M/S Valmark Developers Private Limited vs. State Of Karnataka

Though this Court was inclined to dispose of the petition, the petitioner's counsel referring to the affidavit filed on 14.07.2025 brought to the notice of this Court that despite representation dated 22.5.2025 submitted by the HC-KAR NC: 2025:KHC:31200 petitioner enclosing the interim order granted by this Court, the respondents are yet to issue modified plan.

The petitioner has also submitted an affidavit before this Court on 14.7.2025 undertaking to execute an indemnity bond as per the interim order for securing payment of demands. Para 8 would be relevant. Same is extracted, which reads as under:

I submit that to show our bonafides, without prejudice to the contentions urged in the Writ Petition we have been advised to file this affidavit to the following effect: a) Notwithstanding the order passed in WP No.23086/2022 we are ready to deposit the demand amount in terms of the interim order dated 15.05.2025 passed by this Hon'ble Court. b) We are ready to submit indemnity bond to secure the payment of the demands which are stayed by this Honb'le Court. c) We will abide by the final order in the present Writ Petition and in the Writ Appeal that may be filed by the BBMP against the order passed in W.P.No.23086/2022."

As a counter to the petitioner’s claim, the respondent–BBMP filed its statement of objections on HC-KAR NC: 2025:KHC:31200

2025. It is contended therein that, notwithstanding the reported judgment in M/s. Sapthagiri Shelters [W.P. No.23086/2022 and connected matters], wherein the amendment to Section 240A was declared unconstitutional, the officials continue to apply the amended provision already held to be ultra vires. To circumvent the law laid down by the Co-ordinate Bench and the interim directions issued by this Court, the Corporation asserts that the matter is pending before the Division Bench and, therefore, the petitioner’s request for issuance of a modified plan cannot be considered at this stage.

Upon hearing the learned counsel and perusing the material on record, this Court has given anxious consideration to the aforesaid judgment, the relevant portion of which bears directly on the petitioner’s entitlement to a modified plan. For ready reference, the same is extracted below: HC-KAR NC: 2025:KHC:31200 "ORDER (i) The writ petitions are partly allowed. (ii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022), is hereby quashed and set aside. (iii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024), is hereby quashed and set aside. (iv) It is hereby declared that the provisions contained in Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only in respect of ‘Development Plan’ containing the proposal for construction on plots measuring more than 20,000 square meters in extent and not in respect of plots measuring less than 20,000 square meters. (v) It is hereby declared that if fee has been earlier collected for change of land use or while approving a layout plan, fee shall not be collected for subsequent ‘Development Plan’ in terms of the ‘Note’ found below TABLE I of Rule 37-A of the Karnataka Planning Authority Rules, 1965. (vi) It is hereby declared that the linking of the fee leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to the ‘market value’ or ‘guidance value’ as determined under Section 45-B of HC-KAR NC: 2025:KHC:31200 the Karnataka Stamp Act, 1957, is illegal. However, liberty is reserved to the respondent-State Government and the BBMP to re-fix a standard after collecting empherical data. (vii) Consequently, all the impugned Circulars which seek to give effect to the Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are hereby quashed and set aside. (viii) It is hereby declared that Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye- laws, 2003, providing for ‘Ground Rent’, is illegal and are accordingly quashed and set aside. (ix) Consequently, all the impugned Demand Notices raised by the respondent-BBMP, in respect of the writ petitioners herein are also quashed and set aside. It would be advisable that the BBMP may come out with a scheme for ‘One Time Settlement’ and settle the levy and collect the fee generally acceptable to the citizens of Bengaluru. This would also augment the present situation."

This Court also considers it appropriate to reproduce the interim order dated 15.05.2025 granted in the present case, which reads as under: HC-KAR NC: 2025:KHC:31200 "Learned High Court Government Pleader is directed to take notice for respondent Nos. 1 and 3. Sri. Pawn Kumar, learned counsel undertakes to appear for respondent Nos.4 and 5. The petitioner is before this Court being aggrieved by the demand notice as per Annexure-J. This Court in the similar matters has granted interim order. On principle of parity petitioner is also entitled for such interim relief. There shall be interim order of demand at Annexure-J as under: Sl. No. Particulars Relief granted by this Court

Lake Rejuvenation fee No Stay

Compound wall fee No Stay

Road cutting fee No Stay 10. 1% service charges on Labour cess No Stay

Water supply Scheme (BWSSB) Stayed Completely (100% stay)

Ring road (BDA) Stayed Completely (100% stay)

Improving the Slums (KSCB) Stayed Completely (100% stay)

MRTS (BDA) Stayed Completely (100% stay) HC-KAR NC: 2025:KHC:31200

5% Levy Service charges Stayed Completely (100% stay)

Labour Cess Stayed subject to condition that the said demand would be met as and when obligation to make said payment arises in terms of the Building and other Construction Workers Welfare Cess Rules, 1998. Aforesaid interim relief is subject to further order which may be passed by this Court. In addition to that petitioner shall furnish an indemnity bond to secure the payment of remaining amount in event of his failure in the writ petition within a period of one week in the. On payment of the amount as above respondent shall consider issuing modified sanctioned plan if, the petitioner complies with the applicable provisions of law. List this matter on 11.06.2025."

It is further noted that the petitioner submitted a detailed representation dated 20.06.2025, seeking issuance of a modified development plan in File No. PRJ/3646/22-23. Paragraphs 1 to 5 of the said representation are reproduced hereunder:

We hereby also undertake to execute the indemnity bond as required under the said interim order, securing the payment of the stayed portion in the event of an adverse outcome in the pending writ proceedings or in the Writ Appeal to be filed by BBMP."

On a plain reading of the interim order dated 15.05.2025 passed by the Co-Ordinate Bench, the direction issued to the respondent–authorities is clear, categorical, and unequivocal. The respondents were specifically directed to consider the petitioner’s request for issuance of a modified sanction plan, subject only to the condition that the petitioner furnishes an indemnity bond. HC-KAR NC: 2025:KHC:31200 The record discloses that, along with his detailed representation, the petitioner has expressly conveyed his willingness to execute such an indemnity bond in compliance with the said direction.

Notwithstanding this unambiguous directive, the respondents have chosen to disregard both the interim order of this Court and the binding pronouncement of the Co-Ordinate Bench in M/s. Sapthagiri Shelters [supra]. The said judgment has struck down Act No.1 of 2022 and Karnataka Act No.37 of 2024, holding that the linking of fees under Rule 37-A of the Karnataka Planning Authority Rules, 1965 to the market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957 is illegal and without authority of law. In the face of such a declaration, the respondents cannot legally insist upon compliance with provisions already declared unconstitutional, nor can they use the pendency of an appeal before the Division Bench as a shield to perpetuate non-compliance. HC-KAR NC: 2025:KHC:31200

The stand adopted by the respondents that they are unable to process the petitioner’s application for a modified plan on account of such pendency amounts to a deliberate act of defiance and is nothing short of gross contempt of the binding orders of this Court. It is a settled principle that orders of constitutional courts are binding on all authorities and must be obeyed in letter and spirit until set aside by a higher court. Any deliberate disobedience not only undermines the majesty of the court but also strikes at the very root of the rule of law. The Supreme Court has consistently held that such defiance must be dealt with an iron hand to preserve public confidence in the administration of justice.

The petitioner’s counsel has further drawn attention to the connected matter in W.P. No.35896/2024, wherein, despite the subsistence of an interim order, the petitioner therein was compelled to deposit the entire levy owing to the urgency of commencing a CBSE school. Such selective and arbitrary conduct facilitating issuance of a HC-KAR NC: 2025:KHC:31200 modified plan where the entire levy is paid, while refusing to act in the present case despite a clear legal mandate demonstrates a conscious and willful disregard of judicial directions.

The respondents cannot be permitted to take refuge under the pretext that the matter is “under consideration” by the Chief Commissioner of the BBMP and that they, as officials, have “no say” in the matter. Such reasoning is a transparent attempt to evade compliance with judicial orders. The obligation to obey orders of this Court is personal, direct, and absolute, it admits of no exceptions based on internal administrative hierarchies.

The continued inaction of the respondents, notwithstanding the subsistence of clear judicial directives and the binding ratio laid down by a Co-ordinate Bench in a reported decision on an identical issue, has resulted in substantial financial prejudice to the petitioner. The delay in approving the modified plan has not only stalled the HC-KAR NC: 2025:KHC:31200 petitioner’s ongoing project but has also escalated costs on account of idle capital and loss of prospective revenue. This selective and inconsistent approach facilitating immediate relief in comparable matters while withholding it in the present case exemplifies arbitrariness of the highest order.

In these circumstances, this Court is of the considered view that the conduct of the respondent/officials, particularly respondent No.5, constitutes gross contempt. In regard to violation of the interim order granted by this court, the petitioner is at liberty to initiate appropriate contempt proceedings for having violated the interim order dated 15.05.2025 wherein respondent/officials were directed to issue modified plan forthwith, so that the authority and efficacy of the directives issued by constitutional Courts are preserved inviolate. HC-KAR NC: 2025:KHC:31200

For the foregoing reasons, this Court proceeds to pass the following: ORDER (i) The writ petition stands allowed. (ii) The Demand Notice bearing No. BBMP/EoDB/CH/3547/25-26, LP No. BBMP/ Addl.Dir/JDSOUTH/0053/24-25 dated 24.04.2025 is hereby quashed. (iii) The respondent–BBMP is directed to issue the modified sanction plan to the petitioners, upon securing an indemnity bond from them, within a period of two weeks from the date of receipt of a certified copy of this order. (iv) In the event of failure on the part of the respondents to comply with the above direction within the stipulated period, the petitioner shall be at liberty to initiate appropriate contempt proceedings against the concerned officials. (SACHIN SHANKAR MAGADUM) JUDGE