Punjab Minor Mineral Concession Rules | State Can Levy Royalty On Brick Earth : Supreme Court

The Supreme Court (today on January 21) observed that as per the Punjab Minor Mineral Concession Rules, the State Government is entitled to levy royalty on the mining of brick earth.

The Bench of Justices Abhay S. Oka and Ujjal Bhuyan were deciding an appeal preferred by the State of Punjab against the High Court's ruling. In the impugned judgment, the Court had ruled that merely declaring brick earth as a minor mineral does not entitle the State Government to levy royalty. It further held that the appellants failed to prove that they were owners of brick earth. Thus, they are not entitled to collect any royalty.

To provide a brief background, the present respondents filed a suit for a permanent injunction. They sought restraint against the appellants from levying any royalty for making bricks. The respondents argued that they had taken the land on lease from private owners and that no part of the land was vested in the Government.

However, the Trial Court as well as the first appellate Court ruled in State's favour and dismissed the suit. They opined that the right to recover minor minerals in the said lands is vested in the State. Pertinently, through a notification issued under the Mines and Mineral (Regulations and Development) Act, brick earth was declared a minor mineral. Notwithstanding, these orders were reversed by the High Court. Against this background, the matter reached before the Supreme Court.

At the outset, the Court observed that it was unnecessary to decide the issue of land ownership. Elaborating, the Court stated that the issue was the State Government's right to levy royalty.

“Apart from the fact that the land ownership issue was not decided by the Trial Court and the First Appellate Court, even if we assume that the lands on which the respondents carried out excavation were private lands, the question is whether the State Government was powerless to levy royalty.”

Taking a cue from this, the Court perused the above-mentioned rules. Upon examining the same, the Court observed that though Rule 3 provides for exemptions from royalty payment, it does not mention excavation of brick earth.

Further, in order to undertake mining operations, a certificate of approval is required. Pursuant to this, the person, to whom the certificate is issued, is required to file returns about the disposal of minor minerals. On the basis of this, the assessing authority shall determine the amount of royalty due.

“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.”

“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. Once it is 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 becomes irrelevant.”

Stating this, the Court concluded that the respondent made no case for the grant of permanent injunction. However, on the quantum of royalty, an appeal under Rule 54F is always available., the Court said while quashing the impugned judgment and allowing the State's appeal.

Case name: STATE OF PUNJAB & ORS v. M/S OM PRAKASH BRICK KILN OWNER, ETC.

Citation : 2025 LiveLaw (SC) 93

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