Sri T S Mahabaleswara vs. State Of Karnataka
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The petitioner, Sri T.S. Mahableswara, filed a writ petition challenging a demand notice dated March 20, 2021, issued by the Assistant Director, Town Planning, Bruhath Bengaluru Mahanagara Palike (BBMP). The demand notice included charges for ground rent, GST on ground rent, betterment charges for building and site, excess security deposit, revised license fee, revised scrutiny fee, and various cesses and surcharges. The petitioner sought to quash this demand notice and a circular dated August 14, 2020, issued by the BBMP. The petitioner also prayed for a direction to issue a sanction plan for construction without demanding these charges. The High Court noted that the core issue was covered by a co-ordinate bench's judgment in a similar writ petition.
Held
The High Court allowed the writ petition, following the decision of a co-ordinate bench in a similar matter. The Court 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, apply only to development proposals for plots exceeding 20,000 square meters, not smaller plots. The Court also held that if fees were previously collected for change of land use or layout plan approval, no further fee should be levied for subsequent development plans. The linkage of levies to market or guidance value under Section 45-B of the Karnataka Stamp Act was declared illegal. Consequently, all impugned circulars and demand notices were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also struck down. The impugned demand notice dated 20.03.2021 was set aside, and the BBMP was directed to issue a fresh/modified plan and process the petitioner's application for a building license strictly in accordance with law, without withholding it due to any contemplated appeal.
Key Issues
1. Whether the demand notice dated 20.03.2021, issued by Respondent No.3, demanding various charges including ground rent, GST on ground rent, betterment charges, and other levies, is illegal, without jurisdiction, and arbitrary? 2. Whether the circular dated 14.08.2020, issued by Respondent No.2, is illegal in so far as it concerns the petitioner? 3. Whether the BBMP can be directed to issue a sanction plan for construction without demanding ground rent and other disputed charges? Petitioner's Contention: The petitioner argued that the demand notice and the circular were illegal, without jurisdiction, and arbitrary. They sought to quash these demands and obtain a sanction plan without the disputed charges. Revenue/State's Contention: The judgment does not explicitly record arguments made by the respondents. However, it refers to a co-ordinate bench's judgment that dealt with similar issues concerning the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts and related rules and bye-laws.
Sections Cited
Section 18-A, Section 45-B, Rule 37-A, Rule 37-C, Clause 3.8
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Cause title — parties, addresses and appearances
ORAL ORDER
The captioned petition is filed seeking for the following reliefs: "Wherefore, it is respectfully prayed that this Hon'ble Court be pleased to: a) Issue a writ or Order by way of Certiorari quashing the demand notice dt.20.03.2021 bearing No.BBMP/EODB/CH/16808/2020-21 issued by Respondent No.3 as per Annexure-E demanding in so far it is concerned to ground rent, GST on ground rent, betterment charges for the building, betterment charges for site, excess security deposit, revised license fee, revised scrutiny fee, cess for water supply scheme, surcharge for formation of outer ring road, cess for improvement of slum, surcharge for mass rapid transport system, labour cess etc., as illegal, without juri iction and arbitrary. b) Issue a writ or order by way of Certiorari quashing the circular dt. 14.08.2020 bearing No. HE.NI.ΚΑ.ΡΑ KO/P.R/320-20-21 issued by the 2nd Respondent as per Annexure-F in so far as the Petitioners is concerned. HC-KAR NC: 2025:KHC:21739 c) Issue a writ or order or direction by the way of mandamus directing the 2nd and 3rd Respondent BBMP to issue the sanction plan for construction of building in the schedule property without demanding ground rent. Ground rent, GST on ground rent, betterment charges for the building, betterment charges for site, excess security deposit, revised license fee, revised scrutiny fee, cess for water supply scheme, surcharge for formation of outer ring road, cess for improvement of slum, surcharge for mass rapid transport system, labour cess etc., d) Pass any other order or orders as this Hon'ble Court deems fit in 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, HC-KAR NC: 2025:KHC:21739 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 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 HC-KAR NC: 2025:KHC:21739 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, providing for ‘Ground Rent’, is illegal and are accordingly quashed and set aside. HC-KAR NC: 2025:KHC:21739 (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 Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable HC-KAR NC: 2025:KHC:21739 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 the present writ petition no longer survives for adjudication independently, as it is squarely covered by the binding HC-KAR NC: 2025:KHC:21739 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 20.03.2021 issued by respondent No.3 as per Annexure-E 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. HC-KAR NC: 2025:KHC:21739 (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
VMB List No.: 2 Sl No.: 33
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.