Summary
Odisha government land was acquired under the Coal Bearing Areas (Acquisition and Development) Act, 1957 and vested in a government coal company under Section 11. The Collector demanded a land premium and compensation. The company argued that the State could claim only the royalty under Section 18A. The Supreme Court upheld the demands. Under Section 11(2), the company is a deemed lessee of the State, and the State, as original owner, is a 'person interested' under Section 2(d) entitled to compensation. Royalty, introduced in 1971 to compensate States for minerals, is for extraction and is distinct from compensation and surface rent for the loss of land. Disputes over quantum can be taken to the appropriate authority.
Issues
- Whether, after coal-bearing government land acquired under the 1957 Act vests in a Government company under Section 11, the State Government is entitled to premium, compensation and surface rent for the land in addition to royalty under Section 18A.
Provisions considered
- Sections 2(d), 9, 10 and 11, Coal Bearing Areas (Acquisition and Development) Act, 1957Land vests in the Central Government free from encumbrances on declaration, but on a Section 11 direction it vests in the Government company, which becomes the deemed lessee of the State; the State, as original owner, is the deemed lessor and a 'person interested'. (¶ 5)
- Section 18A (inserted by Act 54 of 1971), Coal Bearing Areas (Acquisition and Development) Act, 1957The Statement of Objects and Reasons shows that royalty was made payable to compensate States for underground minerals excluded from market value; it is for extraction of minerals and does not displace compensation for the land. (¶¶ 5.1, 6)
Held
- The Government company in whose favour a Section 11 order is made is a deemed lessee of the State Government, which as original owner is a 'person interested' under Section 2(d) and entitled to compensation and rental for the land. (¶ 5)
- Royalty under Section 18A cannot be mixed with compensation for loss of land and surface rent; otherwise nothing would be payable for the land itself, so the company is liable for both and the demands were rightly confirmed, with liberty to dispute their quantum or calculation before the appropriate authority. (¶¶ 5.1, 6, 7)
Result
Civil Appeal No. 220 of 2023 against the Orissa High Court judgment dated 02.04.2019 in W.P. (C) No. 2477 of 2009 dismissed and the demands upheld, with liberty to the appellant to approach the appropriate authority on quantum or calculation; no costs.