M/S. TRAAN BUILDING BEYOND PVT. LTD. v. STATE OF KARNATAKA

(BY SMT. SPOORTHY V., H.C.G.P. FOR R-1 AND R-2; BBMP, BENGALURU SERVED; R-3-JOINT DIRECTOR (TOWN PLANNING-SOUTH), BENGALURU SERVED) …RESPONDENTS * * * THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE DEMAND NOTICE DATED 11-1-2021 AT ANNEXURE-C ISSUED BY THE RESPONDENT NO.3 ONLY IN SO FAR AS THE DEMAND OF RS.8,84,928/- TOWARDS GROUND RENT AND GST AT 18 PERCENT ON THE GROUND RENT AT RS.1,59,287/- SCRUTINY FEE OF R.29,498/- AND ETC. THIS WRIT PETITION, 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 Caption petition is filed seeking the following reliefs :- "i) issue a writ of certiorari or similar writ or order or direction demand notice No.BBMP/Addl. Dir/JD South/LP/ 0033/2012- 13 dated 11.01.2021 at Annexure -C issued by the respondent No.3 only in so far as the demand of Rs.8,84,928/- towards ground rent and GST at 18% - 3 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR on the ground rent at Rs.1,59,287/- Scrutiny Fee of Rs.29,498/- ii) Issue a writ of Mandamus or any other appropriate writ or order or direction declaring that Bye-law No.3.9 in the Bangalore Mahanagara Palike Building Bye-laws, 2003 as unconstitutional, arbitrary, illegal and ultravires; iii) issue writ of mandamus or similar writ or order or direction directing the respondent Nos. 2 and 3 to issue occupancy certificate pursuant to the demand notice No. BBMP/Addl. Dir/JD South/LP/0033/2012-13 dated 11.01.2021 at Annexure - C without insisting for payment of Rs.8,84,928/- towards ground rent and GST at 18% on the ground rent at Rs.1,59,287/- Scrutiny Fee of Rs.29,498/-. iv) issue any other appropriate writ or order or direction as deemed fit in the circumstances of the case, in the interest of justice and equity."

#2. 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 - 4 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR 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, Security Deposit are all held ultravires the Act and are resultantly rendered unenforceable. (c) The Circular bearing No.ºÉ¤£ÀAiÉÆÃ/eÉ.r(G)/rJªÀiï3/¦Dgï/320/2015-16 dated 04.09.2015 stands quashed. (d) The Circular bearing No.£ÀCE 36 ¨ÉªÀÄ¥Áæ 2016 (¨sÁUÀ) dated 27.01.2017 and the Circular bearing No. ºÉ¤£ÀAiÉÆÃ/¦Dgï/1533/2016-17

30.03.2017 demanding Lake Rejuvenation Fee are quashed. - 5 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR (e) Imposition of labour cess under the Welfare Cess Act is upheld, but its demand for payment upfront in terms of Government Orders dated

18.01.2007 and 28.02.2007 stands quashed. (f) The State or the BBMP is not precluded from bringing in the impugned levies under the provisions of the Act or the Rules by making suitable amendments to the Act and the Rules. 368 (g) Petitioners in all these petitions who have deposited certain amounts in terms of the interim order passed by this Court before this Court are entitled to refund of the amounts so deposited. (h) Insofar as refund in other cases who have paid to the Corporation under protest, they shall be entitled to such refund only if the same is not collected from the consumers of the apartments, businesses as the case would be. (i) Insofar as all other payments made, they would all be at liberty to give representation to the BBMP and the BBMP would consider the - 6 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR refund of the amounts, in accordance with law and the findings of this Court. (j) If representations are made by the petitioners for refund, the BBMP shall pass appropriate orders within 12 weeks the date of such representations. In view of disposal of the petitions, all pending Interlocutory Applications also stand disposed."

#3. 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 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 - 7 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR 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 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 - 8 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR 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 judgment rendered in W.P.No.36017/2018 and connected matters.

#4. In view of the above, this Court proceeds to pass the following; ORDER (i) The writ petition is allowed. (ii) The impugned demand notice dated

11.01.2021 issued by respondent No.3 as per Annexure-C is hereby set-aside. (iii) Respondent - BBMP is hereby directed to issue Occupancy Certificate in accordance - 9 - NC: 2025:KHC:23241 WP No. 1545 of 2021 HC-KAR with law in compliance of the construction strictly adhering to the approved building plan. (iv) Respondent- BBMP is hereby directed to forthwith process the petitioner's application seeking occupancy certificate, strictly in accordance with law. (v) It is made clear that the issuance of the certificate shall not be withheld merely on the ground that the BBMP is contemplating to file an appeal against the reported judgment. (vi) If occupancy certificate is 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. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NG List No.: 2 Sl No.: 2