Coal slurry classified as mineral under Mines and Minerals Act, 1957; State of Bihar’s leases for slurry collection declared illegal due to lack of Central Government approval
In a landmark judgment delivered on August 17, 1990, the Supreme Court of India has clarified the legal position regarding the ownership and regulation of coal slurry deposits arising from coal washery operations. The Court ruled that coal slurry deposited in river beds and on land after escaping from coal washeries constitutes “mineral” under the Mines and Minerals (Regulation and Development) Act, 1957 (“the Act”). Consequently, the State Government has no authority to grant leases or settlements for collection of such slurry without prior approval of the Central Government, which alone has exclusive jurisdiction to regulate these matters.
The case arose from disputes involving Bharat Coking Coal Ltd. (BCCL), Tata Iron & Steel Company Ltd. (TISCO), Central Coalfields Ltd., and Coal India Ltd., who operate coal mines and washeries in the State of Bihar. The State Government had granted leases to various private parties for collecting coal slurry deposited in river beds (notably the Damodar and Bokaro rivers) and raiyati lands after overflow from slurry ponds constructed by the mining companies. The mining companies challenged these leases, contending that the slurry was their property and that the State had no legal authority to grant such leases without Central Government sanction under the Act.
The Supreme Court’s detailed judgment examined the nature of slurry, the legislative competence of the Union and State governments, and the scope of the Mines and Minerals Act. It recognized that slurry is a watery suspension containing fine carbonaceous coal particles, which retain the essential characteristics of coal and are commercially valuable as fuel. The Court held that collection or lifting of slurry from river beds or land constitutes “mining operations” and that leases for such collection amount to mining leases requiring Central Government approval.
Further, the Court highlighted the constitutional framework under Articles 245 and 246 and the Seventh Schedule, noting that “regulation of mines and mineral development” is a subject primarily under the Union List (Entry 54) but with a residual State legislative power (Entry 23, State List) that is subject to Parliamentary declaration. The Mines and Minerals Act, 1957, enacted by Parliament under this constitutional scheme, declares that regulation and development of minerals, including disposal of waste products such as slurry, fall exclusively within the Union’s legislative competence. The Central Government alone has the power to frame rules regulating the disposal or discharge of waste slime or tailings from mining operations (Section 18(2)(k) of the Act).
The Court rejected the State Government’s argument that in the absence of Central Government rules, it could legislate or exercise executive power over slurry disposal. It held that mere non-framing of rules by the Central Government does not revive State legislative or executive competence in a field that Parliament has declared exclusively its own. The Court further found that the slurry deposits on the disputed Plot No. 370 in Sudamdih village belonged to BCCL by virtue of prior acquisition under the Coal Bearing Areas (Acquisition and Development) Act, 1957, and therefore the State had no authority to lease these deposits to third parties.
Consequently, the Supreme Court set aside the leases granted by the State of Bihar for collection of coal slurry and restrained the lessees from collecting slurry from the disputed land and river beds. The judgment underscores the primacy of Central regulation over mineral resources and related waste management, ensuring uniformity and conservation of mineral wealth in the country.
This ruling has far-reaching implications for mining companies, state governments, and contractors involved in mineral extraction and waste disposal, affirming that the regulatory framework established by Parliament governs not only mining operations but also ancillary processes such as coal washing and slurry disposal.
Statutory provisions
Constitution of India Articles 245, 246, 162, Schedule VII Entry 54 (Union List), Entry 23 (State List); Mines and Minerals (Regulation and Development) Act, 1957 Sections 2, 3(c), 3(d), 5(1), 5(2)(a), 13, 13(2)(o) (pre-amendment), 18(1), 18(2)(k), Mines Act, 1952 Section 2(1)(j)(xii); Coal Bearing Areas (Acquisition and Development) Act, 1957 Sections 4(1), 7, 9
Bharat Coking Coal Ltd v. State of Bihar , (SC) : Law Finder Doc Id # 199135
