The Supreme Court has upheld the Kerala High Court’s view that land used for quarrying is not ‘commercial site’ by definition, and therefore not exempted from the applicability of Kerala Land Reforms Act, 1963.

The Bench of Justices L. Nageswara Rao and Hemant Gupta in KH Nazar v Mathew k. Jacob held, “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.”

The appeal was based on the contention that quarrying operations involve digging land and breaking of rocks into metal pieces, which is for a commercial activity and the sale of stones is for the purpose of trade and business. Court refused the contention.

Court said, “The dominant legislative intent of the Act is the imposition of ceiling on land holdings and distribution of excess land among landless people.”

Speaking of interpretation flowing from the intent, Court noted, “Provisions of a beneficial legislation have to be construed with a purpose-oriented approach.  The Act should receive a liberal construction to promote its objects.  Also, literal construction of the provisions of a beneficial legislation has to be avoided. It is the Court’s duty to discern the intention of the legislature in making the law. Once such an intention is ascertained, the statute should receive a purposeful or functional interpretation.”

“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.” – court explained.

Section 81(3) however grants the Government power to exempt lands for commercial purposes in public interest. That overriding power to exempt lands has not been vested in the judiciary while interpreting the statute.

Court did not agree with the minority judgement of the High Court which sough support from Section 81(1)(k) where land previously used for commercial or industrial purposes were exempted.

The Court thus held that Section 81 must be interpreted in a manner so as to restrict “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.”

–India Legal Bureau