M/S Bhartiya City Developers Private Limited vs. State Of Karnataka

Issue a Writ in the nature of Certiorari or any other appropriate Writ of like nature or direction, declaring the Bye law No.3.9 of the Bangalore Mahanagara Palike Building Bye- laws 2003 (ANNEXURE-A) as unconstitutional, illegal and ultra vires; 2 Issue a Writ in the nature of Certiorari or any other appropriate Writ, Order or Direction, quashing the Demand Notice bearing No. JDTP(N)/LP/25/2010-11 dated 24.07.2018 (Annexure-B) issued by Respondent No. 3, in so far as it relates to claim made for payment of Ground Rent amounting to Rs.1,37,47,619/- (Rupees One Crore Thirty Seven Lakh Forty Seven Thousand Six Hundred and Nineteen only), CGST on Ground Rent amounting to Rs. 12,37,286/- (Rupees Twelve Lakh Thirty Seven Thousand Two Hindered and Eighty Six Only) and SGST Ground Rent HC-KAR NC: 2025:KHC:21704 amounting to Rs.12,37,286/- (Rupees Twelve Lakh Thirty Seven Thousand Two Hundred and Eighty Six Only);

Issue a Writ in the nature of Mandamus, or any other appropriate writ, order or direction, directing the Respondents No.2 and 3 to refund Petitioner a sum of Rs. 1,37,47,619/- (Rupees One Crore Thirty Seven Lakh Forty Seven Thousand Six Hundred and Nineteen only) collected towards Ground Rent, Rs.12,37,286/- (Rupees Twelve Lakh Thirty Seven Thousand Two Hundred and Eighty Six Only) collected towards CGST on Ground Rent and Rs.12,37,286/- (Rupees Twelve Lakh Thirty Seven Thousand Two Hundred and Eighty Six Only) collected towards SGST, totally amounting Rs.1,62,22,191/- (Rupees One Crore Sixty Two Lakh Twenty Two Thousand One Hundred and Ninety One only) which was demanded and collected/received from the Petitioner, by making it as a pre-requisite condition vide Demand Notice dated 24.07.2018 at ANNEXURE-B, for issuance of Occupancy Certificate sought for by the Petitioner, with interest at 24% P.A., from the date of receipt till its payment to the Petitioner; HC-KAR NC: 2025:KHC:21704 Grant such other and further relief/s, including costs of this Petition, as this Hon'ble Court deems fit, in the facts and circumstances of the case, in the interests 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.36017/2018 and connected matters. The Co-ordinate Bench, while deciding the issue, has held that the bye-laws under which Ground Rent, License Fee, Building License fee, Scrutiny fee are levied are ultra vires the Act. The Co-ordinate Bench also quashed the circular dated 04.09.2015 and Government circulars dated 27.01.2017 and 30.03.2017. Therefore, this Court deems it fit to cull out the operative portion of the order, which reads as under; "O R D E R (a) All the Writ Petitions are allowed. (b) The bye-laws under which Ground Rent, Licence Fee, Building Licence Fee, Scrutiny Fee, HC-KAR NC: 2025:KHC:21704 Security Deposit are all held ultravires the Act and are resultantly rendered unenforceable.

In the considered view of this Court, the issues raised in the present writ petition stand squarely covered by the authoritative pronouncement rendered by the Co- ordinate Bench of this Court in W.P.No.36017/2018 and connected matters. The Co-ordinate Bench, after examining the statutory framework and the impugned levy mechanisms adopted by the BBMP, categorically held that the imposition of Ground Rent, Licence Fee, Building HC-KAR NC: 2025:KHC:21704 Licence Fee, Scrutiny Fee, and Security Deposit lacked statutory sanction and were ultra vires the Karnataka Municipal Corporations Act, 1976. The Co-ordinate Bench further held that Clause 3.8 of the BBMP Building Bye-laws, 2003, which provided for imposition of Ground Rent, was also devoid of legal authority and consequently struck it down. The Court also quashed the impugned Circular dated 04.09.2015 issued by respondent No.4, as well as the Government Orders dated 27.01.2017 and 30.03.2017, which had directed collection of such fees without statutory backing. With specific reference to labour welfare cess, the Co-ordinate Bench upheld the competence of the State to levy the cess under the Building and Other Construction Workers’ Welfare Cess Act, 1996, but set aside the directive mandating its upfront collection through Government Orders dated 18.01.2007 and 28.02.2007, thereby rendering the demand raised in anticipation of sanction of building plans unlawful. The Co-ordinate Bench also clarified that the HC-KAR NC: 2025:KHC:21704 only charging provision available under the Act was sub- section (20-b) of Section 423, which merely enabled collection of fees for services relating to burial grounds and crematoria, and could not be relied upon for the imposition of unrelated charges such as ground rent or scrutiny fee. In light of these clear and binding findings, the controversy raised in the present writ petition does not survive for independent adjudication, as the grievance of the petitioner is directly addressed and resolved by the said judgment. Therefore, this Court is of the considered opinion that the present writ petition deserves to be allowed by applying the ratio and operative portion of the judgment rendered in W.P.No.36017/2018 and connected matters.

In view of the above, this Court proceeds to pass the following; ORDER (i) The writ petition is allowed. HC-KAR NC: 2025:KHC:21704 (ii) The impugned demand notice dated 24.07.2018 issued by respondent No.3 as per Annexure-B is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue Occupancy Certificate in accordance with law in compliance of the construction strictly adhering to the approved building plan.