SHREYAS .S v. THE STATE OF KARNATAKA

(BY SRI. H.K. KEMPE GOWDA, AGA FOR R1 AND R2; SRI/SMT. V. SREENIDHI, ADVOCATE FOR R3 AND R4) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE CIRCULAR DATED 14TH AUGUST 2020, DEMANDING PAYMENT OF EXCESSIVE AND UNREASONABLE BETTERMENT / DEVELOPMENT FEE ON SITAL AREA AND SANCTIONED FLOOR AREA, AS CONTAINED IN ANNEXURE-D AND THE DEMAND NOTICE ISSUED BY THE R-4, ASSISTANT DIRECTOR TOWN PLANNING, DATED 22ND SEPTEMBER 2020, AS CONTAINED IN ANNEXURE-E AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The captioned petition is filed seeking the following - 3 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR reliefs: "i. Grant an Order, Direction or Writ in the nature of Certiorari quashing the Circular dated 14th August 2020, Bearing No. H.N.K.P.K/P.R/320/2020-21 demanding payment of excessive and unreasonable Betterment/ Development Fee on Sital Area and Sanctioned Floor Area, as contained in ANNEXURE 'D'; and the Demand Notice issued by the Respondent No. 4. Assistant Director Town Planning, bearing No. A.D.T.P.(East)/P.R/313/2020- 21 dated 22nd September 2020, as contained ANNEXURE 'E'. ii. Grant an Order, Direction or Writ in the nature of Mandamus, directing the Respondents to issue the Sanction Plan for construction of additional Commercial Building at the Schedule Property in favour of the Petitioner; iii. 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 Bye-Laws, 2003, is suitably amended and approved by the state Government; iv. Declare that the Respondents has no authority to collect the taxes under the guise of collection of Betterment/ Development Fee and Levy & Surcharge Fee under various heads, without sanction by Government; - 4 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR v. Issue Writ in the nature of Mandamus directing the Respondent No. 4 to collect the Betterment/ Development Fee as specified in the Karnataka Planning Authority Rules, 1965, prior to issuance of alleged Circulated dated 14th August 2020; vi. Declare that the Respondents have no authority to collect Betterment/ Development Fee on the Sital Area in accordance with the amended Rule 37 - A(1)(a) in accordance with the Circular dated 14th August 2020 at ANNEXURE 'D' and similarly, the Corporation has no authority to collect exorbitant Betterment/ Development Fee on the Sanctioned Floor Area relying on the alleged Circular; and vii. Grant such other Relief/s as this Hon'ble Court may deem fit to Grant, including cost of the Petitioner, in the facts and 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.23086/2022 and connected matters. The Co-ordinate Bench, while deciding the issue, has set-aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022) and the Karnataka - 5 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024). Therefore, this Court deems it fit to cull out the operative portion of the order, which reads as under; "ORDER (i) The writ petitions are partly allowed. (ii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022), is hereby quashed and set aside. (iii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024), is hereby quashed and set aside. (iv) It is hereby declared that the provisions contained in Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only in respect of ‘Development Plan’ containing the proposal for construction on plots measuring more than 20,000 square meters in extent and not in respect of plots measuring less than 20,000 square meters. (v) It is hereby declared that if fee has been earlier collected for change of land use or while approving a layout plan, fee shall not be collected for subsequent ‘Development Plan’ in terms of the ‘Note’ - 6 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR found below TABLE I of Rule 37-A of the Karnataka Planning Authority Rules, 1965. (vi) It is hereby declared that the linking of the fee leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to the ‘market value’ or ‘guidance value’ as determined under Section 45-B of the Karnataka Stamp Act, 1957, is illegal. However, liberty is reserved to the respondent-State Government and the BBMP to re-fix a standard after collecting empherical data. (vii) Consequently, all the impugned Circulars which seek to give effect to the Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are hereby quashed and set aside. (viii) It is hereby declared that Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye- laws, 2003, providing ‘Ground Rent’, illegal and are accordingly quashed and set aside. (ix) Consequently, all the impugned Demand Notices raised by the respondent-BBMP, in respect of the writ petitioners herein are also quashed and set aside. It would be advisable that the BBMP may come out with a scheme for ‘One Time Settlement’ and settle the levy and collect the fee generally acceptable to the citizens of Bengaluru. This would also augment the present situation." - 7 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR

#3. In the present writ petition, the core issue raised stands substantially covered and decided by authoritative pronouncement of the coordinate bench, wherein the writ petitions were partly allowed and several consequential reliefs were granted. The Hon’ble Court, in unequivocal terms, quashed and set aside the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023 (Karnataka Act Nos.01 of 2022 and 37 of 2024 respectively).

#4. The Court further declared that the provisions under Section 18-A of the Karnataka Town and Country Planning Act, 1961, read with Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are applicable only to development proposals concerning plots exceeding 20,000 square meters, and not to smaller plots. Importantly, it was also held that if a fee has been previously collected for change of land use or approval of layout plan, no further fee shall be levied for subsequent - 8 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR development plans, in view of the explanatory 'Note' to Table I of Rule 37-A.

#5. The Court declared illegal the linkage of such levies to market or guidance value under Section 45-B of the Karnataka Stamp Act, and consequently, quashed all Circulars and demand notices issued to give effect to such unlawful interpretations. Clause 3.8 of the BBMP Building Bye-laws, 2003, imposing 'Ground Rent', was also struck down.

#6. In view of these comprehensive declarations and findings, it is submitted that the controversy raised in the present writ petition no longer survives for adjudication independently, as it is squarely covered by the binding judgment of the coordinate bench. In the light of the law laid down in the reported judgment, substantially covering the issue, which is raised in the captioned writ petition, the writ petition is liable to be allowed strictly aligning to the operative portion of the said writ petition. - 9 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR

#7. 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

22.09.2020 issued by respondent No.4 as per Annexure-E 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 to forthwith process the 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 of the plan shall not be withheld merely on the ground that the BBMP is contemplating to file a writ appeal against the reported judgment. (vi) If the building license and sanction plan are issued, the same shall be subject to the - 10 - NC: 2025:KHC:24620 WP No. 12881 of 2020 HC-KAR outcome of any appeal that may be filed by the BBMP against the said judgment. Pending applications, if any, also stand disposed of. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE ALB List No.: 1 Sl No.: 93