In a landmark ruling, the Supreme Court upheld the executive’s authority over the computation of mineral royalties, asserting that such policy decisions fall squarely within the government’s domain and lie outside the judiciary’s purview—unless the decision-making process itself is illegal. This judgment dismissed a challenge to the government’s recalculated royalty method on minerals, maintaining that courts lack the specialized expertise to evaluate such economic policies.
The ruling was delivered by a bench led by Chief Justice DY Chandrachud, with Justices JB Pardiwala and Manoj Misra. Emphasizing judicial restraint, the Court highlighted that it is not the role of the judiciary to judge the wisdom of policy decisions but to ensure the legality of the process. “The judiciary’s role is confined to assessing if the policymaking authority acted within its powers, adhered to the law, and did not breach the principles of natural justice,” the Court observed.
The petitioner, a mineral extraction firm, argued that the updated royalty computation method unfairly increased costs by compounding royalty charges monthly, leading to a “cascading financial burden” that allegedly violated constitutional principles. The Court, however, reiterated that judicial intervention in economic policy is unwarranted unless a policy is patently arbitrary or unconstitutional. It stated that economic policies involve nuanced considerations best left to legislative and executive branches.
Moreover, the Court explained that policy-related judicial review is focused on the procedural legality, not the substantive merits. Even if a policy appears flawed or controversial, the Court underlined that it should defer to the expertise and discretion of policymakers. “Judges must resist the urge to substitute their judgment in matters of policy and economics, domains where expertise lies with the executive,” it concluded.
In its ruling, the Court also acknowledged an identified anomaly in the royalty compounding formula and granted the government two months to reassess its royalty computation framework. The matter will be revisited by the Supreme Court at that time to ensure compliance with this directive.
