2012 (1) TMI 334 - SC - Indian Laws

Supreme Court upholds constitutionality of BDA Act Section 32(5A) charges, directs State review

The Supreme Court held that Section 32(5A) of the Bangalore Development Authority Act, 1976 was constitutional and not discriminatory. It overturned the ... - Issues Involved:1. Constitutionality of Section 32(5A) of the Bangalore Development Authority Act, 1976.2. Excessive delegation of legislative power.3. Whether the charges levied amount to a tax and are ultra vires Article 265 of the Constitution.4. Proportionality of charges collected by the BDA.Summary:Issue 1: Constitutionality of Section 32(5A) of the Bangalore Development Authority Act, 1976The High Court declared Section 32(5A) of the 1976 Act as violative of Article 14 of the Constitution, void, and inoperative. It quashed the conditions requiring respondents to pay various charges and directed a refund. The Supreme Court disagreed, stating that the High Court erred in finding the provision discriminatory without a strong factual foundation. The Court emphasized that the BDA needed to augment resources for civic amenities due to increased population and development, and this did not violate Article 14.Issue 2: Excessive Delegation of Legislative PowerThe High Court found Section 32(5A) to be a piece of excessive delegation, lacking guidelines for the BDA's power to demand additional sums. The Supreme Court reversed this, noting that the legislative policy and guidelines are evident in the Preamble and objects of the 1961 and 1976 Acts. The Court held that the BDA's power under Section 32(5A) is guided by the need to meet expenditure for augmenting water supply, electricity, roads, and other amenities, and is subject to State Government directions under Section 65.Issue 3: Whether Charges Levied Amount to a Tax and are Ultra Vires Article 265 of the ConstitutionThe High Court did not explicitly address this issue, but the Supreme Court found that the charges for augmenting water supply, electricity, transport, etc., do not amount to a tax. The Court highlighted that the BDA and other agencies incurred substantial expenses for these amenities, benefiting all residents, including those in private layouts. Thus, the charges are not a tax and do not violate Article 265.Issue 4: Proportionality of Charges Collected by the BDAThe High Court did not provide reasons for declaring the levy of supervision charges, improvement charges, examination charges, slum clearance development charges, and MRTS cess illegal. The Supreme Court noted that the BDA collected Rs. 34.55 crores for the Cauvery Scheme and Rs. 15.15 crores for the Ring Road surcharge, and the State Government had directed stopping these collections. The Court directed the State Government to decide on the pending demands and the appropriateness of these charges within three months.Conclusion:The Supreme Court allowed the appeals, set aside the High Court's order, and dismissed the writ petitions. It directed the State Government to take appropriate decisions regarding the charges within three months and communicate these to the respondents. If aggrieved, respondents may seek legal remedies.