BBMP office.
Credit: DH Photo
In a move that is unlikely to stand judicial scrutiny, the Karnataka government is said to be contemplating enacting a law to nullify an order of the High Court which had struck down as “non-enforceable” various fees and levies imposed on buildings by the BBMP. While the legislature is empowered to pass any law as long as it does not run ultra vires of the Constitution or basic principles of law, what raises eyebrows is the proposal to implement the new legislation with retrospective effect. In August 2021, a single judge bench of Justice M Nagaprasanna had held that the bylaws under which the BBMP sought to collect ground rent, licence fee, building licence fee, scrutiny fee and security deposit were ultra vires of the Karnataka Municipal Corporation (KMC) Act and could not be “enforced”. Several property owners, residents of apartments, and builders had challenged the BBMP’s circular issued in 2015. The court also held that the linking of these levies to the guidance value had led to “bleeding of citizens”. While quashing the impugned bylaws, the court observed that even a single rupee cannot be taken from a citizen as fee except in accordance with the law. The judge had held that any fee can be charged for the services rendered for the benefit of individuals and if no service was rendered, then such fee would take the character of tax. The court had rejected the BBMP’s argument that it was empowered under the KMC Act to levy such fees for the upkeep of the city.
The court, however, permitted the state government to impose these fees and levies by making suitable amendments to the KMC Act. More significantly, the court directed BBMP to refund the fees already collected within 12 weeks of the order. The government’s move now to give retrospective effect to the law to collect all such fees is aimed at bailing out the BBMP, which would be required to repay to citizens the fees it had collected without a legal provision, an amount of over Rs 2,300 crore. The state cabinet is said to have approved the Bill to be tabled during the ongoing winter session of the legislature in Belagavi. A parallel may be drawn with the infamous Vodafone case where the then central government had in 2012 passed an amendment to nullify a Supreme Court order and thereby tax the telecom major retrospectively. Subsequently, the Centre had to face embarrassment with the Permanent Court of Arbitration at The Hague upholding Vodafone’s plea.
The Karnataka government should not only refund the amount collected illegally from citizens but should also give up its decision to pass any law with retrospective effect.