AI Drafter 
TaxTMI 
TaxTMI 
2012 (1) TMI 334
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....m law for planned growth of land use and development and for the making and execution of town planning schemes. Therefore, the State Legislature enacted the Mysore Town and Country Planning Act, 1961 (for short, 'the Town Planning Act'). The objectives of that Act were : (i) to create conditions favourable for planning and replanning of the urban and rural areas in the State of Mysore, with a view to providing full civic and social amenities for the people in the State; (ii) to stop uncontrolled development of land due to land speculation and profiteering in land; (iii) to preserve and improve existing recreational facilities and other amenities contributing towards balanced use of land; and (iv) to direct the future growth of populated areas in the State, 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. 3. The State of Mysore was renamed Karnataka in 1973. Thereupon, necessary consequential changes were made in the nomenclature of various enactments including the Town Planning Act. 4. Section 4 of the....
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.... its jurisdiction and shall, not later than two years from the date of commencement of this Act, prepare and publish in the prescribed manner an outline development plan for such area and submit it to the State Government, through the Director, for provisional approval: Provided that on application made by a Planning Authority, the State Government may from time to time by order, extend the aforesaid period by such periods as it thinks fit. 12. Contents of Outline Development Plan.-(1) An outline development plan shall generally indicate the manner in which the development and improvement of the entire planning area within the jurisdiction of the Planning Authority are to be carried out and regulated. In particular it shall include,- (a) a general land-use plan and zoning of land-use for residential, commercial, industrial, agricultural, recreational, educational and other public purposes; (b) proposals for roads and highways; (c) proposals for the reservation of land for the purposes of the Union, any State, any local authority or any other authority established by law in India; (d) proposals for declaring certain areas as areas of special control, development in su....
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.... (b) financial responsibility connected with the proposed improvements, and (c) the manner in which these responsibilities are proposed to be met. 26. Making of town planning scheme and its contents.-(1) Subject to the provisions of this Act, a Planning Authority, for the purpose of implementing the proposals in the Comprehensive Development Plan published under sub-section (4) of section 22, may make one or more town planning schemes for the area within its jurisdiction or any part thereof. (2) Such town planning scheme may make provisions for any of the following matters namely,- (a) the laying out or re-laying out of land, either vacant or already built upon; (b) the filling up or reclamation of low-lying, swamp or unhealthy areas or levelling up of land; (c) lay-out of new streets or roads; construction, diversion, extension, alteration, improvement and stopping up of streets, roads and communications; (d) the construction, alteration and removal of buildings, bridges and other structures; (e) the allotment or reservation of land for roads, open spaces, gardens, recreation grounds, schools, markets, green belts and dairies, transport facilities and pub....
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....nd it may not be possible to rectify/correct mistakes in the future. For achieving these objectives, the State legislature enacted the 1976 Act. Simultaneously, Section 81-B was inserted in the Town Planning Act for deemed dissolution of the City Planning Authority in relation to the area falling within the jurisdiction of the BDA. The preamble of the 1976 Act and the definitions of "Authority", "Amenity", "Civic amenity", "Bangalore Metropolitan Area", "Development", "Engineering operations", "Local Authority", "Means of access" contained in Section 2 thereof are reproduced below: "An Act to provide for the establishment of a Development Authority for the development of the City of Bangalore and areas adjacent thereto and for matters connected therewith 2. Definitions.- In this Act, unless the context otherwise requires,- (a) "Authority" means the Bangalore Development Authority constituted under section 3; (b) "Amenity" includes road, street, lighting, drainage, public works and such other conveniences as the Government may, by notification, specify to be an amenity for the purposes of this Act; (bb) "Civic amenity" means,- (i) a market, a post office, a telepho....
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....ecure the development of the Bangalore Metropolitan Area and for that purpose the Authority shall have the power to acquire, hold, manage and dispose of moveable and immoveable property, whether within or outside the area under its jurisdiction, to carry out building, engineering and other operations and generally to do all things necessary or expedient for the purposes of such development and for purposes incidental thereto. 15. Power of Authority to undertake works and incur expenditure for development, etc.- (1) The Authority may,- (a) draw up detailed schemes (hereinafter referred to as "development scheme") for the development of the Bangalore Metropolitan Area ; and (b) with the previous approval of the Government, undertake from time to time any works for the development of the Bangalore Metropolitan Area and incur expenditure therefor and also for the framing and execution of development schemes. (2) The Authority may also from time to time make and take up any new or additional development schemes,- (i) on its own initiative, if satisfied of the sufficiency of its resources, or (ii) on the recommendation of the local authority if the local authority place....
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....on. (2) The Provisions of the Karnataka Municipal Corporations Act, 1976 (Karnataka Act 14 of 1977) shall mutatis mutandis apply to the assessment and collection of property tax. Explanation.- For the purpose of this section "property tax" means a tax simpliciter requiring no service at all and not in the nature of fee inquiring service. 28-C. Authority is deemed to be a Local Authority for levy of cesses under certain Acts.- Notwithstanding anything contained in any law for the time being force the Authority shall be deemed to be a local authority for the purpose of levy and collection of,- (i) education cess under sections 16.17 and 17A of the Karnataka Compulsory Primary Education Act, 1961 (Karnataka Act 9 of 1961); (ii) health cess under sections 3,4 and 4A of the Karnataka Health Cess Act, 1962 (Karnataka Act 28 of 1962); (iii) library cess under section 30 of the Karnataka Public Libraries Act, 1965 (Karnataka Act 10 of 1965); and (iv) beggary cess under section 31 of the Karnataka Prohibition of Beggary Act, 1975 (Karnataka Act 27 of 1975). 32. Forming of new extensions or layouts or making new private streets.- (1) Notwithstanding anything to the co....
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....s, drains, water supply mains and open spaces laid out by him to the Authority permanently without claiming any compensation therefor. (5A) Notwithstanding anything contained in this Act, the Authority may require the applicant to deposit before sanctioning the application such further sums in addition to the sums referred to in the sub-section (5) to meet such portion of the expenditure as the Authority may determine towards the execution of any scheme or work for augmenting water supply, electricity, roads, transportation and such other amenities within the Bangalore Metropolitan Area. 65. Government's power to give directions to the Authority.- The Government may give such directions to the Authority as in its opinion are necessary or expedient for carrying out the purposes of this Act, and it shall be the duty of the Authority to comply with such directions. 65-B. Submission of copies of resolution and Government's power to cancel the resolution or order.- (1) The Commissioner shall submit to the Government copies of all resolutions of the Authority. (2) If the Government is of opinion that the execution of any resolution or order issued by or on behalf of....
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....ent Authority shall exercise the powers, perform the functions and discharge the duties under this Act as if it were a Local Planning Authority constituted for the Bangalore City; (iii) the City Planning Authority shall stand dissolved and upon such dissolution,-" ****" 7. In exercise of the power vested in it under Section 4-A(1) of the Town Planning Act, the State Government issued Notifications dated 1.11.1965 and 13.3.1984 declaring the areas specified therein to be the "Local Planning Areas". By the first notification, the State Government declared the area comprising the city of Bangalore and 218 villages enumerated in Schedule I thereto to be the "Local Planning Area" for the purposes of the Town Planning Act and described it as the Bangalore City Planning Area. The limits of the planning area were described in Schedule II appended to the notification. By the second notification, the area comprising 325 villages around Bangalore (as mentioned in Schedule I) was declared to be the Local Planning Area for the environs of Bangalore. The limits of the city planning area were indicated in Schedule II. At the end of Schedule II of the second notification, the ....
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....auvery Scheme. 12.Since the World Bank assistance was expected only in the year 1988 and the Cauvery Scheme was to be 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 BDA because substantial quantity of water was required for the layouts which were being developed by it or likely to be developed in future. In furtherance of that decision, the State Government issued order dated 25.03.1987 and directed the BDA to make a grant of Rs. 30 crores to BWSSB to be paid in installments from 1987-88 to 1989-90 by loading an extra amount as water supply component at the rate of Rs. 10,000/- on an average per site for all the layouts to be formed thereafter. 13.In compliance of the directions given by the State Government, the BDA started collecting Rs. 10,000/- per site. Later on, the levy under the Cauvery Scheme was increased to Rs. 1 lac per acre. By 1992, it was realised that the BDA had not been able to de....
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.... and Rs. 1 lac as Ring Road surcharge. Another condition incorporated in the Resolution of the BDA was that the civil portion of work shall be carried out by the respondent under its supervision. The decision of the BDA was communicated to the respondent vide letter dated 12.11.1992. 16.The respondent challenged the conditional sanction of its layout in Writ Petition No.11144/1993 and prayed for quashing the demand of Rs. 2 lacs per acre towards the Cauvery Scheme and Rs. 1 lac as Ring Road surcharge by making the following assertions: (i) The order passed by the State Government was applicable only to the sites to be formed by the BDA and not the layout of private House Building Societies because as per the Chairman of BWSSB, it will not be possible to take up the responsibility of providing water supply and underground drainage to such layouts and the societies had to make their own arrangements. (ii) The Cauvery Scheme will be able to meet the requirements of only the citizens residing within the municipal area and some newly formed layouts adjacent to the city. (iii) There is no provision in the Bangalore Water Supply and Sewerage Act, 1964 (for short, 'the 1964 Act....
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.... sanctioned subject to payment of the following charges: (i) Supervision Charges Rs. 92,26,687.00 (at the rate of 9% on Civil Work) (ii) Improvement charges Rs. 1,65,95,008.00 (at the rate of Rs. 20 per sq. mtrs.) (iii) Examination charges Rs. 4,14,876.00 (0-50 per sq. mtrs.) (iv) Slum Clearance Development Rs. 20,74, 365.00 Charges (Rs. 25,000 per hectare) (v) M.R.T.S. Tax Rs. 1,02,51, 875.00 (Rs. 50,000 per acre) (vi) Miscellaneous Rs. 7,189.00 20.The respondent challenged the conditional approval of civil work in Writ Petition No. 25833/1998 on the ground that the 1976 Act does not authorize such levies and that the legislature has not laid down any guideline for creating such demand from the private House Building Societies. An additional plea taken by the respondent was that the BDA has applied the provisions of Section 32 of the 1976 Act under a mistaken impression that the layout was within its jurisdiction. According to the respondent, no notification had been issued by the State Government for including the villages of North and South Talukas within the Bangalore Metropolitan Area. Another plea taken by the respondent was that the State ....
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....estion whether Notification dated 1.3.1988 issued under Section 2(c) of the 1976 Act was invalid because the names of the villages or the specified area had not been notified or published in the Official Gazette and whether in the absence of such notification, the villages in which the societies had formed layouts cannot be treated as part of the Bangalore Metropolitan Area. The Division Bench referred to the definition of the expression "Bangalore Metropolitan Area" contained in Section 2(c) of the 1976 Act, the contents of Notification dated 1.3.1988 and held that the description of the area given in the notification was in consonance with the definition of the Bangalore Metropolitan Area because reference had been made to the villages in Schedule I to Notification dated 13.3.1984 and the boundaries of the planning environs area as per Schedule II of the said notification. The Division Bench opined that if Notifications dated 13.3.1984 and 1.3.1988 are read together, it cannot be said that the particular villages do not form part of the Bangalore Metropolitan Area. 24.The Division Bench did not decide the plea of the respondents that some of the villages were not included in t....
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....ere being opportunity of being heard being given to the concerned persons or person before determination of the portion of the expenditure which the Bangalore Development Authority has to incur with reference to those schemes or works to be levied thereunder." 27.The Division Bench relied upon the ratio in Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors. AIR 1958 SC 538, Jyoti Pershad v. The Administrator for The Union Territory of Delhi, AIR 1961 SC 1602; Devi Das Gopal Krishnan v. State of Punjab, AIR 1967 SC 1895, State of Kerala v. M/s. Travancore Chemicals and Manufacturing Company (1998) 8 SCC 188 and observed: "In the present case, sub-section (5-A) of Section 32 of the Act, does not appear to provide any guidelines so as to determine as to what exact portion of the expenditure should the applicant be required to deposit. No doubt, the entire expenditure cannot be fastened on the applicant. It does not provide any guidelines in this regard. It does not provide the portion of the amount the applicant maybe required to deposit shall bear any percentage on the basis of enjoyment of the benefit by the applicant or the applicant likely to enjoy the benefit qua enj....
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....n lieu of sanction of their layouts and substantial amount from the allottees of the sites of the layouts developed by it between 1984-1992 and this, by itself, was sufficient to prove that the exercise of power by the BDA under Section 32 (5A) of the 1976 Act is arbitrary. After considering the statement made by Shri Dave, the Court directed the Commissioner and/or Secretary of the BDA to file a detailed and specific affidavit giving the particulars of contribution made by the BDA towards the Cauvery Scheme and the amount demanded and/or collected from those who applied for sanction of the private layouts as also the allottees of the sites in the BDA layouts. In compliance of the Court's direction, Shri Siddaiah, the then Commissioner, BDA, filed affidavit dated 11.11.2009, paragraphs 2 to 5 of which are extracted below: "2. The Government of Karnataka formed the Cauvery Water IIIrd Stage Scheme in 1984. However, the Government directed the Bangalore Development Authority to contribute Rs. Thirty crores towards the Cauvery Water IIIrd Stage Scheme by its order No. HUD 97 MNI 81, Bangalore dated 25th March, 1987. The Bangalore Development Authority started collecting Cauvery Wat....
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.... three fourth gunthas). However, Cauvery Water Cess and Ring Road Cess are levied and collected as stated above from 1988 and 2005 respectively. The submissions made in the Writ Petition to the contrary are speculative. 5. Similarly, the averments in the W.P. that the Bangalore Development Authority would collect about 300 crores are speculative. It is submitted with respect after the directions of the Government in 2005, all the above collections have been stopped. Hence, this affidavit. BANGALORE DEVELOPMENT AUTHORITY BANGALORE THE COLLECTION OF CAUVERY WATER CESS & PAID TO BWSSB AS MENTIONED BELOW (INR in Lakh) 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 5 753086 06.07.1997 100.00 6 756449 30.12.1997 150.00 7 650002 18.03.1998 50.00 8 759664 20.07.1998 50.00 9 502441 22.01.1999 50.00 10 769862 15.09.1999 75.00 11 653066 04.06.2005 500.00 TOTAL 3,455.00 (Rupees Thirty Four Crores and Fifty Five Lakh) Sd/-....
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....the allottees of the sites in the layouts prepared by the BDA itself. 3. I say that the BDA has deliberately not at all disclosed the material facts: i) the total number of the Housing Societies and others who applied for sanction of layouts including private layouts; ii) the amount BDA has demanded from the Housing Societies and others who have applied for sanction of layouts and private layouts; iii) the total number of sites formed in the layouts formed by the BDA and allotted to the public; (iv) the total amount demanded and collected from the allottees of the sites in the layouts formed by BDA itself; v) as per Government order dated 25.03.1987 the BDA was empowered to levy and collect amount towards the Cauvery Water Supply Scheme also from the Applicants who apply for change in land use and for formation of Group Housing/other major developments and for formation of Private Layouts. The BDA has not disclosed the details of such Applicants or the amount recovered from them in terms of the Government order dated 25.03.1987. 4. I say that in the affidavit under reply the BDA has stated that it has approved layouts involving about an extent of 5668 acres and 15....
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....vathi Layout, in the 1st Phase 1710 sites and in the 2nd phase 8314 sites of different dimensions. A total of 3664 (30x40) dimension sites have been allotted totally at the rate of Rs. 2100 sq. mtrs. S.No Name of the layout Location No. of sites formed Intermediate Corner Total No. of sites allotted 1 BSK 6th Stage South part of the city with approach road from Kengeri Road South part of the city with approach road from Kanakapura Road. Biggest Layout formed in recent years 15520 2379 17899 15520 2 5175 816 5991 5175 3 Anjanapura Township 1 to 8^th Block 5424 829 6253 5424 4 4340 683 5023 4340 5 SMV Layout West part of the city with approach road from Nagarabhavi Road 9696 1764 11460 9696 6 SMV further extension 3615 650 4265 3615 7 Arkavath 20000 8600 28600 8813 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 ANNEXUR....
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....who applied for change in land use and for formation of Group Housing/other major developments and for formation of Private Layouts which facts have not been disclosed by the BDA. The entire information pertaining to the demand and collection of the funds towards Cauvery Water Supply Scheme is available with BDA but has been deliberately withheld. In any event even according to the affidavit filed by the BDA it has collected Rs. 34.55 crores as against the limit of Rs. 30 crores which it could collect under the Government Order. Therefore, the amount collected is far in excess of its limit. On this ground also the demand raised against the Respondent Societies is illegal and without authority of law." 31. We shall first deal with the question whether the area in which the respondents have formed layouts fall within the Bangalore Metropolitan Area. In the impugned order, the Division Bench has recorded brief reasons for negating the respondents' challenge to Notification dated 1.3.1988. The conclusion recorded by the Division Bench and similar view expressed by another Division Bench of the High Court in the Commissioner, Bangalore Development Authority v. State of Karnataka ILR ....
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..... The purpose of the note was not to exclude the area declared under the Notification dated 1-11-1965 from the local planning area. The intention was to specify what was being added to the local planning area declared under the Notification dated 1-11-1965. But in the Notification dated 1-3-1988, what is declared as the Bangalore Metropolitan Area is the area, that is, within the boundaries indicated in Schedule II to the Notification dated 13-3-1984, which as noticed above is the area notified on 1-11-1965 as also the area notified on 13-3-1984. The note in the Notification dated 13-3-1984 was only a note for the purposes of the Notification dated 13-3-1984 and did not form part of the Notification dated 1-3-1988. There is therefore no doubt that the intention of the State Government was to include the entire area within the boundaries described in Schedule II, that is, the area declared under the two Notifications dated 1-11-1965 and 13-3-1984, as the Bangalore Metropolitan Area. In fact ever since 1988 everyone had proceeded on the basis that the Bangalore Metropolitan Area included the entire area within the boundaries mentioned in Schedule II to the Notification dated 13....
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....ore area or the inner circle area, that is, Bangalore City, is a part of Bangalore Metropolitan Area in view of the definition under Section 2(c). The 218 villages specified in the Notification dated 1-11-1965 are the villages immediately surrounding and adjoining Bangalore City and it forms the first concentric circle area around the core area of Bangalore City. The 325 villages listed in First Schedule to the Notification dated 13-3-1984 are situated beyond the 218 villages and form a wider second concentric circle around the central core area and the first concentric circle area of 218 villages. That is why the Notification dated 1-3-1988 made it clear that the Bangalore Metropolitan Area would be the area within the boundaries indicated in Second Schedule to the Notification dated 13-3-1984. It would mean that the three areas, namely, the central core area, the adjoining 218 villages constituting the first concentric circle area and the next adjoining 325 villages forming the second concentric circle are all included within the Bangalore Metropolitan Area. What is already specifically included by Section 2(c) of the BDA Act cannot obviously be excluded by Notification dated 1-3....
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....ened 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 BDA layouts which were formed by spending substantial public funds and the private layouts prepared by the house building societies. Learned counsel referred to the additional affidavit of Shri Siddaiah to show that Rs. 34.55 crores were collected by the BDA between 1988 and 2005 both from the private layouts as well as the BDA sites and the entire amount has been paid to BWSSB in lieu of the BDA's share in the Cauvery Scheme. 35. Shri K.K. Venugopal and Shri P. Vishwanatha Shetty, learned senior advocates and Shri R.S. Hegde and other learned counsel appearing for the respondents supported the conclusion recorded by the High Court that Section 32(5A) is violative of Article 14 of the Constitution by emphasizing that the impugned provision has resulted in hostile discrimination between the allottees of sites in the layouts of the house building societies and other people living in the Bangalore Metropolitan Area. Learne....
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.... as follows: "It must be presumed that a legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds."" (emphasis supplied) 38. In M.H. Quareshi v. State of Bihar (1959) 1 SCR 629, this Court observed: "The Courts, it is accepted, must presume that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. It must be borne in mind that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times, and may assume every state of facts which can be conceived existing at the time of legislation." 39. In Ram Krishna Dalmia v. Justice S.R. Tendolkar (supra), to which reference has been made in the impugned order....
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....ity and the policy decision taken by the State Government to encourage house building societies to form private layouts, the BDA was obliged to take effective measures to improve the civic amenities like water supply, electricity, roads, transportation, etc. within the Bangalore Metropolitan Area and for this it became necessary to augment the resources by the BDA itself or through other State agencies/instrumentalities by making suitable contribution. It would be a matter of sheer speculation whether in the absence of increase in the population of the Bangalore Metropolitan Area and problems relating to planned development, the legislature would have enacted the 1976 Act and the State and its agencies/instrumentalities would have spent substantial amount for augmenting water supply, electricity, transportation and 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 reality qua the layouts of the private House Building Societies and those involved in execution of large housing projects, etc., the BDA and other agencies/instrumentalities of the State incurred substantial expenditure for a....
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....the argument made before the High Court that Section 32(5A) suffers from the vice of excessive delegation because the legislature has not laid down any policy for recovery of cost of infrastructure required for augmentation of supply of water, electricity, roads, transportation, etc. Learned senior counsel referred to the averments contained in the amended writ petitions to show that the cost of additional infrastructure is recovered only from those who apply for sanction of private layouts and there is no provision for distribution of liability by creating demand on others including those to whom sites are allotted in the BDA layouts. Shri Venugopal referred to Sections 15 and 16 of the Act to show that the BDA is required to prepare development scheme and execute the same and argued that the cost of the scheme cannot be loaded only on the private layouts. Learned counsel relied upon the judgments in Daymond v South West Water Authority (1976) 1 All England Law Reports 39, The State of West Bengal v. Anwar Ali Sarkar (1952) SCR 284, Devi Das Gopal Krishnan and Ors. v. State of Punjab and Ors. (supra) and A.N. Parasuraman and others v. State of Tamil Nadu (1989) 4 SCC 683 to suppor....
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....retion limited, however, by the guidance afforded by the Act. This is the ratio of delegated legislation, and is a process which has come to stay, and which one may be permitted to observe is not without its advantages. So long therefore as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate. The second is that if the power or discretion has been conferred in a manner which is legal and constitutional, the fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating the law." (emphasis supplied) 47. In Maharashtra State Board of S.H.S.E. v. Paritosh Bhupeshkumar Sheth, (supra), the Court while dealing with the issue of excessive delegation of power to the ....
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....must retain in its own hand the essential legislative function which consists in declaring the legislative policy and lay down the standard which is to be enacted into a rule of law, and what can be delegated in the task of subordinate legislation which by very nature is ancillary to the statute which delegates the power to make it effective provided the legislative policy is enunciated with sufficient clearness or a standard laid down. The courts cannot and do not interfere on the discretion that undoubtedly rests with the Legislature itself in determining the extent of the delegated power in a particular case." (emphasis supplied) 49. In Kishan Prakash Sharma v. Union of India (2001) 5 SCC 212, the Constitution Bench speaking through Rajendra Babu, J. (as he then was), summed up the principle of delegated legislation in the following words: "The legislatures in India have been held to possess wide power of legislation subject, however, to certain limitations such as the legislature cannot delegate essential legislative functions which consist in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct. Th....
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....cess of the power of the supporting legislation conferred on the delegate, has to be determined with regard not only to specific provisions contained in the relevant statute conferring the power to make rules or regulations, but also the object and purpose of the Act as can be gathered from the various provisions of the enactment. It would be wholly wrong for the court to substitute its own opinion as to what principle or policy would best serve the objects and purposes of the Act; nor is it open to the court to sit in judgment over the wisdom, the effectiveness or otherwise of the policy, so as to declare a regulation ultra vires merely on the ground that, in the view of the court, the impugned provision will not help to carry through the object and purposes of the Act." (emphasis supplied) 51. The principle which can be deduced from the above noted precedents is that while examining challenge to the constitutionality of a statutory provision on the ground of excessive delegation, the Court must look into the policy underlying the particular legislation and this can be done by making a reference to the Preamble, the objects sought to be achieved by the particular legislation....
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....nning schemes and execution thereof by the Planning Authorities constituted for the specified areas. Section 9 (unamended) envisaged preparation of outline development plan incorporating therein the various matters enumerated in Section 12(1), preparation of comprehensive development plan by including the proposal for comprehensive zoning of land use for the planning area; building complete street pattern indicating major and minor roads, 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 2(j) of the 1976 Act is somewhat similar to the one contained in Section 1(c) of the Town Planning Act. Section 14 of the 1976 Act lays down that the objects of the BDA shall be to promote and secure the development of the Bangalore Metropolitan Area and for that purpose, the BDA shall have the power to acquire, hold manage and dispose of movable and immovable property, whether within or outside the area under its jurisdiction. "Bangalore Metropolitan Area" has been defined under Section 2(c) of the 1976 ....
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....the streets formed by it. Section 32 provides for formation of new extensions or layouts or making of new private streets, which can be done only after obtaining express sanction from the BDA and subject to the conditions which may be specified by the BDA. Section 32(5) lays down that the BDA can call upon the applicant to deposit the sums necessary for meeting the expenditure for making roads, drains, culverts, underground drainage and water supply and lighting and the charges for such other purposes as may be indicated by the BDA, as a condition precedent to the grant of application. Section 32(5A), which also contains a non obstante clause, empowers the BDA to require the applicant to deposit additional amount to meet a portion of the expenditure, which the BDA may determine towards the execution of any scheme or work for augmenting water supply, electricity, roads, transportation and such other amenities within the Bangalore Metropolitan Area. 53. The above survey of the relevant provisions of the 1961 and the 1976 Acts makes it clear that the basic object of the two enactments is to ensure planned development of the areas which formed part of the Bangalore Metropolitan Area....
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....e streets to pay a specified sum in addition to the sums referred to in Section 32(5) to meet a portion of the expenditure incurred for the execution of any scheme or work for augmenting water supply, electricity, roads, transportation and other amenities. 54. At the cost of repetition, it will be apposite to observe that apart from the Preamble and the objects of the 1961 and 1976 Acts and the scheme of the two enactments, the expression "such portion of the expenditure as the Authority may determine 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 BDA under Section 32(5A) and it is not possible to agree with the learned counsel for the respondents that the section confers unbridled and uncanalised power upon the BDA to demand an unspecified amount from those desirous of forming private layouts. It is needless to say that the exercise of power by the BDA under Section 32(5A) is always subject to directions which can be given by the State Government under Section 65. We may add that it could not have been possible for the legislature ....
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....ensees 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 purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them. (6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (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 renderi....
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....recognised by Mukherjea, J. himself, the fact that the collections are not merged in the consolidated fund, is not conclusive, though that fact may enable a court to say that very important feature of a fee was present. But the attention of the Supreme Court does not appear to have been called to Article 266 which requires that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public accounts of the Union and the States. It is submitted that if the services rendered are not by a separate body like the Charity Commissioner, but by a government department, the character of the imposition would not change because under Article 266 the moneys collected for the services must be credited to the consolidated fund. It may be mentioned that the element of quid pro quo is not necessarily absent in every tax."" (emphasis supplied) The three Judge Bench also referred to the Constitution Bench judgment in Kewal Krishna Puri v. State of Punjab (supra) and observed: "To our mind, these observations are not intended and meant as laying down a rule of universal application. The Court wa....
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....part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest if the element of revenue for general purpose of the State predominates, the levy becomes a tax. In regard to fees there is, and must always be, correlation between the fee collected and the service intended to be rendered. In determining whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefited by it. The power of any legislature to levy a fee is conditioned by the fact that it must be "by and large" a quid pro quo for the services rendered. However, correlationship between the levy and the services rendered (sic or) expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a "reasonable relationship" between the levy of the fee and the services rendered." 61. In Kishan Lal Lakhmi Chand v. State of Haryana 1993 Supp (4) SCC 461, while dealing with the constitut....
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....d 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 a fee that it must have a direct relation to the actual services rendered by the authorities to each individual to obtain the benefit of the service. The element of quid pro quo in the strict sense is not always a sine qua non for a fee. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. It is immaterial that the general public may also be benefited from some of the services if the primary service intended is for the payers of the fees." 63. In I.T.C. Ltd. v. State of Karnataka 1985 (Supp) SCC 476, another three Judge Bench considered the validity of levy and collection of market fee from sellers of specified agricultural produce. Sabyasachi Mukharji, J. (as he then was), with whom Fazal Ali, J. (as he then was) agreed, laid down the following principles: "(1) ....
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.... benefit of amenities provided by the BDA. Thus, charges demanded by the BDA under Section 32(5A) cannot be termed as tax and declared unconstitutional on the ground that the same are not sanctioned by the law enacted by competent legislature. Question (4) 66. The only issue which survives for consideration is whether the charges demanded by the BDA are totally disproportionate to its contribution towards Cauvery Water Scheme, Ring Road, Mass Rapid Transport System, etc. We may have examined the issue in detail but in view of the affidavit dated 11.11.2009 filed by Shri Siddaiah, the then Commissioner, BDA to the effect that only Rs. 34.55 crores have been collected between February, 1988 to 4.6.2005 towards the Cauvery Scheme and a sum of Rs. 15.15 crores has been collected by way of Ring Road surcharge between 1992-93 and 2005-06 and that the State Government has directed that henceforth Ring Road surcharge, the Cauvery Water Cess and MRTS Cess should not be levied till appropriate decision is taken, we do not consider it necessary to adjudicate the controversy, more so, because in the written arguments filed on behalf of the BDA it has been categorically stated that the Gover....