Holding

Section 32(5A) of the Bangalore Development Authority Act, 1976 is constitutionally valid, does not violate Article 14, does not amount to excessive delegation, and the levied charges are fees, not taxes.

Summary

The Bangalore Development Authority (BOA) under Section 32(5A) of the Bangalore Development Authority Act, 1976, required applicants for private layouts to pay additional sums to fund water supply, electricity, roads and other amenities. Several house‑building societies challenged this provision, alleging discrimination violating Article 14, excessive delegation of legislative power, that the levies amounted to an illegal tax under Article 265, and that the charges were disproportionate to BOA’s actual contribution. The Karnataka High Court struck down Section 32(5A) as unconstitutional. The Supreme Court reversed that decision, holding that the provision is presumed valid, the petitioners failed to prove factual discrimination, the policy underlying the Act justifies the power, the levy is a fee, not a tax, and the delegation is within constitutional limits. The Court set aside the High Court order, dismissed the writ petitions and directed the State Government to decide on the excessiveness of certain charges.

Issues considered

Whether Section 32(5A) of the Bangalore Development Authority Act, 1976 violates Article 14 of the Constitution.
Whether Section 32(5A) constitutes an excessive delegation of legislative power.
Whether the charges levied under Section 32(5A) amount to a tax, thereby violating Article 265.
Whether the amounts collected by BOA are disproportionate to its actual contribution to the schemes.

Legislation cited

Bangalore Development Authority Act, 1976s. 32(5), s. 32(5A), s. 65
Mysore Town and Country Planning Act, 1961

Subjects

Article 14excessive delegationtax vs feeBangalore Development Authorityurban planningcivic amenitiesconstitutional validitySection 32(5A)

Judgment

[2012] 4 S.C.R. 881

BANGALORE DEVELOPMENT AUTHORITY A
v.
THE AIR CRAFT EMPLOYEES COOPERATIVE SOCIETY
LTD. AND OTHERS
(Civil Appeal Nos. 7503-7537 of 2002)
B
JANUARY 24, 2012

[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.)

Town Planning - Bangalore Development Authority Act,
1976 - s.32(5A) - In terms of s.32(5A), the Bangalore C
Development Authority (BOA) 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 s.32(5) to meet a portion
of the expenditure incurred for the execution of any scheme D
or work for augmenting water supply, electricity, roads,
transportation and other amenities within the Bangalore
Metropolitan area - Whether s.32(5A) is violative of Article 14
of the Constitution - Held: A statutory provision is presumed
to be constitutionally valid unless proved otherwise and E
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 - Though the
respondents pleaded that s.32(5A) is discriminatory, no
factual foundation was laid in support of this plea and in the F
absence of such foundation - While examining the issue of
hostile discrimination in the context of s.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 G
building societies to form private layouts, the BOA was obliged
to take effective measures to improve civic amenities like
water supply, electricity, roads, transportation, etc. within the
Bangalore Metropolitan Area and for this it became
881
882 SUPREME COURT REPORTS [2012] 4 S.C.R.

A necessary to augment the resources by the BOA itself or
through other State agencies/instrumentalities by making
suitable contribution - 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
B the private House Building Societies and those involved in
execution of large housing projects, etc., the BOA 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
c 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
0 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 - Constitution of India, 1950 - Article 14.

Town Planning - Bangalore Development Authority Act,
E 1976 - s.32(5A) - Challenge to, on the ground of excessive
delegation - Whether s. 32(5A) suffers from the vice of
excessive delegation of legislative power - Held: While
examining challenge to the constitutionality of a statutory
provision on the ground of excessive delegation, the Court
F 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
G which the power to implement the particular provision is
conferred upon the executive authorities - The policy
underlying the 1976 Act is clearly discernible from the
Preamble of the 1961 Act and the 1976 Act and the objects
sought to be achieved by the two legislations, namely,
H development of the City of Bangalore and areas adjacent
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 883
EMPLOYEES COOP. SOCIETY LTD.

thereto - It cannot be said s. 32(5A) confers unbridled and A
uncanalised power upon the BOA to demand an unspecified
amount from those desirous of forming private layouts - The
exercise of power by the BOA u/s.32(5A) is always subject to
directions which can be given by the State Government u/s. 65
of the 1976 Act - s.32(5A) does not suffer from the vice of B
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 - Mysore Town and
Country Planning Act, 1961.

Town Planning - Bangalore Development Authority Act, c
1976 - s.32(5A) - Conditions incorporated in orders passed
by Bangalore Development Authority (BOA) sanctioning
residential layout plans or work orders in terms of which house
building societies and the allottees of sites of the layouts were
required to pay/deposit various charges/sums for D
augmentation of water supply, electricity, transport within the
Bangalore Metropolitan area - Demand of such charges -
Whether amounted to tax and, therefore, ultra vires the
provisions of Article 265 of the Constitution - Held: Under the
1976 Act, the BOA is obliged to provide different types of E
amenities to the population of the Bangalore Metropolitan
Area including the al/ottees 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 BOA, but this. cannot detract from the F
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 Water Supply Scheme because
availability of additional 270 MLD water to Bangalore will G
enable Bangalore Water Supply and Sewerage Board
(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 H
884 SUPREME COURT REPORTS [2012] 4 S.C.R.

A by the BOA - Thus, charges demanded by the BOA u/
s.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 -
Constitution of India, 1950 - Article 265.
B
Town Planning - Bangalore Development Authority Act,
1976 - s.32(5A) - Conditions incorporated in orders passed
by Bangalore Development Authority (BOA) sanctioning
residential layout plans or work orders in terms of which house
C building societies and the allottees of sites of the layouts were
required to pay/deposit various charges/sums for
augmentation of water supply, electricity, transport within the
Bangalore Metropolitan area - Whether charges demanded
by BOA were totally disproportionate to its contribution towards
Cauvery Water Supply Scheme, construction of Ring Road,
D Mass Rapid Transport System, etc. - Held: This Court may
have examined the issue in detail but in view of the affidavit
filed by the then Commissioner, BOA 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.
E 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 Gess and MRTS Gess should
not be levied till appropriate decision is taken, it is not
F necessary to adjudicate the controversy, more so, because
in the written arguments filed on behalf of the BOA 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 BOA will comply
G - The ends of justice will be served by directing the State
Government to take appropriate decision in the light of its
communication dated 03.05.2005 (whereby BOA was directed
to stop collection of Cauvery Water Gess and Ring RoadCess
and MRTS Gess) - So far as levy of supervision charges,
H improvement charges, examination charges, slum clearance
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 885
EMPLOYEES COOP. SOCIETY LTD.

development charges and MRTS cess is concerned, the High A
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, the State
Government should take appropriate decision in the matter
of levy of these charges as well and determine whether the B
same were disproportionate to the expenses incurred by it, the
BOA or any other agency/instrumentality of the State.

To meet the additional requirement of water and
electricity and to tackle the problems of traffic, new C
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 Ill D
(for short, 'the Cauvery Scheme') for supply of an
additional 270 MLD water to Bangalore at a cost of Rs.
240 crores. The State Government granted approval to
the Cauvery Scheme. In a meeting held under the
chairmanship of the Chief Secretary of the State it was E
decided that with a view to avoid escalation in the cost,
the funds may be collected from other sources including
the Bangalore Development Authority (BOA) because
substantial quantity of water was required for the layouts
which were being developed by it or likely to be F
developed in future.

The State Government issued an order directing the
BOA to make a grant of Rs. 30 crores to BWSSB to be
paid in installments from 1987-88 to 1989-90 by loading G
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. In compliance of the directions
given by the State Government, the BOA started
collecting Rs.10,000/- per site. Later on, the levy under H
886 SUPREME COURT REPORTS [2012] 4 S.C.R.

A the Cauvery Scheme was increased to Rs.1 lac per acre.
By 1992, however, it was realised that BOA had not been
able to develop and distribute sites as expected.
Therefore, a proposal was submitted by the
Commissioner, BOA to the State Government that
B 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 BOA
c and passed order for levy of charges under the Cauvery
Scheme at the rate of Rs.2 lacs per acre.

In 1992, BOA also decided to take up construction of
63.30 kilometers long Outer Ring Road and 3.5 kilometers
long Intermediate Ring Road. 36.24 kilometers of the
D Outer Ring Road was to pass through the BOA layouts.
In a meeting under the Chairmanship of the Chief
Secretary of the State, it was agreed that like the Cauvery
Scheme, Ring Road surcharge should be levied on the
sites to be formed by the BOA and the private housing
E societies at the rate of Rs.1 lac per acre. Thereafter, the
BOA 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
F formed by itself.

The Air Craft Employees Cooperative Society Limited
(respondent in C.A. No.7503/2002) submitted an
application for approval of layout in respect of 324 acres
G 30 guntas of land. The application of respondent was
considered in the BOA's meeting 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
H in the Resolution of the BOA was that the civil portion of
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 887
EMPLOYEES COOP. SOCIETY LTD.

work shall be carried out by the respondent under its A
supervision. The decision of BDA was communicated to
the respondent vide letter dated 12-11-1992.

The respondent challenged the conditional sanction
of its layout by filing a Writ Petition in 1993 and prayed 8
for quashing the demand of Rs.2 lacs per acre towards
the Cauvery Scheme and Rs.1 lac as Ring Road
surcharge. During the pendency of the Writ Petition, the
State legislature amended the Bangalore Development
Authority Act, 1976 and inserted sub-section (SA) in C
Section 32 authorising the BOA to demand sums in
addition to those referred in sub-section (S) 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. Thereupon, the respondent amended D
the writ petition and challenged the constitutional validity
of the newly inserted sub-section by asserting that the
provision is discriminatory and violative of Article 14 of
the Constitution because it gives unbridled and
uncanalized power to the BDA to demand additional E
sums for different schemes. It was also pleaded that sub-
section (SA) 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. F

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 BOA for starting civil work. G
The same was sanctioned subject to payment of
supervision charges, improvement charges, examination
charges, slum clearance charges, MRTS tax etc. The
respondent challenged the conditional approval of civil
work in another Writ Petition on the ground that the H
888 SUPREME COURT REPORTS [2012] 4 S.C,.R.

A Bangalore Development Authority Act, 1976 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 BOA has applied
B 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
c Bangalore Metropolitan Area. Another plea taken by the
respondent was that the State Government has already
collected conversion fine and, as such, the BOA does not
have the jurisdiction to levy betterment fee. Similar plea
was raised in respect of Mass Rapid Transport System
0 Cess and the Slum Clearance charges. 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
E in the sanction of civil work as was done in the case of
Air Craft Employees Cooperative Society Limited.

The writ petitions filed by the respondents were
ultimately allowed by the High Court, Section 32(5A) of
F the Bangalore Development Authority Act, 1976 was
declared as violative of Article 14 of the Constitution, void
and inoperative and the conditions incorporated in the
orders passed by BOA sanctioning residential layout
plans or work orders in terms of which respondents were
G required to pay/deposit various charges/sums specified
therein were quashed and a direction was issued for
refund of the amount.

In the instant appeals, the following questions arose
H for consideration: (1) whether Section 32(5A) of the 1976
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 889
EMPLOYEES COOP. SOCIETY LTD

Act is violative of Article 14 of the Constitution; (2) A
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) B
whether the BOA 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.

Allowing the appeals, the Court c
HELD:

Question (1)

1. The High Court committed serious error by D
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 E
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. [Para 36] [944-B-C] F

1.2. 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 G
High Court was not at all justified in recording a
conclusion that the impugned provision is violative of the
equality clause contained in Article 14 of the Constitution.
[Para 41] [946-F-G]
1.3.While examining the issue of hostile H
890 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
s layouts, the BOA 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 BOA itself or
c 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
0
agencies/instrumentalities would have spent substantial
amount for augmenting water supply, electricity,
transportation and other 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
E reality qua the layouts of the private House Building
Societies and those involved in execution of large
housing projects, etc., the BOA and other agencies/
instrumentalities of the State incurred substantial
expenditure for augmenting the water supply, electricity,
F 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
G 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. [Para 42]
H [946-H; 947-A-G]
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 891
EMPLOYEES COOP. SOCIETY LTD.

State of Kera/a v. Mis. Travancore Chemicals and A
Manufacturing Company (1998) 8 SCC 188: 1998 (2) Suppl.
SCR 651; Commissioner, Bangalore Development Authority
v. State of Karnataka ILR 2006 KAR 318; Bondu
Ramaswamy v. Bangalore Development Authority (2010) 7
SCC 129: 2010 (6) SCR 29; Padma Sundara Rao v. State B
of T. N (2003) 5 SCC 533 - referred to.

Question (2)

2.1. While examining challenge to the constitutionality
of a statutory provision on the ground of excessive C
delegation, the Court must look into the policy underlying
the particular legislation and this can be done by making
a reference ~o 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 D
of the legislature and nullify the provisions under which
the power to implement the particular provision is
conferred upon the executive authorities. [Para 51] [954-
G-H; 955-A]
E
2.2. The policy underlying the 1976 Act is clearly
discernible from the Preamble of the Mysore Town and
Country Planning Act, 1961 and the 1976 Act and the
objects sought to be achieved by the two legislations,
namely, development of the City of Bangalore and areas F
adjacent thereto. [Para 52] [955-B]

2.3. A survey of the relevant provisions of the 1961
Act and the 1976 Act 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 G
Metropolitan Area as on 15.12.1975 and other adjacent
areas which may be notified by the Government from time
to time. The BOA 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 H
892 SUPREME COURT REPORTS [2012) 4 S.C.R.

A the entire Bangalore Metropolitan Area. In exercise of the
powers vested in it under Sections 15 and 16, the BOA
can prepare detailed schemes for the development of the
Bangalore Metropolitan Area and incur expenditure for
implementing those schemes, which are termed as
B development schemes. The expenditure incurred by the
BOA 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 1961 Act and
c 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 BOA was and is bound to
provide amenities like water, electricity, streets, roads,
0 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 BOA
alone from its meager fiscal resources. Therefore, the
State Government, the BOA and other instrumentalities
E 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 BOA had
to contribute to the funds required for new water supply
scheme, generation of additional electricity and
F 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·s5 of the 1976
G Act for carrying out the purposes of the Act and approved
the proposal for loading the BOA'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
H legislative mandate. In terms of that section, the BOA has
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 893
EMPLOYEES COOP. SOCIETY LTD.

been vested with the power to call upon the applicants A
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, B
transportation and other amenities. [Para 53] [958-B-H;
959-A-O]

2.4. Apart from the Preamble and the objects of the
1961 and 1976 Acts and the scheme of the two C
enactments, 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, transportation and such other
amenities" supplies sufficient guidance for the exercise
of power by the BOA under Section 32(5A) and it is not 0
possible to agree with the respondents that the section
confers unbridled and uncanalised power upon the BOA
to demand an unspecified amount from those desirous
of forming private layouts. The exercise of power by the
BOA under Section 32(5A) is always subject to directions E
which can be given by the State Government under
Section 65. 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 F
this task had to be delegated to some other agency/
instrumentality of the State. [Para 54] [959-E-H; 960-A]

2.5. Section 32(5A) does not suffer from the vice of
excessive delegation and the legislative guidelines can G
be traced in the Preamble of the 1961 and 1976 Acts and
the object and scheme of the two legislations. [Para 55]
[960-B]

Charanjit Lal Chowdhuri v. Union of India (1950) 1 SCR
869; M.H. Quareshi v. State of Bihar (1959) 1 SCR 629; Ram H
894 SUPREME COURT REPORTS [2012] 4 S.C.R.

A Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors. AIR
1958 SC 538: 1959 SCR 279; R.K. Garg v. Union of India
(1981) 4 SCC 675: 1982 (1) SCR 947; Jyoti Pershad v. The
Administrator for The Union Territory of Delhi AIR 1961 SC
1602: 1962 SCR 125; Maharashtra State Board of S.H.S.E.
B v. Paritosh Bhupeshkumar Sheth (1984) 4 SCC 27; Ajoy
Kumar Banerjee v. Union of India (1984) 3 SCC 127: 1984
(3) SCR 252; Kishan Prakash Sharma v. Union of India
(2001) 5 SCC 212; Union of India v. Azadi Bachao Ando/an
(2004) 10 sec 1: 2003 (4) Suppl. SCR 222 - relied on.
c Municipal Board, Hapur v. Raghuvendra Kripal and
others (1966) 1 SCR 950, Corporation of Calcutta and
another v. Liberty Cinema (1965) 2 SCR 477; Bhavesh D.
Parish and others v. Union of India and another (2000) 5 sec
471: 2000 (1) Suppl. SCR 291; Devi Das Gopal Krishnan v.
D State of Punjab AIR 1967 SC 1895; The State of West Bengal
v. Anwar Ali Sarkar (1952) SCR 284; A.N. Parasuraman and
others v. State of Tamil Nadu (1989) 4 SCC 683: 1989 (1)
Suppl. SCR 371 and Kunnathat Thathunni Moopil Nair v.
State of Kera/a (1961) 3 SCR 77 - referred to.
E
Oaymond v South West Water Authority (1976) 1 All
England Law Reports 39 - referred to.

Question (3)

F 3.1. If the conditions imposed by the BOA 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,
Kishan Lal Lakhmi Chand and l.T.C. Ltd., it cannot be said
G that the demand made by the BOA amounts to levy of tax
and is ultra vires Article 265 of the Constitution. [Para 64]
[968-B-0]

3.2. Under the 1976 Act, the BOA is obliged to provide
H different types of amenities to the population of the
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 895
EMPLOYEES COOP. SOCIETY LTD.

Bangalore Metropolitan Area including the allottees of the A
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 BOA, but this cannot detract from the fact that they
will certainly be benefited by the construction of the B
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 MLO water to Bangalore will enable
BWSSB to spare water for the private layouts. It is neither c
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 BOA. Thus, charges demanded
by the BOA under Section 32(5A) cannot be termed as tax 0
and declared unconstitutional on the ground that the
same are not sanctioned by the law enacted by
competent legislature. (Para 65] (968-0-G]

Sreenivasa General Traders v. State of A.P. (1983) 4
SCC 353: 1983 (3) SCR 843; Kishan Lal Lakhmi Chand v. E
State of Haryana 1993 Supp (4) SCC 461: 1993 (1) Suppl.
SCR 433 and /. T.C. Ltd. v. State of Kamataka 1985 (Supp)
sec 476 - relied on.
Kewal Krishan Puri v. State of Punjab (1980) 1 SCC 416: F
1979 (3) SCR 1217; Southern Pharmaceuticals and
Chemicals, Trichur and others v. State of Kera/a and others
(1981) 4 SCC 391: 1982 (1) SCR ~19; Krishi Upaj Mandi
Samiti v. Orient Paper & Industries Ltd. (1995) 1 SCC 655:
1994 (5) Suppl. SCR 392; Commissioner, Hindu Religious G
Endowments, Madras v. Lakshmindra Thirtha Swamiar of
Shirur Mutt (1954) SCR 1005; Mahant Sri Jagannath
Ramanuj Das v. State of Orissa (1954) SCR 1046; Ratila/
Panachand Gandhi v. State of Bombay (1954) SCR 1055;
H. H. Sadhundra Thirtha Swamiar v. Commissioner for Hindu
H
896 SUPREME COURT REPORTS [2012] 4 S.C.R.

A Religious and Charitable Endowments 1963 Supp (2) SCR
302; Corporation of Calcutta and another v. Liberty Cinema
(1965) 2 SCR 477 and Om Parkash Agarwal v. Giri Raj
Kishori (1986) 1 SCC 722: 1986 (1) SCR 149 and- referred
to.
B
Question (4)

4.1. The only issue which survives for consideration
is whether the charges demanded by the BOA are totally
disproportionate to its contribution towards Cauvery
C Water Scheme, Ring Road, Mass Rapid Transport
System, etc. This Court may have examined the issue in
detail but in view of the affidavit dated 11.11.2009 filed by
the then Commissioner, BOA to the effect that only Rs.
34.55 crores have been collected between February,
D 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
E Cess should not be levied till appropriate decision is
taken, it is not necessary to adjudicate the controversy,
more so, because in the written arguments filed on behalf
of the BOA it has been categorically stated that the
Government has to take a decision about the pending
F demands and the Court may issue appropriate direction
in the matter, which the BOA will comply. The ends of
justice will be served by directing the State Government
to take appropriate decision in the light of its
communication dated 03.05.2005 (whereby BOA was
G directed to stop collection of the Cauvery Water Cess and
Ring RoadCess and MRTS Cess) [Para 66] [969-A-E]

4.2. So far as levy of supervision charges,
improvement charges, examination charges, slum
clearance development charges and MRTS cess is
H concerned, the High Court has not assigned any reason
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 897
EMPLOYEES COOP. SOCIETY LTD.

for declaring the levy of these charges to be illegal. A
Therefore, that part of the impugned order cannot be
sustained. Nevertheless, 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 BOA B
or any other agency/instrumentality of the State. [Para 67]
[969-E-G]

5. In the result, the impugned order is set aside and
the writ petitions filed by the respondents are dismissed C
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 D
charges, examination charges, slum clearance
development charges and MRTS cess at the rates
specified in the communications of the BOA was
excessive. The decision of the State Government should
be communicated to the respondents within next four E
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. [Para 68] [969-H; 970-A-
C]
F
Case Law Reference:
1959 SCR 279 relied on Para 27, 39
1962 SCR 125 relied on Para 27,45,
46 G
AIR 1967 SC 1895 referred to Para 27,43-
45,
·1998 (2) Suppl. SCR 651 referred to Para 27
ILR 2006 KAR 318 referred to Para 31 H
898 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 2010 (6) SCR 29 referred to Para 31,32

(2003) 5 sec 533 referred to Para 31

(1950) 1 SCR 869 relied on Para 37

(1959) 1 SCR 629 relied on Para 38
B
1982 (1) SCR 947 relied on Para 40

(1966) 1 SCR 950 referred to Para 43

(1965) 2 SCR 477 referred to Para 43
c
2000 (1) Suppl. SCR 291 referred to Para 43

(1976) 1 All ELR 39 referred to Para 44

(1952) SCR 284 referred to Para 44
D 1989 (1) Suppl. SCR 371 referred to Para 44,45

(1961) 3 SCR 77 referred to Para 45

1984 (3) SCR 252 relied on Para 45,48

E (1984) 4 sec 21 relied on Para 45,47

(2001) 5 sec 212 relied on Para 49

2003 (4) Suppl. SCR 222 relied on Para 45,50

1979 (3) SCR 1217 referred to Para 58,60,62
F
1982 (1) SCR 519 referred to Para 59

(1954) SCR 1005 referred to Para 59,62,

1983 (3) SCR 843 relied on Para 60,62,64
G
1993 (1) Suppl. SCR 433 relied on Para 61,62,64

1994 (5) Suppl. SCR 392 referred to Para 62

(1954) SCR 1046 referred to Para 62
H (1954) SCR 1055 referred to Para 62
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 899
EMPLOYEES COOP. SOCIETY LTD.

1963 Supp (2) SCR 302 referred to Para 62 A
1986 (1) SCR 149 referred to Para 62
1985 (Supp) sec 476 relied on Para 63,64

CIVIL APPELLATE JURISDICTION : Civil Appeal No. B
7503-7537 of 2002.

From the Judgment & Order dated 20.04.2001 of the High
Court of Karnataka at Bangalore in Writ Petition Nos. 11144
of 1993, c/w 13436-13439 of 1990, 30409, 30527, 33689 of
1994, 13907, 35884, 38988, 41725-41726 of 1995, 1760, C
2194-2195 of 1996, W.P. 769, 8111, 21784, 22311of1996,
15664, 24186-24187, 27098-27104 of 1997, 6993,19134,
21973, 25833 of 1998 and 8526 of 1999.

Altaf Ahmed, S.K. Kulkarni, M. Gireesh Kumar, Ankur S. D
Kulkarni, Vijay Kumar for the Appellant.

K.K. Venugopal, P. Vishwanatha Shetty, E.C. Vidya Sagar,
Srinivas, Vijay Kumar L. Paradeshi, Brahmjeet Mishra, R.S.
Hegde, Chandra Prakash, Amit Wadhwa Ashwani Garg, Rahul
Tyagi (for P.P. Singh), Sanjay R. Hegde, Bina Gupta for the E
Respondents.

The Judgment of the Court was delivered by

G.S. SINGHVI, J. 1. These appeals are directed against F
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 G
Bangalore Development Authority (BOA) sanctioning
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
H
900 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B 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,
C 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
o future growth of populated areas in the State, with 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.
E 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.

F 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
G 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,
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT901
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

prepare and publish an outline development plan for such area A
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 B
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) c
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 D
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 E
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.

4-C. Constitution of Planning Authority. - (1) As soon F
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 G
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 H
902 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B
Authority, the State Government may from time to time by
order, extend the aforesaid period by such periods as it
thinks fit.

12. Contents of Outline Development Plan.-(1) An
c 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,-
D
(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;
E
(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;

(d) proposals for declaring certain areas as areas of
F
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;

G (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
H Plan.-(1) As soon as may be after the publication of the
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 903
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

Outline Development Plan and the Regulations under sub- A
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 B
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 C
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 D
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
E
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;
F
(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; G

(e) areas for new housing;

(f) new areas earmarked for future development and
expansion; and H
904 SUPREME COURT REPORTS [2012] 4 S.C.R.

A (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.-
B
(a) acquisition of land for the purpose of implementing the
plan,

(b) financial responsibility connected with the proposed
c improvements, and

(c) the manner in which these responsibilities are
proposed to be met.

26. Making of town planning scheme and its
D 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
E jurisdiction or any part thereof.

(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
F 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,
G
extension, alteration, improvement and stopping up of
streets, roads and communications;

(d) the construction, alteration and removal of buildings,
bridges and other structures;
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 905
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

(e) the allotment or reservation of land for roads, open A
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 B
drainage and sewage disposal;

(g) lighting;

(h) water supply;

(i) the preservation of objects of historical or national
c
interest or natural beauty and of buildings actually used for
religious purposes;

0) the imposition of conditions and restrictions in regard
to the open space to be maintained about buildings, the D
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 appropriated, the sub-division of plots,
the discontinuance of objectionable users of land in any E
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 F
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;

(I) such other matter not inconsistent with the objects of this G
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 H
906 SUPREME COURT REPORTS (2012] 4 S.C.R.

A November 1971 that a common authority should be set up for
the development of Metropolitan Cities. Before the constitution
of the BOA, different authorities like the City of Bangalore
Municipal Corporation, the City Improvement Trust Board, the
Karnataka Industrial Area Development Board, the Housing
B 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
c 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
0
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
E relation to the area falling within the jurisdiction of the BOA. 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
F 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 therewith
G
2. Definitions.- In this Act, unless the context otherwise
requires,-

(a) "Authority" means the Bangalore Development
Authority constituted under section 3;
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 907
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

(b) "Amenity" includes road, street, lighting, drainage, A
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,-
B
(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; c
(ii) a recreation centre run by the Government or the
Corporation;

(iii) a centre for educational, social or cultural activities
0
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 E
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 F
purposes;

(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
G
(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 H
908 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B Government may from time to time by notification specify;

0) "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
c redevelopment;

(k) "Engineering operations" means formation or laying
out of means of access to road;

D (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
E passengers, and includes a road;"

6. Sections 14, 15, 16, 28-A, 28-8, 28-C, 32(1) to (5A),
65, 65-B 67(1)(a) and (b) of the 1976 Act are also extracted
below:
F
"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,
G
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.
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 909
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

15. Power of Authority to undertake works and incur A
expenditure for development, etc.- (1) The Authority
may,-

(a) draw up detailed schemes (hereinafter referred to as
"development scheme") for the development of the 8
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 C
development schemes.

(2) The Authority may also from time to time make and take
up any new or additional development schemes,-
D
(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; E
or

(iii) otherwise.

(3) Notwithstanding anything in this Act or in any other law
for the time being in force, the Government may, whenever F
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.
G
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 ,-
H
910 SUPREME COURT REPORTS [2012] 4 S.C.R.

A (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
B
and alteration of streets ;

(c) drainage, water supply and electricity ;

(d) the reservation of not less than fifteen percent of the
c 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,-

D (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;
E
(c) the sanitary arrangements required ;

(3) may, within and without the limits aforesaid provide for
the construction of houses.

F 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,-

G (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
H in respect of the streets formed by the Authority.
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 911
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

28-B. Levy of tax on lands and buildings.- (1) A
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. B

(2) The Provisions of the Karnataka Municipal
Corporations Act, 1976 (Karnataka Acf14 of 1977) shall
mutatis mutandis apply to the assessment and collection
of property tax.
c
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 0
levy of cesses under certain Acts.- Notwithstanding
anything contained in any law for the t.ime 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 E
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); F

(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 th~ Karnataka
Prohibition of Beggary Act, 1975 (Karnataka Act 27 of G
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 H
912 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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:
B
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:

c 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 matter shall be
referred to the Government, whose decision thereon shall
be final.
D
(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,-

E (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
F
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
G 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
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT913
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

particulars referred to in that sub-section shall be subject A
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
8
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, C
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 D
out by him to the Authority permanently without claiming any
compensation therefor.

(SA) Notwithstanding anything contained in this Act, the
Authority may require the applicant to deposit before E
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 F
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 G
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 H
914 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B
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
c 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,-
D
(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.
E
(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
F 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).
G 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),
H the following item shall be substituted namely,-
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 915
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.)

"(i) the local planning area comprising the City of A
Bangalore, the Bangalore Development Authority, and";

(b) after section 81-A, the following section shall be
inserted, namely,-

"81-8. Consequences to ensue upon the B
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, C
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 D
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 E
exercise the powers, perform the functions and
discharge the duties under this Act as if it were a
Local Planning Authority constituted for the
~angalore City;
F
(iii) the City Planning Authority shall stand dissolved
and upon such dissolution,-"

****"
7. In exercise of the power vested in it under Section 4- G
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 notification, the State Government declared the area
comprising the city of Bangalore and 218 villages enumerated H
916 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B 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:
c 'This excludes the Bangalore City Local Planning Area
declared (by) Government Notification No. PLN/42/MNP/
65/S0/3446 dated 1-11-1965."

8. A third notification was issued on 6.4.1984 under
D 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.

E 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
F 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.
G
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
H requirement of water and electricity and to tackle the problems
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 917
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

of traffic, new schemes were prepared in the development plan A
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 Ill (for short, 'the Cauvery B
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,
c
(ii) Life Insurance
Corporation of India Rs. 50/- crores,

(iii) Bangalore City Corporation - Rs. 30/- crores, and
D
(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 E
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
F
implemented by 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 BOA because substantial quantity G
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 BOA to make a grant of Rs. 30
crores to BWSSB to be paid in installments from 1987-88 to H
918 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B Government, the BOA 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 BOA had
not been able to develop and distribute sites as expected.
Therefore, a proposal was submitted by the Commissioner,
BOA to the State Government that contribution towards the
C 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 BOA and
passed order dated 12.1.1993 for the levy of charges under
0 the Cauvery Scheme at the rate of Rs.2 lacs per acre.
14. In 1992, the BOA 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
E 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 BOA layouts and the balance was to pass through
the land outside the BOA layouts. The cost of construction of
Outer Ring Road passing through the BOA layout was to be
F met by charging the allottees of sites in the BOA 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
G Secretary of the State, the possibility of taking loan from
HUOCO 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
H on the sites to be formed by the BOA and the private housing
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT919
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

societies at the rate of Rs.1 lac per acre. Thereafter, the BOA A
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.
B
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
Segur Hobli respectively. The application of the respondent was C
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 BOA was that the civil portion of work shall
be carried out by the respondent under its supervision. The D
decision of the BOA 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 E
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 BOA and not F
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. G

(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.
H
920 SUPREME COURT REPORTS [2012] 4 S.C.R.

A (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
B Section 16 of the 1964 Act.

(iv) Under the 1976 Act, the Government is not empowered
to authorise the BOA to transfer the cost of the Cauvery
Scheme to the private layouts.

C (v) 20,000 acres of land has been acquired by the BOA
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
D the BOA 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
E 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 BOA cannot
burden the private layouts without determining whether the Ring
Road would be of any use to the members of the House
F 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 (SA) in Section 32 w.e.f. 20.6.1987
G authorising the BOA 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.
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 921
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

18. The respondent promptly amended the writ petition and A
challenged the constitutional validity of the newly inserted sub-
section by asserting that the provision is discriminatory and
violative of Article 14 of the Constitution because it gives
unbridled and uncanalized power to the BOA to demand
additional sums for different schemes. It was also pleaded that B
sub-section (SA) 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 C
of the amended provision and legality of the conditional
sanction of the layout, the respondent applied for approval of
the BOA for starting civil work. The same was sanctioned
subject to payment of the following charges:
D
(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.)
E
(iii) Examination charges Rs. 4, 14,876.00
(0-50 per sq. mtrs.)

(iv) Slum Clearance Development Rs. 20,74, 365.00
F
Charges (Rs. 25,000 per hectare)

(v) M.R.T.S. Tax Rs. 1,02,51, 875.00
(Rs. 50,000 per acre)

(vi) Miscellaneous Rs. 7,189.00 G
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 H
922 SUPREME COURT REPORTS [2012] 4 S.C.R.

A demand from the private House Building Societies. An
additional plea taken by the respondent was that the BOA 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 beeri issued
B 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 BOA
does not have the jurisdiction to levy betterment fee. Similar
c plea was raised in respect of Mass Rapid Transport System
Gess 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
0 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:
E
i. the BOA 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
F 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;

G 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 specifications and
H schedules referred to in the notification have not
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 923
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

been published; A

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 B
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 c
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 D
decision taken by the BOA.

iii. the societies are required to carry out civil work
under the supervision of the BOA and, therefore,
they are liable to pay supervision charges. E
iv. 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.
F
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 G
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 H
924 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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 bec;ause 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
B per Schedule II of the said 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
C 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.
D
25. The argument that while dealing with the issue raised
in Writ Petition No.13907/1995, the BOA had lost the territorial
jurisdiction because the areas in question had become part of
City Municipal Council, Byatarayanapura and City Municipal
E Council, Krishnaraja Puram respectively vide Notification dated
22.1.1996 was left to be decided by the BOA with liberty to the
concerned respondent to raise the same at an appropriate
stage.

26. The Division Bench then adverted to Articles 265 and
F 300A of the Constitution and held that the BOA 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
G 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
H determining in such portion of the expenditure, which
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 925
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

expenditure have to relate to be made or to be incurred in A
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 B
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 c
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 Bangalore Development D
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 E
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 F
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 Gopa/
Krishnan v. State of Punjab, AIR 1967 SC 1895, State of
Kera/a v. Mis. Travancore Chemicals and Manufacturing G
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 H
926 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B of enjoyment of the benefit by the applicant or the applicant
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
c 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.
D
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
E 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
F 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
G 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.1.R.1958
H Supreme Court 538 and Shri Jyothi Pershad's case
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 927
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

reported in A.LR. 1961 Supreme Court 1602. We find that A
the provision of sub-section (5-A) of Section 32 of the
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." B

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.
c
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 D
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 (SA) of the
1976 Act is arbitrary. After considering the statement made by E
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 towards
the Cauvery Scheme and the amount demanded and/or
collected from those who applied for sanction of the private F
layouts as also the allottees of the sites in the BDA layouts. In
compliance of the Court's direction, Shri Siddaiah, the then
Commissioner, BOA, filed affidavit dated 11.11.2009,
paragraphs 2 to 5 of which are extracted below:

"2. The Government of Karnataka formed the Cauvery G
Water lllrd Stage Scheme in 1984. However, the
Government directed the Bangalore Development Authority
to contribute Rs. Thirty crores towards the Cauvery Water
Hird Stage Scheme by its order No. HUD 97 MNI 81,
Bangalore dated 25th March, 1987. The Bangalore H
928 SUPREME COURT REPORTS [2012] 4 S.C.R.

A Development Authority started collecting Cauvery Water
Cess from 1988. However, the Government by its order
No. UDO 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
B 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 BOA has charged and collected the
Cauvery water cess between 1988 and 2005. The Cauvery
Water cess collected by the BOA is periodically
c tran&ferred 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
D
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 Rs.34.55 crores
collected is in respect of both private layouts as well as
Bangalore Development Authority sites. The entire money
E 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
F 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.
G
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
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 929
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

acres towards the private societies will not be within the A
knowledge of the Bangalore Development Authority,
because the Government does not seek the opinion or
consent of BOA before acquiring land for a private layout.
The private layouts within the limits of BOA have to apply
to BOA for approval of a private under Section 32 of BOA B
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 G
gunthas). However, Gauvery Water Gess and Ring Road
Gess are levied and collected as stated above from 1988
and 2005 respectively. The submissions made in the Writ
Petition to the contrary are speculative.

5. Similarly, the averments in the W.P. that the Bangalore D
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.
E
BANGALORE DEVELOPMENT AUTHORITY BANGALORE

THE COLLECTION OF CAUVERY WATER CESS & PAID TO
BWSSB AS MENTIONED BELOW
(INR in Lakh)
F
SL NO CHEQUE NO. DATE AMOUNT
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 G
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 H
930 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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

B (Rupees Thirty Four Crores and Fifty Five Lakh)

Sd/-
Accounts Officer BOA,
Bangalore
c ANNEXURE-11
YEAR WISE RING ROAD CESS
(INR in Lakh)
YEAR COLLECTIONS CHARGED TO BALANCE
RING ROAD
EXPEND.
D
1992-93 63.39 63.39 -
(Feb 93 on wards)
1993 -94 183.89 183.89 -
1994-95 217.87 217.87 -
E 1995-96 331.14 331.14 -
1996-97 162.08 162.08 -
1997-98 180.79 180.79 -
1988-99 84.23 84.23 -
F 1999-00 50.49 50.49 -
2000-01 19.48 19.48 -
2001-02 0.30 0.30 -
2002-03 7.34 7.34 -

G
2003-04 - - -
2004-05 - - -
2005-06 214.27 214.27 -
TOTAL 1,515.27 1,515.27 "

H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 931
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

Letter dated 03.05.2005 of the State Government, which A
is enclosed with the affidavit of Shri Siddaiah, is also
reproduced below:

"GOVERNMENT OF KARNATAKA
UDD.151.BAN.2005 Karnataka Secretariat B
Multistoried Building
Bangalore
Dated: 03.05.2005

Sub: Ring Road Cess, Augmentation Cess (Cauvery c
Water Cess) & MRTS Cess.

Ref: Government Circular No. 249 of 2001 dated
20.09.2003.

In the above circular referred above, the Government D
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 Corporations, Municipalities and Authorities are
charging the above cess. E

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
F
charged. Hence this order.
Sd/-03.05.2005
(V.R. llakal)
Addi. Secretary, Govt. of Karnataka
Urban Development" G
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:
H
932 SUPREME COURT REPORTS [2012] 4 S.C.R.

A "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 BOA
B towards Cauvery Water Supply Scheme Stage Ill 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 BOA itself.

3. I say that the BOA has deliberately not at all disclosed
c the material facts:

(i) the total number of the Housing Societies and others
who applied for sanction of layouts including private
layouts;
D
(ii) the amount BOA 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
E by the BOA and allotted to the public;

(iv) the total amount demanded and collected from the
allottees of the sites in the layouts formed by BOA itself;

(v) as per Government order dated 25.03.1987 the BOA
F
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 BOA has not disclosed the details
G 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 BOA has stated
that it has approved layouts involving about an extent of
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 933
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

5668 acres and 15 % guntas from 1984 till 2005. The A
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 BOA 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 B
conservative estimate the BOA 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 BOA has not disclosed the total number of
layouts formed by it and the total number of site allotted in c
the said layouts to its allottees. I say that the BOA 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 BOA itself it has
0
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 BOA as under:

A. BANASHANKARI 6TH STAGE E

• 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. F

B. BANASHANKARI 6TH STAGE FURTHER
EXTENSION

• 750 acres land acquired in Uttarahalli Hobli, Bangalore
South Taluk, 5800 allotted during January 2004. G

C. SIR. M. VISWESHWARAYA LAYOUT

• 1337 acres and 22 guntas of land acquired for SMV
Layout allotted 10,000 sites during March 2003.
H
934 SUPREME COURT REPORTS [2012] 4 S.C.R.

A D. SIR. M. VISWESHWARAYA LAYOUT FURTHER
EXTENSION

• 510 acres land acquired, 4200 allotted during January,
2004. It is near Kengeri Hobli.
B 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.

A total of 9900 sites have been allotted in HSR Layout
c 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
D 6 x 9 - 4445
9 x 12 - 7368
12 x 18 - 4167
15 x 24 - 1644
E G. In SMV Further Extension we have allotted 3615 sites.

In Anjanpura Further Extension we have allotted 7340 sites
6 x 9 - 1835
F 9 x 12 - 3305
12 x 18 - 1335
15 x 24 - 365

H. In Arkavathi Layout, in the 1st Phase 1710 sites and in
G 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.

H
co
(,)
S.No Name of the Location No. of sites formed 01
layout Intermediate Corner Total No. of sites m Cll
:s:: )>
allotted lJ z
r- G)
1 BSK 6th Stage South part of the 15520 2379 17899 0 )>
15520 -< r-
2 city with 5175 816 5991 5175 mo
m :;a
C/l m
approach road
() CJ
from Kengeri Om
o<
Road :u m
(/) r-
3 Anjanapura South part of the 5424 829 6253 5424 o O
() lJ
Township 1 to 8th city with approach -mm :s::
Block road from
4 Kanakapura Road. 4340 683 5023 4340
~~
~ )>
Biggest Layout CJ c
. -i
formed in recent ~::r:

years .G) 0
:;a
~ =l
5 SMV Layout West part of the 9696 1764 11460 9696 (/) -<
city with approach z :-: :
G) )>
6 SMVfurther road from 3615 650 4265 3615 ::r: -
< :;a
extension Nagarabhavi ::- ()

7 Arkavath Road 20000 8600 28600 8813 1: ~
~
936 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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.
B
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/-).
c
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
D 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,opo per site x 73503 sites).

6. I say that apart from the amount levied and collected by
E
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 for formation of Group Housing/
other major developments and for formation of Private
F 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
G 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.
H 170 crores) and from its allottees (Rs. 200 crores)
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 937
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

excluding the Applicants who applied for change in land A
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 BOA is not
empowered to levy and collect the amount towards B
Cauvery Water Supply Scheme and without prejudice to
the submission that the provisions of Section 32(5-A) of
the BOA Act is ultra vires the Constitution and without
prejudice to rights and contentions raised in the Civil
Appeal even assuming that the BOA could levy and collect C
the amount towards Cauvery Water Supply Scheme, the
BOA could collect only Rs. 30 crores. The BOA 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 O
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 BOA. The entire
information pertaining to the demand and collection of the
funds towards Cauvery Water Supply Scheme is available E
with BOA but has been deliberately withheld. In any event
even according to the affidavit filed by the BOA 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. F
On this ground also the demand raised against the
Respondent Societies is illegal and without authority of
law."

31. We shall first deal with the question whether the area G
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 H
938 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B 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
c 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
D 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 BOA Act. There is no
dispute that the boundaries indicated in Schedule II to the
Notification dated 13-3-1984 would include not only the
E 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
F 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
G 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
H Metropolitan Area.
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 939
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

A
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 Notification 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 B
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 C
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 D
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 E
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 F
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 G
II to the Notification dated 13-3-1984. Between 1988 and
2003, BOA 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 H
940 SUPREME COURT REPORTS [2012] 4 S.C.R.

A Government had sanctioned them. None of those 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
B 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
C 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
D also makes it clear that the areas where the City of
Bangalore Improvement Act, 1945 was i;i 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.
E 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
F 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
G
villages included in Schedule I to the Notification dated 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
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT941
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

already included in the Bangalore Metropolitan Area and A
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, B
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 C
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 D
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 E
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 F
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 proper way of reading the
Notification dated 1-3-1988 is to read it as specifying 325 G
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
H
942 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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."

B 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 BOA has lost
territorial jurisdiction over the area in which the House Building
C 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:
0
(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
E 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
F Constitution; and

(4) whether the BOA 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,
G etc.

Question (1)

34. Shri Altaf Ahmed, learned senior counsel appearing
H for the BOA and Shri Sanjay R. Hegde, learned counsel for the
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 943
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

State of Karnataka argued that Section 32(5A) is not violative A
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 BOA
layouts on the other hand. Learned counsel emphasised that
the allottees of sites in the BOA layouts which were carved out B
after 20.06.1987 have been burdened with the liability to pay
charges for the Cauvery 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 BOA c
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 BOA between 1988 and 2005 both from the private 0
layouts as well as the BOA 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 E
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 F
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 G
sites of the private layouts and to some extent the BOA 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 H
944 SUPREME COURT REPORTS [2012] 4 S.C.R.

A that the BOA 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.

B 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
C 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.

D 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
E
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
F 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
G 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:

H "It must be presumed that a legislature understands and
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 945
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.}

correctly appreciates the need of its own people, that its A
laws are directed to problems made manifest by
experience and that its discriminations are based upon
adequate grounds.""

(emphasis supplied) 8
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 c
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 o
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 E
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 F
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 G
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,
H
946 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
8
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
C 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
D 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
E 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
F 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
G absence of such foundation, the High Court was not at all
justified in recording a conclusion that the impugned provision
is violative of the equality clause contained in Article 14 of the
Constitution.

H 42. While examining the issue of hostile discrimination in
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 947
EMPLOYEES COOP. SOCIETYtID". [G.S. SINGHVI, J.]

the context of Section 32(5A), the Court cannot be oblivious of A
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 BOA was obliged to take effective
measures to improve the civic amenities like water supply, B
electricity, roads, transportation, etc. within the Bangalore
Metropolitan Area and for this it became necessary to augment
the resources by the BOA 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 c
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 other
0
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 BOA and other agencies/
instrumentalities of the State incurred substantial expenditure E
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 F
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. G
Question (2)

43. Learned senior counsel for the BOA and the counsel
appearing for the State assailed the finding recorded by the
H
948 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B 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
c that the policy of the legislation is clearly discernable from the
Preamble of the 1976 Act and its provisions in terms of which
the BOA 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 BOA and by using the
0
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
BOA. In support of this argument, learned counsel relied upon
E 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 sec 471.
F
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
G 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
H the cost of additional infrastructure is recovered only from those
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 949
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

who apply for sanction of private layouts and there is no A
provision for distribution of liability by creating demand on
others including those to whom sites are allotted in the BOA
layouts. Shri Venugopal referred to Sections 15 and 16 of the
Act to show that the BOA is required to prepare development
scheme and execute the same and argued that the cost of the B
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. C
(supra) and A.N. Parasuraman and others v. State of Tamil
Nadu (1989) 4 sec 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 0
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 Kera/a ( 1961) 3 SCR 77 and A.N. Parasuraman
and others v. State of Tamil Nadu (supra), the Court did not E
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), Ajay Kumar Banerjee v. Union of
India (1984) 3 SCC 127, Maharashtra State Board of S.H_.S.E. F
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 Ando/an (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 G
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 H
950 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
8 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 of the Court was ultra vires the provisions
C 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
D 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
E 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
F
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
G 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
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 951
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

the law." A

(emphasis supplied)

47. In Maharashtra State Board of S.H.S.E. v. Paritosh
Bhupeshkumar Sheth, (supra), the Court while dealing with the B
issue 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 C
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 o
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 E
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 F
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 G
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 modem socio-economic H
952 SUPREME COURT REPORTS [2012] 4 S.C.R.

A legislations passed by the Legislature lay down the
guiding principles of the legislative policy. The
Legislatures, because of /imitation imposed upon them
and the time factor, hardly can go into the matters in
detail. The practice of empowering the executive to make
B 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
c 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
D 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
E 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
F 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)
G 5 SCC 212, the Constitution Bench speaking through Rajendra
Babu, J. (as he then was), summed up the principle of
delegateq legislation in the following words:

"The legislatures in India have been held to possess wide
H power of legislation subject, however, to certain limitations
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 953
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

such as the legislature cannot delegate essential A
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 B
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 c
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
0
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 E
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 F
of the statute including 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 modem State has to face, will have
to be taken note of and if, on a liberal construction given G
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 H
954 SUPREME COURT REPORTS [2012] 4 S.C.R.

A legislative policy to 'sustain an arbitrary power conferred
on the executive."

(emphasis supplied)

50. In Union of India v. Azadi Bachao Ando/an (supra),
8 the Court was called upon to consider the constitutionality of
the Inda-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
C 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
D 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
E
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
F
to carry through the object and purposes of the Act."

(emphasis supplied)

51. The principle which can be deduced from the above
G 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
H achieved by the particular legislation and the scheme thereof
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 955
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

and that the Court would not sit over the wisdom of the A
legislature and nullify the provisions under which the power to
implement the particular provision is conferred upon the
executive authorities.

52. The policy underlying the 1976 Act is clearly B
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 C
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 BOA became the Local Planning Authority for the local
planning area comprising the City of Bangalore with jurisdiction 0
over an area which the City Planning Authority for the City of
Bangalore had immediately before the constitution of the BOA
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 E
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 BOA
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 F
powers which were earlier vested in the Local 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 G
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 H
956 SUPREME COURT REPORTS · [2012] 4 S.C.R.

A 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.
B Section 9 (unamended) envisaged preparation of outline
development plan incorporating therein the various matters
enumerated in Section 12(1), preparation of comprehensive
development plara by including the proposal for comprehensive
zoning of land use for the planning area; building complete
c street pattern indicating major and minor roads, National 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 20) of the
1976 Act is somewhat similar to the one contained in Section
0
1(c) of the Town Planning Act. Section 14 of the 1976 Act lays
down that the objects of the BOA shall be to promote and
secure the development of the Bangalore Metropolitan Area
and for that purpose, the BOA shall have the power to acquire,
hold manage and dispose of movable and immovable property,
E 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
F 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
G specify. Section 15 empowers the BOA 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
H resources. If a local authority provides necessary funds for
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 957
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

framing and carrying out ,my scheme, then too, the BOA can A
take up such scheme. Under Section 15(3), which contains a
non obstante clause, the Government can issue direction to the
BOA 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 B
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 c
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 the area comprised in the
scheme or any adjoining area and the sanitary arrangement.
0
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 E
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 F
layouts or making of new private streets, which can be done
only after obtaining express sanction from the· BOA 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 G
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
grant of application. Section 32(5A), which also contains a non
obstante clause, empowers the BOA to require the applicant H
958 SUPREME COURT REPORTS [2012) 4 S.C.R.

A to deposit additional amount to meet a portion of the
expenditure, which the BOA 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.
B
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
C 15.12.1975 and other adjacent areas which may be notified by
the Government from time to time. The BOA 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 BOA can
0 prepare detailed schemes for the development of the
Bangalore Metropolitan Area and incur expenditure for
implementing those schemes, which are termed as
development schemes. The expenditure incurred by the BOA
in the implementation of the development schemes can be
E 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
F merged in the Bangalore Metropolitan Area. For these areas,
the BOA 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
G the BOA alone from its meager fiscal resources. Therefore, the
State Government, the BOA 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,
H layouts, etc. The BOA had to contribute to the funds required
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 959
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

for new water supply scheme, generation of additional electri~ity A
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 B
purposes of the Act and approved the proposal for loading the
BOA'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 C
BOA 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 o
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 E
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, transportation and
such other amenities" supplies sufficient guidance for the
exercise of power by the BOA under Section 32(5A) and it is F
not possible to agree with the learned counsel for the
respondents that the section confers unbridled and uncanalised
power upon the BOA to demand an unspecified amount from
those desirous of forming private layouts. It is needless to say
that the exercise of power by the BOA under Section 32(5A) G
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 H
960 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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
B 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)

c 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
D 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.

E 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
F notified market areas from Rs. 2/- to Rs. 3/- for every Rs. 100/
- were legally sustainable. After noticing the distinction between
tax and fee and a large number of precedents, the Constitution
Bench culled out the following principles:

"(1) That the amount of fee realised must be earmarked
G 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.

(2) That the services rendered to the licensees must be in
H relation to the transaction of purchase or sale of the
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 961
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

agricultural produce. A

(3) 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 8
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.

(4) That while conferring some special benefits on the C
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.

(5) That spending the amount of market fees for the D
purpose of augmenting the agricultural produce, its facility
of transport in viilages 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 E
ultimately benefiting the traders also. Such an indirect and
remote benefit to the traders is in no sense a special
benefit to them.

(6) That the element of quid pro quo may not be possible,
or ewen necessary, to be established with arithmetical F
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
(7) 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."
H
962 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 59. The ratio of the aforesaid judgment was substantially
diluted in Southern Pharmaceuticals and Chemicals, Trichur
and others v. State of Kera/a 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
B 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 RI.lie 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
c services rendered by the State. The Bench. 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:
D "''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
E 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,
F 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
G 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
H consolidated fund. It is also increasingly realised that the
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 963
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

element of quid pro quo stricto senso is not always a sine A
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:
B
"ft 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 c
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 D
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 E
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) F

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 G
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 H
964 SUPREME COURT REPORTS [2012] 4 S.C.R.

A in rate of the fee and, therefore, it partook the nature of a
tax. It seems that 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."
8
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
C 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
D 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
E 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 which
were really not necessary for purposes of the decision and
F 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
G 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.
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 965
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]

The traditional view that there must be actual quid pro quo A
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 B
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 c
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 legis!ature
0
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 E
relationship" between the levy of the fee and the services
rendered."

61. In Kishan Lal Lakhmi Chand v. State of Haryana 1993
Supp (4) sec 461, while dealing with the constitutionality of F
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 G
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 H
966 SUPREME COURT REPORTS [2012] 4 S.C.R.

A 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.
8
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
C 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)
D 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
E 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
F
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.
G
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 rendering services to those on
whom the burden of the fee falls. There is no postulate of
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 967
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.]
a fee that it must have a direct relation to the actual services A
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 B
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 c
primary service intended is for the payers of the fees."

63. In/. 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 D
Fazal Ali, J. (as he then was) agreed, laid down the following
principles:

"(1) there should be relationship between service and fee,
E
(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, F
quid pro quo is not destroyed. The concept 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 G
to others,

(4) a reasonable projection for the future years of practical
scheme is permissible, and
H
968 SUPREME COURT REPORTS (2012] 4 S.C.R.

A (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.
B
(6) The primary object and the essential purpose of the
imposition must be looked into."

64. If the conditions imposed by the BOA requiring the
respondents to pay for augmentation of water supply, electricity,
C 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 BOA amounts to levy of tax and is
O ultra vires Article 265 of the Constitution.

65. Under the 1976 Act, the BOA is obliged to provide
different types of amenities to the population of the Bangalore
Metropolitan Area including the allottees of the sites in the
E 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 BOA, 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
F ultimate beneficiaries of the Cauvery Scheme because
availability of additional 270 MLO 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
G private societies will not get benefit of amenities provided by
the BOA. Thus, charges demanded by the BOA 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.
H
BANGALORE DEVELOPMENT AUTHORITY v. AIR CRAFT 969
EMPLOYEES COOP. SOCIETY LTD. [G.S. SINGHVI, J.)

Question (4) A

66. The only issue which survives for consideration is
whether the charges demanded by the BOA are totally
disproportionate to its contribution towards Cauvery Water
Scheme, Ring Road, Mass Rapid Transport System, etc. We B
may have examined the issue in detail but in view of the
affidavit dated 11.11.2009 filed by Shri Siddaiah, the then
Commissioner, BOA 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 C
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 O
arguments filed on behalf of the BOA 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 BOA will comply. In our view,
ends cf justice will be served by directing the State Government E
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 F
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 G
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 BOA or any other agency/
instrumentality of the State.

H
970 SUPREME COURT REPORTS (2012] 4 S.C.R.

A 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
B 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 BOA was
c 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.
D B.B.B. Appeals allowed.