M/S Puravankara Limited vs. State Of Karnataka
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The petitioner, M/s. Puravankara Limited, filed a writ petition challenging Bye-Law 3.9 of the Bangalore Mahanagara Palike Building Bye-Laws, 2003, and various notifications and circulars related to the collection of fees and cess for building plan sanction and licenses. The petitioner sought to quash these provisions and a demand notice dated January 8, 2021, issued by the Joint Director (Town Planning North), Bruhat Bengaluru Mahanagara Palike (BBMP), for various charges including scrutiny fee, ground rent, license fee, betterment fees, security deposit, service charge on labour cess, and surcharges. The petitioner argued that these levies were unconstitutional, arbitrary, illegal, and ultra-vires.
Held
The High Court of Karnataka, in its order dated June 23, 2025, allowed the writ petition. The Court noted that the issues raised in the present petition were squarely covered by previous binding decisions of co-ordinate benches in W.P.No.23086/2022 (M/s Sapthagiri Shelters) and W.P.No.36017/2018 (Sunderam Shetty). In those cases, levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws were declared ultra vires the Act and government circulars were quashed. Furthermore, Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024 were struck down for linking fees under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to market/guidance value. Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, was also declared invalid. Consequently, the impugned demand notice dated January 8, 2021, 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 Court clarified that the issuance of the license and plan approval shall not be withheld pending any appeal by the BBMP, but would be subject to the outcome of such an appeal.
Key Issues
1. Whether Bye-Law 3.9 of the Bangalore Mahanagara Palike Building Bye-Laws, 2003, is unconstitutional, arbitrary, illegal, and ultra-vires, as contended by the petitioner. 2. Whether the Notification No. UDD 3 TPP 2015 dated February 25, 2020, insofar as it inserted Rules 37-A and 37-C, is liable to be quashed. 3. Whether the circular dated August 14, 2020, issued by Respondent No.4, is liable to be quashed concerning the petitioner. 4. Whether the Government Order No. LD/300/LET/2006 dated January 18, 2007, and its corrigendum dated February 28, 2007, mandating upfront collection of labour welfare cess, are liable to be quashed concerning the petitioner. 5. Whether the Circular No. He.Ni.Na.Yo/JD(N) /DM3/ PR/320/2015-16 dated September 04, 2015, issued by Respondent No.4, concerning the levy and collection of 'Licence Fee', is liable to be quashed. 6. Whether the Impugned Demand Notice dated January 08, 2021, issued by Respondent No. 5, is liable to be quashed for the specified demands. Petitioner's Contention: The petitioner argued that the challenged bye-laws, notifications, and circulars were unconstitutional, arbitrary, illegal, and ultra-vires. They sought to quash these provisions and the demand notice, and to direct the BBMP to issue the sanction plan without insisting on the payment of various disputed charges. Respondents' Contention: The judgment does not record specific arguments from the respondents. However, it notes that the matter is covered by previous decisions of co-ordinate benches.
Sections Cited
Rule 37-A, Rule 37-C, Section 45-B
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Cause title — parties, addresses and appearances
ORAL ORDER The captioned petition is filed seeking for the following reliefs: "WHEREFORE, the Petitioners most respectfully prays that this Hon'ble Court be pleased to: a) Grant an order, direction or writ in the nature of Certiorari quashing Bye-Law 3.9 of the Bangalore Mahanagara Palike Building Bye- Laws, 2003 as unconstitutional, arbitrary, illegal and ultra-vires, in the interest of justice and equity; b) Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the Respondent No.1 bearing No. UDD 3 TPP 2015 dated February 25, 2020 (Annexure E) insofar as the inserted Rules 37-A and 37-C are concerned; c) Grant an order, direction or writ in the nature of Certiorari quashing the circular dated August 14, 2020, bearing No. He.Ni. Ka.Pa.Ko/P.R/320/2020-21 issued by the Respondent No.4 (Annexure F) in so far the Petitioners are concerned. HC-KAR NC: 2025:KHC:21778 d) Grant an order, direction or writ in the nature of Certiorari quashing the Government Order bearing No. LD/300/LET/2006 dated January 18, 2007 (Annexure G) and the corrigendum order bearing No. LD/300/LET/2006, dated February 28, 2007 (Annexure H) issued by the Respondent No. 2 mandating upfront collection of labour welfare cess in so far the Petitioners are concerned. e) Grant an order, direction or writ in the nature of Certiorari quashing the Circular bearing No. He.Ni.Na.Yo/JD(N) /DM3/ PR/320/2015-16 dated September 04, 2015 (Annexure J) issued by the Respondent No.4 is so far as levy and collection of "Licence Fee'; f) Grant a Writ or order or direction, in the nature of Certiorari, quashing the Impugned Demand Notice bearing BBMP/Addl.Dir/JDNORTH/ 1005/20-21 dated January 08, 2021 by the Respondent No. 5 (Annexure A) as regards the demand made for :- • Scrutiny Fee at Serial No. 1; • Ground Rent at Serial No. 2; • License Fee at Serial No. 3; • Betterment Fees for Building at Serial No. 4; HC-KAR NC: 2025:KHC:21778 • Betterment Fees for Site Area at Serial No. 5; • Security Deposit at Serial No. 6; • Service Charge on Labour Cess at Serial No. 10; • Levy and Collection of surcharge to be paid to BWSSB, BDA and KSCB at Serial No. 11; • Levy and Collection of 5% surcharge to be paid to BBMP at Serial No. 12; and • Labour Cess."
g) Grant an order, direction or writ in the nature of Mandamus directing the Respondent Nos. 4 and 5 BBMP to issue the sanction plan for construction of the Project in the Property, without insisting payment of Ground Rent, GST on Ground Rent, Betterment Charges for Building, Betterment Charges for Site, Security Deposit, License fee, 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 HC-KAR NC: 2025:KHC:21778 h) Grant such other reliefs as this Hon'ble Court deems fit in the above circumstances of the case, in the interests 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, 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. Similarly, in M/s Sapthagiri Sheltersand 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 HC-KAR NC: 2025:KHC:21778 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.
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. HC-KAR NC: 2025:KHC:21778 (ii) The impugned demand notice dated 08.01.2021 issued by respondent No.5 as per Annexure-A is hereby set-aside. (iii) Respondent - BBMP is 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 of the 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 subject HC-KAR NC: 2025:KHC:21778 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
VMB 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.