HUDA Haryana: Must You Pay Royalty on Minerals from Acquired Land?

In the bustling world of urban development in Haryana, the Haryana Urban Development Authority (HUDA), now known as Haryana Shehri Vikas Pradhikaran (HSVP), plays a pivotal role in acquiring land for sectors, housing, and infrastructure. But what happens when minerals like earth, rock, or spoil are extracted during this process? A common question arises: royalty on land acquired by HUDA Haryana—does HUDA owe royalties to the State for such extractions?

This blog delves into the legal nuances, drawing from key statutes and court precedents. While this provides general insights, consult a legal expert for advice tailored to your situation.

Legal Framework Governing Mineral Royalties

The cornerstone of mineral regulation in India is the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). Under this Act, the State holds ownership of all minerals within its territory. As clarified in relevant rulings, The State owns all minerals within its territory, and minerals vest with the State 2000 7 Supreme 651.

Even government agencies like HUDA are not exempt. When land is acquired for development—such as laying out plots, roads, or infrastructure—and minerals are extracted, this typically qualifies as quarrying operations. Extraction for non-domestic purposes triggers royalty liability, irrespective of whether a lease or permit was obtained. The law states that extraction of minerals from land acquired by a government authority for development purposes triggers royalty liability, regardless of whether the authority holds a lease 2000 7 Supreme 651.

Royalty Liability: No Escape for Development Authorities

Court precedents emphasize that entities like railways or urban development bodies cannot sidestep royalties. For instance, Railway could not escape from its liability from paying royalty chargeable by the State on the minerals when it utilized minerals from land acquired for laying railway lines 2000 7 Supreme 651. By analogy, HUDA faces similar obligations when using extracted minerals for land leveling, boundary walls, or plot development.

The absence of a permit doesn't absolve liability: The absence of a lease or permit does not exempt the entity from paying royalties if minerals are extracted and utilized 2000 7 Supreme 651. Unauthorized extraction may even invite penalties alongside royalties.

Application to HUDA's Land Development Practices

HUDA frequently acquires land under the Land Acquisition Act, 1894, for urban estates. During development, activities like leveling or constructing boundaries often involve mineral extraction. A Punjab and Haryana High Court case notes scenarios where contractors for HUDA handled construction of boundary wall around the land and levelling of the land 2026 Supreme(Online)(P&H) 650. Such processes mirror quarrying, subjecting HUDA to royalties unless exempted.

In another context, land acquired vide notifications for HUDA sectors underscores that HUDA is merely an authority for use of which the land in question was acquired

STATE OF HARYANA vs GRAM PANCHAYAT OF VILLAGE JHARSA ETC.

Insights from Punjab & Haryana High Court Rulings

Several High Court decisions provide context on HUDA's land dealings, indirectly highlighting development obligations:

• In oustee allotment disputes, courts affirm policies for landowners whose land is acquired by HUDA. For example, schemes dated 10.9.87 allowed allotments to oustees, but extraction during development isn't covered similarly 2000 0 Supreme(P&H) 590.
• A case involving Sectors 19 and 20, Kaithal, held that oustee are entitled to apply for allotment of plot along-with earnest money in pursuance of public advertisement under 1978 Regulations, yet development costs like royalties fall on HUDA 2016 0 Supreme(P&H) 1412.
• Appeals under Section 54 of the Land Acquisition Act assessed market value, noting location's impact, but didn't negate post-acquisition extraction liabilities 2018 0 Supreme(P&H) 3254.

These rulings, while focused on compensation and allotments, illustrate HUDA's role in systematic development, where mineral use incurs State dues. Co-owners' entitlements to plots were upheld without needing 'No Objection Certificates' in some consumer forums

HUDA & ANR. vs KESAR SINGH

Recent writs grant petitioners liberty to represent for oustee plots in sectors like Gurugram or Panchkula, directing authorities to decide expeditiously [Ram Chander VS State of Haryana - 2018 Supreme(P&H) 9 2018 0 Supreme(P&H) 33 2018 0 Supreme(P&H) 192 2018 0 Supreme(P&H) 185. This underscores procedural fairness but doesn't alter royalty rules for HUDA's operations.

Exceptions: When Royalties May Not Apply

Limited exemptions exist:- Bona fide domestic or agricultural use: Extraction for personal farming or home needs may be exempt 2000 7 Supreme 651.- However, development activities—like laying tracks, roads, or plots—do not qualify. Minerals used for laying railway tracks, which are not for domestic or bona fide agricultural consumption, are considered quarrying operations 2000 7 Supreme 651.

Practical Recommendations for HUDA and Stakeholders

To navigate these obligations:- Obtain mining permits or leases before extraction.- Calculate royalties per MMDR Act rules and state concessions (e.g., Orissa Minor Mineral Concession Rules, 1990, as analogous 2000 7 Supreme 651 1989 0 Supreme(SC) 253).- Document all extractions meticulously to avoid disputes.- Landowners (oustees) should pursue allotments via policies, while monitoring development for compliance.

Key Takeaways

• State Ownership Prevails: Minerals belong to the State, even on acquired HUDA land 2000 7 Supreme 651.
• Development Triggers Royalties: Extraction for infrastructure use mandates payment, sans exemptions.
• Precedents Bind: Analogous to railways, HUDA cannot evade liability 2000 7 Supreme 651.
• Holistic View: While oustees gain plot rights, development costs like royalties are HUDA's remit.

In summary, HUDA typically must pay royalties for minerals extracted from acquired land used in development projects, per the MMDR Act. This ensures equitable resource management. For specific cases, especially involving recent acquisitions or policies, professional legal counsel is advisable.

Disclaimer: This article offers general information based on statutes and judgments like 2000 7 Supreme 651 and 1989 0 Supreme(SC) 253. It is not legal advice; laws evolve, and outcomes depend on facts.