Ownership of mineral wealth should normally follow the ownership of the land
The makers of the Constitution were aware of the fact that the mineral wealth obtaining in the land mass is not vested in the State in all cases
Jul 17, 2013
Source : The Economic Times

 

DELHI: A three judge Supreme Court bench has ruled that the owner of land has rights to everything beneath, "down to the centre of the earth."

"There is nothing in the law which declares that all mineral wealth sub-soil rights vest in the State, on the other hand, the ownership of sub-soil or mineral wealth should normally follow the ownership of the land, unless the owner of the land is deprived of the same by some valid process," said a July 9 order.

In fact, said the bench headed by Justice R M Lodha, the authors of the Indian Constitution were clearly conscious of this when they "expressly" declared the union's rights over minerals in the ocean. "The makers of the Constitution were aware of the fact that the mineral wealth obtaining in the land mass (territory of India) is not vested in the State in all cases. They were conscious of the fact that under the law, as it existed, proprietary rights in minerals (subsoil) could vest in private parties who happen to own the land," reads the 40 page order.

The Mines and Minerals Act recognises the same, why else make specific laws nationalisation coal mines, asserting the right of the state to coal bearing areas. The Atomic Energy Act, 1962 only allows mining of sensitive minerals such as uranium by the Central Government in national interest, it does not declare the proprietary right of the State, said Apex court.

Neither does the Oilfields (Regulation and Development) Act, 1948 dealing "crude oil, petroleum etc. which are the most important minerals in the modern world. The Act does not anywhere declare the proprietary right of the State."

 

The court was hearing pleas from jenmis, hereditary landholders of Malabar who have always held "absolute" proprietorship over lands, defending their right to minerals beneath their lands ( jenmom, derived from jenmamor birthright). Also known as mutalans, the court compares them to the "freeholders" of erstwhile England. Until, the Mahomedan princes of Mysore conquered Malabar, the jenmis, unlike anyone else in within the Presidency region, weren't even taxed in money or produce.

TheKerala High Court had earlier on 2nd August, 1999 ruled that their "absolute rights" had changed to patta lands after the Ryotwari settlements was extended to Malabar in 1926. Thus any mineral deposit under their soil now belonged to the Government.

The SC disagreed. It argued that the British made no proprietary claim to land in the Old Madras Province, either over jenmomlands in Malabar, nor over ryotwari patta lands.

In fact, as per Halsbury's Laws of England, "...Mines, quarries and minerals in their original position are part and parcel of the land. Consequently the owner of surface land is entitled prima facie to everything beneath or within it, down to the centre of the earth." Unless subject to exceptions, or common laws specified, for example, that "the property in petroleum existing in its natural condition in strata is vested by statute in the Crown."

Thus when the Constitution provided for "succession by the Union of India, or the corresponding state, as the case maybe of the property which vested in the British Crown..", it didn't necessarily imply any automatic right to minerals (subsoil). And thus the need for Parliamentary enactments, such as coal nationalization act, expressly provide for rights over coal bearing lands.

The judgement could be far reaching, with possibly particular implications for Goa, according mining industry leaders. Hereditary concessions granted by the Portuguese were sought to be converted to leases under the Goa, Daman and Diu Mining Concessions (Abolition and declaration as Mining Leases) Act, 1987. This has been challenged by Goan miners in court and remains undecided.

With regards to jenmisclaim, the SC ruling against the High Court order, said the resettlement 1926, a mere nomenclature, only retained the jenmomestates. While the Estates Abolition Act, specifically sought the transfer of mines and minerals, along with estates (which the court also cites to support its argument), the Estate land Act did not cover the district of Malabar, of old Madras Province ,or theexisting ryotwari systems .

An whenever the state has moved to demand royalty or tax the produce or ore, it has only asserted its Sovereign authority, said the court. "If a person has only a share in the produce of some property, it can never be said that such property vests in such a person," it argued.

The bench however did not decide on the jenmisobligation to pay royalty, since a larger bench was to debate the "the character and legal nature of royalty" in the matter of "Mineral Area Development Authority & Ors. Vs. Steel Authority of IndiaBSE -0.53 % & Ors(2011)". For similar reasons, it also did not decide on the subsoil rights of ryotwari pattasspecifically inOld Madras Province, subsequent to the abolition of estates under the Estates Abolition Act, 1948.

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