Bharathi Housing Factory vs. State Of Karnataka

Facts

The petitioner, Bharathi Housing Factory, a partnership firm, filed a writ petition challenging a demand notice dated November 6, 2020, issued by the Joint Director, Town Planning (South), Bruhat Bangalore Mahanagara Palike (BBMP). The demand notice included various charges such as Ground Rent, GST, License Fee, Betterment Fee, Security Deposit, Surcharge, and Labour Cess, totaling over Rs. 4.7 Crores. The petitioner sought to quash this demand notice and also challenged the constitutional validity of Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, a Government Order dated January 18, 2007, and a corrigendum dated February 28, 2007, concerning labour welfare cess, and provisions of Section 18-A of the Karnataka Town and Country Planning Act, 1961. Additionally, the petitioner challenged Notification No. UDD 3 TTP 2015 dated February 25, 2020, concerning amended Rules 37-A and 37-C. The petitioner prayed for directions to issue a building plan and license without insisting on the payment of the disputed demands.

Held

The Court held that the issues raised in the present writ petition are squarely covered by previous binding decisions of coordinate benches of the High Court in W.P.No.23086/2022 (M/s Sapthagiri Shelters) and W.P.No.36017/2018 (Sunderam Shetty). In Sunderam Shetty, the court declared levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws as ultra vires the Act and quashed related 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 illegal, and quashed related circulars and Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent. Consequently, the impugned demand notice dated November 6, 2020, issued by respondent No.4 was set aside. Respondents No. 3 and 4 were directed to issue a fresh/modified plan and forthwith process the petitioner's application for a building license and sanction of the building plan strictly in accordance with law. The issuance of the license and plan shall not be withheld due to any contemplated appeal by the BBMP, but will be subject to the outcome of any such appeal.

Key Issues

1. Whether the demand notice dated November 6, 2020, issued by the respondent No. 4, demanding various charges including GST, Ground Rent, License Fee, Betterment Fee, Security Deposit, Surcharge, and Labour Cess, is liable to be quashed? (This issue turns on the validity of the underlying bye-laws, government orders, and statutory provisions under which these demands were raised). 2. Whether Bye-law No. 3.9 of the Bangalore Mahanagara Palike Building Bye-laws, 2003, is unconstitutional, arbitrary, illegal, and ultravires? (This issue concerns the legislative competence and reasonableness of the bye-law). 3. Whether the Government Order bearing G.O.No.LD 300 LET 2006 dated January 18, 2007, and its corrigendum dated February 28, 2007, directing upfront collection of labour welfare cess, are illegal? (This issue concerns the legality of the government's directive). 4. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, are unconstitutional? (This issue concerns the validity of the statutory provision). 5. Whether Notification No. UDD 3 TTP 2015 dated February 25, 2020, amending Rules 37-A and 37-C, is illegal? (This issue concerns the validity of the amended rules). Petitioner's Arguments: The petitioner sought to quash the demand notice and challenged the constitutional validity of the bye-laws, government orders, and statutory provisions. The petitioner relied on previous judgments of the High Court that had adjudicated similar issues. Respondents' Arguments: The judgment does not record specific arguments from the respondents. It notes that the issues raised are squarely covered by previous binding decisions.