Mr. Shad Ebrahim vs. The State Of Karnataka
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The petitioners, Mr. Shad Ebrahim and Mrs. Nilofer Shad, filed a writ petition challenging the constitutional validity of the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022), and subsequent amendments and notifications related to building plan sanctions, fees, and charges levied by the Bruhat Bengaluru Mahanagara Palike (BBMP). They sought to quash various office orders, notifications, circulars, and a demand notice issued by the BBMP and other state authorities. The core of their challenge revolved around the legality and constitutionality of these provisions and actions, particularly concerning ground rent, GST on ground rent, license fees, betterment charges, and other levies demanded by the BBMP for building plan sanction and construction.
Held
The High Court, in this writ petition, relied on a coordinate bench's judgment in W.P.No.23086/2022 and connected matters, which had already decided the core issues. The coordinate bench had partly allowed the writ petitions, quashing and setting 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 (Amendment) Act, 2023 (Karnataka Act No.37 of 2024). 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, are applicable only to development plans for plots exceeding 20,000 square meters. The court also declared illegal the linkage of fees to market or guidance value under Section 45-B of the Karnataka Stamp Act, and struck down Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent'. Consequently, all impugned circulars and demand notices giving effect to these provisions were quashed. Following this precedent, the present writ petition was allowed, the impugned demand notice dated 16.05.2025 was set aside, and the BBMP was directed to issue a fresh/modified plan and process the petitioner's application for building license and sanction strictly in accordance with law. The issuance of the license and plan was to be subjected to the outcome of any appeal filed by the BBMP.
Key Issues
1. Whether 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 (Amendment) Act, 2023, are ultra vires the Constitution of India, as contended by the petitioners. 2. Whether Section 18-A of the Karnataka Town & Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only to development plans for plots exceeding 20,000 square meters, as argued by the petitioners, or if they apply more broadly. 3. Whether the linkage of fees leviable under Rule 37-A to the market value or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, is illegal, as asserted by the petitioners. 4. Whether Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye-laws, 2003, providing for 'Ground Rent', is illegal and liable to be quashed, as claimed by the petitioners. 5. Whether the demand notice dated 16/05/2025 issued by the BBMP, demanding various charges including ground rent, GST on ground rent, license fee, scrutiny fee, and betterment charges, is illegal, without jurisdiction, and arbitrary, as argued by the petitioners. Petitioner's Arguments: The petitioners argued that the impugned Acts, Rules, Notifications, Circulars, and the demand notice were ultra vires the Constitution, in violation of previous court decisions, and arbitrary. They specifically challenged the imposition of various fees and charges, including GST on ground rent, and sought a direction to issue the sanction plan without these levies. Respondents' Arguments: The judgment does not explicitly record arguments from the respondents. However, it notes that the issue was dealt with by a coordinate bench in a reported judgment.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Section 45-B, Clause 3.8
AI-generated summary — verify with the full judgment below
Before: DR. B.R AMBEDKAR VEEDHI, DR. B.R AMBEDKAR VEEDHI,
DECLARING THAT THE ENTIRE KARNATAKA MUNICIPAL CORPORATIONS AND CERTAIN OTHER LAW (AMENDMENT) ACT, 2021 (KARNATAKA ACT NO. 01 OF 2022) BEARING NO.DPAL/50/SHASANA/2021, BENGALURU NOTIFIED ON 13/01/2022 (ANNEXURE-R) AS BEING ULTRA VIRES THE CONSTITUTION IN SO FAR, THE PETITIONER IS CONCERNED IN SO FAR, THE PETITIONER IS CONCERNED AND ETC.
THIS PETITION IS COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM HC-KAR NC: 2025:KHC:23029 ORAL ORDER
Petitioners, in the captioned petition has sought for following reliefs : "i) Grant an order declaring that the entire Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) bearing No.DPAL/50/Shasana/2021, Bengaluru notified on 13/01/2022 (Annexure-R) as being ultra vires the Constitution in so far, the Petitioner is concerned in so far, the Petitioner is concerned. ii) To declare that Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) bearing No.DPAL/50/Shasana/ 2021, Bengaluru notified on 13/01/2022 (Annexure- R), is in violation/contrary to the decision of this Hon'ble Court in W.P No.4601/2020 (LB-BMP) which is at Annexure-P issued by Respondent No.2. iii) Grant an order, direction or writ in the nature of certiorari quashing the Office Order No. HaNiNaYo/PR/461/2021-22 dated 09/03/2022 issued by Respondent No.3 as contained in (Annexure-S) in so far, the Petitioner is concerned. iv) 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 HC-KAR NC: 2025:KHC:23029 in (Annexure-K) insofar as Section 18-A(i) and (iv) of the Karnataka Act No. 23 of 2004 is concerned; v) 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-J) insofar as the inserted Rule 37-A and 37-C is concerned; vi) 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.3 (Annexure-L) in so far the Petitioner is concerned. vii) Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 23 TTP 2020 (E) dated 21/06/2021 as contained in (Annexure-M) insofar as the inserted Rule 37-A and 37-C is concerned; viii) issue a writ or order by way of certiorari quashing the circular dated 24/06/2021, bearing No. He.Ni.Na.Yo/P.R/320/2020-21 issued by the Respondent No.3 (Annexure-N) in so far the Petitioner is concerned. ix) to declare that the entire Bruhat Bengaluru Mahanagara Palike and Certain other Law (Amendment) Act, 2023 notified on 16/08/2024 vide Notification bearing No.DPAL 36 Shasana 2023, Bengaluru issued by the Respondent No.2 (Annexure-T1) as being ultra vires the Constitution of India" HC-KAR NC: 2025:KHC:23029 x) issue a writ or order by way of certiorari quashing the demand notice dated 16/05/2025, bearing No.BBMP/Ad.Com/EST/1049/24-25, issued by the Respondent No.4 (Annexure-D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, Betterment charges for site, security deposit, Lake Rejuvenation 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. xi) Issue a writ or order or direction by way of mandamus directing the Respondent No.3 and 4 BBMP to issue the sanction plan for construction of the Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, Betterment charges for site security deposit, Lake Rejuvenation fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum and Surcharge for Mass Rapid Transport System, Labour cess and xii) 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." HC-KAR NC: 2025:KHC:23029
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 (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 HC-KAR NC: 2025:KHC:23029 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’ 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, HC-KAR NC: 2025:KHC:23029 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."
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 HC-KAR NC: 2025:KHC:23029 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 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 HC-KAR NC: 2025:KHC:23029 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.
In view of the above, this Court proceeds to pass the following; ORDER (i) The writ petition is allowed. (ii) The impugned demand notice dated 16.05.2025 issued by respondent No.4 as per Annexure-D 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 HC-KAR NC: 2025:KHC:23029 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 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 SMJ List No.: 2 Sl No.: 31
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.