Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2088 OF 2007

M/s. Som Datt Builders Ltd.           …Appellant

Versus Union of India and Ors.   …Respondents

WITH

Civil Appeal Nos.7475-7476/2009 (SLP(C) Nos. 6808-6809 of 2008)

Civil Appeal No.7477/2009 (SLP(C) No.12127 of 2006) Civil Appeal No.7478 /2009 (SLP(C) No. 12722 of 2006)

Civil Appeal No. 4314 of 2008 AND

Civil Appeal No. 2087 of 2007

JUDGEMENT

R.M. Lodha, J.

Leave granted  in  SLP(Civil)  Nos.  12127 of  2006,  

12722 of 2006 and 6808-6809 of 2008.

2. This  group  of  seven  appeals  arises  from  the  

common judgment passed by the High Court of Judicature at

Allahabad  on  February  28,  2006  and,  therefore,  all  these  

appeals were heard together and are being disposed of by this  

judgment.

3. The core issue that calls for determination in these  

appeals is whether ‘ordinary earth’ used for filling or levelling  

purposes in the construction of embankments, roads, railways,  

buildings has validly been declared to be a ‘minor mineral’ by  

the  Central  Government  vide  notification  dated  February  3,  

2000  issued  under  Section  3(e)  of  Mines  and  Minerals  

(Development and Regulation) Act, 1957 (for short, ‘Act, 1957’).

4. It is not necessary to refer to the facts of each of  

these  appeals.  The  brief  narration  of  facts  in  Civil  Appeal  

No.  2088  of  2007  will  suffice.  The  appellant  therein  is  a  

company incorporated  under  the  Companies  Act,  1956.  It  is  

engaged  in  the  construction  of  business  towers,  hotels  and  

various other infrastructural development projects. According to  

them, an agreement was entered into between the Company  

and National Highway Authority of India for widening of Grand  

Trunk Road from 393 kilometer stone to 470 kilometer stone at  

Sikandara,  Kanpur.  For the purpose of filling and levelling of  

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road, the company entered into agreement with the local land  

holders/agriculturists for purchase of ‘ordinary earth’ and paid  

them accordingly.  Various  demand  notices  are  said  to  have  

been issued to the appellant towards royalty for lifting ‘ordinary  

earth’  necessitating  them  to  approach  the  High  Court  of  

Judicature at Allahabad challenging the constitutional validity of  

notification  dated  February  3,  2000  issued  by  the  Central  

Government. They also challenged the amendment brought in  

the  First  Schedule  by  the  State  of  Uttar  Pradesh  in  Uttar  

Pradesh Minor Minerals (Concession) Rules,  1963 (for  short,  

‘Rules, 1963’) fixing royalty for the use of ‘ordinary earth’ at the  

rate Rs. 4/- per cubic meter.

5. Section 3 of  the Act,  1957 defines ‘minerals’  and  

‘minor minerals’ as follows :

“Section 3 – Definitions In this Act, unless the context otherwise requires,-- (a) “minerals” includes all minerals except mineral oils; (b) ….. (c) ….. (d) ….. (e) “minor  minerals”  means  building  stones,  gravel,  

ordinary clay, ordinary sand other than sand used for  prescribed purposes, and any other mineral which the  Central Government may, by notification in the Official  Gazette, declare to be a minor mineral;………”     

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6. In  exercise of  the power  conferred  under  Section  

3(e),  Central  Government  issued the following notification on  

February 3, 2000 :

“G.S.R.95(E).—In  exercise  of  the  powers  conferred  by  clause  (e)  of  Section  3  of  the  Mines  and  Minerals  (Development and Regulation) Act, 1957 (67 of 1957), the  Central  Government  hereby  declares  the  ‘ordinary  earth’  used  for  filling  or  levelling  purposes  in   construction  of  embankments,  roads,  railways,  buildings  to  be  a  minor  mineral in addition to the minerals already declared as minor  minerals hereinbefore under the said clause.”

7. That a substance has to be mineral before it can be  

notified  as  a  ‘minor  mineral’  pursuant  to  the  power  under  

Section  3(e)  of  the  Act  of  1957  is  not  in  dispute.  Whether  

‘ordinary  earth’  is  a  mineral  is  the  primary  question  for  

consideration. The question is a little intricate one because the  

definition of ‘minerals’ in the Act, 1957 is not of much help in  

finding answer to the question.  

8. The  word  ‘mineral’  has  come  up  for  judicial  

interpretation from time to time.

9. In  Lord  Provost  And  Magistrates  of  Glasgow v.  

Farie1, the issue before the House of Lords was whether clay is  

included in ‘other minerals’ under the Waterworks Clauses Act,  

1847. Lord Halsbury, L.C said :  1 (1888) LR 13 Appeal Cases 657

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“There is no doubt that more accurate scientific investigation  of  the  substances  of  the  earth  and  different  modes  of  extracting them have contributed to render the sense of the  word “minerals” less certain than when it originally was used  in  relation  to  mining  operations.  I  should  think  that  there  could  be  no  doubt  that  the  word  “minerals”  in  old  times  meant the substances got by mining, and I think mining in  old times meant subterranean excavation. I doubt whether in  the present state of the authorities it is accurate to say that in  every  deed  or  in  every  statute  the  word  “minerals”  has  acquired a meaning of its own independently of any question  as  to  the  manner  in  which  the  minerals  themselves  are  gotten.”    

Lord  Watson  in  his  opinion  stated  that  “mines”  and  

“minerals”  are  not  definite  terms:  they  are  susceptible  of  

limitation or  expansion,  according to  the intention with  which  

they are used.

10. The  House  of  Lords  in  North  British  Railway  

Company v. Budhill Coal And Sandstone Company And Others2  

was  concerned  with  the  question  whether  sandstone  or  

freestone is included in the minerals excepted by Section 70 of  

the  Railways  Clauses  Consolidation  (Scotland)  Act  of  1845.  

Lord Loreburn L.C. considered number of decisions including  

the aforequoted decision and summarised the tests applied in  

various cases in the following words :

“…..It  is not possible to extract any uniform standard. The  same is true of the opinions expressed by different learned  judges. A variety of tests have been propounded, which are  

2 (1910) AC 116

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discussed  by  Lord  Gorell.  I  agree  with  him  both  in  his  enumeration  and  in  his  criticism.  Is  the  substance  in  common  parlance  a  mineral?  Is  it  so  considered  by  geologists? Is it a substance of any peculiar value?  No one  principle has been accepted, and every principle appears to  have its friends.”

11. In  Scott v.  Midland Railway Company3,  Darling J.  

observed  that  the  word  “minerals”  is  one  which  at  different  

times  has  been  used  with  very  different  meanings.  In  some  

statutes it has a very restricted meaning, in others a very wide  

one. In order to determine in each case whether the word is  

used in a wide or narrow sense we must, as Lord Herschell said  

in Glasgow v. Farie1, look at the object which the Legislature  

had in view.

12. In  Great  Western  Railway  Company v.  Carpalla  

United China Clay Company, Limited and Another4,  House of  

Lords had an issue before it whether China clay was a mineral  

within  the  provisions  of  the  Railways  Clauses  Consolidation  

Act, 1845. Lord Macnaghten said :  

“……The  word  ‘minerals’  undoubtedly  may  have  a  wider  meaning than the word ‘mines’.  In its  widest  signification it  probably means every inorganic substance forming part of the  crust of the earth other than the layer of soil which sustains  vegetable life.”

3 (1901) 1 Q.B. 317 4 (1910) A.C. 83

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13.   In Bhagwan Das v. State of U.P. and Others5, it was  

argued before this court that the sand and gravel are deposited  

on the surface of the land and not under the surface of the soil  

and,  therefore,  they  cannot  be  called  minerals.  

Y.V.  Chandrachud,  J.  (as  he  then  was)  negating  the  said  

contention said :

“………It is in the first place wrong to assume that mines  and minerals must always be subsoil and that there can be  no minerals on the surface of the earth. Such an assumption  is contrary to informed experience. In any case, the definition  of mining operations and minor minerals in Section 3(d) and  (e) of the Act of 1957 and Rule 2(5) and (7) of the Rules of  1963 shows that minerals need not be subterranean and that  mining operations cover every operation undertaken for the  purpose of “winning” any minor mineral. “Winning” does not  imply  a  hazardous  or  perilous  activity.  The  word  simply  means  “extracting  a  mineral”  and  is  used  generally  to  indicate  any  activity  by  which  a  mineral  is  secured.  “Extracting”, in turn, means, drawing out or obtaining. A tooth  is  ‘extracted’  as much as is  fruit  juice and as much as a  mineral. Only, that the effort varies from tooth to tooth, from  fruit to fruit and from mineral to mineral.”

14. In  the  case  of  M/s.  Banarsi  Dass  Chadha  and  

Brothers v.   Lt. Governor, Delhi Administration and Others6,  a  

three-Judge Bench of this Court was seized with the question  

whether ‘brick earth’ is a ‘minor mineral’ within the meaning of  

5 (1976) 3 SCC 784 6 (1978) 4 SCC 11  

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that  expression  as  defined in  Section  3(e)  of  the  Act,  1957.  

Chinnappa Reddy, J. speaking for the Bench observed :

“……..The expression “minor mineral” as defined in Section  3(e)  includes  ‘ordinary  clay’  and  ‘ordinary  sand’.  If  the  expression “minor mineral” as defined in Section 3(e) of the  Act includes ‘ordinary clay’ and ‘ordinary sand’, there is no  reason  why  earth  used  for  the  purpose  of  making  bricks  should not be comprehended within the meaning of the word  “any  other  mineral”  which  may  be  declared  as  a  “minor  mineral”  by the  Government.  The word “mineral”  is  not  a  term of art. It is a word of common parlance, capable of a  multiplicity  of  meanings  depending  upon  the  context.  For  example the word is occasionally used in a very wide sense  to  denote  any  substance  that  is  neither  animal  nor  vegetable. Sometimes it is used in a narrow sense to mean  no more than precious metals like gold and silver. Again, the  word  “minerals”  is  often  used  to  indicate  substances  obtained from underneath the surface of the earth by digging  or  quarrying.  But  this  is  not  always so as  pointed  out  by  Chandrachud, J. (as he then was) in Bhagwan Dass v. State  of U.P.”

This court referred to a decision of the Supreme Court of  

United States in Northern Pacific Railway Company v. John A.  

Soderberg7 and  quoted  the  observations  made  therein  as  

follows :

“The word “mineral” is used in so many senses, dependent  upon  the  context,  that  the  ordinary  definitions  of  the  dictionary throw but little light upon its signification in a given  case.  Thus,  the  scientific  division  of  all  matter  into  the  animal, vegetable, or mineral kingdom would be absurd as  applied  to  a  grant  of  lands,  since  all  lands  belong  to  the  mineral kingdom, and therefore could not be excepted from  the  grant  without  being  destructive  of  it.  Upon  the  other  hand,  a  definition  which  would  confine  it  to  the  precious  

7 47 L Ed 575.

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metals—gold and silver—would so limit its application as to  destroy  at  once  half  the  value  of  the  exception.  Equally  subversive of the grant would be the definition of minerals  found in the Century Dictionary; as “any constituent of the  earth's  crust;”  and  that  of  Bainbridge  on  Mines:  “All  the  substances that now form, or which once formed, a part of  the solid body of the earth.” Nor do we approximate much  more closely to the meaning of the word by treating minerals  as  substances  which  are  “mined,”  as  distinguished  from  those which are “quarried,” since many valuable deposits of  gold, copper, iron, and coal lie upon or near the surface of  the  earth,  and  some of  the  most  valuable  building  stone,  such,  for  instance,  as  the  Caen  stone  in  France,  is  excavated from mines running far beneath the surface. This  distinction between underground mines and open workings  was expressly repudiated in Midland R. Co. v. Haunchwood  Brick & Tile Co. L. R. 20 Ch. Div. 552, and in Hext v. Gill, L.  R. 7 Ch. 699.”

This court further held in paragraph 6 of the report thus :

“The  Supreme  Court  of  United  States  also  referred  to  several  English  cases  where  stone  for  road  making  or  paving was held to be ‘mineral’, as also granite, sandstone,  flint stone, gravel, marble, fire clay, brick-clay, and the like. It  is clear that the word ‘mineral’ has no fixed but a contextual  connotation.”

It was then concluded that word ‘mineral’ has no definite  

meaning  but  has  a  variety  of  meanings,  depending  on  the  

context of its use. This is what this Court observed :  

“……..In the context of the Mines and Minerals (Regulation &  Development) Act, we have no doubt that the word ‘mineral’  is of sufficient amplitude to include ‘brick-earth’. As already  observed by us, if the expression ‘minor mineral’ as defined  in the Act includes ‘ordinary clay’ and ‘ordinary sand’, there  is no earthly reason why ‘brick-earth’ should not be held to  be ‘any other mineral’  which may be declared as a ‘minor  mineral’. We do not think it necessary to pursue the matter  further except to say that this was the view taken in  Laddu  Mal  v.  State  of  Bihar, Amar  Singh  Modilal v.  State  of   

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Haryana and Sharma & Co. v. State of U.P. We do not agree  with the view of the Calcutta High Court in  State of West  Bengal v. Jagdamba Prasad, that because nobody speaks of  ‘ordinary  earth’  as  a  mineral  it  is  not  a  minor  mineral  as  defined  in  the  Mines  and  Minerals  (Regulation  &  Development) Act.”

15. The decision of this Court in Banarsi Dass Chadha  

squarely answers the question posed before us. However, the  

learned Senior Counsel for the appellants heavily relied upon a  

subsequent  decision  of  this  court  in  V.P.  Pithupitchai  and  

Another v. Special Secretary to the Govt. of T.N.8 and submitted  

that  ‘ordinary  earth’  is  not  comprehended  by  the  expression  

‘mineral’.  That  was  a  case where the  question  was whether  

seashells could be termed to be ‘mineral’ within the meaning of  

the Act, 1957. This court referred to earlier decisions viz; State  

of  M.P. v.  Mahalaxmi Fabric Mills  Ltd.9,  Bhagwan Dass5 and  

Banarsi  Dass Chadha6 and  also  noticed  the  meaning  of  the  

word  ‘mineral’  noted  in  (i)  Webster’s  3rd New  International  

Dictionary, 1968; (ii) Funk and Wagnalls’ Standard Dictionary,  

International Edn., Vol. II; (iii) Oxford Illustrated Dictionary and  

(iv)  Groliar  International  Dictionary,  Vol.II.  We  deem  it  

8 (2003) 9 SCC 534 9 1995 Supp (1) SCC 642

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appropriate to reproduce paragraph 13 wherein meaning of the  

word ‘mineral’ noted in aforesaid dictionaries was noticed :

“13. This is in keeping with the meaning given in the several  dictionaries referred to by the High Court to determine  the  meaning of the word “mineral” which are reproduced:

(i) Webster’s 3rd New International Dictionary, 1968 defines  “mineral” as:

“a  solid  homogeneous  crystalline  chemical  element or compound (as diamond or quartz) that results  from the inorganic processes of  nature and that  has a  characteristic crystal structure and chemical composition  or  range  of  compositions  ...  something  that  is  neither  animal nor vegetable (as in the old general classification  of  things  into  three  kingdoms:  animal,  vegetable  and  mineral)”. (ii)  Funk  and  Wagnalls’  Standard  Dictionary,  International  Edn., Vol. II:

“a naturally occurring, homogeneous substance or  material  formed  by  inorganic  processes  and  having  a  characteristic set of physical properties, a definite range  of  chemical  composition,  and  a  molecular  structure  usually expressed in crystalline forms ... . Any inorganic  substance, as ore, a rock, or a fossil”. (iii) Oxford Illustrated Dictionary:

“Substance (e.g. metal, coal, salt) got by mining.... ...  (chem.) element or compound occurring naturally  

as a product of inorganic processes.... ... substance which is neither animal nor vegetable.”

(iv) Groliar International Dictionary, Vol. II: “any  naturally  occurring,  homogeneous  inorganic  

substance  having  a  definite  chemical  composition  and  characteristic  crystalline  structure,  colour  and  hardness....

... Any of various natural substances. (a) An element, such as gold or silver. (b)  A  mixture  of  inorganic  compounds,  such  as  

hornblende or granite. (c)  An  organic  derivative,  such  as  coal  or  

petroleum ... any substance that is neither animal nor  vegetable; inorganic matter”.”

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16. In  V.P.  Pithupitchai,  this  Court  did  not  consider  

whether  seashells were covered within the residuary entry in  

the  Second  Schedule  but  considered  the  correctness  of  the  

High  Court’s  view  whether  seashell  is  limeshell  within  the  

meaning of Item 28 of the Second Schedule. In paragraph 15 of  

the report, the following observations were made:

“15. A distinction must be drawn between (i) a substance  identified as a mineral, (ii) a substance  containing minerals  (for  example  bones  which  contain  large  percentages  of  calcium and phosphate and to some extent carbonate), and  (iii)  a  substance  which  may  be  the  original  source of  a  mineral (for example plants which after being subjected to  millions of years of geological processes ultimately become  coal). In the first case, the classification of a substance as a  mineral  is  simple.  But  the bones in  the second class and  trees in the third class can hardly be termed to be minerals  although they may contain or ultimately result in a mineral.  Seashells may, like bones,  contain calcium carbonate, and  may also like trees, through a geological process result in a  mineral  such  as  limestone.  But  it  cannot  be  said  that  a  seashell in its original form is a mineral.”

17. In  our  view,  the  decision  of  this  court  in  V.P.  

Pithupitchai is  a  substance specific  and not  of  much help in  

deciding the case in hand for more than one reason. In the first  

place, in that case the court was not concerned with the power  

conferred upon the Central Government to declare a substance  

‘minor mineral’ in exercise of the power conferred on it under  

Section 3(e) of the Act,1957. Secondly, and more importantly,  

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in  that  case  the  court  was  called  upon  to  determine  the  

correctness of the High Court’s opinion whether a seashell is  

limeshell within the meaning of item 28 of the Second Schedule  

to the Act, 1957. It is true that in paragraph 15 of the report, this  

court drew distinction between (i) a substance identified as a  

mineral,  (ii)  a  substance  containing  minerals  and  (iii)  a  

substance which may be the original source of mineral and then  

it was held that seashell in its original form is not a mineral but,  

we are afraid, the test applied by this court in V.P. Pithupitchai  

is not of universal application.

18. The  learned  Senior  Counsel  for  the  appellants  

submitted that as there is no definition of ‘mineral’ in the Act,  

1957  or  the  Rules  1963,  dictionary  meaning  of  the  word  

‘mineral’ is most pertinent and apt to the context. In this regard,  

he referred to the Black’s Law Dictionary (Sixth Edition) wherein  

the  meaning  of  the  ‘mineral’  is  noted  to  be  an  inorganic  

substance which is homogeneous in structure and similar in the  

composition when found on or under the soil bed. The learned  

Senior  Counsel  would  submit  that  ‘ordinary  earth’  (sadharan  

mitti)  is  not  covered  by  the  definition  of  ‘mineral’  as  noted  

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above.  He  also  submitted  that  one  cannot  equate  ‘ordinary  

earth’ (sadharan mitti) with ‘ordinary clay’ and ‘ordinary earth’ is  

not like ‘ordinary clay’. The Learned Senior Counsel argued that  

Banarsi Dass Chadha was a case relating to ‘brick earth’ and  

there was no cause of action, no plea and no argument raised  

as  regards  ‘ordinary earth’  and the  remark  in  passing  about  

‘ordinary earth’ or the judgment of Calcutta High Court in the  

State of  West Bengal and Ors.  v.  Jagadamba Prasad Singh  

and Others10 at the fag end is obiter and not part of law laid  

down by this Court. According to him, Banarsi Dass Chadha is  

not  an authority or  precedent for  the purpose of  the present  

case  and  it  is  the   ratio in  V.P. Pithupitchai   that governs  

and binds the case.

19. It  is  appropriate  to  reproduce the meaning of  the  

word  ‘mineral’   noted   in   Black’s   Law  Dictionary  (Eighth  

Edition) since  it  is  a   later edition.   It reads thus :

“mineral,  n. 1.  Any  natural  inorganic  matter  that  has  a  definite  chemical  composition  and  specific  physical  properties that give it  value <most minerals are crystalline  solids>. [Cases: Mines and Minerals  48. C.J.S.  Mines and  Minerals  §§  4,  140-142.]  2.  A subsurface  material  that  is  explored for,  mined,  and exploited for its  useful  properties  and commercial value. 3. Any natural material that is defined  as a mineral by statute or caselaw.”   

10 AIR 1969 Cal 281

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20. A  survey  of  various  decisions  referred  to  

hereinabove   would show  that  there   is   wide    divergence of  

meanings   attributable   to   the word ‘mineral’  and that  in  

judicial     interpretation of the expression ‘mineral’ variety of  

tests   and principles have been propounded; their application,  

however,  has    not  been   uniform.   Insofar  as  dictionary  

meaning  of   the  word ‘mineral’  is concerned, it  has never  

been  held  to  be  determinative  and  conclusive.  The  word  

‘mineral’  has  not  been  circumscribed  by  a  precise  scientific  

definition;  it  is  not  a  definite  term.  The proposition that  

the  minerals  must  always  be  subsoil  and  that  

there can be no minerals on the surface of the earth has also  

not found favour in judicial interpretation of the word ‘mineral’.  

The term ‘mineral’ has been judicially construed many a time in  

widest  possible amplitude and sometimes accorded a narrow  

meaning. Pithily said, its precise meaning in a given case has  

to  be  fixed  with  reference  to  the  particular  context.  We find  

ourselves  in  agreement  with  the  view expressed  in  Banarsi   

Dass Chadha that word ‘mineral’ is not a word of art and that it  

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is  capable  of  multiplicity  of  meanings  depending  upon  the  

context and that the word ‘mineral’ has no fixed but a contextual  

connotation.  The test applied by this Court in V.P. Pithupitchai  

in holding seashell not a mineral because in its original form it is  

not mineral, in our view, is not determinative and conclusive in  

all situations when a question arises as to whether a particular  

substance  is  a  mineral  or  not.  It  is  worth  noticing  that  any  

natural material that is defined as a ‘mineral’ by statute or case  

law may also be covered by the expression ‘mineral’ as noted  

in Black’s Law Dictionary (Eighth Edition).

21. Common parlance test that because nobody speaks  

of ‘ordinary earth’ as a ‘mineral’ has not been accepted by this  

Court in Banarsi Dass Chadha.  As a matter of fact, this Court  

in this regard specifically disagreed with the view of Calcutta  

High Court in Jagadamba Prasad Singh10 .

22. In  the  context  of  Section  3(e),  what  we  have  

discussed above, we hold, as it must be, that ‘ordinary earth’ is  

comprehended  within  the  meaning  of  the  word  ‘any  other  

mineral’. We adopt the reasoning given by three-Judge Bench  

in  Banarsi Dass Chadha that if the expression ‘minor mineral’  

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as defined in Section 3(e) of the Act includes ‘ordinary clay’ and  

‘ordinary sand’, there is no reason why ‘ordinary earth’ should  

not be comprehended within the meaning of the word ‘any other  

mineral’.

23. Having held that ‘ordinary earth’  is comprehended  

within the meaning of the word ‘any other mineral’ in Section  

3(e) of the Act, 1957, the question that now arises is whether  

the exercise of power by the Central Government under Section  

3(e) of the Act, 1957 in declaring the use of ‘ordinary earth’ for  

filling  or  levelling  purposes  in  construction  of  embankments,  

roads, railways,  building as ‘minor mineral’  is justified.  It  was  

contended  on  behalf  of  the  appellants  that  the  Central  

Government cannot include any matter based on mere use nor  

can  it  make  purpose-based  distinction.  Once  the  ‘ordinary  

earth’ is found to be comprehended within the meaning of the  

word ‘any other mineral’ for the purposes of Section 3(e) of the  

Act, 1957, in our view, there is no impediment for the Central  

Government  to  include  or  exclude  the  same  based  on  a  

particular  use  or  purpose.  User  can  be  a  valid  reason  for  

exclusion  as  well  as  inclusion  in  declaring  mineral,  ‘minor  

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mineral’ in exercise of the powers conferred upon the Central  

Government under Section 3(e) of the Act and exercise of any  

such power based on use or  purpose cannot  be said  to  be  

arbitrary. We, accordingly, find no merit in the contention of the  

Learned Senior Counsel for the appellants that the declaration  

of the ‘ordinary earth’ for the uses and purposes mentioned in  

the notification dated February 3, 2000 is ultra vires the power  

conferred upon the Central Government.

24. The learned Senior Counsel for the appellants also  

argued that  demand of  royalty  can be raised only  against  a  

lessee or mining permit-holder and the demand raised against  

the  appellants,  who  are  neither  lessees  nor  mining  permit  

holders, is violative of the Rules, 1963.

25. The  High  Court  while  dealing  with  the  aforesaid  

contention held :

“Now coming to the question as to whether the amount of  royalty can be recovered from the petitioners who are the  contractors and suppliers of ordinary earth and other minor  minerals, we are of the considered opinion that the royalty is  payable on excavation of any minor minerals. The liability is  primarily of the person holding the mining lease or a mining  permit but if a person does not hold any mining lease or a  mining  permit,  the  liability  does  not  cease.  Any  person  dealing in a minor mineral is required to maintain and keep  documents to show that  the royalty has been paid and in  order to ensure that due royalty on minor minerals has been  

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paid within the State of U.P., the State Government by the  tree Government Orders have provided for producing copies  of  declaration  in  form  MM  11  and  treasury  challan  evidencing  deposit  of  royalty.  It  cannot  be  said  that  any  undue restrictions have been placed upon the right to carry  on trade or  business or  it  is  without the authority  of  law.”

26. Rules, 1963 have been framed by the Government  

of  Uttar  Pradesh  in  exercise  of  its  power  conferred  under  

Section 15 of  the Act,  1957.  These Rules have adopted the  

definition of ‘minor mineral’ as provided in Clause (e) of Section  

3  of  the  Act,  1957.  The  Rules  make  provision  for  grant  of  

mining lease; payment of royalty/dead rent; conditions of mining  

lease  and  permit;  contraventions,  offences  and  penalties  for  

unauthorized mining including  consequences of  non-payment  

of royalty, rent or other dues; powers of the District Officers and  

the Officers of the Directorate of Geology and Mining for the  

purpose of assessment of royalty; collection of royalty or dead  

rent  through   contractor;  appeal  against  order  passed under  

these  Rules  by  the  District  Officer  and  remedy  by  way  of  

revision to the State Government.

27. Vide  notification  dated  March  20,  2001,  First  

Schedule appended to the Rules, 1963 was amended and rate  

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of royalty for ‘ordinary clay’ ‘ordinary earth’ was fixed at Rs. 4/-  

per cubic meter.

28. Admittedly  demand notices  came to  be issued to  

the appellants by the Office of the District  Officer bringing to  

their notice that they have extracted ‘ordinary earth’ covered by  

the definition of ‘minor mineral’ without any permission or permit  

and that they have also not paid royalty. The appellants were,  

thus, called upon to make payment of royalty.  However, neither  

the material placed before us nor from the judgment of the High  

Court,  it  transpires that the appellants responded to the said  

notices and raised the objection that demand of royalty cannot  

be  raised  against  them as  they  were  not  lessees  or  mining  

permit holders. In any case, if they raised such objection, they  

did not await decision of the authorities in this regard. Rules,  

1963 provide complete machinery for assessment and recovery  

of royalty and consequences of non-payment of royalty. These  

Rules  also  provide  remedy  to  an  aggrieved  person  against  

order passed under the Rules by the District Officer demanding  

payment  of  royalty.  The  appellants,  having  failed  to  pursue  

remedy provided under the Rules, 1963 as regards recovery of  

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royalty from them, we are afraid, the view taken by the High  

Court does not call for any interference in our jurisdiction under  

Article 136 of the Constitution.

29. Consequently,  all  these  appeals  fail  and  are  

dismissed with no order as to costs.  

……………………J   (Tarun Chatterjee)

…….……………..J         (R. M. Lodha)

New Delhi November 9, 2009.

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