Bangalore Development
Authority Vs. The Air Craft Employees Cooperative Society Ltd. and others
[Civil Appeal Nos.
7503-7537 of 2002]
J U D G M E N T
G. S. Singhvi, J.
1.
These
appeals are directed against the order of the Division Bench of the Karnataka High
Court whereby the writ petitions filed by the respondents were allowed, Section
32(5A) of the Bangalore Development Authority Act, 1976 (for short, `the 1976
Act') was declared as violative of Article 14 of the Constitution, void and inoperative
and the conditions incorporated in the orders passed by the Bangalore Development
Authority (BDA) 2sanctioning residential layout plans or work orders in terms of
which respondents were required to pay/deposit various charges/sums specified therein
were quashed and a direction was issued for refund of the amount.
2.
With
the formation of the new State of Mysore, it was considered necessary to have a
uniform law for planned growth of land use and development and for the making
and execution of town planning schemes. Therefore, the State Legislature
enacted the Mysore Town and Country Planning Act, 1961 (for short, `the Town
Planning Act'). The objectives of that Act were :(i) to create conditions
favourable for planning and replanning of the urban and rural areas in the
State of Mysore, with a view to providing full civic and social amenities for the
people in the State; (ii) to stop uncontrolled development of land due to land
speculation and profiteering in land; (iii) to preserve and improve existing recreational
facilities and other amenities contributing towards balanced use of land; and
(iv) to direct the future growth of populated areas in the State, 3with a view to
ensuring desirable standards of environmental health and hygiene, and creating
facilities for the orderly growth of industry and commerce, thereby promoting
general standards of living in the State.
3.
The
State of Mysore was renamed Karnataka in 1973. Thereupon, necessary consequential
changes were made in the nomenclature of various enactments including the Town
Planning Act.
4.
Section
4 of the Town Planning Act envisages constitution of a State Town Planning
Board by the State Government. By Act No.14 of 1964, the Town Planning Act was
amended and Chapter I-A comprising of Sections 4-A to 4-H was inserted.
These provisions enabled
the State Government to issue notification and declare any area in the State to
be a local planning area for the purposes of the Act and constitute the "Planning
Authority" having jurisdiction over that area. Section 9(1) (unamended)
imposed a duty on every Planning Authority to carry out a survey of the area
within its jurisdiction, prepare and publish an outline development plan for
such area and submit the same to the State Government for provisional approval.
In terms of Section 12(1)
(unamended), an outline development plan was required to indicate the manner in
which the development and improvement of the entire planning area was to be
carried out and regulated. Section 19(1), as it then stood, contemplated preparation
of a comprehensive development plan and submission of the same for the approval
of the State Government.
Section 21 (unamended)
gave an indication of the factors which were to be included in the
comprehensive development plan. Section 26 (unamended) imposed a duty on every Planning
Authority to prepare town planning schemes incorporating therein the contents
specified in sub-section (1) of that Section. For the sake of reference, these
provisions are extracted below : "4-A. Declaration of Local Planning Areas,
their amalgamation, sub-division, inclusion of any area in a Local Planning
Area. - (1) The State Government may, by notification, declare any area in the
State to be a Local Planning Area for the purposes of this Act, this Act shall
apply to such area: Provided that no military cantonment or part of a military
cantonment shall be included in any such area. 54-C.
Constitution of Planning
Authority. - (1) As soon as may be, after declaration of a local planning area,
the State Government in consultation with the Board, may, by notification in the
Official Gazette, constitute for the purposes of the performance of the
functions assigned to it, an authority to be called the "Planning Authority"
of that area, having jurisdiction over that area.9. Preparation of Outline Development
Plan.-(1) Every Planning Authority shall, as soon as may be, carry out a survey
of the area within its jurisdiction and shall, not later than two years from
the date of commencement of this Act, prepare and publish in the prescribed manner
an outline development plan for such area and submit it to the State
Government, through the Director, for provisional approval: Provided that on application
made by a Planning Authority, the State Government may from time to time by
order, extend the aforesaid period by such periods as it thinks fit.
Contents of Outline
Development Plan.-(1) An outline development plan shall generally indicate the
manner in which the development and improvement of the entire planning area
within the jurisdiction of the Planning Authority are to be carried out and
regulated. In particular it shall include,-(a) a general land-use plan and zoning
of land-use for residential, commercial, industrial, agricultural,
recreational, educational and other public purposes;
(b) proposals for
roads and highways;(c) proposals for the reservation of land for the purposes
of the Union, any State, any local authority or any other authority established
by law in India; 6(d) proposals for declaring certain areas as areas of special
control, development in such areas being subject to such regulations as may be made
in regard to building line, height of buildings, floor area ratio, architectural
features and such other particulars as may be prescribed;
(e) such other
proposals for public or other purposes as may from time to time be approved by the
Planning Authority or directed by the State Government in this behalf.19. Preparation
of the Comprehensive Development Plan.-(1) As soon as may be after the
publication of the
Outline Development
Plan and the Regulations under sub-section (4) of section 13, but not later than
three years from such date, every Planning Authority shall prepare in the prescribed
manner a comprehensive Development Plan and submit it through the Director
together with a report containing the information prescribed, to the State
Government for approval: Provided that on application made by a Planning
Authority, the State Government may, from time to time, by order in writing,
extend the aforesaid period by such periods as it thinks fit.21. Contents of
the Comprehensive Development Plan.-
(1) The comprehensive
Development Plan shall consist of a series of maps and documents indicating the
manner in which the development and improvement of the entire planning area within
the jurisdiction of the Planning Authority are to be carried out and regulated.
Such plan shall include proposals for the following namely:-(a) comprehensive zoning
of land-use for the planning area, together with zoning regulations;
(b) complete street pattern,
indicating major and minor roads, national and state high ways, and traffic
circulation pattern, for meeting immediate and future requirements;(c) areas reserved
for agriculture, parks, play-grounds and other recreational uses, public open
spaces, public buildings and institutions and areas reserved for such other purposes
as may be expedient for new civic development;
(d) major road
improvements;(e) areas for new housing;(f) new areas earmarked for future
development and expansion; and(g) the stages by which the plan is to be carried
out.(2) The report shall further contain a summary of the findings in the
surveys carried out under sub-section (2) of section 19, and give relevant information
and data supporting proposals in the plan and deal in detail with.-(a) acquisition
of land for the purpose of implementing the plan,
(b) financial responsibility
connected with the proposed improvements, and(c) the manner in which these responsibilities
are proposed to be met.26. Making of town planning scheme and its
contents.--(1) Subject to the provisions of this Act, a Planning Authority, for
the purpose of implementing the proposals in the Comprehensive Development Plan
published under sub-section (4) of section 22, may make one or more town planning
schemes for the area within its jurisdiction or any part thereof. 8(2) Such
town planning scheme may make provisions for any of the following matters
namely,--(a) the laying out or re-laying out of land, either vacant or already
built upon;
(b) the filling up or
reclamation of low-lying, swamp or unhealthy areas or levelling up of land;(c) lay-out
of new streets or roads; construction, diversion, extension, alteration, improvement
and stopping up of streets, roads and communications;
(d) the construction,
alteration and removal of buildings, bridges and other structures;(e) the
allotment or reservation of land for roads, open spaces, gardens, recreation grounds,
schools, markets, green belts and dairies, transport facilities and public
purposes of all kinds;(f) drainage inclusive of sewerage, surface or sub-soil
drainage and sewage disposal;
(g) lighting;(h)
water supply;(i) the preservation of objects of historical or national interest
or natural beauty and of buildings actually used for religious purposes;(j) the
imposition of conditions and restrictions in regard to the open space to be maintained
about buildings, the percentage of building area for a plot, the number, size, height
and character of buildings allowed in specified areas, the purposes to which
buildings or specified areas may or may not be 9 appropriated, the sub-division
of plots, the discontinuance of objectionable users of land in any area in
reasonable periods, parking space and loading and unloading space for any
building and the sizes of projections and advertisement signs;
(k) the suspension,
so far as may be necessary for the proper carrying out of the scheme, of any rule,
bye- law, regulation, notification or order, made or issued under any Act of the
State Legislature or any of the Acts which the State Legislature is competent to
amend; (l) such other matter not inconsistent with the objects of this Act as
may be prescribed."
5.
The
1976 Act was enacted by the State legislature in the backdrop of the decision
taken at the conference of the Ministers for Housing and Urban Development held
at Delhi in November 1971 that a common authority should be set up for the
development of Metropolitan Cities. Before the constitution of the BDA, different
authorities like the City of Bangalore Municipal Corporation, the City Improvement
Trust Board, the Karnataka Industrial Area Development Board, the Housing Board
and the Bangalore City Planning Authority were exercising jurisdiction over the
Bangalore Metropolitan Area. Some of the functions of these authorities like development,
planning etc. were overlapping and creating avoidable confusion.
Not only this, the
intervention of multiple authorities was impeding coordinated development of the
Metropolitan Area. It was, therefore, considered appropriate that a single authority
like the Delhi Development Authority should be set up for the city of Bangalore
and areas adjacent thereto which, in due course, would become part of the city.
It was also realised that haphazard and irregular growth would continue unless checked
by the development authority and it may not be possible to rectify/correct
mistakes in the future.
For achieving these
objectives, the State legislature enacted the 1976 Act. Simultaneously, Section
81-B was inserted in the Town Planning Act for deemed dissolution of the City
Planning Authority in relation to the area falling within the jurisdiction of
the BDA. The preamble of the 1976 Act and the definitions of
"Authority", "Amenity", "Civic amenity",
"Bangalore Metropolitan Area", "Development", "Engineering
operations", "Local Authority", "Means of access" contained
in Section 2 thereof are reproduced below: "An Act to provide for the establishment
of a Development Authority for the development of the City of Bangalore and areas
adjacent thereto and for matters connected therewith2. Definitions.- In this Act,
unless the context otherwise requires,-
(a) "Authority"
means the Bangalore Development Authority constituted under section 3;(b) "Amenity"
includes road, street, lighting, drainage, public works and such other conveniences
as the Government may, by notification, specify to be an amenity for the
purposes of this Act;(bb) "Civic amenity" means,-(i) a market, a post
office, a telephone exchange, a bank, a fair price shop, a milk booth, a school,
a dispensary, a hospital, a pathological laboratory, a maternity home, a child care
centre, a library, a gymnasium, a bus stand or a bus depot;(ii) a recreation
centre run by the Government or the Corporation;
(iii) a centre for educational,
social or cultural activities established by the Central Government or the
State Government or by a body established by the Central Government or the
State Government ;(iv) a centre for educational, religious, social or cultural
activities or for philanthropic service run by a cooperative society registered
under the Karnataka Co-operative Societies Act, 1959 (Karnataka Act 11 of 1959)
or a society registered under the Karnataka Societies Registration Act, 1960
(Karnataka Act 17 of 1960) or by a trust created wholly for charitable,
educational or religious purposes ; 12 (v) a police station, an area office or
a service station of the Corporation or the Bangalore Water Supply and Sewerage
Board or the Karnataka Electricity Board ; and
(vi) such other amenity
as the Government may, by notification, specify; (c) "Bangalore Metropolitan
Area" means the area comprising the City of Bangalore as defined in the City
of Bangalore Municipal Corporation Act, 1949 (Mysore Act 69 of 1949), the areas
where the City of Bangalore Improvement Act, 1945 (Mysore Act 5 of 1945) was immediately
before the commencement of this Act in force and such other areas adjacent to
the aforesaid as the Government may from time to time by notification specify;
(j) "Development"
with its grammatical variations means the carrying out of building, engineering,
or other operations in or over or under land or the making of any material change
in any building or land and includes redevelopment; (k) "Engineering operations"
means formation or laying out of means of access to road; (n) "Local Authority"
means a municipal corporation or a municipal council constituted or continued
under any law for the time being in force; (o) "Means of access" includes
any means of access whether private or public, for vehicles or for foot passengers,
and includes a road;"
6.
Sections
14, 15, 16, 28-A, 28-B, 28-C, 32(1) to (5A), 65, 65-B 67(1)(a) and (b) of the
1976 Act are also extracted below: "14. Objects of the Authority.- The objects
of the Authority shall be to promote and secure the development of the Bangalore
Metropolitan Area and for that purpose the Authority shall have the power to
acquire, hold, manage and dispose of moveable and immoveable property, whether within
or outside the area under its jurisdiction, to carry out building, engineering
and other operations and generally to do all things necessary or expedient for the
purposes of such development and for purposes incidental thereto.15. Power of Authority
to undertake works and incur expenditure for development, etc.-
(1) The Authority
may,-(a) draw up detailed schemes (hereinafter referred to as "development
scheme") for the development of the Bangalore Metropolitan Area ; and(b) with
the previous approval of the Government, undertake from time to time any works for
the development of the Bangalore Metropolitan Area and incur expenditure therefor
and also for the framing and execution of development schemes.(2) The Authority
may also from time to time make and take up any new or additional development
schemes,-
(i) on its own
initiative, if satisfied of the sufficiency of its resources, or(ii) on the
recommendation of the local authority if the local authority places at the
disposal of the Authority the necessary funds for framing and carrying out any
scheme; or(iii) otherwise. 14(3) Notwithstanding anything in this Act or in any
other law for the time being in force, the Government may, whenever it deems necessary
require the Authority to take up any development scheme or work and execute it subject
to such terms and conditions as may be specified by the Government.
16. Particulars to be
provided for in a development scheme.- Every development scheme under section 15,-
(1) shall, within the limits of the area comprised in the scheme, provide for
,-(a) the acquisition of any land which, in the opinion of the Authority, will
be necessary for or affected by the execution of the scheme ;
(b) laying and re-laying
out all or any land including the construction and reconstruction of buildings
and formation and alteration of streets ;(c) drainage, water supply and
electricity ;(d) the reservation of not less than fifteen percent of the total area
of the layout for public parks and playgrounds and an additional area of not less
than ten percent of the total area of the layout for civic amenities.(2) may,
within the limits aforesaid, provide for,-
(a) raising any land
which the Authority may consider expedient to raise to facilitate better
drainage;(b) forming open spaces for the better ventilation of the area comprised
in the scheme or any adjoining area;(c) the sanitary arrangements required ; 15(3)
may, within and without the limits aforesaid provide for the construction of
houses.28-A. Duty to maintain streets etc.- It shall be incumbent on the Authority
to make reasonable and adequate provision by any means or measures which it is lawfully
competent to use or take, for the following matters, namely,-(a) the maintenance,
keeping in repair, lighting and cleansing of the streets formed by the Authority
till such streets are vested in the Corporation; and(b) the drainage, sanitary arrangement
and water supply in respect of the streets formed by the Authority.28-B. Levy of
tax on lands and buildings.-
(1) Notwithstanding anything
contained in this Act, the Authority may levy a tax on lands or buildings or on
both, situated within its jurisdiction (hereinafter referred to as the property
tax) at the same rates at which such tax is levied by the Corporation within
its jurisdiction.(2) The Provisions of the Karnataka Municipal Corporations Act,
1976 (Karnataka Act 14 of 1977) shall mutatis mutandis apply to the assessment
and collection of property tax.
Explanation.- For the
purpose of this section "property tax" means a tax simpliciter requiring
no service at all and not in the nature of fee inquiring service.28-C.
Authority is deemed to be a Local Authority for levy of cesses under certain Acts.-
Notwithstanding anything contained in any law for 16the time being force the
Authority shall be deemed to be a local authority for the purpose of levy and
collection of,-(i) education cess under sections
16.17 and 17A of the Karnataka
Compulsory Primary Education Act, 1961 (Karnataka Act 9 of 1961);(ii) health cess
under sections 3,4 and 4A of the Karnataka Health Cess Act, 1962 (Karnataka Act
28 of 1962);(iii) library cess under section 30 of the Karnataka Public
Libraries Act, 1965 (Karnataka Act 10 of 1965); and(iv) beggary cess under section
31 of the Karnataka Prohibition of Beggary Act, 1975 (Karnataka Act 27 of
1975).32.
Forming of new extensions
or layouts or making new private streets.- (1) Notwithstanding anything to the
contrary in any law for the time being in force, no person shall form or
attempt to form any extension or layout for the purpose of constructing
buildings thereon without the express sanction in writing of the Authority and except
in accordance with such conditions as the Authority may specify:
Provided that where
any such extension or layout lies within the local limits of the Corporation, the
Authority shall not sanction the formation of such extension or layout without the
concurrence of the Corporation:
Provided further that
where the Corporation and the Authority do not agree on the formation of or the
conditions relating to the extension or layout, the 17matter shall be referred to
the Government, whose decision thereon shall be final.(2) Any person intending to
form an extension or layout or to make a new private street, shall send to the Commissioner
a written application with plans and sections showing the following
particulars,-(a) the laying out of the sites of the area upon streets, lands or
open spaces;
(b) the intended level,
direction and width of the street;(c) the street alignment and the building
line and the proposed sites abutting the streets;(d) the arrangement to be made
for levelling, paving, metalling, flagging, channelling, sewering, draining,
conserving and lighting the streets and for adequate drinking water supply.(3) The
provisions of this Act and any rules or bye-laws made under it as to the level
and width of streets and the height of buildings abutting thereon shall apply also
in the case of streets referred to in sub-section
(2) and all the particulars
referred to in that sub-section shall be subject to the approval of the
Authority.(4) Within six months after the receipt of any application under subsection
(2), the Authority shall either sanction the forming of the extension or layout
or making of street on such conditions as it may think fit or disallow it or ask
for further information with respect to it.
(5) The Authority may
require the applicant to deposit, before sanctioning the application, the sums necessary
for meeting the expenditure for making roads, side-drains, culverts, underground
drainage and water supply and lighting and the charges for such other purposes
as such applicant may be called upon by the Authority, provided the applicant also
agrees to transfer the ownership of the roads, drains, water supply mains and
open spaces laid out by him to the Authority permanently without claiming any
compensation there for.(5A) Notwithstanding anything contained in this Act, the
Authority may require the applicant to deposit before sanctioning the
application such further sums in addition to the sums referred to in the
sub-section (5) to meet such portion of the expenditure as the Authority may determine
towards the execution of any scheme or work for augmenting water supply,
electricity, roads, transportation and such other amenities within the
Bangalore Metropolitan Area.
65. Government's power
to give directions to the Authority.- The Government may give such directions to
the Authority as in its opinion are necessary or expedient for carrying out the
purposes of this Act, and it shall be the duty of the Authority to comply with
such directions.65-B. Submission of copies of resolution and Government's power
to cancel the resolution or order.- (1) The Commissioner shall submit to the
Government copies of all resolutions of the Authority.
(2) If the Government
is of opinion that the execution of any resolution or order issued by or on behalf
of the Authority or the doing of any act which is about to be done or is being
done by or on behalf of the Authority is in contravention of or in excess of the
powers conferred by this Act or any other law for the time being in force or is
likely to lead to a breach of peace or to cause injury or annoyance to the public
or to any class or body of persons or is prejudicial to the interests of the
authority, it may, by order in writing, suspend the execution of such resolution
or order or prohibit the doing of any such act after issuing a notice to the Authority
to show cause, within the specified period which shall not be less than fifteen
days, why,-
(a) the resolution or
order may not be cancelled in whole or in part; or (b) any regulation or bye-law
concerned may not be repealed in whole or in part. (3) Upon consideration of the
reply, if any, received from the authority and after such inquiry as it thinks
fit, Government may pass orders cancelling the resolution or order or repealing
the regulation or bye-law and communicate the same to the authority. (4) Government
may at any time, on further representation by the authority or otherwise,
revise, modify or revoke an order passed under subsection (3).67. Amendment of the
Karnataka Town and Country Planning Act, 1961.-
(1) In the Karnataka
Town and Country Planning Act , 1961 (Karnataka Act 11 of 1963),-(a) in section
2, for item (i) of sub-clause (a) of clause (7), the following item shall be
substituted namely,-"(i) the local planning area comprising the City of
Bangalore, the Bangalore Development Authority, and"; 20 (b) after section
81-A, the following section shall be inserted, namely,- "81-B. Consequences
to ensue upon the constitution of the Bangalore Development Authority.-
Notwithstanding anything contained in this Act, with effect from the date on which
the Bangalore Development Authority is constituted under the Bangalore Development
Authority Act, 1976 the following consequences shall ensue,-
(i) the Bangalore
Development Authority shall be the local Planning Authority for the local planning
area comprising the City of Bangalore with jurisdiction over the area which the
City Planning Authority for the City of Bangalore had jurisdiction immediately before
the date on which the Bangalore Development Authority is constituted; (ii) the Bangalore
Development Authority shall exercise the powers, perform the functions and discharge
the duties under this Act as if it were a Local Planning Authority constituted for
the Bangalore City; (iii) the City Planning Authority shall stand dissolved and
upon such dissolution,-" ****"
7.
In
exercise of the power vested in it under Section 4-A(1) of the Town Planning
Act, the State Government issued Notifications dated 1.11.1965 and 13.3.1984 declaring
the areas specified therein to be the "Local Planning Areas". By the first
21 notification, the State Government declared the area comprising the city of
Bangalore and 218 villages enumerated in Schedule I thereto to be the "Local
Planning Area" for the purposes of the Town Planning Act and described it as
the Bangalore City Planning Area.
The limits of the
planning area were described in Schedule II appended to the notification. By the
second notification, the area comprising 325 villages around Bangalore (as mentioned
in Schedule I) was declared to be the Local Planning Area for the environs of Bangalore.
The limits of the city planning area were indicated in Schedule II. At the end of
Schedule II of the second notification, the following note was added: "This
excludes the Bangalore City Local Planning Area declared (by) Government Notification
No. PLN/42/MNP/65/SO/3446 dated 1-11-1965."
8.
A
third notification was issued on 6.4.1984 under Section 4- A(3) of the Town Planning
Act amalgamating the Local Planning Areas of Bangalore declared under the earlier
two notifications as "Bangalore City Planning Area" w.e.f. 1.4.1984.
9.
On
1.3.1988, the State Government issued notification under Section 2(c) of the
1976 Act specifying the villages indicated in the first Schedule and within the
boundaries indicated in the second Schedule to Notification dated 13.3.1984 to be
the areas for the purposes of that clause. We shall refer to this notification a
little later in the context of the High Court's negation of the respondents' challenge
to that notification on the ground that the names of the villages or specified areas
had not been published in the Official Gazette and, as such, the layout plans
of the area comprised in those villages are not governed by the 1976 Act.
10.
As
a result of unprecedented increase in the population of the city of Bangalore between
1970 and 1980, the available civic amenities like roads, water supply system and
supply of electricity were stretched to their limit. To meet the additional requirement
of water and electricity and to tackle the problems of traffic, new schemes
were prepared in the development plan of Bangalore city, which was approved in 1984.
These included augmentation of water supply, formation of Ring Road etc. Bangalore
Water Supply and Sewerage Board (BWSSB) submitted a proposal to the State Government
for taking up of Cauvery Water Supply Scheme, Stage III (for short, `the Cauvery
Scheme') for supply of an additional 270 MLD water to Bangalore at a cost of Rs.
240 crores. The proposed financing pattern of the project was as follows: (i) State
Government - Rs.80/- crores, (ii) Life Insurance Corporation of India - Rs.
50/- crores, (iii) Bangalore City Corporation - Rs. 30/- crores, and (iv) World
Bank - Rs. 80/- crores.
11.
By
an order dated 28.06.1984, the State Government, after taking cognizance of the
difficulties being experienced by BWSSB in supplying water to the Bangalore
Metropolitan Area and the possibility of acute shortage of water in next 10
years if the supply was not augmented, granted approval to the Cauvery Scheme.
12.
Since
the World Bank assistance was expected only in the year 1988 and the Cauvery
Scheme was to be implemented by 24 1990 to meet the drinking water needs of the
residents of Bangalore, the issue was discussed in the meeting held on 01.01.1987
under the chairmanship of the Chief Secretary of the State and it was decided that
with a view to avoid escalation in the cost, the funds may be collected from other
sources including the BDA because substantial quantity of water was required
for the layouts which were being developed by it or likely to be developed in
future. In furtherance of that decision, the State Government issued order
dated 25.03.1987 and directed the BDA to make a grant of Rs. 30 crores to BWSSB
to be paid in installments from 1987-88 to 1989-90 by loading an extra amount as
water supply component at the rate of Rs. 10,000/- on an average per site for
all the layouts to be formed thereafter.
13.
In
compliance of the directions given by the State Government, the BDA started collecting
Rs.10,000/- per site. Later on, the levy under the Cauvery Scheme was increased
to Rs.1 lac per acre. By 1992, it was realised that the BDA had not been able to
develop and distribute sites as expected. Therefore, a proposal was submitted by
the Commissioner, BDA to the State Government that contribution towards the Cauvery
Scheme may be distributed among those applying for change of land use and the
private layouts to be developed by the house building societies and on major housing
projects. The State Government accepted the suggestion of the BDA and passed
order dated 12.1.1993 for the levy of charges under the Cauvery Scheme at the
rate of Rs.2 lacs per acre.
14.
In
1992, the BDA also decided to take up the construction of 63.30 kilometers long
Outer Ring Road and 3.5 kilometers long Intermediate Ring Road at an estimated cost
of Rs.115 crores with a possible escalation up to Rs.130 crores. 36.24 kilometers
of the Outer Ring Road was to pass through the BDA layouts and the balance was to
pass through the land outside the BDA layouts. The cost of construction of Outer
Ring Road passing through the BDA layout was to be met by charging the allottees
of sites in the BDA layouts. For the balance 27.06 kilometers of Outer Ring Road
and 3.5 kilometers of Intermediate Ring Road a proposal was prepared to obtain financial
assistance from the World Bank.
In the meeting held
on 5.6.1992 under the chairmanship of the Chief Secretary of the State, the possibility
of taking loan from HUDCO was explored. Simultaneously, it was considered whether
partial burden of the cost could be passed on to the beneficiaries of the
private layouts and it was agreed that like the Cauvery Scheme, Ring Road
surcharge should be levied on the sites to be formed by the BDA and the private
housing societies at the rate of Rs.1 lac per acre. Thereafter, the BDA passed Resolution
dated 19.10.1992 for levy of charges at different rates on change of land use in
different areas and Rs.1 lac per acre on the layouts of housing societies and private
lands as also the sites formed by itself.
15.
The
Air Craft Employees Cooperative Society Ltd. (respondent in C.A. No.7503/2002) submitted
an application for approval of layout in respect of 324 acres 30 guntas land situated
in Singasandra and Kudlu villages, Surjapur Hobli and Begur Hobli respectively.
The application of the respondent was considered in the BDA's meeting held on
31.10.1991 and was approved subject to various conditions including payment of Rs.2
lacs per acre towards the Cauvery Scheme and Rs.1 lac as Ring Road surcharge.
Another condition incorporated in the Resolution of the BDA was that the civil
portion of work shall be carried out by the respondent under its supervision. The
decision of the BDA was communicated to the respondent vide letter dated
12.11.1992.
16.
The
respondent challenged the conditional sanction of its layout in Writ Petition No.11144/1993
and prayed for quashing the demand of Rs.2 lacs per acre towards the Cauvery Scheme
and Rs.1 lac as Ring Road surcharge by making the following assertions:
i.
The
order passed by the State Government was applicable only to the sites to be
formed by the BDA and not the layout of private House Building Societies
because as per the Chairman of BWSSB, it will not be possible to take up the responsibility
of providing water supply and underground drainage to such layouts and the
societies had to make their own arrangements.
ii.
The
Cauvery Scheme will be able to meet the requirements of only the citizens residing
within the municipal area and some newly formed layouts adjacent to the city.
iii.
There
is no provision in the Bangalore Water Supply and Sewerage Act, 1964 (for short,
`the 1964 Act') under which the burden of capital required for the execution of
schemes could be passed on to the private House Building Societies and, in any
case, the BWSSB can recover the cost by resorting to Section 16 of the 1964
Act.
iv.
Under
the 1976 Act, the Government is not empowered to authorise the BDA to transfer
the cost of the Cauvery Scheme to the private layouts.
v.
20,000
acres of land has been acquired by the BDA for forming layouts in the vicinity
of Bangalore and 10,000 acres had been acquired by the Government for House
Building Cooperative Societies and if Rs.1 or 2 lacs per acre are charged, the
Government will collect about Rs.600 crores from the BDA itself, though the
latter's contribution was initially fixed at Rs.30 crores only.
vi.
The
demand of Rs.1 or 2 lacs per acre towards the Cauvery Scheme is ultra vires the
provisions of Article 265 of the Constitution.
vii.
The
levy of Rs.1 lac per acre as Ring Road surcharge is not sanctioned by law and
the State and the BDA cannot burden the private layouts without determining whether
the Ring Road would be of any use to the members of the House Building
Societies.
17.
During
the pendency of Writ Petition No.11144/1993, the State legislature amended the 1976
Act by Act. No.17/1994 and inserted sub-section (5A) in Section 32 w.e.f. 20.6.1987
authorising the BDA to demand sums in addition to those referred in sub-section
(5) to meet the expenditure towards the execution of any scheme or work for
augmenting water supply, electricity, roads, transportation and other amenities
within the Bangalore Metropolitan area.
18.
The
respondent promptly amended the writ petition and challenged the constitutional
validity of the newly inserted sub-section by asserting that the provision is discriminatory
30 and violative of Article 14 of the Constitution because it gives unbridled and
uncanalized power to the BDA to demand additional sums for different schemes. It
was also pleaded that sub-section (5A) has been inserted in Section 32 to legitimize
the conditions incorporated in letter dated 12.11.1992 for payment of charges
for the Cauvery Scheme and the Ring Road.
19.
While
the parties were litigating on the constitutionality of the amended provision and
legality of the conditional sanction of the layout, the respondent applied for
approval of the BDA for starting civil work. The same was sanctioned subject to
payment of the following charges: (i) Supervision Charges Rs. 92,26,687.00 (at
the rate of 9% on Civil Work) (ii) Improvement charges Rs. 1,65,95,008.00 (at
the rate of Rs. 20 per sq. mtrs.) (iii) Examination charges Rs. 4,14,876.00 (0-50
per sq. mtrs.) (iv) Slum Clearance Development Rs. 20,74, 365.00 Charges (Rs.
25,000 per hectare) (v) M.R.T.S. Tax Rs. 1,02,51, 875.00 31 (Rs. 50,000 per
acre) (vi) Miscellaneous Rs. 7,189.00
20.
The
respondent challenged the conditional approval of civil work in Writ Petition
No. 25833/1998 on the ground that the 1976 Act does not authorize such levies and
that the legislature has not laid down any guideline for creating such demand from
the private House Building Societies. An additional plea taken by the
respondent was that the BDA has applied the provisions of Section 32 of the 1976
Act under a mistaken impression that the layout was within its jurisdiction. According
to the respondent, no notification had been issued by the State Government for
including the villages of North and South Talukas within the Bangalore
Metropolitan Area. Another plea taken by the respondent was that the State Government
has already collected conversion fine and, as such, the BDA does not have the jurisdiction
to levy betterment fee. Similar plea was raised in respect of Mass Rapid Transport
System Cess and the Slum Clearance charges.
21.
The
other House Building Cooperative Societies also filed writ petitions between 1994
and 1998 for striking down Section 32(5A) and the conditional sanction of their
layouts in terms of which they were required to pay for the Cauvery Scheme and the
Ring Road apart from other charges mentioned in the sanction of civil work as was
done in the case of Air Craft Employees Cooperative Society Limited. They generally
pleaded that:i. the BDA has no jurisdiction to make demands requiring payment of
sums under various heads in the matter of sanction of the residential layout plan
as areas of their layouts do not form part of the Bangalore Metropolitan Area;ii.
the notification issued under Sec. 2(c) of the 1976 Act is not valid as there
is no specification of the adjacent areas;iii. Notification dated 1.3.1988 is not
in consonance with the requirements of law as it does not specify the villages and
the areas which were sought to be declared and specified as part of the Bangalore
Metropolitan Area and the 33 specifications and schedules referred to in the notification
have not been published;iv. the villages which include the lands that form a part
of the residential layouts also do not figure in the schedule to Notification
dt. 13.3.1984.
22.
The
writ petitions were contested by the appellant by making the following
assertions:i. the lands of the respondents' residential layout fall within the
local planning area of the authority and, therefore, they are liable to pay layout
charges in respect of the Cauvery Scheme, Ring Road surcharge, slum clearance charge,
betterment levy, scrutiny fee, supervision charges, etc.ii. the charges have
been levied in terms of the directions given by the State Government and the decision
taken by the BDA.iii. the societies are required to carry out civil work under
the supervision of the BDA and, therefore, they are liable to pay supervision
charges. 34iv. Section 32(5A) of the 1976 Act does not suffer from any constitutional
infirmity and guidance for levy of such charges can be traced in the scheme of
the Act.
23.
The
Division Bench of the High Court first considered the question whether Notification
dated 1.3.1988 issued under Section 2(c) of the 1976 Act was invalid because
the names of the villages or the specified area had not been notified or published
in the Official Gazette and whether in the absence of such notification, the villages
in which the societies had formed layouts cannot be treated as part of the Bangalore
Metropolitan Area. The Division Bench referred to the definition of the expression
"Bangalore Metropolitan Area" contained in Section 2(c) of the 1976 Act,
the contents of Notification dated 1.3.1988 and held that the description of the
area given in the notification was in consonance with the definition of the Bangalore
Metropolitan Area because reference had been made to the villages in Schedule I
to Notification dated 13.3.1984 and the boundaries of the planning environs area
as per Schedule II of the said 35 notification. The Division Bench opined that if
Notifications dated 13.3.1984 and 1.3.1988 are read together, it cannot be said
that the particular villages do not form part of the Bangalore Metropolitan
Area.
24.
The
Division Bench did not decide the plea of the respondents that some of the
villages were not included in the Schedules by observing that determination of this
question involves investigation into a question of fact and this can be
considered at the time of approval of the layout plan of the particular society.
25.
The
argument that while dealing with the issue raised in Writ Petition No.13907/1995,
the BDA had lost the territorial jurisdiction because the areas in question had
become part of City Municipal Council, Byatarayanapura and City Municipal Council,
Krishnaraja Puram respectively vide Notification dated 22.1.1996 was left to be
decided by the BDA with liberty to the concerned respondent to raise the same at
an appropriate stage.
26.
The
Division Bench then adverted to Articles 265 and 300A of the Constitution and
held that the BDA cannot levy or recover the sums specified in the demand notice
on the basis of the government order or circular. The Division Bench further
held that the approval of layout plan or work order cannot be made subject to
the condition of deposit of the sum demanded by it. The Division Bench then
analysed the provisions of Section 32 of the 1976 Act and observed: "No principle
appears to have been laid down or indicated for the authority to be kept in view
and followed when determining in such portion of the expenditure, which expenditure
have to relate to be made or to be incurred in the execution of any schemes or
works as referred.
No doubt, the schemes
or works for augmenting the water supply, electricity and other amenities only
provide that it should be worked within the Bangalore Metropolitan Area or work
is to be for the benefit of the Bangalore Metropolitan Area to provide amenities
within the Bangalore Metropolitan Area. But, the question is that out of that expenditure
which the Bangalore Metropolitan Area has to bear or incur what portion thereof
the applicant seeking approval of layout plan etc., will be required to deposit
and know the proportion or a portion of that is to be determined by the authority.
There is nothing in this
section to indicate or to provide any guideline. There are no rules framed under
the Act with reference to subsection (5-A) of Section 32 of the 37 Bangalore
Development Authority Act, 1976 to provide guidelines or to indicate as to how that
is to be determined. The section does not by itself provide any procedure of
either hearing or of giving the notice to the persons affected, or there being opportunity
of being heard being given to the concerned persons or person before determination
of the portion of the expenditure which the Bangalore Development Authority has
to incur with reference to those schemes or works to be levied
thereunder."
27.
The
Division Bench relied upon the ratio in Ram Krishna Dalmia v. Shri Justice S.R.
Tendolkar and Ors. AIR 1958 SC 538, Jyoti Pershad v. The Administrator for The Union
Territory of Delhi, AIR 1961 SC 1602; Devi Das Gopal Krishnan v. State of Punjab,
AIR 1967 SC 1895, State of Kerala v. M/s. Travancore Chemicals and Manufacturing
Company (1998) 8 SCC 188 and observed: "In the present case, sub-section (5-A)
of Section 32 of the Act, does not appear to provide any guidelines so as to determine
as to what exact portion of the expenditure should the applicant be required to
deposit. No doubt, the entire expenditure cannot be fastened on the applicant.
It does not provide
any guidelines in this regard. It does not provide the portion of the amount
the applicant maybe required to deposit shall bear any percentage on the basis of
enjoyment of the benefit by the applicant or the 38applicant likely to enjoy the
benefit qua enjoyment by total area or its population. It also does not provide
that the applicant before being required to pay will have opportunity of disputing
that claim and challenging the correctness of the portion proposed by the
authority to be fastened on him. Really the section appears to confer unbridle
powers without providing any guide lines or guidance in that regard.
The section also does
not provide any remedy against the order of authority under Section 32(5) of the
Act.The learned counsel for the respondents contended that there is remedy
against the order of the authority under Section 63 of the Act by way of
revision to the Government which may consider the legality or propriety of the order
or proceedings. In our opinion, this contention of the learned Counsel is without
substance.
In view of the Non obstante
clause contained in sub-section (5-A) of Section 32 of the Act which provides that
exercise of that power and it may result in or it may cause irrational
discrimination between the same set of persons and the persons maybe deprived
of their properties in the form of money by the exercise of sweet will and the unbridled
discretion of the authority concerned. In our view this provision as it confers
unbridle and uncontrolled power on the authority as such it may enable unequal
and discriminatory treatment to be accorded to the persons and it may enable the
authority to discriminate among the persons similarly situated.
Tested by the yardstick
of the principle laid down in Sri Rama Krishna Dalmia's case reported in
A.I.R.1958 Supreme Court 538 and Shri Jyothi Pershad's case reported in A.I.R. 1961
Supreme Court 1602. We find that the provision of sub-section (5-A) of Section 32
of the 39 Bangalore Development Act, 1976 suffers from vice of discrimination and
has tendency to enable the authority to discriminate and as such hit by Article
14 of the Constitution."
28.
The
Division Bench finally concluded that the demand made by the BDA with the support
of Section 32(5A) is illegal and without jurisdiction and accordingly allowed
the writ petitions.
29.
29.At
this stage, it will be appropriate to mention that during the course of hearing
on 2.9.2009, Shri Dushyant Dave, learned senior counsel appearing for one of the
respondents stated that a sum of Rs.300 crores (approximately) has been
collected by the BDA from the House Building Societies in lieu of sanction of their
layouts and substantial amount from the allottees of the sites of the layouts developed
by it between 1984-1992 and this, by itself, was sufficient to prove that the exercise
of power by the BDA under Section 32 (5A) of the 1976 Act is arbitrary.
After considering the
statement made by Shri Dave, the Court directed the Commissioner and/or Secretary
of the BDA to file a detailed and specific affidavit giving the particulars of contribution
made by the BDA 40towards the Cauvery Scheme and the amount demanded and/or collected
from those who applied for sanction of the private layouts as also the allottees
of the sites in the BDA layouts. In compliance of the Court's direction, Shri
Siddaiah, the then Commissioner, BDA, filed affidavit dated 11.11.2009,
paragraphs 2 to 5 of which are extracted below: "2. The Government of Karnataka
formed the Cauvery Water IIIrd Stage Scheme in 1984. However, the Government
directed the Bangalore Development Authority to contribute Rs.
Thirty crores towards
the Cauvery Water IIIrd Stage Scheme by its order No. HUD 97 MNI 81, Bangalore
dated 25th March, 1987. The Bangalore Development Authority started collecting Cauvery
Water Cess from 1988. However, the Government by its order No. UDD 151 Bem.Aa.Se
2005, dated 03.05.2005 directed the Bangalore Development Authority to stop collection
of the Cauvery Water Cess and Ring Road Cess and MRTS Cess.
A copy of the order of
the Government Order dated 03.05.2005 directing not collect any cess referred above
is produced herewith as Annexure-`A'. The BDA has charged and collected the Cauvery
water cess between 1988 and 2005. The Cauvery Water cess collected by the BDA is
periodically transferred to the Bangalore Water Supply and Sewerage Board (BWSSB).
The chart showing year wise payments made to BWSSB towards the Cauvery Water
Cess from 1988 till 2005 is produced herewith as Annexure-`B'. The payment chart
shows the amount collected towards the Cauvery Water Cess and paid to BWSSB.
The chart shows that a
total sum of Rs. 34.55 crores are collected from 1988 to April 2005. The sum of
41Rs.34.55 crores collected is in respect of both private layouts as well as
Bangalore Development Authority sites. The entire money collected towards the
Cauvery Water Cess has been paid to the Bangalore Water Supply Sewerage Board, Bangalore
as stated above.3. Similarly, the collection towards the Ring Road Cess from
the year 1992-93 and the collections were made up to 2005-06. The total sum collected
is Rs.15.15 crores.
The year-wise chart showing
the collection of Ring Road Cess is produced herewith as Annexure-`C'. The Ring
Road Cess is collected only from the private layouts.4. With regard to certain averments
made in W.P. No. 11144/1993 with regard to estimated collection of Cauvery Water
Cess, it is submitted that the estimates are far from accurate. It is just a guess
work. The averments made therein that the Government has acquired around 10,000
acres towards the private societies will not be within the knowledge of the Bangalore
Development Authority, because the Government does not seek the opinion or
consent of BDA before acquiring land for a private layout.
The private layouts within
the limits of BDA have to apply to BDA for approval of a private under Section 32
of BDA Act. From 1984 till 2005, 194 applications for approval of private layouts
were received and were approved by the Bangalore Development Authority involving
about an extent of 5668 acres and 15 3/4th gunthas (five thousand six hundred and
sixty-eight acres and fifteen and three fourth gunthas). However, Cauvery Water
Cess and Ring Road Cess are levied and collected as stated above from 1988 and 2005
respectively.
The submissions made in
the Writ Petition to the contrary are speculative. 425. Similarly, the averments
in the W.P. that the Bangalore Development Authority would collect about 300 crores
are speculative. It is submitted with respect after the directions of the Government
in 2005, all the above collections have been stopped. Hence, this affidavit.
BANGALORE DEVELOPMENT
AUTHORITY
BANGALORE
THE COLLECTION OF CAUVERY
WATER CESS & PAID TO BWSSB AS MENTIONED BELOW
Sl No
|
Cheque
No.
|
Date
|
Amount
(Inr In Lakh)
|
1.
|
|
FROM
FEB 1988 TO APRIL 1992
|
2,130.00
|
2.
|
705908
|
02.11.1996
|
150.00
|
3.
|
718093
|
21.01.1997
|
100.00
|
4.
|
737303
|
15.03.1997
|
100.00
|
5.
|
753086
|
06.07.1997
|
100.00
|
6.
|
756449
|
30.12.1997
|
150.00
|
7.
|
650002
|
18.03.1998
|
50.00
|
8.
|
759664
|
20.07.1998
|
50.00
|
9.
|
502441
|
22.01.1999
|
50.00
|
10.
|
769862
|
15.09.1999
|
75.00
|
11.
|
653066
|
04.06.2005
|
500.00
|
TOTAL
|
3,455.00
|
(Rupees Thirty Four
Crores and Fifty Five Lakh)
Sd/-
Accounts
Officer BDA,
Bangalore
ANNEXURE-II
YEAR
WISE RING ROAD CESS
YEAR
|
COLLECTIONS CHARGED
TO RING ROAD EXPEND.
|
BALANCE (INR in
Lakh)
|
1992-93
(Feb 93 on wards)
|
63.39
|
63.39
|
1993 -94
|
183.89
|
183.89
|
1994-95
|
217.87
|
217.87
|
1995-96
|
331.14
|
331.14
|
1996-97
|
162.08
|
162.08
|
1997-98
|
180.79
|
180.79
|
1998-99
|
84.23
|
84.23
|
1999-00
|
50.49
|
50.49
|
2000-01
|
19.48
|
19.48
|
2001-02
|
0.30
|
0.30
|
2002-03
|
7.34
|
7.34
|
2003-04
|
-
|
-
|
2004-05
|
-
|
-
|
2005-06
|
214.27
|
214.27
|
TOTAL
|
1,515.27
|
1,515.27
|
"Letter dated 03.05.2005
of the State Government, which is enclosed with the affidavit of Shri Siddaiah,
is also reproduced below: "
GOVERNMENT OF
KARNATAKA
UDD.151.BAN.2005
Karnataka
Secretariat
Multistoried
Building
Bangalore
Dated:
03.05.2005
Sub: Ring Road Cess, Augmentation
Cess (Cauvery Water Cess) & MRTS Cess.
Ref: Government Circular
No. 249 of 2001 dated 20.09.2003.
In the above circular
referred above, the Government has withdrawn all earlier orders and decided that
henceforth Ring Road Cess, Augmentation Cess (Cauvery Water Cess) & MRTS Cess
should not be levied. Even so some 44 Corporations, Municipalities and Authorities
are charging the above cess. Therefore, until a decision is taken at the level of
the Government about the above stated subject and until further directions, Ring
Road Cess, Augmentation Cess (Cauvery Water Cess) & MRTS Cess should not be
charged. Hence this order.
Sd/-03.05.2005
(V.R.
Ilakal) Addl. Secretary,
Govt.
of Karnataka Urban Development"
30.
30.
Thereafter, Shri Anand R.H., President of the Bank Officers and Officials House
Building Cooperative Society Limited filed detailed affidavit dated 08.03.2010,
paragraphs 2 to 7 whereof are reproduced below: "2. I submit that this Hon'ble
Court by order dated 02.09.2009 had directed the Commissioner and/or Secretary of
Appellant Bangalore Development Authority (BDA for short) to file a detailed and
specific affidavit stating therein the total contribution made by the BDA towards
Cauvery Water Supply Scheme Stage III and the amount demanded and/or collected from
those who applied for sanction of private layouts as also the allottees of the
sites in the layouts prepared by the BDA itself.
3. I say that the BDA
has deliberately not at all disclosed the material facts: 45i) the total number
of the Housing Societies and others who applied for sanction of layouts
including private layouts;ii) the amount BDA has demanded from the Housing
Societies and others who have applied for sanction of layouts and private
layouts;
iii) the total number
of sites formed in the layouts formed by the BDA and allotted to the
public;(iv) the total amount demanded and collected from the allottees of the sites
in the layouts formed by BDA itself;v) as per Government order dated 25.03.1987
the BDA was empowered to levy and collect amount towards the Cauvery Water
Supply Scheme also from the Applicants who apply for change in land use and for
formation of Group Housing/other major developments and for formation of Private
Layouts.
The BDA has not disclosed
the details of such Applicants or the amount recovered from them in terms of
the Government order dated 25.03.1987.4. I say that in the affidavit under
reply the BDA has stated that it has approved layouts involving about an extent
of 5668 acres and 15 > guntas from 1984 till 2005. The extent of area involved
in respect of each of the Societies is more than 10 acres in each layout. In terms
of the Government Order the BDA has demanded towards the Cauvery Water Supply
Scheme at the rate of Rs. 3,00,000/- (Rupees Three Lakhs Only) per acre.
Therefore, at a conservative
estimate the BDA has raised demand of more than Rs. 170/- crores (5668 x Rs. 3 lakhs).
This amount pertains to only Housing Societies. As stated above the BDA has not
disclosed the total number of 46layouts formed by it and the total number of site
allotted in the said layouts to its allottees. I say that the BDA has in its officials
site http://www.bdabangalore.org/layout.htm has furnished the layout information
till 2007 which information has been downloaded from the internet by the deponent.
As per the information published by the BDA itself it has formed 62 layouts and
has made allotments of about 2 lakh sites to general public. It is also stated therein
that in the last one decade more than 10 new layouts have been added to the
growing city of Bangalore by BDA as under:
A.
BANASHANKARI
6TH STAGE7 743 acres land acquired for phase-3 Banashankari 6th Stage and Anjanapura
Further Extension in Uttarahalli Hobli, Bangalore South Taluk, 5000 sites
allotted in September 2002.
B.
BANASHANKARI
6TH STAGE FURTHER EXTENSION7 750 acres land acquired in Uttarahalli Hobli, Bangalore
South Taluk, 5800 allotted during January 2004.
C.
SIR.
M. VISWESHWARAYA LAYOUT7 1337 acres and 22 guntas of land acquired for SMV Layout
allotted 10,000 sites during March 2003.
D.
SIR.
M. VISWESHWARAYA LAYOUT FURTHER EXTENSION7 510 acres land acquired, 4200 allotted
during January, 2004. It is near Kengeri Hobli.
E.
HSR
Layout is on the South-Eastern part of the city closer to Electronic City and
Outer Ring Road. It is one among the prestigious layouts of BDA. 47 A total of 9900
sites have been allotted in HSR Layout during 1986 to 88, 92, 95 and 99.
F.
Sir.
M. Visweswaraya Nagar Layout is in the Western part of the city. In SMV Layout we
have allotted 17, 624 sites
6 x 9 - 4445
9 x 12 - 7368
12 x 18 - 4167
15 x 24 - 1644
G.
In
SMV Further Extension we have allotted 3615 sites. In Anjanpura Further Extension
we have allotted 7340 sites
6 x 9 - 1835
9 x 12 - 3305
12 x 18 - 1335
15 x 24 - 365
H.
In
Arkavathi Layout, in the 1st Phase 1710 sites and in the 2nd phase 8314 sites of
different dimensions. A total of 3664 (30x40) dimension sites have been
allotted totally at the rate of Rs. 2100 sq. mtrs.
True copy of the layout
information published by BDA in its official website: http://www.bdabangalore.org/layout.htm
as at 2007 is filed as ANNEXURE A-1 to this affidavit. The true typed copy of
Annexure A-1 is filed as
ANNEXURE A- 2. 5. I say
that if the total number of sites allotted by the BDA in the layout formed by it
if taken as 2 lakhs sites as stated in the BDA publication the amount levied and
collected by BDA from such allottees will come to Rs. 200 crores (2,00,00,000 x
Rs. 10,000/-).
As stated in the BDA publication
in the last decade itself more than 73503 sites have been allotted by the BDA
in the layouts formed by itself. The amount levied and collected by the BDA
from these allottees in the last one decade at the rate of Rs. 10,000/- per site
in terms of the Government Order dated 25.03.1987 towards the Cauvery Water Supply
Scheme itself will come to Rs. 73,50,30,000/- (Rs.10,000 per site x 73503
sites).
6. I say that apart from
the amount levied and collected by BDA from the above mentioned Applicants, the
BDA must have collected the amount towards the Cauvery Water Supply Scheme from
the Applicants who applied for change in land use and 49for formation of Group Housing/other
major developments and for formation of Private Layouts at the rate as prescribed
in the Government Order dated 25.03.1987.7. I say that the facts and figures
disclosed above is based on the averments made in the affidavit filed by BDA and
the information official from the official website of BDA
http://www.bdabangalore.org/layout.htm and I believe the same to be correct.
Therefore, it is
apparent that the BDA has demanded more than Rs.370 crores from the societies
whose layouts have been approved by BDA (Rs. 170 crores) and from its allottees
(Rs. 200 crores) excluding the Applicants who applied for change in land use
and for formation of Group Housing/other major developments and for formation
of Private Layouts.I say that apart from the fact that the BDA is not empowered
to levy and collect the amount towards Cauvery Water Supply Scheme and without
prejudice to the submission that the provisions of Section 32(5-A) of the BDA Act
is ultra vires the
Constitution and without
prejudice to rights and contentions raised in the Civil Appeal even assuming
that the BDA could levy and collect the amount towards Cauvery Water Supply Scheme,
the BDA could collect only Rs. 30 crores. The BDA has however demanded the payment
towards Cauvery Water Supply Scheme in excess of over Rs. 370 crores from the Housing
Societies and its own allottees apart from the demand made from the Applicants who
applied for change in land use and for formation of Group Housing/other major
developments and for formation of Private Layouts which facts have not been
disclosed by the BDA.
The entire information
pertaining to the demand and collection of the funds towards Cauvery Water 50 Supply
Scheme is available with BDA but has been deliberately withheld. In any event
even according to the affidavit filed by the BDA it has collected Rs.34.55
crores as against the limit of Rs. 30 crores which it could collect under the Government
Order. Therefore, the amount collected is far in excess of its limit. On this
ground also the demand raised against the Respondent Societies is illegal and without
authority of law."
31.
31.
We shall first deal with the question whether the area in which the respondents
have formed layouts fall within the Bangalore Metropolitan Area. In the impugned
order, the Division Bench has recorded brief reasons for negating the
respondents' challenge to Notification dated 1.3.1988. The conclusion recorded by
the Division Bench and similar view expressed by another Division Bench of the High
Court in the Commissioner, Bangalore Development Authority v. State of
Karnataka ILR 2006 KAR 318 will be deemed to have been approved by the three Judge
Bench of this Court in Bondu Ramaswamy v. Bangalore Development Authority (2010)
7 SCC 129, which referred to Notifications dated 1.11.1965 and 13.3.1984 issued
under Section 4A(1) of the Town Planning Act and Notification dated 1.3.1988
issued under Section 2(c) of the 1976 Act and observed:
"A careful
reading of the Notification dated 1-3-1988 would show that the clear intention of
the State Government was to declare the entire area declared under the
Notification dated 1-11-1965 and the Notification dated 13-3-1984, together as the
Bangalore Metropolitan Area. The Notification dated 1-3-1988 clearly states
that the entire area situated within the boundaries indicated in Schedule II to
the Notification dated 13-3-1984 was the area for the purpose of Section 2(c)
of the BDA Act. There is no dispute that the boundaries indicated in Schedule II
to the Notification dated 13-3-1984 would include not only the villages enumerated
in First Schedule to the Notification dated 13-3-1984 but also the area that was
declared as planning area under the Notification dated 1-11-1965.
This is because the
areas declared under Notification dated 1-11-1965 are the core area (Bangalore City)
and the area surrounding the core area that is 218 villages forming the first concentric
circle; and the area declared under the Notification dated 13-3- 1984 (325 villages)
surrounding the area declared under the Notification dated 1-11-1965 forms the second
concentric circle. Therefore, the boundaries of the lands declared under the Notification
dated 13-3-1984, would also include the lands which were declared under the Notification
dated 1-11-1965 and therefore, the 16 villages which are the subject- matter of
the impugned acquisition, are part of the Bangalore Metropolitan Area.
The learned counsel for
the appellants contended that the note at the end of Second Schedule to the Notification
dated 13-3-1984 excluded the Bangalore City Planning Area declared under the 52Notification
dated 1-11-1965. As the planning area that was being declared under the
Notification dated 13-3-1984 was in addition to the area that was declared under
the Notification dated 1-11-1965, it was made clear in the note at the end of the
Notification dated 13-3-1984 that the area declared under the Notification dated
1-11-1965 is to be excluded. The purpose of the note was not to exclude the area
declared under the Notification dated 1-11-1965 from the local planning area.
The intention was to specify
what was being added to the local planning area declared under the Notification
dated 1-11-1965. But in the Notification dated 1-3-1988, what is declared as the
Bangalore Metropolitan Area is the area, that is, within the boundaries indicated
in Schedule II to the Notification dated 13-3-1984, which as noticed above is
the area notified on 1-11-1965 as also the area notified on 13-3-1984. The note
in the Notification dated 13-3-1984 was only a note for the purposes of the Notification
dated 13-3-1984 and did not form part of the Notification dated 1-3-1988. There
is therefore no doubt that the intention of the State Government was to include
the entire area within the boundaries described in Schedule II, that is, the area
declared under the two Notifications dated 1-11-1965 and 13-3-1984, as the Bangalore
Metropolitan Area. In fact ever since 1988 everyone had proceeded on the basis that
the
Bangalore Metropolitan
Area included the entire area within the boundaries mentioned in Schedule II to
the Notification dated 13-3-1984. Between 1988 and 2003, BDA had made several development
schemes for the areas in the first concentric circle around Bangalore City (that
is, in the 218 villages described in First Schedule to the Notification dated 1-11-1965)
and the State Government had sanctioned them. None of those 53 were challenged on
the ground that the area was not part of Bangalore Metropolitan Area.
"The Bench then considered
the argument that the language of notification dated 1.3.1988 cannot lead to a
conclusion that the areas specified in the Schedule were made part of the
Bangalore Metropolitan Area, referred to the doctrine of casus omissus, the
judgment of the Constitution Bench in Padma Sundara Rao v. State of T. N.
(2003) 5 SCC 533 and proceeded to observe: "Let us now refer to the wording
and the ambiguity in the notification. Section 2(c) of the BDA Act makes it clear
that the city of Bangalore as defined in the Municipal Corporation Act is part of
Bangalore Metropolitan Area. It also makes it clear that the areas where the
City of Bangalore Improvement Act, 1945 was in force, is also part of Bangalore
Metropolitan Area.
It contemplates other
areas adjacent to the aforesaid areas being specified as part of Bangalore
Metropolitan Area by a notification. Therefore, clearly, the area that is contemplated
for being specified in a notification under Section 2(c) is "other areas adjacent"
to the areas specifically referred to in Section 2(c). But it is seen from the Notification
dated 1-3-1988 that it does not purport to specify the "such other areas adjacent"
to the areas specifically referred to in Section 2(c), but purports to specify the
Bangalore Metropolitan Area itself as it states that it is specifying the "areas
for the purpose of the said clause".
If the notification specifies
the entire Bangalore Metropolitan Area, the interpretation put forth by the appellants
that only the villages included in Schedule I to the Notification 54dated 13-3-1984
would be the Bangalore Metropolitan Area, would result in an absurd situation. Obviously
the city of Bangalore and the adjoining areas which were notified under the
City of Bangalore Improvement Act, 1945 are already included in the Bangalore
Metropolitan Area and the interpretation put forth by the appellants would have
the effect of excluding those areas from the Bangalore Metropolitan Area. As stated
above, the core area or the inner circle area, that is, Bangalore City, is a part
of Bangalore Metropolitan Area in view of the definition under Section 2(c).
The 218 villages specified
in the Notification dated 1-11-1965 are the villages immediately surrounding and
adjoining Bangalore City and it forms the first concentric circle area around the
core area of Bangalore City. The 325 villages listed in First Schedule to the Notification
dated 13-3-1984 are situated beyond the 218 villages and form a wider second concentric
circle around the central core area and the first concentric circle area of 218
villages. That is why the Notification dated 1-3-1988 made it clear that the
Bangalore Metropolitan Area would be the area within the boundaries indicated
in Second Schedule to the Notification dated 13-3-1984.
It would mean that the
three areas, namely, the central core area, the adjoining 218 villages constituting
the first concentric circle area and the next adjoining 325 villages forming the
second concentric circle are all included within the Bangalore Metropolitan
Area. What is already specifically included by Section 2(c) of the BDA Act cannot
obviously be excluded by Notification dated 1-3-1988 while purporting to
specify the additional areas adjoining to the areas which were already enumerated.
Therefore, the 55 proper
way of reading the Notification dated 1-3- 1988 is to read it as specifying 325
villages which are described in the First Schedule to the Notification dated 13-3-1984
to be added to the existing metropolitan area and clarifying that the entire
areas within the boundaries of Second Schedule to the Notification dated 13-3-1984
would constitute the Bangalore Metropolitan Area. There is no dispute that the boundaries
indicated in the Notification dated 13-3-1984 would clearly include the 16 villages
which are the subject-matter of the acquisition."
32.
In
view of the judgment in Bondu Ramaswamy v. Bangalore Development Authority
(supra), we hold that the villages specified in the schedules appended to
Notifications dated 1.11.1965 and 13.3.1984 form part of the Bangalore Metropolitan
Area. The question whether the BDA has lost territorial jurisdiction over the area
in which the House Building Societies have formed layouts need not be decided
because the learned counsel for the respondents did not challenge the observations
made by the Division Bench of the High Court.
33.
We
shall now consider the following core questions: (1) whether Section 32(5A) of
the 1976 Act is violative of Article 14 of the Constitution; (2) whether Section
32(5A) of the 1976 Act suffers from the vice of excessive delegation of
legislative power; (3) whether the demand of charges under the Cauvery Scheme etc.
amounts to tax and is, therefore, ultra vires the provisions of Article 265 of the
Constitution; and (4) whether the BDA has collected charges from the house building
societies and the allottees of sites of the layouts prepared by it far in
excess of its contribution towards the Cauvery Scheme, MRTS, etc. Question (1)
34.
Shri
Altaf Ahmed, learned senior counsel appearing for the BDA and Shri Sanjay R.
Hegde, learned counsel for the State of Karnataka argued that Section 32(5A) is
not violative of Article 14 of the Constitution inasmuch as it does not operate
unequally qua the allottees of the sites of the layouts prepared by the house
building societies on the one hand and the BDA layouts on the other hand. Learned
counsel emphasised that the allottees of sites in the BDA layouts which were
carved out after 20.06.1987 have been burdened with the liability to pay charges
for the 57Cauvery Scheme as well as Ring Road and no discrimination has been
practiced between the two sets of allottees. Learned senior counsel Shri Altaf
Ahmed submitted that even otherwise there is no comparison between the BDA layouts
which were formed by spending substantial public funds and the private layouts
prepared by the house building societies. Learned counsel referred to the
additional affidavit of Shri Siddaiah to show that Rs. 34.55 crores were collected
by the BDA between 1988 and 2005 both from the private layouts as well as the
BDA sites and the entire amount has been paid to BWSSB in lieu of the BDA's
share in the Cauvery Scheme.
35.
Shri
K.K. Venugopal and Shri P. Vishwanatha Shetty, learned senior advocates and
Shri R.S. Hegde and other learned counsel appearing for the respondents
supported the conclusion recorded by the High Court that Section 32(5A) is violative
of Article 14 of the Constitution by emphasizing that the impugned provision has
resulted in hostile discrimination between the allottees of sites in the layouts
of the house building societies and other people living in the Bangalore Metropolitan
Area. Learned counsel submitted that while the benefit of the Cauvery Scheme,
Ring Road, etc. will be availed by all the residents of the Bangalore Metropolitan
Area, the cost of amenities have been loaded exclusively on the allottees of the
sites of the private layouts and to some extent the BDA layouts and in this
manner similarly situated persons have been discriminated. Shri Venugopal referred
to the averments contained in paragraphs 4 to 6 of the amendment application filed
in Writ Petition No. 11144/1993 to drive home the point that the BDA has loaded
its share towards the Cauvery Scheme and Ring Road exclusively on the allottees
of the private layouts leaving out the remaining population of the Bangalore
Metropolitan Area.
36.
In
our view, the High Court committed serious error by recording a finding that Section
32(5A) is discriminatory and violative of Article 14 of the Constitution. While
deciding the issue relating to constitutionality of the Section, the High Court
overlooked the well-established principle that a statutory provision is
presumed to be constitutionally valid unless proved otherwise and burden lies upon
the person who alleges discrimination to lay strong factual foundation to prove
that the provision offends the equality clause enshrined in the Constitution.
37.
In
Charanjit Lal Chowdhuri v. Union of India (1950) 1 SCR 869, this Court
enunciated the rule of presumption in favour of constitutionality of the
statute in the following words: "Prima facie, the argument appears to be a
plausible one, but it requires a careful examination, and, while examining it,
two principles have to be borne in mind :- (1) that a law may be constitutional
even though it relates to a single individual, in those cases where on account of
some special circumstances or reasons applicable to him and not applicable to others,
that single individual may be treated as a class by himself; (2) that it is the
accepted doctrine of the American courts, which I consider to be well-founded on
principle, that the presumption is always in favour of the constitutionality of
an enactment, and the burden is upon him who attacks it to show that there has
been a clear transgression of the constitutional principles.
A clear enunciation
of this latter doctrine is to be found in Middleton v. Texas Power and Light
Company 248 U.S. 152, 157, in which the relevant passage runs as follows: "It
must be presumed that a legislature understands and correctly appreciates the need
of its own people, that its laws are directed to problems made manifest by experience
and that its discriminations are based upon adequate grounds."" (emphasis
supplied)
38.
In
M.H. Quareshi v. State of Bihar (1959) 1 SCR 629, this Court observed: "The
Courts, it is accepted, must presume that the legislature understands and correctly
appreciates the needs of its own people, that its laws are directed to problems
made manifest by experience and that its discriminations are based on adequate grounds.
It must be borne in mind that the legislature is free to recognise degrees of harm
and may confine its restrictions to those cases where the need is deemed to be
the clearest and finally that in order to sustain the presumption of constitutionality
the Court may take into consideration matters of common knowledge, matters of
common report, the history of the times, and may assume every state of facts
which can be conceived existing at the time of legislation."
39.
In
Ram Krishna Dalmia v. Justice S.R. Tendolkar (supra), to which reference has been
made in the impugned order, this Court laid down various propositions including
the following: "(b) that there is always a presumption in favour of the constitutionality
of an enactment and the burden is upon him who attacks it to show that there
has been a clear transgression of the constitutional principles; (e) that in order
to sustain the presumption of constitutionality the court may take into
consideration matters of common knowledge, matters of common report, the
history of the times and may assume every state of facts which can be conceived
existing at the time of legislation;"
40.
In
R.K. Garg v. Union of India (1981) 4 SCC 675 the Constitution Bench reiterated the
well-settled principles in the following words: "While considering the constitutional
validity of a statute said to be violative of Article 14, it is necessary to bear
in mind certain well established principles which have been evolved by the courts
as rules of guidance in discharge of its constitutional function of judicial review.
The first rule is that there is always a presumption in favour of the constitutionality
of a statute and the burden is upon him who attacks it to show that there has been
a clear transgression of the constitutional principles. This rule is based on the
assumption, judicially recognised and accepted, that the legislature understands
and correctly appreciates the needs of its own people, its laws are directed to
problems made manifest by experience and its discrimination are based on adequate
grounds. The presumption of constitutionality is indeed so strong that in order
to sustain it, the Court may take into consideration matters of common knowledge,
matters of common report, the history of the times and may assume every state of
facts which can be conceived existing at the time of legislation."
41.
Though,
in the writ petitions filed by them, the respondents pleaded that Section 32(5A)
is discriminatory, no factual foundation was laid in support of this plea and
in the absence of such foundation, the High Court was not at all justified in 62recording
a conclusion that the impugned provision is violative of the equality clause
contained in Article 14 of the Constitution.
42.
While
examining the issue of hostile discrimination in the context of Section 32(5A),
the Court cannot be oblivious of the fact that due to unprecedented increase in
the population of the Bangalore City and the policy decision taken by the State
Government to encourage house building societies to form private layouts, the BDA
was obliged to take effective measures to improve the civic amenities like water
supply, electricity, roads, transportation, etc. within the Bangalore Metropolitan
Area and for this it became necessary to augment the resources by the BDA itself
or through other State agencies/instrumentalities by making suitable contribution.
It would be a matter
of sheer speculation whether in the absence of increase in the population of the
Bangalore Metropolitan Area and problems relating to planned development, the legislature
would have enacted the 1976 Act and the State and its
agencies/instrumentalities would have spent substantial amount for augmenting water
supply, electricity, transportation and 63other amenities. However, the fact of
the matter is that with a view to cater to the new areas, and for making the concept
of planned development a reality qua the layouts of the private House Building
Societies and those involved in execution of large housing projects, etc., the BDA
and other agencies/instrumentalities of the State incurred substantial
expenditure for augmenting the water supply, electricity, etc.
There could be no justification
to transfer the burden of this expenditure on the residents of the areas which
were already part of the city of Bangalore. In other words, other residents
could not be called upon to share the burden of cost of the amenities largely meant
for newly developed areas. Therefore, it is not possible to approve the view taken
by the High Court that by restricting the scope of loading the burden of expenses
to the allottees of the sites in the layouts developed after 1987, the
legislature violated Article 14 of the Constitution.Question (2)
43.
Learned
senior counsel for the BDA and the counsel appearing for the State assailed the
finding recorded by the High Court that Section 32(5A) is a piece of excessive delegation
by pointing out that while the sums specified in Section 32(5) are required to
be deposited by those intending to form an extension or layout to meet the
expenditure for making roads, side-drains, underground drainage and water supply,
lighting etc., the amount required to be deposited under Section 32(5A) is
meant for developing the infrastructure necessary for augmenting the supply of
water, electricity, construction of roads, etc., which are an integral part of
the concept of planned development. Learned counsel emphasised that the policy of
the legislation is clearly discernable from the Preamble of the 1976 Act and
its provisions in terms of which the BDA is required to ensure planned
development of the Bangalore Metropolitan Area. Both, Shri Ahmed and Shri
Sanjay R. Hegde submitted that Section 32(5A) does not confer unbridled and unguided
power upon the BDA and by using the expression "such portion of the
expenditure as the Authority may determine towards the execution of any scheme
or work for augmenting water supply, electricity, roads" and the legislature
has provided sufficient guidance for exercise of power by the BDA. In support of
this argument, learned 65counsel relied upon the judgments in Municipal Board,
Hapur v. Raghuvendra Kripal and others (1966) 1 SCR 950, Corporation of
Calcutta and another v. Liberty Cinema (1965) 2 SCR 477 and Bhavesh D. Parish and
others v. Union of India and another (2000) 5 SCC 471.
44.
Shri
K. K. Venugopal, Shri P. Vishwanatha Shetty, learned senior counsel and other learned
counsel appearing for the respondents reiterated the argument made before the
High Court that Section 32(5A) suffers from the vice of excessive delegation
because the legislature has not laid down any policy for recovery of cost of infrastructure
required for augmentation of supply of water, electricity, roads, transportation,
etc.
Learned senior
counsel referred to the averments contained in the amended writ petitions to show
that the cost of additional infrastructure is recovered only from those who apply
for sanction of private layouts and there is no provision for distribution of liability
by creating demand on others including those to whom sites are allotted in the
BDA layouts. Shri Venugopal referred to Sections 15 and 16 of the Act to show
that the BDA is required to prepare 66development scheme and execute the same
and argued that the cost of the scheme cannot be loaded only on the private
layouts.
Learned counsel
relied upon the judgments in Daymond v South West Water Authority (1976) 1 All
England Law Reports 39, The State of West Bengal v. Anwar Ali Sarkar (1952) SCR
284, Devi Das Gopal Krishnan and Ors. v. State of Punjab and Ors. (supra) and
A.N. Parasuraman and others v. State of Tamil Nadu (1989) 4 SCC 683 to support
the conclusion recorded by the High Court that Section 32 (5A) is a piece of
excessive delegation.
45.
The
issue relating to excessive delegation of legislative powers has engaged the
attention of this Court for the last more than half century. In Devi Das Gopal
Krishnan and Ors. v. State of Punjab and Ors. (supra), Kunnathat Thathunni
Moopil Nair v. State of Kerala ( 1961) 3 SCR 77 and A.N. Parasuraman and others
v. State of Tamil Nadu (supra), the Court did not favour a liberal application of
the concept of delegation of legislative powers but in a large number of other
judgments including Jyoti Pershad v. the Administrator for the Union Territory of
Delhi (supra), Ajoy Kumar Banerjee v. Union of India (1984) 3 SCC 67127, Maharashtra
State Board of S.H.S.E. v. Paritosh Bhupeshkumar Sheth (1984) 4 SCC 27, Kishan
Prakash Sharma v. Union of India (2001) 5 SCC 212 and Union of India v. Azadi
Bachao Andolan (2004) 10 SCC 1, the Court recognized that it is not possible
for the legislature to enact laws with minute details to deal with increasing complexities
of governance in a political democracy, and held that the legislature can lay down
broad policy principles and guidelines and leave the details to be worked out by
the executive and the agencies/instrumentalities of the State and that the delegation
of the powers upon such authorities to implement the legislative policy cannot be
castigated as excessive delegation of the legislative power.
46.
In
Jyoti Pershad v. the Administrator for the Union Territory of Delhi (supra), the
Court dealt with the question whether Section 19(1) of the Slum Areas (Improvement
and Clearance) Act, 1956 which adversely affected the decree of eviction
obtained by the landlord against the tenant was a piece of excessive
delegation. It was argued that the power vested in the competent authority to
withhold eviction in pursuance of orders or decrees 68of the Court was ultra vires
the provisions of the Constitution. While repelling this argument, the Court referred
to the provisions of the 1956 Act and observed:
"In the context of
modern conditions and the variety and complexity of the situations which present
themselves for solution, it is not possible for the Legislature to envisage in
detail every possibility and make provision for them. The Legislature therefore
is forced to leave the authorities created by it an ample discretion limited,
however, by the guidance afforded by the Act. This is the ratio of delegated legislation,
and is a process which has come to stay, and which one may be permitted to observe
is not without its advantages.
So long therefore as the
Legislature indicates, in the operative provisions of the statute with certainty,
the policy and purpose of the enactment, the mere fact that the legislation is skeletal,
or the fact that a discretion is left to those entrusted with administering the
law, affords no basis either for the contention that there has been an excessive
delegation of legislative power as to amount to an abdication of its functions,
or that the discretion vested is uncanalised and unguided as to amount to a carte
blanche to discriminate. The second is that if the power or discretion has been
conferred in a manner which is legal and constitutional, the fact that Parliament
could possibly have made more detailed provisions, could obviously not be a ground
for invalidating the law." (emphasis supplied)
47.
In
Maharashtra State Board of S.H.S.E. v. Paritosh Bhupeshkumar Sheth, (supra),
the Court while dealing with the 69issue of excessive delegation of power to
the Board of Secondary Education observed: "So long as the body entrusted with
the task of framing the rules or regulations acts within the scope of the authority
conferred on it, in the sense that the rules or regulations made by it have a
rational nexus with the object and purpose of the statute, the court should not
concern itself with the wisdom or efficaciousness of such rules or regulations.
It is exclusively within the province of the legislature and its delegate to determine,
as a matter of policy, how the provisions of the statute can best be
implemented and what measures, substantive as well as procedural would have to
be incorporated in the rules or regulations for the efficacious achievement of the
objects and purposes of the Act. It is not for the Court to examine the merits or
demerits of such a policy because its scrutiny has to be limited to the
question as to whether the impugned regulations fall within the scope of the regulation-making
power conferred on the delegate by the statute."
48.
In
Ajoy Kumar Banerjee v. Union of India (supra), the three Judge Bench, while interpreting
the provisions of the General Insurance Business (Nationalisation) Act, 1972,
observed: "The growth of legislative power of the executive is a significant
development of the twentieth century. The theory of laissez-faire has been given
a go-by and large and comprehensive powers are being assumed by the State with
a view to improve social and economic well-being of the people. Most of the modern
socio-economic legislations passed by the Legislature lay down the guiding principles
of the legislative policy.
The Legislatures, because
of limitation imposed upon them and the time factor, hardly can go into the matters
in detail. The practice of empowering the executive to make subordinate
legislation within the prescribed sphere has evolved out of practical necessity
and pragmatic needs of the modem welfare State. Regarding delegated
legislation, the principle which has been well established is that Legislature must
lay down the guidelines, the principles of policy for the authority to whom power
to make subordinate legislation is entrusted.
The legitimacy of delegated
legislation depends upon its being used as ancillary which the Legislature
considers to be necessary for the purpose of exercising its legislative power effectively
and completely. The Legislature must retain in its own hand the essential legislative
function which consists in declaring the legislative policy and lay down the standard
which is to be enacted into a rule of law, and what can be delegated in the task
of subordinate legislation which by very nature is ancillary to the statute which
delegates the power to make it effective provided the legislative policy is enunciated
with sufficient clearness or a standard laid down. The courts cannot and do not
interfere on the discretion that undoubtedly rests with the Legislature itself
in determining the extent of the delegated power in a particular case." (emphasis
supplied)
49.
In
Kishan Prakash Sharma v. Union of India (2001) 5 SCC 71212, the Constitution
Bench speaking through Rajendra Babu, J. (as he then was), summed up the principle
of delegated legislation in the following words: "The legislatures in
India have been held to possess wide power of legislation subject, however, to certain
limitations such as the legislature cannot delegate essential legislative
functions which consist in the determination or choosing of the legislative policy
and of formally enacting that policy into a binding rule of conduct. The legislature
cannot delegate uncanalised and uncontrolled power. The legislature must set the
limits of the power delegated by declaring the policy of the law and by laying down
standards for guidance of those on whom the power to execute the law is conferred.
Thus the delegation is
valid only when the legislative policy and guidelines to implement it are adequately
laid down and the delegate is only empowered to carry out the policy within the
guidelines laid down by the legislature. The legislature may, after laying down
the legislative policy, confer discretion on an administrative agency as to the
execution of the policy and leave it to the agency to work out the details within
the framework of the policy. When the Constitution entrusts the duty of law-making
to Parliament and the legislatures of States, it impliedly prohibits them to throw
away that responsibility on the shoulders of some other authority.
An area of compromise
is struck that Parliament cannot work in detail the various requirements of giving
effect to the enactment and, therefore, that area will be left to be filled in by
the delegatee. Thus, the question is whether any particular legislation suffers
from excessive delegation and in ascertaining the same, the scheme, the provisions
of the statute including 72 its preamble, and the facts and circumstances in the
background of which the statute is enacted, the history of the legislation, the
complexity of the problems which a modern State has to face, will have to be taken
note of and if, on a liberal construction given to a statute, a legislative policy
and guidelines for its execution are brought out, the statute, even if skeletal,
will be upheld to be valid but this rule of liberal construction should not be carried
by the court to the extent of always trying to discover a dormant or latent legislative
policy to sustain an arbitrary power conferred on the executive." (emphasis
supplied)
50.
In
Union of India v. Azadi Bachao Andolan (supra), the Court was called upon to consider
the constitutionality of the Indo-Mauritius Double Taxation Avoidance Convention,
1983. While rejecting the argument that Section 90 of the Income Tax Act, under
which the Treaty is said to have been entered, amounted to delegation of the
essential legislative functions, the Court observed:
"The question whether
a particular delegated legislation is in excess of the power of the supporting legislation
conferred on the delegate, has to be determined with regard not only to
specific provisions contained in the relevant statute conferring the power to
make rules or regulations, but also the object and purpose of the Act as can be
gathered from the various provisions of the enactment.
It would be wholly wrong
for the court to substitute its own opinion as to what principle or policy would
best serve the objects and purposes of the Act; nor is it open to the court to
sit in judgment over the wisdom, the effectiveness or otherwise of the policy, so
as to declare a regulation ultra vires merely on the ground that, in the view
of the court, the impugned provision will not help to carry through the object
and purposes of the Act." (emphasis supplied)
51.
The
principle which can be deduced from the above noted precedents is that while examining
challenge to the constitutionality of a statutory provision on the ground of
excessive delegation, the Court must look into the policy underlying the particular
legislation and this can be done by making a reference to the Preamble, the objects
sought to be achieved by the particular legislation and the scheme thereof and
that the Court would not sit over the wisdom of the legislature and nullify the
provisions under which the power to implement the particular provision is conferred
upon the executive authorities.
52.
52.
The policy underlying the 1976 Act is clearly discernable from the Preamble of the
Town Planning Act and the 1976 Act and the objects sought to be achieved by the
two legislations, namely, development of the City of Bangalore and areas
adjacent thereto. The Town Planning Act was enacted for the regulation of
planned growth of land use and development and for the making and execution of town
planning schemes in the entire State including the City of Bangalore.
By virtue of Section 67
of the 1976 Act and with the insertion of Section 81-B in the Town Planning Act
by Act No.12 of 1976, the BDA became the Local Planning Authority for the local
planning area comprising the City of Bangalore with jurisdiction over an area which
the City Planning Authority for the City of Bangalore had immediately before the
constitution of the BDA and the latter has been empowered to exercise the powers,
perform the functions and discharge the duties under the Town Planning Act as
if it were a Local Planning Authority constituted for the Bangalore City. In
other words, w.e.f. 20.12.1975, i.e., the date on which the 1976 Act was enforced,
the BDA acquired the status of a Local Planning Authority as defined in Section
2(7) read with Section 4(C) of the Town Planning Act in respect of the City of
Bangalore and thereby acquired the powers which were earlier vested in the 75Local
Planning Authority constituted for the Bangalore City.
The objects sought to
be achieved by the legislature by enacting the Town Planning Act were to create
conditions favourable for planning and replanning of the urban and rural areas in
the State so that full civic and social amenities could be available for the
people of the State; to stop uncontrolled development of land due to land
speculation and profiteering in land; to preserve and improve existing recreational
facilities and other amenities contributing towards the balance use of land and
future growth of populated areas in the State ensuring desirable standards of
environment, health, hygiene and creation of facilities of orderly growth of
industry and commerce.
The Town Planning Act
also envisaged preparation of the town planning schemes and execution thereof
by the Planning Authorities constituted for the specified areas. Section 9
(unamended) envisaged preparation of outline development plan incorporating therein
the various matters enumerated in Section 12(1), preparation of comprehensive development
plan by including the proposal for comprehensive zoning of land use for the
planning area; building complete street pattern indicating major and minor roads,
76National and State highways and traffic circulation pattern for meeting immediate
and future requirements; areas for new housing and new areas earmarked for future
development and expansion.
The definition of
"development" contained in Section 2(j) of the 1976 Act is somewhat
similar to the one contained in Section 1(c) of the Town Planning Act. Section
14 of the 1976 Act lays down that the objects of the BDA shall be to promote and
secure the development of the Bangalore Metropolitan Area and for that purpose,
the BDA shall have the power to acquire, hold manage and dispose of movable and
immovable property, whether within or outside the area under its jurisdiction.
"Bangalore Metropolitan
Area" has been defined under Section 2(c) of the 1976 Act. It consists of the
following areas: (a) area comprising the City of Bangalore as defined in the City
of Bangalore Municipal Corporation Act, 1949 which is now replaced by the
Karnataka Municipal Corporations Act, 1976, (b) the areas where the City of Bangalore
Improvement Act, 1945 was immediately before the commencement of the 1976 Act in
force, and (c) such other areas adjacent to the aforesaid as the Government may
from time to time by notification specify. 77Section 15 empowers the BDA to
draw up detailed schemes and undertake works for the development of the Bangalore
Metropolitan Area and incur expenditure for that purpose.
It can also take up any
new or additional development scheme on its own, subject to the availability of
sufficient resources. If a local authority provides necessary funds for framing
and carrying out any scheme, then too, the BDA can take up such scheme. Under
Section 15(3), which contains a non obstante clause, the Government can issue direction
to the BDA to take up any development scheme or work and execute it subject to such
terms and conditions as may be specified by it. Section 16 enumerates the
matters which are required to be included in the scheme, i.e., the acquisition
of land necessary for or affected by the execution of the scheme, laying or
relaying of land including construction and reconstruction of buildings and
formation and alteration of streets, drainage, water supply and electricity,
reservation of land for public parks or playgrounds and at least 10% of the total
area for civil amenities.
The development
scheme may also provide for raising of any land to facilitate better drainage, forming
of open spaces for better ventilation of 78the area comprised in the scheme or
any adjoining area and the sanitary arrangement. Sections 17 to 19 contain the
mechanism for finalisation of the scheme and its approval by the State
Government as also the acquisition of land for the purposes of the scheme. Sections
20 to 26 provide for levy and collection of betterment tax. Section 27 specifies
the time limit of five years from the date of publication of the scheme in the
Official Gazette for execution of the scheme as also consequence of non
execution. Section 28-A casts a duty on the BDA to ensure proper maintenance,
lighting and cleansing of the streets and the drainage, sanitary arrangement and
water supply in respect of the streets formed by it. Section 32 provides for
formation of new extensions or layouts or making of new private streets, which
can be done only after obtaining express sanction from the BDA and subject to the
conditions which may be specified by the BDA.
Section 32(5) lays
down that the BDA can call upon the applicant to deposit the sums necessary for
meeting the expenditure for making roads, drains, culverts, underground
drainage and water supply and lighting and the charges for such other purposes
as may be indicated by the BDA, as a condition precedent to the 79grant of
application. Section 32(5A), which also contains a non obstante clause, empowers
the BDA to require the applicant to deposit additional amount to meet a portion
of the expenditure, which the BDA may determine towards the execution of any scheme
or work for augmenting water supply, electricity, roads, transportation and such
other amenities within the Bangalore Metropolitan Area.
53.
The
above survey of the relevant provisions of the 1961 and the 1976 Acts makes it clear
that the basic object of the two enactments is to ensure planned development of
the areas which formed part of the Bangalore Metropolitan Area as on 15.12.1975
and other adjacent areas which may be notified by the Government from time to
time. The BDA is under an obligation to provide "amenities" as defined
in Section 2(b) and "civic amenities" as defined in Section 2(bb) of the
1976 Act for the entire Bangalore Metropolitan Area. In exercise of the powers
vested in it under Sections 15 and 16, the BDA can prepare detailed schemes for
the development of the Bangalore Metropolitan Area and incur expenditure for
implementing those 80schemes, which are termed as development schemes.
The expenditure incurred
by the BDA in the implementation of the development schemes can be loaded on the
beneficiaries of the development schemes. By virtue of Notifications dated
1.11.1965 and 13.3.1984 issued under Section 4A(1) of the Town Planning Act and
notification dated 1.3.1988 issued under Section 2(c) of the 1976 Act, hundreds
of villages adjacent to the City of Bangalore were merged in the Bangalore
Metropolitan Area. For these areas, the BDA was and is bound to provide
amenities like water, electricity, streets, roads, sewerage, transport system,
etc., which are available to the existing Metropolitan Area of the City of
Bangalore.
This task could not
have been accomplished by the BDA alone from its meager fiscal resources. Therefore,
the State Government, the BDA and other instrumentalities of the State like
BWSSB had to pool their resources as also man and material to augment water supply,
electricity and transport facilities and also make provision for construction of
new roads, layouts, etc. The BDA had to contribute to the funds required for
new water supply scheme, generation of additional electricity and development of
a mass rapid transport system to decongest the Bangalore Metropolitan Area.
This is the reason why
the State Government passed orders dated 25.3.1987 and 12.1.1993, which could
appropriately be treated as directions issued under Section 65 of the 1976 Act for
carrying out the purposes of the Act and approved the proposal for loading the BDA's
share of expenditure in the execution of the Cauvery Scheme on all the layouts to
be formed thereafter. With the insertion of Section 32(5A) in the 1976 Act, these
orders acquired the legislative mandate.
In terms of that
section, the BDA has been vested with the power to call upon the applicants desirous
of forming new extensions or layouts or private streets to pay a specified sum
in addition to the sums referred to in Section 32(5) to meet a portion of the expenditure
incurred for the execution of any scheme or work for augmenting water supply, electricity,
roads, transportation and other amenities.
54.
At
the cost of repetition, it will be apposite to observe that apart from the Preamble
and the objects of the 1961 and 1976 Acts and the scheme of the two enactments,
the expression "such portion of the expenditure as the Authority may determine
82towards the execution of any scheme or work for augmenting water supply, electricity,
roads, transportation and such other amenities" supplies sufficient
guidance for the exercise of power by the BDA under Section 32(5A) and it is
not possible to agree with the learned counsel for the respondents that the section
confers unbridled and uncanalised power upon the BDA to demand an unspecified amount
from those desirous of forming private layouts. It is needless to say that the
exercise of power by the BDA under Section 32(5A) is always subject to directions
which can be given by the State Government under Section 65. We may add that it
could not have been possible for the legislature to make provision for effective
implementation of the provisions contained in the 1961 and 1976 Acts for the
development of the Bangalore Metropolitan Area and this task had to be
delegated to some other agency/instrumentality of the State.
55.
The
above discussion leads to the conclusion that Section 32(5A) does not suffer from
the vice of excessive delegation and the legislative guidelines can be traced in
the Preamble of the 1961 and 1976 Acts and the object and scheme of the two
legislations.
Question (3)
56.
The
next question which calls for determination is whether the demand of charges
under the Cauvery Scheme, etc. amounts to imposition of tax and is, therefore, ultra
vires the provision of Article 265 of the Constitution.
57.
The
debate whether a particular levy can be treated as `fee' or `tax' and whether
in the absence of direct evidence of quid pro quo, the levy would always be treated
as tax has engaged the attention of this Court and almost all the High Courts
for the last more than four decades.
58.
In
Kewal Krishan Puri v. State of Punjab (1980) 1 SCC 416, the Constitution Bench considered
the question whether the resolutions passed by the Agriculture Market Committees
in Punjab and Haryana to increase the market fee on the agricultural produce bought
and sold by the licensees in the notified market areas from Rs. 2/- to Rs. 3/-
for every Rs. 100/- 84were legally sustainable. After noticing the distinction between
tax and fee and a large number of precedents, the Constitution Bench culled out
the following principles:
a. "That the amount
of fee realised must be earmarked for rendering services to the licensees in the
notified market area and a good and substantial portion of it must be shown to be
expended for this purpose.
b. That the services rendered
to the licensees must be in relation to the transaction of purchase or sale of the
agricultural produce.
c. That while rendering services
in the market area for the purposes of facilitating the transactions of purchase
and sale with a view to achieve the objects of the marketing legislation it is not
necessary to confer the whole of the benefit on the licensees but some special benefits
must be conferred on them which have a direct, close and reasonable correlation
between the licensees and the transactions.
d. That while conferring
some special benefits on the licensees it is permissible to render such service
in the market which may be in the general interest of all concerned with the transactions
taking place in the market.
e. That spending the amount
of market fees for the purpose of augmenting the agricultural produce, its facility
of transport in villages and to provide other facilities meant mainly or
exclusively for the benefit of the agriculturists is not permissible on the ground
that such services in the long run go to increase the volume of transactions in
the market ultimately benefiting the traders also. Such an indirect and remote
benefit to the traders is in no sense a special benefit to them.
f. That the element of quid
pro quo may not be possible, or even necessary, to be established with arithmetical
exactitude but even broadly and reasonably it must be established by the authorities
who charge the fees that the amount is being spent for rendering services to those
on whom falls the burden of the fee.
g. At least a good and substantial
portion of the amount collected on account of fees, may be in the neighbourhood
of two-thirds or three-fourths, must be shown with reasonable certainty as
being spent for rendering services of the kind mentioned above."
59.
The
ratio of the aforesaid judgment was substantially diluted in Southern
Pharmaceuticals and Chemicals, Trichur and others v. State of Kerala and others
(1981) 4 SCC 391. In the latter decision, the Court considered the
constitutional validity of Sections 12-A, 12-B, 14(e) and (f) and 68-A of the
Kerala Abkari Act 1077. One of the questions considered by the 3-Judge Bench
was whether the levy of supervisory charges under Section 14 (e) of the Act and
Rule 16(4) of the Kerala Rectified Spirit Rules, 1972 could be regarded as fee
even though there was no quid pro quo between the levy and the services
rendered by the State.
The 86Bench referred
to the distinction between tax and fee highlighted in the Commissioner, Hindu Religious
Endowments, Madras v. Lakshmindra Thirtha Swamiar of Shirur Mutt (1954) SCR 1005
and proceeded to observe: ""Fees" are the amounts paid for a privilege,
and are not an obligation, but the payment is voluntary. Fees are distinguished
from taxes in that the chief purpose of a tax is to raise funds for the support
of the Government or for a public purpose, while a fee may be charged for the privilege
or benefit conferred, or service rendered or to meet the expenses connected therewith.
Thus, fees are nothing
but payment for some special privilege granted on service rendered. Taxes and taxation
are, therefore, distinguishable from various other contributions, charges, or
burdens paid or imposed for particular purposes and under particular powers or functions
of the Government. It is now increasingly realised that merely because the collections
for the services rendered or grant of a privilege or licence, are taken to the
consolidated fund of the State and are not separately appropriated towards the expenditure
for rendering the service is not by itself decisive.
That is because the
Constitution did not contemplate it to be an essential element of a fee that it
should be credited to a separate fund and not to the consolidated fund. It is also
increasingly realised that the element of quid pro quo stricto senso is not
always a sine qua non of a fee. It is needless to stress that the element of quid
pro quo is not necessarily absent in every tax. We may, in this connection, refer
with profit to the observations of Seervai in his Constitutional Law, to the
effect: 87 "It is submitted that as recognised by Mukherjea, J. himself, the
fact that the collections are not merged in the consolidated fund, is not conclusive,
though that fact may enable a court to say that very important feature of a fee
was present.
But the attention of the
Supreme Court does not appear to have been called to Article 266 which requires
that all revenues of the Union of India and the States must go into their
respective consolidated funds and all other public moneys must go into the respective
public accounts of the Union and the States. It is submitted that if the services
rendered are not by a separate body like the Charity Commissioner, but by a government
department, the character of the imposition would not change because under
Article 266 the moneys collected for the services must be credited to the consolidated
fund.
It may be mentioned that
the element of quid pro quo is not necessarily absent in every tax.""
(emphasis supplied)The three Judge Bench also referred to the Constitution Bench
judgment in Kewal Krishna Puri v. State of Punjab (supra) and observed: "To
our mind, these observations are not intended and meant as laying down a rule of
universal application. The Court was considering the rate of a market fee, and
the question was whether there was any justification for the increase in rate
from Rs 2 per every hundred rupees to Rs 3. There was no material placed to justify
the increase in rate of the fee and, therefore, it partook the nature of a tax.
It seems that 88 the Court proceeded on the assumption that the element of quid
pro quo must always be present in a fee. The traditional concept of quid pro quo
is undergoing a transformation."
60.
The
test laid down in Kewal Krishna Puri v. State of Punjab (supra) was again considered
in Sreenivasa General Traders v. State of A.P. (1983) 4 SCC 353. In that case,
the petitioners had challenged the constitutional validity of the increase in
the rate of market fee levied under the Andhra Pradesh (Agricultural Produce and
Livestock) Markets Act, 1966 from 50 paise to Rs. 1/- on every Rs. 100/- of the
aggregate amount for which the notified agricultural produce, etc. were
purchased or sold in the notified market area. The petitioners relied upon the
proposition laid down in Kewal Krishna Puri's case (supra) in support of their
argument that in the absence of any evidence or correlation between the levy and
special services rendered by the Market Committees to the beneficiaries, the levy
should be regarded as tax.
The three Judge Bench
referred to the proposition laid down in Kewal Krishna Puri's case (supra) and
observed: "It would appear that there are certain observations to be found
in the judgment in Kewal Krishan Puri case 9which were really not necessary for
purposes of the decision and go beyond the occasion and therefore they have no
binding authority though they may have merely persuasive value. The observation
made therein seeking to quantify the extent of correlation between the amount of
fee collected and the cost of rendition of service, namely: (SCC p. 435, para 23):
"At least a good and substantial portion of the amount collected on account
of fees, maybe in the neighbourhood of two-thirds or three-fourths, must be
shown with reasonable certainty as being spent for rendering services in the
market to the payer of fee", appears to be an obiter.
The traditional view that
there must be actual quid pro quo for a fee has undergone a sea change in the
subsequent decisions. The distinction between a tax and a fee lies primarily in
the fact that a tax is levied as part of a common burden, while a fee is for
payment of a specific benefit or privilege although the special advantage is
secondary to the primary motive of regulation in public interest if the element
of revenue for general purpose of the State predominates, the levy becomes a tax.
In regard to fees
there is, and must always be, correlation between the fee collected and the service
intended to be rendered. In determining whether a levy is a fee, the true test must
be whether its primary and essential purpose is to render specific services to a
specified area or class; it may be of no consequence that the State may
ultimately and indirectly be benefited by it. The power of any legislature to levy
a fee is conditioned by the fact that it must be "by and large" a quid
pro quo for the services rendered. However, correlationship between the levy and
the services rendered (sic or) expected is one of general character and not of mathematical
exactitude. All that is necessary is that there should be a "reasonable 90
relationship" between the levy of the fee and the services rendered."
61.
In
Kishan Lal Lakhmi Chand v. State of Haryana 1993 Supp (4) SCC 461, while
dealing with the constitutionality of the levy of cess under the Haryana Rural
Development Act, 1986, the three Judge Bench referred to the scheme of the Act
and held that from the scheme of the Act it would be clear that there is a broad,
reasonable and general corelationship between the levy and the resultant benefit
to the producer of the agricultural produce, dealer and purchasers as a class though
no single payer of the fee receives direct or personal benefit from those services.
Though the general public may be benefited from some of the services like laying
roads, the primary service was to the producer, dealer and purchaser of the
agricultural produce.
62.
In
Krishi Upaj Mandi Samiti v. Orient Paper & Industries Ltd. (1995) 1 SCC 655
the two Judge Bench reviewed and analysed various precedents including the judgments
in Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of
Sri Shirur Mutt (supra), Mahant Sri Jagannath Ramanuj Das v. State of Orissa (1954)
SCR 1046, Ratilal Panachand Gandhi v. State of Bombay (1954) SCR 1055, H.H. Sadhundra
Thirtha Swamiar v. Commissioner for Hindu Religious and Charitable Endowments 1963
Supp (2) SCR 302, Corporation of Calcutta v. Liberty Cinema (supra), Kewal
Krishna Puri v. State of Punjab (supra), Sreenivasa General Traders v. State of
A.P. (supra), Om Parkash Agarwal v. Giri Raj Kishori (1986) 1 SCC 722, Kishan
Lal Lakhmi Chand v. State of Haryana (supra) and culled out 9 propositions, of
which proposition No. 7 is extracted below:
"(7) It is not a
postulate of a fee that it must have relation to the actual service rendered. However,
the rendering of service has to be established. The service, further, cannot be
remote. The test of quid pro quo is not to be satisfied with close or proximate
relationship in all kinds of fees. A good and substantial portion of the fee must,
however, be shown to be expended for the purpose for which the fee is levied. It
is not necessary to confer the whole of the benefit on the payers of the fee but
some special benefit must be conferred on them which has a direct and
reasonable corelation to the fee. While conferring some special benefits on the
payers of the fees, it is permissible to render service in the general interest
of all concerned.
The element of quid pro
quo is not possible or even necessary to be established with arithmetical exactitude.
But it must be established broadly and reasonably that the amount is being spent
for 92 rendering services to those on whom the burden of the fee falls. There is
no postulate of a fee that it must have a direct relation to the actual services
rendered by the authorities to each individual to obtain the benefit of the service.
The element of quid pro
quo in the strict sense is not always a sine qua non for a fee. The element of quid
pro quo is not necessarily absent in every tax. It is enough if there is a broad,
reasonable and general corelationship between the levy and the resultant
benefit to the class of people on which the fee is levied though no single
payer of the fee receives direct or personal benefit from those services. It is
immaterial that the general public may also be benefited from some of the services
if the primary service intended is for the payers of the fees."
63.
In
I.T.C. Ltd. v. State of Karnataka 1985 (Supp) SCC 476, another three Judge Bench
considered the validity of levy and collection of market fee from sellers of specified
agricultural produce. Sabyasachi Mukharji, J. (as he then was), with whom Fazal
Ali, J. (as he then was) agreed, laid down the following principles: "(1) there
should be relationship between service and fee, (2) that the relationship is reasonable
cannot be established with mathematical exactitude in the sense that both sides
must be equally balanced,
(3) in the course of rendering
such services to the payers of the fee if some other benefits accrue or arise to
others, quid pro quo is not destroyed. The concept 93 of quid pro quo should be
judged in the context of the present days -- a concept of markets which are expected
to render various services and provide various amenities, and these benefits cannot
be divorced from the benefits accruing incidentally to others, (4) a reasonable
projection for the future years of practical scheme is permissible, and (5) services
rendered must be to the users of those markets or to the subsequent users of those
markets as a class. Though fee is not levied as a part of common burden yet service
and payment cannot exactly be balanced. (6) The primary object and the
essential purpose of the imposition must be looked into."
64.
If
the conditions imposed by the BDA requiring the respondents to pay for
augmentation of water supply, electricity, transport, etc. are scrutinized in the
light of the principles laid down in Sreenivasa General Traders v. State of A.P.
(supra), Kishan Lal Lakhmi Chand v. State of Haryana (supra) and I.T.C. Ltd. v.
State of Karnataka (supra), it cannot be said that the demand made by the BDA amounts
to levy of tax and is ultra vires Article 265 of the Constitution.
65.
Under
the 1976 Act, the BDA is obliged to provide different types of amenities to the
population of the Bangalore Metropolitan Area including the allottees of the sites
in the layouts prepared by house building societies. It is quite possible that
they may not be the direct beneficiaries of one or the other amenities made available
by the BDA, but this cannot detract from the fact that they will certainly be benefited
by the construction of the Outer Ring Road and Intermediate Ring Road, Mass
Rapid Transport System, etc.
They will also be the
ultimate beneficiaries of the Cauvery Scheme because availability of additional
270 MLD water to Bangalore will enable BWSSB to spare water for the private
layouts. It is neither the pleaded case of the respondents nor it has been argued
that the allottees of sites in the layouts to be developed by the private societies
will not get benefit of amenities provided by the BDA. Thus, charges demanded
by the BDA under Section 32(5A) cannot be termed as tax and declared unconstitutional
on the ground that the same are not sanctioned by the law enacted by competent
legislature. Question (4)
66.
The
only issue which survives for consideration is whether the charges demanded by
the BDA are totally disproportionate to its contribution towards Cauvery Water Scheme,
Ring Road, Mass Rapid Transport System, etc. We may have examined the issue in
detail but in view of the affidavit dated 11.11.2009 filed by Shri Siddaiah,
the then Commissioner, BDA to the effect that only Rs. 34.55 crores have been collected
between February, 1988 to 4.6.2005 towards the Cauvery Scheme and a sum of Rs.
15.15 crores has been collected by way of Ring Road surcharge between 1992-93 and
2005-06 and that the State Government has directed that henceforth Ring Road surcharge,
the Cauvery Water Cess and MRTS Cess should not be levied till appropriate
decision is taken, we do not consider it necessary to adjudicate the
controversy, more so, because in the written arguments filed on behalf of the BDA
it has been categorically stated that the Government has to take a decision
about the pending demands and the Court may issue appropriate direction in the matter,
which the BDA will comply. In our view, ends of justice will be served by directing
the State Government to take appropriate decision in the light of communication
dated 03.05.2005.
67.
So
far as the levy of supervision charges, improvement charges, examination charges,
slum clearance development charges and MRTS cess is concerned, it is appropriate
to mention that the High Court has not assigned any reason for declaring the levy
of these charges to be illegal. Therefore, that part of the impugned order
cannot be sustained. Nevertheless, we feel that the State Government should take
appropriate decision in the matter of levy of these charges as well and
determine whether the same were disproportionate to the expenses incurred by it,
the BDA or any other agency/instrumentality of the State.
68.
In
the result, the appeals are allowed, the impugned order is set aside and the writ
petitions filed by the respondents are dismissed subject to the direction that within
three months from the date of receipt/production of the copy of this judgment,
the State Government shall take appropriate decision in the context of communication
dated 03.05.2005. Within this period, the State Government shall also decide
whether the levy of supervision charges, improvement charges, examination charges,
slum clearance development charges and MRTS cess at the rates specified in the communications
of the BDA was excessive. The decision of the State Government should be
communicated to the respondents within next four weeks. If any of the respondents
feel aggrieved by the decision of the State Government then it shall be free to
avail appropriate legal remedy. The parties shall bear their respective costs.
........................................J.
[G.S. Singhvi]
........................................J.
[Asok Kumar Ganguly]
New
Delhi,
January
24, 2012.
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