2025 (1) TMI 1029 - SC - Indian Laws

Right to levy royalty - 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 - Legality of appellants action of assessing royalty and sending notices for recovery - Jurisdiction of Civil Court to entertain the suit in view of Rule 54F of the Mineral Rules which provides a remedy of appeal against orders of assessment of royalty. HELD THAT - The High Court in the impugned judgment held that the presumption under sub-Section (2) of Section 42 of the Land Revenue Act would not apply. The reason is that at the relevant time brick earth was not declared as a minor mineral - the High Court has missed the real issue. As far as the ownership of the said lands is concerned admittedly respondents were not the owners. The respondents claimed that they had taken the said lands on lease from the real 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. 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 - 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. The reason is that the owners of the said lands in which the excavation is made are not in the exempted category specified in Rule 3 of the Mineral Rules. Though for different reasons the Trial Court and the First Appellate Court were right in dismissing the suits. Conclsuion - i) The State Government has the right to levy royalty on brick earth as a minor mineral. ii) The Civil Court lacks jurisdiction due to the appellate remedy under the Mineral Rules. iii) Land ownership is irrelevant to the royalty issue and the nonjoinder of landowners does not affect the outcome. iv) 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 impugned judgment dated 19th September 2007 of the High Court is hereby quashed and set aside and the decrees of the dismissal of suits passed by the Trial Court are restored - Appeal allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the State Government has the right to levy royalty on the excavation and use of brick earth, declared as a minor mineral, by the respondents.
Whether the Civil Court has jurisdiction to entertain the suit challenging the levy of royalty, considering the provisions of the Punjab Minor Mineral Concession Rules, 1964.
Whether the ownership of the land from which brick earth is excavated affects the State Government's right to levy royalty.
Whether the failure to include the landowners as parties to the suit affects the maintainability of the suit.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Right to Levy Royalty

Relevant Legal Framework and Precedents: The Mines and Mineral (Regulations and Development) Act, 1957, and the Punjab Minor Mineral Concession Rules, 1964, particularly Rule 54A, 54B, and 54C, which govern the assessment and levy of royalty on minor minerals.
Court's Interpretation and Reasoning: The Court interpreted that once brick earth is declared a minor mineral, the State Government is empowered to levy royalty on its excavation and use, irrespective of land ownership.
Key Evidence and Findings: The notification under Section 3(e) of the 1957 Act declaring brick earth as a minor mineral was pivotal. The Court noted that the respondents were not the landowners but lessees, and the ownership issue was not adjudicated.
Application of Law to Facts: The Court applied the Mineral Rules to conclude that the State Government's right to levy royalty is independent of land ownership, provided the mineral is classified as a minor mineral.
Treatment of Competing Arguments: The respondents argued that the declaration of brick earth as a minor mineral does not automatically vest ownership in the State. The Court dismissed this, focusing on the regulatory framework for minor minerals.
Conclusions: The Court concluded that the State Government has the right to levy royalty on brick earth as a minor mineral, and the issue of land ownership is irrelevant to this right.

Issue 2: Jurisdiction of Civil Court

Relevant Legal Framework and Precedents: Rule 54F of the Punjab Minor Mineral Concession Rules, 1964, provides an appellate remedy against royalty assessments.
Court's Interpretation and Reasoning: The Court held that the Civil Court lacks jurisdiction due to the specific appellate remedy provided under the Mineral Rules.
Key Evidence and Findings: The existence of an appellate remedy under Rule 54F was critical in determining the jurisdictional issue.
Application of Law to Facts: The Court applied the procedural framework to conclude that the respondents should have pursued the appellate remedy rather than filing a civil suit.
Treatment of Competing Arguments: The appellants argued that the suit was barred due to the availability of an appellate remedy, which the Court upheld.
Conclusions: The Court concluded that the Civil Court lacked jurisdiction, and the respondents should have utilized the appellate mechanism provided in the Mineral Rules.

Issue 3: Ownership of Land and its Relevance

Relevant Legal Framework and Precedents: Section 42 of the Punjab Land Revenue Act, 1887, which deals with the presumption of ownership of forests, quarries, and waste lands.
Court's Interpretation and Reasoning: The Court found that the ownership of the land is irrelevant to the State's right to levy royalty on a declared minor mineral.
Key Evidence and Findings: The Court noted the absence of landowners as parties and the lack of adjudication on land ownership.
Application of Law to Facts: The Court applied Section 42 to determine that the presumption of ownership does not affect the royalty issue.
Treatment of Competing Arguments: The respondents argued that ownership affects royalty rights, but the Court focused on the regulatory framework for minor minerals.
Conclusions: The Court concluded that land ownership is not relevant to the State's right to levy royalty on minor minerals.

Issue 4: Nonjoinder of Necessary Parties

Relevant Legal Framework and Precedents: Procedural rules regarding the joinder of necessary parties in civil suits.
Court's Interpretation and Reasoning: The Court noted the absence of landowners as parties but found it irrelevant to the royalty issue.
Key Evidence and Findings: The respondents' failure to include landowners was noted but deemed non-critical to the case's outcome.
Application of Law to Facts: The Court applied procedural rules to determine that the nonjoinder did not affect the State's right to levy royalty.
Treatment of Competing Arguments: The appellants argued that the suit was defective due to nonjoinder, but the Court focused on the substantive issue of royalty.
Conclusions: The Court concluded that the nonjoinder of landowners does not affect the State's right to levy royalty on minor minerals.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "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."
Core principles established: The State Government's right to levy royalty on minor minerals is independent of land ownership. The availability of an appellate remedy under the Mineral Rules precludes civil court jurisdiction.
Final determinations on each issue: The State Government has the right to levy royalty on brick earth as a minor mineral. The Civil Court lacks jurisdiction due to the appellate remedy under the Mineral Rules. Land ownership is irrelevant to the royalty issue, and the nonjoinder of landowners does not affect the outcome.

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