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K.H. Nazar Vs. Mathew K. Jacob and Ors. - (Supreme Court) (30 Sep 2019)

Land used for quarrying is not covered by term ‘commercial site’ and therefore not exempted from applicability of Kerala Land Reforms Act



The width and amplitude of the expression 'commercial site' in Section 2(5) and Section 81(1)(q) of the Kerala Land Reforms Act, 1963, falls for consideration in present Appeals. Commercial sites are exempted from the purview of the Act. The question whether a rocky land which is used for quarrying purposes can be treated as a 'commercial site' and thereby excluded from the applicability of the Act.

The Appellant requested environmental clearance for his quarry which was recommended in his favour by the District Expert Appraisal Committee (DEAC) on 25.04.2017. Respondents No. 1 and 2 filed a Writ Petition aggrieved by the said recommendation to permit quarry on land which was a plantation site. It is relevant to note that the Appellant's land was exempted from the realm of the Act as it was a plantation.

The Writ Petition filed by Respondent No. 1 and 2 was heard by a Full Bench of the Kerala High Court comprising three Judges. The majority opinion was in favour of Respondent No. 1 and 2. It was held by the majority that the land which is used for quarrying is not covered by the expression 'commercial site'. Therefore, there can be no exemption of such land from the applicability of the Act. The Appellant is aggrieved by the said judgment of the Full Bench of the High Court.

In the present case, the Appellant is claiming exemption on the ground that, a quarry would fall within the sweep of 'commercial site' as stated in Section 81(1)(q). Commercial site is defined in Section 2(5) as any land (not being a kudiyiruppu or a kudikidappu or karaima) which is used principally for the purposes of any trade, commerce, industry, manufacture or business.

Section 81 exempts among others, lands comprised of mills, factories or workshops, lands occupied by educational institutions, and lands owned by Universities, religious and charitable institutions. House sites, sites of temples, churches and mosques, sites of buildings including warehouses and commercial sites are also exempted. There is a definite distinction between the expressions 'lands' and 'sites' in the context in which they have been used. Commercial sites read along with the other clauses dealing with sites clearly indicate that, land occupied by structures is described as 'site'.

The other clauses in Section 81 dealing with sites are house sites, temples, churches and mosques and buildings. As such, the expression 'commercial site' cannot take into its fold vacant lands, including lands used for the purpose of quarrying. It has a restrictive meaning in comparison to the other categories of 'land' in Section 81. Therefore, quarry cannot fit into the terms 'commercial site'. A commercial site is a land on which there is a structure being utilized for an industrial or commercial purpose. Extension of the words 'commercial site' to quarries would result in defeating the purpose of the Act.

Exemption of quarries by the Government under Section 81(3) would not arise, if quarries are covered by Section 81(1)(q) of the Act. If quarries are commercial sites, the need for their exemption in public interest does not arise. Section 81(3) of the Act empowers the Government to exempt lands for commercial purposes in public interest. The overriding power conferred on the Government to exempt lands from the applicability of the Act cannot be utilized for the purpose of interpretation of Section 81(1)(q) which exempts commercial sites from the purview of the Act. Section 81(1)(k) exempts unused lands of industrial or commercial undertakings at the time of commencement of the Act. The provision pre-supposes that, an industrial or commercial undertaking was existing on the date of the commencement of the Act and there was some land set apart for the use of the undertaking in future. The said land is exempted only if the land is used for the industrial or commercial purposes of the undertaking within the time to be fixed by the authority. If the land is not used for the purpose for which it was set apart, the exemption ceases to operate. It is clear from the above that Section 81(1)(k) deals with a completely different type of land belonging to an industrial or commercial undertaking set apart for use of the said undertaking.

Breaking of rock into small pieces of stone is not a manufacturing activity. In Rajasthan SEB v. Associated Stone Industries, it was held that, cutting and polishing stones into slabs is not a process of manufacture for the obvious and simple reason that no new and distinct commercial product came into existence as the end product still remained stone and thus its original identity continued.

The interpretation of Section 81 which exempts certain lands and sites should be interpreted in a manner, which promotes the object of the Act and restricts concentration of large swathes of land in favour of a few individuals. Wider construction of the words 'commercial site' would defeat the laudable object of the Act. There is no error in the majority opinion of the Full Bench in the impugned judgment which requires to be upheld. The Appeals are dismissed, accordingly.

Relevant : Rajasthan SEB v. Associated Stone Industries MANU/SC/0399/2000


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