In Brief
Northern Coal Fields Ltd., a government company, held coal mining leases on land acquired by the Central Government under the Coal Bearing Areas (Acquisition and Development) Act, 1957. The State of Uttar Pradesh demanded annual lease rent from the company. The Supreme Court held that when land vests absolutely in the Central Government under Section 10(1) of the Act—free from all encumbrances—and is subsequently vested in a Government Company under Section 11(1), the Company acquires absolute rights over the land. The State becomes a deemed lessee only if a mining lease pre-existed at acquisition, which was not the case here. Therefore, the State's demand for lease rent had no statutory basis and was dismissed.
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