M/S Blue Horizon Hotels PVT LTD vs. State Of Karnataka
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The petitioner, M/s Blue Horizon Hotels Pvt Ltd, represented by its GPA holder M/s. Epitome Builders (P) Ltd., filed a writ petition challenging the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Act No. 1/2022) and subsequent notifications and demand notices. The petitioner sought to quash these legislative enactments and administrative actions, including a demand notice from the Bruhat Bengaluru Mahanagara Palike (BBMP) for various fees and charges, including GST. The core of the petitioner's challenge was directed at the legality and constitutionality of the amended laws and the levies imposed thereunder. The matter was brought before the High Court of Karnataka.
Held
The High Court, in its order, noted that the issues raised in the present writ petition were substantially covered by a coordinate bench's judgment in W.P.No.23086/2022 and connected matters. Following that precedent, the Court held that the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023 (Karnataka Act No.37 of 2024) were unconstitutional and thus quashed and set aside. The Court declared that Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only to development plans for plots exceeding 20,000 square meters, not smaller ones. It was also held that if fees were already collected for change of land use or layout plan approval, no further fee should be collected for subsequent development plans. The linkage of fees to market or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, was declared illegal. Consequently, all impugned circulars and demand notices giving effect to these provisions were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also declared illegal and quashed. The impugned demand notice dated 05.08.2024 issued to the petitioner was set aside.
Key Issues
1. Whether the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023 (Karnataka Act No.37 of 2024) are ultra vires and unconstitutional? - Petitioner's contention: The petitioner argued that these amendment acts were unconstitutional and sought to quash them. - Revenue's contention: Not recorded in the judgment. 2. Whether Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable to all plot sizes or only to plots exceeding 20,000 square meters? - Petitioner's contention: The petitioner challenged the applicability of these provisions to their case. - Revenue's contention: Not recorded in the judgment. 3. Whether the linking of fees leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to the market value or guidance value under Section 45-B of the Karnataka Stamp Act, 1957, is legal? - Petitioner's contention: The petitioner argued that this linkage was illegal. - Revenue's contention: Not recorded in the judgment. 4. Whether Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye-laws, 2003, providing for 'Ground Rent', is illegal? - Petitioner's contention: The petitioner challenged the imposition of 'Ground Rent'. - Revenue's contention: Not recorded in the judgment.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Section 45-B, Clause 3.8
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
The captioned petition is filed seeking the following reliefs: i) issue a writ of certiorari or similar writ or order or direction to quash the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 Act No.1/2022 dated 13.01.2022 enacted by the second respondent published through notification bearing No.DPAL 50 SHASANA 2021 gazetted on 13.01.2022 at Annexure-J declaring it to be ultravires and unconstitutional. ii) issue writ of certiorari or similar writ or order or direction to quash the Office Order bearing No.ADTP/PR/ 461/ 2021-22 dated 09.03.2022 issued by the 3rd respondent at Annexure -K; iii) issue a writ of certiorari to quash the demand notice bearing No. BBMP /Addl.Dir/JD SOUTH/0261/17-18 dated 05.08.2024 at Annexure -F issued by the Respondent No.4 in so far as demand towards scrutiny fee of Rs.3,91,761/-, Ground Rent in a sum of Rs.78,35,207/- GST at 18% in a sum of HC-KAR NC: 2025:KHC:20863 Rs.14,10,338/-, license fee of Rs.78,35,207/-, Betterment fee for building of Rs.96,952/-, Betterment Fee for Site Area of Rs.18,62,294/-, Betterment fee for Building in a sum of Rs.9,05,947/- , security deposit of Rs.4,84,775/-, Cess towards BWSSB in a sum of Rs.2,62,983/-, Cess towards Ring Road in a sum of Rs.2,62,983/-, Cess towards Improving the slums in a sum of Rs. 1,31,492/-, cess towards MRTS in a sum of Rs. 13,14,914/-, 5% Rs. 1,03,810/- are concerned administrative charges of iv) issue Writ of Certiorari or similar Writ, order or direction to quash the Circular bearing No.He. Ni.Ka.Pa.Ko/ P.R/320/2020-21 dated 14.08.2020 at Annexure-L issued by the 3rd Respondent; v) 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-M in so far as 18- A(i) and (iv) of Karnataka Act No.23 of 2004 is concerned. vi) 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 HC-KAR NC: 2025:KHC:20863
2020 as contained in ANNEXURE-N in so far as the amended Rule 37-A and Rule 37-C are concerned; vii) issue any other appropriate writ or order or direction to the respondents as deemed fit in the circumstances of the casein the interest 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.23086/2022 and connected matters. The Co-ordinate Bench, while deciding the issue, has set-aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024). Therefore, this Court deems it fit to cull out the operative portion of the order, which reads as under; HC-KAR NC: 2025:KHC:20863 "ORDER (i) The writ petitions are partly allowed. (ii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022), is hereby quashed and set aside. (iii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024), is hereby quashed and set aside. (iv) It is hereby declared that the provisions contained in Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only in respect of ‘Development Plan’ containing the proposal for construction on plots measuring more than 20,000 square meters in extent and not in respect of plots measuring less than 20,000 square meters. (v) It is hereby declared that if fee has been earlier collected for change of land use or while approving a layout plan, fee shall not be collected for subsequent ‘Development Plan’ in terms of the ‘Note’ found below TABLE I of Rule 37-A of the Karnataka Planning Authority Rules, 1965. (vi) It is hereby declared that the linking of the fee leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to the ‘market value’ or ‘guidance value’ as determined under Section 45-B of HC-KAR NC: 2025:KHC:20863 the Karnataka Stamp Act, 1957, is illegal. However, liberty is reserved to the respondent-State Government and the BBMP to re-fix a standard after collecting empherical data. (vii) Consequently, all the impugned Circulars which seek to give effect to the Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are hereby quashed and set aside. (viii) It is hereby declared that Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye- laws, 2003, providing for ‘Ground Rent’, is illegal and are accordingly quashed and set aside. (ix) Consequently, all the impugned Demand Notices raised by the respondent-BBMP, in respect of the writ petitioners herein are also quashed and set aside. It would be advisable that the BBMP may come out with a scheme for ‘One Time Settlement’ and settle the levy and collect the fee generally acceptable to the citizens of Bengaluru. This would also augment the present situation."
In the present writ petition, the core issue raised stands substantially covered and decided by the authoritative pronouncement of the coordinate bench, wherein the writ petitions were partly allowed and several consequential reliefs were granted. The Hon’ble Court, in HC-KAR NC: 2025:KHC:20863 unequivocal terms, quashed and set aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023 (Karnataka Act Nos.01 of 2022 and 37 of 2024 respectively).
The Court further declared that the provisions under Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only to development proposals concerning plots exceeding 20,000 square meters, and not to smaller plots. Importantly, it was also held that if a fee has been previously collected for change of land use or approval of layout plan, no further fee shall be levied for subsequent development plans, in view of the explanatory 'Note' to Table I of Rule 37-A.
The Court declared illegal the linkage of such levies to market or guidance value under Section 45-B of the Karnataka Stamp Act, and consequently, quashed all HC-KAR NC: 2025:KHC:20863 Circulars and demand notices issued to give effect to such unlawful interpretations. Clause 3.8 of the BBMP Building Bye-laws, 2003, imposing 'Ground Rent', was also struck down.
In view of these comprehensive declarations and findings, it is submitted that the controversy raised in the present writ petition no longer survives for adjudication independently, as it is squarely covered by the binding judgment of the coordinate bench. In the light of the law laid down in reported judgment substantially covering the issue, which is raised in the captioned writ petition, the writ petition is liable to be allowed strictly aligning to the operative portion of the said writ petition.
In view of the above, this Court proceeds to pass the following; ORDER (i) The writ petition is allowed. HC-KAR NC: 2025:KHC:20863 (ii) The impugned demand notice dated 05.08.2024 issued by respondent No.4 as per Annexure-F is hereby set-aside. (iii) Respondent Nos.3 and 4 are hereby directed to issue modified sanction plan. (iv) Respondent - BBMP is hereby directed to issue Occupancy Certificate in accordance with law in compliance of the construction strictly adhering to the approved building plan. (v) Respondent Nos.3 and 4 are hereby directed to forthwith process the petitioner's application seeking building license and sanction of the building plan, strictly in accordance with law. (vi) It is made clear that the issuance of the building license and approval plan shall not be withheld merely on the ground that the BBMP is contemplating to file an appeal against the reported judgment. (vii) If the building license and sanction plan are issued, the same shall be subjected to the outcome of any appeal that may HC-KAR NC: 2025:KHC:20863 be filed by the BBMP against the judgment. Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
KLY
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.