- 1 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE N S SANJAY GOWDA WRIT PETITION NO. 28360 OF 2015 (LB-BMP) C/W WRIT PETITION NO. 35308 OF 2015 (LB-BMP) WRIT PETITION NO. 35410 OF 2015 (LB-BMP) WRIT PETITION NO. 16376 OF 2017 (LB-BMP) IN WP No. 28360/2015 BETWEEN: 1. SOBHA LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT1956 AND HAVING ITS OFFICE AT, SARJAPUR-MARTHAHALLI OUTER RING ROAD (ORR) DEVERABESANAHALLI, BELLANDUR POST, BANGALORE 560103 REPRESENTED BY ITS AUTHORISED SIGNATORY, MRS. V. PADMAVATHI …PETITIONER (BY SRI. P.S.RAJAGOPAL., SENIOR COUNSEL FOR SRI. KEMPE GOWDA., ADVOCATE) AND: 1. BRUHAT BANGALORE MAHANAGARA PALIKE, N.R SQUARE, BANGALORE 560002 REPRESENTED BY ITS COMMISSIONER 2. JOINT DIRECTOR Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 TOWN PLANNING (SOUTH) BRUHAT BANGALORE MAHANAGARA PALIKE, N.R SQUARE, BANGALORE 560002. 3. STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, URBAN DEVELOPMENT DEPARTMENT, 4TH FLOOR, VIKAS SOUDHA, AMBEDKAR VEEDHI, BANGALORE 560001. …RESPONDENTS (BY SRI. BATHE GOWDA.K.V., ADVOCATE FOR R-1 & R-2; SRI. BOPANNA BELLIAPPA., AGA FOR R-3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA., PRAYING TO QUASH THE CIRCULAR / ORDER DATED 1.7.2014 ISSUED BY R-1 VIDE ANNEXURE-B AND QUASH THE DEMAND NOTICE / LETTER DATED 16.3.2015 ISSUED BY THE R-1 AND 2 SEEKING FOR THE PAYMENT OF COMMENCEMENT CERTIFICATE FEE ALONG WITH THE PRE REQUISITE CONDITION OF PRODUCING RECEIPT FOR HAVING PAID THE BETTERMENT CHARGES FOR THE PURPOSE OF ISSUE OF PARTIAL COMMENCEMENT CERTIFICATE VIDE ANNEXURE-A, ETC. IN WP NO. 35308/2015 BETWEEN: 1. SOBHA LIMITED (FORMERLY SOBHA DEVELOPERS LIMITED) A COMPANY INCORPORATED UNDER THE COMAPANIES ACT, 1956 AND HAVING ITS OFFICE AT SARJAPUR-MARTHAHALLI OUTER RING ROAD (ORR) DEVERABESANAHALLI, BELLANDUR POST, BANGALORE 560103 REPRESENTED BY ITS AUTHORISED SIGNATORY MRS. V. PADMAVATHI ...PETITIONER (BY SRI. P.S.RAJGOPAL., SENIOR COUNSEL FOR SRI. KEMPEGOWDA., ADVOCATE) - 3 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 AND: 1. BRUHAT BANGALORE MAHANAGARA PALIKE N.R SQUARE, BANGALORE 560002 REPRESENTED BY ITS COMMISSIONER 2. ASSISTANT REVENUE OFFICER BYTARAYANAPURA SUB DIVISION, BRUHAT BANGALORE MAHANAGARA PALIKE, YELAHANKA, BYTARAYANAPURA SUB-DIVISION, BANGALORE 560077 3. STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, URBAN DEVELOPMENT DEPARTMENT, 4TH FLOOR, VIKAS SOUDHA, AMBEDKAR VEEDHI, BANGALORE 560001 ...RESPONDENTS (BY SRI. B.S.SATHYANANDA., ADVOCATE FOR R-1 & R-2; SRI. BOPANNA BELLIAPPA., AGA FOR R-3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA., PRAYING TO QUASH THE CIRCULAR DATED:1.7.2014 ISSUED BY R-1 AT ANNEXURE-C, ETC. IN WP NO. 35410/2015 BETWEEN: 1. M/S. SOBHA HIGHRISE VENTURES PRIVATE LIMITED A COMPANY INCORPORATED UNDER: THE COMPANIES ACT, 1956 AND HAVING ITS OFFICE AT, SARJAPUR-MARTHAHALLI OUTER RING ROAD (OBR), DEVERABESANAHALLI, BELLANDUR POST, BANGALORE-560 103. REPRESENTED BY ITS AUTHORISED SIGNATORY, MRS.V.PADMAVATHI. ...PETITIONER (BY SRI. P.S.RAJAGOPAL., SENIOR COUNSEL FOR SRI. KEMPEGOWDA., ADVOCATE) - 4 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 AND: 1. BRUHAT BANGALORE MAHANAGARA PALIKE N.R.SQUARE, BANGALORE-560 002 REPRESENTED BY ITS COMMISSIONER. 2. ASSISTANT REVENUE OFFICER MARATHAHALLI SUB DIVISION, BRUHAT BANGALORE MAHANAGARA PALIKE, BANGALORE 3. STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, URBAN DEVELOPMENT DEPARTMENT, 4TH FLOOR, VIKASA SOUDHA, AMBEDKAR VEEDHI, BANGALORE-560 B001. ...RESPONDENTS (BY SRI. B.S.SATHYANANDA., ADVOCATE FOR R-1 & R-2; SRI. BOPANNA BELLIAPPA., AGA FOR R-3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA., PRAYING TO QUASH THE CIRCULAR DATED:1.7.2014 ISSUED BY R-1 AT ANNEXURE-B, ETC. IN WP NO. 16376/2017 BETWEEN: 1. SOBHA LIMITED EARLIER KNOWN AS SOBHA DEVELOPERS LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956 HAVING ITS OFFICE AT "SOBHA" SARJAPUR MARATHAHALLI OUTER RING ROAD DEVARABEESANAHALLI, BELLANDUR POST BENGALURU-560103 REPRESNETED BY ITS AUTHORIZED SIGNATORY MRS. V PADMAVATHI ...PETITIONER (BY SRI. P.S.RAJGOPAL., SENIOR COUNSEL FOR - 5 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 SRI. MADHUKAR M DESHPANDE., ADVOCATE AND SMT. MAHESHWARI.D.M., ADVOCATE) AND: 1. BRUHAT BENGALURU MAHANAGARA PALIKE N.R.SQUARE, BENGALURU-560 002 REPRESENTED BY ITS COMMISSIONER 2. ASSISTANT REVENUE OFFICER BRUHAT BENGALURU MAHANAGARA PALIKE WHITEFIELD SUB DIVISION, MAHADEVAPURA ZONE BENGALURU-560 066 3. STATE OF KARNATAKA BY ITS PRINCIPAL SECRETARY TO GOVERNMENT, URBAN DEVELOPMENT DEPATMENT, 4TH FLOOR, VIKAS SOUDHA AMBEDKAR VEEDHI BENGALURU-560 001 ...RESPONDENTS (BY SRI.BOPANNA BELLIAPPA., AGA FOR R-3; SRI.H.DEVENDRAPPA., ADVOCATE FOR R-1 & R-2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA., PRAYING TO CALL FOR THE ENTIRE RECORDS LEADING TO THE OFFICE MEMORANDUM DATED:9.4.2015 AND NOTICE DATED:2.2.2015 QUASH (i) OFFICE MEMORANDUM DATED 9.4.2015 (UNDER ANNEXURE-E TO THE W.P.) AND (ii) NOTICE DATED 2.2.2017 (UNDER ANNEXURE-M TO THE W.P.) ISSUED BY THE R-1 & 2 BY ISSUE OF A WRIT IN THE NATURE OF CERTIORARI AND (iii) ISSUE A WRIT IN THE NATURE OF MANDAMUS DIRECTING THE RESPONDENTS TO REFUND TO THE PETITIONER THE AMOUNT AGGREGATING TO RS.4,10,84,195/- COLLECTED TOWARDS IMPROVEMENT EXPENSES FORTHWITH, ETC. THESE PETITIONS, COMING ON FOR, PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 6 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 CORAM: HON'BLE MR JUSTICE N S SANJAY GOWDA ORAL ORDER 1. In these writ petitions, the challenge is to the demand made by the Bruhat Bengaluru Mahanagara Palike ('BBMP') for payment of improvement expenses. 2. It is not in dispute that the petitioners have paid the improvement expenses and therefore, prayers are also made for refund of the amounts paid as improvement expenses. 3. The learned Senior Counsel appearing for the petitioners submits that the BBMP does not possess the jurisdiction to demand the improvement expenses since Rule 6 of the Karnataka Municipal Corporations (Recovery of Improvement Expenses) Rules, 2009 [for short, ‘the 2009 Rules’] does not enable them to demand improvement expenses in - 7 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 respect of the layouts approved by the Planning Authority. 4. Learned counsel also places reliance on the decision rendered by this Court in the case of S.R. Constructions1 to also contend that the BBMP does not have the power to demand improvement charges from the owners of sites in a private layout if it is approved by the Bangalore Development Authority (“BDA”) or any other local authority. 5. Learned counsel for the BBMP, on the other hand, contends that Rule 6 of the 2009 Rules would come into operation only if the layout is not only approved but is also formally transferred to the local authority after its all round development. He seeks to contend that since there is no document produced to show that there was a formal approval by the Planning Authority and there was a transfer to the local 1 S.R. Constructions, Ananthapura, Andhra Pradesh vs. State of Karnataka and others, 2013 (3) Kar.L.J.588 - 8 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 authority, no reliance can be placed on Rule 6 of the 2009 Rules. 6. Learned counsel also places reliance on the Circular dated 01.07.2014, which according to him is upheld by this Court in the case of Gokulam Shelters Private Limited2, to contend that it is permissible for the BBMP to collect planning charges even in respect of the layouts approved by the Planning Authority. 7. This Court in the case of S.R. Constructions has interpreted the 2009 Rules and has ultimately concluded as follows insofar as it relates to private layouts which are approved by the BDA: “24. One other aspect of the matter is also that the improvement charges are being collected only in respect of private layouts which are not approved by BDA or any 2 Gokulam Shelters Private Limited vs. Kanakapura Main Road, Bengaluru vs. The Commissioner, Bruhat Bengaluru Mahanagara Palike, Bengaluru and Another, 2017 (2) Kar.L.J.389 - 9 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 other local authority and land converted for non-agriculture. This has been stated in the additional objection statement and it is clarified that the layouts formed by KHB, BDA, KIADB, KSSIDC etc, no improvement charges are levied, which in effect would mean that it would not be imposed on owners of sites in private layout if it is approved by BDA or any other local authority. Hence, that exercise to separate the grain from the chaff also has to take place either before the improvement charge is worked out or before it is demanded. The learned senior counsel appearing for the petitioners has also referred to some of the petitioners having formed the layout in accordance with law and also having deposited amount with BWSSB, BESCOM etc. Similarly, learned counsel for the petitioner in W.P. No. 45223/2012 has referred to payment of betterment charges made to the panchayat. Therefore, in such cases, the owners should have an opportunity to establish compliances when the property was situate in the earlier dispensation so as to eliminate double levy. Hence, at least after determination and - 10 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 when the demand is made, an opportunity should be available to seek deduction or adjustment on submission of proof of payment. A method should be deviced in this regard if the respondent would not be in a position to do it earlier. If this and all the other aspects noticed above are taken into account, the present exercise followed would not satisfy the requirement stated by this Court. The matter requires reconsideration by the respondents.” 8. In light of the decision rendered by a Co-ordinate Bench of this Court way back in the year 2013 while interpreting the 2009 Rules, the argument of the BBMP that the improvement expenses can still be collected from layouts approved by the BDA would be untenable. 9. The further argument that under Rule 6, mere approval would be insufficient but there should also be a formal transfer to local authority to attract Rule 6 can also not be accepted. - 11 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 10. It is to be stated here that once a layout is approved by the Planning Authority, the transferring to the local authority would be a factor which is outside the control of the site owners and even if the layout is not formally transferred, that cannot enable the BBMP to proceed against the site owners to demand improvement expenses. 11. In the instant case, the petitioners have placed on record the work order issued by the BDA at Annexure ‘T2’ (to W.P. No.35308 of 2015) which indicates a Resolution was passed by the BDA conveying its approval for the plan submitted to it and also indicates that a registered relinquishment deed was executed by the applicant therein, handing over the open spaces, civic amenity sites, roads, etc. to the BDA. 12. This document would clearly establish that not only was there a layout plan approved by the BDA, but - 12 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 the roads, parks, open spaces and civic amenity sites were relinquished in favour of the BDA. 13. It is therefore clear that the layout in respect to which improvement expenses were demanded is a legally formed layout and therefore, falls outside the purview of Rule 6 of the 2009 Rules as held by this Court in the case of S.R. Constructions. 14. In the result, the following: ORDER (I) The writ petitions are allowed. (II) The impugned demands made by the respondent—BBMP are quashed. (III) The amounts, if any, paid by the petitioners/Developer towards improvement expenses shall be refunded to them within a period of two months from the date of receipt of a copy of this order. - 13 - NC: 2025:KHC:2268 WP No. 28360 of 2015 C/W WP No. 35308 of 2015 WP No. 35410 of 2015 WP No.16376 OF 2017 (IV) Since the Developer has erected an apartment complex, it is obvious that the improvement charges would have been collected by them from the purchasers of the apartment. (V) The amount deposited by the Developer as improvement expenses shall therefore be refunded to the Developer, on an undertaking given by him that he would pay the said refunded amount pro-rata to the apartment owners, within a period of two months from the date of receipt of a copy of this order. (VI) It is needless to state that if some apartments remain unsold, the Developer can retain that portion of the betterment charges. Sd/- (N S SANJAY GOWDA) JUDGE RK List No.: 1 Sl No.: 61