Mr. Siby Thomas John vs. State Of Karnataka
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The petitioner, Mr. Siby Thomas John, filed a writ petition challenging a demand notice dated December 22, 2020, issued by the Assistant Director, Town Planning (East), Bruhat Bengaluru Mahanagara Palike (BBMP). The demand notice included various charges such as scrutiny fee, license fee, ground rent GST, betterment fee for building and site area, security deposit, administrative charge on labour cess, and labour cess. The petitioner sought to quash this demand notice, a Government Order dated January 18, 2007, and a corrigendum dated February 28, 2007, related to upfront collection of labour welfare cess. The petitioner also sought to declare Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, as unconstitutional and sought directions to issue building plan and license without insisting on the disputed payments.
Held
The Court held that the issues raised in the present writ petition were squarely covered by the judgment in W.P.No.36017/2018 and connected matters. The coordinate bench had previously held that the bye-laws under which Ground Rent, License Fee, Building License Fee, Scrutiny Fee, and Security Deposit were levied were ultra vires the Karnataka Municipal Corporations Act, 1976, and thus unenforceable. The Court also quashed the Circular dated September 4, 2015, and Government Orders dated January 27, 2017, and March 30, 2017, which directed the collection of such fees without statutory backing. Regarding labour cess, the imposition was upheld, but the directive for upfront collection via Government Orders dated January 18, 2007, and February 28, 2007, was quashed. The Court found that Section 423(20-b) of the Act, which allowed collection of fees for burial grounds and crematoria, could not be used for unrelated charges. Consequently, the impugned demand notice was set aside, and the BBMP was directed to issue a fresh/modified plan and process the building license application strictly in accordance with law. The issuance of the license and plan 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 bye-laws under which Ground Rent, License Fee, Building License Fee, Scrutiny Fee, and Security Deposit are levied are ultra vires the Karnataka Municipal Corporations Act, 1976, rendering them unenforceable? 2. Whether the Circular dated September 4, 2015, and Government Circulars dated January 27, 2017, and March 30, 2017, demanding Lake Rejuvenation Fee, are liable to be quashed? 3. Whether the imposition of labour cess under the Welfare Cess Act is valid, but its demand for upfront payment in terms of Government Orders dated January 18, 2007, and February 28, 2007, is liable to be quashed? Petitioner's Arguments: The petitioner argued that the bye-laws and circulars under which various fees were demanded lacked statutory sanction and were arbitrary and illegal. They relied on a coordinate bench judgment in W.P.No.36017/2018 and connected matters. Revenue/State's Arguments: The judgment does not record specific arguments from the respondents. However, the court's decision implies that the respondents' actions were based on the challenged bye-laws and circulars.
Sections Cited
Section 18, Section 423, Bye-law No. 3.9
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Cause title — parties, addresses and appearances
ORAL ORDER
The captioned petition is filed seeking the following reliefs: HC-KAR NC: 2025:KHC:22561 "i) issue a writ of certiorari writ or order or direction to quash the demand notice dated 22-12-2020 bearing No. BBMP/Ad.Com EST/0757/20-21 at Annexure- A. issued by the respondent No.4 impugned demand towards scrutiny fee of Rs.38,498/-, towards the License fee Rs. 7,69,831/-, towards Ground Rent GST 18% Rs.7,13,744/-, towards Betterment fee of building u/s 18 of KTCP Act, 1961 Rs. 1, 25,400/- towards Betterment fee of site area u/s 18 of KTCP Act, 1961 Rs. 12,85,843/- towards Security deposit Rs.1,25,400/- towards Administrative charge on labour cess Rs.45,146/+ Rs. 2,29,000.00, which are at Sl. No. 1, to 6 & 10 plus labour cess of the impugned notice as wholly illegal and arbitrary. ii) Issue Writ of Certiorari quashing the Government Order issued by the 2nd respondent bearing G.O.No. LD 300 LET 2006 dated 18.01.2007 and the corrigendum bearing No.LTD 300 LET 2006 dated 28.02.2007 directing upfront collection of labour welfare cess, as contained in Annexure-F. iii) Issue a writ of Mandamus or any other appropriate writ or order or direction declaring that Bye- law No. 3.9 in the Bangalore Mahanagara Palike building Bye-laws, 2003 framed under the Karnataka Municipal Corporations Act as Unconstitutional, arbitrary, illegal and ultravires; iv) Issue writ of mandamus or similar writ or order or direction directing the respondent Nos. 3 and 4 to issue building plan and license pursuant to the demand notice HC-KAR NC: 2025:KHC:22561 dated 22-12-2020 bearing No. BBMP / Ad.Com EST/0757/20-21 at Annexure-A. issued by the respondent No.4 without insisting for payment of demands stated above. v) issue any other appropriate writ or order or direction deemed fir in the circumstances of the case."
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.36017/2018 and connected matters. The Co-ordinate Bench, while deciding the issue, has held that the bye-laws under which Ground Rent, License Fee, Building License fee, Scrutiny fee are levied are ultra vires the Act. The Co-ordinate Bench also quashed the circular dated 04.09.2015 and Government circulars dated 27.01.2017 and 30.03.2017. Therefore, this Court deems it fit to cull out the operative portion of the order, which reads as under; "O R D E R (a) All the Writ Petitions are allowed. HC-KAR NC: 2025:KHC:22561 (b) The bye-laws under which Ground Rent, Licence Fee, Building Licence Fee, Scrutiny Fee, Security Deposit are all held ultravires the Act and are resultantly rendered unenforceable. (c) The Circular bearing No.ºÉ¤£ÀAiÉÆÃ/eÉ.r(G)/rJªÀiï3/¦Dgï/320/2015-16 dated 04.09.2015 stands quashed. (d) The Circular bearing No.£ÀCE 36 ¨ÉªÀÄ¥Áæ 2016 (¨sÁUÀ) dated 27.01.2017 and the Circular bearing No. ºÉ¤£ÀAiÉÆÃ/¦Dgï/1533/2016-17 dated 30.03.2017 demanding Lake Rejuvenation Fee are quashed. (e) Imposition of labour cess under the Welfare Cess Act is upheld, but its demand for payment upfront in terms of Government Orders dated 18.01.2007 and 28.02.2007 stands quashed. (f) The State or the BBMP is not precluded from bringing in the impugned levies under the provisions of the Act or the Rules by making suitable amendments to the Act and the Rules. 368 (g) Petitioners in all these petitions who have deposited certain amounts in terms of the interim order passed by this Court before this Court are entitled to refund of the amounts so deposited. HC-KAR NC: 2025:KHC:22561 (h) Insofar as refund in other cases who have paid to the Corporation under protest, they shall be entitled to such refund only if the same is not collected from the consumers of the apartments, businesses as the case would be. (i) Insofar as all other payments made, they would all be at liberty to give representation to the BBMP and the BBMP would consider the refund of the amounts, in accordance with law and the findings of this Court. (j) If representations are made by the petitioners for refund, the BBMP shall pass appropriate orders within 12 weeks from the date of such representations. In view of disposal of the petitions, all pending Interlocutory Applications also stand disposed."
In the considered view of this Court, the issues raised in the present writ petition stand squarely covered by the authoritative pronouncement rendered by the Co- ordinate Bench of this Court in W.P.No.36017/2018 and connected matters. The Co-ordinate Bench, after HC-KAR NC: 2025:KHC:22561 examining the statutory framework and the impugned levy mechanisms adopted by the BBMP, categorically held that the imposition of Ground Rent, Licence Fee, Building Licence Fee, Scrutiny Fee, and Security Deposit lacked statutory sanction and were ultra vires the Karnataka Municipal Corporations Act, 1976. The Co-ordinate Bench further held that Clause 3.8 of the BBMP Building Bye- laws, 2003, which provided for imposition of Ground Rent, was also devoid of legal authority and consequently struck it down. The Court also quashed the impugned Circular dated 04.09.2015 issued by respondent No.4, as well as the Government Orders dated 27.01.2017 and 30.03.2017, which had directed collection of such fees without statutory backing. With specific reference to labour welfare cess, the Co-ordinate Bench upheld the competence of the State to levy the cess under the Building and Other Construction Workers’ Welfare Cess Act, 1996, but set aside the directive mandating its upfront collection through Government Orders dated HC-KAR NC: 2025:KHC:22561
2007 and 28.02.2007, thereby rendering the demand raised in anticipation of sanction of building plans unlawful. The Co-ordinate Bench also clarified that the only charging provision available under the Act was sub- section (20-b) of Section 423, which merely enabled collection of fees for services relating to burial grounds and crematoria, and could not be relied upon for the imposition of unrelated charges such as ground rent or scrutiny fee. In light of these clear and binding findings, the controversy raised in the present writ petition does not survive for independent adjudication, as the grievance of the petitioner is directly addressed and resolved by the said judgment. Therefore, this Court is of the considered opinion that the present writ petition deserves to be allowed by applying the ratio and operative portion of the judgment rendered in W.P.No.36017/2018 and connected matters.
In view of the above, this Court proceeds to pass the following; HC-KAR NC: 2025:KHC:22561 ORDER (i) The writ petition is allowed. (ii) The impugned demand notice dated 22.12.2020 issued by respondent No.4 as per Annexure-A is hereby set-aside. (iii) Respondent- BBMP is 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 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. HC-KAR NC: 2025:KHC:22561 Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
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