Karnataka High Court
Palladium Constructions Pvt Ltd vs The Central Valuation Committee on 5 December, 2023
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE R.NATARAJ
WRIT PETITION NO.9071 OF 2020 (GM-ST/RN)
BETWEEN:
PALLADIUM CONSTRUCTIONS PVT. LTD.
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
MARKETCITY RESOURCES PVT. LTD.,
GROUND FLOOR,
R.R. HOSIERY BUILDING,
SHREE LAXMI WOOLLEN MILLS ESTATE,
MAHALAKSHMI, MUMBAI-400011
REPRESENTED BY AUTHORIZED REPRESENTATIVE
MR. RAVI SANKAR
...PETITIONER
(BY SRI. DHYAN CHINNAPPA, SENIOR ADVOCATE FOR DHRITI
VISHWANATH, ADVOCATE)
AND:
1. THE CENTRAL VALUATION COMMITTEE
DEPARTMENT OF REGISTRATION AND STAMPS,
8TH FLOOR, KANDAYA BHAVAN,
K.G. ROAD, BANGALORE-560009.
REPRESENTED BY CHAIRMAN
THE INSPECTOR GENERAL OF REGISTRATION
AND COMMISSIONER OF STAMPS.
2. INSPECTOR GENERAL OF REGISTRATION
OF STAMPS,
DEPARTMENT OF REGISTRATION AND STAMPS,
8TH FLOOR, KANDAYA BHAVAN,
2
K.G. ROAD, BANGALORE-560009.
3. THE DISTRICT REGISTRAR
RAJAJINAGAR REGISTRATION DISTRICT,
NO.2, "LEELA ARCADE",
NAGARABHAVI,
BANGALORE-560072.
4. THE SUB-REGISTRAR, RAJAJINAGAR
RAJAJINAGAR INDUSTRIAL TOWN,
RAJAJINAGAR, BANGALORE-560010.
...RESPONDENTS
(BY SRI. VIKRAM A. HUILGOL, ADDITIONAL ADVOCATE
GENERAL ALONG WITH SRI. RAHUL CARIAPPA, ADDITIONAL
GOVERNMENT ADVOCATE FOR RESPONDENT NOS.1 TO 4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
DECLARE THAT THE 1ST RESPONDENT IS BOUND TO
CONSTITUTE A SUB-COMMITTEE FOR EVERY DISTRICT OR SUB-
DISTRICT AND THAT IT CANNOT ACT UPON THE
RECOMMENDATION OF ANY AUTHORITY, UNLESS IT IS A
RECOMMENDATION OBTAINED IN THE MANNER CONTEMPLATED
IN RULE 5 OF THE RULES AND ETC.
THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDER ON 07.09.2023 AND COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE THE
FOLLOWING:-
ORDER
The petitioner has sought for a writ in the nature of certiorari to quash a Memorandum bearing No.£ÉÆÃ.ªÀÄÄ/¹«¹/126/2019-20 dated 17.07.2019 Annexure-G and the consequent notification bearing 3 No.R&S/CVC/485/2017-18 dated 05.05.2020 at Annexure
- M. The petitioner has sought for declaration that respondent No.1 is bound to constitute a Sub-Committee for every District or Sub-District and that it cannot act upon the recommendation of any authority to re-fix the guideline value for the purpose of registering documents unless such recommendation is in the manner provided under Rule 5 of the Karnataka Stamp (Constitution of Central Valuation Committee for Estimation, Publication and Revision of Market Value Guidelines of Properties) Rules, 2003 (henceforth referred to as 'Rules of 2003'). The petitioner has also sought for a declaration that the power conferred by Section 45-B of the Karnataka Stamp Act, 1957 (henceforth referred to as 'Act of 1957') is limited to fixing "average rates" of agricultural lands, residential, commercial industrial sites and properties on discernable, objective and relevant material in any village, municipal or any other local body as specified in the Rules of 2003 and that it does not extend to fixing the guideline value for standalone properties.
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2. The petitioner claims to have developed an integrated multi-storied residential complex consisting of 12 blocks, which is named as "One Bangalore West". Of 12 blocks, one of them is named "Kessaku" with large apartment units. The petitioner claims that due to the sheer size of the apartments in "Kessaku" block, it was finding it difficult to secure buyers and therefore, applied for modification of the sanctioned plan. The petitioner contends that respondent No.1 issued a notification dated 30.03.2017 under Section 45-B of the Act of 1957 fixing the guideline value of the property promoted by the petitioner at a sum of Rs.76,000/- per sq. mtr. of super built-up area.
3. Later, another notification was issued on 29.08.2018 under Section 45-B of the Act of 1957 re-fixing the guideline value of the apartment developed by the petitioner at a sum of Rs.1,61,500/- per sq. mtr of super built-up area. The petitioner objected to the re-fixation of exorbitant guideline value of its project, which was far in 5 excess of the prevailing market value and the actual transaction value. The respondent No.3 addressed a communication dated 09.10.2018 to respondent No.2 contending that the guideline value of the project developed by the petitioner should be fixed at a sum of Rs.1,50,000/- per sq. mtr. of super built-up area and a sum of Rs.1,85,000/- per sq. mtr. of super built-up area in respect of "Kessaku" block. In doing so, respondent No.3 claimed that the value of the apartments sold in the project of the petitioner ranged between Rs.1,00,262/- and Rs.1,59,475/- per sq. mtr. Further, he claimed that the apartment had premium facilities such as club house, covered car parks, swimming pool, jogging track, play area and helipad and therefore, the value of the project excluding "Kessaku" should be fixed at Rs.1,50,000/- per sq. mtr of super built-up area. The respondent No.2 based on some internet sources claimed that the value of "Kessaku" block should be fixed at Rs.1,85,000/- per sq. mtr.
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4. The petitioner contends that the transaction value of the sales in the project that were finalized ranged between Rs.90,213/- to Rs.1,30,244/- per sq. mtr. of super built-up area. The petitioner contends that though a specific request was made by it for hearing, respondent No.1 without affording an opportunity of being heard, adopted the value on the basis of the report of respondent No.3 and issued a final notification dated 05.12.2018 fixing the guideline value for the project at a sum of Rs.1,50,700/- per sq. mtr. of super built-up area, which was in respect of the entire project "One Bangalore West", which included "Kessaku". The petitioner contends that there are other premium integrated multi residential premium projects in the vicinity developed by Brigade Developers, which comprised of World Trade Centre, a Five Star Hotel, a Luxury Mall, Columbia Asia Hospital and a High-end International School. It contended that in the year 2017, the guideline value of apartments in Brigade Gateway was Rs.84,300/- per sq. mtr. while the guideline value of the petitioner's project was Rs.76,000/- per sq. 7 mtr. However, by virtue of the notification dated 05.12.2018, the guideline value of Brigade Gateway Apartment was re-fixed at Rs.1,20,000/-per sq. mtr. while the guideline value for the petitioner's project was fixed at Rs.1,50,700/- per sq. mtr. Likewise, the petitioner claimed that in respect of three other projects in the vicinity developed by Renaissance Developers, the guideline value in the year 2017 was Rs.60,700/-, which was revised to Rs.62,000/- in the year 2019.
5. Later, in terms of another notification dated 17.07.2019, respondent No.2 issued an Official Memorandum proposing to re-fix the guideline value for "Kessaku" block at a sum of Rs.1,85,000/- per sq. mtr. The petitioner submitted detailed objections to the Official Memorandum dated 17.07.2019. It was brought to the notice of respondent No.2 that the apartment units in "Kessaku" were larger in size but the other facilities were identical to the facilities provided in "One Bangalore West". The respondent No.2 addressed a letter dated 31.08.2019 8 to respondent No.3 directing him to furnish a fresh report and to reconsider its previous recommendation dated 17.07.2019.
6. The petitioner purportedly filed a detailed representation with all the previous objections filed. However, respondent No.3 failed to consider the objections and submitted a report on 23.10.2019 stating that "Kessaku" block could be treated as a separate project. The petitioner therefore, filed a representation on 24.01.2020 before respondent Nos.1 to 3 stating that a fixation of separate and higher guideline value of "Kessaku" block though it lay within the same project, is misconceived.
7. The petitioner claims that an application was filed by it seeking information about the details of the meeting of respondent No.1 and it was given to understand that respondent No.1 at its meeting dated 22.01.2020, without referring to the objections raised by the petitioner, decided to revise the guideline value, 9 thereby re-fixing the guideline value at a sum of Rs.1,81,000/- per sq. mtr. of super built-up area. The revised guideline was brought into force by a revised notification dated 05.05.2020. The petitioner contends that the re-fixation of the guideline value was in flagrant violation of Section 45-B of the Act of 1957 and Rules of 2003 and that the petitioner was singled out and treated differentially. The petitioner contends that as a result of huge fixation of guideline value, the petitioner is unable to sell the apartments as customers have to pay a higher stamp duty than they are actually liable to pay. It further contended that one sale deed was presented for registration on 12.02.2020 for a sale consideration of Rs.20,02,08,000/- and stamp duty of Rs.1,32,13,730/- was paid. However, based on the revised guideline value, respondent No.4 is demanding an additional stamp duty of Rs.18,40,0415/-.
8. The petitioner contends that respondent No.1 is an authority constituted under Section 45-B of the Act of 10 1957 for estimation and publication of the market value guidelines in different areas in the State of Karnataka. Therefore, it is required to formulate methodology for estimating the area-wise guideline value of immovable properties. In exercise of powers conferred under Section 45-B of the Act of 1957, the Rules of 2003 was formulated. The role of the Sub-Committee constituted under Rule 5 of the Rules, 2003 states, "The Sub-Committee shall meet as often as required to discuss and decide on the estimation of the market value rates for the guidelines and prepare a statement showing the average rates of agricultural lands, residential, commercial and industrial sites in village and municipal or any other local body area in its jurisdiction as specified in these rules."
9. It is contended that the Registrar, under Rule 5(3) has the right to comment on the correctness of the method and details gathered by the Sub-Committee and in turn send the decision of the Sub-Committee with his recommendations to the Central Valuation Committee. 11 Rule 6 of the Rules of 2003 prescribe the guidelines to be adopted for ascertaining the average market value for the purpose of the guideline. Therefore, it is contended that the mandate is for fixing the guideline value for an area and not for fixing the guideline for individual properties. Therefore, it is contended that the re-fixation of market value of the project of the petitioner more particularly, in respect of "Kessaku" block is beyond the role, power and functions of the respondents.
10. Further, it is contended that respondent No.3 while recommending the re-fixation of the guideline value of "Kessaku" block at a sum of Rs.1,85,000/-per sq. mtr. had considered a non-existing Golf Course within the "Kessaku" block. Therefore, it is contended that the entire exercise by respondent Nos.1 to 4 in re-fixing the guideline value of the apartment in "Kessaku" block at a sum of Rs.1,85,000/- per sq. mtr. is wholly illegal and not in accordance with the provisions of the Act of 1957 and the Karnataka Stamp Rules, 1958 as well as the Rules of 2003. 12
11. The respondents have opposed the writ petition contending that respondent No.1 had issued a notification dated 17.07.2019 notifying the guideline value of "Kessaku" block at a sum of Rs.1,81,000/- per sq. mtr. of super built-up area. They contended that "Kessaku" is one of 12 blocks in the integrated multi-storied apartment developed on the property measuring 67,488.073 sq. mtrs. They contended that "Kessaku" is a super luxury apartment, which consists of duplex flats of 7 bedrooms with 5-7 car parks. The property has a helipad and a dedicated club house. They further contended that "Kessaku" has special features, which are not available in the other blocks.
12. The respondents contend that the petitioner filed objections to the preliminary notification notifying the guideline value published on 14.09.2018, where the guideline value was tentatively fixed at Rs.1,85,000/- per sq. mtr. of super built-up area. The petitioner objected to the same, which was considered by the Committee and the 13 guideline value was reduced to Rs.1,81,000/- per sq. mtr., which is impugned in the present writ petition.
13. The respondents further contend that before finalizing the guideline value, respondent No.1 called for a report from respondent No.3 as per Rule 5 of the Rules of 2003. The respondent No.3 visited the spot and after visited "Kessaku" block and after being satisfied about the facility available, submitted a report to respondent No.1 on 09.10.2018. Based on the said report, respondent No.1 issued the notification dated 05.05.2020 as at Annexure - M. Therefore, they contended that the valuation of "Kessaku" block is just and proper and there is no contravention of the Rules of 2003. They contend that under Section 45-B of the Act of 1957 read with Rule 6 of the Rules of 2003 and Rule 6(c)(iii) empowers the respondents to fix the guideline value of the property. Therefore, there is no illegality or infirmity in fixing the guideline value of "Kessaku" block of Rs.1,81,000/- per sq. mtr.
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14. The respondents contend that under Section 45-B(2) of the Act of 1957, respondent No.1 is the final authority for formulation of policy, methodology and administration of the market value guidelines in the State and that it did determine the guideline value applicable to "Kessaku" block in accordance with the Rules of 2003. They contend that the respondents have formed Sub- Committee for Bangalore Urban District. The Central Valuation Committee has been constituted under Section 45-B(2) of the Act of 1957 vide a resolution dated 18.09.2003, which has assumed the charge of the Sub- Committee for Bangalore Urban District. They contended that the difference in the guideline value of the apartment blocks in "One Bangalore West" and "Kessaku" block is due to the fact that at "One Bangalore West", there are 2-3 bedrooms apartments with a super built-up area of 1200 - 1800 sq. ft. with one or two car parks and has lesser amenities and features compared to "Kessaku", which is a large apartment with luxury features. Therefore, the fixation of guideline value for "Kessaku" block at 15 Rs.1,81,000/- is just and proper. Further, it is contended that the stamp duty is paid by the buyer and not the petitioner. In case, if the buyer is aggrieved by the guideline value, he will have to appeal against the guideline value as provided under Section 45-A of the Act of 1957 and therefore, the petitioner cannot have any grievance.
15. The respondents contended that Section 45-B of the Act of 1957 cannot be read in isolation but in conjunction with Rule 6(c)(iii) of the Rules of 2003, which empowers the respondents to fix the guideline value based on discernable data. Further, they contend that the apartment developed by the petitioner more particularly, the "Kessaku" block is unique and is a first of its kind in the country and therefore, the guideline value is fixed based upon the intrinsic value of the property. Thus, it is claimed that the writ petition is not maintainable.
16. The learned Senior counsel representing the petitioner contended that the re-fixation of guideline value 16 has to be done in accordance with the Rules of 2003. He invited the attention of the Court to Rule 5 of the Rules of 2003, which reads as follows:-
"5. Estimation of market value guidelines.- (1) The Central Valuation Committee shall, as far as possible in the first week of October of every calendar year, send instructions along with general policy guidelines to all the Sub-Committees in the State of estimation of market value guidelines of properties for the next calendar year. Such instruction may be sent to any Sub- Committee, at any time of the calendar year for the revision of the rates, if required.
(2) The Sub-Committee shall on receipt of the instructions publish the intention of such estimation or revision, as the case may be, in the local newspapers and also on the notice board of important offices. A period of 15 days may be allowed for receipt of objections and suggestions from the public and all such suggestions and objections so received, shall be processed by the Secretary and placed before the Sub-Committee for discussion. The Sub-Committee shall meet as 17 often as required to discuss and decide on the estimation of market value rates for the guidelines and prepare a statement showing the average rates of agricultural lands, residential, commercial and industrial sites in village and municipal or any other local body area in its jurisdiction as specified in these rules. The data shall be arranged village and local body wise and the statement shall be prepared and signed by the Secretary and Chairman of the Sub-Committee in such form as may be specified by the Committee from time to time. The data so prepared shall be both in paper copy and a soft copy (floppy) in Microsoft Access shall be sent to the Registrar of the concerned district, in the last week of December of every calendar year. The hard copy of the data shall be in a booklet form and the Committee may also record its views on the suggestions and objections received from the public in the appropriate column.
(3) The Registrar shall on receipt of the statement received under sub-rule (2), shall verify and if he finds any discrepancy or omission may remit it back to the Sub-
Committee immediately for rectification or 18 supply of the omission. Such references shall be attended by the Sub-Committee and the statement be resubmitted to the Registrar within 15 days from the date of reference. The Registrar shall finally examine the data and record his views in the appropriate column for any improvement or change and send the booklets and soft copies of the same, separately for each sub-district to the Secretary of the Central Valuation Committee in the first week of January of the next calendar year."
17. The learned Senior counsel contended that the mandate of the Rules of 2003 is to fix the guideline value for an area and not for individual or standalone properties. Therefore, any attempt to fix the market value of individual properties is beyond the scope of functions of the respondents and would be an infraction of the fundamental rights of the citizens. He referred to Rule 6 of the Rules of 2003 and pointed out that a Market Valuation Sub-Committee shall prepare a statement showing the average rates of agricultural and non-agricultural lands, 19 residential, commercial and industrial sites in the sub- district and municipal or local body area on the guidelines contained in Rule 6. He submits that the process of evaluation of the reports of the Sub-Committee is as contained in Rule 7 and respondent No.1 may adopt any policy or modality or standard for deciding the estimated market value of the properties. He submits that in order to achieve uniformity, uniform guidelines should be evolved for calculation of rates for building as applicable to all the Sub-Districts and for that purpose, should consider the rates approved by PWD for various types of constructions, which has to be applied in the State. He therefore, contends that in the present case, in terms of the notification dated 30.03.2017, the guideline value was fixed at Rs.76,000/- per sq. mtr. and later in terms of the notification dated 05.05.2020, it was enhanced to a sum of Rs.1,81,000/- per sq. mtr. in respect of "Kessaku" block. The learned Senior counsel contended that respondent No.3 arbitrarily concluded that the value of the property sold was between Rs.1,00,262/- and Rs.1,59,475/- though 20 the transaction value of sales in the project was finalized between Rs.90,213/- to Rs.1,30,244/- per sq. mtr. He contended that respondent No.3 failed to notice that the fee paid for the membership of the club house, reimbursable BESCOM and BWSSB deposits, maintenance charges advance for a period of one year, charges towards right to use car parks, floor right charges, GST and legal expenses are separately collected by the builder and these payments are not part of the value of the apartment. However, respondent No.3 has assumed that all these constitute part of the value of the apartment and claimed that the value of the apartment sold was between Rs.1,00,262/- and Rs.1,59,475/- per sq. mtr. He contends that even if this is accepted, then the average sale value must be Rs.1,38,523/ per sq. mtr. He therefore, contends that the rate in which the guideline value is fixed in respect of "Kessaku" block is arbitrary and based on information sourced from third party website. He contends that the respondents did not even consider the objections filed by 21 the petitioner against revision of the guideline value but arbitrarily accepted the report of respondent No.3.
18. The learned Additional Advocate General for the respondents reiterated the contentions urged in the statement of objections and contended that "Kessaku" block is a super luxury apartment with high-end features, which is not available in any other apartment and therefore, respondent No.3 in exercise of power under Rule 6(c)(iii) of the Rules of 2003 felt it appropriate to enhance the guideline value at a sum of Rs.1,85,000/- per sq. mtr. He contends that the information sourced by respondent No.3 from various websites cannot be disbelieved as that represented the market trend of the properties.
19. I have considered the submissions made by the learned Senior counsel for the petitioner and the learned Additional Advocate General for the respondents.
20. Under Section 45-B of the Act of 1957, the State Government is entitled to constitute a Central 22 Valuation Committee for estimation, publication and revision of market value guidelines of properties in any area in the State at such intervals and in such manner, as may be prescribed for the purpose of Section 45-A. The Central Valuation Committee may for the said purpose constitute Market Valuation Committees in each sub- district and district comprising of such members as may be prescribed for estimation and revision of the market value guidelines in the State of Karnataka. The Sub-Committee so constituted shall follow such procedures as may be prescribed. In exercise of power under Section 68 of the Act of 1957, the Rules of 2003 are framed. The Central Valuation Committee is constituted under Rule 3. The Sub- Committees are constituted under Rule 4. The members of the Sub-Committee are to be drawn from the departments of Revenue, Survey and Settlement, Public Works, Municipal Councils or Town Panchayaths and shall be headed by the Tahsildar of the concerned Taluk, while the Sub-Registrar of said sub-district shall be Member Secretary. The Committee shall function under the control 23 of the Registrar of the District. While estimating the market value, the Central Valuation Committee shall send instructions and general policy guidelines to all the Sub- Committees in the State for estimation of the all the properties for the next calendar year. On receipt of the instructions, publish intention of such estimation or revision in the local newspapers and allow objections/suggestions to be filed, which shall be processed by the Secretary and placed before the Sub- Committee for discussion. The Sub-Committee shall decide on the estimation of the market value guidelines of specific properties village-wise, local body wise and then sent to the Registrar of the concerned District. The Registrar shall on receipt, may accept or remit it back to the Sub- Committee for rectification or supply any omission and after it is attended to by the Sub-Committee, he shall examine and record his views and place it before the Secretary of the Central Valuation Committee. The Sub- Committees are bound to prepare their reports based on the guidelines prescribed under Rule 6 of the Rules, 2003. 24 The Secretary shall then place it before the Committee, which shall take final decision on the estimation of the market value after considering the suggestions made by the committees and the Registrar of the Districts. The approved statements of the estimated market value shall be sent to the Registrar of the Districts in such form as prescribed and the same shall be made available to all concerned. While fixing the market value, the Central Valuation Committee is bound to achieve uniformity by following uniform guidelines for the calculation of the rates for the buildings of different kind, lands either converted for non-agricultural use or industrial use. While fixing the guideline value of construction, the rates approved by the Public Works Department has to be adopted uniformly.
21. Therefore, the determination and re-fixation of the guideline value of properties in the State of Karnataka has to be done in accordance with the Rules of 2003 which is a complete code in itself and has to be strictly complied since the Central Valuation Committee is the final authority 25 on all matters relating to fixation and re-fixation of guideline value.
22. Now coming to the case on hand, the guideline value of the project of the petitioner was initially fixed in terms of the notification dated 30.03.2017 at a sum of Rs.76,000/- per sq. mtr. of super built-up area. A notification dated 29.08.2018 was issued inviting objections regarding re-fixation of the guideline value of the project of the petitioner at a sum of Rs.1,61,500/- per sq. mtr. of super built-up area. The petitioner objected to this on 14.09.2018 inter alia contending that the revision in the guideline value at 112.5% is without any basis and was not in accordance with the Rules of 2003. The respondent No.3 on 09.10.2018 purportedly inspected the project of the petitioner and found that there were 9 towers of which, 5 towers were completed and 2 towers were raised upto plinth level and 2 others were yet to be started. He purportedly found that 400 flats in 5 towers were already sold and deeds were registered, while 50 26 flats were yet to be sold. He also found from the sale statistics that a sum of Rs.1,00,262/- per sq. mtr. was the minimum price, while a sum of Rs.1,59,475/- per sq. mtr. was the maximum price at which, the flats were sold. He reported that there were special amenities in the apartment namely, club house, covered car parking, swimming pool, jogging track, stadium and helipad. He found from the internet that the cost of a 2 BHK flat with a super built-up area of 1718 sq. ft. was Rs.3 crores, while a 3 BHk of 2367 sq.ft. super built-up area commanded a price of Rs.4.13 crores and 4 BHK 3436 sq. ft. super built- up area at Rs.6 crores. Therefore, he opined that the guideline value of the flats in the apartment of the petitioner could be fixed at Rs.1,50,000/- per sq. mtr. of super built-up area. In so far as the "Kessaku" deluxe apartment is concerned, he found that there were 7 wings of 7 BHK duplex flats of a minimum area of 6116 sq. ft and maximum area of 12,000 sq. ft. of super built-up area. He found from the internet that 4 BHK flat of 6116 sq. ft. super built-up area was quoted at a sum of Rs.13 crores 27 and 5 BHK 7506 sq. ft. super built-up area was quoted at Rs.15.28 crores and 6 BHK of 11968 sq.ft. of super built- up area was quoted at Rs.24.17 crores. He therefore, claimed that in "Kessaku" wing, the market value was Rs.20,000/- per sq. ft. He found that the facilities of rain harvesting, 24 x 7 security, power backup, gymnasium, Heat indoor, home automation, swimming pool, children's play area, jogging track, 50,000 sq. ft. golf stadium, club house, helipad etc., were available exclusively for "Kessaku" block and therefore, opined that the guideline value of "Kessaku" block could be fixed at Rs.1,85,000/- per sq. mtr. of super built-up area.
23. Following this, respondent No.1 issued a notification dated 05.12.2018 fixing the guideline value of the flats in the petitioner's project at a sum of Rs.1,50,700/- per sq. mtr. of super built-up area. The respondent No.2 thereafter, considering the report of respondent No.3 dated 09.10.2018, proposed to re-fix the 28 guideline value of the "Kessaku" block at a sum of Rs.1,85,000/- per sq. mtr. of super built-up area.
24. The petitioner objected against the revision contending that the revision was not in accordance with Rules of 2003 and that the reports from internet cannot be the basis to fix the guideline value. It also contended that the revision of the guideline value at a sum of Rs.1,85,000/- per sq.mtr. in respect of "Kessaku" block was excessive and arbitrary and affected its prospects of disposal of the flats constructed in the "Kessaku" block. It contended that there was no golf stadium as reported by respondent No.3 in "Kessaku" block and therefore, contended that report of respondent No.3 was incorrect and could not be relied upon. It referred to various other projects in the vicinity and claimed that the guideline value in respect of those projects was fixed at a sum of Rs.1,20,000/- per sq. mtr. at the highest and Rs.54,600/- at the lowest. It also claimed that the revision of the guideline value for the year 2017-18 from Rs.76,000/- per 29 sq. mtr. to Rs.1,85,000/- per sq. mtr. would be an unrealistic 143% upward revision. It also claimed that the cost of the apartment did not include various components such as club house charges, maintenance charges, car parks, floor raise charges etc.,
25. The respondent No.2 forwarded the objections of the petitioner to respondent No.3 for proper consideration of the objections. Nonetheless, respondent No.3 in terms of its letter dated 23.10.2019 recommended the fixation of guideline value of "Kessaku" block and "One Bangalore West" at a sum of Rs.1,85,000/- per sq. mtr. super built-up area. In order to arrive at such a conclusion, respondent No.3 relied upon the advertisements by prospective sellers on common floor, Protiger and MagicBrick websites. The petitioner again represented to respondent Nos.1 to 3 about the unreasonableness of the re-fixation of the guideline value at Rs.1,85,000/- per sq. mtr. and also informed the respondents that the flats in "Kessaku" block could not be 30 sold as the super built-up area was huge and therefore, an application was filed before the Bruhat Bengaluru Mahanagara Palike for modification of the plan. Nonetheless, respondent No.1 issued the impugned notification dated 05.05.2020 re-fixing the guideline value of the "Kessaku" block at a sum of Rs.1,81,000/- per sq. mtr.
26. It is therefore, evident that while revising the guideline value of properties, the respondents did not follow the Rules of 2003 in re-fixing or revising the guideline value. However, the entire process of re-fixation has emanated from the office of respondent No.3 and not by the Market Valuation Sub-Committee as defined under Rules 5 and 6 of the Rules of 2003. Since it is held that the Rules of 2003 is a complete code for fixation/revision of the guideline value of properties for the purposes of Section 45-A of the Act of 1957, the methodology adopted in fixing the guideline value of "Kessaku" block promoted by the petitioner is arbitrary and warrants interference. It 31 is also necessary to note that the advertisements made on the internet are only in the nature of offers made by owners and cannot represent the actual value of the flat and therefore, cannot be the basis for determination of the guideline value. It is also pertinent to note that while determining the guideline value, the charges collected by the developer such as clubhouse subscription, maintenance etc., which does not form part of actual value, cannot be tucked into the guideline value. Therefore, the revision of the guideline value in respect of "Kessaku" block promoted by the petitioner at a sum of Rs.1,81,000/-per sq. mtr. is unrealistic, unscientific and arbitrary and therefore, deserves to be set at naught. The respondent No.1 is directed to re-fix the guideline value in accordance with the Rules of 2003 and not based on any consideration outside the Rules of 2003.
27. In that view of the matter, this petition is allowed in part. The Memorandum dated 17.07.2019 issued by respondent No.2 and the consequent notification 32 dated 05.05.2020 issued by respondent No.1 are quashed. The respondents are directed to re-consider and re-fix the guideline value in accordance with the Karnataka Stamp (Constitution of Central Valuation Committee for Estimation, Publication and Revision of Market Value Guidelines of Properties) Rules, 2003 in the manner mentioned in paragraph Nos.16 and 20 above.
28. The relief of declaration to constitute Sub- Committee for every District or Sub-District and the relief of declaration to declare that the power conferred under Section 45-B of the Karnataka Stamp Act, 1957 is limited to fixation of 'average rates' and does not extend to fixation of rates for individual properties, are kept open to be considered later.
Sd/-
JUDGE PMR