Sri. N Manohar vs. The State Of Karnataka

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WP/16734/2024HC KarnatakaGSTCNR KAHC01034480202430 June 2025Bench: SACHIN SHANKAR MAGADUM10 pages
For Petitioner: SRI SAMMITH S., ADVOCATEFor Respondent: SRI BOPANNA B., AGA FOR R-1; SRI K.B. MONESH KUMAR, ADVOCATE FOR R-2 & R-3
AI SummaryAllowed

Facts

The petitioners, represented by M/s. Karle Infra Private Limited, filed a writ petition challenging the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.1/2022), and subsequent notifications and circulars issued by the State of Karnataka and Bruhat Bengaluru Mahanagara Palike (BBMP). The petitioners sought to declare the amendment act ultra vires the Constitution and to quash specific notifications, circulars, and an office order related to amended Rule 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, and Ground Rent. They also sought a direction to issue a modified sanction plan without insisting on various fees, including Ground Rent along with GST, as demanded in a notice dated 05/06/2024.

Held

The High Court of Karnataka, in this writ petition, followed a coordinate bench's decision in W.P.No.23086/2022 and connected matters. The Court held that the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023 were ultra vires and accordingly quashed and set them 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, not smaller plots. The Court also held that if fees were already collected for change of land use or layout plan approval, no further fee should be collected for subsequent development plans, as per the 'Note' to Table I of Rule 37-A. The linkage of these fees to market or guidance value under Section 45-B of the Karnataka Stamp Act was declared illegal. Consequently, all impugned circulars and demand notices giving effect to these rules were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also struck down as illegal. The impugned demand notice dated 05.06.2024 was set aside, and the respondents were directed to issue a modified plan and process the building license application strictly in accordance with law, without withholding it due to potential appeals.

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. The petitioners argued for their unconstitutionality, while the respondents' stance is not explicitly recorded on this specific point in the provided text, but they are the authorities who enacted these laws. 2. Whether the provisions of 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. The petitioners contended for a narrower application, while the respondents likely supported a broader interpretation leading to the impugned levies. 3. Whether the linkage of fees under Rule 37-A to the market value or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, is legal. The petitioners challenged this linkage, and the respondents presumably defended it. 4. Whether Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye-laws, 2003, providing for 'Ground Rent', is illegal. The petitioners sought its quashing.

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
- 1 - HC-KAR NC: 2025:KHC:23180 WP No. 16734 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.16734 OF 2024 (LB-BMP) BETWEEN: 1. SRI N. MANOHAR AGED ABOUT 51 YEARS, S/O. SRI LATE A NARAYANAPPA, 2. SRI N. PRASHANTH, AGED ABOUT 47 YEARS, S/O. SRI LATE A. NARAYANAPPA, RESIDING AT VSPL ANTHORIUM, FLAT NO.301, JAIRAM NAGAR, JAKKUR, BENGALURU-560 064. 3. SMT. N. ANITHA AGED ABOUT 54 YEARS, W/O. SRI R. PRAHALLAD, RESIDING AT NO.555, 17TH CROSS, AI BLOCK, VIJAYANAGAR, 3RD STAGE, MYSORE-570 030. REPRESENTED BY THEIR GPA HOLDER, M/S. KARLE INFRA PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.151, INDUSTRIAL SUBURB, YESHWANTHPUR, BANGALORE-560 022 REPRESENTED BY ITS AUTHORISED SIGNATORY AND DIRECTOR SRI DHRUVA KARLE, AGED ABOUT 42 YEARS, S/O. SRI. SUDARSHAN KARLE. 4. M/S. KARLE INFRA PRIVATE LIMITED, A COMPANY INCORPORATED UNDER Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:23180 WP No. 16734 of 2024 THE COMPANIES ACT, 1956, NO.151, INDUSTRIAL SUBURB, YESHWANTHPUR, BANGALORE-560 022 REPRESENTED BY ITS AUTHORISED SIGNATORY AND DIRECTOR SRI DHRUVA KARLE. …PETITIONERS (BY SRI SAMMITH S., ADVOCATE) AND: 1. THE STATE OF KARNATAKA REPRESENTED BY ITS UNDER SECRETARY DEPARTMENT OF URBAN DEVELOPMENT, GOVERNMENT OF KARNATAKA VIKASA SOUDHA, BENGALURU-560 001. 2. THE BRUHAT BENGALURU MAHANAGARA PALIKE REPRESENTED BY THE CHIEF COMMISSIONER N.R. SQUARE, BENGALURU-560 002. 3. THE JOINT DIRECTOR, TOWN AND COUNTRY PLANNING (NORTH) BRUHAT BENGALURU MAHANAGARA PALIKE, N.R. SQUARE, BANGALORE-560002. …RESPONDENTS (BY SRI BOPANNA B., AGA FOR R-1; SRI K.B. MONESH KUMAR, ADVOCATE FOR R-2 & R-3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO GRANT AN ORDER DECLARING THAT THE ENTIRE KARNATAKA MUNICIPAL CORPORATION AND CERTAIN OTHER LAW (AMENDMENT) ACT 2021 (KARNATAKA ACT NO.1/2022) NOTIFIED ON 13.01.2022 AS CONTAINED IN ANNEXURE-N AS BEING ULTRA VIRES THE CONSTITUTION AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM - 3 - HC-KAR NC: 2025:KHC:23180 WP No. 16734 of 2024

ORAL ORDER

The captioned petition is filed seeking following reliefs: “a. 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 13/01/2022 as contained in ANNEXURE-N as being ultra vires the Constitution.

b. grant an order, direction, or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No.UDD 3 TPP 2015 dated 25/02/2020 as contained in ANNEXURE-E insofar as the amended Rule 37-A is concerned.

c. grant an order, direction, or writ in the nature of Certiorari quashing the circular issued by the Respondent No.1 bearing No.UDD 23 TTP 2020(E) dated 21/06/2021 as contained in ANNEXURE-L insofar as the amended Rule 37-A and 37-C is concerned.

d. 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-Q.

e. grant an order, direction, or writ in the nature of mandamus directing the Respondent Nos.2 to issue Modified Sanction Plan to the Petitioners without insistence of the fees specified at I. Sl. No.1 i.e., HC-KAR NC: 2025:KHC:23180 (Scrutiny Fee), Sl. No.2 (i.e., Ground Rent including GST) Sl. No.3 (i.e., License Fee), Sl. No.6 (Security Deposit), Sl. No.4 and 5 (Betterment Charge) and in II. Sl. No.1 (Labour Cess) for the modified sanction plan dated 05/06/2024 towards ground rent along with GST, as contained in the demand notice bearing LP No.BBMP/Addl. Dir/JD NORTH/0027/20-21 dated 05/06/2024 ANNEXURE-R.

f. grant an order, direction, or writ in the nature of Mandamus, directing the Respondents to issue the modified sanction plan with respect to the Schedule Property to the Petitioners without insisting for payment of amounts demanded in the impugned demand notice.

g. grant such other relief or reliefs as this Hon'ble Court may deem fit to grant, including cost of the Petitioners, in the facts and circumstances of the case, in the interest of justice and equity.”

2.

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 HC-KAR NC: 2025:KHC:23180 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 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’ HC-KAR NC: 2025:KHC:23180 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, 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." HC-KAR NC: 2025:KHC:23180

3.

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).

4.

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 HC-KAR NC: 2025:KHC:23180 development plans, in view of the explanatory 'Note' to Table I of Rule 37-A.

5.

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.

6.

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 HC-KAR NC: 2025:KHC:23180 allowed strictly aligning to the operative portion of the said writ petition.

7.

In view of the above, this Court proceeds to pass the following: ORDER (i) The writ petition is allowed.

(ii) The impugned demand notice dated 05.06.2024 issued by respondent No.3 as per Annexure-R is hereby set-aside.

(iii) Respondent Nos.2 and 3 are hereby directed to issue fresh/modified plan as the case may be.

(iv) Respondent Nos.2 and 3 are 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 HC-KAR NC: 2025:KHC:23180 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

MBM List No.: 2 Sl No.: 21

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.