No Penalty / Royalty for On-Site Use of Excavated Earth
The petitioner was awarded the contract of construction of the computer complex for IIT, Mumbai.
One of the conditions of the work order for disposing off of surplus excavated materials to the nearby dumping pits / areas within 3 kms of the IIT campus.
SDO issued the notice alleging unauthorized excavation of 3800 bras of minor minerals and after recording the statement, issued the penalty order for Rs.54,08,811/-. This was confirmed by the Collector and also by the Additional Commissioner.
The Notification dated 11th May 2015 is also relevant. It reads thus:
“3. In rule 46 of the Principal Rules: (a) for the sub-rule (i), the following sub-rule shall be substituted, namely : (i) The lessee shall pay royalty on minor minerals removed from the leased area at the rates specified in Schedule I Provided that, such rates shall be revised once in every three years : Provided further that, no royalty shall be required to be paid on earth which is extracted while developing a plot of land and utilized on the very same plot for land levelling or any work in the process of development of such plot”. ; (b) in the sub-rule (v), for the words “as specified by the Government, from time to time”, the words “at the rate specified in Schedule II” shall be substituted.” (Emphasis supplied) 43) The Notification recognises that no royalty is payable on earth excavated in the course of developing a plot and utilised on that very plot for levelling or for any work undertaken in the process of its development. This fortifies the Petitioner’s contention that the excavation and utilisation of the material within the IIT campus could not, merely because the campus comprised different survey numbers, have attracted the impugned demand.
Mere excavation of ordinary earth does not, by itself, attract Section 48(7) of the MLRC. The liability depends upon the use or purpose for which the excavated earth is put. The authority is required to make a precise determination of its end-use and cannot impose liability merely because ordinary earth has been excavated. Where the excavated earth is not commercially exploited but is redeployed in the course of the very development activity for which it was excavated, it would not fall within the description of a minor mineral merely by reason of its excavation.
Judgment dated 22.6.2026 of the High Court of Bombay in Writ Petition No.1830 of 2015 of IVRCL Limited Vs. State of Maharashtra and others
