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Judgment
P. Shanmugam, J.—The second respondent before the Principal Sub-court, Tirunelveli (Reference Court under L.A.O.P) is the appellant
herein. A total extent of 44.401/2 acres of lands were acquired for mining of limestone for Tamil Nadu Cement Corporation Limited. Notification
u/s 4(1) of the Land Acquisition Act, 1894 was published on 30.4.1986 and the draft declaration u/s 6 was published on 19.5.1987. An Award
was made dated 21.4.1988. The Land Acquisition Officer determined the compensation at Rs.2,500 per acre. Aggrieved by the said award, the
claimants sought for reference. The reference Court enhanced the compensation to Rs.1,80,000. The reference Court has granted Rs.11,000 as
claimed by the claimants for the surface of the soil rights and Rs.1,69,000 for the subsoil rights, and the same had been conceded by the Reference
Court. Aggrieved by this determination, the above appeals are filed.
According to the learned Advocate General appearing on behalf of the appellant, there is no provision under the Land Acquisition Act for
evaluing the Mineral Wealth of the land. The mineral, if any, found under the sub-soil, is not the property of the claimants and it belongs to the State
and therefore, the landowners are not entitled to claim compensation in respect of the sub-soil rights. He submitted that as per the Mines and
Minerals (Regulation and Development) Act, 1957, the mineral deposits will vest with the government. He further submitted that the claimants
themselves have claimed only Rs.1,000 per acre, as against the award of the Land Acquisition Officer at Rs.2,000 per acre. Whereas, the Court
has granted an astronomical figure of Rs.1,80,000 on assumed calculation of Mineral deposits.
Mr. T.R. Mani, learned senior counsel appearing on behalf the respondent/claimants submitted that the acquisition is for the purpose of
quarrying limestone deposits and the lands acquired admittedly have very fine quality of limestone deposits underneath and therefore, the value of
the land should be calculated on the basis of the quantum of limestone deposits available in the land. He further submitted that the appellant
Corporation has decided to seek for acquisition only after a detailed scientific survey regarding the quality and quantum of limestone deposits in the
land in question. The special adaptability of the land for quarrying purpose was taken into account for fixing the compensation. Though they have
claimed rupees five lakhs per acre in the reference, the Court has awarded only Rs.1,80,000 and therefore, he submits that no interference is
called for in the amount awarded.
Both sides have cited a number of decisions. We have considered the arguments and references carefully.
By the Mines and Minerals (Regulation and Development) Act, 1957, the Union Government has declared that it is expedient in the public
interest that the Union should take under its control, the regulation of mines and the development of minerals. A question was raised in a batch of
writ petitions before this Court as to whether the land owners own the minerals beneath the surface as full proprietor of the land. After having been
unsuccessful before the learned single Judge, a batch of writ appeals along with writ petitions came up for consideration in Writ Petition No.8542
etc. of 1990 and Writ Appeal No.1307 etc. of 1989. Justice Venkatsami, J. as he then was, speaking for the Bench, considered the question
whether the minerals beneath the surface are owned by the petitioners as proprietors of the land. After referring to the elaborate arguments and all
the decisions on this point, in paragraph 46 of the judgment, their Lordships have concluded as follows:
From the above discussion and looked at from any angle, we entertain no doubt that it is the state which is the owner of the Minerals underneath
the surface of the soil."" (Italics Supplied)
In T. Swaminathan (Dead) and Another Vs. State of Madras and Others, , a Division Bench of this Court held that though in theory, a ryotwari
Pattadar is a kind of tenant with a right to hold his tenure, so long as he pays his assessment, in practice he is the full owner, and is entitled to sell,
mortgage, lease or otherwise deal with his holdings. He has every right to the use of the surface of the soil, but his proprietary right does not extent
to the minerals of the soil. The Division Bench further held that it is well established proposition that all minerals underground belong to the Crown
and how to State except insofar as the State has parted with the right wholly or partly in favour of an individual or a body. While considering the
claim that the ryotwari as proprietor is entitled to work minerals on his land, the Division Bench agreed with the view of Srinivasan, J. that neither
the Mining Manual nor the Board Standing Orders justify the inference that the minerals below the surface of the soil in ryotwari holdings are
vested with the Pattadar as a Proprietor. Their Lordships further observed as follows:
As a matter of fact, the extract we have made from the Board''s Standing Orders itself indicates that although a holder on a ryotwari tenant is
entitled to work minerals on his land, it is subject to the liability to pay therefore a separate assessment in addition to the usual assessment for
surface cultivation. The separate additional assessment is the seigniorage, or royalty which the Government is entitled to collect for the working of
the minerals. That shows that the state is entitled to the whole of the mineral rights under the surface, and not merely a part in the holding under
ryotwari tenure. That is view of Srinivasan, J. and we see no reason to differ. It is true that the Mineral Concessions Rules, 1960 make threefold
classification in Chapters IV, V and VI, namely, the lands in which minerals vest in the Government, lands in which minerals vest in a person other
than the government; and lands in which the minerals vest partly in Government and partly in private persons. In respect of the last category, the
proviso to Rule 53 makes it clear that the dead rent and royalty payable in respect of minerals which partly vest in the government and partly in
Private persons shall be shred by the government and by the person in proposition to the Sharers they have in the minerals. But the point is whether
Minerals have vested in the ryotwari Pattadar, The references mentioned above do not enable us to hold that the minerals are so vested in the
pattadar."" (Italics Supplied)
Their lordships went on to consider the case of Inam or a permanent estate and held, following the decision of the privy council in Sashi Bhushan
Misra v. Jyoti Prasad Singh Deo, AIR 1916 PC 191, that a grant by a Zamindar of a tenure at a fixed rent even if the tenure was permanent,
heritable and transferable, it will not carry a right to the minerals under the land granted unless there was express evidence that the grant included
them. A Constitution Bench of the Supreme Court, in Karimbil Kunhikoman Vs. State of Kerala, , held that the ryotwari Pattadar was never
considered proprietor of the land under his patta though he had many of the advantages of the proprietor. Another Constitution Bench, in State of
Andhra Pradesh Vs. Duvvuru Balarami Reddy, , held that the mere fact that the person is holder of an Inam grant would not by itself establish that
the Inam grant included the grant of sub-soil rights in addition to the surface rights. In that case, it was held that the mica mining lease granted by
Shrotriemdar who had no right in the mineral would be of no legal effect and the lessee cannot put forward the lease for obtaining mining lease from
the government under the Mineral Concession Rules. His Lordship K. Venkatsami, J. as he then was, in the Division Bench Judgment referred to
above, further observed as follows:
Once the conclusion namely that the State is the owner of the minerals underneath the surface is arrived at, all the subsidiary arguments based on
the assumption that sofar as ryotwari lands are concerned if the pattadars are owners of the minerals will not hold water in view of the clear
pronouncement of the Supreme Court in State of Tamil Nadu Vs. Hind Stone and Others, . "" In Hindstone''s case, their lordships held that rivers,
forest, minerals and such other resources constitute a nation''s natural wealth.
Therefore, in the absence of any specific plea and proof that the claimants are the owners of the sub-soil and minerals also, they are not entitled for
compensation for the minerals.
Under the Land Acquisition Act, land has been defined as including the benefit to arise out of the land and things attached to earth. In section 23
dealing with matters to be considered in determining the compensation, the Court is directed to take into consideration the market value of the land
and the damage sustained by the person interested by reason of the takings of any of the standing crops or trees which may be on the land. For
damage, if any, resulting from the diminishing of the profits of the land, there is no provision for determining the compensation on the minerals found
under the subsoil of the land.
A Constitution Bench of the Supreme Court, in Raja Anand Brahma Shah Vs. State of Uttar Pradesh and Others, , was considering the
question whether the appellant had subsoil and mineral rights in the area in dispute and whether the appellant was entitled to compensation for the
minerals including the limestone in the area. Their Lordships, on the basis of two sanads granted by Mr. Warren Hastings, held that there is no
reservation of mineral rights in favour of the Government and that in the absence of any reservation in the grant, minerals necessarily pass with the
rights to the surface. This view was expressed on the interpretation and the legal effects of the sanads concerned in that case. Their Lordships
ultimately concluded that in the light of the interpretation of the two sanads dated October 9, 1781 and December 10, 1803 supported by the
subsequent events, proceedings and conduct of the parties over a long period of time, they are of the opinion that the appellant is the owner of all
the minerals of subsoil rights of Pargana of Agori and therefore, overruled the view of the High Court. Hence, this judgment will not support the
case of the claimants herein.
In AIR 1939 98 (Privy Council) , their lordships of the Privy Council held that the compensation under the Land Acquisition Act must be
determined in reference to the price which a willing vendor might reasonably except to obtain from a willing purchaser. A land having potentialities
had to be valued by reference to the uses to which it is reasonably capable of being put to in future. Their lordships further observed as follows:
In the present case, the land must be valued not at the sum it would be worth after it had been acquired by the harbour authority and used for anti-
malarial purposes, but at the sum that the authority (in a friendly negotiations, to use Lord Johnstone''s words) would be willing to pay on 13th
February, 1928 in order to acquire at for these purposes. In Daya Kirisal and others v. Assistant Collector Surat, ILR (1913) 38 Bom. 37, a
Division Bench held that where a piece of land is compulsorily acquired by the Government for quarrying purposes, its special adaptability for
quarrying is an element for consideration in fixing the amount of compensation.
In Raghunatha Rao v. Secretary of State, 1939 MLJ 625, a Division Bench of the Madras High Court held that the adaptability for quarrying is an
element for consideration in fixing the amount of compensation, even though the land may be acquired as cultivable land and not as gravel quarry.
From both these decisions, it could be stated that the claimants are not entitled to treat and evaluate the minerals, but the land can only be valued
for its adaptability for being put to use for quarrying. In Collector of Chengalpet v. Khadir Mohideen Sahib, AIR 1926 Mad.731, a Division Bench
of our High Court has taken the view that while awarding compensation, any and every element of value which the lands possess to the owner
must be taken into consideration insofar as it increased the value to him. In other words, not the land alone, but the land with all its potentialities
must be considered for assessing the value, but the claimant is not entitled to the hypothetical profit which, in certain events, he is likely to make.
Though in that case it was urged that the value is to be assessed on the basis that the land is producing clay useful for making bricks, the principle
to apply is to assess the market value of the land as put to its most lucrative use. It was urged in that case that the claimant is entitled to
compensation on the basis of the profit which he is likely to make by converting clay on his land into bricks and selling the bricks in the open
market. The said principle was accepted by the Court, but the question of ownership of the minerals and its entitlement was not an issue before the
Division Bench. In Addition Special Land Acquisition Officer v. P. Anatha Bhat, AIR 1972 Mys 815, a Division Bench of the Mysore High Court
held that the principle of capitalisation of the rental declared by the landlord of the land with a quarry should be adopted while determining the
value of the land and not on the basis of the total quantity of granite actually available on it. The Division Bench held that it is incorrect to compute
the value of the land and the quarry separately and awarding compensation in regard to both. The value of that portion of the land on which the
quarry is situated consists entirely of the value of such quarry to the owner. If a land is a granite quarry to the owner. If a land is a granite quarry on
it, it cannot be an agricultural land at the same time. Estimating the value of the quarry in question on the basis of quantum of metal available is
highly impracticable and unreasonable besides producing a grossly misleading and enamolus result. In The Additional Special Land Acquisition
Officer, Ports, Mangalore Vs. K.T. Alva and Others, , it was held that the area covered by granite should be valued as one unit. In The Special
Tahsildar, Land Acquisition, Yerraguntla Vs. Kamalagangi Reddy and others, , it was held that in determining the market value of the land, the
Court is entitled to go into the Special adaptability as one of the components for determination of the market value of the land, but it cannot award
market value separately for the subsoil rights. A learned single Judge of this Court in M/s Burn & Company Ltd. v. Special Tahsildar, (L.A), 1979
TLNJ 276 held that what is acquired in that case is only the surface rights and nothing more. The object of enactment of Section 3 of the Land
Acquisition Mines Act, 1885 is to require the Government to determine whether the land should be acquired simply under the Land Acquisition
Act or whether the minerals lying under those lands are also to be acquired. In that case, what was acquired was the surface right alone and not
mines and, minerals lying under the lands.
The claimants have not let in documentary evidence to show the value of a comparable land with an adaptability to be used for mining purpose
and claiming on that basis. On the contrary, the claim was that they are the owners of the minerals and therefore, the quantum of the mineral
deposits should be calculated and that value to be paid to them. Inasmuch as our finding is that the claimants are not the owners of the minerals and
the minerals vest with the State absolutely, the value awarded by the Reference Court for the mineral deposits cannot be sustained. In our view,
there is no scope for holding that the claimants are the owners of the minerals underneath the land and that therefore, they are entitled for
compensation.
All the decisions on the general principle of ownership and transfer of property cannot be straight-away be applied to the present case without
considering the Mines and Minerals (Regulations and Development) Act readwith the Minerals Concession Rules and the Land Acquisition Act. It
is established that the claimants are not the owners of the minerals. No evidence has been let in to prove that they have acquired absolute right over
the minerals. Therefore, the Land Acquisition Act deals only with the payment of compensation for the lands that are acquired and the lands do not
include the subsoil or the minerals underneath the land. The judgment in Kaveri Chetty M.P.P, v. State of Tamil Nadu, 1993 WLR 63 is actually
against the claim of the claimants. The Division Bench, in that Judgment, has held that the right of ryotwari patta holders is only to the surface of the
land, while underground minerals belong to the Government. Their lordships held as follows:
We proceed on the basis that ryotwari patta holder is entitled only to surface of the patta of the land and the under ground minerals belong to the
Government. We also proceed on the basis that granite is a mineral within the meaning of Section 3(e) of the Act. When the mining lease is granted
and royalty and seigniorage fee has been collected from the mining lease holder, the mineral extracted from the land belongs would mining lease
holder. By paying royalty and seigniorage fee to the Government, the mining lease holder becomes the, owner of the mineral and is free to sell them
in the domestic market or export the same only as per the law made by the competent authority.
This judgment does not, in any way, support the case of the claimants, but has been relied on by the reference court to hold that the claimants are
entitled for the value of the minerals. In our view, the learned Judge cannot rely on the said judgment for the purpose of fixing the compensation for
the minerals.
In The State of Mysore Vs. Swamy Satyanand Saraswati, Religious Preacher, Raichur, , the Supreme Court was concerned with the issue as
to whether the Pattadar was entitled to subsoil rights by virtue of the grant of patta in favour of their predecessor-in-interest and as a consequence
thereof, become entitled to compensation for acquisition of a large block of land. In that context, the Supreme Court held as follows:
(i) There is no scope for any presumption that the Nizam had parted with mineral right to the Jagirdar or that the jagirdar had done so in his turn.
The original sands have not been produced and the pattadars issued do not include mineral rights.
(ii) Subsoil rights are not to be treated as having been conveyed by implication in grants of surface rights to the tenure holders, pattadars (lessees)
etc.
(iii) Minerals will not be held to have formed part of the grant in the absence of express evidence to that effect.
All the claimants, in their claim statements, have uniformly and clearly claimed that the patta land is far way, whereas the adjacent land in S.
No. 522/1 measuring and extent of 1.75 acres has been sold for Rs.19,690 through Document No.49/84. Thus, the claimants themselves have
assessed the market value of their lands at Rs.11,000. Of course, they claim that it is only the surface value. On the other hand, they also admit that
adjoining land has been sold at the same rate, which would reflect the market value of their land in that area. The Supreme Court, in Ujjain Vikas
Pradhikaran Vs. Tarachand and another etc., , has held that notwithstanding the amendment to section 25 of the Act, it would always be open to a
party to claim a particular amount and having claimed at that rate, the Court cannot grant compensated higher than the amount claimed by the
party. It would be obvious that when a party claims compensation at a particular rate, he assesses the market value of the land at that particular
rate and seeks compensation on that basis. Since we have found that the claimants are not the owners of the minerals and the subsoil rights, they
are entitled for compensation only in reference to the land.
For all these reasons, the judgment and decree of the Court below is liable to be set aside and the appeal allowed. Accordingly, the appeal is
allowed insofar as the determination of compensation insofar as the market value for the minerals below the sub-soil is concerned, Considering the
facts and circumstances, the value of the land determined at the rate of Rs.11,000 per acre is confirmed. The claimants are entitled for solatium,
additional amount and interest as provided for under the Act for the compensation determined. No costs. Consequently, the connected CM.Ps.
are closed.