Judgment Sheet

LAHORE HIGH COURT RAWALPINDI BENCH,

RAWALPINDI.
JUDICIAL DEPARTMENT
WRIT PETITION NO.4968 OF 2010

JUDGMENT
Date of hearing___6.10.2011
Petitioners (WAPDA and another) by Mian Ashiq Hussain, Advocate.
Respondents (Assisant Director, Mines & Mineral, Attock etc) by
Mr.Sadaqat Ali Khan, Additional Advocate General, Punjab, with
Ijaz Hadayat, Assistant Director, Mines and Minerals, Attock.

IJAZ UL AHSAN, J.- The petitioners are aggrieved of

order dated 16.9.2010 passed by the Secretary, Government of
Punjab, Mines and Minerals Department. Through the impugned
order a revision petition filed by the petitioners was dismissed.
2.

The brief facts necessitating filing of this petition are that

petitioner No.2 was a contractor of petitioner No.1 for the purpose

of construction of Ghazi Barotha Hydro Power Project (the
Project). For the purpose of execution of the Project thousands of
acres of land were acquired by petitioner No.1, who subsequently
awarded a contract to petitioner No.2 to execute the Project by
way of excavation and construction of the Ghazi Barotha Hydro
Power Project. While digging the power channel for the Project,
petitioner No.2 found deposits of ordinary/slate stone in the right

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of way. They excavated the said stone and used the same for
construction of the power channel and other related works. On
inspection by the respondents on 18.11.1997, it was assessed
that the petitioner No.2 had excavated and used ordinary/slate
stone worth Rs.4.5 million. The said assessment was duly
approved by the Licensing Authority as per the law. Petitioner
No.2 filed an appeal before the Director of Industries and Mineral
Development, Punjab. The same was rejected vide order dated
17.12.1998. Petitioner No.2 thereafter filed revision petition before
the Secretary Industries and Mineral Development which was
adjourned sine die vide order dated 28.6.2000 for the reason that
matter had been agitated by the petitioners before courts of law
and was pending before the said courts.
3.

It appears that while the matter was pending before

departmental functionaries, petitioner No.2 had filed a civil suit

against the respondents in which the aforesaid order passed by
the departmental functionaries was challenged. Initially a status
quo order was issued which was subsequently confirmed on
4.2.1999.

The

Department

filed

an

appeal

against

grant/confirmation of the status quo order before the District

Judge, Attock. The order dated 4.2.1999 passed by the learned
Civil Judge was set aside. Aggrieved of the order passed by the
learned Additional District Judge, Attock, petitioner No.2 filed Civil
Revision No.264/1999 before this Court. Vide order dated
18.4.2000, petitioner No.2 was directed to deposit the sale price
of minerals excavated and used by them with the trial court. A

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further direction was issued that if in future they continue

excavation, then they should deposit the sale price of minerals
excavated and used by them with the trial court. It appears that
petitioner No.2 deposited the sale price of ordinary/slate stone
excavated and used in the Project with the trial court.
4.

On 4.1.2003, the site near Kamra was inspected by the

Department. Petitioner No.2 was again found to have excavated

and used ordinary/slate stone in various civil works including
construction of road along the power channels. A claim of
Rs.35,02,827/- was raised against petitioner No.2 on account of
unauthorized excavation and use. Show Cause Notices were
issued to the petitioners. The petitioners filed their respective
responses. The stance taken by the petitioners was that WAPDA
had engaged petitioner No.2 for construction of power channel of
Ghazi

Barotha

Hydro

Power

Project.

During

excavation

ordinary/slate stone was found which was used for civil works
relating to the power channel. The land falling in the route of the
power channel was acquired by WAPDA. Therefore, excavation
of ordinary/slate stone from right of way of the power channel was
neither illegal nor unauthorized. It was admitted that pursuant to
order passed by this Court on 18.4.2000, the petitioner had
already deposited a sum of Rs.4.5 million. It was, however,
prayed that since the civil suit was pending in the civil courts of
Attock, the fresh assessment of Rs.35,02,827/- may be stayed till
final decision of the civil courts. After hearing the parties, the

W.P.4968/2010

Licensing Authority approved recovery of the aforesaid amount of

Rs.35,02,827/-.
5.

Aggrieved of the aforesaid order, the petitioners filed an

appeal before the Director General, Mines and Minerals, Lahore.

The appeal in question was dismissed on 3.4.2006. Being
dissatisfied with the order passed by the Director General, Mines
and Minerals, a revision petition was preferred before the
Secretary,

Government

of

Punjab,

Mines

and

Minerals

Department. However, the revision petition did not succeed and

the same was dismissed vide the impugned order dated
16.9.2010. Hence this petition.
6.

This petition has not yet been admitted to regular hearing.

However, as the parties are represented and their learned

counsels have been heard at considerable length, with their
consent, this case is treated as a pacca case and is being
disposed of as such.
7.

The learned counsel for the petitioner submits that the

main allegation against the petitioner is that it violated the

provisions of Rule 32 of the Punjab Minor Minerals Concession
Rule, 1990. He submits that notice under Rule 32 has been
issued in oblivion of the fact that excavation for public purpose is
excluded where the said area is acquired for public purpose. In
this regard, he has referred to Rule 31 of the Punjab Minor
Minerals Concession Rules, 1990 which provides that:-

W.P.4968/2010

if an area or a portion thereof held under a lease is

required at any time for any public purpose, the
lessee shall forthwith release to the Licensing
authority such area and to such extent as is required
by the Government and in such a case the bid
money will be reduced proportionately.
8.

The learned counsel has also referred Rule 27 of the

Punjab Minor Minerals Concession Rules 1990 to argue that a

lessee can be restricted from carrying on any mining operations
at or upto any point within a distance of 100 meters from any
Railway Line, water reservoir, power line, gas pipeline or other
public works. He maintains that the rationale of this rule is that no
interference may be made in works being undertaken for public
purpose. He therefore submits that since the Project is for public
purpose and no mining operation could have been carried on
within 100 meters from the Project, the government has not
suffered any loss which is sought to be recovered.
9.

The learned counsel has referred to Muhammad Iqbal

Khan and others vs. Collector, Mansehra and others (PLD

2004 Sc. 659) in which the Honble Supreme Court of Pakistan
has drawn a distinction between minor and major minerals and
has held that the rules need to be a liberally interpreted. It has
been held that the liberal interpretation has to be adopted in
order to safeguard the interest of the owners of the land having
deposits of minor minerals because if besides them a third party
succeeds to acquire leasehold right in an auction to extract minor
minerals from their land, it would cause multiple administrative

W.P.4968/2010

problems for both the sides and owners of the land would be
deprived to utilize the benefits of the land owned by them.
10.

The learned counsel further submits that a pre-condition to

attract Rule 32 of the Punjab Minor Minerals Concession Rules,

1990 is that there should be unauthorized mining. In this
connection, he has referred to the definition of mine as given in
the Punjab Mining Concession Rules, 2002 in subsection 2 (xxv)
which provides as follows:mine means any surface or underground excavation
where any operation for the purpose of searching for
or obtaining a mineral has been or is being carried on,
and includes all works, machinery, tramway, ropeway
and siding, whether above or below ground, in or
adjacent or belonging to or appurtenant to a mine but
does not include the manufacturing or processing
plant.

11.

From the said definition, the learned counsel has

attempted to build an argument that if the purpose of excavation

is not mining, the provisions of Rule 32 are not attracted. The
learned counsel further submits that the authority to issue a show
cause notice namely Additional Director, Mines and Mineral was
not the competent authority to issue such a notice. He submits
that in terms of the Rule 32 of the Rules 1990, action can only be
initiated by Licensing Authority whereby the Additional Director is
not the licensing authority.

W.P.4968/2010

12.

The learned counsel submits that the term Licensing

Authority has been defined in Rule 2 (ii) of the Punjab Minor

Minerals Concession Rules, 1990 which provides as follows:Licensing

Authority

means

the

Joint

Director

(Mineral Development), Punjab, or an authority

notified by the Government as a Licensing Authority
for purposes of these rules.
He therefore, submits that the notice was issued without
jurisdiction. At this stage, the learned Additional Advocate
General has pointed out that the Additional Director has been
notified by the Competent Authority as the Licensing Authority
through a notification which has been placed on record. Faced
with this situation the learned counsel for the petitioners has not
pressed this argument.
13.

The learned counsel for the petitioner finally argues that

the impugned order dated 5.10.2010 passed by the Secretary,

Mines is an arbitrary order which has mechanically been passed
without discussing the arguments of the petitioner. Further, the
judgment of the Honble Supreme Court of Pakistan in
Muhammad Iqbals case ibid has not been considered. He
therefore, submits that the impugned order is not sustainable in
law.
14.

The learned Additional Advocate General, on the other

hand, submits that under Section 49 of the Land Revenue Act, all
mines and minerals are deemed to be the property of the
Government. He argues that the petitioners do not deny that

W.P.4968/2010

stone was excavated from the site in question and the same was
utilized for the purpose of construction of the bed of the water
channel and other ancillary purposes. The learned counsel
submits that law governing mines, oilfields and minerals is the
Regulation of Mines and Oilfields and Minerals Development
(Government Control) Act, 1948. Section 2 of the said Act
empowers the Appropriate Government to frame rules. The
term Appropriate Government has been defined in section 6 to
mean in relation to the mines of nuclear substances, oilfield and
gas fields and development of such substances, mineral and gas
the Central Government and in ration to other mines and mineral
development, the Provincial Government. He has also referred to
Section 4 of the Act to argue that the Act and the Rules will
prevail if there is any inconsistency with other enactments. He
points out that pursuant to powers available to the Government
under Section 2 the provincial governments have notified rules
from time to time. The Government of NWFP promulgated rules in
1976, which are subject matter of the judgment cited by other side
reported as PLD 2004 SC 659. He points out that

the aforesaid

judgment is not applicable to the facts and circumstances of the

present case having been rendered on the basis of a different set
of rules and different facts and circumstances.
15.

It is submitted that the Punjab Minor Mineral Concession

Rules 1990 define minor minerals to mean ordinary sand,

ordinary stone, lime stone and gravel used as a building material
and any other mineral so declared by the Government. There is

W.P.4968/2010

no denial of the fact that where minor minerals are concerned, the
same are undoubtedly owned by Government of Punjab and
cannot be excavated/used without authorization.
16.

The learned Law Officer further submits that the owner of

landed property is only entitled to use the surface. However, any

minerals excavated from the said land belong to the Provincial
Government under the law as well as the rules. Such minerals
which include ordinary stone/slate stone cannot be used/utilized
for any purpose without the permission and/or payment for the
same to the Government of Punjab. It is pointed out that
admittedly ordinary/slate stone was excavated during construction
of the water channel, which was utilized by the petitioner for the
purpose of construction of the bed of the water channel in
addition to construction of road and other ancillary works. He,
therefore, submits that the petitioner was required to pay for use
of the said stone in accordance with rates notified by the
Government. He further submits that the petitioners applied for
and obtained a lease from the respondents, which shows that
they understood the position that no excavation could be
undertaken without a lease which constituted admission on the
part of the petitioners of the fact that the minerals excavated from
the site belonged to the Government of Punjab and should have
been paid for.
17.

As far as the argument of the learned counsel for the

petitioner that the charges were calculated without any criteria to

W.P.4968/2010

10

measure the amount of the minerals excavated or its value, the

learned Law Officer submits that the said criteria is already
available in the rules. The petitioners were associated with the
process of calculation using their own records for the purpose of
calculation of the quantity of stone excavated and used and the
calculations have been made on the basis of said criteria. He
further points out that the calculations have not been challenged
by the petitioners before any forum.
18.

I have heard the learned counsels for the parties and gone

through the record.

19.

The questions requiring determination by this Court are

whether ordinary/slate stone falls within the definition of minor

mineral. Who owns such minerals and if the minor minerals in
question are used without authorization, whether the Provincial
Government can recover their price.
20.

As a general rule all mines and minerals are the property

of the government, notwithstanding the fact as to who owns the

surface area. Section 49 of the West Pakistan Land Revenue Act
provides as follows:49. Right of Government in mines and minerals.
Notwithstanding anything to the contrary in any other
law, or in any order or decree of Court or other
authority, or in any rule of custom or usage, or in any
contract, instrument, deed or other documents, all
mines and minerals shall be and shall always be
deemed to have been the property of Government,

W.P.4968/2010

11

and Government shall have all powers necessary for

the proper enjoyment of its rights thereto.
Explanation For the purposes of this section,
Government, in relation to unclear energy, mineral
oil

and

natural

gas,

shall

mean

the

Central

Government, and in relation to other mines and

minerals, the Government of West Pakistan.
The word minor mineral is defined in Rule (2) of the
Punjab Minor Mineral Concession Rules, 1990 (Rules 1990)
as follows:Minor Minerals means ordinary sand, ordinary stone,
limestone and gravel used as a building material and
may include any other mineral so declared by the
Government
21.

The questions raised in this petition can also be answered

with reference to the regulations of Mines and Oil Fields and

Minerals Development (Government Control) Act, 1948. Section 2
of the Act empowers the Appropriate Government to frame
rules. The term Appropriate Government has been defined in
section 6 to mean in relation to mines of nuclear substances, oil
fields and gas fields and development of such substances,
mineral oil and gas, the Central Government and in relation to
other mines and mineral development, the provincial government.
Section 4 of the Act provides that in case of inconsistency with
other enactments the Act and the rules framed thereunder will
prevail. In exercise of powers available to it under section 2 of the
Act the Government of Punjab has framed rules from time to time

W.P.4968/2010

12

including the Punjab Minor Minerals and Concession Rules, 1990

an the Punjab Mining Concession Rules, 2002.
22.

Rule 4 of the Rules 1990 provides as follows:4. Mining of minor minerals.- There shall be no
mining of minor minerals

except under a lease

granted in accordance with these rules:

Provided that notwithstanding anything in these
rules, a lease for minor minerals to a Government
Department and for limestone to an industrial
undertaking shall be governed under the Punjab
Mining Concession Rules, 1986.
23.

The subject of unauthorized mining is dealt with in rule 32

of the Punjab Minor Mineral Concession Rules, 1990, which

provides as follows:32. Unauthorized mining:- (1) If any person carries
out mining of minor minerals outside the area granted
to him under a lease or in any area for which he has
not obtained a lease or obstructs free access of a
lessee to the leased area or directly or indirectly tries
to interfere with the mining operations by a lessee, he
shall be liable, on conviction before the Magistrate of
such class as the Government directs in this behalf, to
a fine not exceeding Rs.50,000/- or imprisonment for
a term which may extend to three years or with both.
(2).

Notwithstanding sub-rule (1), the Licensing

Authority shall have the power to stop unauthorized

work in such manner as it may deem fit and recover,
in addition to the fine, the sale price of the mineral so

W.P.4968/2010

13

excavated from the person responsible for such

authorized work:
Provided that before proceeding, the person
shall be given a reasonable opportunity of being
heard.
24.

It is common ground between the parties that the

ordinary/slate stone excavated by the petitioners falls within the

definition of minor minerals. It is not denied that the said stone
was excavated and used by the petitioners. The argument of the
learned counsel for the petitioners that the petitioners do not
require a lease in view of the fact that the land in question had
been acquired for a public purpose, has not impressed me. While
it is evident that the petitioners owned the surface area for all
intents and purposes, the minerals excavated continued to belong
to the Provincial government which is entitled to recover the value
of its property. Further, by applying for and receiving a lease, the
petitioners admitted the ownership of the provincial government of
any minerals to be excavated and cannot be heard to say at this
stage that they are not under any obligation to pay for the same.
25.

It has not been denied by the petitioners that the stone was

excavated and the said stone was used for the purpose of
construction of the bed of the water channel, in addition to other
infrastructure including construction of diversion of railway line,
construction of platform for the mixing plant, protection of river
banks at Haro River near Qaziabad District Attock etc. Since all
the minerals including ordinary/slate stone are the property of the

W.P.4968/2010

14

provincial government under the law, it is only just and fair that
the petitioners should pay its fair price. The whole system for
grant of license for mining/excavation of minerals, whether minor
or major is based on the fact that minerals wherever located,
belong to the government and can be excavated only after getting
a mining lease on the terms and conditions agreed between the
parties.
26.

The acquisition of land by WAPDA did not confer on it any

right on minerals contained in the land in question. Had the

minerals not been used, the same would have remained the
property of the respondents, who would have been within their
rights to sell the same in the open market. By the same token,
had the stone not been excavated, the petitioners would have had
to purchase stone or other material for construction of the bed of
the channel and other ancillary works. The fact that they did not
purchase stone and other material for the said purpose and
utilized the stone which falls within the definition of minor mineral
excavated from the land which stone admittedly belonged to the
government,

furnishes

reasonable

justification

for

the

Government of Punjab to claim its price.

27.

The learned counsel for the petitioner has also referred to

Rules 27 and 31 of the Punjab Minor Minerals Concession Rules,

1990. Rule 31 thereof relates to a situation where an area is held
under a lease and is required at any time for public purpose. The
said rule obligates the lessee to release such area as may be

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15

required by the government of Punjab for this purpose and in

such case the bid money can be reduced proportionately. The
said rule has no relevance to the facts and circumstances of the
present case. Likewise, the learned counsel has relied on Rule 27
ibid which prohibits mining operations upto any point within a
distance of 100 meters from any railway line, water reservoir,
power line and other public work etc. The learned counsel for the
petitioner has submitted that since mining lease could not have
been granted within a distance of 100 meters from the water
channel of the Project of the petitioners, the claim of the
respondents that they have suffered loss on account of use of the
excavated material by the petitioners is without logical basis.
28.

I am afraid the argument made by the learned counsel for

the petitioner is misconceived. Further, rule 27 has no relevance

in the matter. The material question before this Court is whether
the petitioners could have used the minor minerals for their
project without paying for the same on the basis of the fact that
the land had been acquired by them. As already held, the land
may belong to the petitioner No.1 pursuant to the acquisition
undertaken by it, the minerals excavated from the said land
belonged to the Provincial Government and could not have been
used without payment for the same.
29.

The learned counsel for the petitioners has also placed

reliance on a Judgment of the Honourable Supreme Court of

Pakistan rendered in the case of Muhammad Iqbal Khan and

W.P.4968/2010

16

others Vs. Collector Mansehra and others (PLD 2004 S.C.659).

I have carefully gone through the Judgment of the Apex Court
and find that the same is not helpful to the case of the petitioners
having been rendered under a different set of facts and
circumstances. Through the said Judgment the Honourable
Supreme Court of Pakistan had directed that a liberal
interpretation of rules 3, 5, 6 and 14 of the Northwest Frontier
Province (Minor Minerals) Mining Concession Rules, 1971,
should be adopted in order to safeguard the interests of private
owners of land for the reason that in case a third party succeeded
in acquiring leasehold rights in an auction to extract minor
minerals from the lands owned by private parties, it would cause
multiple administrative problems for both sides and owners of
land will be deprived of its utilization and benefits.
30.

In the instant case, the relevant rules are the Punjab

Mining Concession Rules, 2002 and the Punjab Minor Minerals

Concession Rules, 1990. The land in question is admittedly not
private property. Further, there is no apprehension that the mining
rights on the land in question will be given to third parties. The
aforesaid judgment cited by the learned counsel for the
petitioners is distinguishable and is not applicable to the facts and
circumstances of the instant case.
31.

As far as reference by the learned counsel for the

petitioners to Article 165 of the Constitution of Islamic Republic of

Pakistan is concerned, the said Article is not attracted to the facts

W.P.4968/2010

17

and circumstances of the present case. Article 165 deals with

exemption of public property from taxation. The claim raised by
the Department is not in the nature of taxation but by way of
recovery of the price of minor minerals owned by the Government
of Punjab which were admittedly used for the project of the
petitioners. Consequently, reliance on Article 165 ibid is
misconceived.
32.

The learned counsel for the petitioners has not seriously

contested the calculation of the amount of stone excavated and

its value which already stands deposited with the civil court
pursuant to orders passed by this Court. Even otherwise, the
petitioners were associated with the process of calculation of the
quantum and value of the stone used. Further, the petitioners
have not challenged the criteria, or the methodology used and the
calculations made by the department before any forum.
Therefore, this Court does not consider it necessary to examine
that aspect of the matter. In addition, the said factual inquiry has
already been undertaken by three subordinate forums and it is
neither advisable nor appropriate for this court to undertake such
factual enquiry in exercise of its Constitutional Jurisdiction.
33.

The learned counsel for the petitioners has not been able

to convince me that the order passed by the Secretary Mines and

Minerals, Government of Punjab, suffers from any illegality,
perversity or jurisdictional error. The order in question is well
reasoned, founded on correct application of the relevant

W.P.4968/2010

18

provisions of the law and the rules and warrants no interference

by this Court in exercise of its Extra-Ordinary Constitutional
Jurisdiction.
34.

For reasons recorded above, this petition fails. It is

accordingly dismissed.
(IJAZ UL AHSAN)
JUDGE
Announced in Open Court
on 28th October, 2011.

JUDGE

APPROVED FOR REPORTING

M.Tariq