The Supreme Court of India on 14 July 2013 ruled that the ownership of minerals should be vested with the owner of the land and not with the government. A three-judge bench headed by Justice R M Lodha noted that there is no law in the country which declares that State is the owner of sub-soil or mineral wealth. Referring to various acts regulating extraction of underground natural resources, the bench said that the laws do not anywhere declare the proprietary right of the State. It ruled that the assertion of government to collect duty or tax is in the realm of the sovereign authority, but not a proprietary right.
The court passed the order on a petition filed by a few land owners of Kerala challenging the verdict of the high court which had passed the order in favour of the state government. The court rejected the argument that individual owners cannot claim any proprietary right on the sub-soil resources because Section 425 of the Mines and Minerals (Development and Regulation) Act, 1957, does not allow carrying out of any mining activity in India except in accordance with a permit, licence or mining lease.
The right of government to collect duty or tax comes under the sovereign authority; however it is not a proprietary right.
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