Sri Nehal V vs. The State Of Karnataka
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The petitioner, Sri Nehal, 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 a demand notice 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 core of the challenge involved levies such as ground rent, GST on ground rent, license fees, scrutiny fees, betterment charges, and various other cess and surcharges demanded by the BBMP for the sanction of a building plan. The petitioner also sought a direction to issue the sanction plan without insisting on these charges.
Held
The High Court, in the present writ petition, relied on a coordinate bench's judgment in W.P.No.23086/2022 and connected matters. The coordinate bench had partly allowed the writ petitions, quashing and setting aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023. 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, were applicable only to development proposals for plots exceeding 20,000 square meters. The court also held that if fees were already collected for land use change or layout plan approval, no further fee should be levied for subsequent development plans. The linkage of levies to market or guidance value under Section 45-B of the Karnataka Stamp Act was declared illegal, and consequently, all related circulars and demand notices were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also struck down. Following this precedent, the present writ petition was allowed, the impugned demand notice dated 29.07.2024 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 sanction of the building plan strictly in accordance with law.
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, as contended by the petitioner. The petitioner argued that these amendments, along with Section 18-A of the Karnataka Town and Country Planning Act, 1961, and Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, were illegal and arbitrary. The respondents, represented by the State and BBMP, did not appear to have made specific arguments against this contention in the judgment, as the court relied on a coordinate bench's decision. 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 specific plot sizes and whether the linkage of fees to market value is legal, as argued by the petitioner. The petitioner contended that these provisions were being misapplied and that the fee structure was illegal. The court's decision was based on a prior judgment that addressed these points.
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
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 of 2022) notified on 13/01/2022 ANNEXURE-R) as being HC-KAR NC: 2025:KHC:22748 ultra vires the Constitution in so far, the Petitioner is concerned in so far, the Petitioner is concerned.
ii) To declare that Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) notified 13.01.2022 (ANNEXURE-R) is in violation/contrary to the decision of this Hon'ble Court in W.P. No.4601/2020 (LB-BMP) which is at Annexure-P. iii) 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.3 as contained in (ANNEXURE-S) in so far, the Petitioner is concerned.
iv) grant an order, direction or writ in the nature of Certiorari quashing 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-K) 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 as contained in (ANNEXURE-J) 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 Respondent No.3 (Annexure-L) insofar the Petitioner is 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-M) 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 HC-KAR NC: 2025:KHC:22748 No.3 (ANNEXURE - N) in so far the Petitioner is concerned.
ix) issue a writ or order by way of certiorari quashing the demand notice dated 29/07/2024, bearing No.BBMP/Ad.Com/WST/1429/23-24, issued by the Respondent No.4 (Annexure-D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, Betterment charges of site, security deposit, Lake Rejuvenation 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., as illegal, without juri iction and arbitrary.
x) Issue a writ or order or direction by way of Mandamus directing the Respondent No.3 and 4 BBMP to issue the sanction plan for construction of the commercial building in the Schedule Property without insisting the Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment Charges for building, Betterment charges of site, security deposit, Lake Rejuvenation fee, cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum and Surcharge for Mass Rapid Transport System, Labour cess and xi) 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.
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 HC-KAR NC: 2025:KHC:22748 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 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. HC-KAR NC: 2025:KHC:22748 (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, 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 HC-KAR NC: 2025:KHC:22748 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 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 HC-KAR NC: 2025:KHC:22748 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 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 HC-KAR NC: 2025:KHC:22748 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 dated 29.07.2024 issued by respondent No.4 as per Annexure-D 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 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 HC-KAR NC: 2025:KHC:22748 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.: 20
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.