M/S Atz Properties vs. State Of Karnataka
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The petitioner, M/s ATZ Properties, filed a writ petition challenging a demand notice dated February 11, 2021, issued by the Assistant Director, Town Planning (East), Bruhat Bangalore Mahanagara Palike (BBMP). The demand notice included various charges such as scrutiny fee, ground rent, GST, license fee, betterment fee, security deposit, and surcharges for water supply, ring road, slum improvement, and mass rapid transport system. The petitioner sought to quash these demands and also challenged the constitutional validity of certain bye-laws and provisions of the Karnataka Town and Country Planning Act, 1961, and related rules. The petitioner also prayed for the issuance of a building plan and license without insisting on the payment of the disputed demands.
Held
The High Court of Karnataka, in the present writ petition, referred to a coordinate bench's judgment in W.P.No.23086/2022 and connected matters. The coordinate bench had partly allowed the writ petitions, quashing and setting aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023. It was 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, applies only to development proposals for plots exceeding 20,000 square meters. The court also held that if fees were previously collected for land use change or layout plan approval, no further fee should be levied for subsequent development plans. The linkage of levies to market or guidance value under Section 45-B of the Karnataka Stamp Act was declared illegal, and consequently, all impugned circulars and demand notices were quashed. Clause 3.8 of the BBMP Building Bye-laws, 2003, concerning 'Ground Rent', was also struck down. In light of this binding precedent, the present writ petition was allowed, with the impugned demand notice being set aside. The respondents were directed to issue fresh/modified plans and process the petitioner's application for a building license strictly in accordance with law, without withholding it due to potential appeals.
Key Issues
1. Whether the demand notice dated February 11, 2021, issued by the Assistant Director, Town Planning (East), BBMP, in so far as it levies various charges including scrutiny fee, ground rent, GST, license fee, betterment fee, security deposit, and surcharges, is sustainable in law? 2. Whether Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultra vires? 3. Whether Section 18-A of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No. 23 of 2004, specifically sub-sections (i) and (iv), is unconstitutional, arbitrary, illegal, and ultra vires? 4. Whether the Notification dated February 25, 2020, issued by the State Government, amending Rule 37-A and Rule 37-C of the Karnataka Planning Authority Rules, 1965, is unconstitutional, arbitrary, illegal, and ultra vires? Petitioner's arguments: The petitioner contended that the demand notice was illegal and sought to quash it. They also challenged the constitutional validity of the aforementioned bye-laws, statutory provisions, and rules, arguing they were arbitrary and ultra vires. The petitioner sought a direction to issue the building plan and license without payment of the disputed demands. Revenue/State's arguments: The judgment does not explicitly record arguments from the revenue or state respondents. However, the court's decision is based on a coordinate bench's ruling that addressed similar issues.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Bye-law No. 3.9, Section 45-B
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 demand notice LP No.BBMP/Ad.Com./EST/1271/20-21 dated HC-KAR NC: 2025:KHC:20861
2021 at Annexure-D issued by the respondent No.3 only in so far as the demand of Rs.14,881/-towards Scrutiny Fee, Rs.2,75,940/- towards Ground Rent and GST Rs.8,97,621/- towards License Fee, Rs.1,38,800/- towards Betterment fee towards Building. Rs.5,33,284/- towards Betterment Fee towards Site Area, Rs.1,38,800/- towards security deposit, surcharge of Rs.71,105/- towards water supply scheme (BWSSB), Rs.71,105/- towards Ring Road(BDA), Rs.35,553/- towards improving slums (KSCB), Rs.1,77,761/. towards Mass Rapid Transport System(BDA), Rs.17,776/. towards levy and collection of 5% cess on surcharge 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 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 1st Respondent at Annexure-F in so far as 18- HC-KAR NC: 2025:KHC:20861 A(i) and (iv) of Karnataka Act No.23 of 2004 is concerned. iv) grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No.UDD 3 TPP 2015dated 25.02.2020 as contained in ANNEXURE-G in so far as the amended Rule 37-A and Rule 37-C are concerned; v) 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.1 dated nil signed on 11.02.2021 at Annexure -D issued by the respondent No.3 without insisting for payment of aforesaid demands. vi) 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.
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 HC-KAR NC: 2025:KHC:20861 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; "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. HC-KAR NC: 2025:KHC:20861 (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 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 HC-KAR NC: 2025:KHC:20861 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 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 HC-KAR NC: 2025:KHC:20861 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 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 HC-KAR NC: 2025:KHC:20861 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. (ii) The impugned demand notice dated 11.02.2021 issued by respondent No.3 as per Annexure-D is hereby set-aside. (iii) Respondent Nos.2 and 3 are hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent Nos.2 and 3 are hereby directed to issue fresh/modified plan as the case may be. (v) Respondent Nos.4 and 5 are hereby directed to forthwith process the petitioner's application seeking building license and sanction of the building plan, strictly in accordance with law. HC-KAR NC: 2025:KHC:20861 (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 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.