irrespective of the user's nature, thereby bringing the staff car within the scope of the transferred property.
(B) Key legal principles include: statutory vesting under the nationalization Act operates as a complete transfer free from encumbrances; the definition of 'mine' is exhaustive and includes all assets belonging to the owner and used for or appurtenant to the mine; the subsequent user or personal use of an asset by an officer does not remove it from the definition if it remains a fixed asset of the mine; and questions of fact as to user do not preclude legal determination when the asset's status as a mine asset is clear.
Facts of the case:
A staff car (Ambassador No. MHX 3771) owned by United Collieries Limited, the owner of the North Chirimiri Collieries, was used as the staff car of the Technical Advisor to the colliery. On and from May 1, 1973, the colliery was nationalized under the Coal Mines (Nationalization) Act, 1973. Post-nationalization, the Deputy Custodian required the car to be handed over, but it was withheld on the ground that it was used for multifarious activities of the Thapar Group. A petition under Article 226 was filed, and the High Court directed that the matter be resolved by a civil suit.
Findings of Court:
The Supreme Court held that the staff car was a fixed asset belonging to the owner of the mine and fell within the definition of 'mine' under S. 2(h)(xii), irrespective of the nature of its use. The High Court erred in directing the parties to approach a civil court, as the legal question of vesting was clear and did not depend on the user of the vehicle.
Issues:
Whether a staff car owned by the mine owner and used by the Technical Advisor was covered by the definition of 'mine' and therefore vested in the Central Government upon nationalization.
Ratio Decidendi:
The car being a fixed asset belonging to the mine owner and used in connection with the mine operations falls within S. 2(h)(xii) of the Act, and consequently vested in the Central Government on the appointed day, rendering the High Court's direction to file a civil suit incorrect.
Result:
The appeal is allowed, the High Court judgment and order are set aside, and the writ petition is dismissed.
DALVIR BHANDARI, M.S.GUJRAL, N.M.GHATATE, R.N.Poddar, S.V.DESHPANDEY, U.R.Lalit
Judgment
SEN, J. :- This appeal by special leave directed against the judgment and order of a Division Bench of the Bombay High Court at Nagpur dated October 27, 1980 raises a question as to whether a staff car of the Technical Advisor to the North Chirimiri Collieries owned by respondent No. 1, the United Collieries Limited, which was nationalized under sub-s. (1) of S. 3 of the Coal Mines (Nationalization) Act, 1973 w.e.f. May, 1, 1973, was or was not covered by the definition of the term mine in S. 2(h)(xii) and therefore stood transferred to and became vested in, the Central Government free from all encumbrances.
2. It is common ground that the Ambassador car No. MHX 3771 was purchased by Messrs. Karamchand Thapar & Bros. (Coal Sales) Ltd., Delhi in the year 1966 and was transferred to respondent No. 1, United Collieries. Limited, the owners in relation to the North Chirimiri Collieries, and it was therefore the owner of the said vehicle. On and from the appointed day i.e. May 1, 1973, the rights, title and interest of the owners in relation to the coal mines specified in the Schedule stood transferred to, and became vested absolutely in, the Central Government free from all encumbrances, under sub-s. (1) of S. 3 of the Act. It is also not in dispute that the vehicle had been placed at the disposal of one D.D. Diddi, the Technical Advisor to the North Chirimiri Collieries to be used as his staff car. Immediately after the nationalization of the coal mines, the Deputy Custodian General, Coal Mines Authority Limited, Nagpur addressed a letter dated May 9, 1973 to the aforesaid D.D. Diddi requiring him to hand over the staff car to the Custodian. In his reply dated May 25, 1973, he asserted that although the said car belonged to respondent No. 1 and had been allotted to him for use as a staff car, it was not used exclusively for the North Chirimiri Collieries but used by him for looking after multifarious activities of the Thapar Group of Industries which was a composite concern with business other than coal mining. It is not necessary for us to refer to the long correspondend that ensued between the parties.
3. Eventually, the Managing Director, Western Division, Coal Mines Authority Ltd., Nagpur addressed letters dated August 9, 1973 both to respondent No. 1 and the erstwhile Technical Advisor stating that on coming into force of the Act the right, title and interest of the North Chirimiri Collieries vested in the Central Government under sub-s. (1) of S. 3 of the Act and therefore the car which was an asset belonging to the mine vested in the Central Government. It further stated that if they failed to hand over possession of the car, they would be liable to prosecution under the Act. Thereupon respondent No. 1, United Collieries Limited, the owners of the coal mine, and the aforesaid D.D. Diddi, the erstwhile Technical Advisor of the North Chirimiri Collieries, filed a petition under Art. 226 of the Constitution before the Nagpur Bench of the High Court. The High Court held that the question as to whether the staff car should be treated as belonging to the owner of a mine as part of the mine itself raised disputed questions of fact relating to its user which would have to be determined on the basis of evidence. In taking that view, the High Court purported to rely upon the decision of this Court in New Satgram Engineering Works v. Union of India (1980) 4 SCC 570 and left the parties to have their rights adjudicated in a civil suit. It accordingly discharged the rule directing respondent No. 1 to establish its claim by filing a civil suit with a direction that in the event of such a suit being filed, the Civil Court will consider the making of an appropriate order for the grant of interim relief on condition of furnishing of adequate, security keeping in view that the Coal Mines Authority had been deprived of the staff car for all these years.
4. We are afraid, the judgment of the High Court cannot be sustained. It failed to appreciate that in dealing with the question whether or not the staff car was covered by the definition of mine in S. 2(h)(xii) the nature of its user was immaterial. Undoubtedly, the staff car belonged to respondent No. 1, the United Collieries Ltd., the owners in relation to the mine, and it being the staff car of the Technical Advisor of the North Chirimiri Collieries, was an asset belonging to the mine. The High Court should therefore have answered the question in favour of the appellants and dismissed the writ petition on merits. Instead it misdirected itself into thinking that the matter was covered by the decision of this Court in New Satgram Engineering Works case, supra, where it was observed that where there is a dispute as to whether a particular property vests in the Central Government or not under sub-s. (1) of S. 3 of the Act, the dispute undoubtedly is a civil dispute and must therefore be resolved by a suit. These observations of the Court in New Satgram Engineering Works case were made in the -context of S. 2(h)(xi).
5. In the Act, mine in S. 2(h) is defined, except what is immaterial, in the following terms :
"2. Definitions - In this act, unless the context otherwise requires, -
(h) mine means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on, and includes -
(vi) all lands, buildings, works, adits, levels, planes, machinery and equipments, instruments, stores, vehicles, railways, tramways and sidings in, or adjacent to, a mine and used for the purposes of the mine;
(xi) all lands and buildings other than those referred to in sub-clause (x), wherever situated, if solely used for the location of the management, sale or liaison offices, or for the residence of officers and staff, of the mine;
(xii) all other fixed assets, movable and immovable, belonging to the owner of a mine, wherever situated, and current assets, belonging to a mine, whether within its premises or outside."
It will be seen that there is difference in the language used in S. 2(h)(xi) and (xii). Sub-cl. (xi) used the words if solely used in relation to lands and buildings for the location of the management, sale or liaison offices, or for the residence of officers and staff, of the mine, while sub-cl. (xii) uses the words belonging to the owner of a mine, wherever situated. The difference in language between the two expressions if solely used and belonging to the owner of a mine is obvious. In New Satgram Engineering Works case this Court observed that it was therefore possible to contend that lands and buildings appurtenant to a coal mine, if not exclusively used for the purposes of the colliery business, would not come within the definition of mine in S. 2(h) i.e. it would depend upon the nature of user, and that the crucial date is the date of vesting. It then went on to say that the distinction though apparent may not be real in the facts and circumstances of a particular case. The workshop or a building constructed initially for the purposes of a coal mine cannot by itself being diverted to other purposes cease to belong to a mine. What is of essence is whether the workshop or building originally formed a part and parcel of a coal mine. The Court laid down that the subsequent user may not be very material. The High Court was clearly in error in directing the parties to have the matter settled by a civil suit.
6. Parliament by an enlarged definition of mine in S. 2(h) of the Act has indicated the nature of the properties that vest and the question whether a particular asset is taken within the sweep of S. 2(h) depends on whether it answers the description given therein. The staff car in question was undoubtedly a fixed asset of the North Chirimiri Collieries and it, belonging to respondent No. 1 the United Collieries Ltd., the owners in relation to the said mine, being the staff car of the Technical Advisor, was a fixed asset belonging to the mine. It is rightly not suggested that the staff car was not a fixed asset. Fixed assets in general comprise those assets which are held for the purpose of conducting a business, in contradistinction to those assets which the proprietor holds for the purpose of converting into cash, and they include real estate building, machinery etc. : Words & Phrases. Permanent Edition, Vol. 17, P. 161: Blacks Law Dictionary, 5th edn., P. 573; Strouds Judicial Dictionary, 4th edn., Vol. 1, P. 201. The staff car therefore fell within the definition of mine as contained in S. 2(h)(xii) and vested in the Central Government under sub-s. (1) of S. 3 of the Coal Mines (Nationalization) Act, 1973. Merely because the Technical Advisor was putting the staff car to his personal use or for multifarious activities of the Thapar Group of Industries would not alter the true legal position since the subsequent user for a different purpose was not really germane.
7. For these reasons, the appeal must therefore succeed and is allowed with costs. The judgment and order passed by the High Court dated October 27, 1980 relegating the parties to a civil suit is set aside and the writ petition filed by the respondents is dismissed.
Appeal allowed.
For Citation : AIR 1985 SC 192