Sri M Nayaz Ahmed vs. The State Of Karnataka
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The petitioner, Sri M. Nayaz Ahmed, filed a writ petition challenging Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, and various notifications, circulars, and government orders related to the collection of charges and cess. Specifically, the petitioner sought to quash the demand notice dated 13/11/2020 issued by the Assistant Director, Town Planning-(West), Bruhat Bengaluru Mahanagara Palike (BBMP), which demanded ground rent, GST on ground rent, betterment charges, license fees, scrutiny fees, and various cesses and surcharges. The petitioner also sought a direction to issue a sanction plan without insisting on these charges. The respondents include the State of Karnataka through its various departments and the BBMP.
Held
The Court held that the issues raised in the present writ petition are squarely covered by previous binding decisions of coordinate benches. In the case of 'M/s Sapthagiri Shelters' and 'Sunderam Shetty', similar levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws were declared ultra vires the Act and 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 under Section 45-B of the Karnataka Stamp Act, 1957. Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, was also declared invalid. Consequently, all related circulars were quashed. The Court found no reason for separate adjudication and allowed the petition in terms of the operative directions issued in the cited cases. 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 a building license strictly in accordance with law, without withholding it based on the contemplation of an appeal.
Key Issues
1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, are ultra vires the Constitution, in so far as they permit the levies challenged by the petitioner? 2. Whether the notification dated 25/02/2020, inserting Rules 37-A and 37-C into the Karnataka Planning Authority Rules, 1965, is illegal? 3. Whether the circulars dated 04/09/2015 and 14/08/2020 issued by the BBMP, and the Government Order dated 18/01/2007 and its corrigendum dated 28/02/2007, mandating upfront collection of labour welfare cess, are illegal and arbitrary? 4. Whether the demand notice dated 13/11/2020 issued by the BBMP, demanding various charges including ground rent, GST on ground rent, betterment charges, license fees, and cesses, is without jurisdiction and arbitrary? The petitioner argued that the aforementioned provisions, notifications, circulars, and demand notice are illegal, without jurisdiction, and arbitrary, particularly concerning the levies of ground rent, GST on ground rent, betterment charges, and various cesses. The respondents, through their counsel, did not present specific arguments but relied on the court's previous pronouncements.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Section 45-B
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Cause title — parties, addresses and appearances
ORAL ORDER
The petitioner is seeking for the following reliefs:
i) Grant an order, direction or writ in the nature of Certiorari quashing Section 18-A of the Karnataka Town & Country Planning Act, 1961 brought into effect by Karnataka Act No. 23 of 2004 (Karnataka Town & Country Planning HC-KAR NC: 2025:KHC:21860 (Amendment) Act, 1998) as contained in ANNEXURE-G1 insofar as Section 18-A(i) and (iv) of the Karnataka Act No. 23 of 2004 is concerned; ii) Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 3 TTP 2015 dated 25/02/2020 as contained in ANNEXURE-G insofar as the inserted Rule 37-A and 37-C is concerned; iii) Issue a writ or order by way of certiorari quashing the circular dated 04/09/2015, bearing No. Heninayo/JD(N)/DM3/PR /320/2015-16 issued by the Respondent No.4 (Annexure-E) in so far the Petitioner is concerned. iv) Issue a writ or order by way of certiorari quashing the circular dated 14/08/2020, bearing No. He.Ni.Ka.Pa.Ko/P.R/320/2020-21 Issued by the Respondent No.4 (Annexure-H) in so far the Petitioner is concerned. v) Issue a writ or order by way of certiorari quashing the Government Order bearing No.LD/300/LET/2006 dated 18/01/2007 and the corrigendum order bearing No.LD/300/LET/2006, dated 28/02/2007 issued by the Respondent No.2 mandating upfront collection of labour welfare cess (Annexure-F) in so far the Petitioner is concerned. vi) Issue a writ or order by way of certiorari quashing the demand notice dated 13/11/2020, bearing No.BBMP/Ad.Com/WST /0449/2020-21, issued by the Respondent No.5 (Annexure-D) for demanding in so far it is HC-KAR NC: 2025:KHC:21860 concerned to Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, excess security deposit revised License fee, revised 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., as illegal, without juri iction and arbitrary. vii) Issue a writ or order or direction by way of mandamus directing the Respondent No.4 and 5 BBMP to issue the sanction plan with respect to the Schedule Property without insisting the Ground rent, GST on Ground rent, Betterment charges for building, Betterment charges for site, excess security deposit, revised License fee, revised 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 viii) Pass any such other order(s) as this Hon'ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity]
2 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 HC-KAR NC: 2025:KHC:21860 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 and similarly, in M/s Sapthagiri Shelters and 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 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 HC-KAR NC: 2025:KHC:21860 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. ii) The impugned demand notice dated 13.11.2020 issued by respondent No.5 as per Annexure-D is hereby set-aside. iii) Respondent - BBMP is hereby directed to issue fresh/modified plan as the case may be. iv) Respondent - BBMP is directed to forthwith process the petitioner’s application seeking building license HC-KAR NC: 2025:KHC:21860 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 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
GSS List No.: 2 Sl No.: 21
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