Embassy-Ksl Realty Ventures vs. The State Of Karnataka
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The petitioner, Embassy-KSL Realty Ventures, filed a writ petition challenging Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws 2003, amendments to the Karnataka Planning Authority Rules, 1962, and a demand notice dated October 16, 2020, issued by the Joint Director (Building License Directory-North) of Bruhat Bengaluru Mahanagara Palike (BBMP). The demand notice sought various charges including Ground Rent, GST on Ground Rent, Betterment Tax, Security Deposit, License Fee, Scrutiny Fee, Labour Cess, Service Charges, Water Supply Cess, Ring Road Surcharge, Slum Improvement Cess, Mass Rapid Transport System Surcharge, and Building and Other Construction Workers Welfare Cess, as a prerequisite for issuing a sanction plan for a commercial building and multi-level car parking. The petitioner sought to declare these levies unconstitutional and ultra vires, and to direct the BBMP to issue the sanction plan and license without insisting on these challenged charges.
Held
The Court held that the present writ petition was substantially covered by a coordinate bench's judgment in W.P.No.23086/2022 and connected matters. The coordinate bench had partly allowed the writ petitions, quashed and set aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023. 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, were applicable only to development plans for plots exceeding 20,000 square meters, not smaller plots. The court also declared that if fees were already collected for change of land use or layout plan approval, no further fee should be collected for a subsequent development plan. The linkage of levies to market or guidance value under Section 45-B of the Karnataka Stamp Act was declared illegal, and all impugned circulars and demand notices were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, imposing 'Ground Rent', was also struck down. Consequently, the impugned demand notice in the present petition was set aside, and the BBMP was directed to process the petitioner's application for a building license and sanction plan strictly in accordance with law.
Key Issues
1. Whether Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws 2003 is unconstitutional, illegal, and ultra vires? 2. Whether the amendment of Rule 37-A and insertion of Rule 37-C in the Karnataka Planning Authority Rules, 1962, by way of the Karnataka Planning Authorities (Amendment) Rules, 2019, relating to the levy of fees, cess, and surcharges for issuance of development plans, is ultra vires of Sections 18 and 18-A of the Karnataka Town and Country Planning Act, 1961? 3. Whether the demand notice dated October 16, 2020, issued by the BBMP demanding various charges, including GST, is liable to be quashed? Petitioner's Arguments: The petitioner argued that Bye-law No. 3.9 and the amended KPA Rules were unconstitutional and ultra vires the KTCP Act. They also contended that the demand notice was illegal and sought its quashing, along with a direction to issue the sanction plan and license without insisting on the challenged charges. Revenue/State's 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, Section 18-A, Rule 37-A, Rule 37-C, Section 45-B, Bye-law No.3.9
AI-generated summary — verify with the full judgment below
Before: DR. B.R.AMBEDKAR VEEDHI,
Petitioner, in the captioned petition has sought for following reliefs :
Issue a Writ of Certiorari or any other appropriate Writ, order or direction, declaring the Bye law No.3.9 of the Bangalore Mahanagara Palike Building Bye-laws 2003 (ANNEXURE-A) as unconstitutional, illegal and ultra vires;
Issue a Writ of Certiorari or any other appropriate writ, order or direction, declaring that the amendment of 37-A, and insertion of Rule 37-C, in the Karnataka Planning Authority Rules, 1962, ("КРA Rules") by way of The Karnataka Planning Authorities (Amendment) Rules, 2019., vide Notification No.UDD3 TTP 2015 dated 25/02/2020 issued by Respondent No.1 (Annexure-B), relating to levy of fees, cess and surchages for issuance of development plans, is ultra vires of the Sections 18, 18-A of the KTCP Act, and consequently quash/set aside the same ; and 3. Issue a Writ of Certiorari or any other appropriate Writ, Order or Direction, quashing the Demand Notice at Annexure-C dated 16-10-2020 bearing No. BBMP/Addl. Dir /JD-North LP/0005/20-21 issued by Respondent No.5 demanding :- HC-KAR NC: 2025:KHC:23044 Rs.2,53,43,291/- towards Ground Rent; Rs.45,61,792/- towards GST on the said ground rent; Rs.1,32,71,518/- towards Betterment Tax; Rs.1,32,71,518/- towards Security Deposit; Rs.3,22,55,097/- towards License Fee; Rs.16,12,755/- towards Scrutiny fee; Rs.2,02,099/- towards the labour cess; Rs.17,47,540/- towards 5% of Service Charges on Levy and Surcharge ; and Rs.66,40,651/- towards Cess for Water supply scheme; Rs.66,40,651/- towards Surcharge for formation of Ring Road; Rs.33,20,325/- towards cess for Improving Slums; Rs.1,66,01,626/- towards surcharge for establishing Mass Rapid Transport System ; and Rs.2,00,08,000/- towards the Building and other construction workers welfare cess ; as a pre-requisite condition for issuance of sanction plan for construction of Commercial Building (Office) and MLCP (Multi Level Car Parking) sought for by Petitioner in relation to the proposed commercial building project in the Schedule Property; and HC-KAR NC: 2025:KHC:23044
Issue a writ of Mandamus or any other appropriate writ or like nature or direction directing Respondent No.4 and 5 to issue the sanction plan and license sought for by the Petitioner without insisting charges/levies challenged in this writ petition i.e., Ground rent, GST, Scrutiny Fee, License fee, Security Deposit, Betterment Tax, labour cess, surcharge, etc., except the nominal charges;
Grant such other and further relief as this Hon'ble Court deems fit and proper under the facts and circumstances of the case, in the interest of justice and equity.
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; HC-KAR NC: 2025:KHC:23044 "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 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 HC-KAR NC: 2025:KHC:23044 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, 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 HC-KAR NC: 2025:KHC:23044 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 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 HC-KAR NC: 2025:KHC:23044 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 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. HC-KAR NC: 2025:KHC:23044 (ii) The impugned demand notice dated 16.10.2020 issued by respondent No.5 as per Annexure-C 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 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.: 46
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.