M/S Sumuk Projects vs. The State Of Karnataka
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The petitioners, including M/s Architha Ventures LLP, M/s Sumuk Projects, and M/s Aryan Landmarks, filed writ petitions challenging demand notices issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) and its Joint Director. These notices demanded various fees, including scrutiny fees, license fees, betterment fees, security deposits, administrative charges, ground rent, and surcharges, often including 18% GST. The petitioners also challenged the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 1 of 2022), and Section 18-A of the Karnataka Town & Country Planning Act, 1961, as amended. The core of the challenge revolved around the legality and jurisdiction of these demands and the validity of the amending legislation.
Held
The Court allowed the writ petitions. It held that the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023 (Karnataka Act Nos. 01 of 2022 and 37 of 2024) were 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, applies only to development plans for plots exceeding 20,000 square meters, not smaller plots. It was also declared that if fees were already collected for change of land use or layout plan approval, no further fee should be levied for subsequent development plans. The linkage of fees to market or guidance value under Section 45-B of the Karnataka Stamp Act was declared illegal. Consequently, all impugned circulars and demand notices were quashed. Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye-laws, 2003, concerning 'Ground Rent', was also quashed. The Court directed the BBMP to issue fresh/modified plans and process applications for building licenses and plan sanctions strictly in accordance with law, subject to the outcome of any appeal filed by the BBMP.
Key Issues
1. Whether the demand notice dated 29.11.2022, issued by Respondent No. 4 in WP No. 24727/2022, demanding various fees including 18% GST, scrutiny fee, license fee, betterment fee, security deposit, lake rejuvenation fee, administrative charges, ground rent, road cutting fee, compound wall fee, water supply scheme fee, ring road fee, slum improvement fee, mass rapid transport system fee, and a 5% levy and surcharge, is illegal, without jurisdiction, and arbitrary? 2. Whether the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022), notified on 13.01.2022, is ultra vires the Constitution of India in so far as it concerns the petitioners? 3. Whether the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) is in violation or contrary to a previous decision of the High Court in W.P.No.4601/2020? 4. Whether Section 18-A of the Karnataka Town & Country Planning Act, 1961, brought into effect by Karnataka Act No.23 of 2004, specifically sub-sections (i) and (iv), is liable to be quashed? Petitioner's Arguments: The petitioners argued that the demand notices were illegal, without jurisdiction, and arbitrary. They contended that the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021, and Section 18-A of the Karnataka Town & Country Planning Act, 1961, were ultra vires the Constitution and in violation of previous court pronouncements. They also challenged the inclusion of GST on various fees and charges. Revenue/State's Arguments: The judgment does not explicitly record arguments made by the respondents (State of Karnataka and BBMP).
Sections Cited
Section 18 A, Rule 37-A, Rule 37-C, Section 45-B
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Heard together (3 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
ORDER DECLARING THAT THE ENTIRE KARNATAKA MUNICIPAL CORPORATIONS AND CERTAIN OTHER LAW (AMENDMENT) ACT, 2021 (KARNATAKA ACT NO.01 OF 2022) NOTIFIED ON 13.01.2022 (ANNEXURE-R) AS BEING ULTRA VIRES THE CONSTITUTION IN SO FAR THE PETITIONER ID CONCERNED IN SO FAR, THE PETITIONER IS CONCERNED AND ETC.
THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
ORAL ORDER The petitioners in W.P.No.24727/2022 are seeking for the following reliefs. HC-KAR NC: 2025:KHC:20506 "i. Issue a writ of certiorari or similar writ or order or direction to quash the demand notice dated 29/11/2022, bearing No.BBMP/Ad.com/RJH/1629/20-21 issued by Respondent No.4 vide ANNEXURE-A in so far it relates to the demand for payment of Scrutiny fee, License fee, KTCP ACT betterment fee for building, betterment fee for site area, security deposit, lake rejuvenation fee, Administrative charges, ground rent including 18% GST, Road cutting, compound wall fee, water supply scheme, Ring Road, improving the slum, mass rapid transport system, 5% levy and Collection of surcharge payable to BBMP produced at ANNEXURE-A as illegal without juri iction and arbitrary.
ii. To grant an order declaring that the entire Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No. 01 of 2022) notified on 13/01/2022ANNEXURE-V asbeing ultra vires the constitution of India in so far as petitioners are concerned.
iii. To declare that Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) notifiedon13/01/2022 ANNEXURE- V is in violation/contrary to the decision of this Hon'ble Court in W.P.No.4601/2020 (LB-BMP) which is at Annexure-T.
iv. Grant an order direction or writ in the nature of certiorari quashing the office Order No.Ha. Ni.Na. Yo/PR/461/2021-22 dated:-09/03/2022 issued by Respondent No.3 as contained in ANNEXURE-W in so far the Petitioners are concerned. HC-KAR NC: 2025:KHC:20506 v. Grant an order, direction or writ in the nature of Certiorari quashing section 18 A of the Karnataka Town & Country Planning act. 1961 brought into effect by Karnataka Act No.23 of 2004(Karnataka Town and Country Planning (Amendment) act 1998) as contained in ANNEXURE -N insofar as section 18-A(i) and (iv) of the 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 25/2/2020 vide ANNEXURE-M as contained insofar as the RUE 37 A and 37 C is concerned.
vii. Issue writ or order by way of certiorari quashing the circular date:-14/8/2020 bearing No. HE.NI.ΚΑ.ΡΑ.ΚO/PR/320/2020-21 issued by Respondent No.3 ANNEXURE-P in so far as the petitioners are concerned.
viii. Issue writ or order by way of certiorari quashing the Notification issued by Respondent No.1 bearing No. UDD 23 TTP 2020 (E) Dated21/6/2021 as contained in ANNEXURE -Q in so far as the inserted Rule 37 A and37 C is concerned.
ix. Issue writ or order by way of certiorari quashing the Circular date 24/06/2021 bearing No. HE.NI.NA.YO/PR/320/2021-22 issued by Respondent No.3 ANNEXURE-R in so far as the petitioners are concerned. HC-KAR NC: 2025:KHC:20506 x. Issue writ or order or direction by way of mandamus directing the Respondent No.3 and 4 BBMP to issue the sanction plan for construction of the residential apartment building in the schedule property without insisting the Scrutiny fee, License fee, KTCP ACT betterment fee for building, betterment fee for site area, security deposit, lake rejuvenation fee, Administrative charges, ground rent including 18% GST, Road cutting, compound wall fee, water supply scheme, Ring Road, improving the slum, mass rapid transport system, and xi. Issue any other appropriate writ or order or direction deemed fit in the circumstances of the case in the interest of justice and equity."
The petitioners in W.P.No.15443/2022 are seeking for the following reliefs. "i) Grant an order declaring that the entire Karnataka Municipal Corporations and Certain Other Law (Amendment)
13/01/2022 (ANNEXURE-R) as being ultra vires the Constitution in so far, the Petitioner is concerned in so far, the Petitioner is concerned. ii) To declare that Karnataka Municipal Corporations and Certain Other Law (Armendment) Act, 2021 (Karnataka is in violation/contrary to the decision of this Hon'ble Court in iii) Grant an order, direction or writ in the nature of certiorari quashing the Office Order No. HaNiNaYo/PR/461/2021-22 dated 09/03/2022 issued by HC-KAR NC: 2025:KHC:20506 Respondent No.3 as contained in (ANNEXURE-S) in so far, the Petitioner is concerned. iv) Grant an order, direction or writ in the nature of Certiorari quashing Section 18-A of the Karnataka Town & Country Planning Act, 1961 brought into effect by Karnataka (Amendment) Act, 1998) as contained in (ANNEXURE-J) insofar as Section 18-A(1) and (iv) of the 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 1st Respondent bearing No. UDD 3 TTP 2015 dated 25/02/2020 as contained in (ANNEXURE-H) insofar as the inserted Rule 37-A and 37-C is concerned; vi) Issue a writ or order by way of certiorari quashing the circular dated 14/08/2020, bearing No. He. Ni.Ka.Pa.Ko/P.R/320/2020-21 issued by the Respondent No.3 (Annexure-K) in so far the Petitioner is concerned. vii) Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 23 TTP 2020 (E) dated 21/06/2021 as contained in (ANNEXURE-L) insofar as the inserted Rule 37-A and 37-C is concerned; viii) Issue a writ or order by way of certiorari quashing the circular dated 24/06/2021, bearing No. He.Ni. Na. Yo/P.R/320/2020-21 issued by the Respondent No.3 (Annexure-M) in so far the petitioner is concerned.
ix) Issue a writ or order by way of certiorari quashing the demand notice dated 13/07/2022, bearing No.BBMP/Addl.Dir/JDNORTH/0088/21-22, issued by the Respondent No.4 (Annexure-D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, Betterment HC-KAR NC: 2025:KHC:20506 charges for site, security deposit, Lake Rejuvenation fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum, Surcharge for Mass Rapid Transport System, Labour cess and etc., as illegal, without juri iction and arbitrary. x) Issue a writ or order or direction by way of mandamus directing the respondent Nos.3 and 4 BBMP to issue the sanction plan for construction of the Apartment Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, Betterment charges for site, security deposit, Lake Rejuvenation fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum and Surcharge for Mass Rapid Transport System, Labour cess and xi) pass any such other order(s) as this Hon'ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity"
The petitioner in W.P.No.23250/2022 is seeking for the following reliefs. "i) Grant an order declaring that the entire Karnataka Municipal Corporations and Certain Other Law (Amendment)
13/01/2022 (ANNEXURE-R) as being ultra vires the Constitution in so far, the Petitioner is concerned in so far, the Petitioner is concerned.
ii) To declare that Karnataka Municipal Corporations and Certain Other Law (Armendment) Act, 2021 (Karnataka is in violation/contrary to the decision of this Hon'ble Court in - 12 -
HC-KAR NC: 2025:KHC:20506 iii) Grant an order, direction or writ in the nature of certiorari quashing the Office Order No. HaNiNaYo/PR/461/2021-22 dated 09/03/2022 issued by Respondent No.3 as contained in (ANNEXURE-S) in so far, the Petitioner is concerned. iv) Grant an order, direction or writ in the nature of Certiorari quashing Section 18-A of the Karnataka Town & Country Planning Act, 1961 brought into effect by Karnataka (Amendment) Act, 1998) as contained in (ANNEXURE-J) insofar as Section 18-A(1) and (iv) of the 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 1st Respondent bearing No. UDD 3 TTP 2015 dated 25/02/2020 as contained in (ANNEXURE-H) insofar as the inserted Rule 37-A and 37-C is concerned; vi) Issue a writ or order by way of certiorari quashing the circular dated 14/08/2020, bearing No. He. Ni.Ka.Pa.Ko/P.R/320/2020-21 issued by the Respondent No.3 (Annexure-K) in so far the Petitioner is concerned. vii) Grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 23 TTP 2020 (E) dated 21/06/2021 as contained in (ANNEXURE-L) insofar as the inserted Rule 37-A and 37-C is concerned; viii) Issue a writ or order by way of certiorari quashing the circular dated 24/06/2021, bearing No. He.Ni. Na. Yo/P.R/320/2020-21 issued by the Respondent No.3 (Annexure-M) in so far the Petitioner is concerned. ix) Issue a writ or order by way of certiorari quashing the demand notice dated 09/11/2022, bearing No.BBMP/Addl.Dir/JDNORTH/0086/21-22, issued by the Respondent No.4 (Annexure-D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, License fee, HC-KAR NC: 2025:KHC:20506 scrutiny fee, Betterment charges for building, Betterment charges for site, security deposit, Lake Rejuvenation fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum, Surcharge for Mass Rapid Transport System, Labour cess and etc., as illegal, without juri iction and arbitrary. x) Issue a writ or order or direction by way of mandamus directing the Respondent No.3 and 4 BBMP to issue the sanction plan for construction of the Apartment Building in the Schedule Property without insisting the Ground rent, GST on Ground rent, License fee, scrutiny fee, Betterment charges for building, Betterment charges for site, security deposit, Lake Rejuvenation fee, Cess for water supply scheme, Surcharge for formation outer ring road, Cess for improvement of slum and Surcharge for Mass Rapid Transport System, Labour cess and xi) Pass any such other order(s) as this Hon'ble Court deems fit in the facts and 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 Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka Municipal Corporations and Certain Other Law HC-KAR NC: 2025:KHC:20506 (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. (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’ HC-KAR NC: 2025:KHC:20506 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 citizens of Bengaluru. This would also augment the present situation." HC-KAR NC: 2025:KHC:20506
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 layout plan, no further fee shall be levied for subsequent HC-KAR NC: 2025:KHC:20506 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 the 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. HC-KAR NC: 2025:KHC:20506
In view of the above, this Court proceeds to pass the following; ORDER (i) The writ petitions are allowed. (ii) The impugned demand notice dated 29.11.2022 issued by respondent No.4 as per Annexure-A, is hereby set-aside in W.P.No.24727/2022. (iii) The impugned demand notice dated 13.07.2022 issued by respondent No.4 as per Annexure-D, is hereby set-aside in W.P.No.15443/2022. (iv) The impugned demand notice dated 09.11.2022 issued by respondent No.4 as per Annexure-D, is hereby set-aside in W.P.No.23250/2022. (v) Respondent Nos.3 and 4 are hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent Nos.3 and 4 are hereby directed to forthwith process the petitioners' application seeking building license and HC-KAR NC: 2025:KHC:20506 sanction of the building plan, strictly in accordance with law. (v) 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. (vi) 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
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