PROMOTERS AND BUILDERS ASSOCIATION OF PUNEversusTHE STATE OF MAHARASHTRA & ORS.

                       [2014] 12 S.C.R. 347


 PROMOTERS AND BUILDERS ASSOCIATION OF PUNE                              A
                                  v.
          THE STATE OF MAHARASHTRA & ORS.
             (Civil Appeal No. 10717 of 2014)
                      DECEMBER 03, 2014
                                                                         B
        [RANJAN GOGOi AND R.K. AGRAWAL, JJ.]

       Maharashtra Land Revenue Code, 1966: s.48(7) -
  Imposition of penalty - Whether the ·excavation activity even
  for the purposes of laying foundation of the building would            C
  attract rigours of s.48(7) of the Code - Held: Ordinary earth
  has been brought within the fold of a Minor Mineral by
  Notification of 3.2.2000 issued u/s.3(e) of the Act of 1957 -
  In terms of the said Notification, "ordinary earth" used for filling
  or levelling purposes in construction of embankments, roads,           D
  railways, buildings is deemed to be a minor mineral - An
  excavation undertaken to lay the foundation of a building
  would not, ordinarily, carry the intention to use the excavated
  earth for the purpose of filling up or levelling - In the instant
  appeals, excavation of ordinary earth was undertaken by the            E
  appellants· either for laying foundation of buildings or for the
  purpose of widening of the channel to bring cldequate quantity
  of sea water for the purpose of cooling the nuclear plant - The
  construction of buildings was in terms of a sanctioned
  development plan under the MRTP Act whereas the                        F
  excavation/widening of the channel to bring sea water was in
· furtherance of the object of the grant of the land in favour of
  the Nuclear Power Corporation - Penalty not leviable -
  Maharashtra Regional and Town Planning Act, 1966 - s.31
  - Mines and Minerals (Development and Regulati0n) Act,
  1957- s.3(e) - Notification dated 3.2.2000 issued under 1957           G
  Act - Maharashtra Land Revenue (Restriction on Use of
  Land) Rules, 1968 - r.6.                                  ·


                                 347                                     H
    348      SUPREME COURT REPORTS            [2014] 12 S.C.R. .

A         Allowing the appeal, the Court
       HELD: 1. The .quintessence of Section 48(7) of the
  Maharashtra Land Revenue Code, 1966 is extraction/
  removal of any mineral vested in the State without lawful
  authority or without a lawful assignment by the State.
8
  What is a mineral is not defined either under the MRTP
  Act or the Code. The said expression is, however, defined
  by Section 2(j) of the Mines Act, 1952 and Section 3(a)
  read with Section 3(e) of the Act of 1957. As mining
  activities and operations are regulated by the provisions
C of the Act of 1957, it is the definition contained in the said
  Act which will be more relevant for the present. Ordinary
  earth has been brought within the fold of a Minor Mineral
  by Notification of 3.2.2000 issued under Section 3(e) of
  the Act of 1957. In terms of said Notification, "ordinary
D earth" used for filling or levelling purposes in
  construction of embankments, roads, railways, buildings
  is deemed to be a minor mineral. In these appeals,
  excavation of ordinary earth had been undertaken by the
  appellants either for laying foundation of buildings or for
E the purpose of widening of the channel to bring adequate
  quantity of sea water for the purpose of cooling the
  nuclear plant. The construction of buildings is in terms
  of a sanctioned development plan under the MRTP Act
  whereas the excavation/widening of the channel to bring
F sea water is in furtherance of the object of the grant of
  the land in favour of the Nuclear Power Corporation.
  Unless the excavation undertaken by the appellant-
  builders is for any of the purposes contemplated by the
  Notification dated 3.2.2000 the liability of such builders to
G penalty under Section 48(7) of the Code would be in
  serious doubt. [Paras 10-14] [355-B-D; 356-B-F; 357-C]

        2. Though Section 2(j) of the Mines Act, 1952 which
    defines 'Mine' and the expression "mining operations"
    appearing in Section 3(d) of the Act of 1957 may
H
PROMOTERS AND BUILDERS ASSOCIA110N OF PUNE 349
         v. STATE OF MAHARASHTRA
contemplate a somewhat elaborate process of extraction          A
of a mineral, in view of the Notification dated 3.2.2000,
insofar as ordinary earth is concerned, a simple process
of excavation may also amount to a mining operation in
any given situation. However, the operation of the said
Notification has an inbuilt restriction. It is ordinary earth   B
used only for the purposes enumerated therein, namely,
filling or levelling purposes in construction of an
embankment, road, railways and buildings which alone
is a minor mineral. Excavati.on of ordinary earth for uses
not contemplated in the said Notification, therefore, would     c
not amount to a mining activity so as to attract the wrath
of the provisions of either the Code or the Act of 1957.
As use can only follow extraction or excavation it is the
purpose of the excavation that has to be seen. An
excavation undertaken to lay the foundation of a building       0
would not, ordinarily, carry the intention to use the
excavated earth for the purpose of filling up or levelling.
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            E
 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. [Paras 15 and
 16] [357-D-H; 358-A-B]
                                                                F
     3. Insofar as the appeal filed by the Nuclear Power
Corporation is concerned, the purpose of excavation, ex
facie, being relatable to the purpose of the grant of the
land to the Corporation by the State Government, the
extraction of ordinary earth was clearly not for the G
purposes spelt out by the said Notification. The process
undertaken by the Corporation Is to further the objects
of the grant in the course of which the excavation of earth .
is but coincidental. [Para 17] [356-D-E]
                                                                H
    350      SUPREME COURT REPORTS                 [2014] 12 S.C.R..


A       Rashtriya Chemic,als and Fertilizers Limited     vs.
                                                     State of
    Maharashtra and Others AIR 1993 Bombay 144 - referred
    to:
                           Case Law Reference:
B         AIR .1993 Bombay 144 referred to                 Para 17

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    10717 of 2014.

        From the Judgment & Order dated 08.10.2010 of the High
C   Court of Judicature at Bombay in Writ Petition No. 785 of 2008.

                                  WITH

          C.A. No. 10718; 10716 and 10715 of 2014.
D       Shekhar Naphade, Amel Chitale, Nirnimesh Dube, Gaurav
    Agrawal, .Rahul Jain, Shivaji M. Jadhay, Rukhmini Bobde,
    Nandita Bajpai (for Parekh & Co.) for the Appellant.

         Arun R. Pednekar, Aniruddha P. Mayee, Asha Gopalan
E   Nair for the Respondents.

          The Judgment of the Court was delivered by

        RANJAN GOGOi, J. 1. Leave granted in all the special
    leave petitions.
F
         2. The appellant in the first batch of appeals before us is
    an Association representing individual builders of the State of
    Maharashtra who carry out construction activities in the normal
    course of business. The Association and also the individual
G   builders are aggrieved by the judgment of the Bombay High
    Court dated 8.10.2010, inter alia, holding that "excavation
    activity even for the purposes of laying foundation of the building
    would still attract rigours of Section 48(7) of the Revenue
    Code". Under the aforesaid provision of the Code extraction
H   of minerals by any person without assignment of any ·right by


    ·.
 PROMOTERS AND BUILDERS ASSOCIATION OF PUNE 351
   v. STATE OF MAHARASHTRA (RANJAN GOGOi, J.]
 the State Government makes such person liable to penalty, as      A
 prescribed.

       3. The Nuclear Power Corporation, the second appellant
 before us is a Government Company engaged in the
 construction, maintenance and operation of nuclear power
                                                                    8
 station in India. It is aggrieved by the fact that though an issue
 similar to the one raised by the builders had been raised by it
 before the High Court the writ proceeding instituted by the
 Corporation has been dismissed on the ground that statutory
 remedy under the Maharashtra Land Revenue Code, 1966
 (hereinafter referred to as 'the Code') had not been resorted C
 to by the Corporation.

     4. The relevant facts may, at the outset, be alluded to.

      In the first set of appeals, digging of earth for the purpose 0
 of laying of foundation of a building is an integral part of the
 building activities undertaken by the appellants. According to
 the appellant-builders, the earth excavated or dug up is
 redeployed in the building itself at a particular stage of the
 construction. On the basis that such activity amounts to mining E
 of a "minor mineral" i.e. ordinary earth and that the same is
 without due permission/lease or assignment of the right to do
 so, the respondent authorities have invoked the power under
 Section 48(7) of the Code to levy penalty by the order(s)
 impugned before the High Court. The challenge having resulted F
 in the findings of the High Court, as extracted above, the
 present appeals have been filed by the Association of the '
 Builders and also by some of the builders themselves.

       5. The facts in the appeal filed by Nuclear Power
  Corporation of India Limited are largely similar. In consonance G
  with its objects, the Corporation in whose favour the grant of
  land was made had carried out digging activities for the
· purpose of widening of the water channel through whic~ sea
  water is drawn for the purposes of cooling the nuclear plant in
                                                                   H
    352      SUPREME COURT REPORTS                  [2014] 12 S.C.R.


A   the Tarapur Atomic Power Station. The Corporation
    categorically denies any commercial use of the extracted earth.

       6. On behalf of the appellants it is pointed out that to attract
  Section 48(7) of the Code, the activity undertaken has to be
B unlawful. The building operations undertaken by the appellant-
  builders are pursuant to a. final deve!opment plan sanctioned
  under Section 31 of the Maharashtra Regional and Town
  Planning Act, 1966 (hereinafter for short 'the MRTP Act'). In this
  regard the attention of the Court has also been drawn to the
  provisions of Section 2(7) of the MRTP Act which define
C "development" to mean "carrying out of buildings, engineering,
  mining or other operations in or over or under, land ........ ". It
  is also pointed out that by Notification dated 3.2.2000 issued
  under Section 3(e) of the Mines and Minerais (Development
  and Regulation) Act, 1957 (hereinafter for short referred to as
D 'the Act of 1957') ordinary earth has been declared to be a
  minor mineral but only if it is Used for filling or levelling purposes
  in construction of embankments, roads,-railways, buildings etc.
  According to th~ learned counsel for the appellant-builders, the
  earth which is dug up for the purposes of laying of foundation
E of buildings is not intended for filling up or levelling purposes;
  digging of the earth is inbuilt in the course of building
  operations. The activity undertaken, therefore, cannot be
  characterised as one of excavation of a minor mineral.
  Additionally, the provisions of Rule 6 of the Maharashtra Land
F Revenue (Restriction on Use of Land) Rules, 1968 (hereinafter
  for short 'the Rules of 1968') has been relied upon to contend
  that excavation of land for purposes of laying of foundation for
  buildings do not require any previous permission of the
  Collector which is otherwise mandated prior to use/excavation
G of land for any of the purposes covered by the provisions of the
  Rules of 1968. The definition of 'Mine' in Section 20) of the
  Mines Act, 1952 and the meaning of the expression 'mining
  operation' assigned by Section 3(d) of the Act of 1957 has also
  been pressed into service to contend that mere digging of earth
H as undertaken by the appellants cannot amount to a mining
PROMOTERS AND BUILDERS ASSOCIATION OF PUNE 353
  v. STATE OF MAHARASHTRA [RANJAN GOGOi, J.]
activity. The learned counsel for the appellants (builders) have A
alternatively contended that if the appellants are still to be held
liable under the provisions of Section 48(7) of the Code, the
aforesaid provision itself is liable to be adjudged as
constitutionally invalid. The Act of 1957 which is relatable to
Entry 54 of List I comprehensively deals with all questions of B
liability on account of unauthorised/unlicensed mining and the
field being wholly occupied by a central enactment, Section
48(7) of the Code is constitutionally suspect being relatable to
Entry 23 of List II which is subject to Entry 54 of List I.

      7. Insofar as the appeal of the Nuclear Power Corporation C
is concerned, apart from the common grounds of challenge as
in the .case of the builders, it is contended that no commercial
exploitation of the excavated earth was involved in the process
of repair/widening of the water channel; there was no sale or
transfer of the excavated earth and the same was the incidental D
result of the process of repair/widening of the channel which is
an activity in consonance with the grant of the land to the
appellant by the State Government. The said grant was made
way back in the year 1964 on freehold ba·sis for the purpose of
establishing an atomic power station and for maintenance E
thereof. It is further submitted that the very jurisdiction to levy
penalty under Section 48(7) of the Code having been raised in
the writ petition filed by the appellants, the High Court was not
justified in refusing adjudication on merits.
                                                                  F
     8. In reply, the State has contended that after the inclusion
of ordinary earth in the definition of "minor minerals" by
Notification dated 3.2.2000 under Section 3(e) of the 1957 Act,
excavation of ordinary earth without authorization under the Act
of 1957 would make the appellants liable not only to payment G
of penalty under the Code but also for criminal prosecution
under the Act of 1957. It is contended that mere permission for
construction of buildings; sanction of the development plans or
the provisions of Rule 6 of the Rules of 1968 does not absolve
the appellants from fulfilling the statutory obligations under the H
     354       SUPREME COU~T REPORTS               [2014) 12 S.C.R.

A 1957 Act. Such a contention, if accepted, according to the
  learned State counsel, would have the effect of nullifying the
  provisions of the 1957 Act insofar as one specie of minor
  mineral i.e. ordinary earth is concerned. As regards the
  challenge to the constitutional validity of Section 48(7) of the
8 Code     the State contends that the penalty imposed under
  Section 48(7) is compensatory and in the nature of a civil
  liability for the loss suffered by the State. Consequently, the
  challenge is without any substance as the two enactments i.e.
  the Code and the Act of 1957 operate in different fields. The
  enactment of the Code is traceable to Entry 18 and 45 of the
C List II and not Entry 23 of the said List as contended on behalf
  of the appellants.                                    ·

         9. We may proceed to analyse the issues arising by
     reproducing Section 48(7) of the Code under which the
D    impugned actions have been made.

           "48. Government title to mines and minerals-

           (7) Any person who without lawful authority extracts,
           removes, collects, replaces, picks up or"disposes of any
E          mineral from working or derelict mines, quarries, old
           dumps, fields, bandhas (whether on the plea of repairing
           or construction of bunds of the fields or on any other
           plea}, nallas, creeks, river-beds, or such other places
           wherever situate, the right to which vests in, and has not '·
F.         been assigned by the State Government, shall, without
           prejudice to any other mode of action that may be taken
           against him, be liable, on the order in writing of the
           Collector, to pay penalty not exceeding a sum
           determined, at three times the market value of the
G          minerals so extracted, ,removed., collected, replaced,
           picked up or disposed of, as the case may be.

                Provided that, if the sum so determined is less than
           one thousand rupees, the penalty may be such larger
H
PROMOTERS AND BUILDERS ASSOCIATION OF PUNE 355
  v. STATE OF MAHARASHTRA [RANJAN GOGOi, J.]

    sum not exceeding one thousand rupees as the Collector A
    may impose."

      10. A plain reading of the aforesaid provision would make
it clear that the quintessence of the provision contained in
Section 48(7) is extraction/removal of any mineral vested in the
                                                                 8
State without lawful authority or without a lawful assignment by
the State.

     11. What is a mineral is not defined either under the MRTP
Act or the Code. The said expression is however defined by
Section 20) of the Mines Act, 1952 and Section 3(a) read with C
Section 3(e) of the Act of 1957. As mining activities and
operations are regulated by the provisions of the Act of 1957 it
is the definition contained in the said Act which will be more
relevant for the present. Section 3(a) and Section 3(e) is in the
following terms:                                                  D

      "Section 3.-ln this Act, unless the context otherwise
           requires,-

      (a)   "minerals" includes all minerals except mineral oils:
                                                                    E
      (b)        )()()()()(   xxxx        )()()()()(


      (c)        )()()()()(   xxxx        )()()()()(


      (d)        )()()()()(   xxxx        )()()()()(
                                                              F
      (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 G
            mineral;"
     12. Ordinary earth has been bought within the fold of a
Minor Mineral by Notification of 3.2.2000 issued under Section
3(e) of the Act of 1957. The said Notification is in the following
terms:                                                             ·H
    356      SUPREME COURT REPORTS                   [2014] 12 $.C.R.

                                                                  \'
A                            "NOTIFICATION

               GSR (E) - In ex~rcise of the powers conferred by
          Clause (e} of Section 3 of the Mines and Minerals
          (Development and Regulation) Act 1957 (67of1957), the
          Central Government hereby declares the 'ordinarv earth'
B
          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.

c                                                (F.No.7/5/99-M.VI)
                                                               Sd/-
                                                       (S.P.Gupta)
                        Joint Secretary to the Government of India"
                                               (emphasis supplied)
D        13. It is, therefore, clear that "ordinary earth" used for filling
    or levelling purposes in construction of embankments, roads,
    railways. buildings is deemed to be a minor mineral. It is not in
    dispute that in the present appeals excavation of ordinary earth
    had been undertaken by the appellants either for laying
E   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. The construction of buildings is in
    terms of a sanctioned development plan under the MRTP Act
    whereas the excavation/widening of the channel to bring sea
F   water is in furtherance of the object of the grant of the land in
    favour of the Nuclear Power Corporation. The appellant-builders
    contend that there is no commercial exploitation of the dug up
    earth inasmuch as the same is redeployed in the construction .
    activity itself. In the case of the Nuclear Power Corporation it
G   is the specific case of the Corporation that extract of earth is a
    consequence of the use of the land for the purposes of the grant
    thereof and that there· is no commercial exploitation of the
    excavated earth inasmuch as "the soil being excavated for
    "Intake Channel" was not sent outside or sold to anybody for
    commercial gain".          ·      '
H
PROMOTERS AND BUILDERS ASSOCIATION OF PUNE 357
  v. STATE OF MAHARASHTRA [RANJAN GOGOi, J.)
     14'. None of the provisions contained in the MRTP. Act           A
referred to above or the provisions of Rule 6 of the Rules of
1968 would have a material bearing in judging the validity of
the impugned actions inasmuch as none of the said provisions
can obviate the necessity of a mining license/permission under
the Act of 1957 if the same is required to regulate the activities    B
undertaken in the present case by the appellants. It will,
therefore, not be necessary to delve into the arguments raised
on the aforesaid score. Suffice it would be to say that unless
the excavation undertaken by the appellant-builders is for any
of the purposes contemplated by the Notification dated                c
3.2.2000 the liability of such builders to penalty under Section
48(7) of the Code would be in serious doubt.

     15. Though Section 20) of the Mines Act, 1952 which
defines 'Mine' and the expression "mining operations"
appearing in Section 3(d) of the Act of 1957 may contemplate          D
a somewhat elaborate process of extraction of a mineral, in
view of the Notification dated 3.2.2000, insofar as ordinary
earth is concerned, a simple process of excavation may also
amount to a mining operation in any given situation. However,
as seen, the operation of the said Notification has an inbuilt        E
restriction. It is ordinary earth used only for the purposes
enumerated therein, namely, filling or levelling purposes in
construction of an embankment, road, railways and buildings
which alone is a minor mineral. Excavation of ordinary earth for
uses not contemplated in the aforesaid Notification, therefore,       F
would not amount to a mining activity so as to attract the wrath
of the provisions of either the Code or the Act of 1957.

     16. As use can· only follow extraction or excavation it is the
purpose of the excavation that has to be seen. The liability          G
under Section 48(7) for excavation of ordinary earth would,
therefore, truly depend on a determination of the use/purpose
for which the excavated earth had been put to. An excavation
undertaken to lay the foundation of a building would .not,
ordinarily, carry the intention to use the excavated earth for the
                                                                      H
    358       SUPREME COURT REPORTS               (2014] 12 S.C.R.


A purpose of filling up or levelling. 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
B earth was not used commercially but was redeployed in the
  building operations. If the determination was to return a finding
  in favour of the·claim made by the builders, obviously, the
  Notification dated 3.2.2000 would have no application; the
  excavated earth would not be a specie of minor mine·ral under
c Section 3(e) of the Act of 1957 read with the Notification dated
  3.2.2000.

       17. Insofar as the appeal filed by the Nuclear Power
  Corporation is concerned, the purpose of excavation, ex facie,
  being relatable to the purpose of the grant of the land to the
D Corporation by the State Government, the extraction of ordinary
  earth was clearly not for the purposes spelt out by the said
  Notification dated 03.02.2000. The process undertaken by the
  Corporation is to further the objects of the grant in the course
  of which the excavation of earth is but coincidental. In this
E regard we must notice with approval the following views
  expressed by the Bombay High Court in Rashtriya Chemicals
  and Fertilizers Limited Vs. State of Maharashtra and
  Others' while dealing with a somewhat similar question.

F          14. If it were a mere question of Mines and Minerals Act,
           1957 covering the removal of earth, there cannot be
          possibly any doubt whateve(, now, in view of the very wide
          definition of the term contained in the enactment itself,
           and as interpreted by the authoritative pronouncements
          of the Supreme Court. As noted earlier, the question
G
           involved in the present case is not to be determined with
           reference to the Central enactment but with reference to
           the clauses in the grant arid the provisions in the Code .
          .When it is noted that the Company was given the land
H   1.   AIR 1993 Bombay 144.
PROMOTERS AND BUILDERS ASSOCIATION OF PUNE 359
  v. STATE OF MAHARASHTRA [RANJAN GOGOi, J.]
     for the purpose of erecting massive structures as needed         A
     in setting up a chemical factory of the designs and
     dimensions of the company, the context would certainly
     rule out a reseNation for the State Government of the
     earth that is found in the land. That will very much defeat
     the purpose of the grant itself. Every use of the sod, or        B
     piercing of the land with a pick-axe, would, in that
     eventuality, require sanction of the authorities. The
     interpretation so placed, would frustrate the intention of
     the grant and lead to patently absurd results. To equate
     the earth removed in the process of digging a foundation,        c
     or otherwise, as a mineral product, in that context, would
     be a murder of an alien but lovely language. The reading
     of the entire grant, would certainly rule out a proposition
     equating every pebble or particle of soil in the granted
     land as partaking the character of a mineral product. In
                                                                      0
     the light of the above conclusion, I am clearly of the view
      that the orders of the authorities, are vitiated by errors of
      law apparent on the face of the record. They are liable to
      be quashed. I do so."

      18. For the aforesaid reasons all the appeals are allowed,      E
however, with the direction that in the cases of the appellant-
builders the respondent-State will be at liberty to proceed further
in accordance with the observations contained in this order if
it is so advised. So far as the appeal of the Nuclear Power
Corporation is concerned the writ petition is allowed and the         F
orders impugned before the High Court are set aside and
quashed. In view of our conclusions above, we do not consider
it necessary to go into the larger question raised i.e. the
constitutionality of the provision of Section 48(7) of the Code
which issue is left open for decision in an appropriate case.         G

Devika Gujral                                       Appeal allowed.