Full Judgment Text & Judicial Ruling

P L D 2026 Lahore 54 Before Shahid Kharim, J GHARIBWAL CEMENT LIMITED through Chief Coordination Officer and another---Petitioners Versus The PROVINCE OF PUNJAB through Secretary, Mines and Minerals Department and 3 others---Respondents Writ Petition No. 7572 of 2024 (and other connected petitions), decided on 4th July, 2025. (a) Punjab Mining Concession Rules, 2002--- ----Rr.68(2) & 73(3)---Regulation of Mines and Oil-fields and Mineral Development (Government Control) Act (XXIV of 1948), S.2---Constitution of Pakistan, Art.24---Failure to pay an amount of royalty and rentals, allegation of---Issuance of demand notice for compound payment of markup on outstanding amount of royalty and rentals, challenge to---Vires of law---Imposition of surcharge as other charges when parent statute not providing a specific provision for imposition of that surcharge---Legality and scope---The challenge in the present case concerned the legality/vires of sub-rule (2) of R. 68 and sub-rule (3) of R. 73 of the Punjab Mining Concession Rules, 2002, under which markup was imposed on unpaid royalties and rentals---The question before the Court was whether the Provincial Government, under its delegated rule-making authority derived from the Regulation of Mines and Oil-fields and Minerals Development (Government Control) Act, 1948, was empowered to introduce such a financial burden when the parent statute itself contained no express provision authorizing the levy of markup ?---Held: Provincial Government was not vested with the powers to impose markup if in its opinion a person had failed to make payment of the amount of royalty or rental as required by either R. 68 or 73 of the 2002 Rules---The imposition of markup was strictly not covered by the power to determine rates by the Provincial Government and was in excess of that power---It had been assumed to vest in the Provincial Government by the 2002 Rules---Such a power related to taking of property which was a fundamental right enshrined in the Constitution and could not be assumed to vest in the Provincial Government by virtue of rules which specifically did not confer such a power to inhere in the Provincial Government---If the legislature intended to include the imposition of mark up in the broader power to determine rates, a precise clause could have been added to S. 2---It was noticeable that various clauses of S. 2 enjoined clear and specific powers which did not include the levy of markup---Such a power, therefore, could not be derived unilaterally to enrich the Provincial Government---Sub-rule (2) of rule 68 and sub-rule (3) of R. 73 of the Rules 2002were declared ultra vires and illegal and they were struck down---Consequently, the impugned order and the demands issued under these rules were non est and were declared without lawful authority and of no legal effect---The notices were also quashed---Constitutional petitions were allowed, in circumstances. (b) Constitution of Pakistan--- ----Art.24---Punjab Mining Concession Rules, 2002, Rr. 68(2) & 73(3)---Constitutional protection of property rights---Scope---Payment of mark-up on outstanding amount of royalty and rentals---Constitu-tionality---Clause (1) of Art. 24, without equivocation, states that no person shall be deprived of his property save in accordance with law---The right to hold on to property, thus, is a fundamental right and can only be infringed if the law so permits---If the rule-making power of the Provincial Government does not extend to the impost of mark-up then Art. 24 is triggered and judicial review must be employed to undo the essential wrongness of the action. (c) Punjab Mining Concession Rules, 2002--- ----Rr.68(2) & 73(3)---Regulation of Mines and Oil-fields and Mineral Development (Government Control) Act (XXIV of 1948), S.2(8)---Imposition of mark-up as other charges ---Imposition of mark-up was not specifically authorized under the law---In order to justify imposition of mark-up authorities attempted to bring the charge of mark-up within the ambit of the term any matter ancillary or incidental to the matters set out in the for going clauses ---Legality---Ancillary and incidental powers---Ambit and scope---Clause (8) of S. 2 provided making of rules on any matter ancillary or incidental to the matters set out in the forgoing clauses of S. 2---It was argued by the respondent authorities that the payment of markup would be covered by any matter ancillary or incidental to the matters set out in the other clauses of S. 2---Validity---This argument had no legal basis---There was no doubt that the term any matter ancillary or incidental to the matters set out in the for going clauses did not cover the imposition of markup in case of failure to pay the principal amount of royalty or rentals---The reliance of the respondents was on clause (8) of S. 2 to cull out a power to fix a penalty---That clause concerned with ancillary and incidental powers---The precise argument, if accepted without demur, would be that under the garb of this clause, the Provincial Government was empowered to make rules to confer upon itself broad and polycentric powers which could go beyond the permissible limits---This argument was constitutionally invalid and had no legal basis---Sub-rule (2) of R. 68 and sub-rule (3) of R. 73 of the Rules 2002 were declared ultra vires and illegal and they were struck down---Consequently, the impugned order and the demands issued under these rules were non est and are declared without lawful authority and of no legal effect---The notices were also quashed---Constitutional petitions were allowed, in circumstances. (d) Interpretation of statutes--- ----Delegated legislation---Scope---Delegated legislation is intended to advance the purpose of primary legislation and if a rule goes beyond the rule-making power conferred by the statute or if a rule supplants any provision for which power has not been conferred it becomes invalid---So the rule is that a charge must be imposed by clear and unambiguous language in the statute itself---If there is none, then no power vests in the delegatee to do so by implication through Rules---Delegated power to make rules is circumscribed by the strict periphery of powers defined in the statute itself which cannot be exceeded to assume more powers than granted by the delegator. Sindh Revenue Board through Secretary Government of Sindh Karachi and others v. Messrs Quick Food Industries (Pvt.) Ltd. and others 2023 SCMR 1776; Sanam Javaid Khan through Attorney v. Election Appellate Tribunal, Punjab and others 2024 SCMR 819; Messrs Usman Enterprises v. Federation of Pakistan and 2 others 1997 MLD 3161; PLD 1988 SC 370 and Pakistan Electronic Media Regulatory Authority v. Pakistan Broadcasters Association and others PLD 2023 SC 378 rel. (e) Interpretation of statutes--- ----Fiscal statute---Imposition of surcharge as other charges when parent statues does not specifically authorize levy of that specific surcharge---Legality---Fiscal statutes are to be interpreted strictly and there is no room for any intendment---Surcharge cannot be levied under the category of other charges . (f) Unjust enrichment--- ---Definition, concept and scope---Unjust enrichment means any unequal transfer of value without an adequate legal basis ---There are three elements to the cause of action on the basis of unjust enrichment; i) an enrichment of the defendant; ii) a corresponding deprivation of the plaintiff; and iii) an absence of juristic reason for the enrichment---For a claim of unjust enrichment to succeed, there must be enrichment at the expense of the plaintiff and this enrichment must be unjust in such a way that there should be no lawful justification for the same. Orient Power Company (Pvt.) Ltd. through Authorized Officer v. Sui Northern Gas Pipelines Limited through Managing Director 2021 SCMR 1728; Haider Industries through Managing Partner and others v. Federation of Pakistan through Secretary, Law Division at Islamabad and others 2016 PTD 2004 and Sui Northern Gas Pipelines v. Deputy Commissioner Inland Revenue and others 2014 PTD 1939 rel. Garland v. Consumers Gas Co. (2004) 1 SCR 629 and Supreme Court of United Kingdom 2015 UKSC 66 ref. Imtiaz Rasheed Siddiqui, Shahryar Kasuri, Raza Imtiaz Siddiqui, Ali Umrao, Haider Aziz, Muhammad Saeed Anjum, Ms. Kanwal Tariq, Shahzad Hassan Pervaiz, Irfan Dawood, Salman Ejaz, Ms. Ayesha Qazi, Asad Abbas Butt, Ashiq Ali Rana, Muhammad Adil, Salman Alam Khan, Arslan Amir Tarar, Faisal Anwar and Qari Habib ur Rehman Zubairi for Petitioners. Hassan Ijaz Cheema, A.A.G. with Rashid Bhatti, Law Officer and Asad Ameer, Deputy Director for Respondents. Date of hearing: 10th June, 2025. JUDGMENT SHAHID KARIM, J.---This petition and connected petitions W.P No.7608 of 2024, W.P No.14788 of 2024, W.P No.15450 of 2024, W.P No.14678 of 2024, W.P No.16877 of 2024, W.P No.51664 of 2024, W.P No.12805 of 2024 and W.P No.33359 of 2025, challenge various orders passed by the Secretary Mines and Minerals, Govt. of the Punjab. Prior to that the challenge before the Secretary was to the order passed by the Director General Mines and Minerals of different dates which were upheld by the Secretary. The petitioners had challenged notices for payment of certain amounts which included a demand for payment of markup calculated under sub-rule (2) of rule 68 of the Punjab Mining Concession Rules, 2002 ( the 2002 Rules ) as well as a markup on purported outstanding rentals and renewals under sub-rule (3) of rule 73 of the Rules. The legality of these rules was challenged before the lower forums which did not find favour with the Secretary who was of the opinion that these rules did not offend the primary enactment, that is, the Regulation of Mines and Oil-fields and Minerals Development (Government Control) Act, 1948 ( the 1948 Act ). These petitions were argued primarily on the question of legality of the rules to analyze whether these rules contravened the primary law, that is, the 1948 Act and travelled beyond that law. It is contended that the 1948 Act does not confer power on the rule-making authority to impose markup in terms of rules 63(2) and 73(3) (the impugned rules). It is common ground that as regards primary demand raised in these notices, the petitioners are not in default and the dispute merely revolves around the payment of markup in terms of the impugned rules. This petition seeks the setting aside of order dated 14.11.2023 (by D.G Mines and Minerals) as well as order dated 26.12.2023 (by Secretary Mines and Minerals). Similar orders have been passed in the other petitions based on similar set of facts and legal propositions. (They shall all be referred to as the Impugned Orders). 2. Learned counsel for the petitioners submitted that the impugned rules are outwith the authority of the Government which is empowered by section 2 of the 1948 Act to make rules. Section 2 provides that: 2. Power to Make Rules.---It is hereby declared to be expedient in the public interest that the appropriate Government shall have the power to make rules to provide for all or any of the following matters, namely:- (1) the matter in which, and the authority to whom application for the grant or renewal of an exploration or prospecting license, a mining lease or other mining concession shall be made, and the prescribing of the fees to be paid on such application; (2) the conditions in accordance with which the grant or renewal of an exploration or prospecting license, and mining lease or other mining concession may be made, and the prescribing of forms for the execution or renewal of such license, lease, and concessions; (3) the circumstances under which renewal of a license, lease or concession as aforesaid may be refused, or any such license, lease or concession whether granted or renewed may be revoked; (4) the determination of the rates at which, and the conditions subject to which, royalties, rents and taxes shall be paid by licensees, lessees and grantees of mining concessions; (5) the refinement of ores and mineral oils; (6) the control of production, storage and distribution of minerals and mineral oils; (7) the fixation of the prices at which minerals and mineral oils may be bought or sold; and (8) any matter ancillary or incidental to the matters set out in the foregoing clauses of this section, and the appropriate Government may, by notification in the official Gazette, make rules accordingly. 3. By section 6 the appropriate Government means: In this Act, " appropriate Government" means, in relation to mines of nuclear substances, oilfields and gas fields, and development of such substances, mineral oil and gas, the Central Government and, in relation to the other mines and mineral development, the Provincial Government. 4. In the present cases there is no cavil that the 2002 Rules have been made by the Govt. of the Punjab. Section 68 relates to the payment of royalty and provides that: 68 Payment of royalty.---(1) Royalty in respect of any mineral or group of minerals won, mined or found as provided in rule 65 and disposed of shall be payable not later than 30 days after the end of calendar month in which the mineral or group of minerals is disposed of. (2) Where any person has failed to pay an amount of royalty as required by sub-rule (1). mark up calculated at the rate of one per centum per day on the amount or any part thereof from time to time remaining unpaid, shall be payable from the due date of payment until all outstanding amount is paid. (3) The holder of a mineral title shall submit, in respect of each month and in such form and detail as the Licensing Authority may determine, a return showing the amount of royalty to be paid in respect of any mineral or group of minerals disposed of in the month. 5. Similarly rule 73 relates to rentals and renewals and provides that: 73. Rentals and renewals.-- (1) Annual rent in respect of a mineral title shall be paid in respect of the category of mineral title in accordance with Schedule 2 and sub- rule (2). (2) Payment of the annual rental pursuant to sub-rule (1) in respect of a mineral title shall be made within thirty days after the date of the issue of the mineral title and thereafter shall be made on the same date of each year. (3) Where any person has failed to pay any amount of annual rental mark-up calculated at the rate of one per centum per day on the amount or any part thereof, from time to time remaining unpaid, shall be payable from the due date of payment until all outstanding amount is paid. (4) A renewal fee in respect of the mineral title shall be paid in accordance with column 3 of Schedule I. 6. Sub-rule (2) of rule 68 and sub-rule (3) of rule 73 are similarly worded and impose a markup calculated at the rate of one per centum per day on the amount or any part thereof from time to time remaining unpaid which shall be payable from the due date of payment until all outstanding amount is paid. Therefore, these rules not only grant power to levy markup calculated at the rate of one per centum but also compounds the payment of markup until all outstanding amount is paid. But the essence of challenge of the petitioners relates to the very power to levy markup on any amount of royalty or rentals that remain unpaid by the petitioners. 7. We must begin by reminding ourselves the well-worn rule that every action must have a legal pedigree. Section 2 which has been set out above gives power to the appropriate Government to make rules to provide for all or any of the matters delineated in section 2. Doubtless, the power to make rules is circumscribed by the matters stated in section 2 of the 1948 Act and, therefore, the rule-making authority cannot travel beyond those matters and its hands are tied in this respect. Clause (4) of section 2 grants power to the Provincial Government to make rules regarding determination of the rates at which and the condition subject to which royalties, rentals and taxes shall be paid by the licensees, lessees and grantees of mining concessions. There is no contention that rates have been determined by the Provincial Government and this is a power peculiar to the Provincial Government to do so. The petitioners do not contest this basic enumeration regarding determination of rates by the Provincial Government. The determination of rates however does not mean that the Provincial Government is further vested with the powers to impose markup if in its opinion a person has failed to make payment of the amount of royalty or rental as required by either rule 68 or 73 of the 2002 Rules. Certainly, the imposition of markup is strictly not covered by the power to determine rates by the Provincial Government and is in excess of that power. It has been assumed to vest in the Provincial Government by the 2002 Rules. Such a power relates to taking of property which is a fundamental right enshrined in the Constitution of Islamic Republic of Pakistan, 1973 and cannot be assumed to vest in the Provincial Government by virtue of rules which specifically do not confer such a power to inhere in the Provincial Government. Article 24 provides that: 24. Protection of property rights: (1) No person shall be deprived of his property save in accordance with law. (2) No property shall be compulsorily acquired or taken possession of save for a public purpose, and save by the authority of law which provides for compensation therefor and either fixes the amount of compensation or specifies the principles on and the manner in which compensation is to be determined and given. (3) Nothing in this Article shall affect the validity of (a) any law permitting the compulsory acquisition or taking possession of any property for preventing danger to life, property or public health; or (b) any law permitting the taking over of any property which has been acquired by, or come into the possession of, any person by any unfair means, or in any manner, contrary to law; or (c) any law relating to the acquisition, administration or disposal of any property which is or is deemed to be enemy property or evacuee property under any law (not being property which has ceased to be evacuee property under any law); or (d) any law providing for the taking over of the management of any property by the State for a limited period, either in the public interest or in order to secure the proper management of the property, or for the benefit of its owner; or (e) any law providing for the acquisition of any class of property for the purpose of (i) providing education and medical aid to all or any specified class of citizens; or (ii) providing housing and public facilities and services such as roads, water supply, sewerage, gas and electric power to all or any specified class of citizens; or (iii) providing maintenance to those who, on account of unemployment, sickness, infirmity or old age, are unable to maintain themselves; or (f) any existing law or any law made in pursuance of Article 253. (4) The adequacy or otherwise of any compensation provided for by any such law as is referred to in this Article, or determined in pursuance thereof, shall not be called in question in any court. 8. Clause (1) of Article 24, without equivocation, states that no person shall be deprived of his property save in accordance with law. The right to hold on to property, thus, is a fundamental right and can only be infringed if the law so permits. If the rule-making power of the Provincial Government does not extend to the impost of mark-up then Article 24 is triggered and judicial review must be employed to undo the essential wrongness of the action. 9. The rule-making power does not encompass the granting of power to levy mark up in the Rules. The making of Rules is a circumscribed and derived power. It can neither be expanded nor enlarged to impose additional burdens which are not contained in the main enactment. The determination of rates only has been left to the Provincial Government owing to peculiar and varying nature of transactions in each case for which recourse to the legislature may be cumbersome. It is more efficient to do so by means of rule-making or by agreements as determined by the Government. Apart from determination of rates, the Provincial Government may prescribe conditions subject to which royalties, rentals and taxes shall be paid. The term conditions does not clothe the Provincial Government with power to amplify the amount of royalty etc. by levying mark up on any unpaid amount. The two concepts viz. determination of rates and the condition subject to which royalties etc. shall be paid, are distinct concepts and cannot be confused one with the other. If the legislature intended to include the imposition of mark up in the broader power to determine rates, a precise clause could have been added to section 2. It will be noticed that the various clauses of section 2 enjoin clear and specific powers which does not include the levy of mark up. Such a power, therefore, cannot be derived unilaterally to enrich the Provincial Government. 10. The power to make rules relates to the determination of rates at which royalties, rentals and taxes shall be paid and the payment of markup is certainly not covered by the term rates as used in the 2002 Rules. Clause (8) of section 2 provides making of rules on any matter ancillary or incidental to the matters set out in the forgoing clauses of section 2. It has been argued by the respondents that the payment of markup would be covered by any matter ancillary or incidental to the matters set out in the other clauses of section 2. This argument has no legal basis. There is no doubt in my mind that the term any matter ancillary or incidental to the matters set out in the forgoing clauses will not cover the imposition of markup in case of failure to pay the principal amount of royalty or rentals. These matters would perhaps have connection with the powers of the Government to recover the amount of royalty, rentals and for this purpose provisions have been made in rules 70 and 71 which give power to the Provincial Government to recover the amount of royalty in case of failure by any person to make the payment. Clause (8) of section 2 cannot be extended or interpreted to mean that by rule-making power an additional levy of markup can be imposed on a person whereas the primary enactment does not authorize such a payment to be made. 11. Two legal issues would be engaged in these cases on the basis of which it has been argued that the Rules are inconsistent with the parent statute and thus the respondents have exceeded the powers conferred by way of delegated legislation. It is a rule vouched by respectable authority that delegated legislation is intended to advance the purpose of primary legislation and if a rule goes beyond the rule-making power conferred by the statute or if a rule supplants any provision for which power has not been conferred it becomes invalid. Two recent judgments of the Supreme Court of Pakistan would suffice to be referred which reiterate this proposition. 12. In Sindh Revenue Board through Secretary Government of Sindh Karachi and others v. Messrs Quick Food Industries (Pvt.) Ltd. and others (2023 SCMR 1776) the following statement would be relevant for our purposes: Delegated legislation is intended to enforce the law and advance the purpose of the underlying legislature, without overriding it and while minutia could be filled in, the parent statute could neither be added to nor subtracted from (Muhammad Amin Muhammad Bashir Limited v. Government of Pakistan, 2015 SCMR 630). The Rules were framed to set out for the process and procedure to levy and collet the sales tax on services, which can only be charged on the value of taxable service. However, the sales tax demanded by SRB on the salaries of security and manpower is inconsistent with mandate of the Act. The legislature s intent to levy tax on services under the Act has always been clear, and a deviation from it by use of the Rules cannot be justified (Collector of Central Excise and Sales Tax v. Rupali Polyester Limited, 2002 SCMR 738) as the intent of the Rules is only to give effect to the mandate of the Act. It is clear that the scope of the tax as provided under the Act cannot be altered by the Rules. It is settled law that if a rule goes beyond what the parent statute contemplates, it must yield to the statute. Especially in tax cases, where a tax could not be levied through a delegated legislation until and unless it was leviable under the charging provision of the fiscal statute, which in the instant case it was not. Hence, the scope or value of the tax could not be expanded than what the Act has proscribed through the Rules 13. In the above case, the legal effect of the amendments to the rule 42E of the Sindh Sales Tax on Services Rules, 2011 was under consideration. By that rule, the Sindh Revenue Board intended to include…

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