Brick-earth ruled as minor mineral under Punjab rules; royalty not a tax but extraction charge.

The court held that brick-earth is a minor mineral under the Punjab Minor Mineral Concession Rules, 1964, and royalty is not a tax but a charge for mineral extraction. It found Rule 20 constitutional, authorizing royalty imposition by the State. Royalty applies to holders of mining leases, not private landowners without leases. The court ruled that royalty can only be demanded for minerals vested in the State and dismissed the petitions, affirming Punjab's authority to levy royalty on such minerals. Ownership disputes over minerals must be resolved through legal proceedings.

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Issues Involved:

1. Whether brick-earth is a minor mineral under the Punjab Minor Mineral Concession Rules, 1964.
2. Whether the royalty demanded is a tax and if it can be imposed by a rule-making authority.
3. Whether Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957, authorizes the levy of royalty.
4. Whether the imposition of royalty by Rule 20 of the Punjab Rules is unconstitutional and ultra vires.
5. Whether the power to regulate includes the power to impose a tax like royalty.
6. Whether the Rules apply to petitioners who are owners or lessees of private lands.
7. Whether royalty can be demanded only in respect of minor minerals that vest in the State.
8. Whether royalty can be demanded from petitioners who do not hold any mining lease or license from the Government.
9. Whether Shariat Wajib-ul-Arz vests minor mineral rights in the Government.
10. Whether Section 14 of the Act precludes the demand for royalty from petitioners.

Analysis:

1. Brick-earth as a Minor Mineral:
The court found that brick-earth is indeed a minor mineral as per the Central Government notification dated 1st June 1958, under Section 3(e) of the Mines and Minerals (Regulation and Development) Act, 1957. Therefore, the Punjab Minor Mineral Concession Rules, 1964, apply to brick-earth.

2. Nature of Royalty:
The court concluded that royalty is not a tax but a charge made by the owner of the property for the exploitation or excavation of the mineral wealth contained therein. It is a payment for the privilege of extracting minerals and is based on the quantity extracted, thus distinguishing it from a tax or fee.

3. Authority under Section 15:
The court held that Section 15 of the Act authorizes the State Government to make rules for regulating the grant of prospecting licenses and mining leases in respect of minor minerals, including the power to charge royalty. The power to regulate includes the power to impose conditions such as royalty.

4. Constitutionality of Rule 20:
The court found Rule 20 of the Punjab Rules, which empowers the State to charge royalty, to be constitutional and not ultra vires. The royalty is considered a contractual payment for the privilege of extracting minerals, not a tax.

5. Power to Regulate:
The court determined that the power to regulate includes the power to impose conditions like royalty. The imposition of royalty is a common and usual term of mining leases and is integral to the regulation of minor minerals.

6. Application to Owners or Lessees of Private Lands:
The court noted that the Punjab Minor Mineral Concession Rules, 1964, make provisions for the grant of mineral concessions in respect of minor minerals found in lands where such minerals vest in persons other than the Government. Hence, the rules apply to the petitioners who are owners or lessees of private lands.

7. Royalty on Minor Minerals Vesting in the State:
The court held that royalty can only be demanded in respect of minor minerals that vest in the State. The State has not claimed the right to charge royalty on minor minerals that vest in private individuals.

8. Requirement of Mining Lease or License:
The court emphasized that royalty is payable only by the holder of a mining lease or license. Since the petitioners do not hold any such lease or license, they cannot be compelled to pay royalty.

9. Shariat Wajib-ul-Arz and Mineral Rights:
The court found that the Shariat Wajib-ul-Arz documents do not specifically mention brick-earth as a mineral that belongs to the Government. Therefore, in the absence of specific mention, brick-earth is presumed to belong to the landowners under Section 42(2) of the Punjab Land Revenue Act, 1887.

10. Section 14 and Demand for Royalty:
The court clarified that Section 14 of the Act, which excludes minor minerals from the operation of Sections 4 to 13, does not preclude the State from demanding royalty. The authority to charge royalty is derived from Section 15, which empowers the State to make rules for regulating minor minerals.

Conclusion:
The court dismissed the petitions, holding that the State of Punjab has the authority to charge royalty on minor minerals extracted from lands where such minerals vest in the Government. The petitioners' claims regarding the ownership of minor minerals can be settled through appropriate proceedings in a court of law.

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