New Horizon Educational And Cultural Trust vs. State Of Karnataka

Facts

The petitioner, New Horizon Educational and Cultural Trust, filed a writ petition challenging a demand notice issued by the Joint Director (Town Planning-North), Bruhat Bengaluru Mahanagara Palike (BBMP). The demand notice, dated nil, sought various charges including scrutiny fee, ground rent and GST, license fee, betterment fee, security deposit, and various cess/surcharges related to water supply, ring road, slum improvement, and mass rapid transport system. The petitioner sought to quash these demands and also challenged the constitutional validity of certain bye-laws, government orders, circulars, and provisions of the Karnataka Town and Country Planning Act, 1961, and related rules. The petitioner also sought a direction to issue a building plan and license without insisting on payment of the disputed demands.

Held

The High Court allowed the writ petition. The Court noted that the issues raised in the present petition were comprehensively adjudicated and settled by coordinate benches in previous judgments, specifically in the cases of '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 related government circulars were quashed. Similarly, in 'M/s Sapthagiri Shelters', Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024 were struck down for linking fees to market/guidance value, and Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, was declared invalid. Consequently, the Court held that the present petition did not warrant separate adjudication and was liable to be allowed in terms of the operative directions issued in the aforesaid binding decisions. The impugned demand notice was set aside, and the BBMP was directed to issue a fresh/modified plan and process the petitioner's application for a building license and plan sanction 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 the demand notice LP No.BBMP/AD.COM./MDP/0650/19-20, issued by the Joint Director (Town Planning-North), BBMP, demanding various fees and charges, is liable to be quashed in so far as specific amounts are concerned, particularly concerning scrutiny fee, ground rent and GST, license fee, betterment fee, security deposit, and various cess/surcharges? (Question of law and fact, turning on the validity of the levies under relevant bye-laws and government orders). 2. Whether Bye-law No.3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires? (Question of law, turning on the validity of the bye-law). 3. Whether the Government Order bearing G.O.No.LD 300 LET 2006 dated 18.01.2007 and its corrigendum dated 28.02.2007, directing upfront collection of labour welfare cess, are liable to be quashed? (Question of law, turning on the validity of the government order). 4. Whether the Circular bearing No.He.Ni.Ka.Pa.Ko/P.R/320/2020-21 dated 14.08.2020, issued by the BBMP, is liable to be quashed? (Question of law, turning on the validity of the circular). 5. Whether provisions of Section 18-A of the Karnataka Town and Country Planning Act, 1961, specifically sub-sections (i) and (iv), are liable to be quashed? (Question of law, turning on the validity of the statutory provision). 6. Whether the Notification issued by the State of Karnataka bearing No. UDD 3 TTP 2015 dated 25.02.2020, in so far as amended Rule 37-A and Rule 37-C are concerned, is liable to be quashed? (Question of law, turning on the validity of the notification and amended rules). Petitioner's arguments: The petitioner argued that the demand notice, bye-laws, government orders, circulars, and statutory provisions were illegal and unconstitutional. They relied on previous judgments of the High Court in 'M/s Sapthagiri Shelters' and 'Sunderam Shetty' cases which had dealt with similar issues concerning levies and fees under building bye-laws and planning regulations. Revenue/State's arguments: The judgment does not record any specific arguments made by the respondents (State of Karnataka and BBMP).