State Entitled To Levy Royalty On Brick Earth Once Declared A Minor Mineral, Supreme Court Rules

A bench of Justices Abhay S. Oka and Ujjal Bhuyan heard appeals by the State of Punjab challenging a High Court decree which had allowed suits by brick-kiln operators seeking injunctions against assessment and recovery of royalty for extraction of brick earth. The appeals arose from civil suits filed by kiln owners who operated on leased lands and denied that brick earth vested in the State or that the State could levy royalty under the Mines and Minerals legislative scheme.

The Court allowed the appeals and set aside the High Court judgment, holding that declaration of brick earth as a minor mineral and the statutory scheme under the Punjab Minor Mineral Concession Rules, 1964 authorised levy and assessment of royalty by the State and provided an efficacious remedy of appeal under the Rules. The Court noted that procedural safeguards and assessment mechanism in the Rules applied irrespective of land ownership, observing that "no person shall undertake quarrying or mining operation unless and until he holds a certificate of approval in Form 'B'." The Court, in its reasoning, observed: “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 Court also quoted the Land Revenue Act principle that, where records of rights were completed before 18 November 1871, "it shall be presumed to belong to the Government" unless expressly otherwise recorded.

Background The respondents, brick-kiln operators, sued the State and other authorities seeking permanent injunctions restraining assessment, levy and recovery of royalty on excavation of brick earth from lands taken on lease. They contended that brick earth did not vest in the State and that neither the Mines and Minerals (Regulation and Development) Act, 1957, nor the Punjab Minor Mineral Concession Rules, 1964 authorised levy of royalty in the circumstances. The State defended the suits, relying on Section 15 of the 1957 Act empowering rulemaking, a notification under Section 3(e) declaring brick earth a minor mineral, and Section 42 of the Punjab Land Revenue Act, 1887 which created presumptions of State ownership in certain records-of-rights. The State also relied on Rules 54A–54C and 54F of the Mineral Rules which regulated grant of certificates, returns, assessment and appeals.

The Trial Court dismissed the suits in 1983, holding that the relevant Wajib-ul-arz and settlements supported a presumption of State ownership under Section 42 and that brick earth had been declared a minor mineral. The First Appellate Court affirmed. The High Court, however, allowed second appeals and decreed the suits, reasoning that mere declaration of brick earth as a minor mineral did not by itself vest ownership in the State and that the State had not proved ownership of the brick earth. The Supreme Court found that the real controversy concerned the State's statutory power to levy royalty under the Mineral Rules rather than adjudication of title between landowners and the State. The Court emphasised that the Rules required prior approval to undertake quarrying, mandated returns and provided a detailed assessment mechanism; Rule 54A provided that no person could undertake quarrying without a certificate of approval, and Rule 54C prescribed assessment of royalty. The Court observed that the owners of the lands were not parties to the suits and that the Trial Court had not framed issues on title. It therefore held that the High Court had erred in focusing on ownership; once brick earth was a minor mineral under the Rules, the State was entitled to levy royalty and the statutory appeal under Rule 54F constituted an efficacious remedy to challenge quantum. The Supreme Court quashed and set aside the High Court judgment, restored the Trial Court decrees dismissing the suits, made no adjudication on land ownership, and allowed the appeals with no order as to costs.

Case No.: Civil Appeal Nos. 10687-10694 of 2013 (2025 INSC 88) Case Title: State of Punjab & Ors. v. M/s Om Prakash Brick Kiln Owner, etc. Appearances: For the Petitioner(s): Learned Additional Advocate General for the State of Punjab For the Respondent(s): Counsel for the respondents (names not specified in the reported text)