M/S Bhartiya City Developers Private Limited vs. State Of Karnataka

Issue a Writ of Certiorari or any other appropriate Writ of like nature or direction, declaring the Bye law No.3.9 of the Bangalore Mahanagara Palike Building Bye-laws 2003 (ANNEXURE-A) as unconstitutional, illegal and ultra vires;

Issue a Writ of Certiorari or any other appropriate Writ. Order or Direction, quashing the Demand Notice bearing No.JDTP(N)/LP/25/2010-11 dated 09.04.2018 HC-KAR NC: 2025:KHC:21295 (Annexure-B) issued by Respondent No. 3, so far as it relates to claim made for payment of Ground Rent and GST on it and GST charges claimed towards ground rent already paid is concerned.

Issue a Writ of Mandamus, or any other appropriate writ, order or direction, directing the Respondents No.2 and 3 to refund the sum of Rs.97.29.415/- (Rupees Ninety Seven Lakhs Twenty Nine Thousand Four Hundred and Fifteen only) towards Ground Rent, and a sum of Rs. 17,51,294/- (Rupees Seventeen Lakhs Fifty One Thousand Two Hundred and Ninety Four Only) being the Goods & Service Tax on the said Ground Rent and Rs.8,24,240/- towards GST charges for already paid ground rent (in total Rs.1,23,04,949/- which was demanded ground and collected/received from the Petitioner, by making it as a pre-requisite condition vide Demand Notice dated 09.04.2018 at ANNEXURE-B for issuance of Partial Occupancy Certificate sought for by the Petitioner, with interest at 24% P.A., from the date of receipt till its payment to the Petitioners.

Grant such other and farther relief/s, including costs of this Petition, as thus Hon'ble Court deems fu, in the facts and circumstances of the case in the interests 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.36017/2018 and connected matters. The Co-ordinate Bench, while deciding the issue, has held that the bye-laws under which HC-KAR NC: 2025:KHC:21295 Ground Rent, License Fee, Building License fee, Scrutiny fee are levied are ultra vires the Act. The Co-ordinate Bench also quashed the circular dated 04.09.2015 and Government circulars dated 27.01.2017 and 30.03.2017. Therefore, this Court deems it fit to cull out the operative portion of the order, which reads as under; "O R D E R (a) All the Writ Petitions are allowed. (b) The bye-laws under which Ground Rent, Licence Fee, Building Licence Fee, Scrutiny Fee, Security Deposit are all held ultravires the Act and are resultantly rendered unenforceable. (c) The Circular bearing No.ºÉ¤£ÀAiÉÆÃ/eÉ.r(G)/rJªÀiï3/¦Dgï/320/2015-16 dated 04.09.2015 stands quashed. (d) The Circular bearing No.£ÀCE 36 ¨ÉªÀÄ¥Áæ 2016 (¨sÁUÀ) dated 27.01.2017 and the Circular bearing No. ºÉ¤£ÀAiÉÆÃ/¦Dgï/1533/2016-17 dated 30.03.2017 demanding Lake Rejuvenation Fee are quashed. (e) Imposition of labour cess under the Welfare Cess Act is upheld, but its demand for payment upfront HC-KAR NC: 2025:KHC:21295 in terms of Government Orders dated 18.01.2007 and 28.02.2007 stands quashed. (f) The State or the BBMP is not precluded from bringing in the impugned levies under the provisions of the Act or the Rules by making suitable amendments to the Act and the Rules. 368 (g) Petitioners in all these petitions who have deposited certain amounts in terms of the interim order passed by this Court before this Court are entitled to refund of the amounts so deposited. (h) Insofar as refund in other cases who have paid to the Corporation under protest, they shall be entitled to such refund only if the same is not collected from the consumers of the apartments, businesses as the case would be. (i) Insofar as all other payments made, they would all be at liberty to give representation to the BBMP and the BBMP would consider the refund of the amounts, in accordance with law and the findings of this Court. HC-KAR NC: 2025:KHC:21295 (j) If representations are made by the petitioners for refund, the BBMP shall pass appropriate orders within 12 weeks from the date of such representations. In view of disposal of the petitions, all pending Interlocutory Applications also stand disposed."

In the considered view of this Court, the issues raised in the present writ petition stand squarely covered by the authoritative pronouncement rendered by the Co- ordinate Bench of this Court in W.P.No.36017/2018 and connected matters. The Co-ordinate Bench, after examining the statutory framework and the impugned levy mechanisms adopted by the BBMP, categorically held that the imposition of Ground Rent, Licence Fee, Building Licence Fee, Scrutiny Fee, and Security Deposit lacked statutory sanction and were ultra vires the Karnataka Municipal Corporations Act, 1976. The Co-ordinate Bench further held that Clause 3.8 of the BBMP Building Bye- laws, 2003, which provided for imposition of Ground Rent, was also devoid of legal authority and consequently struck HC-KAR NC: 2025:KHC:21295 it down. The Court also quashed the impugned Circular dated 04.09.2015 issued by respondent No.4, as well as the Government Orders dated 27.01.2017 and 30.03.2017, which had directed collection of such fees without statutory backing. With specific reference to labour welfare cess, the Co-ordinate Bench upheld the competence of the State to levy the cess under the Building and Other Construction Workers’ Welfare Cess Act, 1996, but set aside the directive mandating its upfront collection through Government Orders dated 18.01.2007 and 28.02.2007, thereby rendering the demand raised in anticipation of sanction of building plans unlawful. The Co-ordinate Bench also clarified that the only charging provision available under the Act was sub- section (20-b) of Section 423, which merely enabled collection of fees for services relating to burial grounds and crematoria, and could not be relied upon for the imposition of unrelated charges such as ground rent or scrutiny fee. In light of these clear and binding findings, HC-KAR NC: 2025:KHC:21295 the controversy raised in the present writ petition does not survive for independent adjudication, as the grievance of the petitioner is directly addressed and resolved by the said judgment. Therefore, this Court is of the considered opinion that the present writ petition deserves to be allowed by applying the ratio and operative portion of the judgment rendered in W.P.No.36017/2018 and connected matters.

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 09.04.2018 issued by respondent No.3 as per Annexure-B is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issuemodified sanction plan. (iv) Respondent - BBMP is directed to forthwith process the petitioner’s application HC-KAR NC: 2025:KHC:21295 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 to the outcome of any appeal that may be filed by the BBMP against the said judgment. (vii) Insofar as payments made, Petitioner shall make a representation to Respondent- BBMP for refund. Respondent- BBMP shall consider the same and pass appropriate orders in accordance with law within a period of 8 weeks from the date of receipt of such representation.