Jharkhand High Court
Central Coalfields Limited vs The State Of Jharkhand on 13 October, 2025
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
2025:JHHC:31596-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No.4228 of 2006
-----
Central Coalfields Limited, a Government company
within the meaning of Section 617 of the Companies Act,
having its Headquarters at Darbhanga House, Post
N.C.D.C., Police Station Sadar, District Ranchi through
its Chairman-cum-Managing Director.
... ... Petitioner
-Versus-
1. The State of Jharkhand.
2. The Secretary, Department of Mines and Geology,
Ranchi, Nepal House, Doranda, Ranchi.
3. District Mines Officer, Hazaribagh.
4. The Certificate Officer (Mines), North Chota Nagpur
Circle, Hazaribagh.
... ... Respondents
-------
CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
HON'BLE MR. JUSTICE ARUN KUMAR RAI
-------
For the Petitioner : Mr. Amit Kumar Das, Advocate
Mr. Vineet Sinha, Advocate
For the State : Mr. Rahul Saboo, G.P. II
Mr. Gaurang Jajodia, AC to GP II
------
C.A.V. on 10.09.2025 Pronounced on 13/10/2025
Per Sujit Narayan Prasad, J.
Prayer:
1. The instant writ petition has been filed under Article
226 of the Constitution of India for quashing the entire
Certificate Case No. 01/2005-06 pending before the
Certificate Officer (Mines) and the Notice contained in
memo no. 282 dt. 07.02.2006 issued under the signature
of the Certificate Officer (Mines) whereby a demand of
Rs.52,38,78,085 has been raised towards surface rent for
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the period 1973 to December 2005 out of which
Rs.16,65,05,146 is towards interest.
Factual Matrix
2. The factual aspect involved in this case reads as
under:
3. For the purpose of mining activities of the petitioner
the lands were acquired under the provisions of Coal
Bearing Areas (Acquisition & Development) Act, 1957 and
the petitioner also acquired collieries on account of
vesting of the Coal Mines (Nationalization) Act, 1973.
4. The State Government time and again direct the
petitioner to pay the land rent/surface for the lands
under their control and as such it was brought to the
knowledge of the Ministry of Coal, Government of India.
5. The Government of India by letter dated 12.02.1999
addressed to the Chief Secretary, Government of Bihar
has clarified that the land rent/surface rent is not
payable by the coal companies owned by the Central
Government. The Government of India again vide letter
dated 03.04.2022 wrote to the Chief Secretary,
Government of Bihar that the State Government should
not raise Surface rent on the land acquired under the
different Acts from the Coal Companies owned by the
Central Government.
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6. In the meantime the Mines and Geology Department,
Government of Jharkhand issued a Resolution No.
1055/M dt. 17.06.2005 by which a demand of 5% of
present land value was to be levied as surface rent per
annum for mineral bearing land from the lease holders
with immediate effect.
7. The District Mining Officer in the garb of the
Resolution dt. 17.06.2005 made a demand of
Rs.52,38,78,085.00 towards surface rent for the period
1973 to December 2005 out of which Rs.16,65,05,146.00
was made towards interest. In pursuance of the
resolution made by the District Mining Officer a
Certificate Case No. 01/2005-06 was initiated and a
notice in Memo No. 282 dt. 07.02.2006 was issued to the
petitioner.
8. Being aggrieved thereof, the petitioner has approached
this Court by filing the present petition.
Submission made by the learned counsel for the
petitioner
9. Learned counsel appearing for the petitioner-CCL has
submitted that the lands since have been acquired under
the provisions of the Coal Bearing Areas (Acquisition and
Development) Act, 1957 (hereinafter to be referred to as
the Act, 1957) and, as such, the same has been vested
upon the Central Government and once it has been
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vested upon the Central Government then no subsisting
right is available for the State Government to make any
demand considering the Central Government or the
Government Company like that of the writ petitioner to
be the deemed lessee.
10. It has been contended that after the declaration of
the acquisition and the gazette notification issued under
Section 10(1) of the Act, 1957 in favour of the Central
Government, the land has been vested free from any
encumbrances and subsequent thereto, in view of the
notification issued under Section 11(1) of the Act, 1957,
the land has been vested upon the Government
Company, the writ petitioner herein.
11. The contention has been raised that at the time
when the land was vested upon the Central Government/
Government Company, no subsisting right of lease was
existing, as such, it is not a case where the Government
Company will be said to be deemed lessee of the State
Government in the light of the provision as provided
under Section 11(2) of the Act, 1957.
12. It has been contended that from bare perusal of
Section 18-A it would be evident that the Central
Government or the Government Company "may pay" to
the State Government such sum of money as would have
been payable as royalty by lessees had such lands or
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rights been under mining lease granted to the State
Government. The use of word "may" make it clear that
amount which is paid under Section 18-A is firstly
discretionary and, secondly, as will be apparent from
bare perusal of the object of the Amending Act, is on ex-
gratia basis. However, the State Government all of a
sudden started insisting for payment of surface rent and
dead-rent which has given rise to the instant litigation.
13. Learned counsel has submitted that the judgment
rendered by Hon'ble Apex Court in the case of Mahanadi
Coalfields Ltd. v. State of Odisha & Ors. reported in
(2023) 4 SCC 343, therefore, will not be applicable on
the premise of the factual aspect involved in the present
case, since, in the case of Mahanadi Coalfields Ltd. v.
State of Odisha & Ors. (Supra), the factual aspect was
with respect to the issue of premium and compensation
and has been dealt with the implication in a case of
subsisting right at the time of vesting of the land in
favour of the Central Government or the Government
Company, therefore, the judgment rendered in the case of
Mahanadi Coalfields Ltd. v. State of Odisha & Ors.
(Supra) will not be applicable herein.
14. It has been contended that the judgment rendered
in the case of State of U.P. and Another v. Northern
Coal Fields reported in 2024 SCC OnLine SC 4092,
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rather will be applicable wherein the judgment rendered
by Hon'ble Apex Court in the case of Mahanadi
Coalfields Ltd. v. State of Odisha & Ors. (Supra) has
been distinguished on the facts of the case.
15. Learned counsel for the writ petitioner, on the
basis of the aforesaid premise, has submitted that the
demand so raised on behalf of the State, therefore,
requires interference since it has been issued without any
jurisdiction conferred upon the State after vesting of the
land in the Government Company under Section 10(1)
read with Section 11(1) of the Act, 1957.
Submission made by learned counsel for the
respondent-State
16. Per contra, learned G.P. II appearing for the State,
has submitted by referring to the provision as contained
under Section 10 of the Act, 1957 that the vesting as
notified by virtue of the provision as contained under
Section 10 of the Act, 1957 will be of the land or the
rights in or over the land, meaning thereby, the land
which has been acquired or the rights in or over the land,
all will come under the fold of Section 10 of the Act,
1957.
17. The contention has been raised that the aforesaid
aspect of the matter has been taken into consideration by
the Hon'ble Apex Court in the case of Mahanadi
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Coalfields Ltd. v. State of Odisha & Ors. (Supra)
wherein by taking aid of insertion of the provision by way
of amendment of Section 18-A of the Act, 1957, which
speaks with respect to payment to State Government in
lieu of royalty and by taking into consideration the
implication of Section 18-A of the Act, 1957, the Hon'ble
Apex Court while dealing with the aforesaid provision in
the case of Mahanadi Coalfields Ltd. v. State of
Odisha & Ors. (Supra), has held the Government
Company, Mahanadi Coalfields Limited in the said case,
to be the deemed lessee and thereby upheld the demand
raised by the State upholding the view taken by the High
Court of Orissa.
18. Learned State Counsel in view of the aforesaid
submission, has submitted that the demand, therefore,
needs no interference.
Analysis
19. We have heard learned counsel for the parties and
gone through the pleading made in the writ petition as
also in the counter affidavit and the provision as
contained under the Coal Bearing Areas (Acquisition and
Development) Act, 1957 and the judgment rendered by
Hon'ble Apex Court in the case of Mahanadi Coalfields
Ltd. v. State of Odisha & Ors. (Supra) and State of
U.P. and Another v. Northern Coal Fields (Supra).
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20. This Court, on the basis of the submission made
on behalf of the parties, needs to consider following
issues:-
(i) Whether the State can be said to be empowered to
issue demand if the land has been vested free from
all incumbrances without any subsisting right of
lease in favour of any party at the time of vesting
under the notification of Section 9 of the Act, 1957?
(ii) Whether in the facts and circumstances of the
present case, the judgment rendered in the case of
Mahanadi Coalfields Ltd. v. State of Odisha &
Ors. (Supra) will be applicable or the judgment
rendered in the case of State of U.P. and
Another v. Northern Coal Fields (Supra) will be
applicable?
21. It needs to refer herein that this Court has come
across the judgment passed on 16.09.2025 by this
Court in W.P.(C) No.4478 of 2019 and analogous
cases.
22. We, after going through the prayer and pleadings
made in the writ petition, as also, the judgment dated
16.09.2025 passed in W.P.(C) No. 4478 of 2019 and
analogous cases, have found that the issues, which are
the subject matter of the present writ petition, has
already been decided by this Court in the aforesaid
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judgment. For ready reference, the relevant paragraphs
of the aforesaid judgment are being referred as under:-
"29. This Court, on the basis of the submission made
on behalf of the parties, needs to consider following
issues :-
(i) Whether the State can be said to be empowered to
issue demand if the land has been vested free from all
incumbrances without any subsisting right of lease in
favour of any party at the time of vesting under the
notification of Section 9 of the Act, 1957?
(ii) Whether in the facts and circumstances of the
present case, the judgment rendered in the case of
Mahanadi Coalfields Ltd. v. State of Odisha & Ors.
(Supra) will be applicable or the judgment rendered in
the case of State of U.P. and Another v. Northern Coal
Fields (Supra) will be applicable?
38. Section 10 thus, provides that what would be the
situation of the land if the land has been vested upon
the Central Government while Section 11 stipulates
that if the Central Government is satisfied that the
Government Company is willing to comply or has
complied then the vesting will be in favour of the
Government Company. The pari materia provision is
there under Sub-Section (2) of Section 11 as that of
Sub-section (2) of Section 10 thereof.
39. Section 18A has been inserted in the Act on the
premise of the objective and dealing with the
representation of the State Government as per the
object of the Act, 1957, for ready reference the same is
being referred herein:-
"Act 54 of 1971- The Coal Bearing Areas (Acquisition
and Development) Act, 1957 (20 of 1957) hereinafter
referred to as the Coal Bearing Areas Act) provides
inter alia for the acquisition by the Central Government
of virgin lands, including underground minerals, or
rights in or over such lands. Under the Explanation to
clause (a) of sub-section (5) of section 13, which
provides that the value of any minerals lying in the
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land will not be taken into consideration in determining
the market value of any land no compensation is
payable to the State Governments in respect of the
underground minerals which also vest in the Central
Government when the land is acquired by the Central
Government. The State Government have been
representing from time to time that this results in their
being deprived of large sums by way of revenue. The
Central Government has considered the
representations of the State Government and has
decided that the State Governments should be paid
purely on an ex gratia basis such sums as they would
have been entitled to receive by way of royalty. had
mining leases been granted in respect of the areas
acquired. It is now proposed to amend the Coal Bearing
Areas Act to make such payments obligatory."
40. It is evident from the aforesaid object that the same
has been considered by the legislature based upon the
representation made by the State Government from
time to time that this result in their being deprived of
large sums by way of revenue. The Central Government
has considered the representations of the State
Government and has decided that the State
Governments should be paid purely on an ex gratia
basis such sums as they would have been entitled to
receive by way of royalty, had mining leases been
granted in respect of the areas acquired.
41. The Central Government, in view of the aforesaid
consideration, has inserted Section 18A which
stipulates that notwithstanding anything contained in
this Act, where any land or any rights in or over land
belonging to a State Government (other than the rights
under a mining lease granted or deemed to have been
granted by the State Government to any person) vest in
the Central Government under section 10 or in a
Government Company under section the Central
Government or the Company, as the case may be, may
pay to the State Government such sum of money as
would have been payable as royalty by a lessee had
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such land or rights been under a mining lease granted
by the State Government.
42. The emphasis of argument advanced on behalf of
the State is the provision as contained under Section
18A of the Act, 1957.
43. Learned Advocate General, in support of his
argument, has relied upon the judgment rendered by
Hon'ble Apex Court in the case of Mahanadi Coalfields
Ltd. v. State of Odisha & Ors. (Supra).
44. We have gone through the judgment passed by the
Hon‟ble Apex Court in the case of Mahanadi Coalfields
Ltd. v. State of Odisha & Ors. (Supra) along with the
factual aspect narrated in para 2 to 5, for ready
reference the factual aspect is being referred herein
which is having bearing in the consideration of the
issue pertaining to the applicability of the judgments as
per the Issue No.(ii) framed hereinabove:-
"2. The facts leading to the present appeal in a
nutshell are as under : That the lands in question
owned by the State Government of Odisha came to be
acquired by the Government of India under Section 9 of
the Coal Bearing Areas (Acquisition and Development)
Act, 1957 (hereinafter referred to as "the 1957 Act").
That thereafter, vide order dated 4-9-1981 and in
exercise of powers conferred by sub-section (1) of
Section 11 of the 1957 Act with respect to some lands
acquired, the Central Government directed that the
rights in or over the lands vested absolutely in the
Central Government, shall, instead of continuing to vest
in the Central Government, under sub-section (1) of
Section 10, vest in Western Coalfields Limited.
3. That vide order dated 15-12-1988, with respect to
some other lands acquired by the Central Government
and in exercise of powers conferred by sub-section (1)
of Section 11 of the 1957 Act, the Central Government
directed that the said lands and rights so vested shall,
with effect from 16-5-1987 instead of continuing to so
vest in the Central Government, shall vest in the
government company, subject to the terms and
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conditions mentioned in the said order. That is how, the
appellant acquired the lands and rights over the lands
in question. That the respondent issued the demand
notice dated 15-3-1984 for a sum of Rs 70 lakhs
towards premium for government land and Rs 40 lakhs
towards compensation.
4. That various similar demand notices were issued for
area of non-forest government land and revenue forest
land. The demands were challenged by the appellant
by way of writ petition before the High Court.
5. Before the High Court, Section 18-A of the 1957 Act
was pressed into service by the appellant herein and it
was submitted that in view of the notification as the
lands and rights on the lands absolutely vested in the
Central Government thereafter, the State Government is
not entitled to any compensation with respect to the
lands so acquired/vested except the royalty leviable
under Section 18 A of the 1957 Act. By the impugned
judgment and order [Mahanadi Coalfields v. State,
2019 SCC OnLine Ori 512] the High Court has
interpreted Section 2(d) of the 1957 Act and has
observed that the State Government can be said to be
person interested in land and therefore, entitled to the
compensation over and above in lieu of losing the rights
over the land. That thereafter, by the impugned
judgment and order [Mahanadi Coalfields v. State,
2019 SCC OnLine Ori 512] the High Court has
dismissed the writ petition and has confirmed the
demand(s)."
45.It is evident from the factual aspect of the said case
that the land in question owned by the State
Government of Orissa had been acquired by the
Government of India under Section 9 of the Act, 1957
and the Government thereafter vide order dated
04.09.1981 and in exercise of power conferred by Sub-
section (1) of Section 11 of the Act, 1957 with respect to
some land acquired, the Central Government directed
that the rights in or over the lands vested absolutely in
the Central Government, shall, instead of continuing to
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vest in the Central Government, under Sub-section (1)
of Section 10, vest in the Western Coalfields Limited.
Vide order dated 15.12.1988, with respect to some
other lands acquired by the Central Government and in
exercise of powers conferred by the Sub-section (1) of
Section 11 of the Act, 1957, the Central Government
directed that the said lands and rights so vested shall,
with effect from 16.05.1987 instead of continuing to so
vest in the Central Government, shall vest in the
Government Company, subject to the terms and
conditions mentioned in the said order. The appellant
thereby has acquired the lands and rights over the
lands in question. The respondent issued the demand
notice dated 15.03.1984 for a sum of Rs. 70 lakhs
towards premium for Government land and Rs. 40
lakhs towards compensation. Various similar demand
notices were issued for area of Non-Forest Government
land and Revenue Forest land. The said demands had
been challenged before the High Court. The High Court
has passed order upholding the said demands. The
same has been upheld by the Hon‟ble Apex Court on
the premise of applicability of the provision of Section
18A, for ready reference, the relevant part of the
aforesaid judgment as referred in paragraph 16 and 18
is being referred herein :-
"16. Now so far as the submission made on behalf of
the appellant that the Government company in whose
favour the order is passed under Section 11 after which
the land is vested absolutely with the Central
Government except the amount of royalty as per Section
18-A of the Act, the Government company is not liable
to pay any amount is concerned, the aforesaid has no
substance. The compensation/rental payable with
respect to the lands by the lessee/deemed lessee is
altogether different than the royalty. Royalty is for
extraction of minerals in the lands in question.
18. In that view of the matter over and above the
amount of royalty the coal company/Government
company shall be liable to pay the compensation and
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surface land rent, etc., Therefore, the High Court is
absolutely justified in confirming the respective
demand(s). The amount of royalty cannot be mixed with
the compensation/loss caused to the State Government
due to loss of land and surface land rent as the State
Government is entitled for the adequate compensation.
If the submission made on behalf of the appellant is
accepted in that case nothing would be paid towards
the lands except the amount of royalty under Section
18(a) of the Act, which is for extraction of minerals."
46. The Hon‟ble Apex Court, in the light of the fact that
the Central Government is liable to make payment of
compensation and surface land rent, etc. has been
pleased to uphold the view taken by the High Court.
50. We have also considered the judgment passed by
Hon‟ble Apex Court in the case of State of U.P. and
Another v. Northern Coal Fields (Supra) and after going
through the factual aspect, as would be evident from
the reference made therein at paragraph 3, that on
23.12.1980, the Central Government issued a
notification under Section 7 of the Coal Bearing Areas
(Acquisition and Development) Act, 1957 of its intention
to acquire the lands admeasuring 1657.16 hectares
(approximately) as specified in the Schedule, and
consequently, issued a declaration on 17.11.1981
acquiring the said land under Section 9 of CBA, 1957.
The said declaration was published in the Gazette of
India, dated 05.12.1981, vesting the land and rights
described in the Schedule appended to the
abovementioned notification absolutely in the Central
Government free from all encumbrances under Section
10(1) of the CBA, 1957. Further, in exercise of powers
under Section 11(1) of CBA, 1957, the Union
Government, by its order dated 02.11.1982, directed
that the lands and rights so vested shall, w.e.f. from
05.12.1981, instead of continuing to so vest in the
Central Government, shall vest in the Government
Company named Central Coalfields Ltd. (which was
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later formed into Northern Coal Fields Ltd. w.e.f.
28.11.1985, i.e. the Respondent).
Thereafter, the Respondent submitted a proposal
for its „Krishnashila project‟ of 235.99 hectares of land
for obtaining approval of the Central Government for
use of the land for mining purpose under the Forest
(Conservation) Act, 1980. Similarly, another proposal
under the FCA, 1980 for usage of 258 hectares of forest
land for mining purpose for „Bina Coal Project‟ was
submitted to the Central Government for obtaining its
approval.
Accordingly, in pursuance of Section 2 of the FCA,
1980, the Central Government, vide its order dated
23.05.1996, granted approval for diversion of 258
hectares of forest land under „Bina Project‟, which was
communicated by the State Government to the
Respondent vide letter dated 28.06.1998. Similarly, the
Central Government, with regard to the „Krishnashila
Project‟, vide its letter dated 06.07.2006, granted
approval for diversion of 235.99 hectares of forest land
in accordance with Section 2 of FCA, 1980, which was
communicated to the Respondent by the State
Government vide letter dated 27.07.2007.
The Respondent, by virtue of Section 18A of the CBA,
1957, has been paying money equal to royalty as
determined under Section 9 of the Mines and Minerals
(Development and Regulation) Act, 1957. However, the
letter dated 23.03.2010 and subsequent letter dated
11.06.2010 were issued to the Respondent demanding
the deposit of "lease rent" amounting to Rs.
1,24,23,015/- in accordance with Condition No. 7 of
„Krishnashila Project‟ and Rs. 1,91,25,593/- in
accordance with Condition No. 12 of „Bina Project‟.
51. It is evident from the said judgment that the
Hon‟ble Apex Court, after taking into consideration the
implication of Section 11(2) of the Act, 1957, has come
to the conclusive finding that when the Central
Government's right was free from all encumbrances
and completely absolute, the Government Company
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also acquired an absolute right over the land. No
question of a qualified right in the capacity of a deemed
lessee of the State Government arises in such a
situation. This is by virtue of the fact that when Central
Government acquired such rights and also when it was
further vested in the Government Company, there was
no pre-existing mining lease in favour of any person
and, therefore, Section 10(2) and Section 11(2) become
inapplicable in the given case.
52. The said aspect of the matter has been taken into
consideration at paragraph 14 which is being quoted
hereunder as :-
"14. Further, the Government Order dated
02.11.1982 published by the Government of India,
which was produced as Annexure P-1 before us, clearly
provided that in exercise of the powers conferred by
Section 11(1) of the CBA, 1957, the Central Government
had directed the vesting of such land and rights in the
Government Company, with effect from 05.12.1981. It
is to be noted that the rights in the Government
Company were vested specifically by virtue of sub-
section (1) of Section 11 and at that time, there did not
exist any mining lease as provided under sub-section
(2). As explained above, the rights under Section 11(1)
are vested in the Government Company in the exact
nature as they existed in the Central Government at the
time. Therefore, when the Central Government's right
was free from all encumbrances and completely
absolute, the Government Company also acquired an
absolute right over the land. No question of a qualified
right in the capacity of a deemed lessee of the State
Government arises in such a situation. This is by virtue
of the fact that when Central Government acquired
such rights and also when it was further vested in the
Government Company, there was no pre-existing
mining lease in favour of any person and, therefore,
Section 10(2) and Section 11(2) become inapplicable in
the given case. Thus, the land vested in the
Government Company free from all encumbrances,
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subject to the conditions imposed by the Central
Government. Therefore, the State Government is not
entitled to claim itself as a deemed lessor of the
Government Company in the given situation and the
demand for "lease rent" becomes completely
unwarranted."
53. It is further evident that the judgment rendered in
the case of Mahanadi Coalfields Ltd. v. State of Odisha
& Ors. (Supra) has also been taken into consideration
and on fact, the said judgment has been distinguished
on the basis of the factual aspect involved in the case
of State of U.P. and Another v. Northern Coal Fields
(Supra) on the premise that the factual aspect leading
to the Mahanadi Coalfields Ltd. v. State of Odisha &
Ors. (Supra) was with respect to the payment of
premium and compensation as opposed to the demand
of "lease rent" in the case of State of U.P. and Another
v. Northern Coal Fields (Supra), for ready reference,
paragraph-16 of the said judgment is being referred
herein:-
"16. There is another judgment of this Court in
Mahanadi Coalfields Ltd. v. State of Odisha7 that was
placed before us during the course of arguments.
However, since in the said judgment, the dispute was
with regards to the payment of premium and
compensation, as opposed to the demand for "lease
rent" in our case, the judgment, being distinguishable
on facts, is not applicable to the case at hand.
Moreover, in the said case, the right of the State
Government to claim compensation/premium under
section 18A of the CBA, 1957, was recognized by virtue
of State Government being a "person interested" under
Section 2(d) of the Act. Herein, there arises no question
of an "interested person". The said judgment did not
delve into the question at hand currently, that is the
distinction between the nature of right acquired under
Section 11(1) and (2), and there was no discussion
whether there was a pre-existing mining lease at the
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time of acquisition or vesting of rights or not. Hence, the
said judgment, is clearly distinguishable on facts."
59. Adverting to the factual aspect of the present case,
it is admitted case of the State that the demand is not
by way of premium and compensation, rather, it is on
the basis of the lease rent which is also evident from
the impugned order.
60. This Court, therefore, is of the view that since the
case of the writ petitioner is of acquisition of land
having no subsisting lease right in favour of any party
and, as such, the Government Company, the writ
petitioner herein, will not be construed to be the
deemed lessee of the State Government and in that
view of the matter, the Government Company, due to
vesting of the land, will not be liable to make payment
of lease rent.
61. Again, adverting to the judgment rendered by
Hon'ble Apex Court in the case of State of U.P. and
Another v. Northern Coal Fields (Supra) and in absence
of any subsisting lease, as referred in Sub-section (2) of
Section 11, the State will have no jurisdiction to
demand royalty once the land has been vested in view
of the notification issued under Section 9 of the Coal
Bearing Act, 1957. The Central Government is having
the propriety right over the land.
62. This Court, based upon the aforesaid discussion, is
of the view that the judgment rendered in the case of
Mahanadi Coalfields Ltd. v. State of Odisha & Ors.
(Supra), in the facts and circumstances of the present
case, will not be applicable, since, the case of the State
is not of demand of premium and compensation, rather,
it is a case of lease rent. Therefore, the judgment
rendered in the case of State of U.P. and Another v.
Northern Coal Fields (Supra) will be applicable since
the same is the case of lease rent wherein on fact the
judgment rendered in the case of Mahanadi Coalfields
Ltd. v. State of Odisha & Ors. (Supra) has been
distinguished.
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63. It further needs to refer herein that in the case of
State of U.P. and Another v. Northern Coal Fields
(Supra), the judgment passed by the Patna High Court
in the case of Managing Director, National Coal
Development Corporation Ltd. and etc. v. State of Bihar
and Others reported in AIR 1984 Pat 280 has also been
taken care of, as would be evident from paragraph-15
wherein, after giving consideration of the availability of
the subsisting right in favour of the party and in such
situation the land, if would have been vested upon the
Central Government or the Government Company, as
the case may be, then the question of lease rent would
be there but it has been held by the Patna High Court
that Section 10(2) of the Act, 1957 is not attracted
because there existed no mining lease prior to
acquisition. The situation therein was also governed by
Section 10(1) and hence, it was rightly held that the
State Government is divested of all its rights and the
relationship of lessor and lessee does not continue
between the State and the Central Government, for
ready reference, paragraph 15 of the aforesaid
judgment is being referred herein :-
"15. The findings of the Patna High Court in Paragraph
7 of the judgment in the case of Managing Director,
National Coal Development Corporation (supra) is in
lines with our analysis as even in that case, it was
held that Section 10(2) is not attracted because there
existed no mining lease prior to acquisition. The
situation therein was also governed by Section 10(1)
and hence, it was rightly held that the State
Government is divested of all its rights and a
relationship of lessor and lessee does not continue
between the State and the Central Government (or for
that matter the petitioner company)."
64. This Court, based upon the aforesaid reasons, is
answering the aforesaid issues.
65. Accordingly, the issues are answered.
66. In the result, in consequence of the issues having
been answered hereinabove and on the admitted facts
2025:JHHC:31596-DB
of the case that at the time of vesting of the land in
favour of the Central Government in exercise of power
conferred under Section 10(1) and subsequent thereto
vesting to the Government companies in view of the
provision of Section 11(1) and as stipulated in sub-
section 2 of Section 11 there was no subsisting lease
construing Government companies to be deemed sub-
lessee of the State Government as such the State
Government will have no right to demand by way of
lease rent.
67. However, it needs to refer herein that if the
subsisting lease would be there, then the judgment
rendered in the case of Mahanadi Coalfields Ltd. v.
State of Odisha & Ors (supra) will be applicable.
68. Accordingly, the impugned orders need interference
and, as such, the same are quashed and set aside.
69. These writ petitions stand allowed."
23. This Court, therefore is of the view that since the
factual aspect is identical and the issue has already
been dealt with by this Court in W.P.(C) No.4478 of
2019 and analogous cases on 16.09.2025, hence,
there is no reason to take distinct view.
24. Since this Court has already adjudicated the
issues involved herein in W.P.(C) No.4478 of 2019 and
analogous cases on 16.09.2025 by allowing the writ
petitions in favour of the writ petitioners, hence, the
instant writ petition also deserves to be allowed.
25. Accordingly, the impugned order is hereby
quashed and set aside.
26. Resultantly, the instant writ petition stands
allowed, in terms of the judgment dated 16.09.2025
2025:JHHC:31596-DB
passed in W.P.(C) No.4478 of 2019 and analogous
cases.
27. In consequence thereof, pending interlocutory
application(s), if any, stands disposed of.
I agree (Sujit Narayan Prasad, J.)
(Arun Kumar Rai, J.) (Arun Kumar Rai, J.)
13th October, 2025
Alankar/A.F.R.
