New Delhi: The Kerala government got a huge relief from the Supreme Court in the long-running mining royalty dispute in the Malabar region. The court has stayed the Kerala High Court judgment directing the state to refund royalty collected from landowners. A Bench headed by Chief Justice of India Surya Kant passed the stay order. The state government could face a financial liability of around ₹1,200 crore if the royalty already collected has to be refunded.

The dispute relates to the Kerala Minerals (Vesting of Rights) Act, 2021, under which the state government sought to collect royalty from quarries in the Malabar region. The Kerala High Court had held that the legislation was unconstitutional, noting that it did not provide for compensation to landowners when mineral rights beneath private land were vested in the state. The High Court had also directed the government to refund the royalty collected from 2021 onwards. The state challenged that order before the Supreme Court.

The Kerala government told the Supreme Court that laws existed for collecting royalty from quarries in the erstwhile Travancore and Cochin regions, where sub-soil mineral rights had already vested with the state. However, there was no such law applicable to the Malabar region. It was in this context that the 2021 legislation was enacted, senior advocate V. Giri, Additional Advocate General P.A. Mohammed Shah and standing counsel Zulfiqar Ali P.S., appearing for Kerala, argued.

CJI tells Kerala to ‘rewrite the law’

The Supreme Court raised questions over the constitutional validity of the Kerala Minerals (Vesting of Rights) Act, 2021. Chief Justice Surya Kant orally suggested that the state could amend the legislation to include a provision for compensating landowners.

Justice Bagchi, who was part of the Bench, observed that bringing the amended legislation under the protection of the Ninth Schedule of the Constitution could provide a permanent solution.