Case Note & Summary
The State of Punjab and its officers appealed against the judgment of the Punjab and Haryana High Court which had decreed the suits filed by brick kiln owners (respondents) seeking a permanent injunction restraining the State from assessing, levying, or recovering royalty on brick earth extracted from lands taken on lease from private owners. The respondents contended that the brick earth was not owned by the State and that no provision under the Mines and Mineral (Regulations and Development) Act, 1957 or the Punjab Minor Mineral Concession Rules, 1964 entitled the State to levy royalty. The Trial Court and First Appellate Court had dismissed the suits, holding that under Section 42(1) of the Punjab Land Revenue Act, 1887, there was a presumption that quarries vest in the State, and that brick earth being a minor mineral, royalty was leviable. The High Court reversed, holding that mere declaration of brick earth as a minor mineral did not vest ownership in the State. The Supreme Court allowed the appeals, holding that the High Court missed the real issue. The Court noted that the respondents were not owners of the land and the real owners were not impleaded, making the suit defective. Further, even assuming the lands were private, Rules 54A, 54B, and 54C of the Mineral Rules require a certificate of approval and provide for assessment of royalty, which is payable irrespective of ownership. The Court also held that the presumption under Section 42(1) of the Land Revenue Act applied as the record-of-rights was completed before 1871 and did not expressly state that quarries belonged to land owners. The impugned judgment was set aside and the suits were dismissed.
Headnote
A) Civil Procedure - Non-joinder of necessary parties - Suit for permanent injunction against royalty assessment - Land owners not impleaded - Since respondents were lessees and not owners, the real owners were necessary parties to decide title - Held that suit was not maintainable without impleading land owners (Paras 8-9). B) Mines and Minerals - Royalty on minor minerals - Levy irrespective of ownership - Brick earth declared minor mineral under Section 3(e) of Mines and Mineral (Regulations and Development) Act, 1957 - Rules 54A, 54B, 54C of Punjab Minor Mineral Concession Rules, 1964 require certificate of approval and provide for assessment of royalty - Held that royalty is payable even on extraction from private lands (Paras 10-11). C) Property Law - Presumption of ownership of quarries - Section 42 of Punjab Land Revenue Act, 1887 - Record-of-rights completed before 18th November 1871 - If not expressly provided that quarry belongs to land owners, it is presumed to belong to Government - High Court erred in holding that presumption under sub-section (2) applies - Held that presumption under sub-section (1) applies and State is entitled to levy royalty (Paras 8-9).
Issue of Consideration
Whether the State Government is entitled to levy royalty on brick earth extracted from private lands when brick earth is declared a minor mineral, and whether the High Court erred in decreeing the suit for permanent injunction against such levy.
Final Decision
The Supreme Court allowed the appeals, set aside the impugned judgment of the High Court, and dismissed the suits filed by the respondents. The Court held that the High Court erred in decreeing the suits and that the State is entitled to levy royalty on brick earth irrespective of land ownership.
Law Points
- Presumption of ownership of quarries in favour of State under Section 42(1) of Punjab Land Revenue Act
- 1887
- Royalty on minor minerals leviable irrespective of land ownership under Mines and Mineral (Regulations and Development) Act
- 1957 and Punjab Minor Mineral Concession Rules
- 1964
- Non-joinder of land owners as necessary parties in suit for injunction against royalty assessment
