M/S Shreno Limited vs. State Of Karnataka
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The petitioner, M/s Shreno Limited, filed a writ petition before the High Court of Karnataka challenging a demand notice dated November 27, 2020, issued by the Joint Director (Town Planning - North) of Bruhat Bengaluru Mahanagara Palike (BBMP). The demand notice included substantial amounts for scrutiny fee, license fee, ground rent and GST, betterment fee, security deposit, and workers welfare fund (Labour Cess). The petitioner sought to quash this demand notice and other related government orders, notifications, and bye-laws that formed the basis of these demands. The petition also prayed for the issuance of a building plan and license without insisting on the payment of these disputed amounts.
Held
The High Court allowed the writ petition. The Court noted that coordinate benches of the High Court had comprehensively adjudicated similar issues in previous cases, specifically "M/s Sapthagiri Shelters" and "Sunderam Shetty". In "Sunderam Shetty", the court had declared the levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws as ultra vires the Act and quashed certain government circulars. In "M/s Sapthagiri Shelters", the court struck down Karnataka Act No.01 of 2022 and Karnataka Act No.37 of 2024, holding the linking of fees under Rule 37-A to market/guidance value under the Stamp Act as illegal, and also quashed related circulars and declared Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, as invalid. The Court found that the issues in the present petition were squarely covered by these binding decisions. Consequently, the impugned demand notice dated 27.11.2020 was set aside. The BBMP was directed to issue a fresh/modified plan and forthwith process the petitioner's application for a building license and building plan sanction strictly in accordance with law. The issuance of the license and plan approval was not to be withheld due to any contemplated appeal by the BBMP, but would be subject to the outcome of any such appeal.
Key Issues
1. Whether the demand notice dated 27.11.2020, issued by the Joint Director (Town Planning - North) of BBMP, demanding various fees including scrutiny fee, license fee, ground rent and GST, betterment fee, security deposit, and workers welfare fund, is legally sustainable? (Relates to the general challenge to the demand notice). 2. Whether the Government Order No. LD 300 LET 2006 dated 18.01.2007 and its corrigendum dated 28.02.2007, directing upfront collection of labour welfare cess, are valid? (Relates to the challenge to the Labour Cess collection). 3. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No.33 of 2004, are constitutional and valid? (Relates to the challenge to the statutory provision for fees). 4. Whether Notification No. UDD 3 TFP 2015 dated 25.02.2020, amending Rule 37-A and Rule 37-C of the Karnataka Planning Authority Rules, 1965, is valid? (Relates to the challenge to amended rules). 5. Whether Bye-law No.3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires? (Relates to the challenge to building bye-laws). Petitioner's Arguments: The petitioner argued that the demand notice and the underlying provisions, orders, notifications, and bye-laws were illegal and sought their quashing. They also sought directions to issue the building plan and license without insisting on payment of the disputed amounts. Revenue/State's Arguments: The judgment does not record specific arguments from the respondents. However, it notes that the issues raised are covered by previous binding decisions.
Sections Cited
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 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 No.BBMP/ Ad.Dir/JDNORTH/1003/20-21 dated 27.11.2020 at Annexure -F issued by the respondent No.4 in so far as the demand of Rs.18,98,969/-towards Scrutiny Fee, Rs.3,79,79,372/- towards License Fee, Rs.3,62,12,303/- towards Ground Rent and GST, Rs.2,71,28,123/- towards betterment fee, Rs.2,71,28,123/-towards security deposit, demand towards workers welfare fund(Labour Cess) of Rs.3,31,62,000/- and also 1% of HC-KAR NC: 2025:KHC:20830 the services charges payable to the Corporation from out of the Labour Welfare Fund are concerned. ii) Issue Writ of Certiorari quashing the Government Order issued by the 2nd Respondent bearing G.O.No.LD 300 LET 2006 dated 18.01.2007 and the corrigendum bearing No. LD 300 LET 2006 dated 28.02.2007 directing upfront collection of labour welfare cess, as contained in ANNEXURE-G
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.33 of 2004 by the 1 Respondent at Annexure-H in so far as 18-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 TFP 2015dated 25.02.2020 as contained in ANNEXURE-J in sofar as the amended Rule 37-A and Rule 37-C are concerned;
v) 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 framed under the Karnataka Municipal Corporations Act as unconstitutional, arbitrary, illegal and ultravires;
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 / Ad.Dir /JDNORTH/1003/20-21 dated 27.11.2020 at Annexure -F issued by the respondent No.4 without insisting for payment of demands stated above.
vii) Iissue any other appropriate writ or order or direction deemed fit in the circumstances of the case in the interest of justice and equity. HC-KAR NC: 2025:KHC:20830
The Co-ordinate Benches of this Court, in W.P.No.23086/2022 and connected matters(herein 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 and 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 HC-KAR NC: 2025:KHC:20830 illegal. It further quashed all related Circulars and declared Clause 3.8 of the BBMP 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 27.11.2020 issued by respondent No.4 as per Annexure-F is hereby set-aside. (iii) Respondent BBMP is hereby directed to issue fresh/modified plan as the case may be. HC-KAR NC: 2025:KHC:20830 (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. Pending applications, if any, are also disposed off. (SACHIN SHANKAR MAGADUM) JUDGE
DH List No.: 2 Sl No.: 27
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.