M/S Bren Corporation PVT LTD vs. The State Of Karnataka
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The Petitioner, M/s. Bren Corporation 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 various other notifications, circulars, and demand notices issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) and other state authorities. The Petitioner sought to declare these enactments and actions as ultra vires the Constitution and contrary to previous court decisions. The challenge specifically targeted provisions related to ground rent, GST on ground rent, license fees, betterment fees, and other levies imposed by the BBMP for building plan sanction and construction. The demand notice from Respondent No.4, BBMP, for various fees including GST on ground rent, was also challenged.
Held
The High Court, noting that the core issues raised in the present writ petition were substantially covered and decided by a coordinate bench in a reported judgment (W.P.No.23086/2022 and connected matters), allowed the writ petition. The Court followed the operative portion of the coordinate bench's order. 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) were quashed and set aside. 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, apply only to development plans for plots exceeding 20,000 square meters. The Court also declared illegal the linking of fees to market or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, and consequently quashed all impugned circulars and demand notices. Clause 3.8 of the BBMP Building Bye-laws, 2003, providing for 'Ground Rent', was also struck down. The impugned demand notice (Annexure-C) was set aside, and BBMP was directed 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. The issuance of the license and plan shall not be withheld pending any appeal by BBMP, but will be subject to the outcome of such appeal.
Key Issues
1. Whether 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) are ultra vires the Constitution and liable to be quashed, as argued by the Petitioner. The Revenue did not explicitly argue this point in the provided text, but the Court's decision implies a challenge to these Acts. 2. Whether 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 plans for plots exceeding 20,000 square meters, and not for smaller plots, as contended by the Petitioner. The Revenue's stance is not explicitly recorded on this specific sub-issue, but the Court's reliance on a coordinate bench judgment suggests this was a point of contention. 3. Whether the linkage of fees leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to the market value or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, is illegal, as argued by the Petitioner. The Revenue's position on this is not recorded. 4. Whether Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye-laws, 2003, providing for 'Ground Rent', is illegal and liable to be quashed, as argued by the Petitioner. The Revenue's position is not recorded.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Section 45-B, Clause 3.8
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Cause title — parties, addresses and appearances
ORAL ORDER
The captioned petition is filed seeking the following reliefs: i) Grant an order declaring that the entire Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01/2022) notified on 13/01/2022 produced at ANNEXURE-Q as being ultra vires the Constitution in so far the Petitioner is concerned in so far the Petitioners are concerned.
ii) To declare that Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01/2022) notified on 13/01/2022 produced at ANNEXURE-Q is in violation/contrary to the decision of this hon'ble court in W.P. No.4601/2020 Vide ANNEXURE-M.
iii) Grant an order, direction or writ in the nature of certiorari quashing the Office Order No.HaNiNaYo/PR/461/2021-22 dated 09/12/2021 issued by Respondent No.3 as contained in ANNEXURE-P in so far the Petitioners are 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) insofar as Section 18- A(i) and (iv) 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 produced at ANNEXURE-G 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.He.Ni.Ka.Pa.Ko/P.R/320/2020-21 issued by the HC-KAR NC: 2025:KHC:27132 Respondent No.3 produced at Annexure-J In so far the Petitioners are 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-K 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 at Annexure-L in so far the Petitioner is concerned.
ix) Issue a writ or order by way of certiorari quashing the demand notice dated nil, bearing L.P.No.BBMP/Addl.Dir/JDSOUTH/0023/21-22, issued by the Respondent No.4 produced at Annexure-C for demanding in so far it is concerned to ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment fee for building, Betterment fee for site, security deposit, Cess for water supply scheme, surcharge for formation outer ring road, Cess for improvement of slum, Surcharge for Mass Rapid Transport System, 5% levy service charges payable to BBMP and upfront labour cess and 1% service chargers on labour cess to BBMP as illegal, without juri iction and arbitrary.
x) Issue a writ or order or direction by way of mandamus directing the Respondent Nos.3 and 4 BBMP to issue the sanction plan for construction of the Residential Apartment Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment fees for building, Betterment fees for site, security deposit, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum and surcharge for Mass Rapid Transport System, 5% levy service charges payable to BBMP and upfront labour cess and 1% service chargers on labour cess to BBMP and xi) pass any such other orders(s) as this Hon'ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity. HC-KAR NC: 2025:KHC:27132
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). 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 HC-KAR NC: 2025:KHC:27132 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 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, HC-KAR NC: 2025:KHC:27132 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 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 HC-KAR NC: 2025:KHC:27132 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 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 HC-KAR NC: 2025:KHC:27132 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. (ii) The impugned demand notice issued by respondent No.4 as per Annexure-C is hereby set-aside. (iii) Respondent- BBMP hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent- BBMP is hereby directed to forthwith process the petitioner's HC-KAR NC: 2025:KHC:27132 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. Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
HDK List No.: 2 Sl No.: 10
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.