SUPREME COURT OF INDIA RULES ON OWNERSHIP RIGHTS OF LAND OWNERS IN UNDERLYING MINERALS, by Sreejit Mohanty, Advocate Introduction A recent

judgment of the Supreme Court of India in the case of Thressiamma Jacob v Geologist, Department of Mining and Geology, Kerala1 (Jacobs case) has generated much interest in the mining community in India. In Jacobs case, the Honble Supreme Court (Court) held that ownership in minerals underlying the lands owned under jenmom tenures2 in Malabar area of Kerala vests in the jenmis and not the State. Despite the fact that this case dealt specifically with the issue of ownership in minerals underlying lands held under the jenmom land tenure in Malabar area of Kerala, the general perception in many quarters is that the Court has declared that the owner of the surface land is the owner of the underlying minerals. This article discusses as to what was really decided in Jacobs case and its implications in other States across India. Facts The Petitioner received a gift of 2 acres of granite bearing land in Malabar area of Kerala from her husband under a registered gift deed. The land gifted to the Petitioner was obtained by her husband as a jenmom assignment. The Petitioner and the earlier jenmi had enjoyed the property without any interference from the Government. Due to ignorance, the Petitioner entered into a lease agreement with the Department of Mining and Geology, Government of Kerala (Department) to conduct quarrying operations in her
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Civil Appeal Nos 4540-4548 of 2000 with Civil Appeal Nos 4549 of 2000 decided on 8 July 2013

In Malabar area of Kerala in India the exclusive right to, and hereditary possession of, the soil is denoted by the term jenmam/jenmom, which means birthright and the holder thereof is known as jenmi/jenmy/janmi. Earlier, in Balmadies Plantations Ltd and Anr v The State of Tamil Nadu, AIR 1972 SC 2240, a Constitution Bench of the Supreme Court had held that originally the jenmis 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 19th century, the jenmis conceded the liability to pay land revenue.

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land. Later on she realized that it was not necessary to pay any royalty to the Government since the property belonged to her. The Petitioner made a fresh application for permit (the judgment does not disclose the nature of the permit sought for but it appears to the author that the permit relates to removal of granite from the land) to the Department but the same was refused. Instead, the Department served a notice on the Petitioner directing her to stop quarrying operations. The Petitioner requested the Department to consider her contention that she was not required to pay royalty for quarrying in the land held by her as a jenmi. The Department, however, directed the Petitioner to renew her quarry lease. The Petitioner approached the High Court of Kerala (High Court) and prayed that the directions issued by the Department be quashed. The High Court directed the Department to consider her representation and pass appropriate orders. The Department rejected her contention and passed orders to the effect that the Petitioner was liable to pay royalty even for minerals excavated from her own land. The Petitioner challenged the orders of the Department before the High Court praying inter alia for a declaration that she is not bound to pay royalty to the Government for the granite rocks removed from her own land. The essence of the Petitioners case was that the property being jenmom property, she is the absolute owner of the land and, therefore, she is not liable to pay royalty for the minerals removed from the land. A three judges Bench of the High Court dismissed the writ petition on the premise that the nature of land tenure had undergone a change and was no longer jenmom land. The High Court also referred to the land records, which carried a note that if the land owner wants to work out minerals, an additional tax has to be paid to the Government. The High Court held that minerals underlying such land belong to the Government and the owner is liable to pay royalty if he/she undertakes quarrying/mining on such land. The Petitioner assailed the decision of the High Court before the Supreme Court. The principal grounds for the appeal were as under:

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(i)

(ii)

that the holder of 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; 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.

The appeal was heard by a three judges Bench of the Court along with similar other appeals. The Bench hearing these civil appeals refrained from making any pronouncement on the issue relating to the authority of the State Government to demand royalty in view of the fact that the question as to the real nature of royalty on minerals is currently pending for an opinion before a nine judges Bench of the Court in Mineral Area Development Authority & Ors v Steel Authority of India Limited & Ors, (2011) 4 SCC 450. Analysis The Court examined the position in England to ascertain the rights available in common law to a land owner with proprietary interest in land in respect of the underlying minerals. It was observed that at common law, mines, quarries and minerals in their original position are part and parcel of the land. Consequently, the absolute owner of the land is entitled prima facie to everything beneath or within it down to the centre of the earth. Next, the Court proceeded to examine the position in India, more particularly with reference to the Malabar area. The Court took stock of the history of land tenures in the Malabar area. It was noted that jenmom rights were not affected by resettlement which took place in 1926 and such rights remained intact. Further, the Court observed that the State did not claim any proprietary right over the mineral wealth underlying jenmom lands in Malabar during the British rule nor after India gained independence. Whilst taking note of the distinct language employed in Articles 2943 and 2974 of the
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294. Succession to property, assets, rights, liabilities and obligations in certain cases. - 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 Governors Province shall vest respectively in the Union and the corresponding State, and

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Constitution of India, the Court concluded that mineral wealth underlying the land mass of India were not vested in the State in all cases. The contradistinction between Articles 294 and 297 also lead the Court to infer that the Constitution makers were conscious of the fact that under the law, as it existed, proprietary rights in minerals could vest in private parties who owned the land. The Court also referred to the distinct procedure set out in the Mineral Concession Rules, 1960 framed under Mines and Minerals (Development & Regulation) Act, 1957 for lands where minerals vest in Government and where minerals vest in a person other than the Government to arrive at a finding that in all cases proprietary rights in minerals do not belong to the State. The Court also noticed the absence of any law providing for transfer of proprietary rights in minerals from the jenmi to the State. The Court negated the plea of the Department that in view of enactment of the MMDR Act, the proprietary rights in minerals were transferred from the owners and stood vested in the State. The Court also rejected the contention of the Department that the recitals in the land records5 indicate the ownership of the State in the minerals underlying the land. The Court held that the power to tax is a necessary incident of sovereign authority but not an incident of proprietary rights in land and underlying minerals.

(b) all rights, liabilities and obligations of the Government of the Dominion of India and of the Government of each Governors Province, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations respectively of the Government of India and the Government of each corresponding State, subject to any adjustment made or to be made by reason of the creation before the commencement of this Constitution of the Dominion of Pakistan or of the Provinces of West Bengal, West Punjab and East Punjab
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297. Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union.(1) All lands, minerals and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone, of India shall vest in the Union and be held for the purposes of the Union. (2) All other resources of the exclusive economic zone of India shall also vest in the Union and be held for the purposes of the Union. (3) The limits of the territorial waters, the continental shelf, the exclusive economic zone, and other maritime zones, of India shall be such as may be specified, from time to time, by or under any law made by Parliament. The recitals in the land records provided that the land owner would be liable to pay an additional tax to the State if minerals were exploited.

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Conclusion Based on a discussion on the foregoing issues, the Court concluded that normally the ownership of minerals follows the ownership of the land, unless the owner of the land is deprived of his rights in the minerals by some valid process viz. by a law providing for transfer of such rights and vesting in the State. In the facts of Jacobs case, the Court opined that Petitioner was not deprived of her rights in the minerals by any law and therefore, she continues to be the proprietor of the minerals underlying her land. While parting, the Court made it clear that it has not made any declaration regarding the liability of the Petitioner to pay royalty to the State in view of the fact that the said issues stands referred to a larger Bench. Implications The ruling in Jacobs case will apply to lands in which proprietary rights still continue to subsist in the landowner viz. where such rights have not been taken away by any law like the Zamindari Abolition and Estate Abolition legislations. Such land tenures are few and restricted in India. Owners having proprietary interest in land will not be required to obtain a mining lease from the Government to carry out mining operations. The real implications of the ruling in Jacobs will depend upon the outcome of the decision of the nine judges Bench in Mineral Area Development Authority & Ors v Steel Authority of India Limited & Ors, wherein the nature of royalty on minerals is in question. In the event the nine judges Bench holds that right to royalty is an incident of ownership, the ruling in Jacobs case will enable owners of land with proprietary interest to remove minerals from their land without having to pay royalty to the State.