State’s Right to Levy Royalty on Minor Minerals: The New Principle from The State of Punjab v. M/s. Om Prakash Brick Kiln Owner

1. Introduction

In The State of Punjab & Ors. v. M/s. Om Prakash Brick Kiln Owner & Ors. (2025 INSC 88), the Supreme Court of India addressed the power of the State Government to levy royalty on brick earth declared as a minor mineral. The dispute arose between the State of Punjab (the original defendants) and a group of brick kiln operators (the original plaintiffs). The brick kiln operators had taken land on lease to extract earth for the purpose of manufacturing bricks. The central question was whether the State Government could lawfully assess and recover royalty for the excavation of brick earth, despite the fact that the kiln operators did not concede State ownership of the land or the mineral embedded in it.

The judgment sheds important light on the status of brick earth as a minor mineral, the legal framework under the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter 1957 Act), and the Punjab Minor Mineral Concession Rules, 1964 (hereinafter Mineral Rules). It clarifies that land ownership does not automatically exempt parties from the obligation to pay royalty on recognized minor minerals. The Court conclusively held that once an item is declared as a minor mineral, the State is empowered to levy royalty irrespective of ownership rights claimed by private parties.

2. Summary of the Judgment

The Supreme Court reversed the decision of the High Court, which had ruled in favor of the brick kiln owners. In doing so, the Supreme Court restored the trial court’s decree dismissing the suits for permanent injunction against the levy of royalty. The key findings of the Supreme Court can be summarized as follows:

The State of Punjab has the right to levy royalty on the excavation of minor minerals, including brick earth, by virtue of relevant provisions in the 1957 Act and the accompanying Mineral Rules.
The question of whether the brick kiln operators (or the private owners of the land) actually owned the sub-soil mineral rights was immaterial for assessing liability to pay royalty, as brick earth is declared a minor mineral.
The remedy for challenging the amount of royalty lies in the appeal mechanisms provided under the Mineral Rules, and not by a direct suit for permanent injunction in civil courts.
The Court did not adjudicate the ownership of the land or minerals, focusing instead on the State’s statutory authority to collect royalty on minor minerals.
Consequently, the injunction restraining the State from recovering royalty was set aside, and the trial court’s ruling was reinstated.

3. Analysis

3.1 Precedents Cited

Although the judgment itself focuses largely on statutory provisions rather than prior case law, it does refer to:

The Punjab Land Revenue Act, 1887 – Sections 41 and 42 were pivotal in determining presumption of ownership of land and resources.
The Mines and Minerals (Regulation and Development) Act, 1957 – Section 3(e) declaring brick earth a minor mineral, and Section 15 empowering State Governments to frame rules for regulating minor minerals.
The Punjab Minor Mineral Concession Rules, 1964 – Key provisions such as Rules 54A, 54B, and 54C formed the basis of the Court’s conclusion that the State can levy royalty on minor minerals irrespective of who owns the land.

The judgment also examines the distinction between sub-section (1) and sub-section (2) of Section 42 of the Punjab Land Revenue Act, 1887, and how presumptions regarding ownership of forests and quarries operate. However, ultimately, the statutory rules on minor minerals took precedence regarding the State's authority to levy royalty.

3.2 Legal Reasoning

The Court’s reasoning flows from the statutory framework of the 1957 Act and the Mineral Rules. These provisions make it clear that:

Once a mineral is notified as a “minor mineral” under Section 3(e) of the 1957 Act, State Governments acquire the power to regulate it, including the right to levy royalty.
Under the Punjab Minor Mineral Concession Rules, 1964, no person may undertake quarrying or mining operations (even on privately owned land) without holding a certificate of approval. This requirement indicates that permission is essential for any extraction activity relating to minor minerals.
Rules 54A, 54B, and 54C stipulate the procedure for filing monthly returns, assessment of royalty, and consequences of non-compliance. The Court pointed out that these rules emphasize the State's overarching authority to impose and collect royalty.
The question of land ownership becomes irrelevant to the narrow issue of royalty because the 1957 Act, read with the Mineral Rules, does not exempt private landowners from paying royalty on minor minerals. The Act’s objective is to regulate the extraction of minerals and ensure the State collects proper dues.
Where arguments regarding ownership of the subsoil arise, the Court highlighted that such questions should be addressed through proper factual inquiries involving all necessary parties—particularly the actual landowners. However, the question of whether royalty is payable does not hinge on ownership once the mineral is declared minor.

3.3 Impact

This ruling has significant implications for businesses and industries reliant on minor minerals:

Reduced Litigation on Ownership Claims: The Court’s precedent clarifies that operators cannot simply dispute State ownership to avoid royalty duties. The newly affirmed principle narrows the scope of litigation, ensuring focus remains on the statutory procedures for assessing and contesting royalty.
Streamlined Royalty Collection: The State retains wide-ranging authority to collect royalty, and operators must comply by obtaining the correct approvals and paying assessed amounts. This reduces confusion for kiln operators, private landowners, and government authorities.
Guidance for Future Cases: This judgment will serve as a benchmark for other states with similar frameworks, reinforcing that declarations of certain materials as minor minerals bring them squarely within the State’s royalty regime.

4. Complex Concepts Simplified

This case touches upon several legal concepts that can be daunting:

Minor Mineral: A substance that has been declared to be a minor mineral by Central Government notification. Common examples include building stones, gravel, sand, and brick earth. Once labeled as a minor mineral, its excavation is regulated by the State Government, which can impose royalty.
Royalty: A fee or charge levied by the government for the right to extract and use minerals. In the context of this judgment, it is immaterial whether the land is owned privately or by the government; royalty is still due when the material is a declared minor mineral.
Presumption of Ownership under Section 42 of the Punjab Land Revenue Act (1887): This section defines how ownership is presumed if the record of rights for forest or quarry was completed before or after November 18, 1871. However, the Court concluded that even if a private entity owns the land, that does not negate the statutory obligation to pay royalty regarding minor minerals.

5. Conclusion

The Supreme Court’s decision in The State of Punjab v. M/s. Om Prakash Brick Kiln Owner powerfully clarifies that once a particular resource (in this case, brick earth) is declared a minor mineral, the State Government’s authority to levy royalty is paramount. The ownership question of the land is effectively sidelined in the face of a statutory framework that empowers the State to regulate extraction and impose royalty.

By restoring the trial court’s dismissal of the suits challenging the levy, the Court has paved the way for straightforward enforcement of royalty provisions. Future litigants are put on notice that the correct statutory route to contest royalty assessments is through the appeals mechanism under Rule 54F of the Mineral Rules, rather than seeking an injunction in civil courts. This judgment stands as a key precedent in clarifying the law’s intent to preserve and manage natural resources under the oversight of State authorities.