M/S. Cornerstone Bay East Developers PVT. LTD. vs. The State Of Karnataka
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The petitioner, M/s. Cornerstone Bay East Developers Pvt. Ltd., filed a writ petition challenging the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Bruhat Bengaluru Mahanagara Palike and Certain Other Law (Amendment) Act, 2023 (Karnataka Act No. 37 of 2024). The petitioner also sought to quash an office order and a demand notice issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) for various fees, including ground rent with GST, license fee, and scrutiny fee, for the issuance of a partial occupancy certificate. The petitioner argued that these levies were unconstitutional and bad in law, particularly those based on the guidance value of the property.
Held
The Court held that the core issue raised in the present writ petition was substantially covered and decided by an authoritative pronouncement of a coordinate bench in a reported judgment. This prior judgment had partly allowed writ petitions, quashed and set aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023. It was 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, applied only to development proposals for plots exceeding 20,000 square meters. The Court also declared illegal the linkage of fees to the market or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, and quashed all circulars and demand notices giving effect to such interpretations. Clause 3.8 of the BBMP Building Bye-laws, 2003, regarding 'Ground Rent', was also struck down. Consequently, the present writ petition was allowed, aligning with the operative portion of the binding judgment.
Key Issues
1. Whether the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Bruhat Bengaluru Mahanagara Palike and Certain Other Law (Amendment) Act, 2023 (Karnataka Act No. 37 of 2024) are ultra vires the Constitution? (Question of law, turning on constitutional validity). 2. Whether the demand notice dated 09.04.2025, demanding fees including ground rent with GST, license fee, and scrutiny fee, is illegal and liable to be quashed? (Question of mixed law and fact, turning on the legality of the levies and the application of relevant laws and rules). Petitioner's arguments: The petitioner contended that the impugned amendment Acts were ultra vires the Constitution. They also argued that the fees demanded in the notice, including ground rent with GST, were illegal and unconstitutional, especially as they were linked to the guidance value of the property. They sought a direction to issue a partial occupancy certificate without insisting on these fees. Respondents' arguments: The judgment does not explicitly record arguments from the respondents. However, it notes that the issue was dealt with by a coordinate bench in a reported judgment.
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
Before: REPRESENTED BY
The captioned petition is filed seeking the following reliefs: a. Grant an order declaring that Municipal Corporations the entire Karnataka Certain and Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) notified on 13/01/2022 as contained in ANNEXURE-H as being ultra vires the Constitution. b. 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. 2 as contained in ANNEXURE-K; c. grant an order declaring that the entire the Bruhat Bengaluru Mahanagara Palike and Certain Other Law (Amendment) Act, 2023 (Karnataka Act No. 37 of 2024) das notified by Respondent No. 1, dated 16/8/2024 as contained in ANNEXURE-L as being ultra vires the Constiution. d. grant an order, direction or writ in the nature of mandamus directing the Respondent Nos. 2 to issue partial occupancy certificate to the Petitioner without insistence of the fees specified Sl. No. 1 [5 years delayed (i.e., ground rent with GST)], Sl. No. 2 (i.e., License fee) and Sl. No. 3 (i.e., Scrutiny fee) of the Calculation Sheet in demand notice bearing no. No. BBMP/Addl.Dir/JD Central/LP/280/2017-18 dated 09/04/2025, as contained in ANNEXURE-P; HC-KAR NC: 2025:KHC:27115 e. grant an order, direction or writ in the nature of Mandamus, directing the Respondents to issue the partial Occupancy Certificate with respect to Building Nos. 2 and 4 of the Schedule Property to the Petitioner without insisting for payment of amounts demanded in the impugned demand notice. f. grant an order, direction or declare that the various fees levied on the basis of the guidance value of the property are all bad in law and unconstitutional; and g. grant such other relief or reliefs as this Hon'ble Court may deem fit to grant, including the cost of the Petitioner, 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 across the Bar, the issue 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). HC-KAR NC: 2025:KHC:27115 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. (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. HC-KAR NC: 2025:KHC:27115 (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 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 HC-KAR NC: 2025:KHC:27115 authoritative pronouncement of the coordinate 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 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. HC-KAR NC: 2025:KHC:27115
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 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; HC-KAR NC: 2025:KHC:27115 ORDER (i) The writ petition is allowed. (ii) The impugned demand notice dated 09.04.2025 issued by respondent No.3 as per Annexure-P is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue Occupancy Certificate in accordance with law in compliance of the construction strictly adhering to the approved building plan. (iv) Respondent- BBMP is hereby directed to forthwith process the petitioner's application seeking partial occupancy certificate, strictly in accordance with law. (v) It is made clear that partial occupancy certificate shall not be withheld merely on the ground that the BBMP is contemplating to file an appeal against the reported judgment. (vi) If the partial occupancy certificate is issued, the same shall be subjected to the outcome of any appeal that may be filed by the BBMP against the judgment. Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE HDK List No.: 2 Sl No.: 45
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