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2024 Supreme(Kar) 182

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
M/s. Sobha Limited – Appellant
Versus
The State Of Karnataka – Respondent
Writ Petition No. 20016 of 2021 (GM-BWSSB) C/W Writ Petition No. 10020 of 2020 (GM-BWSSB)
Decided on : 05-04-2024

Advocates:
Advocate Appeared:
For the Appellant :Sri. Vikram Huilgol, senior advocate A/w., Sri. KEMPEGOWDA, ADVOCATE, SRI. SAMMITH S., ADVOCATE
For the Respondent:SRI DHYAN CHINNAPPA., SRI M.VINOD KUMAR, SRI M.N.SESHADRI, SENIOR ADVOCATE, SRI RAVI. B.NAIK, SENIOR ADVOCATE A/W., SRI K.B.MONESH KUMAR, SRI A.JAGANATH, ADVOCATE

Headnote:(A) Karnataka Municipal Corporations Act, 1976 - Sections 295, 423, and 16 - Constitution of India - Article 265 - Imposition of fees by Bangalore Water Supply and Sewerage Board for issuance of No Objection Certificate (NOC) for residential constructions challenged - Advance Probable Pro Rata Charges upheld as legal, while Beneficiary Capital Contribution Charges and Greater Bangalore Water Sewerage Project Charges declared illegal due to lack of legal authority and absence of quid pro quo - Treated Water Charges for Construction upheld as they have a statutory basis. (Paras 1, 33, 34, 35)

(B) Fee Imposition - Legal authority - The Board must act within the parameters of the law and cannot impose fees without statutory backing or quid pro quo, as established in various Apex Court judgments. (Paras 10, 28, 30, 31)

Facts of the case:
The petitioners, real estate developers, challenged the imposition of significant fees by the Board as a prerequisite for obtaining NOC for construction projects, claiming these fees were unconstitutional and lacked proper legal authority. (Paras 4, 6)

Findings of Court:
The court upheld the legality of Advance Probable Pro Rata Charges and Treated Water Charges, while ruling the Beneficiary Capital Contribution Charges and Greater Bangalore Water Sewerage Project Charges illegal due to absence of legal authority. (Paras 33, 34)

Issues: The core issue was whether the imposed fees had legal sanction and whether they constituted valid charges under the law. (Para 13)

Ratio Decidendi: The court emphasized the necessity of a legal basis for imposing fees, asserting that charges without statutory backing or quid pro quo are invalid. (Paras 30, 31)

Result: Writ petitions allowed in part; specific charges upheld and others declared illegal, with provisions for refunds of illegally collected amounts. (Para 35)

Table of Content
1. validity of charges for no objection certificate (Para 1 , 2 , 3 , 4)
2. arguments against the imposition of charges (Para 6 , 7 , 8 , 9 , 10 , 11 , 12)
3. court's analysis of legal authority for charges (Para 13 , 14 , 15 , 16 , 18 , 19)
4. evaluation of specific charges imposed by the board (Para 20 , 21 , 22 , 28 , 29 , 30 , 31 , 32 , 33)
5. conclusion on the legality of charges (Para 34)
6. final order and implications (Para 35)

These petitions call in question the validity of imposition of impost/fee/charge by the Bangalore Water Supply and Sewerage Board (‘the Board’ for short) for the purpose of issuance of a ‘No Objection Certificate’ to a proposed residential building in terms of Bye-law 3.2.10 of the Bruhat Bengaluru Mahanagara Palike Building Bye-laws. The demand is made by the Board.

2. Shorn of unnecessary details, facts in brief, are as follows:-

Petitioner in Writ Petition No.20016 of 2021 is a Company incorporated under the Companies Act, 1956 and is engaged in the business of real estate development. The Company claims to be well known for the construction of apartment complexes. It is also claimed that it has sphere headed the revolution of real estate in India. The petitioner purchases schedule property comprising of different survey numbers through a Joint Development Agreement for the development of the schedule property. All the documents of the properties after transfer are in the name of the petitioner. The issue in the lis does not concern the title of the property. Under Section 295 of the Karnataka Municipal Corporations Act, 1976 (for short ‘the KMC’ Act) certain building bye-laws are notified by the Corporation. Section 423 of the KMC Act empowers the Corporation to make bye-laws which it has notified in the year 2003 viz., Bangalore Mahanagara Palike Building Bye-laws, 2003 (hereinafter referred to as ‘the Bye-laws’ for short). The Bye-laws regulate buildings and other matters concerning those buildings as obtaining under those bye-laws.

3. The petitioner in order to develop the schedule property by construction of residential apartment buildings submits an application for building licence in terms of bye-law No.3.0 of the Bye-laws for construction of building. For the purpose of issuance of building licence with regard to high-rise building, a no objection from respondents 3 and 4 i.e., the Board and other agencies like BESCOM, Fire Services Department etc. as mentioned in Bye-law 3.2.10 is a condition precedent.

4. In furtherance of securing a no objection from all the respondents, the petitioner submits an application to the BBMP only to be told that the petitioner has to pay a sum of Rs.54,48,000/-towards Beneficiary Capital contribution charges, a sum of Rs.49,85,548/- towards Advance Probable Pro rata charges and Rs.8,30,925/- towards Treated Water Charges for construction to the Board if it has to issue a NOC. Those charges in the case at hand run to Rs.1.10 crores, put together. This is said to be a pre-requisite for issuance of a NOC for the proposed residential project, in the schedule property. The petitioners being aggrieved by the said pre-requisite or condition precedent for issuance of NOC under the building Bye-laws of the BBMP, are before this Court calling in question imposition of those imposts.

5. Heard the learned senior counsel Sri Vikram Huilgol appearing for petitioner in Writ Petition No.20016 of 2021; learned counsel Sri Sammith S., appearing for the petitioners in Writ Petition No.10020 of 2020; learned senior counsel Sri M.N. Seshadri and learned senior counsel Sri Ravi B Naik appearing along with learned counsel Sri K.B.Monesh Kumar for the Board; learned Additional Government Advocate Sri Dhyan Chinnappa representing the State and learned counsel Sri A.Jagannath appearing for the BBMP.

6. The learned senior Counsel Sri Vikram Huilgol appearing for the petitioners, sphere-heading the submissions in these cases would raise the following contentions –

(i) The imp

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