Sankara Eye Hospital Bangalore vs. State Of Karnataka
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The petitioner, Sankara Eye Hospital Bangalore, a unit of Kanchi Kamakoti Trust, filed a writ petition seeking to quash an undated demand notice issued by the Assistant Director, Town Planning (Mahadevapura). The notice demanded various fees including scrutiny fee, license fee, ground rent, GST, security deposit, lake rejuvenation fee, ring road surcharge, water supply cess, slum improvement cess, and MRTS surcharge. The petitioner also sought to declare a specific bye-law unconstitutional and sought directions to issue a building plan and license without insisting on payment of these disputed amounts. The respondents include the State of Karnataka and the Bruhat Bengaluru Mahanagara Palike (BBMP) and its Assistant Director.
Held
The Court held that the present writ petition is substantially covered by a co-ordinate bench's judgment in W.P.No.23086/2022 and connected matters. The co-ordinate bench had quashed and set 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, applies only to development plans for plots exceeding 20,000 square meters. The court also held that if fees were previously collected for change of land use or layout plan approval, no further fee should be collected 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 impugned circulars and demand notices were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also struck down. Based on this precedent, the present writ petition was allowed.
Key Issues
1. Whether the demand notice issued by the Assistant Director, Town Planning, demanding various fees including scrutiny fee, license fee, ground rent, GST, security deposit, lake rejuvenation fee, ring road surcharge, water supply cess, slum improvement cess, and MRTS surcharge is liable to be quashed? (Question of law) 2. Whether Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, framed under the Karnataka Municipal Corporations Act, is unconstitutional, arbitrary, illegal, and ultravires? (Question of law) Petitioner's Arguments: The petitioner argued that the demand notice, which includes charges like GST, ground rent, and various other cesses and surcharges, is illegal and arbitrary. They sought to quash the demand notice and obtain a building plan and license without paying these disputed amounts. They also challenged the constitutional validity of Bye-law No. 3.9. Revenue/State's Arguments: The judgment does not explicitly record arguments from the respondents. However, it notes that the issue is dealt with by a co-ordinate bench in a reported judgment.
Sections Cited
Section 18(1) KTCP Act, Section 18-A Karnataka Town and Country Planning Act, 1961, Rule 37-A Karnataka Planning Authority Rules, 1965, Rule 37-C Karnataka Planning Authority Rules, 1965, Section 45-B Karnataka Stamp Act, 1957, Clause 3.8 BBMP Building Bye-laws, 2003, Bye-law No. 3.9 Bangalore Mahanagara Palike Building Bye-laws, 2003
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 relief: "a) issue a writ of certiorari or similar writ or order or direction to quash the undated demand notice No. BBMP/ADDI.Com/MDP/0205/24-25 as per ANNEXURE-F issued by the 03rd Respondent Authority in so far as the demand raised towards Scrutiny Fee, License Fee, Ground Rent & GST, security deposit, Lake Rejuvenation fee U/S 18(1) KTCP Act [building] Ring Road Surcharge, Water Supply Cess, Cess For Improvement of Slums & MRTS surcharge; HC-KAR NC: 2025:KHC:23723 b) 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; c) Issue writ of mandamus or similar writ or order or direction directing the respondent Nos. 2 and 3 to issue building plan and license pursuant to the undated demand notice No. BBMP/Addl.Com/MDP/0205/24 at Annexure F issued by the respondent No. 3 without insisting for payment of amount mentioned above. d) Issue any other appropriate writ or order or direction deemed fit in the 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 Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law HC-KAR NC: 2025:KHC:23723 (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. (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’ HC-KAR NC: 2025:KHC:23723 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 citizens of Bengaluru. This would also augment the present situation." HC-KAR NC: 2025:KHC:23723
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 layout plan, no further fee shall be levied for subsequent HC-KAR NC: 2025:KHC:23723 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 writ petition is liable to be allowed strictly aligning to the operative portion of the said writ petition. HC-KAR NC: 2025:KHC:23723
In view of the above, this Court proceeds to pass the following; ORDER (i) The writ petition is allowed. (ii) The impugned demand notice issued by respondent No.3 as per Annexure-F 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 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 HC-KAR NC: 2025:KHC:23723 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.: 38
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.