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.
