M/S Aquila Projects vs. The State Of Karnataka
Original PDF →Facts
The petitioners, M/s Aquila Projects and Mr. M. Leela Prasad, filed a writ petition challenging Section 18-A of the Karnataka Town and Country Planning Act, 1961, as amended, and various notifications, circulars, and government orders related to the collection of charges like ground rent, GST on ground rent, betterment charges, license fees, and labour cess. The petitioners sought to quash a demand notice dated October 15, 2020, issued by the Assistant Director, Town Planning (East), Bruath Bangalore Mahanagara Palike (BBMP), for these charges, and to direct the BBMP to issue a sanction plan for construction without insisting on these levies. The petition also challenged the upfront collection of labour welfare cess mandated by government orders.
Held
The High Court allowed the writ petition, finding that the issues raised were squarely covered by previous binding decisions of coordinate benches. Specifically, in the case of 'M/s Sapthagiri Shelters', a coordinate bench had declared levies such as Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws as ultra vires the Act and quashed related government circulars. Furthermore, in the same 'M/s Sapthagiri Shelters' case, the court struck down Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024, holding the linking of fees under Rule 37-A to market/guidance value under the Karnataka Stamp Act, 1957, as illegal, and also quashed related circulars and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, as invalid. Consequently, the impugned demand notice dated 15.10.2020 issued by respondent No.5 was set aside. The BBMP was directed to issue a fresh/modified plan and forthwith 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 approval shall not be withheld due to the 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 by Karnataka Act No. 23 of 2004, are ultra vires the Act. 2. Whether Rule 37-A and 37-C, inserted by notification dated 25/02/2020, are illegal. 3. Whether circulars dated 04/09/2015 and 14/08/2020 issued by BBMP, and government orders dated 18/01/2007 and 28/02/2007 mandating labour welfare cess, are illegal and without jurisdiction. Petitioner's arguments: The petitioners contended that the impugned provisions, notifications, and circulars are illegal, without jurisdiction, and arbitrary, particularly concerning the levies of ground rent, GST on ground rent, betterment charges, license fees, and labour cess. They sought to quash the demand notice and compel the BBMP to issue the sanction plan without these charges. Revenue/State's arguments: The judgment does not record specific arguments from the respondents. However, it notes that the issues raised are covered by previous binding decisions of coordinate benches.
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
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 Petitioners are concerned. HC-KAR NC: 2025:KHC:23039 (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 15/10/2020 bearing No.BBMP/Ad.Com/EST/0561/20-21, 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:23039 (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:23039 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:23039
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 15.10.2020 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 shall not be withheld merely on the HC-KAR NC: 2025:KHC:23039 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.: 41
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.