Under Town Planning Act For Mere ‘Alterations’ To Existing Building, Can’t Levy Betterment Charges: Karnataka HC Grants Relief To 150-Yrs Old School

The Karnataka High Court recently quashed a Bruhat Bengaluru Mahanagara Palike (BBMP) order demanding payment of betterment charges/fee from a more than 150-year-old school that plans to build additional floors on the existing school campus through an extension. 

The petition filed by Good Shepherd Convent in the case of Good Shepherd Convent vs State of Karnataka (Writ Petition No.47882 OF 2014) was allowed by a single judge bench led by Honourable Justice M Nagaprasanna, who quashed the corporation’s order dated 07-07-2014 demanding an amount of Rs Rs.69,70,520. 

According to the facts of the case, the petitioner-school, which was founded in 1854, is located in the heart of the city on about 23 acres of land. In June 2014, an application was submitted to the BBMP for a building license to add four floors to the existing school campus due to an increase in the number of students and the need for more classrooms. The BBMP responded with a demand for Rs.69,70,520/- in betterment charges. 

Senior Advocate D.L.N.Rao, who represented the petitioner, claimed that the building was built around 100 years ago with all necessary payments made at the time. Furthermore, betterment charges under Section 18 or 18A of the Karnataka Town and Country Planning Act would only be due when a change of land use is requested or the land is developed for the first time. Both of these instances are not present in this case. 

The petitioner, according to BBMP lawyer K.N.Putte Gowda, has not applied for any license or paid any betterment fee since the Act was enacted. The petitioner did not pay any of the statutory fees because it is a very old institution and all fees that were due previously have been paid. He went on to say that Section 18A of the KTCP Act empowers the BBMP to demand betterment charges, and that there is nothing wrong with the BBMP’s demand. 

The bench noted that Section 18A (of the KTCP Act) allows the BBMP to levy and collect a cess for carrying out a water supply scheme, a surcharge for forming a ring road, a cess for improving slums, and a surcharge for establishing a Mass Rapid Transport System from the owner of a building while granting permission for development. 

It was noted, “Permission should be sought for land or building development. The petitioner’s application for alteration and addition of four floors to the existing building was unequivocal.” 

It was pointed out that the petitioner had made no application for a change of land use, allowing the BBMP to demand a betterment fee/charge under Section 18(1) of the Act. 

The court went on to say, “The petitioner has not requested a change of land use, but has clearly stated in its application that the sanction sought is “addition and alteration.” No application has been filed under Section 14A of the Act.” 

“Accordingly, a combined reading of Section 505 of the KMC Act 1976, sections 18 and 18A of the KTCP Act, and the Rules would lead to an unmistakable inference that the BBMP’s demand is contrary to law,” it concluded. 

It also stated, “The learned counsel for the BBMP contends that because the petitioner, which was established many years ago, has not applied for such a sanction or paid any betterment fee, the BBMP has no other option but to issue a demand under Section 18A of the KTCP Act read with Rule 37A of the Rules sans countenance, as any charge, fee, or imposition of any impost in law can only be in accordance with law. The settled principle of law is that if there is no provision for charging a fee, there can be no demand, and if there is no provision for imposition of an impost, there can be no impost.” 

“This would not preclude the BBMP from inspecting the property and raising any demand strictly in accordance with law,” the court stated. 

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