Karnataka High Court
M/S Valmark Developers Private Limited vs State Of Karnataka on 12 August, 2025
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WP No. 14087 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF AUGUST, 2025
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO. 14087 OF 2025 (LB-BMP)
BETWEEN:
1. M/S VALMARK DEVELOPERS PRIVATE LIMITED
HAVING ITS REGISTERED OFFICE
AT 'THE RESIDENCY', 19TH FLOOR
NO.133/1, RESIDENCY ROAD
BANGALORE-560 025.
REPRESENTED BY ITS
MANAGING DIRECTOR SRI. RATAN LATH
...PETITIONER
(BY SRI. T.P. VIVEKANANDA, ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY
URBAN DEVELOPMENT DEPARTMENT
Digitally signed by 4TH FLOOR, VIKASA SOUDHA
NAGARAJA B M
Location: HIGH DR.AMBEDKAR VEEDHI, BANGALORE 560 001.
COURT OF
KARNATAKA
2. STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY
DEPARTMENT OF PARLIAMENTARY
AFFAIRS AND LEGISLATION
VIDHANA SOUDHA
DR.B.R. AMBEDKAR VEEDHI
BANGALORE-560 001.
3. STATE OF KARNATAKA
DEPARTMENT OF LABOUR
VIKASA SOUDHA
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WP No. 14087 of 2025
HC-KAR
BANGALORE-560 001.
REPRESENTED BY ITS SECRETARY.
4. THE BRUHAT BANGALORE MAHANAGARA PALIKE
N.R.SQUARE, BANGALORE-560 002.
REPRESENTED BY ITS
CHIEF COMMISSIONER
5. THE JOINT DIRECTOR
TOWN PLANNING (SOUTH)
R.R. NAGAR, BBMP
BANGALORE -560 098.
...RESPONDENTS
(BY SRI. H.K. KENCHEGOWDA, AGA FOR R1 AND R3;
SRI. K.B. MONESH KUMAR, ADVOCATE FOR R4 AND R5
NOTICE NOT ORDERED IN RESPECT OF R2)
THIS W.P. IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA, PRAYING TO QUASH THE
KARNATAKA MUNICIPAL CORPORATIONS AND CERTAIN OTHER
LAW (AMENDMENT) ACT, 2021 ACT NO.1/2022 DATED
13.01.2022 ENACTED BY THE SECOND RESPONDENT
PUBLISHED THROUGH NOTIFICATION BEARING NO.DPAL 50
SHASANA 2021 GAZETTED ON 13.01.2022 AT ANNEXURE-K
DECLARING IT TO BE ULTRAVIRES AND UNCONSTITUTIONAL
AND ETC.
THIS PETITION, COMING ON FOR DICTATING ORDERS,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
ORAL ORDER
This petition is filed seeking following reliefs:
"i) issue a writ of certiorari or similar writ or order or direction to quash the Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, -3- NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR 2021 Act No.1/2022 dated 13.01.2022 enacted by the second respondent published through notification bearing No.DPAL 50 SHASANA 2021 gazetted on 13.01.2022 at Annexure-K declaring it to be ultravires and unconstitutional.
ii) issue writ of certiorari or similar writ or order or direction to quash the Office Order bearing No.ADTP/PR/461/2021-22 dated 9.3.2022 issued by the 4th respondent at Annexure -L.
iii) issue a writ of certiorari to quash the demand notice/Challan No.BBMP/EoDB/CH/3547/25-26 LP No.BBMP/Addl.Dir/JDSOUTH/0053/24-25 dated 24.04.2025 at Annexure -J issued by the Respondent No.5 in so far as demand towards scrutiny Fee of Rs.2,75,174/-, license fee of Rs.74,24,990/-, Betterment fee for building in a sum of Rs.16,50,466/-, security deposit of Rs.41,26,165/-, ground Rent (including GST) of Rs.43,81,988/-, Cess towards BWSSB in a sum of Rs.1,56,794/-, Cess towards Ring Road in a sum of Rs.1,56,794/-, Cess towards Improving the slums in a sum of Rs.78,397/-, cess towards MRTS in a sum of Rs.7,83,971/-, 5% levy on service charges in a sum of Rs.61,894/- and labour cess of Rs.1,37,33,323/-
are concerned.
iv) issue Writ of Certiorari or similar Writ, order or direction to quash the Circular bearing No.He.Ni.Ka.Pa.Ko/ P.R/320/2020-21 dated 14.08.2020 at Annexure-M issued by the 4th Respondent. -4-
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v) issue a writ of certiorari or similar writ or order or direction to quash provisions of section 18-A of Karnataka Town and Country Planning Act, 1961 brought into effect by Karnataka Act No.23 of 2004 by the 1st Respondent at Annexure-N in so far as 18-A(i) and (iv) of Karnataka Act No.23 of 2004 is concerned.
vi) grant an order, direction or writ in the nature of Certiorari quashing the Notification issued by the 1st Respondent bearing No. UDD 3 TTP 2015 dated 25.02.2020 as contained in ANNEXURE-P in so far as the amended Rule 37-A and Rule 37-C are concerned.
vii) issue writ of mandamus or similar writ or order or direction declaring that The Bruhat Bengaluru Mahanagara Palike and certain other Law (Amendment) Act, 2023 (Karnataka Act No.37/2024 issued by 2nd Respondent produced at Annexure-Q is ultravires to the Constitution of India and quash the same.
viii) issue any other appropriate writ or order or direction to the respondents deemed fit in the circumstances of the case."
2. Though this Court was inclined to dispose of the petition, the petitioner's counsel referring to the affidavit filed on 14.07.2025 brought to the notice of this Court that despite representation dated 22.5.2025 submitted by the -5- NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR petitioner enclosing the interim order granted by this Court, the respondents are yet to issue modified plan.
3. The petitioner has also submitted an affidavit before this Court on 14.7.2025 undertaking to execute an indemnity bond as per the interim order for securing payment of demands. Para 8 would be relevant. Same is extracted, which reads as under:
"8. I submit that to show our bonafides, without prejudice to the contentions urged in the Writ Petition we have been advised to file this affidavit to the following effect:
a) Notwithstanding the order passed in WP No.23086/2022 we are ready to deposit the demand amount in terms of the interim order dated 15.05.2025 passed by this Hon'ble Court.
b) We are ready to submit indemnity bond to secure the payment of the demands which are stayed by this Honb'le Court.
c) We will abide by the final order in the present Writ Petition and in the Writ Appeal that may be filed by the BBMP against the order passed in W.P.No.23086/2022."
4. As a counter to the petitioner's claim, the respondent-BBMP filed its statement of objections on -6- NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR 16.07.2025. It is contended therein that, notwithstanding the reported judgment in M/s. Sapthagiri Shelters [W.P. No.23086/2022 and connected matters], wherein the amendment to Section 240A was declared unconstitutional, the officials continue to apply the amended provision already held to be ultra vires. To circumvent the law laid down by the Co-ordinate Bench and the interim directions issued by this Court, the Corporation asserts that the matter is pending before the Division Bench and, therefore, the petitioner's request for issuance of a modified plan cannot be considered at this stage.
5. Upon hearing the learned counsel and perusing the material on record, this Court has given anxious consideration to the aforesaid judgment, the relevant portion of which bears directly on the petitioner's entitlement to a modified plan. For ready reference, the same is extracted below:
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NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR "ORDER
(i) The writ petitions are partly allowed.
(ii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2021 (Karnataka Act No.01 of 2022), is hereby quashed and set aside.
(iii) The Karnataka Municipal Corporations and Certain Other Law (Amendment) Act, 2023, (Karnataka Act No.37 of 2024), is hereby quashed and set aside.
(iv) It is hereby declared that the provisions contained 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 'Development Plan' containing the proposal for construction on plots measuring more than 20,000 square meters in extent and not in respect of plots measuring less than 20,000 square meters.
(v) It is hereby declared that if fee has been earlier collected for change of land use or while approving a layout plan, fee shall not be collected for subsequent 'Development Plan' in terms of the 'Note' found below TABLE I of Rule 37-A of the Karnataka Planning Authority Rules, 1965.
(vi) It is hereby declared that the linking of the fee leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965, to the 'market value' or 'guidance value' as determined under Section 45-B of -8- NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR the Karnataka Stamp Act, 1957, is illegal. However, liberty is reserved to the respondent-State Government and the BBMP to re-fix a standard after collecting empherical data.
(vii) Consequently, all the impugned Circulars which seek to give effect to the Rules 37-A and 37-C of the Karnataka Planning Authority Rules, 1965, are hereby quashed and set aside.
(viii) It is hereby declared that Clause 3.8 of the Bengaluru Mahanagara Palike Building Bye- laws, 2003, providing for 'Ground Rent', is illegal and are accordingly quashed and set aside.
(ix) Consequently, all the impugned Demand Notices raised by the respondent-BBMP, in respect of the writ petitioners herein are also quashed and set aside. It would be advisable that the BBMP may come out with a scheme for '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."
6. This Court also considers it appropriate to reproduce the interim order dated 15.05.2025 granted in the present case, which reads as under: -9-
NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR "Learned High Court Government Pleader is directed to take notice for respondent Nos. 1 and 3.
Sri. Pawn Kumar, learned counsel undertakes to appear for respondent Nos.4 and 5.
The petitioner is before this Court being aggrieved by the demand notice as per Annexure-J. This Court in the similar matters has granted interim order. On principle of parity petitioner is also entitled for such interim relief.
There shall be interim order of demand at Annexure-J as under:
Sl. Particulars Relief granted by this Court No.
1. Scrutiny Fees Stayed to the extent of 50%
2. Ground rent and GST 18% Stayed Completely (100% stay)
3. Licence fee Stayed to the extent of 50%
4. Betterment Fees u/s 18 of KTCP Stayed Completely (100% stay) Act, 1961 (Betterment fee/levy) Building
5. Fee u/s 18 of KTCP Act 1961 Stayed Completely (100% stay) (Betterment fee/levy): Site area
6. Security deposit Stayed in excess of Rs.25/- per Sq.mtr.
7. Lake Rejuvenation fee No Stay
8. Compound wall fee No Stay
9. Road cutting fee No Stay
10. 1% service charges on Labour No Stay cess
11. Water supply Scheme (BWSSB) Stayed Completely (100% stay)
12. Ring road (BDA) Stayed Completely (100% stay)
13. Improving the Slums (KSCB) Stayed Completely (100% stay)
14. MRTS (BDA) Stayed Completely (100% stay)
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15. 5% Levy Service charges Stayed Completely (100% stay)
16. Labour Cess Stayed subject to condition that the said demand would be met as and when obligation to make said payment arises in terms of the Building and other Construction Workers Welfare Cess Rules, 1998.
Aforesaid interim relief is subject to further order which may be passed by this Court.
In addition to that petitioner shall furnish an indemnity bond to secure the payment of remaining amount in event of his failure in the writ petition within a period of one week in the.
On payment of the amount as above respondent shall consider issuing modified sanctioned plan if, the petitioner complies with the applicable provisions of law.
List this matter on 11.06.2025."
7. It is further noted that the petitioner submitted a detailed representation dated 20.06.2025, seeking issuance of a modified development plan in File No. PRJ/3646/22-23. Paragraphs 1 to 5 of the said representation are reproduced hereunder:
"1. With reference to the above, the Hon'ble High Court of Karnataka, by its interim order dated 15.05.2025 in W.P. No. 14087/2025 (LB-BMP), was pleased to stay a certain percentage of the demand raised in the Demand Note dated 29.04.2025 (Ref. No. 1) towards issuance of
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NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR the Modified Development Plan in respect of our project. The Hon'ble Court further directed your office to issue the Modified Development Plan within one week from the date of the interim order, upon payment of the amount excluding the stayed portion, and subject to the furnishing of an indemnity bond securing the balance amount, in the event of an adverse outcome in the writ petition.
2. On 22.05.2025, we submitted a requisition to your office (referred to at Sl. No. 3 above), enclosing the certified copy of the interim order passed by the Hon'ble High Court and requested that the Modified Development Plan be issued upon payment of the amount as per the said interim order. However, our request was not acted upon. We were, were informed that, in view of the judgment dated 05.06.2025 passed by the Hon'ble High Court of Karnataka in W.P. No.23086/2022 and other connected matters - whereby the Hon'ble Court declared that the fee leviable under Rule 37-A of the Karnataka Planning Authority Rules, 1965 could not be linked to the 'market value' or 'guidance value', and also quashed the levy of ground rent and certain other provisions of the Karnataka Municipal Corporations Act and the Karnataka Town and Country Planning Act, the BBMP is proposing to prefer a Writ Appeal challenging the said judgment, and hence, issuance of the Modified Development Plan in our case is being withheld.
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3. However, the Hon'ble High Court, in its further order dated 11.06.2025 in W.P No.14087/2025, directed the learned counsel for BBMP to direct the concerned officials of BBMP to issue the Modified Development Plan in compliance with the interim order dated 15.05.2025.
4. In light of the above, we once again request your good office to kindly issue the Modified Development Plan in File No. PRJ/3646/22-23, upon collecting the balance payment in accordance with the interim order dated 15.05.2025 passed in W.P. No. 14087/2025, and subject to the outcome of the Writ Appeal proposed to be filed by BBMP.
5. We hereby also undertake to execute the indemnity bond as required under the said interim order, securing the payment of the stayed portion in the event of an adverse outcome in the pending writ proceedings or in the Writ Appeal to be filed by BBMP."
8. On a plain reading of the interim order dated 15.05.2025 passed by the Co-Ordinate Bench, the direction issued to the respondent-authorities is clear, categorical, and unequivocal. The respondents were specifically directed to consider the petitioner's request for issuance of a modified sanction plan, subject only to the condition that the petitioner furnishes an indemnity bond.
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NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR The record discloses that, along with his detailed representation, the petitioner has expressly conveyed his willingness to execute such an indemnity bond in compliance with the said direction.
9. Notwithstanding this unambiguous directive, the respondents have chosen to disregard both the interim order of this Court and the binding pronouncement of the Co-Ordinate Bench in M/s. Sapthagiri Shelters [supra]. The said judgment has struck down Act No.1 of 2022 and Karnataka Act No.37 of 2024, holding that the linking of fees under Rule 37-A of the Karnataka Planning Authority Rules, 1965 to the market/guidance value under Section 45-B of the Karnataka Stamp Act, 1957 is illegal and without authority of law. In the face of such a declaration, the respondents cannot legally insist upon compliance with provisions already declared unconstitutional, nor can they use the pendency of an appeal before the Division Bench as a shield to perpetuate non-compliance.
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10. The stand adopted by the respondents that they are unable to process the petitioner's application for a modified plan on account of such pendency amounts to a deliberate act of defiance and is nothing short of gross contempt of the binding orders of this Court. It is a settled principle that orders of constitutional courts are binding on all authorities and must be obeyed in letter and spirit until set aside by a higher court. Any deliberate disobedience not only undermines the majesty of the court but also strikes at the very root of the rule of law. The Supreme Court has consistently held that such defiance must be dealt with an iron hand to preserve public confidence in the administration of justice.
11. The petitioner's counsel has further drawn attention to the connected matter in W.P. No.35896/2024, wherein, despite the subsistence of an interim order, the petitioner therein was compelled to deposit the entire levy owing to the urgency of commencing a CBSE school. Such selective and arbitrary conduct facilitating issuance of a
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NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR modified plan where the entire levy is paid, while refusing to act in the present case despite a clear legal mandate demonstrates a conscious and willful disregard of judicial directions.
12. The respondents cannot be permitted to take refuge under the pretext that the matter is "under consideration" by the Chief Commissioner of the BBMP and that they, as officials, have "no say" in the matter. Such reasoning is a transparent attempt to evade compliance with judicial orders. The obligation to obey orders of this Court is personal, direct, and absolute, it admits of no exceptions based on internal administrative hierarchies.
13. The continued inaction of the respondents, notwithstanding the subsistence of clear judicial directives and the binding ratio laid down by a Co-ordinate Bench in a reported decision on an identical issue, has resulted in substantial financial prejudice to the petitioner. The delay in approving the modified plan has not only stalled the
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NC: 2025:KHC:31200 WP No. 14087 of 2025 HC-KAR petitioner's ongoing project but has also escalated costs on account of idle capital and loss of prospective revenue. This selective and inconsistent approach facilitating immediate relief in comparable matters while withholding it in the present case exemplifies arbitrariness of the highest order.
14. In these circumstances, this Court is of the considered view that the conduct of the respondent/officials, particularly respondent No.5, constitutes gross contempt. In regard to violation of the interim order granted by this court, the petitioner is at liberty to initiate appropriate contempt proceedings for having violated the interim order dated 15.05.2025 wherein respondent/officials were directed to issue modified plan forthwith, so that the authority and efficacy of the directives issued by constitutional Courts are preserved inviolate.
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15. For the foregoing reasons, this Court proceeds to pass the following:
ORDER
(i) The writ petition stands allowed.
(ii) The Demand Notice bearing No.
BBMP/EoDB/CH/3547/25-26, LP No. BBMP/
Addl.Dir/JDSOUTH/0053/24-25 dated 24.04.2025 is hereby quashed.
(iii) The respondent-BBMP is directed to issue the modified sanction plan to the petitioners, upon securing an indemnity bond from them, within a period of two weeks from the date of receipt of a certified copy of this order.
(iv) In the event of failure on the part of the respondents to comply with the above direction within the stipulated period, the petitioner shall be at liberty to initiate appropriate contempt proceedings against the concerned officials.
Sd/-
(SACHIN SHANKAR MAGADUM) JUDGE ALB List No.: 2 Sl No.: 9