TATA STEEL LTD v. STATE OF JHARKHAND .

1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION I.A. No. 1 Of 2015 IN CIVIL APPEAL NO. 303 OF 2004 Tata Iron & Steel Co. Ltd. .. Appellant(s) Versus State of Jharkhand & Ors. .. Respondent(s) I.A. Nos. 5-6 Of 2015 IN CIVIL APPEAL NOs. 2940-2941 OF 2015 I.A. Nos. 9-10 Of 2015 IN CIVIL APPEAL NOs.2938-2939 OF 2015 O R D E R 1. In the applications filed before us, there are virtually two prayers: (i) to permit the applicant to revive the appeals in terms of the judgment dated 17.03.2015; and (ii) to permit the applicant to file a separate petition before the High Court to question the vires or validity of Rules 64B and 64C of the Mineral

2 Concession Rules, 1960. 2. We are not inclined to grant the first prayer. However, we permit the applicants to file a separate petition before the High Court, if so desire, to question the vires or the validity of Rule 64B and 64C of the Mineral Concession Rules, 1960 in accordance with law. 3. The applications are disposed of, accordingly. ...................CJI . [ H.L. DATTU ] ....................J. [ ARUN MISHRA ] NEW DELHI, MAY 08, 2015.

ITEM NO.1 COURT NO.1 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS I.A. 1/2015 in Civil Appeal No. 303/2004 TATA IRON & STEEL CO. LTD. Appellant(s) VERSUS STATE OF JHARKHAND & ORS. Respondent(s) (For revival of appeals in terms of order of this court on 17.03.2015 and office report) WITH I.A. Nos. 5-6 IN C.A. Nos. 2940-2941/2015 (For revival of appeals in terms of order of this court on 17.03.2015 and office report) I.A. Nos. 9-10 IN C.A. No. 2938-2939/2015 (For revival of appeals in terms of order of this Court on 17.03.2015 and office report) Date : 08/05/2015 These applications were called on for hearing today. CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE ARUN MISHRA For Appellant(s) Mr . M.K. Dua,Adv. Mr. Punit Dutt Tyagi,Adv. For Respondent(s) Mr. Ajit Kumar Sinha, Sr. Adv. Mr. Anil K. Jha,Adv. Mr. R.K. Ojha, Adv. Mr. Devashish Bharuka,Adv. Mr. S.S. Rawat, Adv. Mr. S.A. Haseeb, Adv. Mr. D.S. Mahra, Adv. UPON hearing the counsel the Court made the following O R D E R The applications are disposed of in terms of the signed order. [ Charanjeet Kaur ] [ Vinod Kulvi ] A.R.-cum-P.S. Asstt. Registrar [ Signed order is placed on the file ]

SECTION XVII MATTER FOR –  COURT NO. ­                    ITEM NO.                           IN THE SUPREME COURT OF INDIA                    CIVIL APPELLATE JURISDICTION                    INTERALOCUTORY APPLICATION NOS. 9­10, 5­6 AND 1 (Applications for Seeking Revival of the Civil Appeals in terms of the leave granted by this Hon'ble Court vide judgment dated 17.3.2015) IN CIVIL APPEAL NOS. 2938­2939, 2940­2941 OF 2015 AND 303 OF 2004 Tata Steel Limited    .. Appellant      VERSUS Union of India & Ors. .... Respondents OFFICE REPORT The matters above mentioned along­with connected matter were listed before the Hon'ble Court on 17.3.2015, when the Court was inter­alia pleased to pass the following order:­ ''...The Constitutional Validity or the vires of Rule 64B and Rule 64C of the Mineral Concession Rules has not been adjudicated upon.  It is open to Tata Steel either to revive these appeals limited to this question or to challenge the constitutionality and vires of these rules through a separate challenge. The appeals are disposed of as above.  However, the parties will bear their own costs.'' It is submitted that Mr. Punit Dutt Tyagi, Advocate for Appellant has on 9/4/2015 filed Applications for Seeking Revival of the Civil Appeals in terms of the leave granted by this Hon'ble Court vide judgment dated 17.3.2015 in Civil Appeal Nos. 2938­2939 and 2940­2941 of 2015.  The applications are registered as I.A. Nos. 9­10 in CA Nos. 2938­2939 of 2015 and I.A Nos. 5­6 in C.A. Nos. 2940­2941 of 2015.  (Copy of applications is placed with main appeal paper books).  It is further submitted that Mr. M.K. Dua, Advocate for Appellant has on 9/4/2015 filed an Applications for Seeking Revival of the Civil Appeal in terms of the leave granted by this Hon'ble Court vide judgment dated 17.3.2015 in Civil Appeal No. 303 of 2004. (Copy of applications is placed with main appeal paper books).  ..P/...2

¨ 1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION I.A. No. 1 Of 2015 IN CIVIL APPEAL NO. 303 OF 2004 Tata Iron & Steel Co. Ltd. .. Appellant(s) Versus State of Jharkhand & Ors. .. Respondent(s) I.A. Nos. 5-6 Of 2015 IN CIVIL APPEAL NOs. 2940-2941 OF 2015 I.A. Nos. 9-10 Of 2015 IN CIVIL APPEAL NOs.2938-2939 OF 2015 O R D E R 1. In the applications filed before us, there are virtually two prayers: (i) to permit the applicant to revive the appeals in terms of the judgment dated 17.03.2015; and (ii) to permit the applicant to file aSignature Not VerifiedDigitally signed byCharanjeet KaurDate: 2015.05.11 separate petition before the High Court17:55:05 IST to question the vires or validity ofReason: Rules 64B and 64C of the Mineral 2 Concession Rules, 1960.2. We are not inclined to grant the firstprayer. However, we permit the applicants tofile a separate petition before the High Court,if so desire, to question the vires or thevalidity of Rule 64B and 64C of the MineralConcession Rules, 1960 in accordance with law.

3. The applications are disposed of,accordingly. ...................CJI. [ H.L. DATTU ] ....................J. [ ARUN MISHRA ]NEW DELHI,MAY 08, 2015.ITEM NO.1 COURT NO.1 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGSI.A. 1/2015 in Civil Appeal No. 303/2004TATA IRON & STEEL CO. LTD. Appellant(s) VERSUSSTATE OF JHARKHAND & ORS. Respondent(s)(For revival of appeals in terms of order of this court on17.03.2015 and office report)WITHI.A. Nos. 5-6 IN C.A. Nos. 2940-2941/2015(For revival of appeals in terms of order of this court on17.03.2015 and office report)I.A. Nos. 9-10 IN C.A. No. 2938-2939/2015(For revival of appeals in terms of order of this Court on17.03.2015 and office report)Date : 08/05/2015 These applications were called on for hearing today.CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE ARUN MISHRAFor Appellant(s) Mr. M.K. Dua,Adv. Mr. Punit Dutt Tyagi,Adv.For Respondent(s) Mr. Ajit Kumar Sinha, Sr. Adv. Mr. Anil K. Jha,Adv. Mr. R.K. Ojha, Adv. Mr. Devashish Bharuka,Adv. Mr. S.S. Rawat, Adv. Mr. S.A. Haseeb, Adv. Mr. D.S. Mahra, Adv. UPON hearing the counsel the Court made the following O R D E R The applications are disposed of in terms of the signed order. [ Charanjeet Kaur ] [ Vinod Kulvi ] A.R.-cum-P.S. Asstt. Registrar [ Signed order is placed on the file ]

ITEM NO.801 COURT NO.1 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS I.A.Nos.9-10 of 2015 in Civil Appeal No(s). 2938-2939/2015 TATA STEEL LTD Appellant(s) VERSUS UOI & ORS Respondent(s) (for revival of Civil Appeals) Date : 22/04/2015 These applns. were mentioned today. CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE S.A. BOBDE HON'BLE MR. JUSTICE ARUN MISHRA For Appellant(s) Mr.Dushyant Dave, Sr.Adv.(Mentinoed by) Mr. Punit Dutt Tyagi,Adv. For Respondent(s) UPON hearing the counsel the Court made the following O R D E R List the I.A.s before an appropriate Bench at the earliest. (G.V.Ramana) (Vinod Kulvi) AR-cum-PS Asstt.Registrar (Copy of I.A.s is enclosed)

ä ITEM NO.801 COURT NO.1 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS I.A.Nos.9-10 of 2015 in Civil Appeal No(s). 2938-2939/2015 TATA STEEL LTD Appellant(s) VERSUS UOI & ORS Respondent(s) (for revival of Civil Appeals) Date : 22/04/2015 These applns. were mentioned today. CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE S.A. BOBDE HON'BLE MR. JUSTICE ARUN MISHRA For Appellant(s) Mr.Dushyant Dave, Sr.Adv.(Mentinoed by) Mr. Punit Dutt Tyagi,Adv. For Respondent(s) UPON hearing the counsel the Court made the following O R D E R List the I.A.s before an appropriate Bench at the earliest. (G.V.Ramana) (Vinod Kulvi) AR-cum-PS Asstt.Registrar (Copy of I.A.s is enclosed)Signature Not VerifiedDigitally signed byRamana Venkata GantiDate: 2015.04.2310:46:30 ISTReason:

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 2938-2939 OF 2015 (Arising out of S.L.P. (C) Nos.8972-8973 of 2014) Tata Steel Ltd. .…Appellant Versus Union of India & Ors. …Respondents AND CIVIL APPEAL NOS. 2940-2941 OF 2015 (Arising out of S.L.P. (C) Nos.9016-9017 of 2014) Tata Steel Ltd. .…Appellant Versus State of Jharkhand & Ors. …Respondents WITH CIVIL APPEAL NO. 303 OF 2004 Tata Iron & Steel Co. Ltd. .…Appellant Versus State of Jharkhand & Ors. .…Respondents WITH C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 1 of 51

CIVIL APPEAL NO. 307 OF 2004 State of Bihar (Now Jharkhand) & Ors. …Appellants Versus Tata Iron & Steel Co. Ltd. …Respondent J U D G M E N T Madan B. Lokur, J . 1. Leave granted. 2. Two sets of appeals are before us. One set of appeals pertains to the Tata Iron and Steel Company Limited (TISCO) and the other set pertains to Tata Steel. 3. In the set of appeals pertaining to TISCO, the first appeal is Civil Appeal No. 303/2004 filed by TISCO against the judgment and order dated 23 rd July, 2002 passed by the Jharkhand High Court. 1 The grievance in this appeal is that though the application of the law laid down by this court in State of Orissa 1 MANU/JH/0590/2002 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 2 of 51

v. Steel Authority of India Ltd . 2 (hereafter SAIL ) has been accepted by the High Court, namely, that royalty is chargeable [in accordance with Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (the MMDR Act)] on the quantity of coal extracted at the pit-head, yet the refund of excess royalty paid by TISCO for the period from 10 th August, 1998 (the date of the decision in SAIL ) till June 2002 [about Rs.29.34 cr.] has been denied. TISCO therefore claims entitlement to refund on the excess royalty paid by it for this period. 4. Civil Appeal No.307/2004 has been filed by the State of Bihar (Now Jharkhand) against the same judgment and order dated 23 rd July, 2002. The submission is that after the decision in SAIL the Government of India issued a notification dated 25 th September, 2000 inserting Rule 64B and Rule 64C in the Mineral Concession Rules, 1960 (hereafter MCR) and as a result of this, Run-of-Mine (ROM) minerals, after being processed in the leased area are exigible to royalty on the processed mineral. It is contended that these rules were, unfortunately, not brought to 2 (1998) 6 SCC 476 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 3 of 51

the notice of the High Court and that the decision rendered by the High Court accepting the law laid down in SAIL is incorrect. 5. In this context, it must immediately be noted that the contention of the State of Jharkhand is not that Rule 64B and Rule 64C of the MCR have retrospective effect. That being so, the question is whether TISCO is entitled to refund of the excess royalty paid from 10 th August, 1998 (the date of the decision in SAIL ) to 25 th September, 2000 and if so whether the High Court was right in denying that refund. Also, the question is whether TISCO is entitled to refund of royalty from 25 th September, 2000 till June 2002 and if so, whether the High Court was right in denying that refund. 6. The other set of appeals pertaining to Tata Steel consists of four appeals. These appeals filed by Tata Steel arise out of S.L.P. (C) Nos.8972-73/2014 and S.L.P. (C) Nos.9016-17/2014 and are directed against a common judgment and order dated 12 th March, 2014 passed by the Jharkhand High Court in W.P. (C) C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 4 of 51

Nos.1504/2009 & 1505/2009 and W.P. (C) Nos. 2995/2008 & 2999/2008. 3 The grievance of Tata Steel is that despite the decision of this court in SAIL and the decision dated 23 rd July, 2002 of the Jharkhand High Court, royalty is being charged from Tata Steel on processed or beneficiated coal and not on extracted coal or Run-of-Mine (ROM) coal at the pit-head. It is submitted that this is despite the affidavit of the Ministry of Coal of the Government of India that Rule 64B and Rule 64C of the MCR “may not be particularly applicable on coal minerals.” Tata Steel is also aggrieved by the conclusion of the Jharkhand High Court that Rule 64B and Rule 64C of the MCR are constitutionally valid. Appeals filed by Tata Steel 7. The question for our consideration in the set of appeals filed by Tata Steel is whether royalty is chargeable under Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 and the Second Schedule thereto on raw or unprocessed or Run-of-Mine (ROM) coal at the pit-head or is it chargeable on coal 3 2014 (2) JLJR 702 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 5 of 51

after it is processed and beneficiated in the washeries located within the boundaries of the leased area. In our opinion, the question of payment of royalty has arisen in respect of other minerals and this has been discussed in cases relating to those minerals. On an appreciation of the decisions rendered, it must be held that royalty is payable on the processed or beneficiated coal only after 25 th September, 2000 and royalty is payable on unprocessed, raw or ROM coal extracted at the pit-head only for the period from 10 th August, 1998 to 25 th September, 2000. Background facts 8. Tata Steel holds several mining leases for coal in the State of Jharkhand, in the district of Ramgarh (formerly Hazaribagh) known as the West Bokaro Colliery and in the district of Dhanbad known as the Jamadoba and Belatand group of collieries. The coal mines are captive coal mines. Tata Steel has an adequate number of washeries in the leased area where the raw coal extracted from the mine (Run-of-Mine coal) is washed to improve its quality and is then dispatched for use in its steel plant at Jamshedpur for the production of iron and steel. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 6 of 51

9. Initially Tata Steel and TISCO were of the opinion that in accordance with the provisions of Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 [now renamed as the Mines and Minerals (Development and Regulation) Act, 1957 or the MMDR Act] 4 they were liable to pay royalty at the rates mentioned in the Second Schedule to the MMDR Act on the tonnage of washed coal, that is after raw coal or Run-of-Mine (ROM) coal is removed from the washery post the beneficiation process. In fact a writ petition was filed by TISCO in the Patna High Court being CWJC No.1 of 1984 (R) seeking a declaration to 4 With effect from 18 th December, 1999 9. Royalties in respect of mining leases. —(1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (2-A) The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month. (3) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification: Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 7 of 51

this effect. The State of Bihar (at that time) was of the view that royalty was payable at the rate mentioned in the Second Schedule to the MMDR Act on the tonnage of the extracted coal at the pit-head and not on the tonnage of the washed or beneficiated coal. By its judgment and order dated 7 th August, 1990 the Patna High Court held that TISCO was liable to pay royalty on the tonnage of the washed or beneficiated coal. It was held: “ From the plain reading of section 9(2) of the Act, it is clear that royalty is payable on the coal removed from the leased area and so long it is not removed, no royalty is payable. In view of the fact that coal is removed from the leased area, only after it is washed, the petitioner is liable to pay royalty on the weightage of that coal.” 10. This decision has attained finality and the position at law in this regard continued till 1998. 11. On 10 th August, 1998 this court delivered judgment in SAIL . The question raised in that case was whether the Steel Authority of India Ltd. or SAIL was liable to pay royalty at the rate mentioned in the Second Schedule to the MMDR Act on the quantity of mineral (limestone and dolomite) extracted as it is or on the quantity arrived at after these minerals have undergone a C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 8 of 51

process of removal of waste and foreign matter. According to the State of Orissa royalty was chargeable on the extracted minerals at the rate mentioned in the Second Schedule to the MMDR Act while according to SAIL royalty was chargeable at the rate mentioned in the Second Schedule to the MMDR Act on the quantity of minerals obtained after the process of removal of waste and foreign matter. 12. This court referred to an earlier decision of the Orissa High Court relating to the National Coal Development Corporation Ltd. 5 In that case, the High Court held that removal of coal from the seam in the mine and extracting it through the pit’s mouth to the surface would satisfy the requirement of Section 9 of the MMDR Act to give rise to a liability for royalty. The decision of the Orissa High Court was appealed against but the appeal was dismissed by this court. 6 Relying upon this decision, it was concluded in SAIL that the process of removal of waste and foreign matter amounts to consumption and, therefore, the entire mineral extracted is exigible to a levy of royalty. By necessary 5 National Coal Development Corporation Ltd. v. State of Orissa, AIR 1976 Orissa 159 6 National Coal Development Corporation Ltd. v. State of Orissa, (1998) 6 SCC 480 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 9 of 51

implication the decision of the Patna High Court in CWJC No.1 of 1984 (R) filed by TISCO stood reversed. 13. Perhaps as a consequence of the decision in SAIL , Rule 64B and Rule 64C were inserted in the MCR by a notification dated 25 th September, 2000. 7 14. Be that as it may, in view of the decision in SAIL , the stand taken by Tata Steel/TISCO completely changed and the view now sought to be canvassed was that royalty is payable at the rate mentioned in the Second Schedule to the MMDR Act on the tonnage of unprocessed or ROM coal at the pit-head and not on processed or beneficiated coal. 15. With regard to the claim of Tata Steel that it was liable to pay royalty only on the tonnage of unprocessed or ROM coal at the pit-head in terms of the decision in SAIL , the response of the State of Jharkhand was that in view of Rule 64B and Rule 64C of the MCR, royalty was liable to be paid at the rate mentioned in the Second Schedule to the MMDR Act on the tonnage of beneficiated coal and not on the tonnage of the raw, extracted or 7 National Mineral Development Corporation Ltd. v. State of M.P., (2004) 6 SCC 281 paragraph 32 had earlier echoed this view C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 10 of 51

ROM coal at the pit-head. In other words, not only was there a volte face by Tata Steel/TISCO but also by the State Government. The High Court has observed in the impugned judgment dated 12 th March, 2014 that the reason for the volte face both by Tata Steel and by the State of Jharkhand was that by the notifications dated 1 st August, 1991 and 14 th October, 1994 the rate of royalty on the washed or beneficiated coal was increased. 8 16. In any event, this interpretational dispute led to the filing of a set of writ petitions by Tata Steel in the High Court of Jharkhand, out of which the present appeals have arisen. The controversy Quality of coal and stage of chargeability 17. When coal is extracted from a mine, it is referred to as raw coal or unprocessed coal. Depending upon the use to which it may be put, which also depends upon its ash content and its calorific value, raw coal or unprocessed coal or Run-of-Mine 8 By a notification dated 5 th May, 1987 the rate of royalty on coking coal Steel Grade I was fixed at Rs.7/- per ton and of Washery Grade IV at Rs.5.50 per ton; by a notification dated 1 st August, 1991 the rate of royalty on coking coal Steel Grade I was increased to Rs.150/- per ton and of coking coal Washery Grade IV to Rs.75/- per ton; by a notification dated 14 th October, 1994 the rate of royalty on coking coal Steel Grade I was further increased to Rs.195/- per ton and of coking coal Washery Grade IV to Rs.95/- per ton. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 11 of 51

(ROM) coal can be used as it is. 18. As far as Tata Steel is concerned, it is stated on page 164 of the Convenience Volume handed over to us by learned counsel for Tata Steel that “Most of our raw coal falls in the (on average) Washery Grade IV.” It may be mentioned that coal of Washery Grade IV has ash content between 28% and 35%. In the synopsis and lists of dates filed by Tata Steel in the appeals arising out of S.L.P. (C) Nos. 8972-73 of 2014 it is stated as follows: “ The coal, when extracted in its raw form also known as ROM contains high percentage of ash. Though ROM is fit for many purposes, it is not fit for the steel industry.” 19. Even the Union of India in its affidavit filed by the Under Secretary in the Ministry of Coal in W.P. (C) No.1504 of 2009 in the Jharkhand High Court states to the same effect, namely, that ROM coal can be used as it is. It is stated in paragraph 11 thereof as follows: “ Considering the fact that in case of coal, where the entire ROM can be generally made usable, the Respondents No. 1 & 2 are of the opinion that rule 64B and the rule 64C [of the Mineral Concession Rules, 1960] may not be particularly applicable on coal minerals.” C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 12 of 51

20. Similarly, the State of Jharkhand in its affidavit filed in the same case has stated in paragraph 79 as follows: “ That with regard to the averments made by the petitioner in Paragraphs 84 and 85 of the instant writ application it is stated and submitted that it is not necessary that coal produced from a mine should always be subjected to processing. There are various coal mines in the country producing raw coal without any processing…….” 21. Therefore, while raw coal or unprocessed coal or ROM coal extracted by Tata Steel being Washery Grade IV having ash content between 28% and 35% can be used as it is for certain purposes, it requires to undergo a process of beneficiation to make it suitable for use in steel making. This process is undertaken by Tata Steel in its washeries in the leased areas. 22. The controversy in the present appeals is, therefore, limited to the question whether royalty is payable at the rate mentioned in the Second Schedule to the MMDR Act on processed coal, that is, coal consumed or removed from the boundaries of the leased area in a beneficiated form or on the raw or unprocessed or ROM coal at the pit-head. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 13 of 51

23. That the controversy is limited to the stage at which royalty is chargeable on coal is also clear from paragraph 17 of W.P.(C) No.2999 of 2008 filed by Tata Steel in the High Court wherein it is stated (though ROM coal can be used as it is) as follows:- “ 17. That the petitioner all along has been utilizing the entire coal raised from the said West Bokaro Colliery for the purpose of treatment and/or washing thereof as to reduce the ash percentage thereof with a view to use the same in its Steel Plant, in as much as in the Steel plant only coking coal of high grade which containing [contains] less ash can be used.” 24. Similarly, in paragraph 31 of the counter affidavit filed by the Union of India in W.P.(C) No.1504 of 2009 in the High Court it is stated as follows:- “ 31. That in reply to the statements made in para No.84 of the Writ Petition the Answering Respondent most humbly and respectfully state that the applicability of Rule 64B and Rule 64C [of the Mineral Concession Rules, 1960] is necessary for minerals that need processing or beneficiation before being used, especially metallic minerals. However, [as far as] its applicability to coal minerals is concerned considering the fact that in case of coal, where the entire ROM can be generally made usable the Respondent No. 1 & 2 are of the opinion that Rule 64B and Rule 64C may not be particularly applicable to coal mineral.” 25. It is quite clear from the above that raw or unprocessed or ROM coal at the pit-head can be used for certain purposes; it is also clear that as far as Tata Steel is concerned, Washery Grade C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 14 of 51

IV coal that it extracts needs to be beneficiated to make it usable in the steel industry and the controversy is limited to the issue of payment of royalty - whether it is payable on raw or unprocessed or ROM coal at the pit-head or it is payable on processed Steel Grade coal. Coal beneficiation 26. The question that, therefore, arises is what is the consequence of beneficiation? Very briefly, the consequence of beneficiation of coal is upgrading or improving its quality from the ROM coal. In the Convenience Volume handed over to us, with reference to beneficiation of coal, it is stated by Tata Steel as follows: 9 “ The crushed raw coal (ROM) has ash percentage varying from 22% to 40% and moisture of 3% to 5%. For use in Blast furnace for steel making, we require clean coal of uniform quality at low ash %. So, Beneficiation of ROM raw coal is done to reduce the ash content to bring up to Steel Grade coal. ROM coal of various seams at coal mine is fed in to the Coal washery (Beneficiation plant) for beneficiation so that the final clean coal product has ash of below 15% (Steel Grade coal). 9 This has not been disputed by the State of Jharkhand C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 15 of 51

For coal beneficiation, gravity separation methods for coarser (size 13 mm to 0.5 mm) material and froth floatation method for finer material (size < 0.5 mm) are done. So, before beneficiation, the raw coal is crushed in to size below 13 mm at Coal Handling Plant (Crushing Plant). The coarse material i.e. size from 13 mm to 0.5 mm is treated in dense media cyclone whereas, less than 0.5 mm is treated by froth floatation method. As beneficiation is a wet process hence, it increases the moisture percentage of beneficiated coal by around 8% to 15%. After beneficiation, apart from the clean coal (required in Blast furnace for Steel making), we also get Coal by-products named as, middling (ash 40-45%), Tailings (ash 40-45%) and Rejects (ash 60-65%). The product quantity after beneficiation process gets increased due to wet process by adding moisture into the output, shown by an example below – Production (Extraction): The basis figure of production of 100 tonnes of ROM coal has been taken. Therefore, Quantity produced (extracted): = 100 tonnes Beneficiation: The products are dewatered but still the surface moisture gets adhered to the product generated. The beneficiation is a wet process i.e. raw coal mass flows through different process in slurry form. Output is measured on wet process because it is transported on wet basis (with moisture). Hence the output is more than the input of raw coal. Beneficiation process results in Clean Coal; Middlings; Tailings; and Rejects Thus 100 tonnes of raw coal will produce approximately 115 tonnes of washed product. Output from collieries (Average Quantities): C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 16 of 51

Clean coal = 40 tonnes Middlings = 40 tonnes Tailings = 25 tonnes Rejects = 10 tonnes Conclusion : It is quite clear that beneficiation process (dense media gravity separation and froth floatation) are a physical separation process to separate higher ash coal and lower ash coal, so no chemical changes are there in the coal mineral, as there are no chemical reactions involved during this beneficiation process. Referring below a flow chart [not relevant]…….. From the quantity related table, it is also quite evident that due to addition of water during wet beneficiation, the summation of beneficiated coal product quantity is higher than fed ROM coal quantity.” 27. From this, it is quite clear that the beneficiation process, as far as coal is concerned, has two significant consequences – the grade of coal improves (from Washery Grade IV it could improve to Steel Grade I) and the weight of the coal increases (from 100 tons of raw ROM coal to 105 tons [excluding rejects] of beneficiated coal). 28. However, the process of beneficiation for other minerals does not result in the same consequence. As mentioned by the Union of India in paragraph 9 of its counter affidavit filed in W.P. (C) No. 1504 of 2009 in the High Court, the beneficiation of C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 17 of 51

copper has different consequences. It is stated, in this regard as follows: “ It is stated that the mineral extracted during mining in its primary state is called run of mine (ROM), which may or may not be useable in its primary state depending on the minerals and its grade. In such a case where the entire ROM cannot be used generally, there is a level of processing required to beneficiate the ROM to enhance the grade ore and also take out waste material occurring with the ore. Rule 64B is specifically applicable in such class of minerals where only a part of the entire ROM mineral extracted through mining can be used. For example, in the case of copper ore, in which the metal contained in ore is in the range of 1% to 2% of the ROM the ROM is converted into a high as 25%, before it is sent out the lease area for refining and smelting. In such cases, the rule 64B of MCR provides for royalty to be charged by the State Government on the higher grade of ore that is being taken out of the lease area, in terms of the royalty rate prescribed in Second Schedule to the MMDR Act. Rule 64B of MCR does not specify the royalty rates and its applicability is only to the extent of facilitating levy or royalty on the processed ore removed from the lease area, and not the mineral consumed in the lease area. Further royalty is required to be paid as per the rates notified by the Central Government in Second Schedule to the MMDR Act. Rule 64B of MCR is therefore applicable in case of such minerals which cannot be used without processing. Similarly, rule 64B [rule 64C] of the MCR is applicable on removal of tailings or rejects from leased area for dumping and restricts levy on royalty on tailings or rejects. However, levy of royalty is applicable only in case such tailings or rejects subsequently used for sale or consumption. For example, tailing from copper concentrate are likely to contain silver. However, royalty on silver generally cannot be levied till silver is extracted from the tailings and sold or consumed. Rule 64C is therefore applicable on such cases of minerals, where tailings or rejects generated during mining or processing are likely to be dumped due to its limited use.” C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 18 of 51

29. In other words, the ROM copper ore contains hardly 1% or 2% of copper but after the beneficiation process the copper extract from the ore increases to about 25%. It is thereafter sent for refining and smelting. In other words, copper ore cannot be utilized as it is or in the ROM state – it must undergo a beneficiation process from the ore and can then be used. 30. As mentioned in SAIL the consequences of processing dolomite or limestone has a consequence different from that of copper ore, namely, mere removal of waste and foreign matter. It appears that this process does not improve the quality of the dolomite or the limestone, though with the removal of waste and foreign matter, the weight would decrease somewhat. It may be mentioned that royalty is charged on dolomite and limestone on a tonnage basis. 31. It is in this context that the nature of the mineral and the stage at which royalty is to be computed become important. The basis of levy would have to be rational and it might have different consequences at different stages. Computation of royalty C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 19 of 51

32. As far as the computation of royalty on coal is concerned, Tata Steel has given details of the methodology of computation in the Convenience Volume handed over to us. 10 For the purposes of computing the royalty amount, the quantities assumed by Tata Steel are given below. 33. It is said that 100 tons of raw coal post-beneficiation will produce approximately 115 tons of the washed products. The break-up of this is as follows: Clean coal = 40 tons Middlings = 40 tons Tailings = 25 tons Rejects = 10 tons 34. The computations made by Tata Steel are on the basis of the above assumptions. The rate of royalty is given in the Notification dated 14 th October, 1994 amending the Second Schedule to the MMDR Act. For coking coal Steel Grade I, coking coal Steel Grade II and coking coal Washery Grade II the rate of 10 This has not been disputed by the State of Jharkhand. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 20 of 51

royalty is Rs.195/- per ton. For coking coal Washery Grade IV the rate of royalty is Rs.95/- per ton. 35. Therefore, for every 100 tons of coking coal Washery Grade IV extracted by Tata Steel, the royalty payable on ROM coal was Rs.9500/- with effect from 14 th October, 1994. However, if the royalty were to be computed on post-beneficiation coal, the royalty payable by Tata Steel would work out to: Product Grade Quantity (tons) Royalty rate (Rs/ton) Amount (in Rs) Clean coal Steel Grade I 40 195 7800 Middlings Grade E 40 70 2800 Tailings Grade D 25 70 1750 Royalty payable 105 12350 Since rejects were ungraded and no rate was prescribed, no royalty was payable on rejects. 36. Based on the above computation, the difference in royalty on post-beneficiation coal (as claimed by the State of Jharkhand) and on ROM coal (as claimed by Tata Steel) is Rs.2850/- per 100 tons of coal extracted (12350 minus 9500 = 2850). 37. This position continued till August 2002 when the Second Schedule to the MMDR Act was amended by a notification dated 16 th August, 2002. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 21 of 51

38. In terms of the notification dated 16 th August, 2002 the rate of royalty for coking coal Steel Grade I, coking coal Steel Grade II and coking coal Washery Grade II was raised to Rs.250/- per ton. For coking coal Washery Grade IV the rate of royalty was raised to Rs.115/- per ton. 39. Therefore, for every 100 tons of coking coal Washery Grade IV extracted by Tata Steel, the royalty payable on ROM coal was Rs.11500/- with effect from 16 th August, 2002. However, if the royalty were to be computed on post-beneficiation coal, the royalty payable by Tata Steel would work out to: Product Grade Quantity (tons) Royalty rate (Rs/ton) Amount (in Rs) Clean coal Steel Grade I 40 250 10000 Middlings Grade E 40 85 3400 Tailings Grade D 25 85 2125 Royalty payable 105 15525 Rejects have not been included in this calculation. 40. Based on the above computation, the difference in royalty on post-beneficiation coal (as claimed by the State of Jharkhand) and on ROM coal (as claimed by Tata Steel) is Rs.4025/- per 100 tons of coal extracted (15525 minus 11500 = 4025). C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 22 of 51

41. This position continued till August 2007 when the Second Schedule to the MMDR Act was amended by a notification dated 1 st August, 2007. Through this notification the rate of royalty on coal became a combination of a specific rate and an ad valorem rate, the formula for calculation being R = a + bP where ‘R’ is the royalty in Rs. per ton, ‘a’ is a fixed component, ‘b’ is a variable or ad valorem component and ‘P’ is the basic pit-head price of ROM coal. 42. The notification provides that for computing royalty (R) on Steel Grade I coal, a = Rs.180; b = 5% of ‘P’; P = basic pit-head price of ROM coal as reflected in the invoice. Similarly, for payment of royalty (R) on Washery Grade IV coal, a = Rs.90; b = 5% of ‘P’; P = basic pit-head price of ROM coal as reflected in the invoice. 43. Tata Steel gives the computation arrived at on the basis of the above notification in the Convenience Volume as follows: “ As Tata Steel is not selling ROM, hence we take the prices notified by CIL [Coal India Limited] for its various collieries. For example, we apply the prices notified by Coal India Ltd for Central Coalfields Ltd. In the Price Notification No.181 dated C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 23 of 51

15.10.2009 for CCL, the basic price for ROM Washery Grade IV is Rs.1120. 11 Product Grade Quantity (in tons) Royalty rate (a+bP) Royalty (Rs. per ton Amount (in Rs) Clean coal Steel Grade I 40 180+5% of 1120 236 9440 Middlings Grade E 40 70+5% of 790 116 4400 Tailings Grade D 25 70+5% of 1000 120 3000 Royalty payable 105 16840 Rejects have not been included in this calculation. If we were to pay on RoM: Washery Grade IV: 90+5% of 1120 (56) (Rs.146 per ton) = Rs.14600/- ” 44. Based on the above computation, the difference in royalty payable on post-beneficiation coal (as claimed by the State of Jharkhand) and on ROM coal (as claimed by Tata Steel) is Rs.2240/- per 100 tons of coal extracted (16840 minus 14600 = 2240). 45. We have been given to understand that this position has 11 Since Tata Steel is not selling ROM coal, the price notified by the Coal India Ltd. for its various collieries has been taken by Tata Steel as the basic price for ROM Washery Grade IV as Rs.1120/- . In terms of the communication dated 16 th October, 2009 issued by the Central Coalfields Limited, Sales & Marketing Division, Darbhanga House, Ranchi with reference to Price Notification No.1181 dated 15 th October, 2009 the pit-head/basic price of Run of Mine (ROM) coal for Washery Grade IV stood revised from 1020 (in Rupees per tonne) to 1120. This is the figure taken by Tata Steel in its computations given in the Convenience Volume. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 24 of 51

undergone changes, but we are not concerned with them. 46. To summarize the computations, the royalty as computed by the State and as computed by Tata Steel is as follows: Royalty payable in Rs. Period (from date) On beneficiated coal (per 100 tons) On ROM coal (per 100 tons) Difference (per 100 tons) Royalty payable 14.10.1994 12350 9500 2850 Royalty payable 16.8.2002 15525 11500 4025 Royalty payable 1.8.2007 16840 14600 2240 47. As is quite obvious, the difference in royalty payable would run into huge figures particularly since coal is mined in millions of tons. Discussion 48. Two interpretations have been given to removal of a mineral from the leased area as postulated in Sections 9(1) and 9(2) of the MMDR Act. 49. The first is a literal meaning given by the Patna High Court in its judgment and order dated 7 th August, 1990. The High Court gave a literal interpretation to Section 9(2) of the MMDR Act and effectively interpreted the removal of a mineral from the C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 25 of 51

leased area as removal from the boundaries of the leased area. On this basis, it was concluded that since beneficiated coal is removed from the leased area, Tata Steel is liable to pay royalty on the weight of the beneficiated coal. 50. The second interpretation is a somewhat restrictive interpretation given by the Orissa High Court in National Coal Development Corporation Limited . In that case, it was held that: “ The incidence of royalty under the general tenor of the scheme [of Section 9 of the MMDR Act] arises when coal is severed from the seam in its natural state within the mine and removed outside. Removal [of coal] from the seam in the mine and extracting the same through the pit’s mouth to the surface satisfies the requirement of Section 9 [of the MMDR Act] in order to give rise to liability for royalty.” 51. In other words, the Orissa High Court did not accept the literal meaning of removal from the leased area occurring in Section 9 of the MMDR Act as removal from the boundaries of the leased area but gave a restricted interpretation to removal from the leased area as extraction of the coal from the seam in the mine which is in the leased area, that is, extraction from the pit-head. This restricted interpretation was accepted by this court C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 26 of 51

in the appeal filed by National Coal Development Corporation and on that basis this court also upheld the payment of royalty by the lease holder on coal consumed by the workmen of the Corporation prior to the amendment of Section 9 of the MMDR Act in 1972. 12 52. Both the interpretations mentioned above relating to removal from the leased area, literal and restricted, were given in the context of extraction of coal. 53. The controversy regarding the interpretation of removal of a mineral (not coal) from the leased area again came up for consideration in a petition filed by SAIL in the Orissa High Court. This petition concerned itself with the payment of royalty on dolomite and limestone. While referring to Section 9(1) of the MMDR Act and the lease deed of SAIL, the Orissa High Court held as follows:- “ A distinction has to be made between removal from the mine and removal from the leased area. If after the mineral is extracted from the mine, it undergoes some processing and during processing, a part of the mineral is wasted and the wastage remains on the leased area and is not removed 12 National Coal Development Corporation Ltd. v. State of Orissa, (1998) 6 SCC 480 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 27 of 51

therefrom, the lessee cannot be asked to pay royalty on that portion of the wastage.” 13 54. In other words, the Orissa High Court took the literal interpretation given to removal from the leased area as removal from the boundaries of the leased area, virtually reiterating the literal interpretation given by the Patna High Court in its judgment and order dated 7 th August, 1990. 55. This court in the appeal filed by SAIL did not get into the question of removal of the mineral from the boundaries of the leased area but noted that the extracted mineral undergoes a process of removal of waste and foreign matter before it is removed from the boundaries of the leased area. The decision of this court on the levy of royalty turned on the consumption of the mineral through that process carried out by the holder of the mining lease. In that context it was held in SAIL that since the process of removal of waste and foreign matter amounts to consumption, the entire extracted mineral is exigible to royalty. It was held:- 13 The decision of the Orissa High Court does not appear to have been reported. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 28 of 51

“ Section 9(1) of the Act also contemplates the levy of royalty on the mineral consumed by the holder of a mining lease in the leased area. If that be so, the case of the appellants that such processing amounts to consumption and, therefore, the entire mineral is exigible to levy of royalty has to be accepted.” 56. It is quite clear that SAIL did not consider (and then reject) the reasoning given by the Orissa High Court that royalty is not payable on wastage that remains within the boundaries of the leased area. This was critically adverted to in an order dated 25 th July, 2006 in C.A. No.5651 of 2005 14 on the ground, inter alia , that the distinction made by the Orissa High Court between removal of a mineral from a mine and removal from a leased area has been rejected without any reason. This is what this court had to say: “ A bare reading of this Court’s judgment in Steel Authority of India’s case (supra) indicates that there is practically no reason indicated as to why the distinction made by the High Court was found to be unacceptable. As was noticed by the High Court in the impugned judgment in the said case the distinction is certainly of relevance. As we are unable to subscribe to the view expressed in Steel Authority of India’s case (supra), we refer the matter to a larger Bench. Records may be placed before Hon’ble the Chief Justice of India for necessary directions.” 14 M/s Central Coalfields Ltd. v. State of Jharkhand decided by this court C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 29 of 51

57. We may also mention at this stage that SAIL has been politely distinguished in National Mineral Development Corporation Ltd. v. State of M.P. (or NMDC ) . 15 58. In sum and substance this is the issue before us, namely, whether for the purposes of payment of royalty, removal of a mineral as mentioned in Section 9 of the MMDR Act must be restrictively interpreted as removal or extraction of the mineral from the mine or the pit-head or a literal interpretation as removal of the mineral from the boundaries of the leased area. 59. In NMDC the question before this court was whether “slimes” are exigible to royalty, as forming part and parcel of iron ore. 60. The Second Schedule to the MMDR Act provides rates of royalty and Entry 23 relates to iron ore. Royalty is payable on lumps, fines and concentrates. In the process of mining, iron ore is extracted and separated into ore lumps, fines and waste material which is commonly known as “slime”, that is the resultant waste material from the wet screening process 15 (2004) 6 SCC 281 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 30 of 51

undertaken for segregation of lumps and fines. When the issue of exigibility of “slimes” was raised in the High Court, 16 it was held that royalty is payable on the mineral as extracted and removed or consumed from the leased area. The High Court also relied upon SAIL to hold that the entire quantity of ROM iron ore as extracted from the earth shall be liable to payment of royalty. 61. While disagreeing with the view taken by the High Court, it was held by this court that if Section 9 of the MMDR Act was to be read in isolation, perhaps, the total quantity of mineral removed from the leased area or consumed in the process of beneficiating iron ore would have been liable for payment of royalty and that quantity may have included the quantity of slimes as held in SAIL . But, this court went on to hold that Section 9 of the MMDR Act cannot be read in isolation and the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 of the said Act. It was also held that though the Parliament was fully aware that iron ore would have to undergo a process which would lead to the emergence of lumps, 16 The decision of the High Court is reported as AIR 1999 MP 112 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 31 of 51

fines, concentrates and slimes yet it chose to leave slimes out of consideration for the payment of royalty. For this reason, it was held that royalty was not payable on slimes. 62. This court also proceeded to consider Rule 64B and Rule 64C of the MCR and held that in the case of iron ore the levy of royalty is postponed until the beneficiation process has been undertaken and it is only then that royalty is capable of being quantified on the quantity of lumps, fines and concentrates. 63. The decision of this court in SAIL was also distinguished by holding that the removal of waste and foreign matter in the processing of dolomite and limestone did not result in any removal from the leased area but that the run-of-mine was itself consumed in the processing in the leased area, thereby making a distinction between removal from the leased area and consumption within the leased area. 64. NMDC has analyzed the scope of Section 9 of the MMDR Act in conjunction with the Second Schedule to the MMDR Act. It was held that there is no conflict between the two and that C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 32 of 51

Section 9 of the MMDR Act cannot be read in isolation but that the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 of the MMDR Act. Paragraphs 23 and 24 of the Report are significant and they read as follows: “ 23. Section 9 is not the beginning and end of the levy of royalty. The royalty has to be quantified for purpose of levy and that cannot be done unless the provisions of the Second Schedule are taken into consideration. For the purpose of levying any charge, not only has the charge to be authorised by law, it has also to be computed. The charging provision and the computation provision may be found at one place or at two different places depending on the draftsman’s art of drafting and methodology employed. In the latter case, the charging provision and the computation provision, though placed in two parts of the enactment, shall have to be read together as constituting one integrated provision. The charging provision and the computation provision do differ qualitatively. In case of conflict, the computation provision shall give way to the charging provision. In case of doubt or ambiguity the computing provision shall be so interpreted as to act in aid of charging provision. If the two can be read together homogeneously then both shall be given effect to, more so, when it is clear from the computation provision that it is meant to supplement the charging provision and is, on its own, a substantive provision in the sense that but for the computation provision the charging provision alone would not work. The computing provision cannot be treated as mere surplusage or of no significance; what necessarily flows therefrom shall also have to be given effect to. 24. Applying the abovestated principle, it is clear that Section 9 neither prescribes the rate of royalty nor does it lay down how the royalty shall be computed. The rate of royalty and its computation methodology are to be found in the Second Schedule and therefore the reading of Section 9 which authorises charging of royalty cannot be complete unless what C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 33 of 51

is specified in the Second Schedule is also read as part and parcel of Section 9.” 65. It is clear therefore that Section 9 of the MMDR Act has to be read and understood in conjunction with the Second Schedule to the MMDR Act. There is a good reason for it, which is that the scheme of the levy of royalty cannot be straitjacketed in view of the variety of minerals to which the MMDR Act applies and for the extraction of which royalty has to be paid. 66. In the case of coal, it has been noted that “Though ROM [coal] is fit for many purposes, it is not fit for the steel industry”; “in case of coal … the entire ROM can be generally made usable” and “it is not necessary that coal produced from a mine should always be subjected to processing. There are various coal mines in the country producing raw coal without any processing…….” This is to say that ROM coal can generally be used in the raw form without processing and beneficiation is not at all necessary. However, if the raw coal is to be utilized for some specialized purposes it would need beneficiation. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 34 of 51

67. On the other hand, in the case of dolomite or limestone (subject matter of SAIL ) the process described in paragraph 4 of the Report is undertaken not to upgrade or improve the quality of the mineral but to remove waste and foreign matter. It is not clear whether dolomite or limestone can be utilized as it is or in the ROM state without removal of waste and foreign matter. That question was adverted to by the Orissa High Court but not considered by this court, hence the critical reference. As mentioned above, the decision in SAIL was based not on removal but on consumption of the mineral. 17 On the basis of the mineral extracted and the decision rendered by this court, therefore, no similarity can be found between SAIL (case of consumption) and National Coal Development Corporation Limited (case of 17 In National Mineral Development Corpn. Ltd. v. State of M.P. this court observed in paragraph 34 of the Report as follows: “ Both these minerals [dolomite and limestone] were utilised as raw material by the mining lessees on the leased area itself. The mining lessee claimed that dolomite and limestone having been extracted from the mine underwent processing wherein a part of the mineral was wasted and the wastage remained on the leased area and not removed therefrom. The contention of the lessee was that royalty could not be demanded on that portion of the wastage which was not removed from the mining area. This contention was repelled by this Court by reference to Section 9(1) of the Act which speaks of payment of royalty in respect of any mineral removed or consumed by the lessee. The Court held that though the impurities part of dolomite and limestone were not removed from the leased area but that would not make any difference as the run-of-mine was itself consumed in the processing on the leased area.” C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 35 of 51

removal) although royalty is charged on dolomite and limestone, as in coal, on a per ton basis. 68. Iron ore (with which NMDC is concerned) falls in the same generic category for levy of royalty as dolomite, limestone and coal namely on a tonnage basis but there is a crucial difference between iron ore and coal (as also between dolomite, limestone and iron ore). In the case of iron ore, beneficiation is necessary before it can be utilized. It has been observed in NMDC that “in iron ore production the run-of-mine (ROM) is in a very crude form. A lot of waste material called “impurities” accompanies the iron ore. The ore has to be upgraded. Upgrading the ores is called “beneficiation”. That saves the cost of transportation. Different processes have been developed by science and technology and accepted and adopted in different iron ore projects for the purpose of beneficiation.” 18 It is for this reason, inter alia , that the levy of royalty on iron ore is postponed, as held in NMDC , to a post-beneficiation stage. 18 National Mineral Development Corporation Ltd v. State of M.P. paragraph 28. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 36 of 51

69. In the case of coal, beneficiation is not necessary since ROM coal can be used as it is straight from the pit-head. In the case of iron ore, as noticed in NMDC , waste material is removed from the extracted iron ore and through the beneficiation process the ore is upgraded. The removal of waste material obviously reduces the weight of the iron ore and that is why it saves the cost of transportation as observed in NMDC . However, in the case of coal apart from the fact that beneficiation is not necessary, if the lease holder does in fact beneficiate the coal, the weight of the beneficiated coal is more than the ROM coal as has been noted above. This would, therefore, increase the cost of transportation which is based on the weight of the coal. Under the circumstances, removal of beneficiated coal as against ROM coal might work to the disadvantage of the lease holder. For this reason, no similarity can be found between coal and iron ore or between coal and dolomite and limestone (apart from the fact that SAIL did not deal with removal from the leased area but consumption within the leased area). C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 37 of 51

70. There are therefore, three categories of minerals dealt with by this court – coal that can be utilized in the raw or ROM stage straight from the pit-head, iron ore that cannot be utilized in the raw or ROM stage and needs beneficiation and dolomite and limestone about which it is not clear whether it can be utilized in the raw or ROM stage. 71. On the other hand, there are other minerals such as copper, gold, lead, zinc and several others where the rate and computation of royalty payable are arrived on a completely different basis. The table below of some sample minerals taken from the Second Schedule to the MMDR Act illustrates this position 19 and it also illustrates that waste or foreign matter in respect of these minerals is much more than someone not in the business of extraction of minerals could imagine: Entry Mineral Rate as per Notification of 5 th May, 1987 Rate as per Notification of 17 th February, 1992 7 Cadmium Sixteen rupees per unit percent of cadmium metal per ton of ore and on pro rata basis Seventy four rupees per unit percent of cadmium metal per ton of ore and on pro rata basis 12 Copper Five rupees per unit Seventeen rupees per unit 19 This has undergone further changes. These figures have been taken since they pertain to the period when the dispute arose in the cases referred to. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 38 of 51

ore percent of copper metal contained per ton of ore and on pro rata basis percent of copper metal contained per ton of ore and on pro rata basis 21 Gold Two rupees per one gram of contained gold per ton of ore and on pro rata basis (a) Eleven rupees per one gram of contained gold per ton of ore and on pro rata basis (b) by product gold ten rupees per gram 27 Lead ore Three rupees per unit percent of contained lead metal per ton of ore and on pro rata basis Eight rupees per unit percent of contained lead metal per ton of ore and on pro rata basis 28 Zinc ore Six rupees per unit percent of zinc metal contained per ton of ore and on pro rata basis Sixteen rupees per unit percent of zinc metal contained per ton of ore and on pro rata basis 72. What follows from this discussion is that though royalty may have a definite connotation, the rate of royalty, its method of computation and the final levy are different from mineral to mineral. It is for this reason that this court held in NMDC that the Second Schedule to the MMDR Act has to be read as a part and parcel of Section 9 of that Act. If the general conclusion of SAIL is to be applied across the board without reference to the Second Schedule to the MMDR Act, calculation of royalty on copper, gold, lead, zinc and some other minerals would become impossible. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 39 of 51

73. It is quite clear that the issue of computation of royalty on minerals is rather complex and it is best left to the experts in the field and it cannot be painted with a broad brush as has been done in SAIL . That decision must be confined to its own facts with reference to consumption of dolomite and limestone. Since the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 thereof, the interpretation given in SAIL possibly cannot apply to the computation of royalty for every mineral, as discussed above. 74. At this stage, it is necessary to refer to an unreported decision of this court. 20 That decision pertains to the removal of coal in relation to Section 9 of the MMDR Act. Interestingly, though a reference was made to SAIL this court adopted the view expressed by the Orissa High Court in National Coal Development Corporation Limited which was endorsed by this court in appeal. The ‘reasons’ given in SAIL were not even adverted to. This unreported decision reads as follows: 20 Central Coalfields Ltd. v. State of Jharkhand, C.A. No.8395 of 2001 decided by three learned judges on 24 th September, 2003 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 40 of 51

“ The contention put forth in this case is that for the purpose of Section 9 of the Mines & Mineral (Regulation & Development) Act, 1957 the expression ‘removal’ would mean that it is not enough to extract the mineral from pit but should be dispatched out of the leased area. In our view word ‘removal’ would mean extracting the mineral from the pit’s mouth after removal from the seam. This exact point has been considered by this Court in State of Orissa and Ors. v. Steel Authority of India Ltd. – (1998) 6 SCC 476 in which this Court has stated as follows: “ Another Division Bench of the Orissa High Court in National Coal Development Corpn. case while considering the question whether the coal extracted by the workmen for their own domestic consumption is exigible to levy of royalty, accepting the contention of the Revenue held “that removal from the seam in the mine and extracting the same through the pit’s mouth to the surface satisfy the requirement of Section 9 in order to give rise to liability for royalty.” This view of the High Court found approval by this Court in National Coal case (C.A. No.807 of 1976 decided on 5.12.1991) and this Court held that the lessee in that case was liable to pay royalty for the coal supplied to its workmen for consumption.” In this view of the matter we find no substance in the matter. The appeal is dismissed accordingly.” 75. In view of the decision of this court in Central Coalfields Ltd. the issue is no longer res integra and in so far as coal is concerned, its “removal from the seam in the mine and extracting the same through the pit’s mouth to the surface [satisfies] the requirement of Section 9 in order to give rise to liability for C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 41 of 51

royalty.” Rule 64B and Rule 64C of the Mineral Concession Rules 76. The complexities of chargeability, computation and levy of royalty on different minerals have now been simplified, clarified and standardized with the insertion of Rule 64B and Rule 64C of the MCR with effect from 25 th September, 2000. 21 77. A plain reading of Rule 64B of the MCR, with which we are presently concerned, clearly suggests that the leased area mentioned therein has reference to the boundaries of the leased area given to a lease holder. Sub-rule (1) provides that if the ROM mineral is processed within the boundaries of that leased area, then royalty will be chargeable on the processed mineral removed from the boundaries of the leased area. However, if the 21 64B. Charging of Royalty in case of minerals subjected to processing: (1) In case of processing of run-of-mine mineral is carried out within the leased area, then royalty shall be chargeable on the processed mineral removed from the leased area. (2) In case run-of mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product. 64C. Royalty on tailings or rejects: On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty: Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 42 of 51

ROM mineral is removed without processing from the boundaries of the leased area then in terms of sub-rule (2) royalty will be chargeable on the unprocessed ROM mineral. Rule 64B of the MCR is silent about removal of a mineral from the mine/pit-head but which is not removed from the boundaries of the leased area. This is a clear pointer that royalty is to be paid by the lease holder only on removal of the mineral from the boundaries of the leased area. This simplification and clarification takes care of some of the different and difficult situations that we have referred to above, namely, the stage of charging royalty on coal at the pit-head or post-beneficiation, the stage of charging royalty on iron ore at the pit-head or post-beneficiation, the stage of charging royalty on dolomite and limestone at the pit-head or after the removal of waste and foreign matter and of course the stage of charging royalty on other minerals such as copper, gold, lead and zinc amongst others. 78. Similarly, Rule 64C of the MCR relates to royalty on tailings or rejects. As far as Tata Steel is concerned, its computation given in the Convenience Volume indicates that royalty is paid C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 43 of 51

and payable on middlings and tailings. Rule 64C of the MCR makes it clear that royalty is payable on rejects when they are sold or consumed after being dumped. This will take care of situations such as that pertaining to silver, as mentioned in the affidavit of the Union of India. 79. There is nothing to indicate in Rule 64B and Rule 64C of the MCR that coal has been put on a different pedestal from other minerals mentioned in the MMDR Act read with the Second Schedule thereto. It is, therefore, difficult to accept the view canvassed by the Union of India that these rules “may not be particularly applicable on coal minerals.” That apart, the stand of the Union of India is not definite or categorical (“may not be”). In any event, we are not bound to accept the interpretation given by the Union of India to Rule 64B and Rule 64C of the MCR as excluding only coal. On the contrary, in NMDC this court has observed that these rules are general in nature, applicable to all types of minerals, which includes coal. The expression of opinion by the Union of India is contrary to the observations of this court. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 44 of 51

80. Therefore, on a plain reading of Rule 64B and Rule 64C of the MCR, we are of the opinion that with effect from 25 th September, 2000 when these rules were inserted in the MCR, royalty is payable on all minerals including coal at the stage mentioned in these rules, that is, on removal of the mineral from the boundaries of the leased area. For the period prior to that, the law laid down in Central Coalfields Ltd. will operate, as far as coal is concerned, from 10 th August, 1998 when SAIL was decided, though for different reasons. 81. We may mention that learned counsel for Tata Steel had reserved his right to challenge the constitutionality of Rule 64B and Rule 64C of the MCR should his interpretation of the law be not accepted, namely that royalty on coal is chargeable on the extracted tonnage at the pit-head. Since we have not accepted this interpretation post the insertion of Rule 64B and Rule 64C in the MCR, we leave it open to Tata Steel to challenge the constitutionality of these rules either by reviving these appeals to this limited extent or by initiating fresh proceedings. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 45 of 51

Appeals filed by TISCO 82. The issue about refund of excess royalty paid by TISCO arises only for the period from 10 th August, 1998 when this Court delivered its judgment and order in SAIL. 83. The claim for refund has been rejected by the High Court in its judgment and order dated 23 rd July, 2002 in the following words:- “ However, in view of the fact that the State [of Bihar] has been reorganized since 15 th November, 2000, now in place of ‘State of Bihar’, ‘State of Jharkhand’ will be charging royalty, the appellant – TISCO shall not ask for refund of excess royalty if deposited.” 84. A perusal of the above indicates that the High Court really gave no reason for denying the refund of the excess royalty paid by TISCO. For the reasons given in respect of Tata Steel keeping in view the decision rendered in Central Coalfields Ltd. , we hold that TISCO is entitled to refund of royalty paid from 10 th August, 1998 to 25 th September, 2000. However, this amount need not be physically refunded but should be adjusted pro rata against future payments of royalty by TISCO over the next one year. TISCO is not entitled to refund of royalty paid after 25 th C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 46 of 51

September, 2000. The royalty paid by TISCO after 25 th September, 2000 was correctly paid and in accordance with Rule 64B and Rule 64C of the MCR, which have not been challenged by TISCO. 85. We make it clear that we have not adverted to the issue of consumption of coal within the boundaries of the leased premises since that question does not arise in these appeals. 86. No other contention was urged before us. Conclusion 87. Our conclusions are as follows:- (1) The decision rendered in SAIL is confined to its own facts and to the minerals dolomite and limestone. The decision does not deal with removal of a mineral from the leased area but deals with consumption within the leased area. (2) The unreported decision of this court in Central Coalfields Ltd. approves the law laid down by the Orissa High Court in National Coal Development Corporation Ltd. to the effect that removal of coal from the seam in the C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 47 of 51

mine and extracting it through the pit-head to the surface satisfies the requirements of Section 9 of the MMDR Act in order to give rise to a liability for royalty. This view was earlier approved by this court in National Coal Development Corporation Ltd. (3) In view of the insertion of Rule 64B and Rule 64C on 25 th September, 2000 in the Mineral Concession Rules, the levy of royalty on coal has now been postponed from the pit-head to the stage of removal of the coal (whether unprocessed or ROM coal or whether beneficiated coal). (4) In view of the decision in Central Coalfields Ltd. the entitlement of TISCO and Tata Steel to refund of royalty from 10 th August, 1998 to 25 th September, 2000 is recognized. For the period from 25 th September, 2000 onwards, TISCO is obliged to pay royalty as per Rule 64B and Rule 64C of the Mineral Concession Rules. (5) Tata Steel, like TISCO is liable to pay royalty on coal with effect from 25 th September, 2000 in terms of Rule 64B and Rule 64C of the Mineral Concession Rules. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 48 of 51

(6) The constitutional validity or the vires of Rule 64B and Rule 64C of the Mineral Concession Rules has not been adjudicated upon. It is open to Tata Steel either to revive these appeals limited to this question or to challenge the constitutionality and vires of these rules through a separate challenge. 88. The appeals are disposed of as above. However, the parties will bear their own costs. … ..……………………CJI (H.L. Dattu) … ..……………………….J (Madan B. Lokur) ……………………………J (A.K. Sikri) New Delhi; March 17, 2015 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 49 of 51

ITEM NO.1B COURT NO.3 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 2938-2939/2015 [@SLP (C) 8972-8973 of 2014] TATA STEEL LTD Appellant(s) VERSUS UOI & ORS Respondent(s) with Civil Appeal No. 2940-2941 of 2015[@SLP (C) 9016-9017 of 2014] with Civil Appeal No. 307 of 2004 with Civil Appeal No. 303 of 2004 Date : 17/03/2015 These appeals were called on for Judgment today. For Appellant(s) Mr. K. V. Vishwanathan, Sr. Adv. Mr. Anup K., Adv. Ms. Adeeba Mujahid, Adv. Mr. Anil Kumar Jha, Adv. Mr. R. K. Ojha, Adv. Mr. Punit Dutt Tyagi, Adv. For Respondent(s) Mr. Devashish Bharuka,Adv. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 50 of 51

Hon'ble Mr. Justice Madan B. Lokur pronounced the reportable Judgment of the Bench comprising Hon'ble The Chief Justice of India, His Lordship and Hon'ble Mr. Justice A.K. Sikri. Leave granted in SLP (C) Nos. 8972-8973 of 2014 and SLP (C) Nos. 9016-9017 of 2014. The Appeals are disposed of. (Jayant Kumar Arora) Sr. P.A. (Sneh Bala Mehra) Assistant Registrar (Signed reportable Judgment is placed on the file) C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 51 of 51

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 2938-2939 OF 2015 (Arising out of S.L.P. (C) Nos.8972-8973 of 2014) Tata Steel Ltd. .…Appellant Versus Union of India & Ors. …Respondents AND CIVIL APPEAL NOS. 2940-2941 OF 2015 (Arising out of S.L.P. (C) Nos.9016-9017 of 2014) Tata Steel Ltd. .…Appellant Versus State of Jharkhand & Ors. …Respondents WITH CIVIL APPEAL NO. 303 OF 2004 Tata Iron & Steel Co. Ltd. .…Appellant Versus State of Jharkhand & Ors. .…Respondents WITH C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 1 of 50

CIVIL APPEAL NO. 307 OF 2004 State of Bihar (Now Jharkhand) & Ors. …Appellants Versus Tata Iron & Steel Co. Ltd. … Respondent J U D G M E N T Madan B. Lokur, J . 1. Leave granted. 2. Two sets of appeals are before us. One set of appeals pertains to the Tata Iron and Steel Company Limited (TISCO) and the other set pertains to Tata Steel. 3. In the set of appeals pertaining to TISCO, the first appeal is Civil Appeal No. 303/2004 filed by TISCO against the judgment and order dated 23 rd July, 2002 passed by the Jharkhand High Court. 1 The grievance in this appeal is that though the application of the law laid down by this court in 1 MANU/JH/0590/2002 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 2 of 50

State of Orissa v. Steel Authority of India Ltd . 2 (hereafter SAIL ) has been accepted by the High Court, namely, that royalty is chargeable [in accordance with Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (the MMDR Act)] on the quantity of coal extracted at the pit-head, yet the refund of excess royalty paid by TISCO for the period from 10 th August, 1998 (the date of the decision in SAIL ) till June 2002 [about Rs.29.34 cr.] has been denied. TISCO therefore claims entitlement to refund on the excess royalty paid by it for this period. 4. Civil Appeal No.307/2004 has been filed by the State of Bihar (Now Jharkhand) against the same judgment and order dated 23 rd July, 2002. The submission is that after the decision in SAIL the Government of India issued a notification dated 25 th September, 2000 inserting Rule 64B and Rule 64C in the Mineral Concession Rules, 1960 (hereafter MCR) and as a result of this, Run-of-Mine (ROM) minerals, after being processed in the leased area are exigible to royalty on the processed 2 (1998) 6 SCC 476 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 3 of 50

mineral. It is contended that these rules were, unfortunately, not brought to the notice of the High Court and that the decision rendered by the High Court accepting the law laid down in SAIL is incorrect. 5. In this context, it must immediately be noted that the contention of the State of Jharkhand is not that Rule 64B and Rule 64C of the MCR have retrospective effect. That being so, the question is whether TISCO is entitled to refund of the excess royalty paid from 10 th August, 1998 (the date of the decision in SAIL ) to 25 th September, 2000 and if so whether the High Court was right in denying that refund. Also, the question is whether TISCO is entitled to refund of royalty from 25 th September, 2000 till June 2002 and if so, whether the High Court was right in denying that refund. 6. The other set of appeals pertaining to Tata Steel consists of four appeals. These appeals filed by Tata Steel arise out of S.L.P. (C) Nos.8972-73/2014 and S.L.P. (C) Nos.9016-17/2014 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 4 of 50

and are directed against a common judgment and order dated 12 th March, 2014 passed by the Jharkhand High Court in W.P. (C) Nos.1504/2009 & 1505/2009 and W.P. (C) Nos. 2995/2008 & 2999/2008. 3 The grievance of Tata Steel is that despite the decision of this court in SAIL and the decision dated 23 rd July, 2002 of the Jharkhand High Court, royalty is being charged from Tata Steel on processed or beneficiated coal and not on extracted coal or Run-of-Mine (ROM) coal at the pit-head. It is submitted that this is despite the affidavit of the Ministry of Coal of the Government of India that Rule 64B and Rule 64C of the MCR “may not be particularly applicable on coal minerals.” Tata Steel is also aggrieved by the conclusion of the Jharkhand High Court that Rule 64B and Rule 64C of the MCR are constitutionally valid. Appeals filed by Tata Steel 7. The question for our consideration in the set of appeals filed by Tata Steel is whether royalty is chargeable under Section 9 of the Mines and Minerals (Development and 3 2014 (2) JLJR 702 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 5 of 50

Regulation) Act, 1957 and the Second Schedule thereto on raw or unprocessed or Run-of-Mine (ROM) coal at the pit-head or is it chargeable on coal after it is processed and beneficiated in the washeries located within the boundaries of the leased area. In our opinion, the question of payment of royalty has arisen in respect of other minerals and this has been discussed in cases relating to those minerals. On an appreciation of the decisions rendered, it must be held that royalty is payable on the processed or beneficiated coal only after 25 th September, 2000 and royalty is payable on unprocessed, raw or ROM coal extracted at the pit-head only for the period from 10 th August, 1998 to 25 th September, 2000. Background facts 8. Tata Steel holds several mining leases for coal in the State of Jharkhand, in the district of Ramgarh (formerly Hazaribagh) known as the West Bokaro Colliery and in the district of Dhanbad known as the Jamadoba and Belatand group of collieries. The coal mines are captive coal mines. Tata Steel has an adequate number of washeries in the leased area where the C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 6 of 50

raw coal extracted from the mine (Run-of-Mine coal) is washed to improve its quality and is then dispatched for use in its steel plant at Jamshedpur for the production of iron and steel. 9. Initially Tata Steel and TISCO were of the opinion that in accordance with the provisions of Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 [now renamed as the Mines and Minerals (Development and Regulation) Act, 1957 or the MMDR Act] 4 they were liable to pay royalty at the rates mentioned in the Second Schedule to the MMDR Act on the tonnage of washed coal, that is after raw coal 4 With effect from 18 th December, 1999 9. Royalties in respect of mining leases. —(1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (2-A) The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month. (3) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification: Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 7 of 50

or Run-of-Mine (ROM) coal is removed from the washery post the beneficiation process. In fact a writ petition was filed by TISCO in the Patna High Court being CWJC No.1 of 1984 (R) seeking a declaration to this effect. The State of Bihar (at that time) was of the view that royalty was payable at the rate mentioned in the Second Schedule to the MMDR Act on the tonnage of the extracted coal at the pit-head and not on the tonnage of the washed or beneficiated coal. By its judgment and order dated 7 th August, 1990 the Patna High Court held that TISCO was liable to pay royalty on the tonnage of the washed or beneficiated coal. It was held: “ From the plain reading of section 9(2) of the Act, it is clear that royalty is payable on the coal removed from the leased area and so long it is not removed, no royalty is payable. In view of the fact that coal is removed from the leased area, only after it is washed, the petitioner is liable to pay royalty on the weightage of that coal.” 10. This decision has attained finality and the position at law in this regard continued till 1998. 11. On 10 th August, 1998 this court delivered judgment in SAIL . The question raised in that case was whether the Steel Authority of India Ltd. or SAIL was liable to pay royalty at the C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 8 of 50

rate mentioned in the Second Schedule to the MMDR Act on the quantity of mineral (limestone and dolomite) extracted as it is or on the quantity arrived at after these minerals have undergone a process of removal of waste and foreign matter. According to the State of Orissa royalty was chargeable on the extracted minerals at the rate mentioned in the Second Schedule to the MMDR Act while according to SAIL royalty was chargeable at the rate mentioned in the Second Schedule to the MMDR Act on the quantity of minerals obtained after the process of removal of waste and foreign matter. 12. This court referred to an earlier decision of the Orissa High Court relating to the National Coal Development Corporation Ltd. 5 In that case, the High Court held that removal of coal from the seam in the mine and extracting it through the pit’s mouth to the surface would satisfy the requirement of Section 9 of the MMDR Act to give rise to a liability for royalty. The decision of the Orissa High Court was appealed against but the appeal was dismissed by this court. 6 Relying upon this 5 National Coal Development Corporation Ltd. v. State of Orissa, AIR 1976 Orissa 159 6 National Coal Development Corporation Ltd. v. State of Orissa, (1998) 6 SCC 480 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 9 of 50

decision, it was concluded in SAIL that the process of removal of waste and foreign matter amounts to consumption and, therefore, the entire mineral extracted is exigible to a levy of royalty. By necessary implication the decision of the Patna High Court in CWJC No.1 of 1984 (R) filed by TISCO stood reversed. 13. Perhaps as a consequence of the decision in SAIL , Rule 64B and Rule 64C were inserted in the MCR by a notification dated 25 th September, 2000. 7 14. Be that as it may, in view of the decision in SAIL , the stand taken by Tata Steel/TISCO completely changed and the view now sought to be canvassed was that royalty is payable at the rate mentioned in the Second Schedule to the MMDR Act on the tonnage of unprocessed or ROM coal at the pit-head and not on processed or beneficiated coal. 15. With regard to the claim of Tata Steel that it was liable to pay royalty only on the tonnage of unprocessed or ROM coal at the pit-head in terms of the decision in SAIL , the response of 7 National Mineral Development Corporation Ltd. v. State of M.P., (2004) 6 SCC 281 paragraph 32 had earlier echoed this view C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 10 of 50

the State of Jharkhand was that in view of Rule 64B and Rule 64C of the MCR, royalty was liable to be paid at the rate mentioned in the Second Schedule to the MMDR Act on the tonnage of beneficiated coal and not on the tonnage of the raw, extracted or ROM coal at the pit-head. In other words, not only was there a volte face by Tata Steel/TISCO but also by the State Government. The High Court has observed in the impugned judgment dated 12 th March, 2014 that the reason for the volte face both by Tata Steel and by the State of Jharkhand was that by the notifications dated 1 st August, 1991 and 14 th October, 1994 the rate of royalty on the washed or beneficiated coal was increased. 8 16. In any event, this interpretational dispute led to the filing of a set of writ petitions by Tata Steel in the High Court of Jharkhand, out of which the present appeals have arisen. The controversy 8 By a notification dated 5 th May, 1987 the rate of royalty on coking coal Steel Grade I was fixed at Rs.7/- per ton and of Washery Grade IV at Rs.5.50 per ton; by a notification dated 1 st August, 1991 the rate of royalty on coking coal Steel Grade I was increased to Rs.150/- per ton and of coking coal Washery Grade IV to Rs.75/- per ton; by a notification dated 14 th October, 1994 the rate of royalty on coking coal Steel Grade I was further increased to Rs.195/- per ton and of coking coal Washery Grade IV to Rs.95/- per ton. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 11 of 50

Quality of coal and stage of chargeability 17. When coal is extracted from a mine, it is referred to as raw coal or unprocessed coal. Depending upon the use to which it may be put, which also depends upon its ash content and its calorific value, raw coal or unprocessed coal or Run-of-Mine (ROM) coal can be used as it is. 18. As far as Tata Steel is concerned, it is stated on page 164 of the Convenience Volume handed over to us by learned counsel for Tata Steel that “Most of our raw coal falls in the (on average) Washery Grade IV.” It may be mentioned that coal of Washery Grade IV has ash content between 28% and 35%. In the synopsis and lists of dates filed by Tata Steel in the appeals arising out of S.L.P. (C) Nos. 8972-73 of 2014 it is stated as follows: “ The coal, when extracted in its raw form also known as ROM contains high percentage of ash. Though ROM is fit for many purposes, it is not fit for the steel industry.” 19. Even the Union of India in its affidavit filed by the Under Secretary in the Ministry of Coal in W.P. (C) No.1504 of 2009 in C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 12 of 50

the Jharkhand High Court states to the same effect, namely, that ROM coal can be used as it is. It is stated in paragraph 11 thereof as follows: “ Considering the fact that in case of coal, where the entire ROM can be generally made usable, the Respondents No. 1 & 2 are of the opinion that rule 64B and the rule 64C [of the Mineral Concession Rules, 1960] may not be particularly applicable on coal minerals.” 20. Similarly, the State of Jharkhand in its affidavit filed in the same case has stated in paragraph 79 as follows: “ That with regard to the averments made by the petitioner in Paragraphs 84 and 85 of the instant writ application it is stated and submitted that it is not necessary that coal produced from a mine should always be subjected to processing. There are various coal mines in the country producing raw coal without any processing…….” 21. Therefore, while raw coal or unprocessed coal or ROM coal extracted by Tata Steel being Washery Grade IV having ash content between 28% and 35% can be used as it is for certain purposes, it requires to undergo a process of beneficiation to make it suitable for use in steel making. This process is undertaken by Tata Steel in its washeries in the leased areas. 22. The controversy in the present appeals is, therefore, limited to the question whether royalty is payable at the rate C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 13 of 50

mentioned in the Second Schedule to the MMDR Act on processed coal, that is, coal consumed or removed from the boundaries of the leased area in a beneficiated form or on the raw or unprocessed or ROM coal at the pit-head. 23. That the controversy is limited to the stage at which royalty is chargeable on coal is also clear from paragraph 17 of W.P.(C) No.2999 of 2008 filed by Tata Steel in the High Court wherein it is stated (though ROM coal can be used as it is) as follows:- “ 17. That the petitioner all along has been utilizing the entire coal raised from the said West Bokaro Colliery for the purpose of treatment and/or washing thereof as to reduce the ash percentage thereof with a view to use the same in its Steel Plant, in as much as in the Steel plant only coking coal of high grade which containing [contains] less ash can be used.” 24. Similarly, in paragraph 31 of the counter affidavit filed by the Union of India in W.P.(C) No.1504 of 2009 in the High Court it is stated as follows:- “ 31. That in reply to the statements made in para No.84 of the Writ Petition the Answering Respondent most humbly and respectfully state that the applicability of Rule 64B and Rule 64C [of the Mineral Concession Rules, 1960] is necessary for minerals that need processing or beneficiation before being used, especially metallic minerals. However, [as far as] its applicability to coal minerals is concerned considering the fact that in case of coal, where the entire ROM can be generally C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 14 of 50

made usable the Respondent No. 1 & 2 are of the opinion that Rule 64B and Rule 64C may not be particularly applicable to coal mineral.” 25. It is quite clear from the above that raw or unprocessed or ROM coal at the pit-head can be used for certain purposes; it is also clear that as far as Tata Steel is concerned, Washery Grade IV coal that it extracts needs to be beneficiated to make it usable in the steel industry and the controversy is limited to the issue of payment of royalty - whether it is payable on raw or unprocessed or ROM coal at the pit-head or it is payable on processed Steel Grade coal. Coal beneficiation 26. The question that, therefore, arises is what is the consequence of beneficiation? Very briefly, the consequence of beneficiation of coal is upgrading or improving its quality from the ROM coal. In the Convenience Volume handed over to us, with reference to beneficiation of coal, it is stated by Tata Steel as follows: 9 “ The crushed raw coal (ROM) has ash percentage varying from 22% to 40% and moisture of 3% to 5%. For use in Blast 9 This has not been disputed by the State of Jharkhand C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 15 of 50

furnace for steel making, we require clean coal of uniform quality at low ash %. So, Beneficiation of ROM raw coal is done to reduce the ash content to bring up to Steel Grade coal. ROM coal of various seams at coal mine is fed in to the Coal washery (Beneficiation plant) for beneficiation so that the final clean coal product has ash of below 15% (Steel Grade coal). For coal beneficiation, gravity separation methods for coarser (size 13 mm to 0.5 mm) material and froth floatation method for finer material (size < 0.5 mm) are done. So, before beneficiation, the raw coal is crushed in to size below 13 mm at Coal Handling Plant (Crushing Plant). The coarse material i.e. size from 13 mm to 0.5 mm is treated in dense media cyclone whereas, less than 0.5 mm is treated by froth floatation method. As beneficiation is a wet process hence, it increases the moisture percentage of beneficiated coal by around 8% to 15%. After beneficiation, apart from the clean coal (required in Blast furnace for Steel making), we also get Coal by-products named as, middling (ash 40-45%), Tailings (ash 40-45%) and Rejects (ash 60-65%). The product quantity after beneficiation process gets increased due to wet process by adding moisture into the output, shown by an example below – Production (Extraction): The basis figure of production of 100 tonnes of ROM coal has been taken. Therefore, Quantity produced (extracted): = 100 tonnes Beneficiation: The products are dewatered but still the surface moisture gets adhered to the product generated. The beneficiation is a wet process i.e. raw coal mass flows through different process in slurry form. Output is measured on wet process because it is transported on wet basis (with moisture). Hence the output is more than the input of raw coal. Beneficiation process results in C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 16 of 50

Clean Coal; Middlings; Tailings; and Rejects Thus 100 tonnes of raw coal will produce approximately 115 tonnes of washed product. Output from collieries (Average Quantities): Clean coal = 40 tonnes Middlings = 40 tonnes Tailings = 25 tonnes Rejects = 10 tonnes Conclusion : It is quite clear that beneficiation process (dense media gravity separation and froth floatation) are a physical separation process to separate higher ash coal and lower ash coal, so no chemical changes are there in the coal mineral, as there are no chemical reactions involved during this beneficiation process. Referring below a flow chart [not relevant]…….. From the quantity related table, it is also quite evident that due to addition of water during wet beneficiation, the summation of beneficiated coal product quantity is higher than fed ROM coal quantity.” 27. From this, it is quite clear that the beneficiation process, as far as coal is concerned, has two significant consequences – the grade of coal improves (from Washery Grade IV it could improve to Steel Grade I) and the weight of the coal increases (from 100 tons of raw ROM coal to 105 tons [excluding rejects] of beneficiated coal). C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 17 of 50

28. However, the process of beneficiation for other minerals does not result in the same consequence. As mentioned by the Union of India in paragraph 9 of its counter affidavit filed in W.P. (C) No. 1504 of 2009 in the High Court, the beneficiation of copper has different consequences. It is stated, in this regard as follows: “ It is stated that the mineral extracted during mining in its primary state is called run of mine (ROM), which may or may not be useable in its primary state depending on the minerals and its grade. In such a case where the entire ROM cannot be used generally, there is a level of processing required to beneficiate the ROM to enhance the grade ore and also take out waste material occurring with the ore. Rule 64B is specifically applicable in such class of minerals where only a part of the entire ROM mineral extracted through mining can be used. For example, in the case of copper ore, in which the metal contained in ore is in the range of 1% to 2% of the ROM the ROM is converted into a high as 25%, before it is sent out the lease area for refining and smelting. In such cases, the rule 64B of MCR provides for royalty to be charged by the State Government on the higher grade of ore that is being taken out of the lease area, in terms of the royalty rate prescribed in Second Schedule to the MMDR Act. Rule 64B of MCR does not specify the royalty rates and its applicability is only to the extent of facilitating levy or royalty on the processed ore removed from the lease area, and not the mineral consumed in the lease area. Further royalty is required to be paid as per the rates notified by the Central Government in Second Schedule to the MMDR Act. Rule 64B of MCR is therefore applicable in case of such minerals which cannot be used without processing. Similarly, rule 64B [rule 64C] of the MCR is applicable on removal of tailings or rejects from leased area for dumping and restricts levy on royalty on tailings or rejects. However, C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 18 of 50

levy of royalty is applicable only in case such tailings or rejects subsequently used for sale or consumption. For example, tailing from copper concentrate are likely to contain silver. However, royalty on silver generally cannot be levied till silver is extracted from the tailings and sold or consumed. Rule 64C is therefore applicable on such cases of minerals, where tailings or rejects generated during mining or processing are likely to be dumped due to its limited use.” 29. In other words, the ROM copper ore contains hardly 1% or 2% of copper but after the beneficiation process the copper extract from the ore increases to about 25%. It is thereafter sent for refining and smelting. In other words, copper ore cannot be utilized as it is or in the ROM state – it must undergo a beneficiation process from the ore and can then be used. 30. As mentioned in SAIL the consequences of processing dolomite or limestone has a consequence different from that of copper ore, namely, mere removal of waste and foreign matter. It appears that this process does not improve the quality of the dolomite or the limestone, though with the removal of waste and foreign matter, the weight would decrease somewhat. It may be mentioned that royalty is charged on dolomite and limestone on a tonnage basis. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 19 of 50

31. It is in this context that the nature of the mineral and the stage at which royalty is to be computed become important. The basis of levy would have to be rational and it might have different consequences at different stages. Computation of royalty 32. As far as the computation of royalty on coal is concerned, Tata Steel has given details of the methodology of computation in the Convenience Volume handed over to us. 10 For the purposes of computing the royalty amount, the quantities assumed by Tata Steel are given below. 33. It is said that 100 tons of raw coal post-beneficiation will produce approximately 115 tons of the washed products. The break-up of this is as follows: Clean coal = 40 tons Middlings = 40 tons Tailings = 25 tons Rejects = 10 tons 34. The computations made by Tata Steel are on the basis of the above assumptions. The rate of royalty is given in the Notification dated 14 th October, 1994 amending the Second 10 This has not been disputed by the State of Jharkhand. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 20 of 50

Schedule to the MMDR Act. For coking coal Steel Grade I, coking coal Steel Grade II and coking coal Washery Grade II the rate of royalty is Rs.195/- per ton. For coking coal Washery Grade IV the rate of royalty is Rs.95/- per ton. 35. Therefore, for every 100 tons of coking coal Washery Grade IV extracted by Tata Steel, the royalty payable on ROM coal was Rs.9500/- with effect from 14 th October, 1994. However, if the royalty were to be computed on post- beneficiation coal, the royalty payable by Tata Steel would work out to: Product Grade Quantity (tons) Royalty rate (Rs/ton) Amount (in Rs) Clean coal Steel Grade I 40 195 7800 Middlings Grade E 40 70 2800 Tailings Grade D 25 70 1750 Royalty payable 105 12350 Since rejects were ungraded and no rate was prescribed, no royalty was payable on rejects. 36. Based on the above computation, the difference in royalty on post-beneficiation coal (as claimed by the State of C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 21 of 50

Jharkhand) and on ROM coal (as claimed by Tata Steel) is Rs.2850/- per 100 tons of coal extracted (12350 minus 9500 = 2850). 37. This position continued till August 2002 when the Second Schedule to the MMDR Act was amended by a notification dated 16 th August, 2002. 38. In terms of the notification dated 16 th August, 2002 the rate of royalty for coking coal Steel Grade I, coking coal Steel Grade II and coking coal Washery Grade II was raised to Rs.250/- per ton. For coking coal Washery Grade IV the rate of royalty was raised to Rs.115/- per ton. 39. Therefore, for every 100 tons of coking coal Washery Grade IV extracted by Tata Steel, the royalty payable on ROM coal was Rs.11500/- with effect from 16 th August, 2002. However, if the royalty were to be computed on post- beneficiation coal, the royalty payable by Tata Steel would work out to: Product Grade Quantity (tons) Royalty rate (Rs/ton) Amoun t (in Rs) C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 22 of 50

Clean coal Steel Grade I 40 250 10000 Middlings Grade E 40 85 3400 Tailings Grade D 25 85 2125 Royalty payable 105 15525 Rejects have not been included in this calculation. 40. Based on the above computation, the difference in royalty on post-beneficiation coal (as claimed by the State of Jharkhand) and on ROM coal (as claimed by Tata Steel) is Rs.4025/- per 100 tons of coal extracted (15525 minus 11500 = 4025). 41. This position continued till August 2007 when the Second Schedule to the MMDR Act was amended by a notification dated 1 st August, 2007. Through this notification the rate of royalty on coal became a combination of a specific rate and an ad valorem rate, the formula for calculation being R = a + bP where ‘R’ is the royalty in Rs. per ton, ‘a’ is a fixed component, ‘b’ is a variable or ad valorem component and ‘P’ is the basic pit-head price of ROM coal. 42. The notification provides that for computing royalty (R) on Steel Grade I coal, a = Rs.180; b = 5% of ‘P’; P = basic pit-head C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 23 of 50

price of ROM coal as reflected in the invoice. Similarly, for payment of royalty (R) on Washery Grade IV coal, a = Rs.90; b = 5% of ‘P’; P = basic pit-head price of ROM coal as reflected in the invoice. 43. Tata Steel gives the computation arrived at on the basis of the above notification in the Convenience Volume as follows: “ As Tata Steel is not selling ROM, hence we take the prices notified by CIL [Coal India Limited] for its various collieries. For example, we apply the prices notified by Coal India Ltd for Central Coalfields Ltd. In the Price Notification No.181 dated 15.10.2009 for CCL, the basic price for ROM Washery Grade IV is Rs.1120. 11 Product Grade Quantity (in tons) Royalty rate (a+bP) Royalty (Rs. per ton Amount (in Rs) Clean coal Steel Grade I 40 180+5% of 1120 236 9440 Middlings Grade E 40 70+5% of 790 116 4400 Tailings Grade D 25 70+5% of 1000 120 3000 Royalty payable 105 16840 Rejects have not been included in this calculation. If we were to pay on RoM: 11 Since Tata Steel is not selling ROM coal, the price notified by the Coal India Ltd. for its various collieries has been taken by Tata Steel as the basic price for ROM Washery Grade IV as Rs.1120/- . In terms of the communication dated 16 th October, 2009 issued by the Central Coalfields Limited, Sales & Marketing Division, Darbhanga House, Ranchi with reference to Price Notification No.1181 dated 15 th October, 2009 the pit-head/basic price of Run of Mine (ROM) coal for Washery Grade IV stood revised from 1020 (in Rupees per tonne) to 1120. This is the figure taken by Tata Steel in its computations given in the Convenience Volume. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 24 of 50

Washery Grade IV: 90+5% of 1120 (56) (Rs.146 per ton) = Rs.14600/- ” 44. Based on the above computation, the difference in royalty payable on post-beneficiation coal (as claimed by the State of Jharkhand) and on ROM coal (as claimed by Tata Steel) is Rs.2240/- per 100 tons of coal extracted (16840 minus 14600 = 2240). 45. We have been given to understand that this position has undergone changes, but we are not concerned with them. 46. To summarize the computations, the royalty as computed by the State and as computed by Tata Steel is as follows: Royalty payable in Rs. Period (from date) On beneficiated coal (per 100 tons) On ROM coal (per 100 tons) Difference (per 100 tons) Royalty payable 14.10.199 4 12350 9500 2850 Royalty payable 16.8.2002 15525 11500 4025 Royalty payable 1.8.2007 16840 14600 2240 47. As is quite obvious, the difference in royalty payable would run into huge figures particularly since coal is mined in millions of tons. Discussion C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 25 of 50

48. Two interpretations have been given to removal of a mineral from the leased area as postulated in Sections 9(1) and 9(2) of the MMDR Act. 49. The first is a literal meaning given by the Patna High Court in its judgment and order dated 7 th August, 1990. The High Court gave a literal interpretation to Section 9(2) of the MMDR Act and effectively interpreted the removal of a mineral from the leased area as removal from the boundaries of the leased area. On this basis, it was concluded that since beneficiated coal is removed from the leased area, Tata Steel is liable to pay royalty on the weight of the beneficiated coal. 50. The second interpretation is a somewhat restrictive interpretation given by the Orissa High Court in National Coal Development Corporation Limited . In that case, it was held that: “ The incidence of royalty under the general tenor of the scheme [of Section 9 of the MMDR Act] arises when coal is severed from the seam in its natural state within the mine and removed outside. Removal [of coal] from the seam in the mine and extracting the same through the pit’s mouth to the surface satisfies the requirement of Section 9 [of the MMDR Act] in order to give rise to liability for royalty.” C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 26 of 50

51. In other words, the Orissa High Court did not accept the literal meaning of removal from the leased area occurring in Section 9 of the MMDR Act as removal from the boundaries of the leased area but gave a restricted interpretation to removal from the leased area as extraction of the coal from the seam in the mine which is in the leased area, that is, extraction from the pit-head. This restricted interpretation was accepted by this court in the appeal filed by National Coal Development Corporation and on that basis this court also upheld the payment of royalty by the lease holder on coal consumed by the workmen of the Corporation prior to the amendment of Section 9 of the MMDR Act in 1972. 12 52. Both the interpretations mentioned above relating to removal from the leased area, literal and restricted, were given in the context of extraction of coal. 53. The controversy regarding the interpretation of removal of a mineral (not coal) from the leased area again came up for consideration in a petition filed by SAIL in the Orissa High 12 National Coal Development Corporation Ltd. v. State of Orissa, (1998) 6 SCC 480 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 27 of 50

Court. This petition concerned itself with the payment of royalty on dolomite and limestone. While referring to Section 9(1) of the MMDR Act and the lease deed of SAIL, the Orissa High Court held as follows:- “ A distinction has to be made between removal from the mine and removal from the leased area. If after the mineral is extracted from the mine, it undergoes some processing and during processing, a part of the mineral is wasted and the wastage remains on the leased area and is not removed therefrom, the lessee cannot be asked to pay royalty on that portion of the wastage.” 13 54. In other words, the Orissa High Court took the literal interpretation given to removal from the leased area as removal from the boundaries of the leased area, virtually reiterating the literal interpretation given by the Patna High Court in its judgment and order dated 7 th August, 1990. 55. This court in the appeal filed by SAIL did not get into the question of removal of the mineral from the boundaries of the leased area but noted that the extracted mineral undergoes a process of removal of waste and foreign matter before it is removed from the boundaries of the leased area. The decision of this court on the levy of royalty turned on the consumption 13 The decision of the Orissa High Court does not appear to have been reported. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 28 of 50

of the mineral through that process carried out by the holder of the mining lease. In that context it was held in SAIL that since the process of removal of waste and foreign matter amounts to consumption, the entire extracted mineral is exigible to royalty. It was held:- “ Section 9(1) of the Act also contemplates the levy of royalty on the mineral consumed by the holder of a mining lease in the leased area. If that be so, the case of the appellants that such processing amounts to consumption and, therefore, the entire mineral is exigible to levy of royalty has to be accepted.” 56. It is quite clear that SAIL did not consider (and then reject) the reasoning given by the Orissa High Court that royalty is not payable on wastage that remains within the boundaries of the leased area. This was critically adverted to in an order dated 25 th July, 2006 in C.A. No.5651 of 2005 14 on the ground, inter alia , that the distinction made by the Orissa High Court between removal of a mineral from a mine and removal from a leased area has been rejected without any reason. This is what this court had to say: 14 M/s Central Coalfields Ltd. v. State of Jharkhand decided by this court C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 29 of 50

“ A bare reading of this Court’s judgment in Steel Authority of India’s case (supra) indicates that there is practically no reason indicated as to why the distinction made by the High Court was found to be unacceptable. As was noticed by the High Court in the impugned judgment in the said case the distinction is certainly of relevance. As we are unable to subscribe to the view expressed in Steel Authority of India’s case (supra), we refer the matter to a larger Bench. Records may be placed before Hon’ble the Chief Justice of India for necessary directions.” 57. We may also mention at this stage that SAIL has been politely distinguished in National Mineral Development Corporation Ltd. v. State of M.P. (or NMDC ) . 15 58. In sum and substance this is the issue before us, namely, whether for the purposes of payment of royalty, removal of a mineral as mentioned in Section 9 of the MMDR Act must be restrictively interpreted as removal or extraction of the mineral from the mine or the pit-head or a literal interpretation as removal of the mineral from the boundaries of the leased area. 59. In NMDC the question before this court was whether “slimes” are exigible to royalty, as forming part and parcel of iron ore. 60. The Second Schedule to the MMDR Act provides rates of royalty and Entry 23 relates to iron ore. Royalty is payable on 15 (2004) 6 SCC 281 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 30 of 50

lumps, fines and concentrates. In the process of mining, iron ore is extracted and separated into ore lumps, fines and waste material which is commonly known as “slime”, that is the resultant waste material from the wet screening process undertaken for segregation of lumps and fines. When the issue of exigibility of “slimes” was raised in the High Court, 16 it was held that royalty is payable on the mineral as extracted and removed or consumed from the leased area. The High Court also relied upon SAIL to hold that the entire quantity of ROM iron ore as extracted from the earth shall be liable to payment of royalty. 61. While disagreeing with the view taken by the High Court, it was held by this court that if Section 9 of the MMDR Act was to be read in isolation, perhaps, the total quantity of mineral removed from the leased area or consumed in the process of beneficiating iron ore would have been liable for payment of royalty and that quantity may have included the quantity of slimes as held in SAIL . But, this court went on to hold that 16 The decision of the High Court is reported as AIR 1999 MP 112 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 31 of 50

Section 9 of the MMDR Act cannot be read in isolation and the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 of the said Act. It was also held that though the Parliament was fully aware that iron ore would have to undergo a process which would lead to the emergence of lumps, fines, concentrates and slimes yet it chose to leave slimes out of consideration for the payment of royalty. For this reason, it was held that royalty was not payable on slimes. 62. This court also proceeded to consider Rule 64B and Rule 64C of the MCR and held that in the case of iron ore the levy of royalty is postponed until the beneficiation process has been undertaken and it is only then that royalty is capable of being quantified on the quantity of lumps, fines and concentrates. 63. The decision of this court in SAIL was also distinguished by holding that the removal of waste and foreign matter in the processing of dolomite and limestone did not result in any removal from the leased area but that the run-of-mine was itself consumed in the processing in the leased area, thereby C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 32 of 50

making a distinction between removal from the leased area and consumption within the leased area. 64. NMDC has analyzed the scope of Section 9 of the MMDR Act in conjunction with the Second Schedule to the MMDR Act. It was held that there is no conflict between the two and that Section 9 of the MMDR Act cannot be read in isolation but that the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 of the MMDR Act. Paragraphs 23 and 24 of the Report are significant and they read as follows: “ 23. Section 9 is not the beginning and end of the levy of royalty. The royalty has to be quantified for purpose of levy and that cannot be done unless the provisions of the Second Schedule are taken into consideration. For the purpose of levying any charge, not only has the charge to be authorised by law, it has also to be computed. The charging provision and the computation provision may be found at one place or at two different places depending on the draftsman’s art of drafting and methodology employed. In the latter case, the charging provision and the computation provision, though placed in two parts of the enactment, shall have to be read together as constituting one integrated provision. The charging provision and the computation provision do differ qualitatively. In case of conflict, the computation provision shall give way to the charging provision. In case of doubt or ambiguity the computing provision shall be so interpreted as to act in aid of charging provision. If the two can be read together homogeneously then both shall be given effect to, more so, when it is clear from the computation provision that it is meant to supplement the charging provision and is, on its own, a substantive provision in the sense that but for the computation provision the charging provision alone would not C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 33 of 50

work. The computing provision cannot be treated as mere surplusage or of no significance; what necessarily flows therefrom shall also have to be given effect to. 24. Applying the abovestated principle, it is clear that Section 9 neither prescribes the rate of royalty nor does it lay down how the royalty shall be computed. The rate of royalty and its computation methodology are to be found in the Second Schedule and therefore the reading of Section 9 which authorises charging of royalty cannot be complete unless what is specified in the Second Schedule is also read as part and parcel of Section 9.” 65. It is clear therefore that Section 9 of the MMDR Act has to be read and understood in conjunction with the Second Schedule to the MMDR Act. There is a good reason for it, which is that the scheme of the levy of royalty cannot be straitjacketed in view of the variety of minerals to which the MMDR Act applies and for the extraction of which royalty has to be paid. 66. In the case of coal, it has been noted that “Though ROM [coal] is fit for many purposes, it is not fit for the steel industry”; “in case of coal … the entire ROM can be generally made usable” and “it is not necessary that coal produced from a mine should always be subjected to processing. There are various coal mines in the country producing raw coal without C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 34 of 50

any processing…….” This is to say that ROM coal can generally be used in the raw form without processing and beneficiation is not at all necessary. However, if the raw coal is to be utilized for some specialized purposes it would need beneficiation. 67. On the other hand, in the case of dolomite or limestone (subject matter of SAIL ) the process described in paragraph 4 of the Report is undertaken not to upgrade or improve the quality of the mineral but to remove waste and foreign matter. It is not clear whether dolomite or limestone can be utilized as it is or in the ROM state without removal of waste and foreign matter. That question was adverted to by the Orissa High Court but not considered by this court, hence the critical reference. As mentioned above, the decision in SAIL was based not on removal but on consumption of the mineral. 17 On the basis of 17 In National Mineral Development Corpn. Ltd. v. State of M.P. this court observed in paragraph 34 of the Report as follows: “ Both these minerals [dolomite and limestone] were utilised as raw material by the mining lessees on the leased area itself. The mining lessee claimed that dolomite and limestone having been extracted from the mine underwent processing wherein a part of the mineral was wasted and the wastage remained on the leased area and not removed therefrom. The contention of the lessee was that royalty could not be demanded on that portion of the wastage which was not removed from the mining area. This contention was repelled by this Court by reference to Section 9(1) of the Act which speaks of payment of royalty in respect of any mineral removed or consumed by the lessee. The Court held that though the impurities part of dolomite and limestone were not removed from the leased area but that would not make any difference as the run-of-mine was itself consumed in the processing on the leased C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 35 of 50

the mineral extracted and the decision rendered by this court, therefore, no similarity can be found between SAIL (case of consumption) and National Coal Development Corporation Limited (case of removal) although royalty is charged on dolomite and limestone, as in coal, on a per ton basis. 68. Iron ore (with which NMDC is concerned) falls in the same generic category for levy of royalty as dolomite, limestone and coal namely on a tonnage basis but there is a crucial difference between iron ore and coal (as also between dolomite, limestone and iron ore). In the case of iron ore, beneficiation is necessary before it can be utilized. It has been observed in NMDC that “in iron ore production the run-of-mine (ROM) is in a very crude form. A lot of waste material called “impurities” accompanies the iron ore. The ore has to be upgraded. Upgrading the ores is called “beneficiation”. That saves the cost of transportation. Different processes have been developed by science and technology and accepted and adopted in different iron ore area.” C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 36 of 50

projects for the purpose of beneficiation.” 18 It is for this reason, inter alia , that the levy of royalty on iron ore is postponed, as held in NMDC , to a post-beneficiation stage. 69. In the case of coal, beneficiation is not necessary since ROM coal can be used as it is straight from the pit-head. In the case of iron ore, as noticed in NMDC , waste material is removed from the extracted iron ore and through the beneficiation process the ore is upgraded. The removal of waste material obviously reduces the weight of the iron ore and that is why it saves the cost of transportation as observed in NMDC . However, in the case of coal apart from the fact that beneficiation is not necessary, if the lease holder does in fact beneficiate the coal, the weight of the beneficiated coal is more than the ROM coal as has been noted above. This would, therefore, increase the cost of transportation which is based on the weight of the coal. Under the circumstances, removal of beneficiated coal as against ROM coal might work to the disadvantage of the lease holder. For this reason, no similarity 18 National Mineral Development Corporation Ltd v. State of M.P. paragraph 28. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 37 of 50

can be found between coal and iron ore or between coal and dolomite and limestone (apart from the fact that SAIL did not deal with removal from the leased area but consumption within the leased area). 70. There are therefore, three categories of minerals dealt with by this court – coal that can be utilized in the raw or ROM stage straight from the pit-head, iron ore that cannot be utilized in the raw or ROM stage and needs beneficiation and dolomite and limestone about which it is not clear whether it can be utilized in the raw or ROM stage. 71. On the other hand, there are other minerals such as copper, gold, lead, zinc and several others where the rate and computation of royalty payable are arrived on a completely different basis. The table below of some sample minerals taken from the Second Schedule to the MMDR Act illustrates this position 19 and it also illustrates that waste or foreign matter in respect of these minerals is much more than someone not in the business of extraction of minerals could imagine: 19 This has undergone further changes. These figures have been taken since they pertain to the period when the dispute arose in the cases referred to. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 38 of 50

Entr y Mineral Rate as per Notification of 5 th May, 1987 Rate as per Notification of 17 th February, 1992 7 Cadmium Sixteen rupees per unit percent of cadmium metal per ton of ore and on pro rata basis Seventy four rupees per unit percent of cadmium metal per ton of ore and on pro rata basis 12 Copper ore Five rupees per unit percent of copper metal contained per ton of ore and on pro rata basis Seventeen rupees per unit percent of copper metal contained per ton of ore and on pro rata basis 21 Gold Two rupees per one gram of contained gold per ton of ore and on pro rata basis (a) Eleven rupees per one gram of contained gold per ton of ore and on pro rata basis (b) by product gold ten rupees per gram 27 Lead ore Three rupees per unit percent of contained lead metal per ton of ore and on pro rata basis Eight rupees per unit percent of contained lead metal per ton of ore and on pro rata basis 28 Zinc ore Six rupees per unit percent of zinc metal contained per ton of ore and on pro rata basis Sixteen rupees per unit percent of zinc metal contained per ton of ore and on pro rata basis 72. What follows from this discussion is that though royalty may have a definite connotation, the rate of royalty, its method of computation and the final levy are different from mineral to mineral. It is for this reason that this court held in NMDC that the Second Schedule to the MMDR Act has to be read as a part and parcel of Section 9 of that Act. If the general conclusion of SAIL is to be applied across the board without reference to the C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 39 of 50

Second Schedule to the MMDR Act, calculation of royalty on copper, gold, lead, zinc and some other minerals would become impossible. 73. It is quite clear that the issue of computation of royalty on minerals is rather complex and it is best left to the experts in the field and it cannot be painted with a broad brush as has been done in SAIL . That decision must be confined to its own facts with reference to consumption of dolomite and limestone. Since the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 thereof, the interpretation given in SAIL possibly cannot apply to the computation of royalty for every mineral, as discussed above. 74. At this stage, it is necessary to refer to an unreported decision of this court. 20 That decision pertains to the removal of coal in relation to Section 9 of the MMDR Act. Interestingly, though a reference was made to SAIL this court adopted the view expressed by the Orissa High Court in National Coal Development Corporation Limited which was endorsed by 20 Central Coalfields Ltd. v. State of Jharkhand, C.A. No.8395 of 2001 decided by three learned judges on 24 th September, 2003 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 40 of 50

this court in appeal. The ‘reasons’ given in SAIL were not even adverted to. This unreported decision reads as follows: “ The contention put forth in this case is that for the purpose of Section 9 of the Mines & Mineral (Regulation & Development) Act, 1957 the expression ‘removal’ would mean that it is not enough to extract the mineral from pit but should be dispatched out of the leased area. In our view word ‘removal’ would mean extracting the mineral from the pit’s mouth after removal from the seam. This exact point has been considered by this Court in State of Orissa and Ors. v. Steel Authority of India Ltd. – (1998) 6 SCC 476 in which this Court has stated as follows: “ Another Division Bench of the Orissa High Court in National Coal Development Corpn. case while considering the question whether the coal extracted by the workmen for their own domestic consumption is exigible to levy of royalty, accepting the contention of the Revenue held “that removal from the seam in the mine and extracting the same through the pit’s mouth to the surface satisfy the requirement of Section 9 in order to give rise to liability for royalty.” This view of the High Court found approval by this Court in National Coal case (C.A. No.807 of 1976 decided on 5.12.1991) and this Court held that the lessee in that case was liable to pay royalty for the coal supplied to its workmen for consumption.” In this view of the matter we find no substance in the matter. The appeal is dismissed accordingly.” 75. In view of the decision of this court in Central Coalfields Ltd. the issue is no longer res integra and in so far as coal is C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 41 of 50

concerned, its “removal from the seam in the mine and extracting the same through the pit’s mouth to the surface [satisfies] the requirement of Section 9 in order to give rise to liability for royalty.” Rule 64B and Rule 64C of the Mineral Concession Rules 76. The complexities of chargeability, computation and levy of royalty on different minerals have now been simplified, clarified and standardized with the insertion of Rule 64B and Rule 64C of the MCR with effect from 25 th September, 2000. 21 77. A plain reading of Rule 64B of the MCR, with which we are presently concerned, clearly suggests that the leased area mentioned therein has reference to the boundaries of the leased area given to a lease holder. Sub-rule (1) provides that 21 64B. Charging of Royalty in case of minerals subjected to processing: (1) In case of processing of run-of-mine mineral is carried out within the leased area, then royalty shall be chargeable on the processed mineral removed from the leased area. (2) In case run-of mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product. 64C. Royalty on tailings or rejects: On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty: Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty. C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 42 of 50

if the ROM mineral is processed within the boundaries of that leased area, then royalty will be chargeable on the processed mineral removed from the boundaries of the leased area. However, if the ROM mineral is removed without processing from the boundaries of the leased area then in terms of sub- rule (2) royalty will be chargeable on the unprocessed ROM mineral. Rule 64B of the MCR is silent about removal of a mineral from the mine/pit-head but which is not removed from the boundaries of the leased area. This is a clear pointer that royalty is to be paid by the lease holder only on removal of the mineral from the boundaries of the leased area. This simplification and clarification takes care of some of the different and difficult situations that we have referred to above, namely, the stage of charging royalty on coal at the pit-head or post-beneficiation, the stage of charging royalty on iron ore at the pit-head or post-beneficiation, the stage of charging royalty on dolomite and limestone at the pit-head or after the removal of waste and foreign matter and of course the stage of charging C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 43 of 50

royalty on other minerals such as copper, gold, lead and zinc amongst others. 78. Similarly, Rule 64C of the MCR relates to royalty on tailings or rejects. As far as Tata Steel is concerned, its computation given in the Convenience Volume indicates that royalty is paid and payable on middlings and tailings. Rule 64C of the MCR makes it clear that royalty is payable on rejects when they are sold or consumed after being dumped. This will take care of situations such as that pertaining to silver, as mentioned in the affidavit of the Union of India. 79. There is nothing to indicate in Rule 64B and Rule 64C of the MCR that coal has been put on a different pedestal from other minerals mentioned in the MMDR Act read with the Second Schedule thereto. It is, therefore, difficult to accept the view canvassed by the Union of India that these rules “may not be particularly applicable on coal minerals.” That apart, the stand of the Union of India is not definite or categorical (“may not be”). In any event, we are not bound to accept the interpretation given by the Union of India to Rule 64B and Rule C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 44 of 50

64C of the MCR as excluding only coal. On the contrary, in NMDC this court has observed that these rules are general in nature, applicable to all types of minerals, which includes coal. The expression of opinion by the Union of India is contrary to the observations of this court. 80. Therefore, on a plain reading of Rule 64B and Rule 64C of the MCR, we are of the opinion that with effect from 25 th September, 2000 when these rules were inserted in the MCR, royalty is payable on all minerals including coal at the stage mentioned in these rules, that is, on removal of the mineral from the boundaries of the leased area. For the period prior to that, the law laid down in Central Coalfields Ltd. will operate, as far as coal is concerned, from 10 th August, 1998 when SAIL was decided, though for different reasons. 81. We may mention that learned counsel for Tata Steel had reserved his right to challenge the constitutionality of Rule 64B and Rule 64C of the MCR should his interpretation of the law be not accepted, namely that royalty on coal is chargeable on the C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 45 of 50

extracted tonnage at the pit-head. Since we have not accepted this interpretation post the insertion of Rule 64B and Rule 64C in the MCR, we leave it open to Tata Steel to challenge the constitutionality of these rules either by reviving these appeals to this limited extent or by initiating fresh proceedings. Appeals filed by TISCO 82. The issue about refund of excess royalty paid by TISCO arises only for the period from 10 th August, 1998 when this Court delivered its judgment and order in SAIL. 83. The claim for refund has been rejected by the High Court in its judgment and order dated 23 rd July, 2002 in the following words:- “ However, in view of the fact that the State [of Bihar] has been reorganized since 15 th November, 2000, now in place of ‘State of Bihar’, ‘State of Jharkhand’ will be charging royalty, the appellant – TISCO shall not ask for refund of excess royalty if deposited.” 84. A perusal of the above indicates that the High Court really gave no reason for denying the refund of the excess royalty paid by TISCO. For the reasons given in respect of Tata Steel keeping in view the decision rendered in Central Coalfields C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 46 of 50

Ltd. , we hold that TISCO is entitled to refund of royalty paid from 10 th August, 1998 to 25 th September, 2000. However, this amount need not be physically refunded but should be adjusted pro rata against future payments of royalty by TISCO over the next one year. TISCO is not entitled to refund of royalty paid after 25 th September, 2000. The royalty paid by TISCO after 25 th September, 2000 was correctly paid and in accordance with Rule 64B and Rule 64C of the MCR, which have not been challenged by TISCO. 85. We make it clear that we have not adverted to the issue of consumption of coal within the boundaries of the leased premises since that question does not arise in these appeals. 86. No other contention was urged before us. Conclusion 87. Our conclusions are as follows:- (1) The decision rendered in SAIL is confined to its own facts and to the minerals dolomite and limestone. The decision does not deal with removal of a mineral from the leased C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 47 of 50

area but deals with consumption within the leased area. (2) The unreported decision of this court in Central Coalfields Ltd. approves the law laid down by the Orissa High Court in National Coal Development Corporation Ltd. to the effect that removal of coal from the seam in the mine and extracting it through the pit- head to the surface satisfies the requirements of Section 9 of the MMDR Act in order to give rise to a liability for royalty. This view was earlier approved by this court in National Coal Development Corporation Ltd. (3) In view of the insertion of Rule 64B and Rule 64C on 25 th September, 2000 in the Mineral Concession Rules, the levy of royalty on coal has now been postponed from the pit-head to the stage of removal of the coal (whether unprocessed or ROM coal or whether beneficiated coal). (4) In view of the decision in Central Coalfields Ltd. the entitlement of TISCO and Tata Steel to refund of royalty from 10 th August, 1998 to 25 th September, 2000 is recognized. For the period from 25 th September, 2000 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 48 of 50

onwards, TISCO is obliged to pay royalty as per Rule 64B and Rule 64C of the Mineral Concession Rules. (5) Tata Steel, like TISCO is liable to pay royalty on coal with effect from 25 th September, 2000 in terms of Rule 64B and Rule 64C of the Mineral Concession Rules. (6) The constitutional validity or the vires of Rule 64B and Rule 64C of the Mineral Concession Rules has not been adjudicated upon. It is open to Tata Steel either to revive these appeals limited to this question or to challenge the constitutionality and vires of these rules through a separate challenge. 88. The appeals are disposed of as above. However, the parties will bear their own costs. … ..……………………CJI (H.L. Dattu) … ..……………………….J (Madan B. Lokur) C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 49 of 50

……………………………J (A.K. Sikri) New Delhi; March 17, 2015 C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 50 of 50

øJ REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 2938-2939 OF 2015 (Arising out of S.L.P. (C) Nos.8972-8973 of 2014) Tata Steel Ltd. ....Appellant Versus Union of India & Ors. ...Respondents AND CIVIL APPEAL NOS. 2940-2941 OF 2015 (Arising out of S.L.P. (C) Nos.9016-9017 of 2014) Tata Steel Ltd. ....Appellant Versus State of Jharkhand & Ors. ...Respondents WITH CIVIL APPEAL NO. 303 OF 2004 Tata Iron & Steel Co. Ltd. ....Appellant Versus State of Jharkhand & Ors. ....Respondents WITHSignature Not Verified C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 1 of 51Digitally signed byJayant Kumar AroraDate: 2015.03.1814:29:48 ISTReason: CIVIL APPEAL NO. 307 OF 2004State of Bihar (Now Jharkhand) & Ors. ...Appellants VersusTata Iron & Steel Co. Ltd. ...Respondent JUDGMENTMadan B. Lokur, J.1. Leave granted.2. Two sets of appeals are before us. One set of appeals

pertains to the Tata Iron and Steel Company Limited (TISCO) andthe other set pertains to Tata Steel.3. In the set of appeals pertaining to TISCO, the first appeal isCivil Appeal No. 303/2004 filed by TISCO against the judgmentand order dated 23rd July, 2002 passed by the Jharkhand HighCourt.1 The grievance in this appeal is that though theapplication of the law laid down by this court in State of Orissa1 MANU/JH/0590/2002C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 2 of 51v. Steel Authority of India Ltd.2 (hereafter SAIL) has beenaccepted by the High Court, namely, that royalty is chargeable [inaccordance with Section 9 of the Mines and Minerals(Development and Regulation) Act, 1957 (the MMDR Act)] on thequantity of coal extracted at the pit-head, yet the refund of excessroyalty paid by TISCO for the period from 10 th August, 1998 (thedate of the decision in SAIL) till June 2002 [about Rs.29.34 cr.]has been denied. TISCO therefore claims entitlement to refund onthe excess royalty paid by it for this period.4. Civil Appeal No.307/2004 has been filed by the State ofBihar (Now Jharkhand) against the same judgment and orderdated 23rd July, 2002. The submission is that after the decisionin SAIL the Government of India issued a notification dated 25 thSeptember, 2000 inserting Rule 64B and Rule 64C in the MineralConcession Rules, 1960 (hereafter MCR) and as a result of this,Run-of-Mine (ROM) minerals, after being processed in the leasedarea are exigible to royalty on the processed mineral. It iscontended that these rules were, unfortunately, not brought to2 (1998) 6 SCC 476C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 3 of 51the notice of the High Court and that the decision rendered bythe High Court accepting the law laid down in SAIL is incorrect.5. In this context, it must immediately be noted that thecontention of the State of Jharkhand is not that Rule 64B and

Rule 64C of the MCR have retrospective effect. That being so, thequestion is whether TISCO is entitled to refund of the excessroyalty paid from 10th August, 1998 (the date of the decision inSAIL) to 25th September, 2000 and if so whether the High Courtwas right in denying that refund. Also, the question is whetherTISCO is entitled to refund of royalty from 25 th September, 2000till June 2002 and if so, whether the High Court was right indenying that refund.6. The other set of appeals pertaining to Tata Steel consists offour appeals. These appeals filed by Tata Steel arise out of S.L.P.(C) Nos.8972-73/2014 and S.L.P. (C) Nos.9016-17/2014 and aredirected against a common judgment and order dated 12 th March,2014 passed by the Jharkhand High Court in W.P. (C)C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 4 of 51Nos.1504/2009 & 1505/2009 and W.P. (C) Nos. 2995/2008 &2999/2008.3 The grievance of Tata Steel is that despite thedecision of this court in SAIL and the decision dated 23rd July,2002 of the Jharkhand High Court, royalty is being charged fromTata Steel on processed or beneficiated coal and not on extractedcoal or Run-of-Mine (ROM) coal at the pit-head. It is submittedthat this is despite the affidavit of the Ministry of Coal of theGovernment of India that Rule 64B and Rule 64C of the MCR"may not be particularly applicable on coal minerals." Tata Steelis also aggrieved by the conclusion of the Jharkhand High Courtthat Rule 64B and Rule 64C of the MCR are constitutionallyvalid.Appeals filed by Tata Steel7. The question for our consideration in the set of appeals filedby Tata Steel is whether royalty is chargeable under Section 9 ofthe Mines and Minerals (Development and Regulation) Act, 1957and the Second Schedule thereto on raw or unprocessed orRun-of-Mine (ROM) coal at the pit-head or is it chargeable on coal3 2014 (2) JLJR 702

C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 5 of 51after it is processed and beneficiated in the washeries locatedwithin the boundaries of the leased area. In our opinion, thequestion of payment of royalty has arisen in respect of otherminerals and this has been discussed in cases relating to thoseminerals. On an appreciation of the decisions rendered, it mustbe held that royalty is payable on the processed or beneficiatedcoal only after 25th September, 2000 and royalty is payable onunprocessed, raw or ROM coal extracted at the pit-head only forthe period from 10th August, 1998 to 25th September, 2000.Background facts8. Tata Steel holds several mining leases for coal in the Stateof Jharkhand, in the district of Ramgarh (formerly Hazaribagh)known as the West Bokaro Colliery and in the district ofDhanbad known as the Jamadoba and Belatand group ofcollieries. The coal mines are captive coal mines. Tata Steel hasan adequate number of washeries in the leased area where theraw coal extracted from the mine (Run-of-Mine coal) is washed toimprove its quality and is then dispatched for use in its steelplant at Jamshedpur for the production of iron and steel.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 6 of 519. Initially Tata Steel and TISCO were of the opinion that inaccordance with the provisions of Section 9 of the Mines andMinerals (Regulation and Development) Act, 1957 [now renamedas the Mines and Minerals (Development and Regulation) Act,1957 or the MMDR Act]4 they were liable to pay royalty at therates mentioned in the Second Schedule to the MMDR Act on thetonnage of washed coal, that is after raw coal or Run-of-Mine(ROM) coal is removed from the washery post the beneficiationprocess. In fact a writ petition was filed by TISCO in the PatnaHigh Court being CWJC No.1 of 1984 (R) seeking a declaration to4 With effect from 18th December, 1999 9. Royalties in respect of mining leases.--(1) The holder of a mining leasegranted before the commencement of this Act shall, notwithstanding anything containedin the instrument of lease or in any law in force at such commencement, pay royalty inrespect of any mineral removed or consumed by him or by his agent, manager,employee, contractor or sub-lessee from the leased area after such commencement, atthe rate for the time being specified in the Second Schedule in respect of that mineral.

(2) The holder of a mining lease granted on or after the commencement of thisAct shall pay royalty in respect of any mineral removed or consumed by him or by hisagent, manager, employee, contractor or sub-lessee from the leased area at the rate forthe time being specified in the Second Schedule in respect of that mineral. (2-A) The holder of a mining lease, whether granted before or after thecommencement of the Mines and Minerals (Regulation and Development) AmendmentAct, 1972, shall not be liable to pay any royalty in respect of any coal consumed by aworkman engaged in a colliery provided that such consumption by the workman does notexceed one-third of a tonne per month. (3) The Central Government may, by notification in the Official Gazette, amendthe Second Schedule so as to enhance or reduce the rate at which royalty shall bepayable in respect of any mineral with effect from such date as may be specified in thenotification: Provided that the Central Government shall not enhance the rate of royalty inrespect of any mineral more than once during any period of three years.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 7 of 51this effect. The State of Bihar (at that time) was of the view thatroyalty was payable at the rate mentioned in the SecondSchedule to the MMDR Act on the tonnage of the extracted coalat the pit-head and not on the tonnage of the washed orbeneficiated coal. By its judgment and order dated 7 th August,1990 the Patna High Court held that TISCO was liable to payroyalty on the tonnage of the washed or beneficiated coal. It washeld: "From the plain reading of section 9(2) of the Act, it is clear that royalty is payable on the coal removed from the leased area and so long it is not removed, no royalty is payable. In view of the fact that coal is removed from the leased area, only after it is washed, the petitioner is liable to pay royalty on the weightage of that coal."10. This decision has attained finality and the position at law inthis regard continued till 1998.11. On 10th August, 1998 this court delivered judgment in SAIL.The question raised in that case was whether the Steel Authorityof India Ltd. or SAIL was liable to pay royalty at the ratementioned in the Second Schedule to the MMDR Act on thequantity of mineral (limestone and dolomite) extracted as it is oron the quantity arrived at after these minerals have undergone aC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 8 of 51process of removal of waste and foreign matter. According to theState of Orissa royalty was chargeable on the extracted mineralsat the rate mentioned in the Second Schedule to the MMDR Actwhile according to SAIL royalty was chargeable at the ratementioned in the Second Schedule to the MMDR Act on the

quantity of minerals obtained after the process of removal ofwaste and foreign matter.12. This court referred to an earlier decision of the Orissa HighCourt relating to the National Coal Development CorporationLtd.5 In that case, the High Court held that removal of coal fromthe seam in the mine and extracting it through the pit's mouth tothe surface would satisfy the requirement of Section 9 of theMMDR Act to give rise to a liability for royalty. The decision ofthe Orissa High Court was appealed against but the appeal wasdismissed by this court. 6 Relying upon this decision, it wasconcluded in SAIL that the process of removal of waste andforeign matter amounts to consumption and, therefore, the entiremineral extracted is exigible to a levy of royalty. By necessary5 National Coal Development Corporation Ltd. v. State of Orissa, AIR 1976 Orissa 1596 National Coal Development Corporation Ltd. v. State of Orissa, (1998) 6 SCC 480C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 9 of 51implication the decision of the Patna High Court in CWJC No.1 of1984 (R) filed by TISCO stood reversed.13. Perhaps as a consequence of the decision in SAIL, Rule 64Band Rule 64C were inserted in the MCR by a notification dated25th September, 2000.714. Be that as it may, in view of the decision in SAIL, the standtaken by Tata Steel/TISCO completely changed and the view nowsought to be canvassed was that royalty is payable at the ratementioned in the Second Schedule to the MMDR Act on thetonnage of unprocessed or ROM coal at the pit-head and not onprocessed or beneficiated coal.15. With regard to the claim of Tata Steel that it was liable topay royalty only on the tonnage of unprocessed or ROM coal atthe pit-head in terms of the decision in SAIL, the response of theState of Jharkhand was that in view of Rule 64B and Rule 64C ofthe MCR, royalty was liable to be paid at the rate mentioned inthe Second Schedule to the MMDR Act on the tonnage ofbeneficiated coal and not on the tonnage of the raw, extracted or7 National Mineral Development Corporation Ltd. v. State of M.P., (2004) 6 SCC 281

paragraph 32 had earlier echoed this viewC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 10 of 51ROM coal at the pit-head. In other words, not only was there avolte face by Tata Steel/TISCO but also by the State Government.The High Court has observed in the impugned judgment dated12th March, 2014 that the reason for the volte face both by TataSteel and by the State of Jharkhand was that by the notificationsdated 1st August, 1991 and 14th October, 1994 the rate of royaltyon the washed or beneficiated coal was increased. 816. In any event, this interpretational dispute led to the filing ofa set of writ petitions by Tata Steel in the High Court ofJharkhand, out of which the present appeals have arisen.The controversyQuality of coal and stage of chargeability17. When coal is extracted from a mine, it is referred to as rawcoal or unprocessed coal. Depending upon the use to which itmay be put, which also depends upon its ash content and itscalorific value, raw coal or unprocessed coal or Run-of-Mine8 By a notification dated 5th May, 1987 the rate of royalty on coking coal Steel Grade Iwas fixed at Rs.7/- per ton and of Washery Grade IV at Rs.5.50 per ton; by a notificationdated 1st August, 1991 the rate of royalty on coking coal Steel Grade I was increased toRs.150/- per ton and of coking coal Washery Grade IV to Rs.75/- per ton; by a notificationdated 14th October, 1994 the rate of royalty on coking coal Steel Grade I was furtherincreased to Rs.195/- per ton and of coking coal Washery Grade IV to Rs.95/- per ton.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 11 of 51(ROM) coal can be used as it is.18. As far as Tata Steel is concerned, it is stated on page 164 ofthe Convenience Volume handed over to us by learned counsel forTata Steel that "Most of our raw coal falls in the (on average)Washery Grade IV." It may be mentioned that coal of WasheryGrade IV has ash content between 28% and 35%. In the synopsisand lists of dates filed by Tata Steel in the appeals arising out ofS.L.P. (C) Nos. 8972-73 of 2014 it is stated as follows: "The coal, when extracted in its raw form also known as ROM contains high percentage of ash. Though ROM is fit for many purposes, it is not fit for the steel industry."19. Even the Union of India in its affidavit filed by the UnderSecretary in the Ministry of Coal in W.P. (C) No.1504 of 2009 in

the Jharkhand High Court states to the same effect, namely, thatROM coal can be used as it is. It is stated in paragraph 11thereof as follows: "Considering the fact that in case of coal, where the entire ROM can be generally made usable, the Respondents No. 1 & 2 are of the opinion that rule 64B and the rule 64C [of the Mineral Concession Rules, 1960] may not be particularly applicable on coal minerals."C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 12 of 5120. Similarly, the State of Jharkhand in its affidavit filed in thesame case has stated in paragraph 79 as follows: "That with regard to the averments made by the petitioner in Paragraphs 84 and 85 of the instant writ application it is stated and submitted that it is not necessary that coal produced from a mine should always be subjected to processing. There are various coal mines in the country producing raw coal without any processing......."21. Therefore, while raw coal or unprocessed coal or ROM coalextracted by Tata Steel being Washery Grade IV having ashcontent between 28% and 35% can be used as it is for certainpurposes, it requires to undergo a process of beneficiation tomake it suitable for use in steel making. This process isundertaken by Tata Steel in its washeries in the leased areas.22. The controversy in the present appeals is, therefore, limitedto the question whether royalty is payable at the rate mentionedin the Second Schedule to the MMDR Act on processed coal, thatis, coal consumed or removed from the boundaries of the leasedarea in a beneficiated form or on the raw or unprocessed or ROMcoal at the pit-head.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 13 of 5123. That the controversy is limited to the stage at which royaltyis chargeable on coal is also clear from paragraph 17 of W.P.(C)No.2999 of 2008 filed by Tata Steel in the High Court wherein it isstated (though ROM coal can be used as it is) as follows:- "17. That the petitioner all along has been utilizing the entire coal raised from the said West Bokaro Colliery for the purpose of treatment and/or washing thereof as to reduce the ash percentage thereof with a view to use the same in its Steel Plant, in as much as in the Steel plant only coking coal of high grade

which containing [contains] less ash can be used."24. Similarly, in paragraph 31 of the counter affidavit filed bythe Union of India in W.P.(C) No.1504 of 2009 in the High Court itis stated as follows:- "31. That in reply to the statements made in para No.84 of the Writ Petition the Answering Respondent most humbly and respectfully state that the applicability of Rule 64B and Rule 64C [of the Mineral Concession Rules, 1960] is necessary for minerals that need processing or beneficiation before being used, especially metallic minerals. However, [as far as] its applicability to coal minerals is concerned considering the fact that in case of coal, where the entire ROM can be generally made usable the Respondent No. 1 & 2 are of the opinion that Rule 64B and Rule 64C may not be particularly applicable to coal mineral."25. It is quite clear from the above that raw or unprocessed orROM coal at the pit-head can be used for certain purposes; it isalso clear that as far as Tata Steel is concerned, Washery GradeC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 14 of 51IV coal that it extracts needs to be beneficiated to make it usablein the steel industry and the controversy is limited to the issue ofpayment of royalty - whether it is payable on raw or unprocessedor ROM coal at the pit-head or it is payable on processed SteelGrade coal.Coal beneficiation26. The question that, therefore, arises is what is theconsequence of beneficiation? Very briefly, the consequence ofbeneficiation of coal is upgrading or improving its quality fromthe ROM coal. In the Convenience Volume handed over to us,with reference to beneficiation of coal, it is stated by Tata Steel asfollows:9 "The crushed raw coal (ROM) has ash percentage varying from 22% to 40% and moisture of 3% to 5%. For use in Blast furnace for steel making, we require clean coal of uniform quality at low ash %. So, Beneficiation of ROM raw coal is done to reduce the ash content to bring up to Steel Grade coal. ROM coal of various seams at coal mine is fed in to the Coal washery (Beneficiation plant) for beneficiation so that the final clean coal product has ash of below 15% (Steel Grade coal).9 This has not been disputed by the State of Jharkhand

C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 15 of 51 For coal beneficiation, gravity separation methods for coarser (size 13 mm to 0.5 mm) material and froth floatation method for finer material (size < 0.5 mm) are done. So, before beneficiation, the raw coal is crushed in to size below 13 mm at Coal Handling Plant (Crushing Plant). The coarse material i.e. size from 13 mm to 0.5 mm is treated in dense media cyclone whereas, less than 0.5 mm is treated by froth floatation method. As beneficiation is a wet process hence, it increases the moisture percentage of beneficiated coal by around 8% to 15%. After beneficiation, apart from the clean coal (required in Blast furnace for Steel making), we also get Coal by-products named as, middling (ash 40-45%), Tailings (ash 40-45%) and Rejects (ash 60-65%). The product quantity after beneficiation process gets increased due to wet process by adding moisture into the output, shown by an example below - Production (Extraction): The basis figure of production of 100 tonnes of ROM coal has been taken. Therefore, Quantity produced (extracted): = 100 tonnes Beneficiation: The products are dewatered but still the surface moisture gets adhered to the product generated. The beneficiation is a wet process i.e. raw coal mass flows through different process in slurry form. Output is measured on wet process because it is transported on wet basis (with moisture). Hence the output is more than the input of raw coal. Beneficiation process results in Clean Coal; Middlings; Tailings; and Rejects Thus 100 tonnes of raw coal will produce approximately 115 tonnes of washed product. Output from collieries (Average Quantities):C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 16 of 51 Clean coal = 40 tonnes Middlings = 40 tonnes Tailings = 25 tonnes Rejects = 10 tonnes Conclusion: It is quite clear that beneficiation process (dense media gravity separation and froth floatation) are a physical separation process to separate higher ash coal and lower ash coal, so no chemical changes are there in the coal mineral, as there are no chemical reactions involved during this beneficiation process. Referring below a flow chart [not relevant]........ From the quantity related table, it is also quite evident that due to addition of water during wet beneficiation, the summation of beneficiated coal product quantity is higher than fed ROM coal quantity."27. From this, it is quite clear that the beneficiation process, as

far as coal is concerned, has two significant consequences - thegrade of coal improves (from Washery Grade IV it could improveto Steel Grade I) and the weight of the coal increases (from 100tons of raw ROM coal to 105 tons [excluding rejects] ofbeneficiated coal).28. However, the process of beneficiation for other mineralsdoes not result in the same consequence. As mentioned by theUnion of India in paragraph 9 of its counter affidavit filed in W.P.(C) No. 1504 of 2009 in the High Court, the beneficiation ofC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 17 of 51copper has different consequences. It is stated, in this regard asfollows: "It is stated that the mineral extracted during mining in its primary state is called run of mine (ROM), which may or may not be useable in its primary state depending on the minerals and its grade. In such a case where the entire ROM cannot be used generally, there is a level of processing required to beneficiate the ROM to enhance the grade ore and also take out waste material occurring with the ore. Rule 64B is specifically applicable in such class of minerals where only a part of the entire ROM mineral extracted through mining can be used. For example, in the case of copper ore, in which the metal contained in ore is in the range of 1% to 2% of the ROM the ROM is converted into a high as 25%, before it is sent out the lease area for refining and smelting. In such cases, the rule 64B of MCR provides for royalty to be charged by the State Government on the higher grade of ore that is being taken out of the lease area, in terms of the royalty rate prescribed in Second Schedule to the MMDR Act. Rule 64B of MCR does not specify the royalty rates and its applicability is only to the extent of facilitating levy or royalty on the processed ore removed from the lease area, and not the mineral consumed in the lease area. Further royalty is required to be paid as per the rates notified by the Central Government in Second Schedule to the MMDR Act. Rule 64B of MCR is therefore applicable in case of such minerals which cannot be used without processing. Similarly, rule 64B [rule 64C] of the MCR is applicable on removal of tailings or rejects from leased area for dumping and restricts levy on royalty on tailings or rejects. However, levy of royalty is applicable only in case such tailings or rejects subsequently used for sale or consumption. For example, tailing from copper concentrate are likely to contain silver. However, royalty on silver generally cannot be levied till silver is extracted from the tailings and sold or consumed. Rule 64C is therefore applicable on such cases of minerals, where tailings or rejects generated during mining or processing are likely to be dumped due to its limited use."C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 18 of 5129. In other words, the ROM copper ore contains hardly 1% or2% of copper but after the beneficiation process the copper

extract from the ore increases to about 25%. It is thereafter sentfor refining and smelting. In other words, copper ore cannot beutilized as it is or in the ROM state - it must undergo abeneficiation process from the ore and can then be used.30. As mentioned in SAIL the consequences of processingdolomite or limestone has a consequence different from that ofcopper ore, namely, mere removal of waste and foreign matter. Itappears that this process does not improve the quality of thedolomite or the limestone, though with the removal of waste andforeign matter, the weight would decrease somewhat. It may bementioned that royalty is charged on dolomite and limestone on atonnage basis.31. It is in this context that the nature of the mineral and thestage at which royalty is to be computed become important. Thebasis of levy would have to be rational and it might have differentconsequences at different stages.Computation of royaltyC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 19 of 5132. As far as the computation of royalty on coal is concerned,Tata Steel has given details of the methodology of computation inthe Convenience Volume handed over to us.10 For the purposesof computing the royalty amount, the quantities assumed by TataSteel are given below.33. It is said that 100 tons of raw coal post-beneficiation willproduce approximately 115 tons of the washed products. Thebreak-up of this is as follows: Clean coal = 40 tons Middlings = 40 tons Tailings = 25 tons Rejects = 10 tons34. The computations made by Tata Steel are on the basis ofthe above assumptions. The rate of royalty is given in theNotification dated 14th October, 1994 amending the SecondSchedule to the MMDR Act. For coking coal Steel Grade I, cokingcoal Steel Grade II and coking coal Washery Grade II the rate of

10 This has not been disputed by the State of Jharkhand.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 20 of 51royalty is Rs.195/- per ton. For coking coal Washery Grade IV therate of royalty is Rs.95/- per ton.35. Therefore, for every 100 tons of coking coal Washery GradeIV extracted by Tata Steel, the royalty payable on ROM coal wasRs.9500/- with effect from 14 th October, 1994. However, if theroyalty were to be computed on post-beneficiation coal, theroyalty payable by Tata Steel would work out to: Product Grade Quantity (tons) Royalty rate Amount (Rs/ton) (in Rs)Clean coal Steel Grade I 40 195 7800Middlings Grade E 40 70 2800Tailings Grade D 25 70 1750Royalty 105 12350payableSince rejects were ungraded and no rate was prescribed, no royalty waspayable on rejects.36. Based on the above computation, the difference in royaltyon post-beneficiation coal (as claimed by the State of Jharkhand)and on ROM coal (as claimed by Tata Steel) is Rs.2850/- per 100tons of coal extracted (12350 minus 9500 = 2850).37. This position continued till August 2002 when the SecondSchedule to the MMDR Act was amended by a notification dated16th August, 2002.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 21 of 5138. In terms of the notification dated 16 th August, 2002 the rateof royalty for coking coal Steel Grade I, coking coal Steel Grade IIand coking coal Washery Grade II was raised to Rs.250/- per ton.For coking coal Washery Grade IV the rate of royalty was raisedto Rs.115/- per ton.39. Therefore, for every 100 tons of coking coal Washery GradeIV extracted by Tata Steel, the royalty payable on ROM coal wasRs.11500/- with effect from 16 th August, 2002. However, if theroyalty were to be computed on post-beneficiation coal, theroyalty payable by Tata Steel would work out to: Product Grade Quantity Royalty rate Amount (tons) (Rs/ton) (in Rs)

Clean coal Steel Grade I 40 250 10000Middlings Grade E 40 85 3400Tailings Grade D 25 85 2125Royalty 105 15525payableRejects have not been included in this calculation.40. Based on the above computation, the difference in royaltyon post-beneficiation coal (as claimed by the State of Jharkhand)and on ROM coal (as claimed by Tata Steel) is Rs.4025/- per 100tons of coal extracted (15525 minus 11500 = 4025).C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 22 of 5141. This position continued till August 2007 when the SecondSchedule to the MMDR Act was amended by a notification dated1st August, 2007. Through this notification the rate of royalty oncoal became a combination of a specific rate and an ad valoremrate, the formula for calculation being R = a + bP where `R' is theroyalty in Rs. per ton, `a' is a fixed component, `b' is a variable orad valorem component and `P' is the basic pit-head price of ROMcoal.42. The notification provides that for computing royalty (R) onSteel Grade I coal, a = Rs.180; b = 5% of `P'; P = basic pit-headprice of ROM coal as reflected in the invoice. Similarly, forpayment of royalty (R) on Washery Grade IV coal, a = Rs.90; b =5% of `P'; P = basic pit-head price of ROM coal as reflected in theinvoice.43. Tata Steel gives the computation arrived at on the basis ofthe above notification in the Convenience Volume as follows: "As Tata Steel is not selling ROM, hence we take the prices notified by CIL [Coal India Limited] for its various collieries. For example, we apply the prices notified by Coal India Ltd for Central Coalfields Ltd. In the Price Notification No.181 datedC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 23 of 51 15.10.2009 for CCL, the basic price for ROM Washery Grade IV is Rs.1120.11 Product Grade Quantity Royalty Royalty Amount (in tons) rate (a+bP) (Rs. per (in Rs) tonClean coal Steel 40 180+5% of 236 9440 Grade I 1120Middlings Grade E 40 70+5% 116 4400 of 790

Tailings Grade D 25 70+5% 120 3000 of 1000Royalty 105 16840payableRejects have not been included in this calculation. If we were to pay on RoM: Washery Grade IV: 90+5% of 1120 (56) (Rs.146 per ton) = Rs.14600/-"44. Based on the above computation, the difference in royaltypayable on post-beneficiation coal (as claimed by the State ofJharkhand) and on ROM coal (as claimed by Tata Steel) isRs.2240/- per 100 tons of coal extracted (16840 minus 14600 =2240).45. We have been given to understand that this position has11 Since Tata Steel is not selling ROM coal, the price notified by the Coal India Ltd. for itsvarious collieries has been taken by Tata Steel as the basic price for ROM Washery GradeIV as Rs.1120/-. In terms of the communication dated 16th October, 2009 issued by theCentral Coalfields Limited, Sales & Marketing Division, Darbhanga House, Ranchi withreference to Price Notification No.1181 dated 15 th October, 2009 the pit-head/basic priceof Run of Mine (ROM) coal for Washery Grade IV stood revised from 1020 (in Rupees pertonne) to 1120. This is the figure taken by Tata Steel in its computations given in theConvenience Volume.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 24 of 51undergone changes, but we are not concerned with them.46. To summarize the computations, the royalty as computedby the State and as computed by Tata Steel is as follows:Royalty Period On beneficiated On ROM Differencepayable in (from coal (per 100 coal (per (per 100 tons)Rs. date) tons) 100 tons)Royalty 14.10.1994 12350 9500 2850payableRoyalty 16.8.2002 15525 11500 4025payableRoyalty 1.8.2007 16840 14600 2240payable47. As is quite obvious, the difference in royalty payable wouldrun into huge figures particularly since coal is mined in millionsof tons.Discussion48. Two interpretations have been given to removal of a mineralfrom the leased area as postulated in Sections 9(1) and 9(2) of theMMDR Act.49. The first is a literal meaning given by the Patna High Courtin its judgment and order dated 7th August, 1990. The High

Court gave a literal interpretation to Section 9(2) of the MMDRAct and effectively interpreted the removal of a mineral from theC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 25 of 51leased area as removal from the boundaries of the leased area.On this basis, it was concluded that since beneficiated coal isremoved from the leased area, Tata Steel is liable to pay royaltyon the weight of the beneficiated coal.50. The second interpretation is a somewhat restrictiveinterpretation given by the Orissa High Court in National CoalDevelopment Corporation Limited. In that case, it was heldthat: "The incidence of royalty under the general tenor of the scheme [of Section 9 of the MMDR Act] arises when coal is severed from the seam in its natural state within the mine and removed outside. Removal [of coal] from the seam in the mine and extracting the same through the pit's mouth to the surface satisfies the requirement of Section 9 [of the MMDR Act] in order to give rise to liability for royalty."51. In other words, the Orissa High Court did not accept theliteral meaning of removal from the leased area occurring inSection 9 of the MMDR Act as removal from the boundaries of theleased area but gave a restricted interpretation to removal fromthe leased area as extraction of the coal from the seam in themine which is in the leased area, that is, extraction from thepit-head. This restricted interpretation was accepted by this courtC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 26 of 51in the appeal filed by National Coal Development Corporation andon that basis this court also upheld the payment of royalty by thelease holder on coal consumed by the workmen of theCorporation prior to the amendment of Section 9 of the MMDRAct in 1972.1252. Both the interpretations mentioned above relating toremoval from the leased area, literal and restricted, were given inthe context of extraction of coal.53. The controversy regarding the interpretation of removal of amineral (not coal) from the leased area again came up forconsideration in a petition filed by SAIL in the Orissa High Court.

This petition concerned itself with the payment of royalty ondolomite and limestone. While referring to Section 9(1) of theMMDR Act and the lease deed of SAIL, the Orissa High Courtheld as follows:- "A distinction has to be made between removal from the mine and removal from the leased area. If after the mineral is extracted from the mine, it undergoes some processing and during processing, a part of the mineral is wasted and the wastage remains on the leased area and is not removed12 National Coal Development Corporation Ltd. v. State of Orissa, (1998) 6 SCC 480C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 27 of 51 therefrom, the lessee cannot be asked to pay royalty on that portion of the wastage."1354. In other words, the Orissa High Court took the literalinterpretation given to removal from the leased area as removalfrom the boundaries of the leased area, virtually reiterating theliteral interpretation given by the Patna High Court in itsjudgment and order dated 7th August, 1990.55. This court in the appeal filed by SAIL did not get into thequestion of removal of the mineral from the boundaries of theleased area but noted that the extracted mineral undergoes aprocess of removal of waste and foreign matter before it isremoved from the boundaries of the leased area. The decision ofthis court on the levy of royalty turned on the consumption of themineral through that process carried out by the holder of themining lease. In that context it was held in SAIL that since theprocess of removal of waste and foreign matter amounts toconsumption, the entire extracted mineral is exigible to royalty.It was held:-13 The decision of the Orissa High Court does not appear to have been reported.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 28 of 51 "Section 9(1) of the Act also contemplates the levy of royalty on the mineral consumed by the holder of a mining lease in the leased area. If that be so, the case of the appellants that such processing amounts to consumption and, therefore, the entire mineral is exigible to levy of royalty has to be accepted."56. It is quite clear that SAIL did not consider (and then reject)

the reasoning given by the Orissa High Court that royalty is notpayable on wastage that remains within the boundaries of theleased area. This was critically adverted to in an order dated 25 thJuly, 2006 in C.A. No.5651 of 2005 14 on the ground, inter alia,that the distinction made by the Orissa High Court betweenremoval of a mineral from a mine and removal from a leased areahas been rejected without any reason. This is what this court hadto say: "A bare reading of this Court's judgment in Steel Authority of India's case (supra) indicates that there is practically no reason indicated as to why the distinction made by the High Court was found to be unacceptable. As was noticed by the High Court in the impugned judgment in the said case the distinction is certainly of relevance. As we are unable to subscribe to the view expressed in Steel Authority of India's case (supra), we refer the matter to a larger Bench. Records may be placed before Hon'ble the Chief Justice of India for necessary directions."14 M/s Central Coalfields Ltd. v. State of Jharkhand decided by this courtC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 29 of 5157. We may also mention at this stage that SAIL has beenpolitely distinguished in National Mineral DevelopmentCorporation Ltd. v. State of M.P. (or NMDC).1558. In sum and substance this is the issue before us, namely,whether for the purposes of payment of royalty, removal of amineral as mentioned in Section 9 of the MMDR Act must berestrictively interpreted as removal or extraction of the mineralfrom the mine or the pit-head or a literal interpretation asremoval of the mineral from the boundaries of the leased area.59. In NMDC the question before this court was whether"slimes" are exigible to royalty, as forming part and parcel of ironore.60. The Second Schedule to the MMDR Act provides rates ofroyalty and Entry 23 relates to iron ore. Royalty is payable onlumps, fines and concentrates. In the process of mining, iron oreis extracted and separated into ore lumps, fines and wastematerial which is commonly known as "slime", that is theresultant waste material from the wet screening process

15 (2004) 6 SCC 281C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 30 of 51undertaken for segregation of lumps and fines. When the issueof exigibility of "slimes" was raised in the High Court, 16 it washeld that royalty is payable on the mineral as extracted andremoved or consumed from the leased area. The High Court alsorelied upon SAIL to hold that the entire quantity of ROM iron oreas extracted from the earth shall be liable to payment of royalty.61. While disagreeing with the view taken by the High Court, itwas held by this court that if Section 9 of the MMDR Act was tobe read in isolation, perhaps, the total quantity of mineralremoved from the leased area or consumed in the process ofbeneficiating iron ore would have been liable for payment ofroyalty and that quantity may have included the quantity ofslimes as held in SAIL. But, this court went on to hold thatSection 9 of the MMDR Act cannot be read in isolation and theSecond Schedule to the MMDR Act must be read as a part andparcel of Section 9 of the said Act. It was also held that thoughthe Parliament was fully aware that iron ore would have toundergo a process which would lead to the emergence of lumps,16 The decision of the High Court is reported as AIR 1999 MP 112C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 31 of 51fines, concentrates and slimes yet it chose to leave slimes out ofconsideration for the payment of royalty. For this reason, it washeld that royalty was not payable on slimes.62. This court also proceeded to consider Rule 64B and Rule64C of the MCR and held that in the case of iron ore the levy ofroyalty is postponed until the beneficiation process has beenundertaken and it is only then that royalty is capable of beingquantified on the quantity of lumps, fines and concentrates.63. The decision of this court in SAIL was also distinguished byholding that the removal of waste and foreign matter in the

processing of dolomite and limestone did not result in anyremoval from the leased area but that the run-of-mine was itselfconsumed in the processing in the leased area, thereby making adistinction between removal from the leased area andconsumption within the leased area.64. NMDC has analyzed the scope of Section 9 of the MMDRAct in conjunction with the Second Schedule to the MMDR Act. Itwas held that there is no conflict between the two and thatC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 32 of 51Section 9 of the MMDR Act cannot be read in isolation but thatthe Second Schedule to the MMDR Act must be read as a partand parcel of Section 9 of the MMDR Act. Paragraphs 23 and 24of the Report are significant and they read as follows: "23. Section 9 is not the beginning and end of the levy of royalty. The royalty has to be quantified for purpose of levy and that cannot be done unless the provisions of the Second Schedule are taken into consideration. For the purpose of levying any charge, not only has the charge to be authorised by law, it has also to be computed. The charging provision and the computation provision may be found at one place or at two different places depending on the draftsman's art of drafting and methodology employed. In the latter case, the charging provision and the computation provision, though placed in two parts of the enactment, shall have to be read together as constituting one integrated provision. The charging provision and the computation provision do differ qualitatively. In case of conflict, the computation provision shall give way to the charging provision. In case of doubt or ambiguity the computing provision shall be so interpreted as to act in aid of charging provision. If the two can be read together homogeneously then both shall be given effect to, more so, when it is clear from the computation provision that it is meant to supplement the charging provision and is, on its own, a substantive provision in the sense that but for the computation provision the charging provision alone would not work. The computing provision cannot be treated as mere surplusage or of no significance; what necessarily flows therefrom shall also have to be given effect to. 24. Applying the abovestated principle, it is clear that Section 9 neither prescribes the rate of royalty nor does it lay down how the royalty shall be computed. The rate of royalty and its computation methodology are to be found in the Second Schedule and therefore the reading of Section 9 which authorises charging of royalty cannot be complete unless whatC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 33 of 51 is specified in the Second Schedule is also read as part and parcel of Section 9."65. It is clear therefore that Section 9 of the MMDR Act has tobe read and understood in conjunction with the Second Schedule

to the MMDR Act. There is a good reason for it, which is that thescheme of the levy of royalty cannot be straitjacketed in view ofthe variety of minerals to which the MMDR Act applies and forthe extraction of which royalty has to be paid.66. In the case of coal, it has been noted that "Though ROM[coal] is fit for many purposes, it is not fit for the steel industry";"in case of coal ... the entire ROM can be generally made usable"and "it is not necessary that coal produced from a mine shouldalways be subjected to processing. There are various coal minesin the country producing raw coal without any processing......."This is to say that ROM coal can generally be used in the rawform without processing and beneficiation is not at all necessary.However, if the raw coal is to be utilized for some specializedpurposes it would need beneficiation.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 34 of 5167. On the other hand, in the case of dolomite or limestone(subject matter of SAIL) the process described in paragraph 4 ofthe Report is undertaken not to upgrade or improve the quality ofthe mineral but to remove waste and foreign matter. It is notclear whether dolomite or limestone can be utilized as it is or inthe ROM state without removal of waste and foreign matter. Thatquestion was adverted to by the Orissa High Court but notconsidered by this court, hence the critical reference. Asmentioned above, the decision in SAIL was based not on removalbut on consumption of the mineral.17 On the basis of the mineralextracted and the decision rendered by this court, therefore, nosimilarity can be found between SAIL (case of consumption) andNational Coal Development Corporation Limited (case of17 In National Mineral Development Corpn. Ltd. v. State of M.P this court .observed in paragraph 34 of the Report as follows: "Both these minerals [dolomite and limestone] were utilised as raw material by the mining lessees on the leased area itself. The mining lessee claimed that dolomite and limestone having been extracted from the mine underwent processing wherein a part of the mineral was wasted and the wastage remained on the leased area and not removed therefrom. The contention of the lessee was that royalty could not be demanded on that portion of the wastage which was not removed from the mining area. This contention was repelled by this Court by reference to Section 9(1) of the Act which speaks of payment of royalty in respect of any mineral removed or

consumed by the lessee. The Court held that though the impurities part of dolomite and limestone were not removed from the leased area but that would not make any difference as the run-of-mine was itself consumed in the processing on the leased area."C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 35 of 51removal) although royalty is charged on dolomite and limestone,as in coal, on a per ton basis.68. Iron ore (with which NMDC is concerned) falls in the samegeneric category for levy of royalty as dolomite, limestone andcoal namely on a tonnage basis but there is a crucial differencebetween iron ore and coal (as also between dolomite, limestoneand iron ore). In the case of iron ore, beneficiation is necessarybefore it can be utilized. It has been observed in NMDC that "iniron ore production the run-of-mine (ROM) is in a very crudeform. A lot of waste material called "impurities" accompanies theiron ore. The ore has to be upgraded. Upgrading the ores is called"beneficiation". That saves the cost of transportation. Differentprocesses have been developed by science and technology andaccepted and adopted in different iron ore projects for thepurpose of beneficiation."18 It is for this reason, inter alia, that thelevy of royalty on iron ore is postponed, as held in NMDC, to apost-beneficiation stage.18 National Mineral Development Corporation Ltd v. State of M.P. paragraph 28.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 36 of 5169. In the case of coal, beneficiation is not necessary since ROMcoal can be used as it is straight from the pit-head. In the case ofiron ore, as noticed in NMDC, waste material is removed from theextracted iron ore and through the beneficiation process the oreis upgraded. The removal of waste material obviously reducesthe weight of the iron ore and that is why it saves the cost oftransportation as observed in NMDC. However, in the case of coalapart from the fact that beneficiation is not necessary, if the leaseholder does in fact beneficiate the coal, the weight of thebeneficiated coal is more than the ROM coal as has been noted

above. This would, therefore, increase the cost of transportationwhich is based on the weight of the coal. Under thecircumstances, removal of beneficiated coal as against ROM coalmight work to the disadvantage of the lease holder. For thisreason, no similarity can be found between coal and iron ore orbetween coal and dolomite and limestone (apart from the factthat SAIL did not deal with removal from the leased area butconsumption within the leased area).C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 37 of 5170. There are therefore, three categories of minerals dealt withby this court - coal that can be utilized in the raw or ROM stagestraight from the pit-head, iron ore that cannot be utilized in theraw or ROM stage and needs beneficiation and dolomite andlimestone about which it is not clear whether it can be utilized inthe raw or ROM stage.71. On the other hand, there are other minerals such as copper,gold, lead, zinc and several others where the rate andcomputation of royalty payable are arrived on a completelydifferent basis. The table below of some sample minerals takenfrom the Second Schedule to the MMDR Act illustrates thisposition19 and it also illustrates that waste or foreign matter inrespect of these minerals is much more than someone not in thebusiness of extraction of minerals could imagine:Entry Mineral Rate as per Notification Rate as per Notification of of 5th May, 1987 17th February, 1992 7 Cadmium Sixteen rupees per unit Seventy four rupees per percent of cadmium metal unit percent of cadmium per ton of ore and on pro metal per ton of ore and on rata basis pro rata basis 12 Copper Five rupees per unit Seventeen rupees per unit19 This has undergone further changes. These figures have been taken since they pertainto the period when the dispute arose in the cases referred to.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 38 of 51 ore percent of copper metal percent of copper metal contained per ton of ore contained per ton of ore and and on pro rata basis on pro rata basis 21 Gold Two rupees per one gram (a) Eleven rupees per one of contained gold per ton gram of contained gold per of ore and on pro rata ton of ore and on pro rata

basis basis (b) by product gold ten rupees per gram 27 Lead ore Three rupees per unit Eight rupees per unit percent of contained lead percent of contained lead metal per ton of ore and metal per ton of ore and on on pro rata basis pro rata basis 28 Zinc ore Six rupees per unit Sixteen rupees per unit percent of zinc metal percent of zinc metal contained per ton of ore contained per ton of ore and and on pro rata basis on pro rata basis72. What follows from this discussion is that though royaltymay have a definite connotation, the rate of royalty, its method ofcomputation and the final levy are different from mineral tomineral. It is for this reason that this court held in NMDC thatthe Second Schedule to the MMDR Act has to be read as a partand parcel of Section 9 of that Act. If the general conclusion ofSAIL is to be applied across the board without reference to theSecond Schedule to the MMDR Act, calculation of royalty oncopper, gold, lead, zinc and some other minerals would becomeimpossible.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 39 of 5173. It is quite clear that the issue of computation of royalty onminerals is rather complex and it is best left to the experts in thefield and it cannot be painted with a broad brush as has beendone in SAIL. That decision must be confined to its own factswith reference to consumption of dolomite and limestone. Sincethe Second Schedule to the MMDR Act must be read as a partand parcel of Section 9 thereof, the interpretation given in SAILpossibly cannot apply to the computation of royalty for everymineral, as discussed above.74. At this stage, it is necessary to refer to an unreporteddecision of this court.20 That decision pertains to the removal ofcoal in relation to Section 9 of the MMDR Act. Interestingly,though a reference was made to SAIL this court adopted the viewexpressed by the Orissa High Court in National CoalDevelopment Corporation Limited which was endorsed by thiscourt in appeal. The `reasons' given in SAIL were not evenadverted to. This unreported decision reads as follows:

20 Central Coalfields Ltd. v. State of Jharkhand, C.A. No.8395 of 2001 decided by threelearned judges on 24th September, 2003C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 40 of 51 "The contention put forth in this case is that for the purpose of Section 9 of the Mines & Mineral (Regulation & Development) Act, 1957 the expression `removal' would mean that it is not enough to extract the mineral from pit but should be dispatched out of the leased area. In our view word `removal' would mean extracting the mineral from the pit's mouth after removal from the seam. This exact point has been considered by this Court in State of Orissa and Ors. v. Steel Authority of India Ltd. - (1998) 6 SCC 476 in which this Court has stated as follows: "Another Division Bench of the Orissa High Court in National Coal Development Corpn. case while considering the question whether the coal extracted by the workmen for their own domestic consumption is exigible to levy of royalty, accepting the contention of the Revenue held "that removal from the seam in the mine and extracting the same through the pit's mouth to the surface satisfy the requirement of Section 9 in order to give rise to liability for royalty." This view of the High Court found approval by this Court in National Coal case (C.A. No.807 of 1976 decided on 5.12.1991) and this Court held that the lessee in that case was liable to pay royalty for the coal supplied to its workmen for consumption." In this view of the matter we find no substance in the matter. The appeal is dismissed accordingly."75. In view of the decision of this court in Central CoalfieldsLtd. the issue is no longer res integra and in so far as coal isconcerned, its "removal from the seam in the mine and extractingthe same through the pit's mouth to the surface [satisfies] therequirement of Section 9 in order to give rise to liability forC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 41 of 51royalty."Rule 64B and Rule 64C of the Mineral Concession Rules76. The complexities of chargeability, computation and levy ofroyalty on different minerals have now been simplified, clarifiedand standardized with the insertion of Rule 64B and Rule 64C ofthe MCR with effect from 25th September, 2000.2177. A plain reading of Rule 64B of the MCR, with which we arepresently concerned, clearly suggests that the leased areamentioned therein has reference to the boundaries of the leasedarea given to a lease holder. Sub-rule (1) provides that if the

ROM mineral is processed within the boundaries of that leasedarea, then royalty will be chargeable on the processed mineralremoved from the boundaries of the leased area. However, if the21 64B. Charging of Royalty in case of minerals subjected to processing: (1) Incase of processing of run-of-mine mineral is carried out within the leased area, thenroyalty shall be chargeable on the processed mineral removed from the leased area. (2) In case run-of mine mineral is removed from the leased area to a processingplant which is located outside the leased area, then, royalty shall be chargeable on theunprocessed run-of-mine mineral and not on the processed product. 64C. Royalty on tailings or rejects: On removal of tailings or rejects from theleased area for dumping and not for sale or consumption, outside leased area suchtailings or rejects shall not be liable for payment of royalty: Provided that in case so dumped tailings or rejects are used for sale orconsumption on any later date after the date of such dumping, then, such tailings orrejects shall be liable for payment of royalty.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 42 of 51ROM mineral is removed without processing from the boundariesof the leased area then in terms of sub-rule (2) royalty will bechargeable on the unprocessed ROM mineral. Rule 64B of theMCR is silent about removal of a mineral from the mine/pit-headbut which is not removed from the boundaries of the leased area.This is a clear pointer that royalty is to be paid by the leaseholder only on removal of the mineral from the boundaries of theleased area. This simplification and clarification takes care ofsome of the different and difficult situations that we have referredto above, namely, the stage of charging royalty on coal at thepit-head or post-beneficiation, the stage of charging royalty oniron ore at the pit-head or post-beneficiation, the stage ofcharging royalty on dolomite and limestone at the pit-head orafter the removal of waste and foreign matter and of course thestage of charging royalty on other minerals such as copper, gold,lead and zinc amongst others.78. Similarly, Rule 64C of the MCR relates to royalty on tailingsor rejects. As far as Tata Steel is concerned, its computationgiven in the Convenience Volume indicates that royalty is paidC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 43 of 51and payable on middlings and tailings. Rule 64C of the MCRmakes it clear that royalty is payable on rejects when they aresold or consumed after being dumped. This will take care of

situations such as that pertaining to silver, as mentioned in theaffidavit of the Union of India.79. There is nothing to indicate in Rule 64B and Rule 64C of theMCR that coal has been put on a different pedestal from otherminerals mentioned in the MMDR Act read with the SecondSchedule thereto. It is, therefore, difficult to accept the viewcanvassed by the Union of India that these rules "may not beparticularly applicable on coal minerals." That apart, the standof the Union of India is not definite or categorical ("may not be").In any event, we are not bound to accept the interpretation givenby the Union of India to Rule 64B and Rule 64C of the MCR asexcluding only coal. On the contrary, in NMDC this court hasobserved that these rules are general in nature, applicable to alltypes of minerals, which includes coal. The expression of opinionby the Union of India is contrary to the observations of this court.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 44 of 5180. Therefore, on a plain reading of Rule 64B and Rule 64C ofthe MCR, we are of the opinion that with effect from 25thSeptember, 2000 when these rules were inserted in the MCR,royalty is payable on all minerals including coal at the stagementioned in these rules, that is, on removal of the mineral fromthe boundaries of the leased area. For the period prior to that,the law laid down in Central Coalfields Ltd. will operate, as faras coal is concerned, from 10 th August, 1998 when SAIL wasdecided, though for different reasons.81. We may mention that learned counsel for Tata Steel hadreserved his right to challenge the constitutionality of Rule 64Band Rule 64C of the MCR should his interpretation of the law benot accepted, namely that royalty on coal is chargeable on theextracted tonnage at the pit-head. Since we have not acceptedthis interpretation post the insertion of Rule 64B and Rule 64C inthe MCR, we leave it open to Tata Steel to challenge theconstitutionality of these rules either by reviving these appeals to

this limited extent or by initiating fresh proceedings.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 45 of 51Appeals filed by TISCO82. The issue about refund of excess royalty paid by TISCOarises only for the period from 10 th August, 1998 when this Courtdelivered its judgment and order in SAIL.83. The claim for refund has been rejected by the High Court inits judgment and order dated 23 rd July, 2002 in the followingwords:- "However, in view of the fact that the State [of Bihar] has been reorganized since 15th November, 2000, now in place of `State of Bihar', `State of Jharkhand' will be charging royalty, the appellant - TISCO shall not ask for refund of excess royalty if deposited."84. A perusal of the above indicates that the High Court reallygave no reason for denying the refund of the excess royalty paidby TISCO. For the reasons given in respect of Tata Steel keepingin view the decision rendered in Central Coalfields Ltd., wehold that TISCO is entitled to refund of royalty paid from 10 thAugust, 1998 to 25th September, 2000. However, this amountneed not be physically refunded but should be adjusted pro rataagainst future payments of royalty by TISCO over the next oneyear. TISCO is not entitled to refund of royalty paid after 25 thC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 46 of 51September, 2000. The royalty paid by TISCO after 25 thSeptember, 2000 was correctly paid and in accordance with Rule64B and Rule 64C of the MCR, which have not been challengedby TISCO.85. We make it clear that we have not adverted to the issue ofconsumption of coal within the boundaries of the leased premisessince that question does not arise in these appeals.86. No other contention was urged before us.Conclusion87. Our conclusions are as follows:- (1) The decision rendered in SAIL is confined to its own facts

and to the minerals dolomite and limestone. The decision does not deal with removal of a mineral from the leased area but deals with consumption within the leased area. (2) The unreported decision of this court in Central Coalfields Ltd. approves the law laid down by the Orissa High Court in National Coal Development Corporation Ltd. to the effect that removal of coal from the seam in theC.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 47 of 51 mine and extracting it through the pit-head to the surface satisfies the requirements of Section 9 of the MMDR Act in order to give rise to a liability for royalty. This view was earlier approved by this court in National Coal Development Corporation Ltd. (3) In view of the insertion of Rule 64B and Rule 64C on 25 th September, 2000 in the Mineral Concession Rules, the levy of royalty on coal has now been postponed from the pit-head to the stage of removal of the coal (whether unprocessed or ROM coal or whether beneficiated coal). (4) In view of the decision in Central Coalfields Ltd. the entitlement of TISCO and Tata Steel to refund of royalty from 10th August, 1998 to 25th September, 2000 is recognized. For the period from 25 th September, 2000 onwards, TISCO is obliged to pay royalty as per Rule 64B and Rule 64C of the Mineral Concession Rules. (5) Tata Steel, like TISCO is liable to pay royalty on coal with effect from 25th September, 2000 in terms of Rule 64B and Rule 64C of the Mineral Concession Rules.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 48 of 51 (6) The constitutional validity or the vires of Rule 64B and Rule 64C of the Mineral Concession Rules has not been adjudicated upon. It is open to Tata Steel either to revive these appeals limited to this question or to challenge the constitutionality and vires of these rules through a separate challenge.

88. The appeals are disposed of as above. However, the partieswill bear their own costs. .............................CJI (H.L. Dattu) .................................J (Madan B. Lokur) .................................J (A.K. Sikri)New Delhi;March 17, 2015C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 49 of 51ITEM NO.1B COURT NO.3 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 2938-2939/2015 [@SLP (C) 8972-8973 of 2014]TATA STEEL LTD Appellant(s) VERSUSUOI & ORS Respondent(s)withCivil Appeal No. 2940-2941 of 2015[@SLP (C) 9016-9017 of 2014]withCivil Appeal No. 307 of 2004withCivil Appeal No. 303 of 2004Date : 17/03/2015 These appeals were called on for Judgmenttoday.For Appellant(s) Mr. K. V. Vishwanathan, Sr. Adv. Mr. Anup K., Adv. Ms. Adeeba Mujahid, Adv. Mr. Anil Kumar Jha, Adv. Mr. R. K. Ojha, Adv. Mr. Punit Dutt Tyagi, Adv.For Respondent(s) Mr. Devashish Bharuka,Adv.C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 50 of 51 Hon'ble Mr. Justice Madan B. Lokur pronounced the

reportable Judgment of the Bench comprising Hon'ble The Chief Justice of India, His Lordship and Hon'ble Mr. Justice A.K. Sikri. Leave granted in SLP (C) Nos. 8972-8973 of 2014 and SLP (C) Nos. 9016-9017 of 2014. The Appeals are disposed of. (Jayant Kumar Arora) (Sneh Bala Mehra) Sr. P.A. Assistant Registrar (Signed reportable Judgment is placed on the file)C.A. Nos._______ /2015 (@ S.L.P. (C) Nos. 8972-8973 of 2014) etc.etc.Page 51 of 51

1 ITEM NO.101(P.H.) COURT NO.1 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 303/2004 TATA IRON & STEEL CO. LTD. Appellant(s) VERSUS STATE OF JHARKHAND & ORS. Respondent(s) WITH C.A. No. 307/2004 SLP(C) Nos. 8972-8973/2014 (With appln.(s) for exemption from filing O.T. and appln.(s) for permission to file additional documents and appln.(s) for exemption from filing c/c of the impugned judgment and Interim Relief and Office Report) AND WITH SLP(C) Nos. 9016-9017/2014 (With appln.(s) for stay and appln.(s) for exemption from filing c/c of the impugned judgment and Interim Relief and Office Report) Date : 11/12/2014 These appeals/petitions were called on for hearing today. CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE A.K. SIKRI For Appellant(s)/ Mr.Dushyant Dave, Sr.Adv. Petitioner(s) Mr.Punit Dutt Tyagi, Adv. Mr.Ankit Parmar, Adv. Mr.M.K.Dua, Adv. For Respondent(s) Mr.Sunil Kumar, Sr.Adv. Mr.Anil Kr.Jha, Adv. Mr.Sunil Kumar, Sr.Adv. Mr.Devashish Bharuka, Adv. Mr.Ravi Bharuka, Adv. UOI Mr.L.N.Rao, ASG Ms.Revathy Raghavan, Adv.

2 UPON hearing the counsel the Court made the following O R D E R Shri Sunil Kumar, learned senior counsel for the State of Jharkhand resumed his arguments at 12.05 p.m. and concluded at 3.00 p.m. Thereafter Mr.Dushyant Dave, learned senior counsel for the petitioner(s)/apppellant(s) started in rejoinder and concluded, when the Court rose for the day. Arguments concluded. Judgment reserved. (G.V.Ramana) (Vinod Kulvi) Court Master Asstt.Registrar

1 ITEM NO.101(P.H.) COURT NO.1 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 303/2004 TATA IRON & STEEL CO. LTD. Appellant(s) VERSUS STATE OF JHARKHAND & ORS. Respondent(s) WITH C.A. No. 307/2004 SLP(C) Nos. 8972-8973/2014 (With appln.(s) for exemption from filing O.T. and appln.(s) for permission to file additional documents and appln.(s) for exemption from filing c/c of the impugned judgment and Interim Relief and Office Report) AND WITH SLP(C) Nos. 9016-9017/2014 (With appln.(s) for stay and appln.(s) for exemption from filing c/c of the impugned judgment and Interim Relief and Office Report) Date : 11/12/2014 These appeals/petitions were called on for hearing today. CORAM : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE A.K. SIKRI For Appellant(s)/ Mr.Dushyant Dave, Sr.Adv. Petitioner(s) Mr.Punit Dutt Tyagi, Adv. Mr.Ankit Parmar, Adv. Mr.M.K.Dua, Adv. For Respondent(s) Mr.Sunil Kumar, Sr.Adv. Mr.Anil Kr.Jha, Adv.Signature Not VerifiedDigitally signed by Mr.Sunil Kumar, Sr.Adv. Mr.Devashish Bharuka, Adv.Ramana Venkata GantiDate: 2014.12.1217:31:15 ISTReason: Mr.Ravi Bharuka, Adv. UOI Mr.L.N.Rao, ASG Ms.Revathy Raghavan, Adv. 2 UPON hearing the counsel the Court made the following O R D E R Shri Sunil Kumar, learned senior counsel for the State ofJharkhand resumed his arguments at 12.05 p.m. and concluded at3.00 p.m. Thereafter Mr.Dushyant Dave, learned senior counsel for

the petitioner(s)/apppellant(s) started in rejoinder andconcluded, when the Court rose for the day. Arguments concluded. Judgment reserved.(G.V.Ramana) (Vinod Kulvi)Court Master Asstt.Registrar

\224% 1 ITEM NO.59 COURT NO.8 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C) No(s). 8972-8973/2014 (Arising out of impugned final judgment and order dated 12/03/2014 in WP No. 1504/2009 and dated 12/03/2014 in WP No. 1505/2009 passed by the High Court Of Jharkhand At Ranchi) TATA STEEL LTD Petitioner(s) VERSUS UOI & ORS Respondent(s) (with appln. (s) for stay and interim relief and office report) WITH SLP(C)NO.9016-9017/2014 (With appln. (s) for stay and interim relief and office report) Date : 01/08/2014 These petitions were called on for hearing today. CORAM : HON'BLE MR. JUSTICE J. CHELAMESWAR HON'BLE MR. JUSTICE A.K. SIKRI For Petitioner(s) Mr. Harish Salve,Sr.Adv. Mr. Dushyant Dave,Sr.Adv. Mr. Punit Dutt Tyagi ,Adv. Mr. Ankit Parhar,Adv. Mr. Anshuman Bahadur,Adv. For Respondent(s) Mr.Sunil Kumar,Sr.Adv. Mr. Devashish Bharuka,Adv. Mr. Ravi Bharuka,Adv. UPON hearing the counsel the Court made the following O R D E R I.A.No.3-4/2014 is filed with the prayer as follows: "a) Grant ad-interim ex-parte stay of the final judgment/ order dated 12.03.2014 passed by the Hon'ble HighSignature Not Verified Court of Jharkhand at Ranchi in W.P.(C)Nos.1504 ofDigitally signed byOm Parkash SharmaDate: 2014.08.02 2009 and 1505 of 2009;12:45:47 ISTReason: b) Restrain the Respondents from taking any coercive steps to recover the disputed amount during the pendency of the present petition; and 2 c) pass such other and/ or further orders/directions as may be deemed just and proper." The legality of Rule 64B of the Mineral Concession Rules,

1960 is the subject matter of the SLP. The dispute is about the liability of the petitionerunder the said Rules for the years 2000-2008 which runs toRs.815.77 crores of which the petitioner admitted the liability ofRs.611 crores and already paid. Out of the remaining Rs.204.77crores, the petitioner has paid Rs.104 crores under protest. Apart from that by letter dated 25th July 2014, thepetitioner gave an undertaking to the Government of Jharkhand. Therelevant portion of the undertaking reads as follows: "5. That payments made under the following schedules shall be under protest, subject to the final outcome of and without prejudice to the contention of Tata Steel in the pending litigation. Further, subject to any order that may be passed by the Hon'ble Supreme Court in the interim, the schedule for payment of the principal demand amounts proposed on behalf of Tata Steel is as follows: a. Rs. 30 Crores (Rupees Thirty Crores) to be paid by 31st July, 2014. b. Balance in three equal instalments to be paid on 31st August, 2014, 30th September, 2014 and 31st October, 2014." That the petitioner would pay the balance amount in threeequal instalments, that is, by 31st August, 2014, 30th September,2014 and 31st October, 2014. I.A.No.3-4/2014 is disposed of recording the abovementioned undertaking. 3 The payment of the disputed amount would be subject tothe final decision of this case. Respondent is permitted to file Counter affidavit duringthe course of the day.[O.P. SHARMA] [INDU BALA KAPUR]COURT MASTER COURT MASTER

DITEM NO.21 COURT NO.6 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGSPetition(s) for Special Leave to Appeal (Civil)No(s).8972-8973/2014(From the judgement and order dated 12/03/2014 in WPNo.1504/2009, WP No.1505/2009 of The HIGH COURT OF JHARKHAND ATRANCHI)TATA STEEL LTD Petitioner(s) VERSUSUOI & ORS Respondent(s)(With appln(s) for exemption from filing c/c of the impugnedJudgment and prayer for interim relief and office report)WITH SLP(C) NO. 9016-9017 of 2014(With appln(s) for exemption from filing c/c of the impugnedJudgment and prayer for interim relief and office report)Date: 02/05/2014 These Petitions were called on for hearing today.CORAM : HON'BLE MR. JUSTICE K.S. RADHAKRISHNAN HON'BLE MR. JUSTICE VIKRAMAJIT SENFor Petitioner(s) Mr. Uday U. Lalit,Sr.Adv. Mr. Punit Dutt Tyagi,Adv. Mr. Ankit Parmar,Adv.For Respondent(s) Mr. Sunil Kumar,Sr.Adv. Mr. Devashish Bharuka,Adv. Mr. Aishwarya Kaushiq,Adv. UPON hearing counsel the Court made the following O R D E R Issue notice on the prayers for interim relief as well as on the petition for special leave. Dasti, in addition, is permitted. 1 Mr. Devashish Bharuka, Advocate, appearsand accepts notice for Respondent No.3-Stateof Jharkhand in SLP(C) No.8972-8973/2014. Let notice be issued to otherrespondents. Liberty is granted to serve notice uponthe standing counsel for the Union of India. Connect with C.A. No.303/2004.(Narendra Prasad) (Renuka Sadana) Court Master Court Master 2

¶*ITEM NO.104 COURT NO.11 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS CIVIL APPEAL NO(s). 303 OF 2004TATA IRON & STEEL CO. LTD. Appellant (s) VERSUSSTATE OF JHARKHAND & ORS. Respondent(s)WITHCivil Appeal NO. 307 of 2004[with appln. for permission to file rejoinder affidavit)T.P.(C) NO. 432-433 of 2011(With office report)T.P.(C) NO. 464-465 of 2011(With office report)Date: 12/10/2011 These Appeals/petitions were called on for hearingtoday.CORAM : HON'BLE MR. JUSTICE R.M. LODHA HON'BLE MR. JUSTICE JAGDISH SINGH KHEHARFor Appellant(s)TP 432-433 Mr. C.S. Vaidyanathan, Sr. Adv.464-465 Mr. Gopal Subramanium, Sr. Adv. Mr. Punit Dutt Tyagi, Adv. Mr. C.D. Mulherkar, Adv. Mr. M.K. Dua,Adv. Mr. Anil K. Jha, Adv.T.P. 432-433 Mr. Punit Dutt Tyagi, Adv.464-465For Respondent(s) Mr. Amrendra Sharan, Sr. Adv. Mr. Sunil Kumar, Sr. Adv. Mr. S. Chandra Shekhar, Adv. Ms. Ashwarya Sinha, Adv. Mr. Manoj Kumar, Adv. Mr. Ramraghvendra, Adv.CA 303, 307 Mr. Sunil Kumar, Sr. Adv. Mr. Anil K. Jha,Adv. Ms. Chhaya Kumari, Adv. Mr. S.K.Dinarkar, Adv.CA 307 Mr. Gopal Subramanium, Sr. Adv. Mr. C.S.Vaidyanathan,Sr. Adv. Mr. Punit Dutt Tyagi, Adv. Mr.C.D. Mulherkar, Adv. UPON hearing counsel the Court made the following O R D E R Civil Appeal Nos. 303 of 2004 and 307 of 2004: Although on behalf of the appellant, reliance is placed on the decision of this Court in State of Orissa and

others vs. Steel Authority of India Ltd. (1998)6 SCC 476 but we are informed that correctness of the view taken in this case has been doubted by this Court in group of Civil Appeals being C.A. Nos. 5651/2005, 5650/2005, 5908/2004, 5909/2004 and 5910/2004. By order dated July 25, 2006, in this group of appeals, a two Judge Bench of this Court observed that they were unable to subscribe to the view expressed in Steel Authority of India's case and referred the appeals for disposal by a larger Bench. In view of the above, we are of the view that it would be in the fitness of things if Civil Appeal Nos. 303 of 2004 and 307 of 2004 are heard along with Civil Appeal No. 5908 of 2004 and other connected matters. Order accordingly. Transfer Petition Nos. 432-433/2011 and 464-465 of 2011: Transfer Petitions are dismissed in terms of signed order. (Pardeep Kumar) (Renu Diwan) Court Master Court Master [ SIGNED ORDER IS PLACED ON THE FILE ] IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION TRANSFER PETITION (C) NOS. 432-433 OF 2011TATA STEEL LIMITED ... PETITIONER(s) VersusUNION OF INDIA AND OTHERS ... RESPONDENT(s) WITH TRANSFER PETITION (C) NOS. 464-465 OF 2011TATA STEEL LIMITED ... PETITIONER(s) VersusSTATE OF JHARKHAND & OTHERS ... RESPONDENT(s) O R D E R

On hearing Mr. C.S. Vaidyanathan, learned senior counsel for the petitioner and Mr. A. Sharan for the State of Jharkhand, we are satisfied that it would be proper if Writ Petitions are heard and decided by the High Court. We are informed that pleadings are already complete in the Writ Petitions. Transfer Petitions are dismissed. We request the High Court to decide Writ Petition No. 1504 of 2009 Tata Steel Limited vs. Union of India and others; Writ Petition (C) No. 1505 of 2009 Tata Steel Limited vs. Union of India and others; Writ Petition (C) No. 2995/2008 Tata Steel : 2 : Limited vs. State of Jharkhand and others and Writ Petition (C) No. 2999 of 2008 Tata Steel Limited vs. State of Jharkhand and others as expeditiously as may be possible preferably before March 31, 2012. ...................J. (R.M. LODHA ) ....................J. (JAGDISH SINGH KHEHAR )NEW DELHI,OCTOBER 12, 2011.

b SLP(C)No. 21613 OF 2002ITEM No.28 Court No. 2 SECTION XVII A/N MATTER S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (Civil) No.21613/2002 (From the judgement and order dated 23/07/2002 in LPA 117/2000 of The HIGH COURT OF JHARKHAND AT RANCHI) TATA IRON & STEEL CO. LTD. Petitioner (s) VERSUS STATE OF JHARKHAND & ORS. Respondent (s) WithSLP(C)No.2552/2003 (With prayer for interim relief) Date : 12/01/2004 These Petitions were called on for hearing today. CORAM : HON'BLE MR. JUSTICE R.C. LAHOTI HON'BLE MR. JUSTICE ASHOK BHAN For Petitioner (s)Mr. R.K.Jain,Sr. adv. Mr. M.K. Dua,Adv.Mr.Gopal Prasad,Adv.Mr. S.K. Singh, Adv. For Respondent (s)Mr. Ashok Mathur, adv. Mr. Punit Dutt Tyagi,Adv. UPON hearing counsel the Court made the following O R D E R Leave granted.Printing dispensed with. The appeals shall be heard on the SLP paperbooks. Parties may file additional documents, if any, within six weeks. Original record need not be requisitioned. (Ajay Kr. Jain) (Radha R. Bhatia) Court MasterCourt Master

¨ SLP(C)No. 21613 OF 2002ITEM No.20 Court No. 4 SECTION XVII A/N MATTER S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (Civil) No.21613/2002 (From the judgement and order dated 23/07/2002 in LPA 117/2000 of The HIGH COURT OF JHARKHAND AT RANCHI) TATA IRON & STEEL CO. LTD. Petitioner (s) VERSUS STATE OF JHARKHAND & ORS. Respondent (s)(With prayer for interim relief) WithSLP(C)No.2552/2003 (With office report) Date : 29/08/2003 These Petitions were called on for hearing today. CORAM : HON'BLE MR. JUSTICE R.C. LAHOTI HON'BLE MR. JUSTICE ASHOK BHAN For Petitioner (s) Mr. M.K. Dua,Adv.Mr.Gopal Prasad,Adv.Mr. S.K. Singh, Adv. For Respondent (s)Mr. Ashok Mathur, adv. Mr. Punit Dutt Tyagi,Adv. UPON hearing counsel the Court made the following O R D E R Rejoinder in SLP(C) No. 21613/2002 and counter affidavit in SLP(C) No. 22552/2003 be filed within four weeks. (Ajay Kr. Jain) (Radha R. Bhatia) Court MasterCourt Master

\SLP(C)... 704 OF 2003ITEM No.33 Court No. 5 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal(Civil)...(CC.704/2003) (From the judgement and order dated 23/07/2002 in LPA 117/2000 of The JHARKHAND AT RANCHI) STATE OF BIHAR & ORS. Petitioner (s) VERSUS TATA IRON & STEEL CO. LTD. Respondent (s) With IA 1( c/delay in filing SLP ) ( With Office Report ) Date : 31/01/2003 This Petition was called on for hearing today. CORAM : HON'BLE MR. JUSTICE R.C. LAHOTI HON'BLE MR. JUSTICE BRIJESH KUMAR For Petitioner (s) Mr. Sunil Gupta, Sr. Adv. Mr. S.K. Singh, Adv. Mr. Gopal Prasad, Adv. For Respondent (s) Mr. Punit Dutt Tyagi, Adv. UPON hearing counsel the Court made the following O R D E R............L.........I..............................................J.SP2 Delay condoned. Issue notice. Mr. Punit D. Tyagi, Advocate appears and takes notice for the respondent. Four weeks' time is allowed for filing counter. Tag with SLP(C) No. 21613/2002..SP1............L.........T..............................................J (Ajay Kr. Jain) (Radha R. Bhatia) Court Master Court Master

\234 SLP(C)No. 21613 OF 2002ITEM No.16 Court No. 6 SECTION IIIA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (Civil) No.21613/2002 (From the judgement and order dated 23/07/2002 in LPA 117/2000 of The HIGH COURT OF JHARKHAND AT RANCHI) TATA IRON & STEEL CO. LTD. Petitioner (s) VERSUS STATE OF JHARKHAND & ORS. Respondent (s) Date : 25/11/2002 This Petition was called on for hearing today. CORAM : HON'BLE MR. JUSTICE R.C. LAHOTI HON'BLE MR. JUSTICE BRIJESH KUMAR For Petitioner (s) Mr. R.K. Jain, Sr. Adv. Mr. A.K. Jain, Adv. Mr. M.K. Dua, Adv. For Respondent (s) UPON hearing counsel the Court made the following O R D E R............L.........I..............................................J.SP2 Issue notice..SP1............L.........T..............................................J (Ajay Kr. Jain) (Radha R. Bhatia) Court Master Court Master