The Supreme Court has held that the government is not entitled to any mining royalty if a developer excavates land for laying foundation of a building, thus rejecting the Maharashtra government’s claim that the activity of digging up earth for any such concrete foundation is akin to mining operations.
Deciding a batch of appeals led by the Promoters and Builders Association of Pune, a bench headed by Justice Ranjan Gogoi partly set aside the Bombay High Court order which held that even ordinary earth was to be treated as a (minor) mineral and the state government had the right to all minerals on public or private land.
The HC in 2010 had said that process of using the extracted soil in the construction activity at the site itself or using it for levelling or landscaping was nothing but using the mineral, thus making a developer liable to pay royalty and penalty for not taking permission for mining the land. The penalty was to be calculated at three times the amount proposed as royalty, charged for excavation of per brass soil.
While it held that the ordinary earth used for filling or levelling purposes in construction of embankments, roads, railways, buildings is deemed to be a minor mineral, the excavation of ordinary earth by the developers for laying foundation of buildings or for the purpose of widening of the channel to bring adequate quantity of sea water for the purpose of cooling the nuclear plant would not amount to a mining activity so as to attract any levy of royalty or penalty.
“A blanket determination of liability merely because ordinary earth was dug up, therefore, would not be justified; what would be required is a more precise determination of the end use of the excavated earth; a finding on the correctness of the stand of the builders that the extracted earth was not used commercially but was redeployed in the building operations,” Justice Gogoi said.