THE BENGALURU COMMERCIAL TRANSPORTERS CREDIT CO-OPERATIVE SOCIETY LTD. v. THE STATE OF KARNATAKA

(BY SRI H. DEVENDRAPPA, ADVOCATE FOR R-1 TO R-5) …RESPONDENTS * * * THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENT NOS.4 AND 5 TO REFUND IMMEDIATELY THE AMOUNT COLLECTED IN THE HEADS SUCH AS GROUND RENT, GST ON GROUND RENT, BETTERMENT FEE, SCRUTINY FEE FOR BUILDING GST ON BETTERMENT FEE LAKE REJUVENATION FEE, COMPOUND WALL FEE, WATER SUPPLY SCHEME (BWSSB) RING ROAD(BDA) IMPROVING THE SLUMS (KSCB) LABOUR CHARGES MASS RAPID TRANSPORT SYSTEM (BDA) AND 5 PERCENT LEVY SERVICE CHARGES PLAYABLE TO BBMP AND ETC. THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM CORAM: ORAL ORDER Caption petition is filed seeking the following reliefs :- "i) Grant an order direction or writ in the nature of Mandamus directing the 4th & 5th Respondent to refund immediately the amount collected under the - 3 - NC: 2025:KHC:23239 WP No. 18675 of 2021 HC-KAR heads such as Ground rent, GST on Ground rent, Betterment Fee, Scrutiny fee for building, GST on Betterment fee, Lake Rejuvenation Fee, Compound wall Fee, Water supply scheme (BWSSB), Ring road(BDA), improving the slums, (KSCB), Labour charges, Mass Rapid Transport System(BDA) and 5% Levy service charges payable to BBMP. ii) Issue writ or order direction by way of Mandamus directing the Respondents 4 and 5 to refund the amount of Rs. 9,58,190 collected towards Mass Rapid Transport System, Labour cess amount of Rs. 98,000/-(Ninety Eight Thousand only)etc., and iii) Pass any such other order/s as this Hon'ble Court may deem fit in the facts and circumstances of the case in the interest 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 - 4 - NC: 2025:KHC:23239 WP No. 18675 of 2021 HC-KAR 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. (e) Imposition of labour cess under the Welfare Cess Act is upheld, but its demand for payment - 5 - NC: 2025:KHC:23239 WP No. 18675 of 2021 HC-KAR 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 refund of the amounts, in accordance with law and the findings of this Court. - 6 - NC: 2025:KHC:23239 WP No. 18675 of 2021 HC-KAR (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. "

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 held that Clause 3.8 of the BBMP Building Bye-laws, 2003, which provided for imposition of Ground Rent, was also - 7 - NC: 2025:KHC:23239 WP No. 18675 of 2021 HC-KAR 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 be relied upon for the imposition of unrelated charges such as ground rent or scrutiny fee. In light of these clear and - 8 - NC: 2025:KHC:23239 WP No. 18675 of 2021 HC-KAR 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.

Pending applications, if any, are also disposed off. SD/- (SACHIN SHANKAR MAGADUM) JUDGE NG List No.: 2 Sl No.: 20