Kerala High Court Strikes Down Kerala Minerals Vesting Law, Says Deprivation Of Private Property Without Compensation Violates Article 300A

A Division Bench of Dr. Justice A.K. Jayasankaran Nambiar and Justice Preeta A.K., delivered the judgment in a batch of writ appeals challenging the validity of the 2021 Act and the demand for royalty from landowners— for granite extracted from the land prior to 2021 Act. The single judge had upheld the constitutionality of the law. 

The Division bench held that the legislation failed because it merely vested mineral rights in the State without prescribing any procedure for acquisition or providing compensation.

“It must be noted that the impugned legislation effectively seeks to deprive a person of his property (in this case, all his rights in the minerals in the soil and sub-soil of his land) without specifying any procedure for effecting such deprivation of property, and without providing for any compensation therefor. In the absence of any protection offered through Article 31-A or 31-C of the Constitution of India, the validity of the impugned legislation must depend on the extent to which it can withstand a challenge under Articles 14, 19, 21 and 300-A of the Constitution of India...

In the case of the impugned legislation, the only substantive provision that it contains envisages the vesting of all rights in the minerals in the soil and sub-soil of all lands of whatsoever ownership or tenure in the Malabar region, in the State of Kerala. There are no provisions, either substantive or procedural, that deal with the compensation payable to the owners of the lands for deprivation/acquisition of their rights over the minerals in the soil and sub-soil of their lands. As the impugned legislation does not enjoy the protection under Articles 31-A or 31-C of the Constitution, does not contain any provision that safeguards any of the seven sub-rights of a citizen under Article 300-A, and does not provide for any compensation at all or, in other words, it is one that provides for 'no compensation' as opposed to 'nil compensation', it has to be seen as one that does not satisfy the requirements of Articles 14, 19 and 21 and therefore as invalid for the purposes of Article 300-A of the Constitution. To save the legislation from a declaration of invalidity we would have to read in provisions into the legislation, which we cannot do on account of the principle of separation of powers envisaged under the Constitution. We are therefore constrained to hold that the impugned legislation fails to qualify as valid law that provides the 'authority of law' to legitimize a deprivation of property under Article 300-A of the Constitution". 

The Division bench examined whether the 2021 Act, which vested all rights in minerals beneath privately owned land in the Malabar region in the State with retrospective effect from December 30, 2019, was constitutionally valid.

The Bench observed that judicial review of legislation requires courts to examine both legislative competence and constitutional validity. While a statute may be traced to an appropriate legislative entry, it must also withstand scrutiny under fundamental constitutional principles.

The Court noted that it provisions of the Act provides for vesting of 'all rights in the minerals in the soil and sub-soil of all lands of whatsoever ownership or tenure' in the State of Kerala. It said that although Section 5 provided for a power to make Rules, no set of Rules were shown to be promulgated in exercise of the Rule-making power of the State Government.

The Court further took note that the vesting of minerals envisaged under the Act was similar to that of Travancore Proclamation dated 14.06.1881 and the Cochin Proclamation of 1905, both of which were pre constitution legislations.

The Court thus examined each of the sources and noted that the impugned legislation was neither reserved for, nor obtained the assent of the President and hence the mandatory pre-condition for obtaining the protection under the Article 31-A or Article 31-C of the Constitution was not satisfied.

“Therefore, the impugned legislation, even if enacted to further the objectives under Article 39(b), must trace its origin to either Entry 18 or Entry 23 of List II or Entry 42 of List III under the Seventh Schedule to the Constitution of India to be constitutionally valid,” it said. 

The court found that the 2021 Act purported to vest rights over all minerals, including major minerals. Since Parliament has occupied the field relating to major minerals under the Mines and Minerals (Development & Regulation) Act, 1957 the State Legislature lacked competence to legislate in that area, it said. 

The Court further noted that Entry 42 of List III deals with 'Acquisition and Requisitioning of property' which would be a more specific entry to which the 2021 Act relates. It said that if there is already a central legislation occupying the field, the State legislature will be denuded of its power to legislate on the subject, unless the State legislature is reserved for the assent of the President and receives his assent.

The court also reiterated that Article 300A embodies substantive and procedural safeguards against arbitrary deprivation of property.

“With the deletion of Articles 19(f) and 31 through the 44th amendment to the Constitution, the express constitutional guarantee of compensation for compulsory acquisition of property was taken away. The right to compensation thereafter depended on whether the acquisition statute in question provided for it. However, courts have since declared that a statute that does not provide for just compensation can be challenged on the ground of violation of Article 14 [as being arbitrary or discriminatory], Article 19 [as imposing an unreasonable restriction on the freedom to carry on a vocation/profession] or Article 21 [as depriving a person of his right to livelihood].” Court observed

The Court thus declared that the Act to be in violation of Article 14, 19, 21 and 300-A of the Constitution and directed refund of royalty collected under the Act. 

Case Title: K.P. Chandramohan and Anr. v State of Kerala and Ors. and connected cases

Case No: WA 665/ 2017

Citation: 2026 LiveLaw (Ker) 373

Counsel for Appellants: MKS Menon, Shashank Devan, Usha Nandini, P.A Augustine, Sarath M.S, Adarsh Kumar

Counsel for Respondents: P.A. Mohammed Shah (Addl. AG), Ahmed Fazil (GP), P.M. Saneer (Spl. GP)