The Supreme Court observed that the State Government gets the right to levy royalty on the production and disposal of brick earth as the same has been declared as a minor mineral under the Mineral Rules.

The Appellants approached the Apex Court challenging the judgment whereby the suit seeking permanent injunction restraining the appellants from recovering royalty was decreed in the favour of the Respondents.

The Division Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan asserted, “The three Courts have unnecessarily gone into the issue of ownership of the said lands or minerals therein. The issue was about the right of the first appellant – the State Government to levy royalty.”

Additional Advocate General Shadan Farasat appeared for the Appellants while AOR Ravindra Bana appeared for the Respondents.

Factual Background

The respondents, in this case, had filed suits against the appellants for a permanent injunction restraining them from assessing, levying or recovering any amount as royalty from the respondents on account of the use of earth by the respondents for making bricks. According to the respondents operating brick kilns, they took different lands (said lands) from private owners on lease which they used for excavation to manufacture bricks in their brick kilns.

As per the respondents, the appellants' action of assessing royalty and sending notices for recovery was illegal as no part of the land was vested in the Government and according to the Wajib-ul-arz, brick earth does not belong to the State Government. Reliance was placed on Section 42 of the Punjab Land Revenue Act, 1887 as well as the Mines and Mineral (Regulations and Development) Act, 1957 & the Punjab Minor Mineral Concession Rules, 1964.The Trial Court dismissed the suit and this decision was confirmed in the appeal by the First Appellate Court. By the impugned judgment, second appeals preferred by the respondents had been allowed, and the suits filed by the respondents were decreed. The High Court concluded that by way of mere declaration of brick earth as a minor mineral, no rights can vest in the State Government to levy royalty. Aggrieved thereby, the appellants approached the Apex Court.

Reasoning

The Bench took note of the fact that in the year 1958, the Government of India published a notification in the exercise of powers conferred under clause (e) of Section 3 of the 1957 Act by which brick earth was declared a minor mineral within the meaning of the 1957 Act. As per the Bench, the High Court missed the real issue. As far as the ownership of the said lands was concerned, admittedly, respondents were not the owners.The persons claiming to be the real owners were not parties to the suit. Most importantly, the Trial Court did not frame any issue on the ownership of the land in question. The District Court did not frame the point for determination on this aspect.

Referring to Rules 54A, 54B, and 54C of the Mineral Rules, the Bench said, “Therefore, even if a person owns the land, he cannot undertake quarrying or mining operations therein unless he holds a certificate of approval in Form “B”. A person to whom the certificate is issued is required to file returns showing the production and disposal of mines or minerals. The royalty is determined as provided in sub-Rule (1) of Rule 54C.” It further held, “Therefore, once it is accepted that brick earth was a minor mineral under the Mineral Rules, the first appellant –the State Government, gets the right to levy royalty on the production and disposal of minor minerals. An appeal is provided under Rule 54F of the Mineral Rules against an order of the assessment of royalty. This remedy is an efficacious remedy available to challenge the levy of royalty.”

Once it was shown that under the Mineral Rules, the first appellant – State Government was entitled to levy royalty on the activity of mining of brick earth, the issue of ownership of the said lands became irrelevant. The reason is that the owners of the said lands in which the excavation was made were not in the exempted category specified in Rule 3 of the Mineral Rules.

“In view of the discussions made above, the respondents did not make out a case for the grant of a decree of permanent injunction restraining the appellants from recovering royalty from the respondents. However, on the quantum of royalty, an appeal under Rule 54F is always available”, the Bench said while allowing the appeal and restoring the judgment of the Trial Court.

Cause Title: State of Punjab & Ors. v. M/s Om Prakash Brick Kiln Owner, Etc. (Neutral Citation: 2025 INSC 88)

Appearance:

Appellants: Mr. Shadan Farasat, A.A.G., AOR Siddhant Sharma

Respondents: AOR Ravindra Bana, Advocates Sudheer Voditel, Tejasvi Kumar

Click here to read/download Judgment


Suprme CourtJustice Abhay S OkaJustice Ujjal BhuyanMines and Minerals ActPunjab Minor Mineral Concession RulesPunjab Land Revenue

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.