M/S. Suvilas Realities PVT LTD vs. State Of Karnataka
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The petitioner, M/s. Suvilas Realities Pvt. Ltd., filed a writ petition challenging a demand notice dated 28.10.2020 issued by the Joint Director (Town Planning North), Bruhat Bangalore Mahanagara Palike (BBMP). The demand notice included various charges such as scrutiny fee, license fee, ground rent and GST, betterment fee, security deposit, workers welfare fund (labour cess), service charges, and surcharges for water supply, ring road, slum improvement, and mass rapid transport system. The petitioner also challenged the constitutionality of certain bye-laws and provisions of the Karnataka Town and Country Planning Act, 1961, and a Government Order regarding upfront collection of labour welfare cess. The petitioner sought to quash the demand notice, declare certain bye-laws unconstitutional, and direct the respondents to issue building plan and license, and refund certain deposited amounts.
Held
The Court allowed the writ petition, setting aside the impugned demand notice dated 28.10.2020 issued by Respondent No.4. The Court noted that similar issues concerning the levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws, as well as the linking of fees to market/guidance value under Rule 37-A of the Karnataka Planning Authority Rules, 1965, have been comprehensively adjudicated and settled by coordinate benches in previous judgments, specifically citing 'M/s Sapthagiri Shelters' and 'Sunderam Shetty'. These prior decisions had declared such levies ultra vires the Act, struck down relevant government circulars and amendments, and quashed related bye-laws. Therefore, the present petition was found to be squarely covered by these binding pronouncements. The Court directed the BBMP to issue a fresh/modified plan and to process the petitioner's application for building license and plan sanction strictly in accordance with law. It was clarified that the issuance of the license and plan approval should not be withheld due to any contemplated appeal by the BBMP, but would be subject to the outcome of any such appeal. For payments already made, the petitioner was directed to make a representation to the BBMP for refund, which the BBMP was ordered to consider and pass orders within eight weeks.
Key Issues
1. Whether the demand notice dated 28.10.2020 issued by Respondent No.4, demanding various fees and charges including scrutiny fee, license fee, ground rent and GST, betterment fee, security deposit, workers welfare fund, service charges, and surcharges, is liable to be quashed? The petitioner argued that these levies are illegal and arbitrary. 2. Whether Bye-law No.3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires? The petitioner contended that this bye-law is beyond the scope of the enabling Act. 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? The petitioner challenged the retrospective and arbitrary nature of this collection. 4. Whether 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? The petitioner argued that these provisions are beyond the legislative competence and are arbitrary. 5. Whether Notification dated 25.02.2020, amending Rule 37-A and Rule 37-C of the Karnataka Planning Authority Rules, 1965, is liable to be quashed? The petitioner challenged the linking of fees to market/guidance value. The respondents did not record specific arguments but relied on the validity of the respective Acts, Rules, and Bye-laws.
Sections Cited
Section 18, Section 18-A, Rule 37-A, Rule 37-C
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
Petitioner in the captioned petition has sought the following reliefs: i. Issue a writ of certiorari or similar writ or order or direction to quash the demand notice No.BBMP/Addl.Dir./JDNORTH/0007/20-21 dated nil signed on 28.10.2020 at Annexure-H issued by the respondent No.4 only in so far as the demand of Rs.3,67,723/- towards Scrutiny Fee, Rs.73,54,462/- towards License Fee, Rs.43,39,133/- towards Ground Rent and GST, Rs.43,39,133/- towards betterment fee for building, as per section 18 of KTCP Act,Rs.81,71,624/- towards security deposit. In this Writ Petition, the petitioner is also challenging the demand towards workers welfare fund(Labour Cess) of Rs. 1,26,62,000/- and also 1% of the services charges in a sum of Rs.9,47,942/- payable to the Corporation from out of the Labour Welfare Fund and demand of surcharge of Rs.26,25,998/-towards water supply scheme (BWSSB), Rs.26,25,998/- towards Ring Road(BDA), Rs.13,12,999/- towards improving slums(KSCB), Rs.65,64,996/- towards Mass Rapid Transport System(BDA), are concerned;
ii. Issue a writ of Mandamus or any other appropriate writ or order or direction declaring that Bye-law No.3.9 in the Bangalore Mahanagara Palike Building Bye-laws, 2003 as unconstitutional, arbitrary, illegal and ultravires;
iii. Issue Writ of Certiorari quashing the Government Order issued by the 2ªd Respondent bearing G.O.No.LD 300 LET 2006 dated 18.01.2007 and the HC-KAR NC: 2025:KHC:21299 corrigendum bearing No. LD 300 LET 2006 dated 28.02.2007 directing upfront collection of labour welfare cess, as contained in ANNEXURE –L
iv. Issue a writ of certiorari or similar writ or order or direction to quash provisions of section 18-A of Karnataka Town and Country Planning Act, 1961 brought into effect by Karnataka Act No.23 of 2004 by the 1" Respondent at Annexure-N in so far as 18-A(i) and (iv) of Karnataka Act No.23 of 2004 is concerned.
v. Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the ist Respondent bearing No. UDD 3 TPP 2015 dated 25.02.2020 as contained in ANNEXURE-P in so far as the amended Rule 37-A and Rule 37- C are concerned;
vi. Issue writ of mandamus or similar writ or order or direction directing the respondent Nos. 3 and 4 to issue building plan and license pursuant to the demand notice No.BBMP/Addl.Dir./JDNORTH / 0007/20-21 dated nil signed on 28.10.2020 at Annexure-H issued by the respondent No.4. vii. Issue Writ of Mandamus to Respondents No.3 and 5 to refund an amount of Rs.1,26,62,000/- deposited by the petitioner through Receipt No.HO/17297/2020 dated 14.12.2020 at Annexure-J and Rs.1,26,99,000/- deposited through receipt No.BBMP/14465/CH/20-21 dated 18.12.2020 at Annexure-K.
viii. Issue any other appropriate writ or order or direction as deemed fit in the circumstances of the case, in the interest of justice and equity.
The Co-ordinate Benches of this Court, in W.P.No.23086/2022 and connected matters(herein HC-KAR NC: 2025:KHC:21299 referred to as “M/s Sapthagiri Shelters”) as well as W.P.No.36017/2018 and connected matters(herein 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. 4. 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 HC-KAR NC: 2025:KHC:21299 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 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 NIL issued by respondent No.4 as per Annexure-H is hereby set-aside. HC-KAR NC: 2025:KHC:21299 (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 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, petitioners shall make a representation to respondent- HC-KAR NC: 2025:KHC:21299 BBMP for refund. Respondent-BBMP shall consider the same and pass orders in accordance with law, within a period of 8 weeks from the receipt of such representation.
Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
PB List No.: 2 Sl No.: 5
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.