STATE OF KERALA & ORS. versus M/S. KERALA RARE EARTH & MINERALS LIMITED & ORS.

Citation: [2016] 5 S.C.R. 515 · Decided: 08-04-2016 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Dismissed
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Judgment (excerpt)

[2016] 5 S.C.R. 515 
STATE OF KERALA & ORS. 
v. 
MIS. KERALA RARE EARTH & MINERALS 
LIMITED & ORS. 
(Civil Appeal No. 3608 of2016) 
APRIL 08, 2016 
[T.S. THAKUR, CJI., V. GOPALA GOWDA AND 
R. BANUMATHI JJ.) 
A 
B 
Mines and Minerals - Grant of mining lease by State 
Government - For non-scheduled minerals - However, the State 
C 
stayed further acJion on the ground that detailed study on 
environmental impact of the proposed leases was required to be 
taken - Further the lessee-company was informed that the State did 
not intend to grant leases for mineral sand to private parties -
Revision applications uls. 3 of Mines and Minerals Act filed by the 
Company - Central Government allowing the revision directed the 
D 
State Government to reconsider the case :__ State Government, on 
reconsideration, rejected the applications of the Company on the 
ground that as per the Industrial Policy, 2007 of the State, mineral 
deposits in question are to be expointed by a State agency only -
Writ petition against decision of the State Government - Allowed by 
E 
Single Judge of High Court - Order of Single Judge confirmed by 
Division Bench of High Court - On appeal, held: Per Majority: 
State Government is the owner of mineral deposits in the land which 
vest with the Government - The State Government has the power to 
reserve the rights to exploit such deposits in its own favour or in 
favour of State owned Companies or Corporations - However, the 
F 
State Government can reserve such right only in terms of s. 17A of 
the Mines and Minerals Act - Absence of procedure resorted to by 
the State Government, as required by s. 17 A, renders the State · 
Government's claim of reservation untenable, until a valid 
reservation is made in accordance with law - Per Minority: State 
G 
Government had legislative competence to take the policy decision 
reserving the area for exploitation of minerals by a State agency -
The_ saicf policy is not dehors the provisions of Mines and .Minerals 
· Act and of Mineral Concession Rules - Mines and Minerals 
(Development and Regulation) Act, 1987 - s. J7A - Mineral 
515 
H 
516 
SUPREME COURT REPORTS 
[2016] S S.C.R. 
A 
Concession Rules,1960. 
B 
c 
D 
E 
F 
G 
H 
Dismissing the appeals, the Court 
Majority opinion(Per T.S. Thakur, CJI, for himself and for V. 
Gopala Gowda,J.) 
HELD: 1. Once the Parliament decl~res it to be expedient 
in public interest to bring the regulation and development of 
mines and minerals under the control of the Union in public 
interest, the subject to the extent laid down by the Parliament 
comes within the exclusive domain of the Parliament and that 
any legislation by the State after such declaration that has the 
effect of trenching upon the field, must necessarily be 
unconstitutional. [Para 8) (530-B) 
2. While the State Government is the owner of the mineral 
deposits in the lands which vest in the Government, the 
Parliament has by reason of the declaration made in Section 2 of 
Mines and Minerals (Development and Regulation Act, 1957) 
acquired complete dominion over the legislative field covered 
by the said legislation. The Act does not denude the State of the 
ownership of the minerals situate within its territories but there 
is no manner of doubt that it regulates, to the extent set out in 
the provisions of the Act, the development of mines and minerals 
in the country. [Para 17](536-H; 537-A-B) 
3.1 The State Government can reserve any area not already 
held under any prospecting licence or mining lease for 
undertaking prospecting or mining operations through a 
Government company or corporation owned or controlled by it, 
but, in terms of sub-Section(2) of Section 17A. [Para 14)[535-C-
D] 
3.2 Three distinct requirements emerge from Section 17 A(2) 
for a valid reservation viz.: the reservation can only be with the 
approval of the Central Government and must confine to areas 
not already held under any prospecting licence or mining lease; 
the reservation must be made by a notification in the official 
gazette; and the notification m~st specify the boundaries of such 
areas and the mineral or minerals in respect of which such areas 
will be reserved. [Para 14](535-D-F] 
STATE OF KERALA v. MIS. KERALA RARE EARTH & 
517 
MINERALS LIMITED 
3.3 If the State Government proposes to reserve any area 
for exploitation by the State owned corporation or company, it 
must resort to making of such reservation in terms of Section 
17A of the Act with the approval o
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