Supreme Court Upholds Acquittal of Respondent in Coal Mines Provident Fund and Bonus Schemes Act Case Due to Non-Ownership of Coal Mine. The Coke Plant Owner Was Not an 'Employer' Under Section 2(e) of the 1948 Act Because the Plant Did Not 'Belong to a Coal Mine' Under Section 2(b) of Mines Act, 1952.

Case Note & Summary

The appeal arose from a criminal prosecution under the Coal Mines Provident Fund and Bonus Schemes Act, 1948. The State of Bihar, as appellant, challenged the Patna High Court's order acquitting the respondent S.K. Roy, who owned the Bhowra Coke Plant. The respondent was originally prosecuted for failing to pay provident fund contributions and submit returns as an alleged employer under the Coal Mines Provident Fund Scheme. The trying Magistrate convicted him and imposed a fine of Rs. 500 with three months' simple imprisonment in default. The Sessions Judge dismissed his appeal, confirming the conviction. In revision, the High Court set aside the conviction, holding that the coke plant was not a coal mine under the Scheme and the respondent was not the owner of a mine within the meaning of the Act. The material facts were largely undisputed. The Bhowra Coke Plant originally belonged to the Bhowra Group of collieries owned by the Eastern Coal Company but was transferred to the respondent between 1945 and 1947. The group of collieries was later sold to Bhowra Kankanee Collieries Limited. The respondent owned the coke plant and was lessee of the land on which it stood, paying royalty as ground rent to Bhowra Kankanee Collieries Limited, which owned the coal mine and coal field area. The coke plant was adjacent to the coal mine and situated on surface land forming part of the coal fields beneath which coal was worked by the colliery company. However, the respondent did not carry on any coal mining operations, did not excavate coal, and the plant was a by-product plant manufacturing hard coke and other by-products. The core legal question was whether the respondent was an "owner of a coal mine" within the meaning of Section 2(b) of the Coal Mines Provident Fund and Bonus Schemes Act, 1948, read with the definition of "owner" under Section 2(1) of the Mines Act, 1952, and thus an "employer" under Section 2(e) of the 1948 Act. The definition of "coal mine" in Section 2(b) of the Mines Act, 1952 included any excavation where operations for obtaining coal had been carried on and included "all works, machinery, tramways and sidings, whether above or below ground, in or adjacent to or belonging to a coal mine". The court examined whether the use of "or" before "belonging to a coal mine" meant that any works, machinery, tramways or sidings in or adjacent to a coal mine, regardless of ownership, would fall within the definition. The Supreme Court, speaking through Ramaswami J., held that the expression "belonging to a coal mine" was the controlling expression governing all aspects of the activities of the coal mine within the definition. The court reasoned that reading "or" literally would lead to anomalous and startling consequences, such as treating an independent railway company owning tramways or sidings for transporting coal as the owner of the coal mine. The legislature could not have intended such a result. Therefore, the conjunction "or" had to be read as "and" so that all works, machinery, tramways and sidings were brought within the definition only if they appertained to and belonged to the coal mine under the same ownership. In the present case, the respondent owned the coke plant independently and did not own, lease or occupy the coal mine itself. The plant did not belong to the coal mine. The proviso to Section 2(b) excluding parts where a manufacturing process was carried on unless for coke-making did not assist the prosecution because the coke plant was not part of a coal mine to begin with. The court also noted that the definition of "employer" in the 1948 Act referred to the Indian Mines Act, 1923, which had been repealed and re-enacted by the Mines Act, 1952; by virtue of Section 8 of the General Clauses Act, the definition of "owner" in the 1952 Act applied. The court referred to State of Uttar Pradesh v. M.P. Singh and Ormond Investment Co. Ltd. v. Betts. Accordingly, the Supreme Court dismissed the State's appeal and upheld the High Court's acquittal. The respondent was not the owner of a coal mine within the meaning of the Act and hence not an employer liable under the Coal Mines Provident Fund Scheme.

Headnote

Issue of Consideration

Final Decision

Supreme Court dismissed the State's appeal and upheld the High Court's order acquitting the respondent. It held that the respondent was not the owner of a coal mine within the meaning of Section 2(b) of the Mines Act, 1952, and therefore not an employer under Section 2(e) of the Coal Mines Provident Fund and Bonus Schemes Act, 1948.

Law Points