Banwarilal Agarwalla vs The State Of Bihar And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 131 of 1959

Decision Date: 10 February 1961

Coram: K.C. Das Gupta, Bhuvneshwar P. Sinha, S.K. Das, N. Rajagopala Ayyangar, J.R. Mudholkar

In the matter titled Banwarilal Agarwalla versus The State of Bihar and Others, the Supreme Court of India delivered its judgment on 10 February 1961. The opinion was authored by Justice K.C. Das Gupta, with Justices Bhuvneshwar P. Sinha, S.K. Das, N. Rajagopala Ayyangar and J.R. Mudholkar forming the bench. The petitioner was Banwarilal Agarwalla and the respondents comprised the State of Bihar together with other parties. The case citation appears in the 1961 volume of the All India Reporter at page 849 and in the 1962 Supplementary Court Reporter (1) at page 33. Additional citations to earlier reports include F 1957 SC 397 (43) and R 1963 SC 134 (6, 7, 13, 22). The matters before the Court related to the Coal Mines Act, the Colliery Company, alleged contravention of the Coal Mines Regulations of 1957, prosecution of directors of a private company, the legality of regulations that had not been referred to a Mining Board, and the effect of those regulations. The statutory provisions concerned were Section 10 of the Mines Act 1923 (4 of 1923), Sections 59(3) and 76 of the Mines Act 1952 (3 ½ of 1952), and Article 14 of the Constitution of India.

The Court’s headnote explained that Section 76 of the Mines Act 1952 stipulated that when the owner of a mine was a private company, any one of the shareholders of that company could be prosecuted and punished under the Act for any offence for which the owner of the mine was punishable. The petitioner, who was both a shareholder and a director of a private company that owned a colliery, had been prosecuted for an offence under Section 74 of the Act for contravening Regulations 107 and 127 of the Coal Mines Regulations 1957. He challenged the validity of the prosecution on two grounds. First, he argued that Section 76, under which he – not being the actual owner of the colliery but merely a director and shareholder – was prosecuted, was void because it violated Article 14 of the Constitution. Second, he contended that the Coal Mines Regulations 1957 were invalid because they had been framed in breach of Section 59(3) of the Act, which required consultation with a Mining Board before publication, and that such consultation had not occurred. The petitioners admitted that at the time the Regulations were framed no Mining Board contemplated under Section 12 of the Act had been constituted, and consequently no reference to any such Board appeared in the Regulations. However, they claimed that there had been consultation with the Mining Board constituted under Section 10 of the Mines Act 1923. The Court held, first, that the phrase “any one” in Section 76 should be interpreted as “every one”, meaning that every shareholder of a private company owning a mine was liable to prosecution, and therefore Section 76 did not transgress Article 14. This interpretation was in line with the decision in Chief Inspector of Mines v. Lala Karam Chand Thapar, [1962] 1 S.C.R. 9, which the Court followed. Second, the Court affirmed that compliance with the provisions of Section 59(3) of the Act was mandatory, distinguishing the earlier case of State of U.P. v. Manbodhan Lai Srivastava, [1958] S.C.R. 533. The judgment concluded by raising the question whether consultation with the Mining Boards constituted under the Mines Act 1923 would satisfy the requirement of Section 59(3) of the Mines Act 1952.

The Court noted that the provisions of the Mines Act of 1923 would satisfy the requirements of section 59(3) of the Mines Act of 1952. The judgment belonged to the criminal appellate jurisdiction, specifically Criminal Appeal No 131 of 1959. The appeal was filed by special leave from the judgment and order dated 21 November 1958 of the Patna High Court in M.J.C. No 805 of 1958. Counsel for the appellant consisted of three advocates, while counsel for the respondents comprised two advocates. The judgment was pronounced on 10 February 1961, and the delivering judge was Justice D.A.S. Gupta. The factual matrix began with an accident that occurred on 20 February 1958 at the Central Bhowra Colliery situated in Dhanbad, Bihar, in which twenty‑three persons lost their lives. Following the accident, an inquiry was conducted under clause 24 of the Mines Act of 1952 to ascertain the causes and circumstances surrounding the incident. After the inquiry report was published, the Regional Inspector of Mines of Dhanbad, acting under the direction of the Chief Inspector of Mines of Dhanbad, prepared a complaint before the Sub‑Divisional Officer of Dhanbad. The complaint alleged that the appellant had committed an offence punishable under section 74 of the Mines Act of 1952 by contravening regulations 107 and 127 of the Coal Mines Regulations of 1957. The Central Bhowra Colliery was, at the relevant time, owned by a private enterprise known as M/s Central Bhowra Colliery Co., Private Limited. The appellant was both a shareholder and a director of that company. After the Sub‑Divisional Officer took cognizance of the complaint and issued process against the appellant, the appellant sought relief from the Patna High Court under Article 226 of the Constitution, requesting a writ to quash the criminal proceedings. That application was dismissed summarily. The appellant then filed the present appeal, seeking special leave from this Court against the dismissal order.

The appellant’s petition for quashing the proceedings rested on two principal grounds. The first ground contended that section 76 of the Mines Act of 1952, under which the appellant—who was not the outright owner of the colliery but merely a director and shareholder—was prosecuted, was void because it violated Article 14 of the Constitution. The second ground argued that the Coal Mines Regulations of 1957 were invalid because they had been framed in contravention of section 59(3) of the Mines Act of 1952. Both contentions were reiterated before this Court in the present appeal. The first ground was premised on an interpretation that the phrase “any one” in section 76 meant only “one director” or “one shareholder.” This issue concerning the meaning of “any one” in section 76 had been previously raised in Criminal Appeals Nos 98 to 106 of 1959, which involved the Chief Inspector of Mines. In those appeals, the Court held that the phrase “any one” should be understood as “every one.” Accordingly, under section 76, every shareholder of a private company that owns a mine, as well as every director, is liable to prosecution. Consequently, the appellant’s reliance on a narrow reading of “any one” was rejected, and the argument that section 76 infringed Article 14 could not succeed. The Court also addressed the second ground, examining whether the Coal Mines Regulations had been made in breach of the mandatory provisions of section 59(3), a point that would be considered in the subsequent part of the judgment.

The Court noted that, according to section 76 of the Mines Act, 1952, every director and every shareholder of a public company that owns a mine is liable to prosecution; consequently, no infringement of Article 14 of the Constitution can be said to arise from this provision. The appellant’s second contention was that the Coal Mines Regulations were invalid because sections 12 and 59 of the Mines Act were mandatory. The Court therefore examined the content of those sections. Section 12 authorises the Central Government to constitute, for any part of the territory to which the Act applies or for any group or class of mines, a Mining Board. The Board must comprise (a) a government servant who is neither the Chief Inspector nor an Inspector and who is appointed by the Central Government to act as Chairman; (b) the Chief Inspector or an Inspector appointed by the Central Government; (c) another person who is not the Chief Inspector or an Inspector and who is appointed by the Central Government; (d) two persons nominated by the owners of mines or their representatives in a manner prescribed by law; and (e) two persons to represent the interests of miners, who are to be nominated in accordance with the provisions laid down in the section. Section 59 empowers the Central Government to make regulations that are consistent with the Act for any of the purposes mentioned therein, while section 58 similarly empowers the Central Government to make rules consistent with the Act. Section 59 stipulates, in its first sub‑section, that the power to make regulations and rules conferred by sections 57 and 58 is conditioned on prior publication. Its third sub‑section adds a further requirement that, before any draft regulation is published, it must be referred to every Mining Board that, in the opinion of the Central Government, is concerned with the subject of the regulation. The regulation may not be published until each such Board has had a reasonable opportunity to report on the expediency of making the regulation and on the suitability of its provisions. An analogous provision appears in the fourth sub‑section with respect to the making of rules, and an amendment in 1959 combined these two sub‑sections into a single provision. It was not disputed that, at the time the Coal Mines Regulations were framed, no Mining Board had been constituted as required by section 12; consequently, there was no reference to any Board as mandated by section 59. The Court therefore posed the question of whether the failure to make such a reference rendered the regulations invalid. The Court observed, citing repeated judicial pronouncements, that no universal rule exists for determining whether a statutory provision is mandatory—meaning that non‑observance would result in invalidity—or merely directory, meaning that failure to comply does not by itself cause invalidity, although other consequences may follow.

In every proceeding the Court must first ascertain what the legislature intended when it enacted the relevant statutory provisions. The inquiry is whether the legislature meant that a failure to obey a particular requirement would render the instrument in question void, or whether the requirement was merely advisory, so that non‑compliance would not automatically cause invalidity but might give rise to other consequences. To reach this conclusion the Court cannot rely solely on the literal wording of the provision. It must also examine the overall scheme of the Act, the public benefit that the provision seeks to secure, and the potential danger to the public if the provision were ignored. Applying this test to the present dispute, the Court had to consider all these elements in order to decide whether the legislature intended that the rule requiring a reference to the Mines Board could be breached only at the cost of the regulation being declared invalid. The analysis therefore involved a careful reading of the language employed in the provision, an assessment of the purpose underlying that language, and an evaluation of the significance of the requirement within the broader regulatory framework of the mining legislation.

The provision in question is set out in subsection (3) and contains two distinct mandates. The first part declares that before any regulation is published it “shall be” referred to every Mining Board that, in the opinion of the Central Government concerned with the subject, is appropriate to receive the reference. The second part adds that the regulation “shall not” be published until each Board has been given a reasonable opportunity to report on the expediency and suitability of the proposed provisions. While the Court recognises that the precise wording is only one factor among many in determining whether a requirement is mandatory or merely directory, the language here is notably emphatic. The phrasing indicates a clear legislative anxiety that the act of publishing a regulation—which is itself a prerequisite to the regulation taking effect—must be conditioned upon two prior steps: first, a formal reference to the relevant Mining Boards, and second, the grant of sufficient time for those Boards to submit their views on whether the proposed regulation is sensible and appropriate. This anxiety becomes apparent when one considers the subjects upon which the regulations may be made. A brief review of the twenty‑seven clauses listed in section 57 shows that most of them directly affect the day‑to‑day operation of mines. For example, clause (c) authorises regulations prescribing the duties of owners, agents and managers of mines and of persons acting under them; clause (g) deals with the circumstances and conditions under which more than one mine may be managed by a single manager; clause (j) concerns the prohibition, restriction or regulation of employment of adolescents and women in mines; clause (k) provides for the safety of persons employed in a mine; clause (m) relates to the safety of roads and working places within mines; clause (n) governs the inspection of workings and sealed‑off fire areas; clause (o) provides for ventilation of mines; and clause (r) addresses proper lighting of mines and the regulation of safety lamps. These examples illustrate that the regulations created under the Act have a profound impact on safety, labour conditions and operational efficiency, underscoring why the legislature insisted that Mining Boards be allowed to examine and comment on any proposed regulation before it is published.

In this case the Court noted that the purpose of the Act could be frustrated unless regulations that were both suitable and practical were prepared to achieve that purpose. The Court explained that regulations made in an arbitrary or haphazard manner, without fully considering their practicability and the effect they would have on the efficient operation of mines, would not only defeat the purpose of the Act but would also harm the general economy of the country. The Court said that this concern explains why the legislature was anxious to give Mining Boards an opportunity to examine draft regulations and to express their views before those regulations were finalized.

The Court then described the composition of the Mining Board as provided in section 12 of the Act. The Board was to consist of two members nominated by owners of mines or their representatives, two members representing the interests of persons employed in mines, and three members representing the Government. The Court observed that this constitution was intended to ensure that every relevant aspect could be examined thoroughly, including the need to secure the safety and welfare of labour on the one hand and, on the other hand, the practicability of the proposed provisions in terms of likely expense and other considerations. The Court said that it was clearly for the public benefit that such Boards should be allowed to examine regulations initially proposed by a governmental administrative department and to give their opinion. While the Court accepted that the law did not require the Board’s concurrence with the proposed regulations, it held that it was reasonable to expect that when a Board expressed an opinion favouring rejection or modification of a draft regulation, the department would not disregard that opinion lightly. The Court further observed that even when the department ultimately did not accept the Board’s view, the very fact that the Board had examined the draft and that the department had reconsidered the matter helped to minimise risks to public welfare. Accordingly, the Court concluded that, as a general rule, strict obedience to the command in sub‑section 3 of section 59 requiring consultation with the Mining Board was likely to promote public welfare.

Turning to another aspect, the Court asked what risk to public welfare might arise from insisting in every case that a failure to consult the Board as required by section 59 would render a regulation invalid. The Court recognised that emergencies could occur in which the public might suffer if delay were caused by the need to refer draft regulations to all the relevant Mining Boards and to wait for their opinions. In such situations, the Court warned, valuable time could be lost and the public interest might be endangered if regulations had to comply with the prior‑consultation requirement before they could be made valid. The Court then pointed out that the Act itself had anticipated such emergencies and had provided a specific exception in section 60. The operative part of that provision, as the Court quoted, allowed regulations falling under certain clauses to be made without prior publication and without prior reference to the Mining Boards when the Central Government was satisfied that, for the prevention of an anticipated danger or for the swift remedy of conditions likely to cause danger, it was necessary to dispense with the delay that would otherwise result from publication and reference. The Court therefore held that the legislative intent was to make consultation with the Mining Board a prerequisite for the validity of regulations, except in the limited circumstances expressly carved out by section 60.

In this judgment, the Court explained that section 60 of the Mines Act, 1952, contains the following provision: “Notwithstanding anything contained in sub‑sections (1), (2) and (3) of section 59, regulations under clause (1) and clauses (k) to (a) excluding clause (1) of section 57 may be made without previous publication and without previous reference to Mining Boards, if the Central Government is satisfied that for the prevention of apprehended danger or the speedy remedy of conditions likely to cause danger it is necessary in making such regulations to dispense with the delay that would result from such publication and reference.” The Court observed that this clause removes the danger to public welfare that would arise if prior consultation with the Mining Board were made a condition of the validity of every regulation. By analysing the language of the statute, the overall legislative scheme, the benefit to the public of insisting on strict compliance, and the possible harm to public interest if such compliance were insisted upon, the Court concluded that Parliament intended consultation with the Mining Board to be a prerequisite for a regulation’s validity. The Court noted that this intention is reinforced by the proviso attached to section 60, which originally limited the life of any regulation made under that section to two years from the date of its making. An amendment enacted in 1959 reduced this period to one year. The Court held that it is reasonable to read this proviso as implying, by legislation’s own terms, that where the special circumstances contemplated in section 60 do not exist and the provision of section 60 cannot be invoked, a regulation made in contravention of section 59 would cease to be valid after a very short period, effectively not more than a single day.

The respondent argued that section 59 does not demand that regulations obtain the concurrence of the Mining Boards. The respondent also relied upon the decision in State of U.P. v. Manbodhan Lal Srivastava (2) (1958) S.C.R. 533, in which this Court held that Article 320(3) of the Constitution was not mandatory and emphasized that “the requirement of the consultation with the Commission does not extend to making the advice of the Commission, on these matters, binding on the government.” While acknowledging that the Court gave weight to that observation, the Court cautioned that it was only one of several considerations that led to the conclusion that the consultation provision in Article 320(3) was not of a compulsory nature. One of the other considerations was the presence of a proviso in Article 320(3) that clearly indicated that the Constitution‑makers envisaged certain cases or classes of cases in which the Commission need not be consulted. As Justice Sinha observed, “If the provisions of Article 320(3) were of a mandatory character … the Constitution would not have left it to the discretion of the head of the executive government to undo these provisions by making regulations to the contrary.” The Court reiterated that, unlike the discretionary power described in Article 320(3), section 60 of the Mines Act provides specific situations where the consultation requirement of section 59 may be dispensed with, and it also imposes a limited lifespan on regulations made without such consultation.

While delivering the judgment, the Court observed that the Constitution would not have permitted the head of the executive government to disregard its provisions by issuing contrary regulations. It is important to note, as previously indicated, that section 60 of the Mines Act 1952 expressly enumerates situations in which the consultation required by section 59 is not mandatory. Unlike a scenario where the legislature leaves it to the executive’s discretion to override statutory requirements, the legislature here has provided clear guidance specifying the exact circumstances in which the Government may forgo such consultation. Moreover, the legislature has stipulated that any regulations issued without the prescribed consultation will possess only a limited lifespan.

In Srivastava’s case, the Court quoted with approval the observations of the Privy Council in the Montreal Street Railway Company v. Nor. Mandin case, stating: “When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.” (1) [1958] S.C.R. 533; (2) [1917] A.C. 170, 175. The Court applied that principle to the case before it. However, the present matter does not permit the application of that principle to support a directory interpretation of section 59(3). As earlier noted, any inconvenience that might arise from declaring regulations made in contravention of section 59(3) invalid is mitigated by the safeguards contained in section 60. Conversely, allowing regulations to be validly made without adhering to the procedure set out in section 59, even in cases outside the ambit of section 60, would likely harm the public interest and cause widespread inconvenience. This situation is the reverse of what the Privy Council considered in the Montreal Street Railway case and what the Court examined in Srivastava’s case. For all the reasons articulated above, the Court holds that the provisions of section 59(3) of the Mines Act 1952 are mandatory.

The remaining issue for consideration is whether those mandatory provisions were observed before the Coal Mines Regulations 1957 were framed. It has been established that, at the time the regulations were prepared, no new Mining Board had been constituted under the Mines Act 1952; consequently, no consultation with any Mining Board established under the 1952 Act took place. Nonetheless, it was submitted before the Court that…

The respondents asserted that the Mining Boards created under section ten of the Mines Act, 1923, continued to function at the time the Coal Mines Regulations, 1957, were drafted, and that full consultation with those Boards had been carried out before the regulations were framed. The respondents relied on two authorities, namely the 1917 case reported in A.C. at page 170, line 175, and the 1958 decision reported in S.C.R. at page 533. The Court observed that even if such consultation had indeed taken place, a further issue arose as to whether consultation with Boards constituted under the 1923 Act would satisfy the mandatory requirement of section 59(3) of the Mines Act, 1952. The Court noted that until the question of whether the 1957 regulations were framed after proper consultation could be resolved, it was impossible to reach a definite conclusion on the validity of those regulations. Because the material before the Court was insufficient to determine conclusively whether the Boards under section ten of the 1923 Act were operating on the relevant date and whether the alleged consultation actually occurred, the Court decided not to address the subsequent question of whether such consultation, if it had occurred, would have amounted to compliance with the provision of section 59(3) of the 1952 Act. The lack of clear documentary evidence regarding the existence and participation of the Boards at the precise moment of regulation‑making meant that the Court could not form a factual foundation for further analysis. Consequently, the Court refrained from expressing any opinion on the adequacy of the purported consultation with respect to the statutory mandate.

The Court therefore directed that the criminal proceedings pending before the sub‑divisional magistrate, or any other magistrate to whom the case might be transferred in accordance with law, should first determine whether any consultation with the Mining Boards created under section ten of the 1923 Act had taken place before the 1957 regulations were framed, and, if such consultation existed, whether it satisfied the requirements of section 59 of the 1952 Act. The Court explained that if the magistrate concluded that the statutory conditions of section 59 had not been complied with, the Coal Mines Regulations, 1957, must be held invalid and the accused should be acquitted. Conversely, if the magistrate found that the consultation had been sufficient to meet the statutory requirement, the magistrate should then dispose of the case on the merits of the evidence relating to the allegations set out in the petition of complaint, applying the ordinary evidentiary standards and rendering a judgment accordingly. The appeal was consequently disposed of, the appeal was allowed, and the matter was remanded for the execution of the directions given.