2004 (3) TMI 794 - SC - Indian Laws

Seeking a relief for release of stowing allowance by compelling the Central Government to discharge its such statutory obligation - royalty on sand extracted for stowing operations - Determination of the rightful authority to recover the royalty Central Government or State of Bihar - Parties changed their identities by succession, amalgamation or supersession - HELD THAT - In the present case, what the Coal Company has sought to enforce is a statutory obligation of the appellant-Union of India. The Coal Mines (Conservation and Development) Act, 1974 has a public purpose and a beneficial object to achieve. The stowing assistance is released to the Coal Company in the interest of securing safety at the coal mines and the development thereof. In the absence of stowing, there may be accidents, casualties and difficulties of operation. Non- payment of stowing allowance may discourage the coal mines from carrying out the stowing operations which would be detrimental to the interest of the workers. It would not be sound exercise of discretion on the part of the Court to permit set-off or recognize an adjustment made out-of-Court which would have the effect of withholding the release of stowing assistance and appropriating the amount thereof for the recovery of dues not arising out of the same transaction. In our opinion, it would not make any difference whether the amount withheld by the Central Government is on account of assistance or reimbursement; in either case the Could would not hold in favour of adjustment being made by the Central Government by setting off the outstanding credit referable to stowing assistance as against the outstanding demand of arrears of royalty. The High Court has not erred in allowing the writ petition filed by the respondent-Coal Company. So far as the finding recorded in its appellate judgment by the Division Bench that the Central Government is not entitled to recover the royalty and it is the State of Bihar which only is entitled to demand and recover the royalty from the respondent-Coal Company is concerned, we set-aside that finding but without recording any opinion of ours on that aspect for the short reason that such issue is not required to be adjudicated upon in the present case in view of the finding arrived at hereinabove. We hasten to add that requisite pleadings and necessary material are also not available on record to arrive at a definite finding in that regard. Conclusion The Supreme Court dismissed the appeal, affirming that the Central Government cannot withhold stowing assistance to recover royalty arrears and left the question of the rightful authority to recover the royalty unresolved due to lack of sufficient evidence. The appellant or the State of Bihar is free to recover the arrears through other legal means. No order as to costs was made.

Summary

Issues Involved:
1. Whether the Central Government can withhold the release of stowing assistance to satisfy its demand for royalty arrears.
2. Determination of the rightful authority to recover the royalty'Central Government or State of Bihar.

Summary:

Issue 1: Withholding Stowing Assistance for Royalty Arrears
The Coal Company, owning coal mines in Bihar, was liable to pay royalty on sand extracted for stowing operations. The Central Government, succeeding the dissolved Coal Board, withheld stowing assistance to recover royalty arrears from the Coal Company. The Coal Company filed a writ petition challenging this adjustment. The High Court ruled that the Central Government could not adjust cross-demands by withholding statutory stowing assistance to satisfy a contractual royalty demand. The Supreme Court upheld this decision, stating that no statutory provision supports such an adjustment and that equity principles do not universally apply. The Court emphasized that stowing assistance, meant for safety and conservation, should not be withheld, as it could discourage necessary stowing operations and affect worker safety.

Issue 2: Authority to Recover Royalty
The Division Bench of the High Court opined that the State of Bihar, not the Central Government, was entitled to recover the royalty. However, the Supreme Court set aside this finding without expressing an opinion, citing insufficient pleadings and material on record. The Court clarified that the appellant or the State of Bihar could pursue other legal methods to recover the royalty arrears.

Conclusion:
The Supreme Court dismissed the appeal, affirming that the Central Government cannot withhold stowing assistance to recover royalty arrears and left the question of the rightful authority to recover the royalty unresolved due to lack of sufficient evidence. The appellant or the State of Bihar is free to recover the arrears through other legal means. No order as to costs was made.