Yelahanka New Town Muslim Welfare Association Trust (Regd) vs. State Of Karnataka

Facts

The petitioner, Yelahanka New Town Muslim Welfare Association Trust, filed a writ petition challenging a demand notice dated August 18, 2020, issued by the Assistant Director, Town Planning (Yelahanka), Bruhath Bangalore Mahanagara Palike (BBMP). The notice demanded various fees, including scrutiny fee, license fee, ground rent, GST, betterment fee, security deposit, and labour cess. The petitioner also challenged a subsequent demand notice dated September 1, 2020, for surcharge towards water supply scheme, Ring Road, improving slums, and Mass Rapid Transport System. The petitioner sought to quash these demands and declare certain bye-laws and provisions of the Karnataka Town and Country Planning Act, 1961, as unconstitutional and illegal. The petitioner also sought a direction to issue building plan and license without insisting on the payment of the disputed demands.

Held

The High Court allowed the writ petition, setting aside the impugned demand notices dated August 18, 2020, and September 1, 2020, issued by Respondent No. 4. The Court noted that coordinate benches of the High Court had comprehensively adjudicated similar issues in cases like 'M/s Sapthagiri Shelters' and '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 related government circulars were quashed. Furthermore, the Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024 were struck down for illegally 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. The Court held that the issues in the present petition were squarely covered by these binding decisions. Consequently, the BBMP was directed to issue a fresh/modified plan and to forthwith process the petitioner's application for building license and sanction of the building plan strictly in accordance with law, without withholding approval based on any contemplated appeal. Any issued license or plan would be subject to the outcome of any appeal filed by the BBMP.

Key Issues

1. Whether the demand notice dated August 18, 2020, and September 1, 2020, issued by the Assistant Director, Town Planning (Yelahanka) (Respondent No. 4), demanding various fees including scrutiny fee, license fee, ground rent, GST, betterment fee, security deposit, labour cess, and surcharges for infrastructure projects, are legally sustainable? 2. Whether Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires? 3. Whether the Government Order No. LD 300 LET 2006 dated January 18, 2007, and its corrigendum dated February 28, 2007, directing upfront collection of labour welfare cess, are liable to be quashed? 4. Whether provisions of Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No. 23 of 2004, are liable to be quashed? 5. Whether Notification No. UDD 3 TPP 2015 dated February 25, 2020, amending Rule 37-A and Rule 37-C of the Karnataka Planning Authority Rules, 1965, is liable to be quashed? Petitioner's Arguments: The petitioner sought to quash the demand notices and challenged the validity of the bye-laws and statutory provisions under which these demands were made. The petitioner relied on previous judgments of the High Court that had dealt with similar issues. Revenue/State's Arguments: The judgment does not record specific arguments from the respondents. However, the court's decision implies that the respondents' actions were based on the challenged bye-laws and government orders.