Fire Bricks And Potteries PVT LTD vs. The State Of Karnataka
Original PDF →Facts
The petitioner, Fire Bricks and Potteries Pvt. Ltd., filed a writ petition challenging various provisions of the Karnataka Town and Country Planning Act, 1961, and related notifications and circulars. Specifically, the petitioner sought to quash Section 18-A(i) and (iv) of the Karnataka Town and Country Planning (Amendment) Act, 2004, a notification dated 25.02.2020 amending Rules 37-A and 37-C, and circulars dated 14.08.2020 and 04.09.2015. The petitioner also challenged a government order dated 18.01.2007 and its corrigendum dated 28.02.2007 mandating upfront collection of Labour Welfare cess. Furthermore, a demand notice dated 21.12.2020 from the Joint Director, Town Planning (East) BBMP, demanding various charges including Ground rent, GST on Ground rent, Betterment charges, and other cesses, was challenged as illegal and without jurisdiction. The petitioner sought a modified sanction plan without these insisted charges.
Held
The Court held that the issues raised in the present writ petition were squarely covered by the binding decisions of coordinate benches in 'M/s Sapthagiri Shelters' and 'Sunderam Shetty' cases. 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 government circulars were quashed. In 'M/s Sapthagiri Shelters', Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024 were struck down for illegally linking fees under Rule 37-A to market/guidance value, and related circulars and Clause 3.8 of BBMP Building Bye-laws, 2003, were quashed. Consequently, the present petition did not warrant separate adjudication. The Court allowed the writ petition, set aside the impugned demand notice dated 21.12.2020, and directed the BBMP to issue a modified sanction 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 due to any contemplation of appeal by the BBMP, but would be subject to the outcome of any such appeal.
Key Issues
1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No. 23 of 2004, are ultra vires the Act? 2. Whether the notification dated 25.02.2020 amending Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, and the subsequent circulars dated 14.08.2020 and 04.09.2015, are illegal and liable to be quashed? 3. Whether the government order dated 18.01.2007 and its corrigendum dated 28.02.2007, mandating upfront collection of Labour Welfare cess, are arbitrary and illegal concerning the petitioner? 4. Whether the demand notice dated 21.12.2020, demanding various charges including Ground rent, GST on Ground rent, Betterment charges, and other cesses, is without jurisdiction and illegal? Petitioner's arguments: The petitioner contended that the impugned provisions, notifications, circulars, and demand notice were illegal, without jurisdiction, and arbitrary. They relied on previous judgments by coordinate benches of the High Court, specifically 'M/s Sapthagiri Shelters' and 'Sunderam Shetty' cases, which had comprehensively adjudicated similar issues and set aside related levies and circulars. Revenue's arguments: The judgment does not record specific arguments from the respondents.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
Caption petition is filed seeking the following reliefs:-
"a. Grant an order, direction or writ in the nature of Certiorari quashing Section 18-A of the Karnataka Town & 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 A) insofar as Section 18- A(i) and (iv) of the Karnataka Act No. 23 of 2004 is concerned;
b. Issue a writ in the nature of certiorari or any other writ, order or direction quashing the Notification issued by Respondent No.1 bearing No.UDD 3 TTP 2015 dated 25.02.2020 in sofar as the amended Rule 37-A and 37-C is concerned (Annexure B).
c. Issue a writ in the nature of certiorari or any other writ, order or direction quashing the Circular dated 14.08.2020 bearing No.He.Ni.Ka.Pa.Ko/P.R./320/ 2020-21 issued by Respondent No.4 insofar as the amended Rule 37-A and 37-C is concerned (Annexure C).
d. Issue a writ in the nature of certiorari or any other HC-KAR NC: 2025:KHC:24126 writ, order or direction quashing the Circular dated 04.09.2015, bearing No. Heninayo/ JD (U)/DM3/PR/320/2015-16 issued by the respondent No 4 (Annexure D).
e. The Petitioner is also seeking a writ in the nature of certiorari or any other writ, order or direction quashing the Government order bearing No.LD/300/LET/2006 dated 18/01/2007 and the Corrigendum order bearing No.LD/300/LET/2006 dated 28.02.2007 issued by Respondent No 2 mandating upfront collection of Labour Welfare cess (Annexure E) in so far the petitioner is concerned.
f. Issue a a writ in the nature of certiorari or any other writ, order or direction quashing the Demand Notice issued by Respondent No.3 bearing No.JDTP/ML/LP 08/05-06 dated 21.12.2020 in so far as the Ground rent, GST on Ground rent, Betterment charges for building, excess security deposit, revised license 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 are concerned as illegal without juri iction and arbitrary. (Annexure F)
g. Issue a writ in the nature of mandamus directing the Respondent No 4 and 5 BBMP to issue modified HC-KAR NC: 2025:KHC:24126 sanction plan with respect to the schedule property without insisting the Ground rent, GST on Ground rent, Betterment charges for building, excess security deposit, revised license 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.
h. Grant an order, direction or declare that Enhanced Development charges levy on the basis of the market value of the property, MTRS surcharge, water supply scheme scheme, Ring road surcharge, Slums improvement cess levy on the basis of the market value of the property are all bad in law;
i. Grant such other relief or reliefs as this Hon'ble Court may deem fit to grant, including cost of the Petitioners, 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 HC-KAR NC: 2025:KHC:24126 referred to as “Sunderam Shetty”), have comprehensively adjudicated the issue involved and settled the controversy. 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. 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. HC-KAR NC: 2025:KHC:24126
The issues raised in the present writ petition are squarely covered by the above binding decisions, wherein 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 21.12.2020 issued by respondent No.3 as per Annexure-F is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue modified sanction plan. (iv) Respondent - BBMP is directed to forthwith process the petitioner’s application seeking HC-KAR NC: 2025:KHC:24126 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 of the 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 subject to the outcome of any appeal that may be filed by the BBMP against the said judgment.
Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
NG 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.