Adarsh Developers vs. State Of Karnataka
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Cause title — parties, addresses and appearances
ORAL ORDER
The petitioners have sought for a writ in the nature of certiorari to quash the demand notice dated 21.03.2021 issued by the respondent No.3 in so far as it relates to the demands made in Account reference Nos.182, 191, 546 and 493 regarding scrutiny fee, ground rent, upfront collection of labour welfare fee and security deposit. They have also sought for a writ in the nature of mandamus to direct respondent Nos.2 and 3 to issue occupancy certificate for the project without insistence of payment of scrutiny fee, ground rent, upfront collection of labour welfare fee and security deposit.
The petitioners contend that they were sanctioned with a development plan to develop a residential complex in properties bearing survey Nos. 177/1P, 180/2, 181/1, 182 and 183/1, 181/2, 179/1, 179/2, 179/3A, 179/3B, 179/4, 179/5 and 185/P and Sy.No.180/1, situate at Kannamangala Village, Bidarahalli Hobli, Bengaluru East Taluk, Bengaluru Urban District. They were also granted a partial occupancy certificate. After the building was complete in all respects, the petitioners filed an application for issuance of an occupancy certificate. The HC-KAR
CNR: KAHC010216792023 NC: 2026:KHC:41580 WP No. 9172 of 2023
respondent No.3 issued a demand notice dated 21.03.2023 demanding the following charges: ACCOUNT REFERENCE DETAILS AMOUNT 182 Scrutiny Fee 5,65,955.00 191 Ground Rent 31,12,756.00 189 Development Fee 25,153.00 183 Plan paper fee 96,000.00 199 Lake Rejuvenation Fee 24,55,960.00 188 Penalty/Fine for building constructed without commencement certificate 6,91,723.00 188 Penalty/Fine for taking possession without obtaining possession letter/certificate 6,91,723.00 Total Amount 76,39,270.00 CGST @ 9% 6,87,534.00
SGST @ 9% 6,87,534.00 546 Labour Welfare Fund 8,79,872.00 493 Security Deposit 6,28,840.00 198 Round off 07.00
Total Amount Payable 1,05,23,100.00 Rupees One Crore Five Lakh Twenty Three Thousand One Hundred only
Being aggrieved by the same, the petitioners are before this Court. HC-KAR
CNR: KAHC010216792023 NC: 2026:KHC:41580 WP No. 9172 of 2023
The petitioners contend that the Bruhat Bengaluru Mahanagara Palike (henceforth referred to as 'BBMP') had issued a circular bearing No. ºÉ¤£ÀAiÉÆÃ/eÉ.r(G)/rJªÀiï3/¦Dgï/320/2015-16 dated 04.09.2015 prescribing the ground rent, scrutiny fee etc. payable in respect of obtaining a sanction plan for construction of residential and commercial buildings. The respondent No.2 issued a circular bearing No.¨ÉA.C.¥Áæ/DAiÀÄÄPÀÛgÀÄ/n-274/2015-16 dated 16.10.2015 adopting the above circular. They contend that the circular dated 04.09.2015 issued by the BBMP was challenged before this Court in a batch of writ petitions and vide judgment dated 04.08.2021 in W.P.No.4601/2020 and connected matters, this Court quashed the BBMP circular as being ultra vires.
It is contended that in W.P.No.7012/2019, this Court vide order dated 31.05.2022 quashed the notification bearing No.¨ÉA.C.¥Áæ/DAiÀÄÄPÀÛgÀÄ/n-274/2015-16 dated 16.10.2015. The petitioners therefore contend that the impugned demand made by the respondent No.3 has no statutory basis and hence is bad in the eyes of law. HC-KAR
CNR: KAHC010216792023 NC: 2026:KHC:41580 WP No. 9172 of 2023
The learned counsel for the petitioners contended that the issues raised in this writ petition is no longer res integra in view of the judgment of this Court in W.P.No.5188/2022 He therefore prays that this petition be disposed of on similar lines.
The learned counsel for the respondent Nos.2 and 3 do not dispute the fact that similar questions of fact and law were considered by this Court in W.P.No.5188/2022 and it was held that the respondent No.3 has no authority to demand and collect ground rent or scrutiny fee or security deposit link to the market value of the property. Further, it was held that the respondent No.3 cannot demand the upfront labour cess and that it is entitled to demand and collect labour cess only in accordance with Rule 4 of the Building and Other Construction Workers' Welfare Cess Rules, 1998 (for short ' Cess Rules, 1998')
In view of the above, the following order is passed: ORDER i. The petition is allowed in part; HC-KAR
CNR: KAHC010216792023 NC: 2026:KHC:41580 WP No. 9172 of 2023
ii. The impugned demand made by the respondent No.3 demanding, ground rent, scrutiny fee and security deposit is set aside. The respondent No.2 shall issue the occupancy certificate to the petitioners, if they give an undertaking that they will abide by any decision that may be passed by the Division Bench of this Court in W.A.No.1226/2025, subject to just exceptions; iii. It is open for the respondent No.3 to raise a fresh demand, demanding the Labour Welfare Fund in accordance with Rule 4 of the Cess Rules, 1998. iv. This is however subject to the outcome of W.A.No.1226/2025 filed against the order passed in W.P.No.23086/2022 and connected writ petitions. (R. NATARAJ) JUDGE
BKN/List No.: 1 Sl No.: 35
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.