Legal Notes by Arvind Datar: Do these territorial waters belong to India?

Article 297 of the Constitution, as substituted in 1976, states that all lands, minerals, and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone of India, shall vest in the Union and be held for the purposes of the Union.

The Madras High Court had the occasion to consider this question in AMSSVM & Co v. State of Madras (AIR 1954 Mad 291). Justice TL Venkatarama Ayyar noted the different views by leading scholars on public international law.

Oppenheim took the view that the territorial waters of all kinds are inalienable appurtenances of the littoral or riparian state. It is the exclusive right of the littoral state to appropriate all products of the sea, especially the fishery therein. However, Higgins and Colombos, in their treatise on the International Law of the Seas, had taken the view that a littoral state has only qualified sovereignty over its territorial waters.

In times of peace, other nations have the right of peaceful navigation and this cannot be reconciled with the theory of ownership by the littoral states. Thus, it was held that England could try an offence committed by a foreigner within its territorial waters (Queen v Keyn, L.R. 2 Ex Div 63).

Justice Ayyar then considered the question as to whether, under Article 297, what vests in the Union of India is only the bed of the sea beneath the territorial waters and not the waters themselves. In law, the two do not stand in the same position. The seabed belongs to India absolutely in the same manner as land and it has the fullest dominion over it.

However, Justice Ayyar pointed out that Article 297 vests only the sea bed and minerals with the Union; it does not have effect of vesting the territorial waters as well. Reference was made to Attorney General for Dominion of Canada v. Attorney General for Province of Ontario, Quebec and Nova Scotia, (1898) AC 700 at 709.

The Privy Council pointed out that there is a proper distinction between proprietary rights and legislative jurisdiction. The fact that one country has jurisdiction of a particular subject matter affords no evidence that any proprietary rights with respect to that subject matter are also transferred to the dominion.

There is no presumption that because legislative jurisdiction was vested in the dominion Parliament, proprietary rights were also transferred to it. He concluded that Article 297 vests only the sea bed with the Union of India.

However, a different view was later taken by the Madras High Court in CIT v Ronald Williams Trikand, (1995) 215 ITR 638. Unfortunately, the earlier decision of Justice Venkatarama Ayyar was not noticed.

A passing observation was made that the territorial waters, the sea bed and the minerals underlying therein, as well as the air space over the territorial waters, form part of the territory of India and the sovereignty of India extends over that area.

This must be treated as obiter dicta as there is no discussion on the basis of which the High Court held that territorial waters formed part of territory of India.

The Bombay High Court in Jalyan Udyog v. Union of India (1987) 32 ELT 697, referring to Oppenheim, observed that if lands, minerals and other things underlying the ocean within the territorial waters vests in the Union, it was difficult to appreciate as to how the territorial waters would not constitute the territory of India. But the Court failed to note that the express reference in Article 297 was only to the sea bed and not the territorial waters.

In Great Eastern Shipping Company Ltd v. State of Karnataka, (2004) ILR Kar 3750, the Karnataka High Court held that the territorial waters abutting the land mass of Karnataka up to a distance of 12 nautical miles was also a part of that State. This conclusion is incorrect.

When this matter was taken on appeal (Great Eastern Shipping Co. Ltd. v State of Karnataka (2020) 3 SCC 354), this question was not answered because the Supreme Court stated that the decision regarding the sales tax liability of the shipping company was sufficient to dispose of the appeal. It is submitted that the decision of the Karnataka High Court is incorrect.

The Supreme Court in Aban Loyd Chiles Offshore Ltd v. Union of India, 2008 (11) SCC 439 was dealing with the question as to whether customs duty could be levied on supplies made to oil rigs located outside the territorial waters, but within the Exclusive Economic Zone of India (EEZ).

In passing, the Court observed that a combined reading of Sections 3, 6 and 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 showed that the territorial waters, sea beds, and the sub-soil over the territorial waters form part of the territory of India. It is submitted that this observation apart being obiter dicta, is also not correct.

Section 3 merely states that the sovereignty of India had always extended to the territorial waters of India, seabed, the sub-soil and air space over such waters. This is different from stating that that territorial waters also vest with India; sovereignty gives jurisdiction, but not proprietary rights.

In fine, it is submitted that the decision of the Madras High Court (of Justice Venkatarama Ayyar) represents the correct legal position. Although India can exercise sovereignty over the territorial waters and has the jurisdiction, it can claim no proprietary rights therein.

The distinction made by the Privy Council between proprietary rights and legislative jurisdiction must be kept in mind. The net result is that only the land, minerals and other valuable things underlying the ocean within the territorial water vest with the Union of India and can be held for the purposes of the Union. The territorial waters do not so vest.

Arvind P Datar is a Senior Advocate of the Supreme Court.