SRI DILIP SURANA v. STATE OF KARNATAKA

(BY SMT. SPOORTHY V., H.C.G.P. FOR R-1; SRI AMIT DESHPANDE, ADVOCATE FOR R-2 AND R-3) …RESPONDENTS * * * THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE CIRCULAR ISSUED BY RESPONDENT NO.2 DATED 4-9-2015 LEVYING FEES FOR ISSUE OF I.T./B.T./APARTMENTS BUILDING LICENCE/SANCTION PLANE AS CONTAINED IN ANNEXURE-A AND THE DEMAND NOTICE ISSUED BY RESPONDENT NO.3 DATED 21-3-2018 VIDE ANNEXURE-B 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. WHEREFORE the Petitioner respectfully prays that this Hon'ble Court may be pleased to: Grant an order, direction or writ in the nature of Certiorari quashing the circular issued by the 2nd Respondent Commissioner bearing No. No.ANUP/J.D.(N)/DM3/PR/320/2015-16 dated 04-09-2015 levying - 3 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR I.T./B.T./Apartments Building Licence/Sanction Plane as contained in ANNEXURE the Demand Notice issued by the 3rd Respondent bearing No. BBMP/Addl. Dir/JD North/0300/2017-18 dated 21-03-2018 as contained in ANNEXURE - B. ii. Grant an order, direction or writ in the nature of Mandamus, directing the Respondents to issue the Building License/Plan for construction of Multistoried Residential Apartments to the Petitioner by collecting License fees only as was existing prior to 04-09-2015; iii. Grant an order, direction to declare that the ground rent, licence fee etc., levy on the basis of market value of the property, as per guideline value fixed under Section 45(B) Karnataka Stamp Act 1957 as bad in law; iv. Declare that the Commissioner of BBMP has no authority to impose/levy fee on the basis of market value of property fixed under Section 45 (B) of the Karnataka Stamp Act 1957, unless Bengaluru Mahanagara Palike building Byelaws 2003 is suitably amended and approved by the State Government. v. Declare that the Corporation has no authority to collect the taxes under the guise of collection of License fee under various heads, without sanction by the Government; vi. Issue writ in the nature of Mandamus directing the - 4 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR Respondents No. 2 and 3 to collect the fees as specified in the Bengaluru Mahanagara Palike Building Byelaws 2003 only; vii. Declare that the ground rent levied on the Petitioner for obtaining building License as bad in law, since the Petitioner is not using the public land/property for stocking of building materials for construction purposes. viii. And grant such other relief or reliefs as this Hon'ble Court may deem fit to grant 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 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; - 5 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR "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. (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 - 6 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR 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 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 - 7 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR 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 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 - 8 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR 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 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; - 9 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR ORDER (i) The writ petition is allowed. (ii) The impugned demand notice dated

21.03.2018 issued by respondent No.3 as per Annexure-B is hereby set-aside. (iii) Respondent- BBMP is hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent- BBMP is hereby directed forthwith process petitioner's application seeking building license and 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 - 10 - NC: 2025:KHC:23478 WP No. 37205 of 2018 HC-KAR that may be filed by the BBMP against the judgment.

#5. Pending applications, if any, are also disposed off. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NG List No.: 2 Sl No.: 1