- 1 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JUNE, 2026 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 19409 OF 2021 (BDA) BETWEEN: SRI. NAVACHAITHANYA A S/O A. NAGARAJA NAIDU AGED ABOUT 36 YEARS RESIDENT OF NO.3800, MAIN ST.NO.234, HOUSTON TX 77002 REPRESENTED BY HIS GENERAL POWER OF ATTORNEY HOLDER A. NAGARAJA NAIDU S/O LATE A. MARKONDAIAH NAIDU, AGED ABOUT 67 YEARS RESIDING AT NO.E-269 4TH B MAIN ROAD, SANTHRUPTHINAGAR J.P. NAGARA 7TH PHASE, BENGALURU - 560 078 …PETITIONER (BY SRI. VENUGOPAL M.S., ADVOCATE) AND: 1. THE COMMISSIONER BENGALURU DEVELOPMENT AUTHORITY KUMARAPARK WEST BENGALURU - 560 020 2. THE JOINT DIRECTOR (EAST) TOWN PLANNING DIVISION, BENGALURU DEVELOPMENT AUTHORITY, KUMARAPARK WEST BENGALURU - 560 020 …RESPONDENTS (BY SRI. N.R.GIRISHA, ADVOCATE FOR RESPONDENT NOS.1 AND 2) Digitally signed by HEMALATHA J Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE DEMAND NOTICE DATED 05.12.2020 BEARING NO.BDA/TPM/BIF-03/1047/2020-21 VIDE ANNEXURE-C AND CONSEQUENTLY, DIRECT THE RESPONDENTS TO REFUND A SUM OF Rs.1,08,339/- TO THE PETITIONER AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ ORAL ORDER The petitioner has challenged a demand notice bearing No.¨ÉAC¥Áæ/£ÀAiÉÆøÀ/BIF-03/1047/2020-21 dated 05.12.2020 issued on behalf of the respondent No.2 by the City Planning Division, Bangalore Development Authority (for short, ‘the BDA’), and consequently, to direct the respondents to refund a sum of Rs.1,08,339/- to the petitioner. He has also sought for a writ in the nature of certiorari to quash the demand notice bearing No.¨ÉAC¥Áæ/£ÀAiÉÆøÀ/BIF-03/1450/2020-21 dated 01.02.2021 issued on behalf of the Town Planning Member of the respondent No.1 – BDA and minutes of the meeting dated 18.12.2020 pertaining to item No.35 (Subject No.156/20) issued by the respondent No.1. - 3 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 2. The petitioner contends that Site No.30 formed in the land bearing Sy. No.77/2 situate at Kothanuru Village, 3rd Block, 8th Phase, J.P. Nagara, Bengaluru, was allotted by the BDA to Sri Munianjinappa / Sri Munianjanappa and Smt. Muttamma @ Radhamma. Thereafter, on 21.09.2019, a sale deed was executed by the respondent No.1 in favour of Sri Munianjinappa and Smt.Muttamma, who sold the northern portion of the site to the petitioner in terms of a sale deed dated 01.06.2020. Based on an application filed by the petitioner, the respondent No.1 - BDA considered the request for bifurcation of Site No.30 and called upon the petitioner to pay a sum of Rs.1,08,339/- towards betterment charges, as provided under Section 18 of the Karnataka Town and Country Planning Act, 1961 (for short, ‘the KTCP Act’) and penalty of Rs.60,300/- for having sold the site without prior permission at the rate of Rs.150/- per square meter. The petitioner contends that the BDA insisted that an affidavit be given that in case the penalty is revised, the petitioner would pay the same. The petitioner paid the betterment charges and the penalty out of compulsion. The petitioner contends that the Site No.30 was bifurcated by an order dated 09.12.2020 passed by the City - 4 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 Planning Division on behalf of the respondent No.2 and Site No.30/A was assigned to the property purchased by him. 3. The petitioner claims that the respondent No.1 - BDA then issued a notice dated 01.02.2021 calling upon the petitioner to pay further penalty of Rs.1,40,700/- at the rate of Rs.500/- per square meter in respect of bifurcation of the site in question in view of the resolution / minutes of meeting of the Board of BDA dated 18.12.2020 pertaining to Sl. No.35 (Subject No.156/20) revising the rates of penalty. The petitioner is, therefore, before this Court challenging the action of the BDA in demanding betterment charges and also penalty at the rate of Rs.500/- per square meter in respect of bifurcation of the site in question. 4. The learned counsel for the petitioner contends that the property in question was allotted by the BDA to the predecessors of the petitioner. He, therefore, contends that there is no incidence of any betterment charges payable on bifurcation of the Site No.30. However, respondent No.2 / the City Planning Division of the BDA has demanded betterment charges of a sum of Rs.1,08,339/-, which is without the - 5 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 authority of law. He contends that a perusal of Section 18 of the KTCP Act does not indicate that the respondent No.1 - BDA is entitled to demand and collect betterment charges but is entitled to collect a fee for bifurcating the plot. He also contends that the bifurcation order, bifurcating Site No.30 into 30/A and 30/B was passed by the City Planning Division of the BDA on behalf of the respondent No.2 on 09.12.2020 and that as on that date, the penalty payable was a sum of Rs.150/- per square metre. He contends that no doubt, the petitioner had given an affidavit that he would pay the enhanced penalty in case the BDA decided to enhance the penalty. However, the respondent No.1 – BDA had passed a resolution on 18.12.2020 enhancing the penalty from Rs.150/- per square meter to Rs.500/- per square meter. He, therefore, contends that the petitioner is not obliged to pay penalty at the rate of Rs.500/- per square meter and the resolution of the BDA dated 18.12.2020 cannot have retrospective application. 5 (i). The petition is opposed by the respondent Nos.1 and 2, who contend that the petitioner had requested for bifurcation of Site No.30 and upon verification of the - 6 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 documents, the respondent No.2 issued a demand for payment on 05.12.2020 demanding Rs.1,08,339/- towards betterment charges and penalty of Rs.60,300/- for having sold part of the site without permission of the respondents as per the resolution of the BDA bearing No.4/2011 dated 07.01.2011. The petitioner was also informed that the difference in amount in case of revision in the penalty shall be paid by the petitioner. The petitioner submitted an undertaking that he would pay the difference amount in case if there is a revision in the penalty. Thereafter, the respondent No.2 passed an order dated 09.12.2020 dividing the site and assigned Site No.30A to the portion purchased by the petitioner with a condition that the petitioner shall pay the difference amount in case of revision of penalty. The respondent thereafter passed the Resolution No.156/20 dated 18.12.2020 and revised the penalty at the rate of Rs.500/- per square meter and then called upon the petitioner by a notice dated 01.02.2021 demanding the enhanced penalty. (ii). It is contended that the BDA has exercised power under Section 18(1) of the KTCP Act in levying betterment fee - 7 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 and hence, notice issued to the petitioner demanding betterment charges is just and proper. It is also claimed that by the said resolution dated 18.12.2020, the respondent - BDA had revised the penalty at the rate of Rs.500/- per square meter and hence, the demand was raised calling upon the petitioner to pay Rs.1,40,700/- towards penalty as per the revised rate. It is thus contended that the action of the respondents is just and proper and is well within the statutory framework. 6. The learned counsel for the respondent Nos.1 and 2 reiterated the above contentions and submitted that Section 18 of the KTCP Act permits the respondents to demand and collect betterment charges in the event of division of a property. He also submits that when the petitioner has given an affidavit agreeing to pay enhanced penalty, he cannot now turn around and claim that he is not liable to pay the enhanced penalty. He also contends that the BDA was contemplating revision of the penalty from the year 2016 and it was in that context, the petitioner was called upon to file an affidavit which was accordingly done by him. He, therefore, contended that the - 8 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 petitioner cannot now extricate himself and claim that he is not bound to pay the penalty as well as the betterment charges. 7. I have considered the submissions of the learned counsel for the petitioner and the learned counsel for respondent Nos.1 and 2. 8. The respondent No.1 – BDA being a Planning Authority for the City of Bangalore, is authorized to sub-divide plots in the manner prescribed under Section 17 of the KTCP Act. The respondent No.1 - BDA has taken a policy decision to impose penalty wherever plots are sub-divided without its permission as per the resolutions passed by the BDA that were prevalent at the time. When the petitioner made an application for bifurcation of Site No.30, the BDA was entitled to demand a sum of Rs.150/- per square meter as penalty for selling a plot without sub-division. The order of bifurcation of Site No.30 was passed by the City Planning Division on behalf of the respondent No.2 on 09.12.2020 and hence, the petitioner was bound to pay penalty at a sum of Rs.150/- per square meter although the petitioner had filed an affidavit agreeing to pay enhanced penalty in the event the respondents revised the - 9 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 rates of penalty. Therefore, the BDA was only entitled to demand and collect penalty at rates that were prevalent at the time when the petitioner made an application for bifurcation of Site No.30 or at the time when an order of bifurcation was passed by the respondent No.2. Under the circumstances, the respondents cannot fall back upon the resolution of the BDA dated 18.12.2020 and call upon the petitioner to pay penalty in respect of a bifurcation order that was passed on 09.12.2020. As rightly contended by the learned counsel for the petitioner, the resolution of the BDA dated 18.12.2020 pertaining to Subject No.156/20 issued by the respondent No.1 could not have retrospective effect, but affected only those cases, where permission for bifurcation of sites was granted after 18.12.2020. In that view of the matter, the penalty of Rs.500/- per square meter demanded by the BDA in respect of the site in question is not only unjust but unethical and arbitrary and has no statutory backing. In that view of the matter, the demand notice dated 01.02.2021 issued on behalf of the Town Planning Member, BDA demanding penalty at a sum of Rs.500/- per square meter in respect of bifurcation of Site No.30 is liable to be struck down. - 10 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 9. As regards the claim of the respondent No.1 - BDA for betterment charges, Section 20 of the BDA Act, 1976 provides for the circumstances under which the BDA can claim betterment charges and for the sake of convenience, Section 20 of the BDA Act, is extracted below: "20. Levy of betterment tax.- (1) Where as a consequence of execution of any development scheme, the market value of any land in the area comprised in the scheme which is not required for the execution thereof has in the opinion of the authority, increased or will increase the authority shall be entitled to levy on the owner of the land or any person having an interest therein a betterment tax in respect of the increase in value of the land resulting from the execution of such scheme. (2) Such increase in value shall be the amount by which the value of the land, on the completion of the execution of the scheme, estimated as if the land were clear of buildings, exceeds the value of the land prior to the execution of the scheme estimated in like manner, and the betterment tax shall be one-third of such increase in value." 10. A perusal of Section 20 of the BDA Act shows that betterment charges can be collected by the BDA from the owner of a property whose value gets bettered by the BDA - 11 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 executing a development scheme, such as better connectivity, better infrastructure etc. In the instant case, the plot in question was part of a development scheme, which was later allotted by the respondent No.1 - BDA to Sri Muni Anjanappa and Smt. Muttamma. Therefore, there is no betterment of the property of the petitioner in the true sense of the term and as provided under Section 20 of the BDA Act. A perusal of Section 18 of the KTCP Act does not show that the respondent No.1 - BDA is entitled to demand and claim betterment tax/charges at the stage of bifurcating a plot, but Section 18 of the KTCP Act only speaks of recovery of a fee and not a tax. This is discernible from Section 18 of the KTCP Act, which is extracted below: "18. Recovery of a fee in certain cases of permission for change in the use of land or building.- (1) Where permission for change of land use or development of land or building is granted under section 14A or section 14B or section 15 or section 17 and such change of land use or development is capable of yielding a better income to the owner, the Planning Authority may levy a prescribed fee not exceeding one- third of the estimated increase in the value of the land or building in the prescribed manner for permitting such change of land use or development of land or building. - 12 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 (1A) Where an application for permission for development of building or land or sanction for sub-division of plot or layout of Private Street is submitted under section 15 or 17 to any Planning Authority, such Planning Authority shall levy and collect an additional prescribed fee for rejuvenation of lakes or tanks, if any, in that local planning area. (2) Any person aggrieved by the levy of fee under sub- section (1), may within such period as may be prescribed, appeal to the District Court having jurisdiction on the ground that the change or development is not capable of yielding a better income to the owner. The decision of the District Court on such appeal shall be final. (3) The State Government may exempt any Board, Authority or body constituted by or under any law and owned or controlled by the State Government or Central Government or an infrastructure Project promoted or implemented by any Company or person and approved by the State Government or Central Government from the payment of fee specified under sub-section (1). Explanation:- For the purpose of this section and section 18A “Infrastructure Project “ means,- (a) road, bridge, air port, port, inland water ways and inland ports, rail system or any other public facility of a similar nature as may be notified by the State Government from time to time; (b) a highway project including housing or other activities being an integral part of that project; - 13 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 (c) water supply project, irrigation project, sanitation and sewerage system.” (d) a tourism project with an investment of not less than Rupees one hundred crores as may be notified by the State Government from time to time." Recovery of a fee ipse dixit means a charge payable for a specific service which cannot be equivalent to a charge or a tax which is a compulsory exaction of money without any element of quid pro quo. Therefore, there is no justification for the respondents in demanding betterment tax at the time of bifurcation of a property allotted by the BDA. In that view of the matter, the petitioner is bound to succeed. 11. Consequently, this Writ Petition is allowed. The impugned notice bearing No.¨ÉAC¥Áæ/£ÀAiÉÆøÀ/BIF-03/1047/2020- 21 dated 05.12.2020 issued on behalf of the respondent No.2 by the City Planning Division, Bangalore Development Authority, in so far as it relates to demanding betterment tax of Rs.1,08,339/- from the petitioner in respect of bifurcation of Site No.30 formed in Sy. No.77/2 situate at Kothanuru Village, 3rd Block, 8th Phase, J.P. Nagar, Bengaluru, is set at nought and the respondent No.1 is directed to refund a sum of - 14 - HC-KAR NC: 2026:KHC:31898 WP No. 19409 of 2021 Rs.1,08,339/- to the petitioner. Likewise, the impugned demand notice dated 01.02.2021 bearing No.¨ÉAC¥Áæ/£ÀAiÉÆøÀ/BIF-03/1450/2020-21 issued on behalf of the Town Planning Member, Bangalore Development Authority, demanding revised penalty at the rate of Rs.500/- per square meter for bifurcation of the aforesaid plot of the petitioner is quashed. Sd/- (R. NATARAJ) JUDGE SMA/List No.: 1 Sl No.: 43