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Time of India
a day ago
- Business
- Time of India
Karnataka HC strikes down amendment laws on civic body's retrospective levies
BENGALURU : In a major setback for the state govt and more particularly BBMP , the high court has struck down the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023. These acts aimed to validate previous collections of various fees from Bengaluru residents and builders. The 2021 Amendment Act was enacted to override the high court's earlier decision in the Sundaram Shetty case rendered in 2021, which declared the practice of linking levies to guidance value as illegal. While litigation against the legislation was under way, the govt promulgated a second amendment in Aug 2023, introducing further definitions of "ground rent," "guidance value," and "scrutiny fee," amending Section 240A of the BBMP Act and attempting once again to validate past levies retrospectively. The petitioners, comprising developers and property owners, challenged the levies imposed by BBMP and BDA during the layout and building approval process. These included scrutiny fees, ground rent, licence fees, security deposits, lake rejuvenation fees, and compound wall charges under the BBMP Act 2020, and water supply cess, slum cess, surcharges for mass rapid transit and ring road, administrative charges, and betterment charges under the Karnataka Town and Country Planning Act, 1961 (KTCP Act). In his order, Justice R Devdas noted that after a coordinate bench ruling in Oct 2021 (Sundaram Shetty case) declared these levies unenforceable, the authorities had an opportunity to reconsider the rates. However, they maintained similar rates through govt circulars without proper justification or empirical data collection, as suggested in that order. Development plan The judge also declared the provisions contained in Section 18A of KTCP Act (collection of cess and surcharge by a planning authority), read with rules 37-A and 37-C of Karnataka Planning Authority Rules, 1965, are applicable only in respect of a development plan for construction on plots measuring over 20,000sqm and not for plots measuring less than that. If a fee was earlier collected for a change of land use or while approving a layout plan, a fee shall not be collected for a subsequent development plan, the judge added. While the govt and BBMP retain the right to establish new standards based on empirical data, Justice Devdas also suggested implementing a one-time settlement scheme to resolve the situation. The court highlighted that the fee collection was intended for large construction projects but was being applied indiscriminately. Citizens began objecting after a Sept 4, 2015, circular revised ground rents and linked them to guidance values. The provision made in clause 3.8 of the building by-laws permitting a person to stock building materials on public land/roads/pavements would be directly in the teeth of the statutory provision contained in Section 229(2) of the BBMP Act, 2020, which empowers the zonal commissioner to summarily evict any encroachment, either temporary or permanent, caused on a public street including footpaths, the judge pointed out while emphasising that public safety should not be compromised, particularly regarding road and pavement maintenance. The court noted that the fees should correspond to the services provided by BBMP, following the principle of quid pro quo. The petitioners demonstrated through BBMP's financial records that relevant factors weren't considered when determining fees. The court agreed that service charges should be uniform across localities and vary only based on plot size and construction extent, rather than property's guidance market values.
New Indian Express
2 days ago
- Business
- New Indian Express
Karnataka HC scraps law linking fees to market, guidance value in Bengaluru
BENGALURU: In a big relief to property owners, the Karnataka High Court set aside the amendment to impose ground rent, licence fee, building licence fee, scrutiny fee etc., based on market value or guidance value of properties in Bruhat Bengaluru Mahanagara Palike (BBMP) limits. Allowing partly over 500 writ petitions filed by various persons, including developers and builders, questioning the legality of the amendment, Justice R Devdas passed the order. 'Surely, the impugned levy and imposts which are on account of services to be rendered by BBMP in the present context, have nothing to do with the market value of properties. There is no rational nexus between the rates and linking them to guidance value. Therefore, this court is of the considered opinion that linking the impugned levy and imposts to guidance value cannot be sustained,' the judge observed. 'Cannot impose ground rent' Giving an example of how the levy by BBMP is illegal, counsel for the petitioners submitted that BBMP cannot impose 'ground rent' on public property if the road or pavement are not utilised to store construction material. Declaring as illegal linking the fee leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to 'market value' or 'guidance value', as determined under Section 45-B of the Karnataka Stamp Act, 1957, the court, however, reserved liberty before the state government and BBMP to 'refix a standard fee after collecting empirical data...' 'Consequently, all the impugned demand notices raised by BBMP in respect of the writ petitioners are also quashed and set aside. It would be advisable that BBMP come out with a scheme for a '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,' the court observed. Also quashing the Karnataka Municipal Corporations and Certain Other Law (Amendment), 2021, which came into effect in 2022, and another amendment which came into effect in 2024, the court declared that provisions 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 the 'development plan' for construction on plots measuring more than 20,000sqm, and not smaller plots. The court made it clear that if the fee has been earlier collected for change of land use, or while approving a layout plan, it should not be collected for any subsequent development plan. It may be noted that in 2021, a single judge had quashed the laws and directed the state to levy fees in accordance with the law. However, the state and BBMP did not take the findings of the court into account, but made amendments to laws which forced the petitioners to approach the high court. Counsel for the petitioners argued that since BBMP has collected Rs 2,362 crore under various fee heads, and refund would incur a financial burden on the BBMP if findings of the 2021 judgment are taken into account, hence the state government should proceed to swiftly amend the laws.
Time of India
2 days ago
- Business
- Time of India
Karnataka high court strikes down amendment laws on civic body's retrospective levies
Bengaluru: In a major setback for the state govt and more particularly BBMP, the high court has struck down the Karnataka Municipal Corporations and Certain Other Law (Amendment) Acts of 2021 and 2023. These acts aimed to validate previous collections of various fees from Bengaluru residents and builders. The 2021 Amendment Act was enacted to override the high court's earlier decision in the Sundaram Shetty case rendered in 2021, which declared the practice of linking levies to guidance value as illegal. While litigation against the legislation was under way, the govt promulgated a second amendment in Aug 2023, introducing further definitions of "ground rent," "guidance value," and "scrutiny fee," amending Section 240A of the BBMP Act and attempting once again to validate past levies retrospectively. The petitioners, comprising developers and property owners, challenged the levies imposed by BBMP and BDA during the layout and building approval process. These included scrutiny fees, ground rent, licence fees, security deposits, lake rejuvenation fees, and compound wall charges under the BBMP Act 2020, and water supply cess, slum cess, surcharges for mass rapid transit and ring road, administrative charges, and betterment charges under the Karnataka Town and Country Planning Act, 1961 (KTCP Act). by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Accounting Automation Software Might Help You To Earn More Accounting Automation Software | Search ads Undo In his order, Justice R Devdas noted that after a coordinate bench ruling in Oct 2021 (Sundaram Shetty case) declared these levies unenforceable, the authorities had an opportunity to reconsider the rates. However, they maintained similar rates through govt circulars without proper justification or empirical data collection, as suggested in that order. Development plan The judge also declared the provisions contained in Section 18A of KTCP Act (collection of cess and surcharge by a planning authority), read with rules 37-A and 37-C of Karnataka Planning Authority Rules, 1965, are applicable only in respect of a development plan for construction on plots measuring over 20,000sqm and not for plots measuring less than that. If a fee was earlier collected for a change of land use or while approving a layout plan, a fee shall not be collected for a subsequent development plan, the judge added. While the govt and BBMP retain the right to establish new standards based on empirical data, Justice Devdas also suggested implementing a one-time settlement scheme to resolve the situation. The court highlighted that the fee collection was intended for large construction projects but was being applied indiscriminately. Citizens began objecting after a Sept 4, 2015, circular revised ground rents and linked them to guidance values. The provision made in clause 3.8 of the building by-laws permitting a person to stock building materials on public land/roads/pavements would be directly in the teeth of the statutory provision contained in Section 229(2) of the BBMP Act, 2020, which empowers the zonal commissioner to summarily evict any encroachment, either temporary or permanent, caused on a public street including footpaths, the judge pointed out while emphasising that public safety should not be compromised, particularly regarding road and pavement maintenance. The court noted that the fees should correspond to the services provided by BBMP, following the principle of quid pro quo. The petitioners demonstrated through BBMP's financial records that relevant factors weren't considered when determining fees. The court agreed that service charges should be uniform across localities and vary only based on plot size and construction extent, rather than property's guidance market values. Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .
