Navin Sinha, J.
1. The controversy for determination in both these applications is whether the agreement for winning of sand is a 'lease' or a 'licence'. If it is a licence, Stamp Duty on the agreement shall be payable under Item 5 of Schedule IA of the Stamp Act. If it be a lease, Stamp Duty shall be payable in accordance with item 35(a)(1).
2. Learned Counsels for the petitioners submitted that the rights settled to them were a licence and not a lease. Reliance was placed on : [1976]3SCR661 (Board of Revenue v. A.M. Ansari), to submit that then was no creation of an interest in immovable property or a right to possess or enjoy it. This was a necessary concomitant of a lease. The petitioners were only entitled to collect sand from the surface of the lands without any right to the lands or to even put up structure on the lands. The right to only take away the fructus naturals could not be construed as lease. Relying upon : [2002]3SCR783 , Corporation of Kalicut v. K. Shriniwashan, it was submitted that a 'lease' as defined under Section 105 of the Transfer of Property Act contemplated transfer of a right to enjoy immovable property. The words 'licence' under Section 52 of the Indian Easement Act, 1882, was a grant of a right to do or continue to do in or upon in movable properly which in absence of such right will be unlawful but did not create an interest in the property.
3. Referring to Rule 11A and 11B of the Bihar Minor Mineral Concession Rules 1972 (hereinafter referred to as 'the Rules') it was submitted that the same dealt with exclusively, for settlement to win sand only. Rule 11A was inserted into the Rules in 1978 and opened with a non obstinate clause. The settlement for sand as a minor mineral was to be done by public auction. It prohibited renewal of existing leases or grant of fresh lease for winning sand. The proviso stated that, settlement cannot be granted for sand beyond one year. Eleven years later in 1991, 11B was inserted which provided that a settlement for sand as a minor mineral was to be executed in Form O. Form O under Rule 11B in Part III provided that winning of sand from the lands of Raiyats could be done only with the consent of the Raiyat for which the settee shall pay compensation to the Raiyat even while paying royalty to the Department. The Department could not grant leases of lands belonging to Raiyats, to the petitioners. The petitioners could not exercise lease hold sovereignty to prevent others from transgressing or interfering with their settled area except when they would interfere with the sand for which the settlement had been made to the petitioners. The provisions of Rule 11A and 11B were brought on to the statute book not withstanding Rule 4 which provided for grant of leases for mining to be executed on conditions stipulated in Rule 21 under Form D. Thus, the Rules contemplated a clear distinction between mining which could be granted only by a lease agreement in Form D as distinct from a settlement for winning sand under an agreement in Form O.
4. Shri Ashok Singh appearing for the Department of Mines submitted that the sand had a connection with the soil and therefore the nomenclature of being attached to the soil and therefore the judgement in A.M. Ansari (Supra) relied upon by the petitioners had no application. Rule 11A by use of the words 'notwithstanding' did not set at naught Rule 4 read with Rule 21 and Form D. Rule 11A itself contemplated applicability of Rule 9 in cases where Rule 12(1) be applicable. He thus submitted that whether in a given case the rights settled for winning sand was a lease or licence could vary depending on the duration of the settlement, etc.
5. Learned Counsel for the State submitted that Section 2(16) of the Indian Stamp Act defined the word lease to include a patta (tilling rights). Thus the present settlement by an agreement was a patta. The petitioners were extracting sand from a river and were thus dealing with immovable property under a lease and therefore were liable to pay stamp duty accordingly.
6. The Court has considered the submissions on behalf of the parties. Section 3(c) of the Mines and Minerals (Development and Regulation) Act. 1957 (hereinafter referred to as the Act') defines 'mining lease' as a lease for undertaking mining operations. 'Mining operations' is defined in Section 3 of the Act as an operation undertaken for winning any mineral. The expression-winning mineral has been considered in Bihar Mines Ltd. v. Union of India : [1967]1SCR707 to mean getting or extracting a mineral from the mines. Section 3(e) of the Act defines 'minor minerals' to include ordinary sand.
7. Section 15 of the Act provides rule making powers to the State Government for minor minerals. Rule 2(x) of the Bihar Minor Mineral Concession Rules (hereinafter referred to as 'the Rules') states that the word 'minerals' in the Rules shall have same meaning as in Section 3 of the Act. Rule 2(xiv) provides that the words and expression not defined in the Rules shall have same meaning as in the Act. Chapter II of the Rules prohibits minim without a permit or lease. Chapter III deals with grant of mining lease. Rules 11A to 11F are part of Chapter III and deal with a lease for winning sand in Form 'O'. Other leases under Chapter III are to he executed in Form D. This distinction is home out in the Rules with regard to permissible maximum duration of the leases, and area of the leases etc.
8. A mineral may be in the earth or on its surface. The argument that since sand was lifted from the surface of the earth being fructus naturals and hence did not have the connotation of mine, was rejected by the Supreme Court in : [1979]3SCR18 , Shri Shri Tarkeshwar Sio Thakur Jiu v. B.D. Dey and Co. and Ors. holding at Para 14 as under:
14. The contention must be repelled. The definitions of 'mining operations' and 'mine', noticed above, are very wide. The expression 'winning of minerals' is spacious enough to comprehend every activity by which the mineral is extracted or obtained from the earth irrespective of whether such activity is carried out on the surface or in the bowels of the earth. As pointed out by this Court in B. Dass v. State of Uttar Pradesh : [1976]3SCR869 . it is wrong to assume that mines and minerals must always be sub-soil and that there can be no minerals on the surface of the earth.
9. It was emphasised that the real character of a document had to be gathered from the substance of the transaction. Mere words or form will not confer upon it a nomenclature mentioned in the document.
10. In the case of Tarakeshwar (Supra) there was a marked similarity with the present agreement as in Form 'O', that was being considered by the Apex Court. The High Court held that though the agreement purported to be for 9 years being unregistered it was void under Section 107 of the Transfer of Property Act and was therefore a month to month lease. It was not a licence. The Apex Court upheld the finding that it was a lease and not a licence. The agreement therein specifically provided that save and except raising of sand there shall be no transfer of right, title and interest in the land. At the end of the stipulated period khas possession of the land would be taken over. What was transferred was only a right to 'raise' and 'lake out' and remove sand 'lying inside' the land. The Apex Court held that construed in the context as a whole the agreement was to carry out mining operations by winning sand. The rights were granted for a price fixed on a yearly basis irrespective of the quantity of the sand extracted.
11. Deciding the issue, whether there could be a mining lease without transfer of right, title or interest in land, the Apex Court rejected the argument that since there was no transfer of right, title and interest in the land, there could be no lease as defined in Section 105 of the Transfer of Property Act. It was held that the term 'lease' in Section 3(C) of the Act has not been used in the narrow technical sense as defined in Section 105 of the Transfer of Property Act 'A settlement of the character of a mining lease is everywhere in India regarded as lease. A mining lease may not in all cases satisfy the characteristics of a lease under the Transfer of Property Act, but in the legally accepted sense it has always been regarded as a lease in this country'.
12. Their Lordships then at para 34 and 35 held Unit the words 'immovable property'' defined in Section 3 of the Transfer of Property Act was not exhaustive and therefore the definition given in Section 3 Sub-section (26) of the General Clauses Act will apply. 'Thus, every interest in the immovable property or a benefit arising out of the land will be immovable property'. The right to mining and to remove and appropriate the minerals is a right to enjoy immovable property within the meaning of Section 105. This Court consider it appropriate to quote paragraphs 34 and 35 of the judgement in its entirety as under:
34. The definition of 'immovable property' given in Section 3, Para 1 of that Act is in he negative, and is not exhaustive. Therefore, the definition given in Section 3(26) of the General Clauses Act (X of 1897) will apply to the expression used in this Act, except as modified by the definition in the first clause of Section 3. According to the definition given in Section 3(26) of the General Clauses Act, ''immovable property' shall include land, benefits to arise out of land, and things at ached to the earth, or permanently fastened to anything attached to the earth'. In short, the expression 'immovable property' comprehends all that would be real properly according to English Law and possibly more. (See (1872) 1 Ind App 34 (PC)). Thus, every interest in immovable property or a benefit arising out of land, will be 'immovable property' for the purpose of Section 105, Transfer of Property Act.
35. A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral, is a 'right to enjoy immoveable property' within the meaning of Section 105; more so, when - as in the instant case - it is coupled with a right to be in its exclusive khas possession for a specified period. The right to enjoy immoveable property' spoken of in Section 105, means the right to enjoy the property in the manner in which that property can be enjoyed. If the subject-matter of the lease is mineral land or a sand-mine, as in the case before us, it can only be enjoyed and occupied by the lessee by working it, as indicated in Section 108, Transfer of Property Act, which regulates the rights and liabilities of lessors and lessees of immoveable property.
13. In AIR 1969 Orissa 152, considering the nature of the right granted under an agreement for mining, the High Court at para 33 observed as under;
This being so, in our opinion, the provision of Section 111G and Section 114 of the Transfer of Property Act have no application to a grant of this nature, because though this may not be a grant of lease in perpetuity it is certainly a grant by transfer of interest in land....
14. The case of Ansari (Supra) relied by the petitioners has no application as it was not a case for settlement of mining rights on land. In the present case, the situation is no different from that in the Tarkeshwar (Supra) case. What has been transferred is a right to win sand on payment of a lump sum amount irrespective of quantity of sand lifted. The working area is in the possession of the lessee and under the agreement he is bound to allow inspection by the lessor. On completion of the period the lessee is liable to give possession of the auctioned area to the competent officer failing which penalty will be levied
15. On a discussion of the provisions of the Act, the Rules and the law as laid down by the Apex Court the conclusion is that lifting of sand even from the surface of the earth is a mining operation. The definition of the Transfer of Property Act with regard to lease is stricto senso not applicable here. The transfer of the right to win minerals from a land is itself a right to mine and appropriate the minerals is a right to enjoy immovable property. The words 'immovable property' shall not he restricted in its technical sense but shall have to he construed in its application in accordance with Section 3(26) of the General Clauses Act.
16. There is thus no merit in both these writ applications. They are accordingly dismissed.
17. No costs.