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

Citation: [1980] 3 S.C.R. 1042

Court: Supreme Court of India

Bench: Y.V. CHANDRACHUD, P.N. BHAGWATI, V.R. KRISHNA IYER, R.S. SARKARIA, N.L. UNTWALIA, P.S. KAILASAM, V.D. TULZAPURKAR

Case summary

For understanding the basis of that challenge, it will be enough to refer to the broad facts of two repre- \ sentative groups of petitions. l83l8(W) of 1975, the High Court of Calcutta is )- stated to have set aside the order of the State Government cancelling the lease of...

Judgment text

):. TARA PRASAD SINGH ETC. ETC. v. UNION OF INDIA & OTHERS I May 7, 1980 " 8 [Y. V. CHANDRACHUD, C. J. , P. N. BHAGWATI, V. R.. KRISHNA IYER, R. S. SARKAR! A, N. L. UNTWALIA, P. S. KAILASAM AND • V. D. TULZAPURKAR, JJ. ] Coal Mines (Nationalisation) Amendment Act, 67 of 1916-Legislative - competence of the ParliamRnt to enact Nationalisation Amendment Act- Whether the Amending Act is violative oif the provisi"ons of Articles 14, \. 19,(1)(/), 19(1)(g) and 31 of the Constituti<>n of lndia-Applicability of the \ ... J Act to leases of composite mines in which there are alternate seams of coal and fire clay. Article 246(1) of the Constitution of Indiia confers upon the Parliament, notwithstanding anything contained in. clauses 2 and 3 pf that Article, the exclusive power to make laws with respect to any of the matters enumerated in List I of the Seventh Schedule, called the Union List, Clause 2 of Article 246 deals with thlj power of the Parliament and the State Legisla.

tures to make laws with respect to any of the matters enumerated in the Concurrent Lisi, while clause 3 deals with the {X>Wer of the State Legislatures to make laws with respect to any of the matters enumerated in the State List. Entry 23 List II, Schedule VU of the Constitution read with Article 246(3) cOnfers legislative· power on the State Legis~atures in respect of "Regulatiol). of mines and mineral development" but that power is "subject to the provisions of List I with respect to regulation and development under the control of the Union". Entry 54 List I enables Parliament to acquire legislative power in respect of, "Regulation of mines and mineral development to the extent to which suCh regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". Entry 24 List II relates to "Industries subject to the provisions of entries 7 and 52 of List I".

Entry 7, List I, relates to Industries declased by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. ·Entry 52, List I, enables'Parliament to acquire legislntive. power in respect of l ' "Industries, the control' of which by the Union is declared by Parliament by law to be expedient in the pub1ic interest". ' Pursuant to these powers the Parliament enacted the Industries (Development & Regulation) Act, 65 of 1951, the Mines Act 35 of 1952, the Mines and Minerals (Regulation and Development) Act 67 of 1957, the Coking Coal . -~' Mines (EmCrgency Pfovisions) Act, 64· of 1971, the Coking Coal Mines {Nationalisation) Act, 36 of 1972, the Coking Coal Mines (Nationalisation) Amendment -Act, 56 of 1972, the Coal Mines (Taking over of Management) Act, 15 of 1973 and the Coal Mines (Nationalisation) Act 26 of 1973. Thereafter the Coal Mines (Nationalisation) ,i\mendmcnt Ai:t 6i of 1976 woo p:isscd, the objects and reasons being : . ;" TARA PRASAD V.

UNION 1043 "After the nationalisation of coal mines, a number of persons holding . coal mining 1eases unauthorisedly started mining of coal in the Dl06t reckless and unstientific manner without regard to considemtions of conservation, safety and welfare of workers. Not only were they resorting to slaughter mining by superficial working of outcrops and thereby destroying a valuable national asset and creating problems of water-logging fires, etc. for the future d~elopment of the deeper deposits, their unsafe working also caused serious and fatal a. ccidonts. They were making larger profits by paying very low wages, and by not providing any safety and welfare measures. Thefts of coal from adjacent nationalised mines were also reported after the commencement of these unauthOrised operations which had shown an increasing trend of late.

· Areas where illegal and unauthorised operations were carried on, were without any assessment of reserves in regard to quality and quantity ol1 coal which could be made available after detailed exploration work was undertaken and results" analysed. No scientific exploitation of these deposits could be undertaken in the nationalised sector without these details. It was, therefore, considered that it would oot be appropriate either to nationalise these unauthorisedly worked mines after taking them over under the Coal Mines (Taking Over of Management) Act, 1973 or to get the concerned rriining leases prematurely terminated and regranted to Govern· ment Companies under the Mining and Minerals ·(Regulation and Deve- Jopment) Act, 1957. In view of the policy followed by the Central Government that the Coal Industry is to be in the nationalised sector, it was decided that the Coal Mines Nationalisation Act, 1973 should be enacted to provide for termination of all privately held coal .

leases, except those held by pfivately owned steel companies, so that it may be possible for the Central Government, Government Company or Corporation to take mining leases where necessary, after necessary exploration has y been made as to the extent of the deposits. of coal, etc. " The petitioners who were the lessees of cool mines by the State Government, being aggrieved by the provisions of the Ameridment Aci 67 of . 1976, ·challenged the competence of Parliament to enact the Amendment Act and also the validity of the Act and contended: (a) Laws made in the exercise of power CO!

llferred by Entry 54 must stand the test of public interest because the very reason for the Parliament acquiring power under that entzy is that it is in public interest that the regulation ofmines and minerals should be under the control of the Union: Jn other words, Entry 54 confers· a legislative power which is purposive, that is to say, any law made in the exercise of the power under Entry 54 must be designed to secure the regulation an. d development of coal inines in public interest or else it must fail. The Nationalisation Amendment Act is not such a law which Parliament can pass under Entry 54 because, that Act not only terininates all leases but it destrQys the contracts of service of thousands of Workmen, and indeed it destroys all other contracts and all securities for moneys lent without even so much as making a provision for priorities for the payn1ent of debts.

Since the Nationalisation Amendment Act terminates aU leases, it is a complete negation of the integrated scheme of taking over the management of m~es; acquisition of the rights of lease-holders and the running of the mines. If (b) The word 'Regulation' in Entry 54 does not include 'Prohibition'. 'Regulatiun' should not also be confused with the expression 'Restrictions' occur- . , 'i . " . ·. J ring in Article 19(2) to (6) of the Constitution. In the very nature of things, there cannot be a power to prohibit the regulation and development of mines and minerals'. Section 3(4) inserted by the Nationalisation Amendment Act impoees no obligation on the Central Government or any other authority to obtain a mining lease and work the mines, the leases in respect of which stand terminated under the Act. The words "it shall be lawful'' for the Central Government to obtain a lease are words qf discretionary power which create no obligation.

They only enable the Central Government to obtain a lease, mal rtrlch exempts the Jaws mentioned in clauses (a) to (e) from invalidity under Articles 14, 19 and 31 does not dispense with the necessity of the authority of law for depriving a person of his property, because tho opening words of Article 3IA(l) are " ..... . no law providing for ...... " matters mentioned in clanses (a) to (e) shall be deemed· to be void as offending Articles 14, 19 and 31. •.. • (h) The Nationalisation Amendment Act confers no authority to terminate· a composite lease for mining coal and fire-clay. The right to mine fire-clay is given to the petitioner by law and it can only be taken away by law. (i) Though the Nationalisation Amendment Act does not in terms prohibit the petitioner from mining fireclay, the effect of the law, in a practical business sense;. is to prohibit the petitioner fronl mining fireclay and, therefore, the posi-..

tion is rhe same1 as th9ugh the Act had enacted the prohibition in express terms. The Court must look at the direct impact of the law on the right of the party, and if that impact prohibits him from exercising his right, the fact that there is no express prohibition in the Act is immaterial. (j) The Nationalisation Amendment Act by m&king it punishahlei to mine coal, in substance and in a practical business sense, prohibits the petitioner from mining fireclay. For this prohibition the Amendment Act does not provide, and therefore, there ~ no authority of law for it. Coal and :fireclay are two distinct minerals as shown by Schedule II to the Mines arul Minerals (Regula· tion and Development) Act, 67 of 1957 wherein item I is coal and item IS is fireclay. The dictionary meanings of coal and fireclay also show that they are two distinct minerals.

(k) The Nationalisation Amendment Act affects, in substance, two kinds of transfers : the transfer of the lease>-hold inll:rests of the lessees in favour of the lessor, namely the State; and the transfer dfl the mining business of the lessees in favour of the Central Government Sin. cc these transfers amount to acquisition within the meaning of Article 31(2), the Act is open to challenge under Articles 14, 19(1)(g) &nd 31 of the Constitution. (! ) The Nationalisation Amendment Act is open to challenge under Article 14 because lessees who fall within that Act are patently discriminated against in comparison with lessees of other mines, both coking and non-coking, who were paid compensation when their property was taken over first for manll@ec ment under the Management Acts and then under the Nationalisation Acts.

(m) The Nationalisation Amendment Act is open challenge under Article 19(1)(g) because the prohibition against lessees from carrying on their business and the transfer of their business, in substance, to the Central Government or Company is an unreasonable restriction on the right of the lessees to hold their lease-hold property and to carry on their business of mining. (n) The Act is open to challenge under Art:icle 31 because no provision is mad. • for_ the payment '>! - any amount wha~er to the lessees·whose mining busmess ts taken over wider the Act. No pubhc purpose is involved either in the termination of the lessees' interest or in the acquisition of their business. Expro~ priation without payment of any amount requires a very heavy public purpose. (o) Since no provision whatsoever is made for the payment of any amount to the .

lessees whose leases are terminated, the Nationalisation Amendment Act is not a 'Law' within the meaning of Article 31(2) and therefore Article l,9(1)(f) is attracted. ' .. (p) The Act is not saved from the challenge of Articles 14, 19 and 31 by Article 31A (I) (e) because that Article provides for extinguishment which does not amount to acquisition by the State. If. extingμishment amounting to acquisition \\'as intended to be saved under' Article 31A(l) (e), the subject IDJ. tter dealt with by clause (e) would have been included in clause (a. ) of that Article. Dismissing all the \Vrit Petitions except Writ Petitions Nos. 111, 178, 220, 221, 257, 352, 600 & 1130-1134/77 which are allowed in part, the Court, HEID: (1) The provisions of the Amendment Act 67 of 1976 are not a mere facade for terminating mining leases without any obligation in the matter '\ of regulation of mines and mineral development. [1071H, 1072A] .

Granting that Entry 54, List I is pur_posive since it qualifies the power to pass a law relating to "Regulation of Mines and Mineral Development" by the addition of a restrictive clause, "to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest", the provisions of the NationalisatiOn Amendment Act show that they are designed to serve progressively the purpose of Entry 54. [1972 A-BJ The Coal Mines (Nationalisation) Act was passed in order to provide for · ·the acquisition and transfer of the right, title and interest of the owners in . respect of the Coal mines specified in the Schedule to that Act. This was done with a view to re-organising and reconstructing such coal mines so as to ensure the rational, co-ordinated and scientific development and utilisation of coa~ resources consistent with the growing requirements of the country.

The high purpose of that Act was to ensnro that tho ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common ~ood. [1072 D-F] I The several provisions of the Nationalisation Amendment Act, are, (I) by r section 3(3) (a) of .

the Coal Mines (N~tionalisation) Act, 1973' which was \ introduced by the Nationalisation Amendment Act, no person other than those mentioned in clauses (i) to (iii) can carry on coal mining operations after 'April 29, 1976, being the date on which section 3 of the Nationalisation Amendment Act came into force; (2) by section 3 (3) (b) all mining leases and sub-leases stood terminated except those granted before April 29, 1976 in favour Of the Central Government, a Government company or corporation owned, managed or controlled by the Central Government; (3) section 3(3) (c) prohibits the granting of a lease for winning or mining coal in favour of any person other than the Government, a Government company or a corporation of the above description provided that a sub-lease could be granted by these auth<>rities to any-pefson if the two conditions mentioned in the proviso are satisfied; and (4) when a mining lease stands terminated under section 3(3), "it shall TARA PRASAD v.

UNION 1047 be lawful'' for the Centrnl Governmen~ or the Government company or the corporation owned or controlled by the Central Government to obtain a pros~ pecting licence or a mining leatie in res~t of lheJ whole or part of the land covered by the mining lease which stands termiriated. Section 4 of the Nation· alisation Amendment Act introduced an additional pena. 1 provision in the parent Act. The provisions of . Ss. 3 and 4 are noi a direct negation of the principles of the parent Act a. nd they do not destory the integral scheme of taking over the management of mines, of acquiring the rights of lease-holders and continu· ing to run the . mines.

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

ativeJy incompetent, if they are otherwiSe within the competence of the legislature to enact. One must principally have regard to the object of an Act in order to find out whether the exercise of· the legislative power is purposive, unless, of course, the provisions of the Act show that the a. vowed or intended objects is a mere pretence for covering a veiled transgression committed by the legislature upon its o. wn powers. Whether. a particular object can be successfully achieved. by an Act, is largely a matter . of legislative policy. [1074 B-D] 3. The Nationalisation Amendment Act needs no preamble, especially when it is backed up by a statement of objects and reasons. Generally, an amendment Act is passed in order to advance the purpose of the parent Act as reflected iD: the preamble to that Act. Acquisition of cool mines, is not an end in itself but is only a means to an end.

The fundamental object of the Nationalisation Act as also of the Nationalisation Amendment Act is to bring into existence a state of affairs which will be congenial for regula~ mines and for mineral development. In regard to the scheduled mines, that purpose was achieved by the means of acquisition. In regard' to mines which were not in- \~ ' cluded in the Schednle, the same purpose was achieved by termination of leases and sub-leases M\d by taking over the right to work the mines·. Termination of leases, vesting of lease-hold properties in the State Governments and the grant of leases ID the Central Government or Government Companies are together the means conceived in order to achieve the object of nationalisation of one of the vital material resources of the community. [1074 D-0] 4. Section 18 of the Mines and Mineral (Regulation and Development) Act 67, 1957 contains a statutory behest and projects a purposive legislative policy.

The later Acts on the subject of regulation of mines and mineral development are linked up with the policy ennnciated in section 18. Therefore, nothing ff contained in the later analogous Acts can be construed as in derogation of the principle ennnciated in. section 18 of the Mines and Minerals (Regulation and Development) Act, 67 of 1957, which provid.. that it shall be the duty of the Central GoVeJ11DMlnt to take all such steps aa may be necessary for the conservation and development of minerals in India. Therefore, even in regard to matters f&lling under the Nationalisation Amendment Act which terminates existing leases and makes it lawful for the Central Government to obtain fresh leases, the obligation of section 18 of the Act of 1957 will continue to apply 4in its full rigour. [1074 G-H, 1075 A-BJ 5. Entry 54 refers to two . tirings: (1) regulation of mines and (2) mineral .. development.

It is true that the Entry is purposive, since the exercise of the power under Entry 54 has to be guided and governed by public interest. But • neither the power to regulate mines nor the power to ensure min. era) develop- 4~ ment postulates that no sooner is a mining lease terminated by the force of the •• statute, then the Central Government must begin to work the mine of which the lease is terminared. It is possible that after the Nationalisation Amendment Act came into force, there was a hiatus between the termination of eixisting "- leases and the granting of fresh ones. But, the Nationa. Jisation Amendment Act does not provide that any kind of type of mine shall not be developed or ~ worked. · Cooservation, prospecting and investigation, developmental steps and finally scientific exploitation of the mines and minerals is the process envisaged • ·by . the Nationalisation Amendment Act. It is nndeniable that conservation of minerals, whk;.

h is brought about by the termination of existing leases and subleases, is vital. for the development of mines. A phased and graded programme I) of conservation is in the ultimate analysis one of the most satisfactory and effective means for the regulation of mines and the development of minerals. [1075 D-GJ 6. The Nationalisation Amendment Act is not destructive of the prpvisions of the Parent Act The destruction which the Nationalisation An1endment Act brings about is of the· lease. or the sub-leHe and not of its 'subject matter, namely, the mine itself. In terminating the lease of a house one does not destroy the house itself. It may be arguable that p;phibiting the use of lhe house for any purpose whatsoever may, for practical purposes, amount to the destruction of the house itself. The Nationalisation Amelldment Act neither contains provisions directed at prohibiting the working of mines, the leases in respect of which are terminated.

A simple provision for granting sub-leases shows that tho object of the Nationalisation Amendment Act is to ensure that no mine will lie idle or unekplored. Interregnums can usefully be utilised for prospecting and investigation. They do not lead to destructiog; of mines. In fact, . it is just as well that the Amendment Act does not require the new leases to undertake an I adventure, reckless and thoughtless, which goes by the name of 'scratching of mines', which ultimately results in the slaughtering of mines. [1075H, 1976A-D] I ~ Nri:tural resources, however, large are not inexhaustible, which makes it imperative to conserve them. Without a wise and planned conservation of such resources, there can neither be a systematic regulation of mines nor a scientific t development of minerals. The importance of.

conservation of natural resources in any scheme of, regulation and development of such resou~s can be seep from the fact that the Parliament had to pass in August 1974 an Act called the Coal Mines (Conservation and Development) Act, 28 of 1974, in order, principally, to provide for the conservation 00" coal and deveiopment of coal mines, Section 4(1) o£ that Act enables the Central Government, for the pnrpose of conservation of coal and for the development of coal mines, to exercise such powers and take or cause to be taken such measures as it may be necessary or proper or as may be prescribed. By section 5(1), a duty is cast on tho '" TARA PRASAD V, UNION 1049 O\\ tion Act of 1973. The provision contained in section 3(3) (a) totally prohibiting the generality of persons from carrying on c. oat mining operation in India in any form and the penal provision of section 30(2} TARA PRASAD V. UNION 1051 virtually leave with the lessees of composite mines the Jiusk of a mining interest.

, That they calUlot win or mine coal is conceded and, indeed, there, is no escape from that position in view of the aforesaid provisions. (1084 B-H, 1085 Al The lessees of composite mines cannot win or mine fireclay though their composite lease·is outside the scope -of section 2(b) of the Nationalisatio11 Act of 1973. The lessees of composite mines will, for all practical purpeses, have " to 1111rse their deeds of lease without being able to exercise any of the· rights :flowing from them. On their own showing, they will be acting at their peril if they attempt to win fireclay. If they cannot win fireclay \vithout v. 'inning coal, they cannot \. vin firecJay either, even if they hold composite leases under which they are entitled to win coal and fireclay. [1085 C-D] (10) Though the Parlia~nt provided for the payment of amounts for acquisition of certain interests under the:. Nationalisation A ment of minerals.

There was a lull in legislative activity in regard to the enactment of further regulatory measures for controlling mines and minera! B. The Coking Coal Mines (Emergency Provisions) Ordinance, 12 of 8 1971, was passed on October 16, 1971. It was replaced by the Coking Coal mines (Emergency Provisions) Act, 64 of 1971, which received the President's assent on December 23, 1971 but was given retrospective operation from the date of the Ordinance. Tile Act was passed to provide for the taking over, in the public interest, of the management· of coking coal mines and coke oven plants, pending nationalisation of such mines and plants. By section 3(1), the . management of all coking coal mines vested in the Central Government from the appointed day-October 17, 1971. , Section 6(1) provided that every owner of coking coal mine shall be given by the Central Government an amount, in cash, for vesting in it, under section 3, the management of such mine..

Such amount was tO be calculated in accordance with the provisions of section 6(2). The Coking Coal Mines (Nationalisation) Act, 36 of 1972, was passed in order, inter aUa, to provide for the acquisition and transfer of the right, title and interest ·of the owners of the coking mines and coke oven plants. Sections 30 and 31 ,of that Act dealing respectively with penalties, and offences by companies came into force at once but the remaimng provisions were deemed to have come into force on May 1, 1972. Section 3(c) defines "coking coal mine" to mean- "a coal mine in which there exists one or more seams of coking coal, whether exclusively or in addition to any seam of other coal". By section 4(1) the right, title and interest of the owners in relation to the coking coal mines specified in the First Schedule shall stand transferred to, and shall vest absolutely in, the Central Government, free from all incumbrances.

By section 4(2), after the appointed day, that is May 1, 1972 if any other coal mine was found to contain coking coal the provisions of the Coking Coal Mines (Emergency Provisions) Act, 1971 were to apply to snch mine until it was nationalised by an appropriate legislation. By section 6(1), the Central Government becomes the lessee of the State Goxemment where the rights of the owner under any mining lease granted in relation to a coking coal mine by the State Government or any other person, vest in the Central Government under section 4. Section 7(1) empowers the Central Government to direct that the right, title and interest of / the owners in relatiob to coking coal mines or coke oven · plants. shall vest in a government company. Sootions 10 and 11 of the Act provide for payment of the amonnts to owners of the coking coaf mines and coke oven plants for the vesting of their right, title ~ and ·ibte1pt in the Central Government.

" · By an Amendment Act, 56 of 1972, which came into force on September 12, 1972, section 4A was added to the Mines and Minerals (Regulation and Development) Act 1957. That section provides for premature termination of mining leases and the grant of fresh leases to Government companies or Corporations owned or controlled by Government. 1 The Coal Mines (Taking Over of Management) Act, 15 of 1973, which received the assent of the President ob March 31, 1973 was given retrospective effect from January 30, 1973 except section S(2) which came into force at once. The Act was passed in order "to provide for the taking over, in the public interest, of the management of coal mines, pending nationalisatio'n of such mines, with a • view to ensuring rational and co-ordinated development of coal. production and for promoting optimum utilisation of the coal resources consistent with the growibg requirements of the country, and for matters connected therewith or incidental thereto.

" Section 2(b) of the Act defines a "coal mine" to mean a mine "in which there exists one or more seams of coal. " ~. Section 3(1) provides that on and from the appointed day (that is, January 31, 1973) the ma·nagement of all coal mines shall vest in the Central Government. By section 3(2), the coal mines specified in the Schedule shall be deemed to be the coal mines the management of which shall vest in the Central Government under sub-section (1 ). Under the proviso to sectiob 3(2), if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, it shall by a notified order I make a declaration about the existence of such mine, upon which the \ management of such coal mine also vests ib the Central Government and the provisions of the Act become applicable thereto.

Section 3(5) casts an obligation on every person in charge of the management of a coal mine, immediately before the date on which the Act received the assent of the President, to intimate the Cenkal Government within 30 days from the said date the name and location of the mine as. well as the name and the address of the owner, if the mine is not included or deemed to be included in the Schedule. All contracts providing for the management of any coal mine made before the appointed day between the owner of the mine and any per- sen in charge of the mine and any person in charge of the management thereof are to be deemed to have been termlnatd on the appointed· day, under section 4, Section 6(1) empowers ! he Central Government to appoint Custodians for the purpose of taking over of the management of the mines.

Sectidn 7(1) provides that every owner of a coal mine shall be given by the Central Government an amount in cash for the vesting in it under section 3, of the management of such mine. Section 18(1) (a) excludes from the operation of the Act any coal mine owned, managed or controlled by the Central Government, or by a Government Company or by a corporation which is owned, managed or controlled by the Government. Clause ·(b) of sectio'n 18(I) also exclude5 from the operation of the Act a coal mine owned by or managed by a company engaged in the production of iron and steel. The Coal Mines (Nationalisation) Act, 26 of 1973, was given retrospective operation with effect from May 1, 1973 except sections 30 and 31 which came into force at once.

This Act was passed, "to provide for the acquisition and transfer of the right, title and interest of the owners in respect of the coal mines specified in the Schedule with a view to re-organising and reconstructing such coal mines so as to ensure the rational, co-ordinated and scientific development a'nd utilisation of coal resources consistent with the growing requirements of the country, in order that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good, and or matters connected therewith cir incidental thereto. " Section 2(b) defines a coal mine in the same way as the corresponding provision of the Management Act viz.

, a mine "in which there exists one or more seams of coal,'' Section 3( 1) provides th~t on the appointed day (that is, May I, 1973) the right, title and interest of the owners· in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in the Central Government free from all incumbrances. Section 4(1) provides that where the rights of an owner under any mining lease granted, or deemed to have been granted, in relation to a coal mine, by a State Government or any other person, vest in the Central Government under section 3, the Central Government shall, on and from the date of such vesting, be deemed to have become the lessee of the State Government or such other person, as the case may be, in relation to such coal mine as if a mining lease in relation to such coal mine had been grantee,! to the Central Government.

The period of such lease > 1 is to be the entire period for which the lease could have been granted ·by the Central Government or such other person under the Mineral Concession Rules and thereupon all the rights under the mining lease granted to the lessee are to be deeme. d to have been transferred ~, and vested in, the Central Government. By section 4 (2), on the expiry of the term of any lease referred to in sub-section (I), the lease, at . B the option of the Central Government, is liable to be renewed on the same terms a'nd conditions on which, it was held by the lessor for the maximum period for which it could be renewed under the Mineral Concession Rules. Section 5( 1) empowers the Central Government under certain conditions to direct by an order in writi:ng that the right, title and interest of an owner in relation to a coal mine shall, ·c ·instead of continuing to vest in the Central Government, vest in the Government company.

Such company, under section 5(2), is to be deemed to have become the Jessee of the coal mine as if the mining lease had been granted to it. By section 6(1), the property which vests in the Central Government or in a Government company is freed and discharged from all obligations and incumbrances ! lffecting it. The mortgagees and other holders of incumbrances are required by section 6(2) to give intimation thereof to the Commissioner within the prescribed time. Section 7( 1) provides that the Central Governme'nt or the Government company shall not be liab:~ to discharge any liability of . the owner, agent, manager or managing contractor of a coal mine in respect of any period prior to the appointed day.

Section 8 requires that the owner of every coal mine or group of coal mines specified in the second column of the Schedule ~all be given by the Central Government in cash and in the manner specified in Chapter VI, for the vesting in it under section 3 of the right, title and interest of the owner, an amount equal to the amount specified 'F against it in the corresponding entry in the fifth column of the Schedule. By secti0n 11 (1), the general superintendance, direction, control and management of the affairs and business of a coal mine, the right, title and interest of an owner in relation to which have vested in the Central Government under section 3, shall vest in the Govern- f ment compa'ny or in the Custodian as the case may be. For the ·G purpose of disbursing the amount payable to the owner, the Central Government is reqnired by section 17(1 ) to appoint a Commissioner 1 of Payments.

By section 18(1 ) , the Central Goverrnnent shall within thirty days from the specified date, pay, in cash, to the Commissioner for payment to the owner of a coal mine, an amount equal to the amount specified against the coal mine in the Schedule and also ·n such sums as may be due to the owner under section 9. Section 26(1) provides that if out of the monies paid to the Commissioner, any balance is left after meeting the liabilities of all the secured and un- secured creditors of the coal mine, he shall disburse the same to the owner. The Coal Mines (Nationalisation) Amendment Ordinance which was promnlgated on April 29, 1976 was replaced on May 27, 1976 by the Coal Mines (Nationalisation) Amendment Act, 67 of 1976. The Amendment Act consists of five sections by which certafu amendments were introduced into the Principal Act, namely, the Coal Mines (Nationalisation) Act, 26 of 1973. The Statement of Objects and •,..

Reasons of the Nationalisation Amendment Act reads thus : "After the nationalisation of coal miries, a number of persons holding coal mining leases unauthorisedly started mining of coal in the most reckless and unscientific manner without regard to considerations of conservation, safety and welfare of workers. Not only were they resorting to slaughter mining by superficial working of outcrops and thereby destroying a valuable national asset and creating problems of water-logging fires, etc. for the future development of the deeper deposits, their unsafe working also caused serious and fatal acc. idents. They were making larger profits by paying very low wages, and by not providing any safety and Welfare measures. Thefts of coal from adjacent nationalised mines were also reported after the commencement of these un;mthorised operations which had shown an increasing trend of late.

Areas where illegal and unauthorised operay tions were carried on, were without any assessment of reserves in regard to quality and quantity of coal which could be made available after detailed exploration work was undertaken and results analysed. No scientific exploitation of these deposits could be undertaken in the nationalised sector without these details. It was, therefore, considered tljat it would not be appropriate either to nationalise these I unauthorisedly worked mines after taking them over under the Coal Mines (Taking Over of Management) Act, 1973 or to get the concerned mining leases prematurely terminated · and regranted to Government Companies under the Mining and Minerals (Regulation and Development) Act, 1957.

In view of the policy followed by the Central Government that the Coal Industry is to be in the nationalised sector, it was decided that the Coal Mines Nationalisation Act, 1973 should be enacted to provide for termination of all privately held coal leases except those held by privately owned steel companies, so that it may be possible for the Central Government, Government company or Corporation to take 9-610SCI/80 • • mining leases where necessary, after the necessary exploration has been made as to the extent of the deposits of coal, etc". Sections 2 and 3 of tl)e Nationalisation Amendment Act were brought into operation with effect from April 29, 1976. By section 2 of ! he Amendment Act a new section, section IA, was introduced under Sub-section (I) of which it was declared that it was expedient in the public interest that the.

Union should take under its control the regulation and development of coal mines to the extent provided in subsections 3 and 4 of section 3 of the Nationalisation Act and subsection 2 of section 30. By sub-section 2 of section IA, the declaration contained in sob-section (I) was to be in addition to and not in derogation of the declaration contained in section 2 of the Mines and Minerals (Regulation and Development) Act, 1957. By section . 3 of the Amendment Act a new sub-section, namely, sub-section 3, . was introduced in section 3 of the principal Act.

Under clause (a) of the newly introduced sub-section 3 of section 3, on and from the commencement of section 3 of the Amendment Act no person other than (i) the Central Government or a Gove=ent company or a corporation owned, managed or controlled by the Central Government, or (ii) a, person to whom a sub-lease, referred to in the proviso to clause I (c) has been granted by any such Government, company or corporation, or (iii) a company eng;iged in the production of iron and steel, shall carry on coal mining operation, in India, in any form. Under clanse (b) of sob-section 3, excepting the mining leases granted before the Amendment Act in favour of the Government, company or corporation referred to in clause (a), and any sub-lease granted by any such Government, company or corporation, all other mmmg leases and sub-leases in force imm~diately before such commencement shall in so far as they refate to the winning or mining of coal, stand terminated.

Clause (c) of the newly introduced ·sub-section 3 of section 3· pro~des that no fease for winning or mining coal shall I be granted in favour of any person other than the Government, company or corporation referred to in clause (a). Under the proviso to cla,use (c), the Government, the company or the corporation to whom . f a lease for winning or mining coal has been granted may grant a sublease to any person in any area if, (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientifu: and economical. development in a co~ordinated and integrated manner, and (ii) the coal produced by the sub-lessee will not be required to be transported by rail.

By sub-section 4 of section 3, where a mining lease stands terminated under sub-section 3, it shall be lawful for the Central Government or a Government company or corporation owned • or controlled by the Central Government to obtain a prospecting licence or mining lease in respect of the whole or part of the land covered by the mining lease which stands terminated. Section 4 of the Amendment Act introduces an additional provision in Section 30 of the Principal Act by providing that any person who engages, or causes any other person to be engaged, in winning or mining coal from the whole or part of any land in respect of which no valid prospecting licence or mining lease or sub-lease' is in force, shall be punishable with imprisonment for a term which may extend to two 'years and also with fine which may extend to ten thousand rupees. Section 5 of the Nationalisation Amendment Act repeals the Coal Mines (Nationalisation) Amendment Orditlance, 1976.

As stated at the beginning of this Judgment, we are concerned in these writ petitions to determine the validity of the Coal Mines Nationalisation (Amendment) Act, 67 of 1976, to which we will refer as 'The Nationalisation Amendment Act'. Shri Seervai, who appears on behalf of the petitioners in writ petition No. 257 of 1977, challenges the legislative competence of the Parliament to enact the Nationalisation Amendment Act. Article 246 (1) confers upon the Parliament, notwithstanding anything contained in clauses 2 and 3 of that Article, the exclusive power to make laws with respect to any of the matters enumerated in List I of the Seventh Schedule, called the 'Union List'. Clause 2 of Article 246 deals with the power of the Parliament and the State Legislatures to make laws with respect to any of the matters enumerated in the Concurrent List, while clause 3 deals with the power of the State Legislatures to make laws with respect to any of the matters enumerated in the State List.

The relevant entries in List I are Entries 52 and 54 which read th. us : Entry 52 :-Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. Entry 54 :-Regulation of mines and mineral development to the extent to. which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the pnblic interest. Entry 24 of the State List reads thus : Entry 24 :-Industries subject ot the provisions of entries 7 and 52 of List I. We are not concerned here with Entry 7 of List I which relates to 'Industries declared by Parliament by law to be necessary for the purpose of defence or for the rrosecution of war'.

Shri Seervai's argument runs thus : (a) Laws made in the exercise of power conferred by 1 Entry 54 must stand the test of public interest because the very reason for the Parliament acquiring power under that entry is that it is in public interest that the regulation of mines and minerals should be under the control of the Union. In other words, Entry 54 confers a legislative power which is purposive, that is to say, an:yi law made in the. exercise of the power under Entry 54 must be designed to secur. e the regulation and development of coal mines in public interest or else it must fail. The Nationalisation Amendment Act is not such a law which Parliament can pass under Entry 54 because, that Act not only terminates all leases but it destroys the contracts of service of thousands of workmen, and indeed it destroys all other contracts and all securities for moneys lent without even so much as making a provision for priorities for the payment of debts.

Since the Nationalisation Amendment Act terminates all leases, it is a complete negation of the integrated scheme of taking over the management of mines, acquisition of the rights of lease-holders and the running of the mines. (b) The word 'Regulation' in Entr:yi 54 does not include p 'Prohibition'. 'Regulation' should not also be confused with the expression 'Restrictions' occurring in Article 19(2) to ( 6) of the Constitution. In the very nature of things, there cannot be a power to prohibit 'the regulation and development of mines and minerals'. Section 3(4) inserted by the Nationalisation Amendment Act imposes no obligation on the Central Government or ai;zy other authority to obtain a mining lease and work the mines, the leases in respect of which stands terminated under the Act. The words "it shall be fawful" for the Central Government to obtain a lease are words of discretionary power which create no obligation.

They only enable the Central Government to obtain a lease, making something legal and possible for _which there would otherwise be no TARA PRASAD v. UNION (Chandrachud, C. 1. ) right or authority to do. Section 3(4) does not confer a power coupled with a duty; it merely confers a faculty or power. No Court can by a Writ of Mandamus or otherwise compel the Central Government to >obtain a lease of a coal miue and to run it under any " of the provisions of the Nationalisation Amendment Act. (c) Where the Legislative power is distributed among different legislative bodies, the Lel! islature may transgress its legislative power either directly or manifestly, or covertly or indirectly.

In the instant case, the exercise of power by the Parliament is colourable because although in passing tile Nationalisation Amendment Act it purported to act within the limits of its legislative power, in substance and in reality it transgressed that power, the transgression being veiled by what appears on proper examination to be a mere pretence or dis~se. (d) In order to tear off the veil or dis~se and in order to get at the substance of the law behind the form, the Court must examine the effect of the legislation and take into consideration its object, purpose and design, Where the legislative entry is purposive, like Entry 54 of the Union List, it is the object or purpose of the legislation which requires consideration. The purpose for which the Parliament is permitted to acquire legislative power of Regulation and Development of mines must dictate the nature of law made in the exercise of that power because public interest demands' that power.

Under the provisions of the Nationalisation Amendment Act, not only is there no obligation on the Central Government to run a mine, but there is no ob'ligation imposed upon it even to carry out prospecting or investigation in order to decide whether a particular mine should be worked at all. Section 3(4) merely authorises the Central Government to apply for "a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands determined". A close examination of the Act thus discloses that far from providing for regulation and development of coal mines, it totally prohibits all mining activity even if the State Government wants to run a mine. It does . 1070 Sill'JUIME COURT REPORTS [1980] 3 s. c. R. not impose prohibition as a step towards running the mines since there is neither any obligation to carry out the prospecting or inve~tigation nor to run the mines. (e) The .

Nationalisation Amendment Act runs directly counter to the whole policy of the Coal Mines (Nationalisation) Act of 1973, to acquire and run the mines. The Parent Act becomes a dead letter in regard to several of its provisions as a result of the amendment Act. It only adopts a colourable device to amend the Nationalisation Act while completely ,negativing it in fact. The Act therefore lacks legislative competence and is, in the sense indicated, a colourable piece of legislation. (f) Article 3l(A)(l)(e) only lifts a restriction on the legislative competence in so far as violation of fundamental rights js concerned. The most benign motive cannot make a law valid if the legislative competence is lacking. In support of his submission that the provisions of the Nationalisation Amendment Act are not conceive.

ct in public interest and therefore they transgress the limitations of Entry 54, List I, learned counsel relies on the circumstance that whereas the Coal Mines Management Act and the Coal Mines Nationalisation Act of 1973 contain elaborate preambles, the Amendment Act contains no preamble setting out the mischief to be remedied or the benefit to be secured, for which the parent ·Act had failed to provide. At first blush, it is said, it would appear that the preamble to the parent Act . can be read into the Nationalisation Amendment. Act but that is impermissible since that preamble provides for acquisition and running: of the mines and can have no application to an Act which provides for termination sirnpli- I citer of all mining leases.

The preambles to the Management Act and the Nationalisation Act are said to be signific'lnt in that they show that ' those Acts were enacted in public interest with a view to rational and co-ordinated development of coal production and for promoting the · optimum utilisation of coal production consistently with the growing requirements of the country. Learned counsel has also compared and contrasted the provisions of these two Acts with the provisions of the Nationalisation Amendment Act for making good his point that the Iittter serves no public interest since it merely terminates all existing leases. The contrast, it is argued, is· also ·provided by section 4A of the Mines and Mineral Regulation and Development Act 1957 which, while providing for premature termination of mining leases, requires that such termination has to be followed by the granting of a fresh mining; lease so that the mines will continue to work. Reliance is placed byr counsel on the decision of this Court in K.

C. Gajapati Narayan Deo & 1 Ors. v. The State of Orissa( ) to show how although the legislature in passing an Act purports to act within the limits of its legislative pow'er, in substance and in reality it can transgress that power, the transgression being veiled. by what appears on proper examination to be a mere pretence or disguise. Attention is then drawn to the decision in Attorney • • General of Alberta v. Attorney General of Canada(') as showing that - in order to tear off the veil or disguise or in order to get at the substance of the law behind the form, the court can examine the effect of the legislation and take into consideration its object, purpose or design. In support of the submission that the word regulation in Entry 54 does not include prohibition, reliance is placed on the decision of the Federal Court in Bho]a Prasad v. The King Emperor(') wherein after setting out two decisions of the Privy Council in Municipal Corporation of City of Toronto v. Virgo v.

UNION (Chandrachud, C.!. ) 1089 ed day and lastly. (4) to terminate all mining leases. The Management Act and the Nationalisation Act provide for payment of amounts, by no means illusory, to the owners of coal mines whose rights were taken over. In the normal course of human affairs, particularly bus. i'ness affairs, it is difficult to conceive that owners of coal mines who had even the vestige of a title thereto would not bring to the notice of the Central Government the existence of their mines, when such mines were not included in the Schedule to the Nationalisation Act. Thooe who did not care to bring the existence of their mines to the knowledge of the Central Government, even though amounts are payable under the Management Act for the. extingnishment o1 the right of management, did not evidently possess even the semblance of a title to the mines. The claims of lessees, holdin or allegedly 2 holding under such owners, would be as tenuous as the title of their putative lessors. .

' The Nationalisation Amendment Act by section 3(3)(b) undoubtedly terminates all existi'ng leases and sub-leases except thooe already granted in favour of persons referred to in clauses (i) to (iii) of section 3 (3)(a). Similarly, section 3 (3)(a) imposes an embargo on all future coal mining operations except in regard to the persons mentioned in clauses (i) to (iii). But the generality of leases which are alleged to have remained outstanding despite the coming into force of the Management Act and the Nationalisation Act, were mostly precarious, whose holders could at best present the familiar alibi that the origin of their rights or of those from whom they derived title was loot in· antiquity. Neither in law, nor In equity and justice, nor under the Constitution can these lessees be heard to complain of the termination of their lease-hold rights without the payment of any amount.

The provision contained in section 3(3) (b) of the Nationalisation Amendment Act was made ex majore cautela so as not to leave any lease of a coal mine surviving after the enactment of the Management Act and the Nationalisation Act. There was no reasonable possibility of ~ liiwful lease surviving the passing of those Acts; blit if, per chance, anyone claimed that he held a lease, that stood terminated under section 3 (3 )(b). Once the real nature of the scheme envisaged by the Management v Act the Nationalisa~on Act and the Nationalisation Amen4ment Act is appreciated, it will be easy to . see that section 3 (3)(b) of the Nationalisation Amendment Act brings about an extinguishment simpliciter of coal mining leases within the meaning of Article 31A ff (1)(e) of the Constitution. That Article, as it stood prior to the 44th Amendment, read thus : "3 lA.

(1) Notwithstanding anything contain~ in Article 13, no law providing for (e) the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence • for the purpose of searching for, or winning, any mineral or mineral oil, or the premature tennination or cancellation of any such agreement, lease or .. licence, • shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conf:erred by article 14, article 19 or wficle 31''. We are not concerned with the amendment introduced by the 44th Arnenment Act which deleted the reference to Article 31, since that Amendment Act ca;me into force prospectively with effect from June 20, 1979. We are unable to accept that the termination of the mining leeseil and sub-leases brought about by section 3(3) (b) of the Nationalisa. tion Amendment Act is a mere pretence for the acquisition of the mining business of the lessees and the sub-lessees.

We have already shown how, in the context of the scheme of the Management Act, the Nationalisation Act and the Nationalisation Amendment Ad. , it is impossible to hold that the true intent of the last mentioned Act was to 'acquire' anyone's business. , This would be so whether the word 'acquire' is understood in its broad popular sense or in the narrow p technical sense which it has come to possess. Whatever 'rights were intended to be acqnired were paid for by the fixation of amounts or by the laying down of a formula for ascertaining amounts p!! jllble for acquisition. It is hard to believe that having provided for payment of arnoul\ts for acquisition of management and ownership rights, the legislature resorted to . the subterfuge of acquiring the mining business of the survi:ving lessees and sub-lessees by the device of terminating their leases and sub-leases.

The legislative history leading to the terminatron of coal-mining leases points to one conclu· sion only that, by and large, every lawful interest which was acquired was paid for; the extinguishment of the interest which survived or which is alleged to have survived the passing of the Management Act and the Nationalisation Act was provided for merely in order to ensure that no loophole was left in the implementation of the scheme envisaged by those Acts. · This will provide a short answer to Shri Sen's argument that persons whose leases and sub-leases are terminated without payment ot any amount are discriminated against in comparison with other lessees who were paid amounts when their property was taken over. The answer is that persons dealt with by section 3(3)(b) of the Nationali'1ltion Amendment Act are differently situated from those who were ' dealt with by the two earlier Acts. No violation of Article 14 ill tilerefore involved. . , ..

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

,the Nationalisation Amendment Act by the termination of leases and sub-leases. But, we may examine that contention in the light of the relevant Constitutional provisions and principles. It was observed in Dwarkadas Shrinivas v. The Sholapur Spinning &. Weaving Co. 1 Lid. ( ) that the provisions of the Constitution touching fundamental rights must be construed broadly and liberally in favour . of those on whom the rights have been conferred. "The form is unessential. It is the substance that we must seek". Making every allowance in favour of the right to property which was available at the relevant time and having regard to the substance of the matter and not merely to the form adopted for terminating the interest of the lessees and the suble11sees, we are of the opinion that the Nationalisation Amendment Act involves no acquisition of the interest of the lessees and the sublessees.

It merely brings about in the language of Article 31A(l) (e) ''the extinguishment" of their right, if any, to win coal. Whichever right; title and interest was lawful and identifiable was acquired by the Marulgement Act and the Nationalisation Act. And whichever lli. terest was acquired was paid for. Tenuous and furtive interests (! ) [1954] SCR 674, 733-734. which survi\'ed the passing of those Acts were merely extingμished by the Nationalisation Amendment Act. In Ajit Singh v. State of Punjab,(}. ) it was observed by Hidayatullah, J. in the dissenting judgment which he gave on behalf of himself and Shela! , J. , that in the case of extinguishment within the meaning of • Article 31A, if all the rights in a property are extinguished the result would be nothing else than acquisition, because no property can remain· in suspense without the rights therein being vested in some one or the other.

These observations made by the learned Judge are not contrary to anything contained in the majority iudgment delivered by Sikri, J. , and naturally therefore, great reliance is placed upon them by the petitioners. Even greater sustenance is drawn by the petitioners frnm the judgment of a 7-Judge Bench of this Court in Madan Mohan Pathak v. Union of India & Ors. (') In that case, a settlement which the Life Insurance Corporation had arrived at with its employees was substantially set at naught by the Life Insurance Corporation (Modification of Settlement) Act, 1976. It was held by ti1is Court that the Act was violative of Article 31 (2) since it did not provide for payment of any amount for the compulsory acquisition of the debts owed by the Life Insurance Corporation to its employees; that the direct effect of the impugned Act.

was to transfer ownership of the debts due and owing to Oass III and Class IV employees in respect of annua1 cash bonus to the Life Insurance Corporation and that, since the Corporation is owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of Article 31(2A). These decisions have no application to the instant case becanse the interest of the lessees and sub-lessees which was brought to termination by section 3(3)(b) of the Nationalisation Amendment Act does not come to be vested in the State. The Act provides tha. t excepting a certain cfass of leases and sub-leases, all other lea5es and sub-leases shall stand terminated in so far as they relate to the winning or minin! j of coal. There is no provision in the Act by whii::h the interest so terminated is vested in the State; Nor does such vesting flow as a necessary c9nsequence of any of the provisions of the Act.

Sub-section (4) of section 3 of the Act provides tliat where a mining lease stands terminated under sub-section (3), it shall be lawful for the Central Government or a Government Company or a corporation owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands so terminated. (I) [1967) 2 SCR 143. (2) [19781 3 SCR 334. ' TARA PRASAD v. UNION (Chandrachud, C. l. ) 1093 The plain intendment of the Act, which, may it be reiterated, is neither a pretence nor a facade, is that once the outstanding leases and subleases are terminated, the Central Government and the; other authorities will be free to apply for a mining lease. Any lease-hold interest which the Central Government, for example, may thus obtain does not directly or immediately flow from the termination brought about ' by section 3(3)(b) .

Another event has to intervene between the termination of existing leases and the creation of new interests. The .. Central Government, etc. have to take a positive step for obtaining • a prospecting licence or a mining lease. Without it, the Act would bi: ineffective to create of its own force any right or interest in favour of the Central Government, a Government Company or a Corporation owned, managed or controlled by the Central Government. As observed _by Sikri, J. , in ,jjit Singh, (supra) the essential difference bet- 1 ween "acquisition by the Sfate" on the one hand and "moclification or extinwshment of rights" on the other, is that in the first case the beneficiary is the Stat~ while in the second the beneficiary is not the State. The Nationalisation Amendment Act merely extinguishes the rights of the lessees and the sub-lessees. It does not provide for the acquisition of those rights, directly or indiretly, by the State.

Article 31 (2A) mil therefore come into play, by which, ' "Where a law does not provide for the transfer· of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives an,y person of his property. " The position in Madan Mohan Pathak (supra) was entirely different because the direct effect of the inipugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life Insurance Corporation; since the L. I. C. is a Corporation owned by the State, the impugned Act was held to be a law providing for oompulsory acquisition of · these debts by the State within the meaning of clause (2A) of Article 31. Shri Sen's argument on the question of acquisitron of the rights of lessees and sub-lessees by the State therefore fails.

It follows that the Nationalisation Amendment Act must receive the protection ·of Article 31A(l)(e) of the Constitution, that is to say, thaf the Act cannot be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Articles 14, 19 and 31. These are our reasons for the order passed by us on May 5, 1978 which reads thus : The stay orders passed in these Writ Petitions are vacated except in those Writ Petitions, viz. , Writ Petitions Nos. 257, 220, 1i1, 600, 1130-1134, 352, 221 and 178/77 in 8 which composite mining leases have been granted for mini. Ilg both fireclay and-t'oal. The stay orders in these latter petitions shall stand modified as from to-day on the lines of the .. order recorded below. .. All the Writ Petitions are dismissed with costs except Writ Petitions Nos. 257, 220, 111, 600, 1130-1134, 352, 221 and 178/77 in each of which there is a composite mining for mining fireclay and coal.

These Petitions are allowed partly in that the petitioners therein s:hall be entitled, for the duration of the unexpi'fed portion of their existing leases, to carry on mining operations for the purpose of winning fireclay so long as, and to the extent that, they do not carry on allj' coal mining operation or engage in winning or mining coal. In these writ petitions there will be no order as to costs. We have already indicated how, though the petitioners holding composite leases were permitted to carry on mining operations for the purpose of winning fireclay, they, according to their own showing, cannot win or mine fireclay without doing a coal mining operation or wi>thout engaging in winning or mining coal. It is self-evident that in attempting to win fireclay, they will have to act at their own peril since they will run the risk of being prosecuted undei; section 30(2) of the Coal Mines (Nationalisation) Act, 1973. ~ Petition Nos.

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