M/S Vinayakaiah Builders vs. The State Of Karnataka

WP/11021/2021HC KarnatakaGSTCNR KAHC01021357202125 June 2025Bench: SACHIN SHANKAR MAGADUM8 pages

For Petitioner: SRI B. PRAMOD, ADVOCATEFor Respondent: SMT. SPOORTHY V., H.C.G.P. FOR R-1 TO R-3; SRI B.L. SANJEEV, ADVOCATE FOR R-4 AND R-5

AI SummaryAllowed

Facts

The petitioners, M/s. Vinayakaiah Builders and associated individuals, filed a writ petition challenging various provisions of the Karnataka Town and Country Planning Act, 1961, and related notifications, circulars, and government orders. Specifically, they sought to quash Section 18-A(i) and (iv) of the Act, a notification dated 25/02/2020 concerning Rules 37-A and 37-C, circulars dated 04/09/2015 and 14/08/2020 issued by Bruhat Bengaluru Mahanagara Palike (BBMP), a government order dated 18/01/2007 and its corrigendum dated 28/02/2007 regarding labour welfare cess, and a demand notice dated 27/04/2021 from the Assistant Director (Town Planning-East) of BBMP. This demand notice included charges for ground rent, GST on ground rent, betterment charges, license fees, scrutiny fees, and various cesses and surcharges.

Held

The Court allowed the writ petition. It noted that similar issues concerning levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws, as well as the linking of 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, have been comprehensively adjudicated by coordinate benches. In the case of 'Sunderam Shetty', levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee were declared ultra vires the Act, and related 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 linking fees to market value, and related circulars and Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, were declared invalid. The Court held that the issues in the present petition are squarely covered by these binding decisions. Consequently, the impugned demand notice dated 27.04.2021 (Annexure-D) was set aside. 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. The issuance of the license and plan shall not be withheld due to BBMP contemplating an appeal, but will 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, are ultra vires the Act and liable to be quashed? 2. Whether the notification dated 25/02/2020, inserting Rules 37-A and 37-C into the Karnataka Planning Authority Rules, 1965, is illegal and liable to be quashed? 3. Whether the circulars dated 04/09/2015 and 14/08/2020 issued by BBMP, and the government order dated 18/01/2007 and its corrigendum dated 28/02/2007 mandating upfront collection of labour welfare cess, are arbitrary and without jurisdiction? 4. Whether the demand notice dated 27/04/2021 issued by BBMP, demanding various charges including ground rent, GST on ground rent, betterment charges, license fees, scrutiny fees, and cesses/surcharges, is illegal and liable to be quashed? Petitioner's arguments: The petitioners sought to quash the impugned provisions, notifications, circulars, and demand notice on grounds of illegality, lack of jurisdiction, and arbitrariness. They sought a direction to issue the sanction plan without insisting on these charges. Revenue/State's arguments: The judgment does not record specific arguments from the respondents. However, it refers to previous judgments that have adjudicated 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:23535 WP No. 11021 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.11021 OF 2021 (LB-BMP) BETWEEN: 1. M/S. VINAYAKAIAH BUILDERS A PROPRIETORSHIP HAVING ITS OFFICE AT FLAT NO.501 V.A. ARCADE, 6TH MAIN ROAD HRBR LAYOUT, 2ND BLOCK, KALYANNAGAR BENGALURU-560 043 BY ITS PROPRIETOR SRI VENKATESWARLU MURAM REDDY S/O. SRI RAMANAIAH AGED ABOUT 39 YEARS. 2. MRS. S. CHANDRAKKALA W/O. MR. K. SHIVAKUMAR AGED ABOUT 68 YEARS. 3. MRS. ANITHARAJA W/O. MR. K. RAJA AGED ABOUT 40 YEARS. 4. MR. S. ASHWIN KUMAR S/O. MR. K. SHIVAKUMAR AGED ABOUT 40 YEARS PETITIONER NOS.2 TO 4 ARE RESIDING AT NO.3AC - 826 HRBR LAYOUT, 1ST BLOCK KALYAN NAGAR BENGALURU-560 043. REPRESENTED BY THEIR GPA HOLDER M/S. VINAYAKAIAH BUILDERS BY ITS PROPRIETOR MR. VENKATESWARLU MURAM REDDY S/O. SRI RAMANAIAH Digitally signed by CHAITHRA P Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:23535 WP No. 11021 of 2021 AGED ABOUT 39 YEARS. …PETITIONERS (BY SRI B. PRAMOD, ADVOCATE) AND: 1. THE STATE OF KARNATAKA THE URBAN DEVELOPMENT DEPARTMENT VIKASA SOUDHA DR. B.R. AMBEDKAR VEEDHI BENGALURU-560 001 REPRESENTED BY ITS SECRETARY. 2. THE STATE OF KARNATAKA THE LABOUR DEPARTMENT VIKASA SOUDHA DR. B.R. AMBEDKAR VEEDHI BENGALURU-560 001 REPRESENTED BY ITS UNDER SECRETARY. 3. THE STATE OF KARNATAKA DEPARTMENT OF PARLIAMENTARY AFFAIRS AND LEGISLATION VIKASA SOUDHA DR. B.R. AMBEDKAR VEEDHI BENGALURU-560 001 REPRESENTED BY ITS SECRETARY. 4. BRUHAT BENGALURU MAHANAGARA PALIKE N.R. SQUARE BENGALURU-560 002 REPRESENTED BY ITS COMMISSIONER. 5. THE ASSISTANT DIRECTOR (TOWN PLANNING-EAST) BRUHAT BENGALURU MAHANAGARA PALIKE UTILITY BUILDING, MAYOHALL 22ND FLOOR M.G. ROAD BENGALURU-560 001. …RESPONDENTS (BY SMT. SPOORTHY V., H.C.G.P. FOR R-1 TO R-3; SRI B.L. SANJEEV, ADVOCATE FOR R-4 AND R-5) * * * - 3 - HC-KAR NC: 2025:KHC:23535 WP No. 11021 of 2021 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, 1988 AS CONTAINED IN ANNEXURE-G1 IN SO FAR AS SECTION 18-A(i) AND (iv) OF KARNATAKA ACT NO.23 OF 2004 IS CONCERNED AND ETC. THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

ORAL ORDER

Caption petition is filed seeking the following reliefs :- "i) 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-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 HC-KAR NC: 2025:KHC:23535 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 Petitioners are 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 Petitioners are concerned.

v) issue a writ or order by way of certiorari quashing the Government order bearing No.LD/300/LET/2006 dated 18/01/2007 and No.LD/300/LET/2006, the corrigendum order bearing 28/02/2007 issued by dated the Respondent No.2 mandating upfront collection of labour welfare cess (Annexure-F) in so far the Petitioners are concerned.

vi) issue a writ or order by way of certiorari quashing the demand notice dated 27/04/2021 bearing No.BBMP/Ad.Com/EST/0004/21-22, 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, revised HC-KAR NC: 2025:KHC:23535 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 BBMP to issue the sanction plan for construction of the residential Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, Betterment charges for building, 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 HC-KAR NC: 2025:KHC:23535 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. 3. 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:23535 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 27.04.2021 issued by respondent No.5 as per Annexure-D is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent - BBMP is directed to forthwith process the petitioner’s application seeking HC-KAR NC: 2025:KHC:23535 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.: 14

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.