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TMI Blog2013 (7) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... all mineral wealth sub- soil rights vest in the State, on the other hand, the ownership of sub- soil / 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. In the instant appeals, no such deprivation is brought to our notice and therefore we hold that the appellants are the proprietors of the minerals obtaining in their lands. We make it clear that we are not making any declaration regarding their liability to pay royalty to the State as that issue stands referred to a larger Bench. - Civil Appeal No.4540-4548/2000 With C.A. NO.4549/2000 - - - Dated:- 8-7-2013 - Chelameswar, J. For Appellant(s) Mr. M.K.S. Menon, Adv., Ms. Sharika Surendran, Adv. And Mr.A. Raghunath, Adv. For Respondent(s) Mr. G. Prakash, Adv. JUDGMENT Chelameswar, J. 1. These appeals are placed before us pursuant to the Order dated 8 th December, 2004 of a Division Bench of this Court which opined that the points involved in these and certain other appeals need to be decided by a three Judge Bench. 2. These appeals arise out of a common judgment rendered in a number of writ petitions by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the belief and assertion of the appellants (1) that the holder of the jenmom rights is not only the proprietor of the soil for which he has jenmom rights, but also the owner of the mineral wealth lying beneath the soil. (2) that the understanding of the appellants that a claim of royalty can be made only by the owner of the mineral against a person who is excavating the mineral with the consent of the owner. 7. We must straightway record that the second of the above-mentioned propositions regarding the character and legal nature of royalty, (though was considered by this Court on more than one occasion) stands referred to a larger Bench by an Order of reference dated 30 th March, 2011 of a three- Judge Bench in Mineral Area Development Authority Ors. Vs. Steel Authority of India Ors.8(2011) 4 SCC 450, therefore, we are not required to examine and decide the question. We are only required to examine the amplitude of the rights of the jenmom land holders called jenmis in the Malabar area of the Kerala State and decide whether a jenmi is entitled to the rights of subsoil / t he minerals lying beneath the surface of the land. 8. The appellants' case is that a `jenmi ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Madras Province, the jenmis ceased to be the absolute owners and proprietors of the lands held by them. The ryotwari settlement had the effect of transferring the ownership of subsoil (minerals) to the Government. The ryotwari pattadars rights are only confined to the surface. 10. The High Court rejected the contentions of the petitioners. The High Court attempted to distinguish the decision of this Court in Balmadies Plantations (supra): Even though there is some force in the contention of the petitioners, the above observations of the Supreme Court are not inconformity with the observations made by the Full Bench (which followed the decision of the Supreme Court in Kunhikoman's case), that does not mean that the view taken by the Full Bench is not correct, because it can be seen from paragraph 14 of the above judgment itself that the Supreme Court has observed that in the Kerala case documents were produced and on the basis of the documents, the Court took the view that the nature of rights has changed after the Ryotwari settlements. 11. We must confess that we have some difficulty to understand the exact purport of the above extract. Be that as it may. The Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary to take note of the legal position regarding the rights over minerals as they obtain in England. Halsbury's Laws of England 4 state the legal position: 19. Meaning of `land' and cognate terms. Prima facie `land' or `lands' includes everything on or under the surface, although this meaning has in some cases been held to have been restricted by the context. `Soil' is apt to denote the surface and everything above and below it, but similarly its meaning may be restricted by the context so as to exclude the mines. `Subsoil' includes everything from the surface to the centre of the earth....... 20......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. This principle applies even where title to the surface has been acquired by prescription, but it is subject to exceptions. Thus, at common law, mines of gold and silvery belong to the Crown, and by statute unworked coal which was, at the restructuring date, vested in the British Coal Corporation is vested in the Coal Authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various enactments in force from time to time whereas the ryotwari tenures were governed by the standing orders of the Board of Revenue - in other words the orders issued by the Executive Government of the Madras province 5 . 21. Eventually, the landlord tenures in the erstwhile province of Madras came to be governed by the enactment known as Madras Estates Land Act, No. 1 of 1908 which admittedly did not apply to Malabar area. 6 22. The Madras Estates Land Act, 1908, which extensively dealt with the rights and obligations of the landlords / landholders owning an estate (popularly known as Zamindars ) expressly recognises the right of the landholder to reserve mining rights while admitting a ryot to Kunhikoman case - Para 12. .....The usual feature of land-tenure in Madras was the ryotwari form but in some districts, a landlord class had grown up both in the northern and southern parts of the Presidency of Madras as it was before the Constitution. The permanent settlement was introduced in a part of the Madras Presidency in 1802. There were also various tenures arising out of revenue free grants all over the Province (see Chap. IV, Vol. III of Land Systems of British India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s applicable to ryotwari areas shall apply to the estate; shall stand transferred to the Government and vest in the Government. See, for example, Section 2- A9 of The Andhra Pradesh (Andhra Area) Inams (Abolition and Conversion into Ryotwari) Act, 1956. We must remember that Andhra area of the present State of Andhra Pradesh was part of the old Madras Province. 24. State of Andhra Pradesh v. Duvvuru Balarami Reddy Ors. AIR 1963 SC 264 was a case where the respondents before this Court secured a lease of a piece of land in an inam village (shrotriem) and sought to carry on mica mining operation and applied for permission from the State of Andhra Pradesh under the Mineral Concession Rules, 1949 made under the Mines Minerals Regulation Development Act, 1948. The question was whether the lessor (shrotriemdar) had rights over the subsoil / m i nerals and whether he could pass rights therein by a lease. 11 A Constitution Bench of this Court examined the rights of the Inamdar under the 2-A. Transfer to, and vesting in the Government of all communal lands, porambokes etc. in inam lands - Notwithstanding anything contained in this Act all communal lands and porambokes, grazing l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the inam grant included the grant of sub-soil rights in addition to the surface rights and that the grant of sub-soil would depend upon the language used in the grant. If there are no words in the grant from which the grant of sub-soil rights can be properly inferred the inam grant would only convey the surface rights to the grantee, and the inam grant could not by itself be equated to a complete transfer for value of all that was in the grantor. (para 8) 26. Coming to the ryotwari tenures, this Court held that they were governed by the standing orders issued from time to time by the Revenue Board. Under the ryotwari system land was given on lease by the government to the ryot under a patta . Noticing the salient features of the ryotwari system as explained in various authoritative works, this Court opined that though a ryotwari pattadar is virtually like a proprietor and has many of the advantages of such a proprietor , such pattadar was never considered a proprietor of land but only a tenant. 13 Para 13 of Kunhikoman (supra) - ......The other class of land-tenures consisted of ryotwari pattadars which were governed by the Board's Standing Orders, there being no Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. On the other hand, the appellants asserted that they were holders of ryotwari pattas issued according to ryotwari settlement in the erstwhile State of Madras under the revenue Board Standing Order. This Court further recorded:- ........it is not in dispute that the ryotwari system was introduced in the South Canara District in the earlier years of this century 28. The question before this Court was whether the holder of such a ryotwari patta could be called the holder of an estate within the meaning of the Kerala Agrarian Relations Act and therefore, precluded by Article 39A of the Constitution to claim the benefit of the fundamental rights under Articles 19(1)(d) and 31 of the Constitution. 29. The legal nature of the rights of a jenmi was considered in greater detail in the case of Balmadies Plantations (supra). At para 6 of the said judgment, the Constitution Bench recorded:- 6. .........Originally the janmis in Malabar were absolute proprietors of the land and did not pay land revenue. After Malabar was annexed by the British in the beginning of the 19 th century, the janmis conceded the liability to pay land revenue........ 30. This Court took not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) ........ It would appear from the above that the effect of the resettlement of 1926 was to retain the janmam estates and not to abolish the same or to convert them into ryotwari estates. There was merely a change of nomenclature. Government janman lands were called the new holdings, while private janmam lands were called the old holdings. In respect of janmabhogam (janmi's share) relating to Government janman lands, the order further directed that the amount to be paid to the Government should include both the taram assessment and janmabhogam. It is difficult, in our opinion, to infer from the above that janmam rights in the lands in question were extinguished and converted into ryotwari estates. The use of the word Janmabhogam on the contrary indicates that the rights of janmis were kept intact. 35. Ashtamurthi case (supra) itself relies upon an earlier decision of the Madras High Court in Secretary of State v. Vira Rayan [(1886) ILR 9 Mad 175] 16 wherein the High Court found that the land in dispute appertains to the District of Malabar and recorded as follows:- ............and we agree with the Judge that there is no presumption in that district and in the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, especially in more modern times, rules have been framed for the sale of waste lands, there is nothing to show that any such change was notified in Malabar up to a period much later than that at which there is considerable evidence to show that the respondents Nos. 1 and 2 were in possession of and recognised as proprietors of the lands they claim by Government officials.... 36. This Court in Balmadies Plantations case (supra) after taking note of the above legal position with reference to the jenmom lands of Malabar rejected the contention that as a result of the resettlement of 1926, jenmom rights stood converted into ryotwari estate. 17 37. We have already taken note of the legal position with respect to the minerals obtaining subsoil in the lands held under landlord tenures (zamindari or inam estates), and also the law of England, we find it difficult to believe with Para 11. .... It would appear from the above that the effect of the resettlement of 1926 was to retain the janmam estates and not to abolish the same or to convert them into ryotwari estates. There was merely a change of nomenclature. Government janmam lands were called the new holdings, while private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.) 1. For mining for gold 5 2. For mining for metals other than gold 2 3. For mining for diamonds and other precious stones 15 4. For mining for coal, lime-stone or quarrying for building stone ... (Such rates as may be fixed by the Board from time to time The rates will be doubled if mining operations are carried on without giving notice to the Board's proceedings dated 10th July 1882 No.1751Collector. The special assessment will be entered in the patta granted for the land and collected under the provisions of Act II of 1834 Madras. No charge will be made for merely prospecting for minerals in patta lands if mines are not regularly worked. No remission will be granted in respect of any land rendered unfit for surface cultivation by the carrying on of mining operations. This rule does not of course afeet in any way the right which all holders of lands on patta possess of digging wells in their lands and of disposing of the gravel and stones which may be thrown up in the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason that even in the lands held on ryotwari patta the British did not assert proprietary rights. 40. Nothing is brought to our notice which indicates that the British intended and in fact did deprive the ryotwari land holders of the right to subsoil / m i nerals. Subsequent to 19 th March, 1888, no law to the contra is brought to our notice. Nor any law made by the Republic of India is brought to our notice. Though we notice laws to the contra w.r.t. the lands held under landlords tenures. 41. Article 294 19 of the Constitution provides for the succession by the Union of India or the corresponding State, as the case may be, of the property which vested in the British Crown immediately before the commencement of the Constitution. On the other hand, Article 297 20 makes 294 - As from the commencement of this Constitution - (a) all property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of the Dominion of India and all property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of each Governor's Province shall vest respectively in the U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by Parliament. 26 by the Government of India in exercise of the powers conferred in Section 3 of the Mines Minerals Regulation Development Act, 1957, different procedures are contemplated and different sets of rules are made dealing with the grant of mining leases in respect of the two categories of lands in which the minerals vest, either in the Government or in a person other than the Government. While Chapter 4 of the said rules deals with the lands where the minerals vest in the Government, Chapter 5 deals with the lands where the minerals vest in a person other than the Government. Correspondingly, the Minor Mineral Concession Rules made by the State of Kerala also recognises such a distinction in Chapters V and VI. 43. In those areas of the Old Madras Province to which the Estates Land Act applied, the minerals came to be vested in the State by virtue of the subsequent statutory / declarations (which are already taken note of). But with reference to those areas where the above-mentioned Act had no application, such as the Malabar area of the Old Madras Province, which is now a part of the State of Kerala, or 27 areas where the ryotwari system was in vogue, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mineral wealth in this country vested in the Crown or the State. 47. The next case relied upon by the High Court is T. Swaminathan (Dead) and Another v. State Of Madras and others, AIR 1971 Mad 483. A passage22 occurring in the said judgment was relied upon in support of the conclusion that a ryotwari pattadar has no right to the subsoil / m i nerals. It is unfortunate that the Madras High Court opined that it is a well established proposition that all minerals underground belong to the Crown and now to the State. Such a statement of law is recorded without any explanation whatsoever nor examination of any legal principle. From our discussion so far, we have already reached the conclusion that neither in England nor in this So, as a ryotwari pattadar, he has every right to the use of the surface of the soil, but his proprietary right, if any, in our view, does not extend to the minerals of the soil. It was a well established proposition that all minerals underground belonged to the Crown, and now to the State, except in so far as the State has parted with the same wholly or partly in favour of an individual or body. country, at least in the Old Madras Province, during the Bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the minerals . would attract additional tax, in our opinion, cannot in any way indicate the ownership of the State in the minerals. The power to tax is a necessary incident of sovereign authority (imperium) but not an incident of proprietary rights (dominium). Proprietary right is a compendium of rights consisting of various constituent, rights. 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. In the instant case, the State asserted its `right' to demand a share in the `produce of the minerals worked' though the expression employed is right - it is in fact the Sovereign authority which is asserted. From the language of the BSO No.10 it is clear that such right to demand the share could be exercised only when the pattadar or somebody claiming through the pattadar, extracts / works the minerals - the authority of the State to collect money on the happening of an event - such a demand is more in the nature of an excise duty / a tax. The assertion of authority to collect a duty or tax is in the realm of the sovereign authority, but not a proprietary right. 52. On the other hand, it appears from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment) Act, 1957 make express declarations under Section 4 and 7 respectively 26 providing Provided that nothing in this sub-section shall affect any prospecting or mining operations undertaken in any area in accordance with the terms and conditions of a prospecting licence or mining lease granted before the commencement of this Act which is in force at such commencement. Provided further that nothing in this sub-section shall apply to any prospecting operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, the Atomic Minerals Directorate for Exploration and Research of the Department of Atomic Energy of the Central Government, the Directorates of Mining and Geology of any State Government ( by whatever name called ), and the Mineral Exploration Corporation Limited, a Government Company within the meaning of Section 617 of the Companies Act, 1956. Section 4 of Coking Coal Mines (Nationalisation) Act, 1972 - 4(1) On the appointed day, the right, title and interest of the owners in relation to the coking coal mines specified in the First Schedule shall stand transferred to, and shall vest absolutely in, the Central Government, free from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry vesting in the Central Government of exclusive rights to work those minerals. The said Act does not in any way declare the proprietary right of the State. may reasonably be expected to be, isolated or extracted, or is engaged or is about to be engaged in treating or concentrating by any physical, chemical or metallurgical process any substance from which, in the opinion of the Central Government, uranium can be or may reasonably be expected to be, isolated or extracted, the Central Government may by notice in writing given to that person either -- (a) require him in conducting the mining operations or in treating or concentrating the substance aforesaid to comply with such terms and conditions and adopt such processes as the Central Government may in the notice, or from time to time thereafter, think fit to specify, or (b) totally prohibit him from conducting the mining operations or treating or concentrating the substance aforesaid. (2) Where any terms and conditions are imposed on any person conducting any mining operations or treating or concentrating any substance under cl. (a) of sub-section (1), the Central Government may, having regard to the nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) rights necessary for the purpose of access to or conveyance of the minerals aforesaid or the ventilation or drainage of the working; (c) rights to use and occupy the surface of any land for the purpose of erecting any necessary buildings and installing any necessary plant in connection with the working of the minerals aforesaid; (d) rights to use and occupy for the purpose of working the minerals aforesaid any land forming part of or used in connection with an existing mine or quarry, and to use or acquire any plant used in connection with any such mine or quarry; and (e) rights to obtain a supply of water for any of the purposes connected with the working of the minerals aforesaid, or to dispose of water or other liquid matter obtained in consequence of working such minerals. (2) Notice of any order proposed to be made under this section shall be served by the Central Government-- (a) on all persons who, but for the order, would be entitled to work the minerals affected; and (b) on every owner, lessee and occupier (except tenants for a month or for less than a month) of any land in respect of which rights are proposed to be acquire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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