# BANGALORE DEVELOPMENT AUTHORITY v. THE AIR CRAFT EMPLOYEES COOPERATIVE SOCIETY LTD. AND OTHERS

- **Citation:** [2012] 4 S.C.R. 881
- **Court:** Supreme Court of India
- **Decided:** 2012-01-24
- **Case number:** Civil Appeal Nos. 7503-7537 of 2002
- **Bench:** G.S. Singhvi, Asok Kumar Ganguly
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bangalore-development-authority-v-the-air-craft-employees-cooperative-society-28427
- **Pages:** 90

## Headnote

B
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 priva

## Text

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[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)
JANUARY 24, 2012
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.)
B
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,
1976 - s.32(5A) - Conditions incorporated in orders passed
c
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
fact that they will certainly be benefited by the construction of
F
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 subsection (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
0 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
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] [954G-H; 955-A]
2.2. The policy underlying the 1976 Act is clearly E
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 0
of power by the BOA under Section 32(5A) and it is not
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
this task had to be delegated to some other agency/
instrumentality of the State. [Para 54] [959-E-H; 960-A]
F
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-AC]
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 27,4345,
·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
B
(1959) 1 SCR 629
relied on
Para 38
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
F
1979 (3) SCR 1217
referred to
Para 58,60,62
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
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2012] 4 S.C.R.
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.