State govt can be 'person interested' in compensation under Coal Bearing Act: SC

New Delhi [India], January 21 (ANI): The Supreme Court has ruled that the state government can be said to be the 'person interested' in getting the compensation under the provisions of the Coal Bearing Areas (Acquisition and Development) Act, 1957.

A bench of justices MR Shah and CT Ravikumar passed the remarks while upholding the Orrisa High Court order dated April 2, 2019, which dismissed the petition filed by Mahanadi Coalfields Ltd.

The top court noted that Section 13 provides for compensation for prospecting licenses ceasing to have an effect, rights under mining leases being acquired, and thus, as per Section 11, the Government company in whose favour the order has been issued by the Central Government shall be deemed to be the lessee and shall be liable to pay the compensation/rental, etc., to the State Government being 'person interested'. 'Person interested' is defined under Section 2(d) of the Act.

The State Government is the original owner and can be said to be deemed lessor and 'person interested.' As per Sub-section (2) of Section 11 of the Act, the Government company in whose favour the order is issued under Section 11 can be said to be the deemed lessee of the State Government.

"Therefore, the State Government can be said to be the 'person interested' in getting the compensation. Therefore, the High Court is absolutely right in observing and taking the view that being 'person interested' the State Government is entitled to the compensation/rental, etc," the top court said.

The court noted that the compensation payable with respect to the lands by the lessee or deemed lessee is altogether different than the royalty. Royalty is for the extraction of minerals in the lands in question, the top court said.

After the Orissa High Court dismissed the petition Mahanadi Coalfields Ltd approached the Supreme Court against the order.

But the top court also refused to interfere with the Orissa High Court and said, "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 surface land rent, etc.,"

"Therefore, the High Court is absolutely justified in confirming the respective demand(s)," the top court held.

"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 to the adequate compensation," the top court said.

"If the submission made on behalf of the appellant is accepted in that case nothing would be paid towards the lands except for the amount of royalty under Section 18(a) of the Act, which is for extraction of minerals. In view of the above and for the reasons stated above, the impugned judgment and order passed by the High Court is not required to be interfered with," the top court said.

"However, if the appellant is disputing the quantum and/or calculation of demand(s), it would be open for them to approach the appropriate authority, however, the demand(s) as such is/are upheld. With this, the present appeal stands dismissed. No costs," the top court said.

The lands in dispute were owned by the State Government of Odisha and came to be acquired by the Government of India under Section 9 of the Coal Bearing Areas (Acquisition and Development) Act, 1957.

The High Court has confirmed the demand made by the District Magistrate and Collector, Sambalpur, of Rs. 70 lakhs towards the premium of the government land. (ANI)