- 1 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO. 10807 OF 2021 (LB-BMP) BETWEEN: 1. SRI. G. DAYALU S/O LATE SRI. V. GOVINDARAJU, AGED ABOUT 59 YEARS, R/A NO.217, 1ST MAIN, 6TH SECTOR, HSR LAYOUT, BENGALURU - 560 102. 2. SRI. MADANALAL JAIN S/O LATE SHAH MANIKLALJI, AGED ABOUT 73 YEARS, R/A 170, 1ST CROSS, HOSUR MAIN ROAD, ROOPENA AGRAHARA, BENGALURU-560 068. 3. SMT. SEEMA SARKAR D/O BADAL SARKAR, AGED ABOUT 48 YEARS, R/AT FLAT NO.1502, OAK, ‘C’ BLOCK, GREENAGE APARTMENT, BOMMANAHALLI, BENGALURU-560 068. 4. SRI. MUKESH M. S/O SRI. MADANALAL JAIN, AGED ABOUT 43 YEARS, R/AT 170, 1ST CROSS, HOSUR MAIN ROAD, ROOPENA AGRAHARA, BENGALURU-560 068. Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 5. SRI. D. SRINIVASAN S/O SRI. G. DAYALU, AGED ABOUT 29 YEARS, R/AT NO.217, 1ST MAIN, 6TH SECTOR, HSR LAYOUT, BENGALURU-560 102. THE PETITIONERS 1 TO 5 ARE REP. BY THEIR P.A. HOLDER M/S. RAJARAJESHWARE BUILDDCON PVT. LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT, HAVING ITS OFFICE AT NO.67/1, SRI. RANGA COMPLEX, NETTAKALLAPPA CIRCLE, BASAVANAGUDI, BANGALORE-560 004, REP. BY ITS DIRECTOR SRI. RANJIT KUMAR J SHA. …PETITIONERS (BY SRI. RAVISHANKAR S., ADVOCATE) AND: 1. THE STATE OF KARNATAKA REP. BY ITS ADDITIONAL CHIEF SECRETARY, URBAN DEVELOPMENT DEPARTMENT, VIDHANA SOUDHA, BENGALURU-560 001. 2. THE BRUHAT BANGALORE MAHANAGARA PALIKE N.R. SQUARE, BENGALURU-560 002, REP. BY ITS COMMISSIONER. 3. THE JOINT DIRECTOR OF TOWN PLANNING (SOUTH) - 3 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 THE BRUHAT BANGALORE MAHANAGARA PALIKE, N.R. SQUARE, ANNEX-3 BUILDING, BANGALORE-560 002. …RESPONDENTS (BY SPOORTHI, HCGP FOR R1; SMT. M.R. SINCHANA, ADVOCATE FOR R2 & R3) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO (A) QUASH THE ANNEXURE-C THE DEMAND NOTICE ISSUED BY THE THIRD RESPONDENT DATED 08.04.2021 BEARING NO.BBMP/ADDL.DIRE/JDSOUTH/0012/20-21, SO FAR IT RELATES TO DEMAND OF RS.36,79,122/- (RUPEES THIRTY SIX LAKHS SEVENTY NINE THOUSAND ONE TWENTY TWO ONLY) UNDER THE HEADS OF GROUND RENT- 18% GST, LICENCE FEE, SECURITY DEPOSIT, SCRUTINY FEE, FEE U/S 18 OF KTCP ACT (BETTERMENT FEE) SITE AREA, 1% ADMINISTRATIVE CHARGES ON LABOUR CESS, LABOUR CESS BY MEANS OF A WRIT OF CERTIORARI 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 This petition is filed seeking the following reliefs:- “a. Quash the Annexure-C the demand notice issued by the Third respondent dated: 08-04- 2021 bearing No.BBMP/Addl.Dire/JDSouth/ 0012/20-21, so for it relates to demand of Rs.36,79,122/- (Rupees Thirty Six Lakhs Seventy Nine Thousand One twenty Two only) - 4 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 under the heads of Ground Rent-18% GST, Licence fee, Security Deposit, Scrutiny Fee, Fee U/s 18 of KTCP Act (Betterment fee)site area, 1% Administrative charges on Labour cess, Labour cess by means of a writ of Certiorari, b. Grant an order directing the third respondent to issue the modified Sanctioned plan and licence for construction of additional three floors by collecting the licence fee only as it existed prior to Annexure-B Circular dated 04-09-2015 and issue occupancy certificate by means of Writ of Mandamus, c. Such other relief or reliefs as this Honourable Court deem fit under the circumstances of the case.” 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 - 5 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 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 dated 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. - 6 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 (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. (j) If representations are made by the petitioners for refund, the BBMP shall pass appropriate orders within 12 weeks from the date of such representations. - 7 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 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 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 - 8 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 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 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 - 9 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 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 of the 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 08.04.2021 issued by respondent No.3 as per Annexure-C is hereby set-aside. (iii) Respondent No.3 - BBMP is hereby directed to issue fresh/modified plan as the case may be. (iv) Respondent No.3 - BBMP is hereby directed to forthwith process the petitioners' application seeking building license and sanction of the building plan, strictly in accordance with law. - 10 - HC-KAR NC: 2025:KHC:23279 WP No. 10807 of 2021 (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 that may be filed by the BBMP against the judgment. Pending applications, if any, are also disposed off. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NBM List No.: 2 Sl No.: 40