Sarla Garments Private Limited vs. The State Of Karnataka
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The petitioner, Sarla Garments Private Limited, filed a writ petition challenging the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022), and subsequent notifications and circulars issued by the Bruhat Bangalore Mahanagara Palike (BBMP) and the State of Karnataka. The petitioner also challenged a demand notice dated March 14, 2025, issued by the Joint Director (Town Planning-North), BBMP, for various charges including ground rent, GST on ground rent, license fee, and betterment charges. The petitioner sought to declare the amendment act ultra vires, quash specific provisions, circulars, and the demand notice, and sought a direction to issue a sanction plan without insisting on the illegal demands.
Held
The Court held that the core issue raised in the present writ petition was substantially covered and decided by a coordinate bench in a reported judgment. This judgment had set aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023 (Karnataka Act No.37 of 2024). The Court further declared that 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, were applicable only to development plans for plots exceeding 20,000 square meters. It was also held that linking these levies to market or guidance value was illegal. Consequently, all impugned circulars and demand notices giving effect to these interpretations were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, regarding 'Ground Rent', was also struck down. Therefore, the controversy in the present petition no longer survived independently. The Court allowed the writ petition, set aside the impugned demand notice, and directed the BBMP to issue a fresh/modified plan and process the petitioner's application for a building license and sanction of the building plan strictly in accordance with law.
Key Issues
1. Whether the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) is ultra vires the Constitution, as it pertains to the petitioner's concerns? 2. Whether the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) notified on January 13, 2022, is in violation or contrary to the decision of this Court in W.P No.4601/2020 dated August 4, 2021? 3. Whether the impugned Demand Notice No. BBMP/Addl.Dir/JDNORTH/0081/24-25, dated March 14, 2025, issued by Respondent No.4, demanding various charges including ground rent, GST on ground rent, license fee, scrutiny fee, betterment charges, security deposit, and various cesses and surcharges, is illegal, without jurisdiction, and arbitrary? Petitioner's Arguments: The petitioner argued that the amendment act and subsequent actions by the respondents were illegal and arbitrary, particularly the demands made in the notice. They sought to quash these actions and obtain a building sanction plan without compliance with the illegal demands. Respondents' Arguments: The judgment does not explicitly record arguments from the respondents. However, it notes that the issue is covered by a coordinate bench's decision.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Section 45-B, Clause 3.8
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
The captioned petition is filed seeking the following reliefs:
"
Grant an order declaring that the entire Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) notified on 16/11/2021 (ANNEXURE-S) as being ultra HC-KAR NC: 2025:KHC:24621 vires the Constitution in so far, the Petitioner is concerned.
ii. To declare that Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) notified on 13/01/2022 (ΑΝNEXURE-T) is in violation/contrary to the decision of this Hon'ble Court in W.P No.4601/2020 (LB-BMP), order dated 04/08/2021 (Annexure-R).
iii. Grant an order, direction or writ in the nature of certiorari quashing the Office Order No. HaNINaYo/PR/461/2021-22 dated 09/03/2022 issued by Respondent No.3 as contained in (ΑΝΝΕΛORE-V) in so far, the Petitioner is concerned.
iv. grant an order, direction or writ in the nature of Certiorari quashing Section 18-A of the Karnataka Town & Country Planning Act, 1961 brought into effect by Karnataka Act No. 23 of 2004 (Karnataka Town & Country Planning (Amendment) Act, 1998) as contained in (ANNEXURE-L) insofar as Section 18-A(1) and (lv) of the Karnataka Act No. 23 of 2004 is concerned;
v. Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 3 TTP 2015 dated 25/02/2020 as contained in (ANNEXURE-K) insofar as the inserted Rule 37-A and 37-C is concerned;
vi. issue a writ or order by way of certiorari quashing the circular dated 14/08/2020, bearing No. HC-KAR NC: 2025:KHC:24621 He.Ni.Ka.Pa.Ko/P.R/320/2020-21 issued by the Respondent No.3 (Annexure-M) in so far the Petitioner is concerned.
vii. Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 23 TTP 2020 (E) dated 21/06/2021 as contained in (ANNEXURE-N) insofar as the inserted Rule 37-A and 37-C is concerned;
viii. Issue a writ or order by way of certiorari quashing the circular dated 24/06/2021, bearing No. He. Ni.Na.Yo/P.R/320/2020-21 Issued by the Respondent No.3 (Annexure-P) In so far the Petitioner is concerned.
ix. issue a writ or order by way of certiorari quashing the impugned Demand Notice No. BBMP/Addl.Dir/JDNORTH/0081/24-25, dated 14.03.2025, issued by the Respondent No.4 (Annexure- A) for demanding in so far it is concerned to Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, security deposit, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum, Surcharge for Mass Rapid Transport System, Labour cess and others, as illegal, without juri iction and arbitrary.
x. Issue a writ or order or direction by way of mandamus directing the Respondent No.3 and 4 BBMP to issue the sanction plan for construction of the Building on the Schedule Property without insisting HC-KAR NC: 2025:KHC:24621 compliance of illegal demands in the impugned Demand Notice No. BBMP/Addl.Dir/JDNORTH/0081/24-25, dated 14.03.2025, issued by the Respondent No.4 (Annexure- A).
xi. pass any such other order(s) as this Hon'ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity."
It is brought to the notice of this Court that the issue involved is dealt by the Co-ordinate Bench in the reported judgment in W.P.No.23086/2022 and connected matters. The Co-ordinate Bench, while deciding the issue, has set-aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024). Therefore, this Court deems it fit to cull out the operative portion of the order, which reads as under; "ORDER (i) The writ petitions are partly allowed. HC-KAR NC: 2025:KHC:24621 (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 the Karnataka Stamp Act, 1957, is illegal. However, liberty is reserved to the respondent-State Government HC-KAR NC: 2025:KHC:24621 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."
In the present writ petition, the core issue raised stands substantially covered and decided by the authoritative pronouncement of the co-ordinate bench, wherein the writ petitions were partly allowed and several consequential reliefs were granted. The Hon’ble Court, in unequivocal terms, quashed and set aside the Karnataka HC-KAR NC: 2025:KHC:24621 Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023 (Karnataka Act Nos.01 of 2022 and 37 of 2024 respectively).
The Court further declared that the provisions under 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 to development proposals concerning plots exceeding 20,000 square meters, and not to smaller plots. Importantly, it was also held that if a fee has been previously collected for change of land use or approval of layout plan, no further fee shall be levied for subsequent development plans, in view of the explanatory 'Note' to Table I of Rule 37-A.
The Court declared illegal the linkage of such levies to market or guidance value under Section 45-B of the Karnataka Stamp Act, and consequently, quashed all Circulars and demand notices issued to give effect to such HC-KAR NC: 2025:KHC:24621 unlawful interpretations. Clause 3.8 of the BBMP Building Bye-laws, 2003, imposing 'Ground Rent', was also struck down.
In view of these comprehensive declarations and findings, it is submitted that the controversy raised in the present writ petition no longer survives for adjudication independently, as it is squarely covered by the binding judgment of the coordinate bench. In the light of the law laid down in the reported judgment substantially covering the issue, which is raised in the captioned writ petition, the writ petition is liable to be allowed strictly aligning to the operative portion of the said writ petition.
In view of the above, this Court proceeds to pass the following; ORDER
(i) The writ petition is allowed. HC-KAR NC: 2025:KHC:24621 (ii) The impugned demand notice dated 14.03.2025 issued by respondent No.4 as per Annexure-A is hereby set-aside.
(iii) Respondent- BBMP is hereby directed to issue fresh/modified plan as the case may be.
(iv) Respondent- BBMP is hereby directed to forthwith process the petitioner's application seeking building license and sanction of the building plan, strictly in accordance with law.
(v) It is made clear that the issuance of the building license and approval plan shall not be withheld merely on the ground that the BBMP is contemplating to file an appeal against the reported judgment.
(vi) If the building license and sanction plan are issued, the same shall be subjected to the outcome of any appeal that may be filed by the BBMP against the judgment.
(vii) Insofar as payment made by the petitioner, Respondent-BBMP is directed to refund the same within a period of 8 weeks HC-KAR NC: 2025:KHC:24621 from the date of certified copy of this order, which shall be subject to the outcome of any appeal that may be filed by the BBMP.
Pending applications, if any, also stand disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
ALB List No.: 1 Sl No.: 76
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