M/S Axis Concepts Capstone Private Limited vs. The State Of Karnataka
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The petitioner, M/s Axis Concepts Capstone Private Limited, filed a writ petition before the High Court of Karnataka challenging various provisions of the Karnataka Town and Country Planning Act, 1961, and related notifications, circulars, and government orders. The petitioner sought to quash Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended, along with notifications and circulars issued by the State and the Bruhat Bengaluru Mahanagara Palike (BBMP). Specifically, the petitioner challenged the insertion of Rules 37-A and 37-C, a circular dated 04.09.2015, another circular dated 14.08.2020, and a government order dated 18.01.2007 mandating upfront collection of labour welfare cess. The petitioner also sought to quash a demand notice dated 19.10.2020 issued by the Assistant Director, Town Planning East, BBMP, for various charges including Ground rent, GST on Ground rent, Betterment Charges, and Labour Cess.
Held
The Court allowed the writ petition, setting aside the impugned demand notice dated 19.10.2020 issued by respondent No. 5 (BBMP). The Court directed respondent No. 4 (BBMP) to issue a fresh/modified plan and to forthwith process the petitioner’s application for a building license and sanction of the building plan strictly in accordance with law. The Court noted that similar issues had been comprehensively adjudicated by co-ordinate benches in previous cases, specifically "M/s Sapthagiri Shelters" and "Sunderam Shetty". In "Sunderam Shetty", levies of Ground Rent, License Fee, Building License Fee, and Scrutiny Fee under relevant bye-laws were declared ultra vires the Act. In "M/s Sapthagiri Shelters", Karnataka Act No. 01 of 2022 and Karnataka Act No. 37 of 2024 were struck down for linking fees to market/guidance value, and related circulars and Clause 3.8 of the BBMP Building Bye-laws, 2003, pertaining to Ground Rent, were declared invalid. The Court found that the issues in the present petition were squarely covered by these binding decisions. The issuance of the building license and approval of the plan shall not be withheld pending any appeal by the BBMP, but if issued, will be subject to the outcome of any such appeal.
Key Issues
1. Whether Section 18-A(i) and (iv) of the Karnataka Town and Country Planning Act, 1961, as amended by Karnataka Act No. 23 of 2004, are ultra vires the Constitution. 2. Whether the notification inserting Rule 37-A and 37-C into the Karnataka Planning Authority Rules, 1965, is illegal. 3. Whether the circulars dated 04.09.2015 and 14.08.2020 issued by the BBMP, and the government order dated 18.01.2007 regarding labour welfare cess, are arbitrary and without jurisdiction. 4. Whether the demand notice dated 19.10.2020 issued by the BBMP for various charges including Ground rent, GST on Ground rent, and Betterment Charges is illegal. The petitioner argued that the impugned provisions, notifications, and circulars were illegal, without jurisdiction, and arbitrary. The respondents did not record any specific arguments in the judgment provided, but the Court relied on previous judgments to decide the matter.
Sections Cited
Section 18-A, Rule 37-A, Rule 37-C, Section 45-B
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER The petitioner is seeking for the following reliefs.
"i) Quash Section 18-A of The Karnataka Town And 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 Annxure-G1 in so far HC-KAR NC: 2025:KHC:20508 Section 18-A(i) And (iv) Of The Karnataka Act No.23 of 2004 is concerned.
ii) Quash the Notification issued by the 1st respondent bearing No.UDD 3 TTP 2015 dated 25.02.2020 as contained in Annexure-G insofar as the inserted Rule 37-A and 37-C is concerned.
iii) Quash the Circular dated 4.09.2015, bearing No.Heninayo/JD(N)/DM3/PR/320/2015-16 issued by the respondent No.4 (Annexure-E) in so far the petitioner is concerned.
iv) Quash the Circular dated 14.08.2020 bearing No.He.Ni.Ka.Pa.Ko/P.R/320/2020-21 issued by the respondent No.4 (Annexure-H) in so far the petitioner is concerned.
v) Quash The Government Order bearing No.LD/300/LET/2006 dated 18.01.2007 and the Corrigendum Order bearing No.LD/300/LET/2006 dated 28.02.2007 issued by the respondent No.2 mandating upfront collection of labour welfare cess (Annexure-F) in so far the petitioner is concerned.
vi) Quash the demand notice dated 19.10.2020 issued by the respondent No.5 (Annexure-D) for demanding in so far it is concerned to Ground rent, GST on Ground rent, Betterment Charges for building, Betterment Charges for Site, excess security deposit, revised license fee, revised scrutiny fee, cess for water supply scheme, surcharge for formation outer ring road, cess for improvement of slum HC-KAR NC: 2025:KHC:20508 surcharge for Mass Rapid Transport System, Labour Cess and etc., as Illegal, without juri iction and arbitrary.
vii) Direct the respondent Nos.4 and 5 - BBMP to issue the modified sanction plan with respect to the schedule property without insisting the Ground Rent, GST on Ground Rent, Betterment Charges For Building Betterment Charges For Site, Excess Security Deposit, Revised License Fee, Revised Scrutiny 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.
viii) 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 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, HC-KAR NC: 2025:KHC:20508 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. 4. 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 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. HC-KAR NC: 2025:KHC:20508
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 19.10.2020 issued by respondent No.5 as per Annexure-D is hereby set-aside.
(iii) Respondent No.4 - BBMP is hereby directed to issue fresh/modified plan as the case may be.
(iv) Respondent No.4 - BBMP is 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:20508 (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
NBM List No.: 2 Sl No.: 6
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.