Summary
The Supreme Court held that once brick earth was declared a minor mineral under Section 3(e) of the Mines and Minerals (Regulation and Development) Act, 1957, the State of Punjab could levy royalty on its extraction under the Punjab Minor Mineral Concession Rules, 1964, whoever owned the land, since brick-kiln operators were not exempt under Rule 3. The High Court's decree restraining recovery of royalty was set aside and the dismissal of the suits restored.
Issues
- Whether the State Government could levy royalty on brick earth excavated by brick-kiln operators from privately owned land taken on lease.
- Whether ownership of the land or of the brick earth under Section 42 of the Punjab Land Revenue Act, 1887 was decisive of the State's right to levy royalty.
- Whether the brick-kiln operators were entitled to a permanent injunction against assessment and recovery of royalty.
Provisions considered
- Section 3(e), Mines and Minerals (Regulation and Development) Act, 1957By a notification of 1 June 1958 under this clause brick earth was declared a minor mineral; the Court treated this undisputed declaration as bringing brick earth within the State's royalty rules. (¶¶ 8, 10, 12)
- Section 42, Punjab Land Revenue Act, 1887The Court set out the presumptions of ownership of forests and quarries (in favour of the Government for records of rights completed before 18 November 1871, in favour of landowners for later records), but held that the courts below need not have decided ownership, since the right to levy royalty did not depend on it; it expressly left ownership undecided. (¶¶ 8, 9, 13, 14)
- Rule 3, Punjab Minor Mineral Concession Rules, 1964Rule 3 lists exemptions from royalty and contains none for excavating brick earth to make bricks; landowners are not in the exempted category, so the levy applies even to private land. (¶¶ 10, 13)
- Rules 54A, 54B and 54C, Punjab Minor Mineral Concession Rules, 1964Read together, these rules bar quarrying or mining without a Form B certificate even by a landowner, require monthly returns of production and disposal, and provide for assessment of royalty on those returns; they were held to confer the power to levy royalty on minor minerals. (¶¶ 10, 11, 12)
- Rule 54F, Punjab Minor Mineral Concession Rules, 1964The appeal provided against an assessment of royalty was held to be an efficacious remedy, available to the respondents on the quantum of royalty. (¶¶ 12, 13)
Held
- Once brick earth is a minor mineral, the State Government acquires the right under the Mineral Rules to levy royalty on its production and disposal; under Rules 54A to 54C even an owner of land cannot quarry without a certificate of approval in Form B, must file returns, and is assessed to royalty on them. (¶¶ 10, 11, 12)
- The issue in the suits was the State's right to levy royalty, not title. Since landowners are not exempted under Rule 3, ownership of the land or of the mineral was irrelevant, and the courts below, including the High Court, had unnecessarily gone into it. (¶¶ 9, 13)
- The High Court missed the real issue in holding that the presumption under Section 42(2) of the Land Revenue Act applied and that the State, having failed to prove ownership of the brick earth, could not claim royalty; the respondents admittedly were not owners, the alleged owners were not parties, and no issue on ownership had been framed. (¶¶ 8, 9)
- The respondents made out no case for a permanent injunction against recovery of royalty; any dispute about the amount of royalty lies in an appeal under Rule 54F. (¶¶ 12, 13)
Result
Appeals allowed. The High Court's judgment of 19 September 2007 set aside and the trial court's decrees dismissing the suits restored; no adjudication made on ownership of the lands; no order as to costs.