M/S. Embassy Construction Private Limited vs. The State Of Karnataka
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The petitioner, M/s. Embassy Construction Private Limited, filed a writ petition challenging Bye Law No. 3.9 of the Bengaluru Mahanagara Palike (BBMP) Building Bye Laws, 2003, and a demand notice dated July 16, 2021, issued by the BBMP. The petitioner sought to declare the bye-law ultra vires the Karnataka Municipal Corporations Act, 1976, and inconsistent with other BBMP bye-laws. The demand notice, issued by Respondent No. 4 (Joint Director, Town Planning (North), BBMP), demanded various fees and charges totaling Rs. 6,56,71,421/-, including Scrutiny Fee, License Fee, Ground Rent, GST on Ground Rent, Betterment charges, Security Deposit, Service Charges, and Labour Welfare Fund. The petitioner sought to quash this demand notice in so far as it related to these payments.
Held
The Court held that the issues raised in the present writ petition were substantially covered and decided by a coordinate bench in a reported judgment. This prior judgment had partly allowed writ petitions, 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). 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 on plots exceeding 20,000 square meters. The Court also declared 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 giving effect to these were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also struck down. The present writ petition was allowed, the impugned demand notice was set aside, and the BBMP was directed to issue a fresh/modified plan and process the petitioner's application for building license and plan sanction strictly in accordance with law, subject to the outcome of any appeal by the BBMP.
Key Issues
1. Whether Bye Law No. 3.9 of the Bengaluru Mahanagara Palike Building Bye Laws, 2003, is ultra vires and inconsistent with the Karnataka Municipal Corporations Act, 1976, and Bye Laws No. 3.8 and 3.10 of the same Building Bye Laws, as argued by the petitioner. 2. Whether the demand notice dated July 16, 2021, issued by the BBMP, demanding various fees and charges including Scrutiny Fee, License Fee, Ground Rent, GST on Ground Rent, Betterment charges, Security Deposit, Service Charges, and Labour Welfare Fund, is liable to be quashed, as argued by the petitioner. The respondents' arguments are not explicitly recorded in the judgment. However, the judgment indicates that the issues raised by the petitioner were substantially covered by a coordinate bench's decision in a connected matter.
Sections Cited
Section 18, Section 45-B, Rule 37-A, Rule 37-C, Bye Law No. 3.9, Bye Law No. 3.8, Bye Law No. 3.10
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Cause title — parties, addresses and appearances
ORAL ORDER
The petitioner is seeking for the following reliefs:
"a) Issue a writ of certiorari, or any other appropriate
Writ, Order or Direction, declaring Bye Law No.3.9 of the Bengaluru Mahanagara Palike Building Bye Laws 2003 (Annexure-A), is ultra vires of and inconsistent with the Karnataka Municipal HC-KAR NC: 2025:KHC:21503 Corporations Act, 1976 and also ultra vires of and inconsistent with Bye Laws No.3.8 and 3.10 of the Bengaluru Mahanagara Palike Building Bye Law 2003; b) Issue a Writ of Certiorari, or any other appropriate Writ, Order or Direction, quashing the Demand Notice dated 16.07.2021, bearing No.BBMP/Addl.Dir/JDNORTH/0023/ 20-21 (Annexure-B), issued by Respondent No.4 in so far as it relates to demanding payment of: Rs.8,22,637/- towards Scrutiny Fee; Rs.1,64,52,737/- towards License Fee; Rs. 1,52,54,037/- towards Ground Rent and GST payable on Ground Rent; Rs.87,44,014/- towards Betterment charges on building u/s 18 of KTCP Act; Rs. 87,44,014/- towards Security Deposit; Rs.22,51,982/- towards 1% Service Charges payable to BBMP from Labour Welfare Fund; and Rs. 1,34,02,000/- towards Labour Welfare Fund; Totally amounting to Rs.6,56,71,421/- (Rupees Six Crore Fifty Six Lakh Seventy One Thousand Four Hundred and Twenty One only); and c) Award Cost of this Writ Petition; d) Grant such other and further reliefs as this Hon'ble Court deems fit and proper under the HC-KAR NC: 2025:KHC:21503 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;
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, HC-KAR NC: 2025:KHC:21503 (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 the Karnataka Stamp Act, 1957, is illegal. However, liberty is reserved to the respondent-State Government and the HC-KAR NC: 2025:KHC:21503 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 HC-KAR NC: 2025:KHC:21503 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 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. HC-KAR NC: 2025:KHC:21503
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 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. HC-KAR NC: 2025:KHC:21503
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 16.07.2021 issued by respondent No.4 as per Annexure-B 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 HC-KAR NC: 2025:KHC:21503 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
GSS List No.: 2 Sl No.: 7
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