M/S Aquila Projects vs. The State Of Karnataka

WP/2322/2021HC KarnatakaGSTCNR KAHC01003989202124 June 2025Bench: SACHIN SHANKAR MAGADUM9 pages

For Petitioner: SRI. B PRAMOD, ADVOCATEFor Respondent: SMT. V.SPOORTI, HCGP FOR R1 TO R3; SRI. PAWAN KUMAR, ADV. FOR R4 TO R5

AI SummaryAllowed

Facts

The petitioners, M/s. Aquila Projects and its partners, 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, inserted by Karnataka Act No. 23 of 2004, as well as Rule 37-A and 37-C inserted by a notification dated 25/02/2020. They also challenged circulars dated 04/09/2015 and 14/08/2020, a government order dated 18/01/2007 and its corrigendum dated 28/02/2007 concerning labour welfare cess, and a demand notice dated 12/11/2020 from the Bruhat Bangalore Mahanagara Palike (BBMP) for various charges including ground rent, GST on ground rent, betterment charges, license fees, and various cesses and surcharges. The petitioners sought a direction to issue a sanction plan for construction without these insisted charges.

Held

The Court allowed the writ petition, setting aside the impugned demand notice dated 12.11.2020 issued by respondent No.5 (BBMP). The Court directed the BBMP to issue a fresh or modified plan and to forthwith process the petitioner's application for 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 of the plan shall not be withheld due to the BBMP contemplating an appeal, but any issued license or plan would be subject to the outcome of any such appeal. The Court's decision was based on previous binding judgments by coordinate benches in W.P.No.23086/2022 (M/s Sapthagiri Shelters) and W.P.No.36017/2018 (Sunderam Shetty). 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, struck down Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024 for illegally linking fees to market/guidance value, and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning Ground Rent, as invalid. The Court found that the issues in the present petition were squarely covered by these authoritative pronouncements.

Key Issues

1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, and Rule 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are ultra vires the Act and liable to be quashed? (Petitioner's contention: Yes, these provisions and rules are illegal and arbitrary. Revenue's contention: Not recorded.) 2. Whether the circulars dated 04/09/2015 and 14/08/2020 issued by the BBMP, the government order dated 18/01/2007 and its corrigendum dated 28/02/2007 regarding labour welfare cess, and the demand notice dated 12/11/2020 issued by the BBMP demanding various charges including ground rent, GST on ground rent, betterment charges, license fees, and cesses are illegal, without jurisdiction, and arbitrary? (Petitioner's contention: Yes, these levies are illegal and without jurisdiction. Revenue's contention: Not recorded.)

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:23040 WP No. 2322 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.2322 OF 2021 (LB-BMP) BETWEEN: 1. M/S. AQUILA PROJECTS HAVING ITS OFFICE AT NO.116, 6TH 'D' MAIN, HMT LAYOUT, R.T.NAGAR POST, BANGALORE-560032. REP. BY ITS PARTNER MR. SYED NOORUDDIN SHAH KHADRI S/O. MR. PEER PASHA, AGED ABOUT 39 YEARS, 2. MR. M.LEELA PRASAD S/O. M.SUBBARAO, AGED ABOUT 65 YEARS, 3. MR. M.KISHORE KUMAR S/O M.SUBBARAO, AGED ABOUT 62 YEARS, PETITIONER NO.2 AND 3 ARE R/AT NO.34, 80 FEET ROAD, HMT LAYOUT, R.T.NAGAR, BANGALORE-560032. PETITIONER NO.2 AND 3 REP. BY THEIR GPA HOLDER M/S AQUILA PROJECTS BY ITS PARTNER Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:23040 WP No. 2322 of 2021 MR. SYED NOORUDDIN SHAH KHADRI …PETITIONERS (BY SRI. B PRAMOD, ADVOCATE) AND: 1. THE STATE OF KARNATAKA, THE URBAN DEVELOPMENT DEPARTMENT, VIKASA SOUDHA, DR. B.R.AMBEDKAR VEEDHI BANGALORE-560001. REP. BY ITS SECRETARY. 2. THE STATE OF KARNATAKA THE LABOUR DEPARTMENT VIKASA SOUDHA, DR. B.R.AMBEDKAR VEEDHI BANGALORE-560001. REP. BY ITS UNDER SECRETARY. 3. THE STATE OF KARNATAKA DEPARTMENT OF PARLIAMENTARY AFFAIRS AND LEGISLATION, VIKASA SOUDHA, DR. B.R.AMBEDKAR VEEDHI BANGALORE-560001. REP. BY ITS SECRETARY. 4. BRUHAT BANGALORE MAHANAGAR PALIKE N.R.SQUARE, BANGALORE-560002. REP. BY ITS COMMISSIONER. - 3 - HC-KAR NC: 2025:KHC:23040 WP No. 2322 of 2021 5. THE ASSISTANT DIRECTOR TOWN PLANNING-(EAST) BRUHAT BANGALORE MAHANAGARA PALIKE 22ND FLOOR, MAYOHALL, UTILITY BUILDING M.G.ROAD, BANGALORE-560001. …RESPONDENTS (BY SMT. V.SPOORTI, HCGP FOR R1 TO R3; SRI. PAWAN KUMAR, ADV. FOR R4 TO R5) THIS W.P. IS FILED UNDER ARTICLES 226 & 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) VIDE ANNX-G1 INSOAR AS SECTION 18-A(i) AND (iv) OF THE KARNATAKA ACT NO.23 OF 2004 IS CONCERNED AND ETC. THIS 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 - 4 - HC-KAR NC: 2025:KHC:23040 WP No. 2322 of 2021

ORAL ORDER

Petitioners, in the captioned petition has sought for 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 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. HC-KAR NC: 2025:KHC:23040 (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 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 Petitioners are concerned. (vi) issue a writ or order by way of certiorari quashing the demand notice dated 12/11/2020 bearing No.BBMP/Ad.Com/EST/0563/20-21, 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, 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. HC-KAR NC: 2025:KHC:23040 (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 Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, 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.

In Sunderam Shetty and connected cases, the Co-ordinate Bench declared the levies of Ground Rent, HC-KAR NC: 2025:KHC:23040 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 the relevant bye-laws and government circulars have been set aside. HC-KAR NC: 2025:KHC:23040

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 12.11.2020 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 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 HC-KAR NC: 2025:KHC:23040 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 SMJ List No.: 2 Sl No.: 42

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.