M/S Arb Signature Infra vs. The State Of Karnataka

WP/11003/2021HC KarnatakaGSTCNR KAHC01021504202102 July 2025Bench: SACHIN SHANKAR MAGADUM8 pages

For Petitioner: SRI B. PRAMOD, ADVOCATEFor Respondent: SRI H.K. KENCHEGOWDA, AGA FOR R-1 AND R-3; SRI K.B. MONESH KUMAR, ADVOCATE FOR R-4 AND R-5

AI SummaryAllowed

Facts

The petitioners, M/s. Arb Signature Infra and two individuals represented by its proprietor, filed a writ petition challenging various provisions of the Karnataka Town and Country Planning Act, 1961, and related notifications, circulars, and government orders. Specifically, they sought to quash Section 18-A(i) and (iv) of the Karnataka Town and Country Planning (Amendment) Act, 2004, Rule 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, certain circulars issued by the Bruhat Bangalore Mahanagara Palike (BBMP), and a government order mandating upfront collection of labour welfare cess. They also challenged a demand notice from the Assistant Director (Town Planning) for various charges including ground rent, GST on ground rent, betterment charges, license fees, and cess. The petitioners sought a direction to issue a sanction plan for their residential apartment building without insisting on these charges.

Held

The Court allowed the writ petition, stating that the issues raised were squarely covered by previous binding decisions of coordinate benches. In the case of 'M/s Sapthagiri Shelters', the court had struck down Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024, holding that linking fees under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957, was illegal. This decision also quashed related circulars and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, as invalid. Similarly, in 'Sunderam Shetty', levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws were declared ultra vires the Act, and government circulars were quashed. Consequently, the impugned demand notice (Annexure-D) was set aside. The BBMP was directed to issue a fresh/modified plan and forthwith 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 approval was not to be withheld pending any appeal by the BBMP, but would be subject to the outcome of such an appeal.

Key Issues

1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No. 23 of 2004, are liable to be quashed? 2. Whether Notification No. UDD 3 TTP 2015, inserting Rule 37-A and 37-C into the Karnataka Planning Authority Rules, 1965, is liable to be quashed? 3. Whether the circulars dated 04/09/2015 and 14/08/2020 issued by the BBMP, and the government order dated 18/01/2007 and its corrigendum dated 28/02/2007, mandating upfront collection of labour welfare cess, are liable to be quashed? 4. Whether the demand notice issued by the Assistant Director (Town Planning) for various charges including ground rent, GST on ground rent, betterment charges, license fees, and cess, is illegal, without jurisdiction, and arbitrary? Petitioner's Contention: The petitioners argued that the impugned provisions, notifications, circulars, and demand notice were illegal, without jurisdiction, and arbitrary, and sought their quashing. They relied on previous judgments of the High Court that had dealt with similar issues. Revenue/State's Contention: The judgment does not record specific arguments from the respondents. However, the court's decision implies that the respondents' actions were based on the challenged provisions and circulars.

Sections Cited

Section 18-A, Rule 37-A, Rule 37-C, Section 45-B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:26252 WP No. 11003 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.11003 OF 2021 (LB-BMP) BETWEEN: 1. M/S. ARB SIGNATURE INFRA, A PROPRIETARY CONCERN, HAVING ITS OFFICE AT GROUND FLOOR, SY.NO.102/1, ARB SIGNATURE INFRA, B. NARAYANAPURA, MARATHALLI OUTER RING ROAD, BENGALURU-560 016. BY ITS PROPRIETOR MR. ABDUL SALAM S/O. LATE ABDUL REHAMAN, AGED ABOUT 43 YEARS. 2. MR. MALICK SALAHUDDIN, S/O. LATE M.A MALICK, AGED ABOUT 70 YEARS. 3. MRS. SHAMSUNISSA NAVEED, D/O. MR. MALICK SALAHUDDIN, AGED ABOUT 42 YEARS. PETITIONER NO.2 & 3 ARE RESIDING AT NO.50, 1ST CROSS, VIVEKANANDA NAGAR, BENGALURU-560 033. PETITIONER NO.2 AND 3 ARE REPRESENTED BY THEIR GPA HOLDER M/S. ARB SIGNATURE INFRA, BY ITS PROPRIETOR, MR. ABDUL SALAM Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:26252 WP No. 11003 of 2021 S/O. LATE ABDUL REHAMAN, AGED ABOUT 43 YEARS. …PETITIONERS (BY SRI B. PRAMOD, ADVOCATE) AND: 1. THE STATE OF KARNATAKA THE URBAN DEVELOPMENT DEPARTMENT VIKASA SOUDHA, DR. B.R. AMBEDKAR VEEDHI, BENGALURU-560 001. REPRESENTED BY ITS SECRETARY. 2. THE STATE OF KARNATAKA THE LABOUR DEPARTMENT VIKASA SOUDHA, DR. B.R. AMBEDKAR VEEDHI, BENGALURU-560 001. REPRESENTED BY ITS UNDER SECRETARY. 3. THE STATE OF KARNATAKA DEPARTMENT OF PARLIAMENTARY AFFAIRS AND LEGISLATION VIKASA SOUDHA, DR. B.R. AMBEDKAR VEEDHI, BENGALURU-560 001. REPRESENTED BY ITS SECRETARY. 4. BRUHAT BANGALORE MAHANAGAR PALIKE N.R. SQUARE, BENGALURU-560 002. REPRESENTED BY ITS COMMISSIONER. 5. THE ASSISTANT DIRECTOR (TOWN PLANNING-MAHADEVAPURA) BRUHAT BENGALURU MAHANAGARA PALIKE, RHB COLONY, WHITEFIELD MAIN ROAD, - 3 - HC-KAR NC: 2025:KHC:26252 WP No. 11003 of 2021 BENGALURU-560 048. …RESPONDENTS (BY SRI H.K. KENCHEGOWDA, AGA FOR R-1 AND R-3; SRI K.B. MONESH KUMAR, ADVOCATE FOR R-4 AND R-5) * * * THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH SECTION 18-A OF THE KARNATAKA TOWN AND COUNTRY PLANNING ACT, 1961 BROUGHT INTO EFFECT BY KARNATAKA ACT NO.23 OF 2004 (KARNATAKA TOWN AND COUNTRY PLANNING (AMENDMENT) ACT 1998 AS CONTAINED IN ANNEXURE-G1 INSOFAR AS SECTION 18-A(I) AND (IV) OF THE KARNATAKA ACT NO.23 OF 2004 IS CONCERNED. THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

ORAL ORDER

The captioned petition is filed seeking the following reliefs: i) 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-G1 insofar as Section 18-A(i) and (iv) of the Karnataka Act No. 23 of 2004 is concerned; ii) 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 HC-KAR NC: 2025:KHC:26252 25/02/2020 as contained in ANNEXURE-G insofar as the inserted Rule 37-A and 37-C is concerned; iii) issue a writ or order by way of certiorari quashing the circular dated 04/09/2015, bearing No. Heninayo/JD(N)/DM3/PR /320/2015-16 issued by the Respondent No.4 (Annexure-E) in so far the Petitioners are concerned. iv) 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 Respondent No.4 (Annexure-H) in so far the Petitioners are concerned. v) issue a writ or order by way of certiorari quashing the Government order bearing No.LD/300/LET/2006 dated 18/01/2007 and the corrigendum order bearing No.LD/300/LET/2006, dated 28/02/2007 issued by the Respondent No.2 mandating upfront collection of labour welfare cess (Annexure-F) in so far the Petitioners are concerned. vi) issue a writ or order by way of certiorari quashing the demand notice dated Nil bearing No.BBMP/Ad.Com/MDP/1226/20-21, issued by the Respondent No.5 (Annexure-D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, excess Security deposit, revised License fee, revised scrutiny fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of HC-KAR NC: 2025:KHC:26252 slum, Surcharge for Mass Rapid Transport System, Labour cess and etc., as illegal, without juri iction and arbitrary. vii) issue a writ or order or direction by way of mandamus directing the Respondent No.4 and 5 BBMP to issue the sanction plan for construction of Residential Apartment Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, excess Security deposit, revised License fee, revised scrutiny fee, 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 etc., and viii) 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.

The Co-ordinate Benches of this Court, in W.P.No.23086/2022 and connected matters(herein referred to as “M/s Sapthagiri Shelters”) as well as W.P.No.36017/2018 and connected matters(herein referred to as “Sunderam Shetty”), have comprehensively adjudicated the issue involved and settled the controversy. HC-KAR NC: 2025:KHC:26252

In Sunderam Shetty and connected cases, the Co- ordinate Bench declared the levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under the relevant bye-laws as ultra vires the Act and quashed the Government Circulars dated 04.09.2015, 27.01.2017, and 30.03.2017. 4. Similarly, in M/s Sapthagiri Shelters and connected matters, the Co-ordinate Bench struck down the Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024, holding that linking fees under Rule 37-A of the Karnataka Planning Authority Rules, 1965 to market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957 is illegal. It further quashed all related Circulars and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, as invalid.

The issues raised in the present writ petition are squarely covered by the above binding decisions, wherein HC-KAR NC: 2025:KHC:26252 the relevant bye-laws and government circulars have been set aside.

In light of the authoritative pronouncements, the present petition does not warrant separate adjudication and is liable to be allowed in terms of the operative directions issued in the aforesaid writ petitions.

Accordingly, this Court proceeds to pass the following: ORDER (i) The writ petition is allowed. (ii) The impugned demand notice issued by respondent No.5 as per Annexure-D is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent - BBMP is directed to forthwith process the petitioner’s application seeking building license and sanction of the building plan, strictly in accordance with law. HC-KAR NC: 2025:KHC:26252 (v) It is made clear that the issuance of the building license and approval of the 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 subject to the outcome of any appeal that may be filed by the BBMP against the said judgment. Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE HDK List No.: 2 Sl No.: 48

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.