In a significant ruling that clarifies the ownership and taxation of mineral wealth in Kerala, the High Court has upheld the constitutional validity of a key state law while setting a crucial limitation on its retrospective application. The court has affirmed the Kerala Minerals (Vesting of Rights) Act, 2021 but simultaneously held that the state government cannot demand royalty payments from private landowners for mining activities conducted in the former Malabar province before this legislation came into force.
Court's Verdict on Validity and Royalty Claims
Justice Kauser Edappagath delivered the judgment while hearing three petitions filed by private landowners. These individuals had challenged the very foundation of the 2021 Act and sought to quash government orders demanding royalty and mineral value for extracting minor minerals from their own properties. The court, acknowledging Kerala's rich mineral deposits which contribute significantly to India's wealth, refused to strike down the Act.
However, in a major relief for the petitioners, Justice Edappagath clearly stated that the state cannot claim royalty for minerals extracted by private persons from their land in the Malabar area prior to the enactment of the Minerals Vesting Act in 2021. This temporal limitation forms the core of the court's decision, protecting landowners from retrospective financial claims.
Constitutional Arguments and State's Defence
The legal battle saw intense arguments from both sides. Advocates for the landowners, including M K S Menon and P A Augustine, contended that the 2021 Act was unconstitutional. Their primary argument was that it violated Article 300A (right to property) and Article 14 (right to equality) of the Indian Constitution because it vested mineral rights with the state without providing any compensation to the landholders.
They argued that the Act amounted to an illegal deprivation of property. The state's legal team, represented by advocates S Kannan and Aswin Sethumadhavan, defended the law vigorously. They invoked the public trust doctrine, asserting that the state, as a trustee of natural resources, has a duty to protect and manage them for public good and environmental conservation. They submitted that the Act was designed to bring uniformity in mineral rights across Kerala and ensure equitable distribution of community resources.
Historical Context and Legal Journey
The case has a long legal history rooted in the fundamental question of mineral ownership in Malabar. Previously, the Kerala High Court had ruled that minerals belonged to the state, making landowners liable for royalty. This decision was overturned by the Supreme Court in 2013, which held that in the absence of a specific law, mineral rights followed land ownership in Malabar, meaning landowners were the rightful owners.
The apex court, however, left the question of royalty payments unresolved. In response to this judgment, the Kerala government first promulgated an ordinance in 2019, which was later replaced by the Kerala Minerals (Vesting of Rights) Act, 2021. This Act explicitly declared that all mineral rights, irrespective of surface land ownership, vest with the state government.
In its latest ruling, the High Court has now settled several aspects. It declared the 2021 Act as constitutional and valid, finding no conflict with central laws like the Mines and Minerals Development and Regulation (MMDR) Act, 1957. The court also clarified that the Act does not violate the right to property or equality. Crucially, it drew a line at the Act's commencement date, shielding pre-2021 mining activities in private lands from royalty claims, while affirming the state's authority for the period thereafter.
