M/S Sobha Limited vs. The State Of Karnataka
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The petitioner, M/s. Sobha Limited, filed a writ petition challenging the constitutional validity of certain provisions inserted into the Karnataka Municipal Corporations Act, 1976, and the Bruhat Bangalore Mahanagara Palike Act, 2020, as well as various notifications and office orders related to the collection of fees and charges. The petitioner argued that these provisions and actions were unconstitutional, arbitrary, unreasonable, and infringed upon their right to property under Article 300A and failed the test of Article 14 of the Constitution. The petition also sought quashing of demand notices and directions for refund of amounts paid. The respondents included the State of Karnataka and various municipal authorities.
Held
The High Court allowed the writ petition. It noted that similar issues had been comprehensively adjudicated by coordinate benches in previous cases, specifically "M/s Sapthagiri Shelters" and "Sunderam Shetty." 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. In "M/s Sapthagiri Shelters," Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024 were struck down for illegally linking fees to market/guidance value, and related circulars were quashed, with Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, declared invalid. The Court found that the issues in the present petition were squarely covered by these binding decisions. Consequently, the impugned demand notices dated 27.11.2020 and 28.06.2024 were set aside. The BBMP was directed to issue Occupancy Certificates in accordance with law, process applications for Occupancy Certificates forthwith, and consider representations for refund of fees. The issuance of Occupancy Certificates was to not be withheld due to any contemplated appeal by the BBMP.
Key Issues
1. Whether Sections 299A and 299C of the Karnataka Municipal Corporations Act, 1976, and Sections 240A and 240C of the Bruhat Bangalore Mahanagara Palike Act, 2020, are unconstitutional, arbitrary, unreasonable, unenforceable, an unreasonable restriction on the right to property, an infringement of Article 300A, and fail the test of Article 14. 2. Whether retrospective amendments made by Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024 to a repealed legislation are illegal, impermissible, and unenforceable. 3. Whether the Bruhat Bengaluru Mahanagara Palike and Certain Law (Amendment) Act, 2023 (Karnataka Act 37 of 2024) is unconstitutional, arbitrary, unreasonable, unenforceable, an unreasonable restriction on the right to property, and an infringement of Article 300A and Article 14. 4. Whether the Office Order dated 09.03.2020, directing the collection of fees and charges based on the impugned amendment, is unconstitutional, arbitrary, unreasonable, and unenforceable. 5. Whether Section 18-A(1)(i) and (iv) of the Karnataka Town & Country Planning Act, 1961, as amended, is unconstitutional, arbitrary, unreasonable, unenforceable, and an infringement of Article 300A and Article 14. Petitioner's arguments: The petitioner contended that the impugned provisions and actions were unconstitutional, arbitrary, and violated fundamental rights. Revenue/State's arguments: The judgment does not record specific arguments from the respondents.
Sections Cited
Section 299A, Section 299C, Section 240A, Section 240C, Section 45-B, Section 18-A(1)(i), Section 18-A(1)(iv), Rule 37-A, Rule 37-C
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Cause title — parties, addresses and appearances
ORAL ORDER
This petition is filed seeking the following reliefs:- “1. Declare that the provisions of Sections 299A and 299C inserted into the Karnataka Municipal Corporations Act, 1976 (Karnataka Act No.14 of 1977) with effect from 4th September 2015 and also Sections 240A and 240C inserted into the Bruhat Bangalore Mahanagara Palike 2020 (Karnataka Act No.53 of 2020) passed on 13.01.2022 under Annexure-A with effect from 11.01.2021 unconstitutional, manifestly arbitrary, as unreasonable, unenforceable, an unreasonable restriction on right to property being expropriatary, an infringement of constitutional right to property under Article 300A and failing the test of Article 14 of the Constitution.
Declare that after repeal of the Karnataka Municipal Corporations Act, 1976, the HC-KAR NC: 2025:KHC:23267 retrospective amendment sought to be made under Annexure-A (Karnataka Act No.01 of 2022 Published in Gazette dated 13.01.2022) and Annexure-B (Karnataka Act No.37 of 2024, Published in Gazette dated 16.08.2024), to a non- existent piece of legislation is illegal, impermissible and unenforceable.
Declare that the Bruhat Bengaluru Mahanagara Palike and Certain Law (Amendment) Act, 2023 (Karnataka Act 37 of 2024 Published in Gazette dated 16.08.2024) under Annexure-B to this writ petition as unconstitutional, manifestly arbitrary, unreasonable, unenforceable and unreasonable restriction on right to property being expropriatory and infringement of constitutional right to property under Article 300A of the Constitution and failing the test of Article 14 of the Constitution.
Declare that, the Office Order dated 09.03.2020, bearing No.He.Ni.Na. Yo/PR/461/2021-22, under Annexure-C issued by the Respondent No.4 directing to collect various fees, charges etc., based on the Impugned Amendment brought under Annexure-A as unconstitutional, manifestly arbitrary, unreasonable, unenforceable, an unreasonable restriction on right to property being expropriatary, an infringement of constitutional right to property under Article 300A and failing the test of Article 14 of the Constitution.
Declare that the Section 18-A(1) (i) and (iv) of the Karnataka Town & Country Planning Act, 1961 HC-KAR NC: 2025:KHC:23267 brought into effect by Karnataka Act No. 23 of 2004 published in Gazette dated 03.06.2004, (Karnataka Town & Country Planning (Amendment) Act, 1998) as contained in Annexure-D, as unconstitutional, manifestly arbitrary, unreasonable, unenforceable, an unreasonable restriction on right to property being exproprietary, an infringement of constitutional right to property under Article 300A and failing the test of Article 14 of the Constitution.,
Issue a writ of Certiorari quashing the Notification issued by the 2nd Respondent bearing No. UDD 3 TTP 2015 dated 25.02.2020 as contained in Annexure-E insofar as the Amended Rule 37 A (1) and inserted Rule 37-C is concerned.,
Issue a writ of Certiorari quashing the Notification issued by the 2nd Respondent bearing No. UDD 23 TTP 2020 (E) dated 21.06.2021 as contained in Annexure-H insofar as the Amended Rule 37 A (1) and inserted Rule 37-C is concerned.,
Issue a writ of Certiorari quashing the circular issued by the Respondent No.4 bearing no. He.Ni.Ka.Pa.Ko/P.R/3.5/320/2020-21 dated 14.08.2020 (Annexure-F) as unconstitutional, arbitrary, unreasonable and unenforceable.
Quash the Demand Notice bearing No. BBMP/Addl. Dir/ JD North/LP/0082/2019-20 dated 27.11.2020 (Annexure-G) issued by the Respondent No.3.,
Quash Demand Notice dated 28.06.2024 bearing No. BBMP/Addl. Dir/ JD North /LP/0082/2019-20 HC-KAR NC: 2025:KHC:23267 (Annexure-J) issued by Respondent No.3 in so far as it relates to unreasonable and arbitrary demand of Ground Rent, GST thereon, and Scrutiny Fees are concerned.,
Direct the Respondent No.3 and 4 by issue of a writ in the nature of mandamus to consider the representation dated 30.09.2021 and reminder dated 06.11.2021 made by the Petitioner under Annexures-U & V respectively pursuant to the Order dated 04.08.2021 rendered by this Hon'ble Court in Writ Petition No.4601 of 2020 (LB-BMP) and connected matters and to refund to the petitioner the amount paid by the petitioner.,
Grant such other and further relief/s as this Hon'ble Court deems fit in the facts and circumstances of the case in the interests 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:23267
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 and 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 the relevant bye-laws and government circulars have been set aside. HC-KAR NC: 2025:KHC:23267
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 notices dated 27.11.2020 and 28.06.2024 issued by respondent No.3 as per Annexure-G and J respectively are hereby set-aside.
(iii) Respondent No.4 - BBMP is hereby directed to issue Occupancy Certificate in accordance with law in compliance of the construction strictly adhering to the approved building plan. HC-KAR NC: 2025:KHC:23267 (iv) Respondent No.4 - BBMP is directed to forthwith process the petitioner’s application seeking Occupancy Certificate, strictly in accordance with law.
(v) It is made clear that the issuance of the 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 Occupancy Certificate is issued, the same shall be subject to the outcome of any appeal that may be filed by the BBMP against the said judgment.
(v) Insofar as payment is concerned, respondent No.4 - BBMP shall consider the representations made by the petitioner at Annexures-U and V for refund of the fees and pass appropriate orders in accordance with law within a period of eight weeks from the date of receipt of order copy. HC-KAR NC: 2025:KHC:23267 Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
NBM List No.: 2 Sl No.: 42
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.