Mro-Tek Reality Limited vs. State Of Karnataka

Facts

The petitioner, MRO-TEK REALITY LIMITED, filed a writ petition challenging a demand notice dated February 21, 2021, issued by the Joint Director (Town Planning-North) of the Bruhat Bangalore Mahanagara Palike (BBMP). The demand notice included various charges such as scrutiny fee, ground rent, GST, license fee, betterment fee, security deposit, service charges, and cess for water supply, ring road, slum improvement, and mass rapid transport system. The petitioner sought to quash these demands and also challenged the constitutionality of certain bye-laws and provisions of the Karnataka Town and Country Planning Act, 1961, and related government orders and notifications. The petitioner argued that these levies were illegal and arbitrary.

Held

The Court held that the issues raised in the present writ petition were squarely covered by previous binding decisions of coordinate benches. Specifically, in the 'Sunderam Shetty' case, a coordinate bench had 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 related government circulars. Furthermore, in the 'M/s Sapthagiri Shelters' case, a coordinate bench had struck down 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, was illegal, and had also quashed related circulars and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, as invalid. Consequently, the present petition did not warrant separate adjudication and was liable to be allowed in terms of the operative directions issued in those prior judgments. The impugned demand notice dated 21.02.2021 was set aside, and the BBMP was directed to issue a modified sanction plan and process the petitioner's application for a building license and plan sanction strictly in accordance with law. The issuance of the license and plan approval was not to be withheld pending any appeal by the BBMP, but would be subject to the outcome of such an appeal.

Key Issues

1. Whether the demand notice dated 21.02.2021, issued by the respondent No.4, is liable to be quashed in so far as it demands various fees and charges including scrutiny fee, ground rent and GST, license fee, betterment fee, security deposit, service charges, and different types of cess? (Question of law and fact, turning on the validity of the levies under relevant bye-laws and statutory provisions). 2. Whether Bye-law No.3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires? (Question of law, turning on the validity of the bye-law). 3. Whether the Government Order dated 18.01.2007 and its corrigendum dated 28.02.2007 directing upfront collection of labour welfare cess are liable to be quashed? (Question of law, turning on the validity of the government order). 4. Whether provisions of Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, brought into effect by Karnataka Act No.23 of 2004, are liable to be quashed? (Question of law, turning on the validity of the statutory provision). 5. Whether Notification dated 25.02.2020, in so far as it amends Rule 37-A and Rule 37-C of the Karnataka Planning Authority Rules, 1965, is liable to be quashed? (Question of law, turning on the validity of the notification). Petitioner's contentions: The petitioner argued that the levies in the demand notice were illegal and arbitrary. They also challenged the constitutional validity of Bye-law No.3.9, the Government Order regarding labour welfare cess, Section 18-A of the Karnataka Town and Country Planning Act, and amended Rules 37-A and 37-C. The petitioner relied on previous judgments of coordinate benches of the High Court. Revenue/State's contentions: The judgment does not record specific contentions from the respondents.