M/S Asn Developers vs. The State Of Karnataka

WP/2814/2021HC KarnatakaGSTCNR KAHC01005789202126 June 2025Bench: SACHIN SHANKAR MAGADUM7 pages

For Petitioner: SRI B PRAMOD, ADVOCATEFor Respondent: SMT. SPOORTHI, H.C.G.P., FOR R-1 AND R-2; SRI K. S. MALLIKARJUNA REDDY FOR R-4 AND R-5

AI SummaryAllowed

Facts

The petitioner, M/s. ASN Developers, filed a writ petition challenging various provisions of the Karnataka Town and Country Planning Act, 1961, as amended, and related notifications, circulars, and government orders. The petitioner sought to quash Section 18-A(i) and (iv) of the Act, 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. The petitioner also challenged a demand notice issued by the BBMP for various charges including ground rent, GST on ground rent, betterment charges, license fees, and various cesses. The core of the dispute revolves around the legality of these levies and their collection in relation to building plan sanction and license issuance.

Held

The High Court allowed the writ petition, setting aside the impugned demand notice dated 03.02.2021 issued by respondent No.5 (BBMP) as per Annexure-D. The Court directed the BBMP to issue a fresh plan as the case may be and to forthwith process the petitioner's application seeking a building license and sanction of the building plan strictly in accordance with law. The Court clarified that the issuance of the building license and approval plan shall not be withheld merely on the ground that the BBMP is contemplating filing an appeal against the reported judgment. However, if issued, the license and plan shall be subject to the outcome of any appeal filed by the BBMP. The Court's decision was based on the reasoning that the issues raised in the present petition were squarely covered by previous binding decisions of coordinate benches in "M/s Sapthagiri Shelters" and "Sunderam Shetty" cases. These prior judgments had declared levies like ground rent, license fee, building license fee, and scrutiny fee as ultra vires the Act, quashed related government circulars, and struck down amendments linking planning fees to stamp duty values, thereby invalidating clauses pertaining to ground rent in BBMP Building Bye-laws. The ratio decidendi is that where prior authoritative pronouncements have set aside the relevant bye-laws and government circulars, a subsequent petition raising identical issues does not warrant separate adjudication and should be allowed in terms of the operative directions issued in those earlier cases.

Key Issues

1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, are ultra vires the Act? 2. Whether Rule 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, which link fees to market/guidance value under the Karnataka Stamp Act, 1957, are illegal? 3. Whether the circulars issued by the BBMP and the government order mandating upfront collection of labour welfare cess are legally sustainable? 4. Whether the demand notice issued by the BBMP for various charges, including ground rent, GST on ground rent, betterment charges, license fees, and cesses, is illegal and without jurisdiction? Petitioner's Arguments: The petitioner contended that the impugned provisions, rules, circulars, and government orders are illegal, without jurisdiction, and arbitrary. They argued that the levies are not authorized by the Act and that the collection of certain charges, like labour welfare cess, upfront is mandated by an illegal government order. The petitioner sought to quash these actions and obtain a direction to issue the sanction plan without insisting on these disputed charges. Revenue/State's Arguments: The judgment does not record specific arguments from the respondents. However, the court's decision relies on previous judgments that have dealt with similar issues.

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:23109 WP No. 2814 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.2814 OF 2021 (LB-BMP) BETWEEN: M/S. ASN DEVELOPERS HAVING OFFICE AT 2ND AND 3RD FLOOR NO.4/1, PATTANDURU AGRAHARA WHITEFIELD, K. R. PURAM HOBLI BANGALORE EAST TALUK BANGALORE - 560 066 REPRESENTED BY ITS MANAGING PARTNER SRI K. ETHIRAJULU NAIDU S/O. K. UDANDAMA NAIDU AGED ABOUT 38 YEARS …PETITIONER (BY SRI B PRAMOD, ADVOCATE) AND: 1. THE STATE OF KARNATAKA THE URBAN DEVELOPMENT DEPARTMENT VIKASA SOUDHA DR. B. R. AMBEDKAR VEEDHI BANGALORE - 560 001 REPRESENTED BY ITS SECRETARY 2. THE STATE OF KARNATAKA THE LABOUR DEPARTMENT VIKASA SOUDHA DR. B. R. AMBEDKAR VEEDHI BANGALORE - 560 001 REPRESENTED BY ITS UNDER SECRETARY Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:23109 WP No. 2814 of 2021 3. THE STATE OF KARNATAKA DEPARTMENT OF PARLIAMENTARY AFFAIRS AND LEGISLATION VIKASA SOUDHA DR. B. R. AMBEDKAR VEEDHI BANGALORE - 560 001 REPRESENTED BY ITS SECRETARY. 4. BRUHAT BANGALORE MAHANAGARA PALIKE N. R. SQUARE BANGALORE - 560 002 REPRESENTED BY ITS COMMISSIONER. 5. THE JOINT DIRECTOR (TOWN PLANNING NORTH) BRUHAT BANGALORE MAHANAGARA PALIKE N. R. SQUARE HEAD OFFICE BUILDING BANGALORE - 560 002. …RESPONDENTS (BY SMT. SPOORTHI, H.C.G.P., FOR R-1 AND R-2; SRI K. S. MALLIKARJUNA REDDY 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 ANNX-G1 INSOAR AS SECTION 18-A(I) AND (IV) OF THE KARNATAKA ACT NO.23 OF 2004 IS CONCERNED AND ETC. THIS WRIT PETITION IS COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:23109 WP No. 2814 of 2021 CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM

ORAL ORDER

The captioned petition is filed seeking the following reliefs: WHEREFORE, it is respectfully prayed that this Hon'ble Court may be pleased to:

i) 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 & 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 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 petitioner is 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 petitioner is concerned. v) issue a writ or order by way of certiorari quashing the Government order and bearing no.LD/300/LET/2006 dated 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 Petitioner is concerned. HC-KAR NC: 2025:KHC:23109 vi) issue a writ or order by way of certiorari quashing the demand notice dated 03/02/2021 bearing no.BBMP/Ad.Dir/Jd NORTH/0032/2019-20, 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 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 DOMP 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:23109

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:23109 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 dated 03.02.2021 issued by respondent No.5 as per Annexure-D is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue fresh 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. HC-KAR NC: 2025:KHC:23109 (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 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

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.